Western District of North Carolina

CHARLOTTE, N.C. – Brianna Leshay Wright, 26, of Charlotte, and her mother-in-law, Tanya Fuentes, 56, of Charlotte, were sentenced today for their respective roles in the sex trafficking of three minor females, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Max O. Cogburn, Jr., sentenced Brianna Wright to 120 months in prison, followed by 15 years of supervised release. Tanya Fuentes was ordered to serve 24 months in prison and two years of supervised release.

According to filed court documents, statements made in court, and today’s sentencing hearing, between April 28, 2016 and May 8, 2016, Zerrell Fuentes, his wife Brianna Wright, and his mother Tanya Fuentes engaged in the sex trafficking of three minor victims.  As Zerrell Fuentes previously admitted in court, while he was in jail on state charges, he recruited three underage victims, via telephone, to engage in prostitution to earn money for his bond.  Zerrell Fuentes arranged for Brianna Wright to transport the minor victims from Charlotte to Myrtle Beach, S.C., for the purpose of engaging in commercial sex acts.

According to court records, Brianna Wright, accompanied by Tanya Fuentes, drove the three minors from Charlotte to Myrtle Beach.  While in Myrtle Beach, Tanya Fuentes paid for lodging. Brianna Wright drove the minors to see clients for the purpose of engaging in sexual acts for money, and her phone was used to post prostitution advertisements for the minor victims on the Internet.  While in Myrtle Beach, at least two minor victims committed sexual acts or had sexual contact.

On July 10, 2018, Zerrell Fuentes and Brianna Wright pleaded guilty to sex trafficking of a minor. On July 16, 2018, Tanya Fuentes pleaded guilty to conspiracy to commit sex trafficking.

A sentencing date for Zerrell Fuentes has not been set. The penalty for sex trafficking is a mandatory minimum of 10 years and a maximum of life in prison and a $250,000 fine.  

In making today’s announcement U.S. Attorney Murray praised the law enforcement agents and officers from ICE’s Homeland Security Investigations and the Charlotte Mecklenburg Police Department who are members of the FBI’s Human Trafficking Task Force for their investigation.  U.S. Attorney Murray also thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives for their assistance in this case.

Assistant U.S. Attorneys Kimlani Ford and Dallas Kaplan, of the U.S. Attorney’s office in Charlotte, is prosecuting the case. 

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that Derek Shawn Pendergraft, 22, of Asheville, N.C., has pleaded guilty to one count of first degree murder and two counts of aggravated sexual abuse resulting in death. U.S. Magistrate Judge W. Carleton Metcalf accepted Pendergraft’s guilty plea in federal court in Asheville.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Neal D. Labrie, Chief Ranger of the Blue Ridge Parkway; and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation (SBI), join U.S. Attorney Murray in making today’s announcement.

According to plea documents and today’s hearing, on July 24, 2018, Pendergraft, who worked at the Pisgah Inn, murdered his co-worker, Sara Ellis, during the perpetration of aggravated sexual abuse. The murder occurred on the Blue Ridge Parkway, within the special territorial jurisdiction of the United States, and within the Western District of North Carolina.

Pendergraft’s plea agreement, which the Court has accepted, provides that the defendant will receive a sentence of life in prison without any possibility of parole for his crimes.   

Pendergraft remains in federal custody.  A sentencing date has not been set. 

 

In making today’s announcement, U.S. Attorney Murray thanked the National Park Service, the FBI, the SBI, the Transylvania County Sheriff's Office, the Haywood County Sheriff’s Office, and the Cruso Fire Department for their respective work and assistance in this case. 

            Assistant U.S. Attorneys Don Gast and John Pritchard, of the U.S. Attorney’s Office in Asheville, are in charge of the prosecution.

 

ASHEVILLE, N.C. – Today, U.S. District Judge Martin Reidinger sentenced Jeramie Lee McSweeney, 39, of Lenoir, N.C., to 70 months in prison and three years of supervised release, for the 2015 robbery of a jewelry store, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. McSweeney was also ordered to pay $176,400 in restitution.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Bill Harrell of the Highlands Police Department join U.S. Attorney Murray in making today’s announcement.

According to documents filed with the court and today’s sentencing hearing, on July 2, 2015, McSweeney and his co-conspirator, Gregory Lee Gobble, robbed the Gold-n-Clipper jewelry store located in Highlands, N.C.  Court records show that Gobble entered the jewelry store, broke the glass casing, and stole two pieces of jewelry valued at $176,400.  According to court records, Gobble and McSweeney were seen fleeing the scene in a vehicle driven by McSweeney.  Highlands police officers arrested McSweeney later the same day.   According to documents filed with the court and today’s sentencing hearing, McSweeney recruited Gobble to assist in the commission of the robbery.

On February 11, 2019, McSweeney pleaded guilty to Hobbs Act robbery. Gobble, who was arrested in South Carolina on August 2016, was previously sentenced to 41 months in prison and three years of supervised release.

In making today’s announcement, U.S. Attorney Murray thanked the FBI and the Highlands Police Department for their investigation of this case.

Assistant United States Attorney John Pritchard, of the U.S. Attorney’s Office in Asheville, is in charge of the prosecution..

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that Arlen Flores, 49, a Honduran national and a permanent United States resident living in Cherokee, N.C., was sentenced to six years in prison for sexual contact with a minor. U.S. District Judge Martin Reidinger presided over the sentencing hearing.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Doug Pheasant of the Cherokee Indian Police Department join U.S. Attorney Murray in making today’s announcement.

According to filed court documents and the sentencing hearing, on a date ranging from January to July 2017, Flores sexually abused a minor female victim.  The sexual abuse occurred in Swain County and within the boundaries of Indian Country.  The female victim, who is an enrolled member of the Eastern Band of Cherokee Indians, was under 12 years old at the time. 

On February 22, 2019, Flores pleaded guilty to nonconsensual sexual contact. He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

Flores will also be subject to deportation proceedings upon the completion of his federal sentence.  If Flores is not deported, or later returns to the United States, he was ordered by Judge Reidinger to serve a lifetime of supervised release and to register as a sex offender.

In making today’s announcement, U.S. Attorney Murray credited the FBI and CIPD for this investigation. 

Assistant United States Attorney John Pritchard, of the U.S. Attorney’s Office in Asheville, is in charge of the prosecution.

ASHEVILLE, N.C. – Timothy Jason McCoy, 47, of Cherokee, N.C. was sentenced to today to 51 months in prison and four years of supervised release for possession with intent to distribute methamphetamine, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

Robert J. Murphy, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, and Chief Doug Pheasant of the Cherokee Indian Police Department join U.S. Attorney Murray in making today’s announcement.

On June 5, 2018, officers with the Cherokee Indian Police Department (CIPD) were conducting a driver license checkpoint in Swain County.  According to court records, CIPD officers stopped the vehicle McCoy was driving.  McCoy’s co-defendant, Patricia Jenkins, was a passenger in the vehicle.  Over the course of the traffic stop, CIPD officers found 33 grams of methamphetamine, drug paraphernalia and a large amount of cash.  Law enforcement also recovered a loaded pistol and shotgun.        

On March 1, 2019, McCoy pleaded guilty to possession with intent to distribute methamphetamine. Jenkins previously pleaded guilty to the same charge and is currently awaiting sentencing.

The DEA and CIPD conducted the investigation.  Assistant United States Attorney John Pritchard, of the U.S. Attorney’s Office in Asheville, is in charge of the prosecution.

 

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced that Anthony Ryan Moore-Powell, 26, of Chicago, Illinois, was sentenced to 14 years in prison, on charges of coercion and enticement of a minor.  U.S. District Judge Martin Reidinger also ordered MoorePowell to serve a lifetime of supervised release and to register as a sex offender.

Ronnie Martinez, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Charlotte, and Chief Herbert Blake of the Hendersonville Police Department, join U.S. Attorney Murray in making today’s announcement. 

According to filed court documents and today’s sentencing hearing, on September 27, 2018, HSI became aware that Moore-Powell was using the Dark Web to locate a minor for the purpose of engaging in sexual activity.  An undercover HSI agent posing as the father of an 8year-old boy began communicating with Moore-Powell.  Over the course of their online exchanges, Moore-Powell agreed to pay $1,500 in exchange for engaging in sexual activity with the minor over the course of a weekend.  Moore-Powell also discussed with the undercover agent the gifts he would bring for the minor, and other details pertaining to the commission of the sexual assault.  Moore-Powell also sent child pornography videos to the undercover agent, requesting that they be shown to the boy.  

On November 15, 2018, Moore-Powell flew from Chicago to Asheville, where he rented a vehicle and checked in at an area hotel.  Moore-Powell then met with an undercover agent who was posing as the child’s father, and paid the agent $200 in cash as down payment in exchange for engaging in sex with the minor.  After the meeting, Moore-Powell returned to his hotel room to await the arrival of the child.  Law enforcement agents arrested Moore-Powell in the parking lot of the hotel.

Law enforcement searched Moore-Powell’s rental vehicle, where they located toys and electronics intended as gifts for the minor, and $1300 in cash.  Moore-Powell was also in possession of computer storage devices that contained child pornography.

On February 25, 2019, Moore-Powell pleaded guilty to coercion and enticement of a minor. He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.  

U.S. Attorney Murray thanked HSI and the Hendersonville Police Department for their investigation of this case. 

The U.S. Attorney’s Office in Asheville prosecuted the case. 

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announces that, on August 20, 2019, an Asheville orthodontist and tax protestor, James E. MacAlpine, 72, was sentenced to prison for tax evasion. U.S. District Judge Martin Reidinger ordered MacAlpine to serve a statutory maximum term of 60 months in prison, followed by 3 years of supervised release, and to pay $2,194,849.03 in restitution to the IRS.

Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI), joins U.S. Attorney Murray in making today’s announcement.

According to documents filed with the court, MacAlpine was the owner/operator of “James E. MacAlpine, DDS,” an orthodontic practice located in Buncombe County, which MacAlpine has operated since at least as early as 1992. At all relevant times, MacAlpine’s orthodontic practice generated taxable income. However, in 1996, MacAlpine stopped filing and paying his federal taxes. With the exception of a period of partial compliance following a state-court conviction in late 2001, MacAlpine has been out of compliance with the federal tax laws ever since. 

By 2014, MacAlpine’s tax debt to the federal government had grown to approximately $1,962,354.11, comprising amounts still due and owing for tax years 1999, 2000, 2002, 2003, 2004, 2005, and 2006, plus penalties and interest.  That year, the United States District Court entered an order finding MacAlpine indebted to the IRS in the same amount.  By the time of his sentencing in this criminal case, MacAlpine’s total tax debt for those years had grown to approximately $2,194,849.03, which is the amount reflected by the Court’s restitution order.

Throughout MacAlpine’s long period of non-compliance with the federal tax laws, the IRS diligently attempted to assess and collect taxes from him.  For example, in 2000, the IRS performed an examination using the available documents for tax years 1996 and 1997, and assessed taxes against MacAlpine for those years. In 2005, the IRS initiated an examination of MacAlpine’s tax liability for tax year 2002, and, soon thereafter, the IRS initiated examinations of MacAlpine’s tax liability for tax years 2003 and 2004. However, MacAlpine routinely obstructed these IRS attempts to determine his actual tax liability. For example, when the Revenue Agent (RA) assigned to conduct the examination of MacAlpine’s tax liability for 2002 attempted to make contact with MacAlpine and to request books and records necessary to make an accurate assessment, MacAlpine failed to meet with the RA or to produce any documentation.  When the RA attempted to get the same information from a different source by issuing summonses to financial institutions, MacAlpine filed a series of frivolous legal challenges to those summonses. When the United States District Court dismissed those frivolous legal challenges, MacAlpine began to inundate IRS personnel—both the RA working the examination for 2002 and the Revenue Officers working collections for MacAlpine’s existing tax debts—with legally unfounded and factually inaccurate correspondence.  For example, in early May of 2006, MacAlpine sent several IRS personnel a “Declaration of Political Intentions” in which he claimed to revoke his own U.S. citizenship, suggesting that it meant he no longer owed any taxes, even for those years with respect to which he had previously admitted that he did owe taxes.

Despite multiple warnings from the IRS that such filings were frivolous and could lead to civil and criminal sanctions, MacAlpine continued in this manner for years.

MacAlpine’s conduct was similarly obstructive with respect to the collections process. For example, between June of 2011 and January 2015, MacAlpine engaged in a game of hide-and-seek with the IRS, moving his money to new, or different, bank accounts every time IRS collections personnel located and garnished the account he had been using for his personal and business affairs.  On at least one occasion, he moved money into an account opened in the name of a shell corporation.  MacAlpine admits that he undertook these actions for the purpose of evading the collection efforts of the IRS.  

On February 4, 2019, MacAlpine pleaded guilty to tax evasion.  Following the sentencing hearing on August 20, 2019, MacAlpine was released on bond, and he will be ordered to report to the United States Bureau of Prisons, upon designation of a federal facility, to begin serving his sentence.  All federal sentences are served without the possibility of parole.

In making today’s announcement, U.S. Attorney Murray thanked the IRS-CI for their outstanding investigative work.

Assistant United States Attorney Daniel Bradley, of the U.S. Attorney’s Office in Asheville, is in charge of the prosecution.

A telemarketer was sentenced to 63 months in prison followed by three years of supervised release today for his role in a $10 million telemarketing scheme that defrauded primarily elderly victims in the United States from call centers in Costa Rica.    

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U. S. Attorney R. Andrew Murray of the Western District of North Carolina, Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s (USPIS) Charlotte Division, Special Agent in Charge Matthew D. Line of IRS Criminal Investigations (IRS-CI) and Special Agent in Charge John A. Strong of the FBI’s Charlotte Field Office made the announcement. 

Carlin Woods, 35, of Merrillville, Indiana, was sentenced by U.S. District Judge Max Cogburn Jr. of the Western District of North Carolina.  Woods pleaded guilty on May 15, 2017, to one count of conspiracy to commit wire fraud, one count of wire fraud and one count of conspiracy to commit money laundering. 

According to admissions made as part of his plea agreement, Woods worked in a call center in Costa Rica in which co-conspirators, who falsely posed as employees of U.S. government agencies such as the Federal Trade Commission (FTC), U.S. Customs and Boder Protection and the IRS, contacted victims in the United States to tell them that that they had won a substantial “sweepstakes” prize.  After convincing victims, many of whom were elderly and vulnerable, that they stood to receive a significant financial reward, Woods and his co-conspirators fraudulently told victims that they needed to make up-front payments for a “refundable insurance fee” before collecting their supposed prize.  The members of the conspiracy used a variety of means to conceal their true identities, such as Voice over Internet Protocol (VoIP) technology, which made it appear that they were calling from Washington, D.C., and other places in the United States. 

Woods arranged for victims to transmit payments to Costa Rica or through people in the United States who collected money from victims and forwarded the payment to Woods and others in Costa Rica, he admitted.

At sentencing it was determined that Woods and his co-conspirators stole more than $1.5 million from victims.     

This case was investigated by USPIS, the IRS and the FBI, with assistance from the FTC and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The case is being prosecuted by Trial Attorneys William Bowne and Jennifer Farer of the Criminal Division’s Fraud Section.  The U.S. Attorney’s Office for the Western District of North Carolina provided substantial assistance with this matter.

Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.  In particular, this past March the Department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep.  The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.   

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced that a former Western Carolina University student and his two co-conspirators were sentenced to prison today on armed robbery charges, for attempting to rob a rival marijuana dealer at gunpoint.  U.S. District Judge Martin Reidinger presided over the sentencing hearings.

Vincent C. Pallozzi, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Sheriff Chip Hall of the Jackson County Sheriff’s Office, join U.S. Attorney Murray in making today’s announcement.

Jonathan Keenan Berkley, 22, of Charlotte, sentenced to 72 months in prison; Kendrick Tyrone Davis, 22, also of Charlotte, was ordered to serve 51 months in prison; and Sawyer Drew Doxtad, 22, of Denton, N.C., was sentenced to 48 months in prison.  In addition to the prison terms imposed, Judge Reidinger ordered each defendant to serve three years under court supervision upon completion of their prison terms, and to pay $38,258.75 as restitution.

According to filed court documents and today’s sentencing hearings, Doxtad was a student at Western Carolina University (the University) in the fall semester of 2017.  During that time, Doxtad resided in an apartment in Sylva, N.C., and engaged in distributing marijuana in and around the University.  Sometime in September 2017, Doxtad met Berkley, who was not an enrolled student at the University, and Berkley moved into Doxtad’s apartment.  Soon thereafter, the third co-conspirator, Davis, also moved into Doxtad’s apartment.  According to court records, the three men engaged in dealing marijuana together.

As described in court documents, Doxtad and Berkley used a social media chat group called “Wheestaylit” to identify local marijuana customers.  Another individual, identified in court documents as J.R., was also a marijuana dealer in the area and a user of the same chat group.  According to court records, J.R. had posted on the chat group a picture of him with multiple pounds of marijuana.  Berkley, Doxtad and Davis conspired to rob J.R. of his marijuana and sell it to their own customers. 

According to court records, on October 24, 2017, Davis and Doxtad purchased a shotgun from an area pawnshop with the intent of using it to rob J.R. The same day, Doxtad and Berkley contacted J.R. pretending to be interested in purchasing marijuana from him, and arranged to meet him at an apartment in Cullowhee, N.C.  Berkley, Davis, and Doxtad arrived at the apartment later that evening and attempted to rob J.R. of the marijuana.  Over the course of the robbery, Berkley, who was holding the shotgun, discharged it, injuring an individual inside the apartment. The three men fled the scene. 

Each of the three defendants previously pleaded guilty to attempted robbery by force.  They are currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

U.S. Attorney Murray thanked the ATF and the Jackson County Sheriff’s Office for their investigation of this case.

The U.S. Attorney’s Office in Asheville prosecuted the case.

CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced three men for conspiring to defraud the U.S. Small Business Administration (SBA) through a fraudulent loan scheme, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

Rafid Latif, 54, of Charlotte, N.C., was sentenced to 84 months in prison; Imtiaz Shareef, 40, of Bossier City, Louisiana, was sentenced to 57 months in prison; and Ejaz Shareef, 42, of Mt. Royal, New Jersey, was handed down a 48-month prison sentence.  In addition to the prison terms imposed, Judge Conrad ordered each defendant to serve two years under court supervision upon completion of their prison terms, and to pay $795,435.33 as restitution. Latif was ordered to pay additional restitution in the amount of $999,487.99.  

In December 2018, a federal jury convicted the three men of conspiracy to commit wire and bank fraud and conspiracy to commit money laundering A fourth co-defendant, Biren Seth, 42, of West Caldwell, New Jersey, previously pleaded guilty to conspiracy to commit wire and bank fraud for his role in the scheme, and was sentenced to 33 months in prison, followed by two years of supervised release.

According to filed court documents, evidence presented at trial, and today’s sentencing hearing, from 2010 to 2018, Latif, Ejaz Shareef, and Imtiaz Shareef, conspired with each other and Sheth to defraud the U.S. Small Business Administration (SBA), various banks, and an insurance company through the operation and sale of two Charlotte-area hotels, the Days Inn located at 1408 West Sugar Creek Road, and the Arlington Suites located at 4416 South Tryon street. 

Trial evidence established that the conspiracy involved three inter-related schemes: an insurance fraud scheme; a fraudulent loan-kickback scheme; and a short-sale scheme.  According to court records, in 2010, Latif, Ejaz Shareef and Imtiaz Shareef were the operators of the Days Inn hotel.  In that capacity, the three co-defendants engaged in a scheme to obtain fraudulent reimbursements from an insurance company for fictitious repairs and remodeling expenses at the Days Inn hotel.  By submitting fake documents and bogus proofs of payment, the co-defendants obtained more than $825,000 from the insurance company, and then used a portion of the money to facilitate bank loan fraud schemes involving the two hotels. 

According to trial evidence, in 2012, the defendants obtained an SBA loan from a bank in order to finance the purchase of the Days Inn hotel.  The co-conspirators obtained the loan by making several false material representations including presenting the bank with fraudulent documents such as an inflated lease-purchase agreement; by misrepresenting the source of the down payment, which was the fraudulently-obtained insurance money; and by failing to disclose to the bank that the co-conspirators would receive nearly $700,000 as a kickback from the hotel’s inflated sale price.

In addition to the fraudulent scheme involving the Days Inn hotel, Sheth and Latif engaged in separate fraudulent loan scheme involving the Arlington Suites hotel. Trial evidence established that, as a favor for Sheth’s assistance in facilitating the purchase of the Days Inn hotel, Latif agreed to help Sheth with the fraudulent short sale of the Arlington Suites hotel. Sheth owned the Arlington Suites hotel, which was in part financed with an SBA loan.  With Latif’s help, Sheth defrauded SBA by convincing SBA to agree to a short-sale when Sheth fell behind on his payments.  According to trial evidence, Sheth arranged to “sell” the Arlington Suites hotel to a corporation in Latif’s name.  This sham sale was in name only. According to trial evidence, Sheth convinced SBA to charge off nearly $1 million of the balance Sheth owed on the existing loan.  Because Latif was only a straw purchaser and Sheth remained the true owner of the hotel, the $1 million represented an immediate increase in Sheth’s equity in the Arlington Suites hotel.

According to evidence presented at trial, Latif further defrauded SBA in connection with the Arlington Suites sale by obtaining another SBA loan to finance the purported purchase of the hotel.  Latif secured the SBA loan by using false and fraudulent documentation and making material representations about the down-payment money, among other things. 

In 2014, Sheth transferred to Latif $690,000 in kickback funds from the Days Inn sale, after Latif threatened to expose the Arlington Suites short-sale fraud.

In handing down today’s sentences, Judge Conrad said that the defendants used a “web of lies” to defraud “multiple institutions,” and noted the importance of deterring “this type of criminal activity.”  

U.S. Attorney Murray credited the Charlotte Division of the FBI for the investigation of this case, and thanked the SBA for its invaluable assistance.

Assistant U.S. Attorneys Caryn Finley and William Miller, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced that Thomas Derreck Charlet, 40, of Valdese, N.C., appeared in federal court today on charges of illegal possession of a destructive device.  Charlet was indicted by a federal grand jury on August 6, 2019, and was arrested by law enforcement this morning.  The federal indictment also charges Charlet with possession of ammunition by a felon and drug trafficking.

According to allegations in the federal indictment, on or about November 24, 2018, Charlet knowingly possessed a destructive device known as a pipe bomb, not registered to him in the National Firearms Registration and Transfer Record.  In addition to the explosive device, the indictment alleges that, during the relevant time period, Charlet was found to be in possession of ammunition, which he is prohibited from possessing due to prior felony convictions. In addition to the firearm offenses, Charlet is also charged with knowingly and intentionally possessing with intent to distribute methamphetamine.

Charlet appeared in federal court before U.S. Magistrate Judge W. Carleton Metcalf.  The maximum penalty for possession of a pipe bomb and possession of ammunition by a convicted felon is up to 10 years in prison and a $250,000 fine for each offense.  The drug trafficking charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine. 

The charges in the indictment are allegations. Charlet is presumed innocent until proven guilty beyond reasonable doubt in a court of law.

In making today’s announcement U.S. Attorney Murray commended the Valdese Police Department for their investigation of the case, and thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the North Carolina State Bureau of Investigation for their assistance with this case. 

Assistant United States Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville is in charge of the prosecution.

STATESVILLE, N.C. – U.S. Attorney Andrew Murray announced today that federal gun prosecutions stemming from the Western District’s Project Safe Neighborhoods (PSN) initiative have resulted in prison terms for five repeat offenders, for illegally possessing firearms or ammunition despite having prior felony convictions.

U.S. District Judge Kenneth D. Bell sentenced Wayne Lamont Johnson, 39, of Statesville, to 63 months in prison, followed by three years of supervised release, on charges of possession of a firearm by a felon.  According to plea documents and statements made in court, on September 13, 2017, officers with the Statesville Police Department recovered a firearm from inside the vehicle Johnson was driving.  Johnson has a prior Sale of Cocaine felony conviction and he is prohibited from possessing a firearm.

Judge Bell also ordered Patrick Maurice Anto Curruth, 27, of Statesville, to serve 50 months in prison, followed by two years of supervised release. According to court records, on April 11, 2013, Curruth was convicted of multiple state charges, including Robbery with a Dangerous Weapon, and Assault with a Deadly Weapon Inflicting Serious Injury, and received a sentence of up to 84 months in prison.  On February 9, 2018, investigators with the Statesville Police Department executed a search warrant at Curruth’s residence, and recovered a loaded Ruger, model P94, .40 caliber semi-automatic pistol.  Curruth pleaded guilty to possession of a firearm by a felon on January 10, 2019.

On Monday, U.S. District Judge Max O. Cogburn, Jr., sentenced Aldrick Newt Taylor, 21, of Charlotte, to 57 months in prison and three years of supervised release for possession of a firearm by a felon.  Court records show that on March 7, 2018, Taylor knowingly and intentionally possessed a stolen Taurus PT 111 G2 9mm pistol. The firearm was loaded with one round of ammunition in the chamber and four rounds in the attached magazine.  According to court records, Taylor possessed the firearm in connection with another felony offense, that being possession with intent to distribute marijuana.

In a separate case, on Monday, Judge Cogburn also ordered Kendrell Sanders, 29, of Charlotte, to serve 57 months in prison and three years of supervised release on charges of possession of a firearm by a felon and possession of ammunition by a felon. As Sanders previously admitted in court, on June 8, 2018, Sanders was found to be in possession of a Glock 43 9mm caliber semi-automatic pistol, and a Taurus 605 357 Magnum revolver.  On August 1, 2018, Sanders knowingly and intentionally possessed 115 rounds of firearm ammunition. At the time Sanders possessed the firearms and the ammunition he was prohibited under federal law from doing so. 

Judge Cogburn also sentenced today Eric Lorenzo Davis, 28, of Charlotte, to 15 months in prison and one year year of supervised release.  Court records show that on July 27, 2018, Davis possessed a Smith and Wesson, model M&P 9, 9mm caliber pistol. Davis was previously convicted of one or more felony offenses and he is therefore prohibited form lawfully possessing a firearm. 

In announcing today’s sentences, U.S. Attorney Murray commended the work of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Statesville Police Department, the Charlotte-Mecklenburg Police Department, and the State Bureau of Investigation for their continued work and coordination on PSN cases.

Project Safe Neighborhoods is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.                  

Assistant U.S. Attorney (AUSA) Erik Lindahl prosecuted the case against Johnson.  The prosecution against Curruth was handled by AUSA Cortney Randall.  AUSA David Kelly was in charge of both Taylor and Sanders’ prosecutions, and Special Assistant U.S. Attorney Stephanie Spaugh prosecuted the case against Davis.

CHARLOTTE, N.C. – De’Asion Malik Coleman, 21, and Marquise Tyrelle Sharpe-Tall, 21, both of Charlotte, were sentenced to prison today on carjacking and firearms offenses, announced the U.S. Attorney’s Office for the Western District of North Carolina.  U.S. District Judge Robert J. Conrad, Jr. sentenced Coleman to 130 months in prison and three years of supervised release.  Sharpe-Tall was sentenced to 141 months in prison, followed by three years of supervised release.

Vincent C. Pallozzi, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD) join the U.S. Attorney’s Office in making today’s announcement.

According to court documents and today’s sentencing hearing, on November 5, 2017, around 10:00 p.m., Coleman and Sharpe-Tall carjacked a 2010 Nissan Versa, while the vehicle was parked outside a store at 6140 The Plaza, in Charlotte.  A male victim, identified as “J.B.” was sitting in the passenger seat of the vehicle.  Court records show that Coleman opened the vehicle’s driver side door and pointed a firearm at the victim. Sharpe-Tall opened the passenger door, grabbed the victim by the neck, pulled him out of the vehicle, and punched him several times.  The two men then drove off in the stolen vehicle. 

Court records show that the victim called 911 and reported the carjacking. CMPD officers located the stolen vehicle and began to follow it.  Coleman and Sharpe-Tall attempted to evade the police.  After crashing the vehicle, the two men proceeded to flee on foot, but were taken into custody shortly thereafter.

In September 2018, both defendants pleaded guilty to carjacking and brandishing a firearm during, in relation to, and in furtherance of a crime of violence.  They are currently in custody and will be transferred to custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The investigation was handled by ATF and CMPD.  Assistant U.S. Attorney Erik Lindahl of the U.S. Attorney’s Office in Charlotte prosecuted the case.

CHARLOTTE, N.C. – Today, Chief U.S. District Judge Frank D. Whitney sentenced Basil Lanas Noble, 50, a Jamaican national residing in Palm Springs, Florida, to 27 years in prison and five years of supervised release on drug trafficking conspiracy and money laundering conspiracy charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. 

According to filed court documents and today’s sentencing hearing, from at least 2017 to November 2018, Noble was the leader of a drug conspiracy responsible for trafficking large amounts of narcotics in and around Mecklenburg County.  Noble and his co-conspirators received the drugs from a supply source in Mexico.  According to court records and statements made in court, when law enforcement arrested Noble in November 2018, they seized approximately 1.4 kilograms of methamphetamine from inside his vehicle.  Law enforcement also recovered one kilogram of cocaine and one kilogram of heroin, as well as three firearms and a bulletproof vest, from a residence that Noble maintained for drug trafficking purposes. Court records show that the conspiracy was also responsible for laundering the drug proceeds and sending the money back to the supply source in Mexico.

Noble previously pleaded guilty to conspiracy to distribute and possession with intent to distribute methamphetamine; distribution and possession with intent to distribute methamphetamine; and money laundering conspiracy.

Noble will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole. 

This case is as part of an ongoing investigation by the Wester District’s Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the federal arrest and prosecution of more than 200 methamphetamine traffickers and the seizure of more than 100 pounds of methamphetamine, $1,000,000 in United States currency and more than 60 firearms.  OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

In making today’s announcement U.S. Attorney Murray thanked the investigators from the Department of Homeland Security, Homeland Security Investigations and Huntersville Police Department, as well as the Drug Enforcement Administration, the Charlotte-Mecklenburg Police Department, North Carolina State Highway Patrol, North Carolina State Bureau of Investigation, North Carolina Alcohol Law Enforcement, the Gastonia Police Department, the Gaston County Police Department, the Mooresville Police Department, the Cleveland County Sheriff’s Office, the Hickory Police Department, the Caldwell County Sheriff’s Office, the Catawba County Sheriff’s Office, the Iredell Count Sheriff’s Office, the Alexander County Sheriff’s Office, the Boone Police Department, the Mocksville Police Department, the Cornelius Police Department, the Rowan County Sheriff’s Office, and the Mint Hill Police Department for their assistance in this investigation.

Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte prosecuted the case.

 

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Keshon Kevino Hawthorne, 27, of Jamaica, was sentenced by Chief U.S. District Judge Frank D. Whitney to 33 months in prison and three years of supervised release for smuggling cocaine at the Charlotte-Douglas International Airport (Charlotte airport). 

According to filed court documents and today’s sentencing hearing, on November 4, 2018, Hawthorne flew into Charlotte onboard a flight that originated in Montego Bay, Jamaica, with a final destination to New York City.  At the airport, Customs and Border Patrol (CBP) agents inspected Hawthorne’s luggage, and seized more than one kilogram of cocaine hidden inside his two suitcases. According to court records, Hawthorne told law enforcement that he had been paid $600 by an individual in Jamaica to deliver the drugs to New York City.  Hawthorne also told law enforcement that he had traveled to the United States on 14 occasions in the preceding year, each time smuggling cocaine hidden inside his luggage.

Hawthorne previously pleaded guilty to drug trafficking conspiracy, possession with intent to distribute cocaine, and unlawful importation of cocaine into the United States.  He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

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In a separate case, on Monday, July 22, 2019, Judge Whitney sentenced Christopher Anthony Samuels, 37, of Montego Bay, Jamaica, to 30 months in prison and three years of supervised release on cocaine trafficking and related charges.   According to filed court documents, in November 2018, Samuels flew into the Charlotte airport onboard a flight that originated in Montego Bay, Jamaica.  Samuels was scheduled to connect in Charlotte, and fly the same day to New York City.  Court records show that, upon entry into the United States, Samuels’ suitcase and backpack were inspected by CBP agents at the airport.   Samuels was sent to secondary inspection, during which time CBP officers X-rayed Samuels’ luggage. Upon further inspection, CBP officers, working jointly with Homeland Security Investigations (HSI), discovered two taped bags weighing approximately two kilograms of cocaine, hidden within the suitcase’s bottom liners. As Samuels previously admitted in court, he intended to deliver the cocaine to co-conspirators located in New Jersey.  Samuels pleaded guilty to drug trafficking conspiracy, possession with intent to distribute cocaine, and unlawful importation of cocaine into the United States. 

In making today’s announcement, U.S. Attorney Murray noted that both cases are the result of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Airport Drug Interdiction Initiative, that targets international drug smuggling and financial crimes, including money laundering, bulk cash smuggling, and unlicensed money transmitters/transporters that utilize air travel to further their criminal enterprise.  Through this initiative, HSI incorporates the collaborative efforts of multiple law enforcement agencies, to include CBP, North Carolina Department of Public Safety’s Divisions of Alcohol Law Enforcement (ALE) and Department of Correction (DOC), and the Charlotte-Mecklenburg Police Department.  

Sanjeev Bhasker, Assistant U.S. Attorney for the Western District of North Carolina in Charlotte prosecuted both cases.

 

CHARLOTTE, N.C. – Edwin R. Barkley, 63, of Charlotte, was sentenced today by Chief U.S. District Judge Frank D. Whitney to 30 months in prison, followed by one year of supervised release, for operating a large-scale fraudulent scheme involving the purchase and sale of stolen goods and merchandise through his Charlotte-based storefront business, Tool King USA (Tool King).

Reginald A. DeMatteis, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department join the U.S. Attorney’s Office in making today’s announcement.

According to filed court documents and statements made in court, from at least September 2015 through October 2018, Barkley operated the Tool King as a “fence,” which is a business that buys stolen merchandise from multiple “boosters.”  A booster is someone who steals goods and merchandise and sells them to a fence.  Court records show that Barkley bought from multiple boosters large-ticket items such as power tools, vacuum cleaners, generators, and home electronic goods, at a fraction of their retail value.  Barkley then sold the stolen merchandise on an e-commerce platform at or near ninety percent of their retail value, and used the profits to pay for his daily living expenses.

In March 2019, Barkley pleaded guilty to interstate transportation of stolen goods.  He is currently released on bond and will be ordered to report to the federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

In announcing Barkley’s sentence, Judge Whitney stated that the defendant ran a “very sophisticated operation” and that “keeping fingerprints” off the stolen goods does not mean that you are innocent.

This case was the result of the investigative efforts of CMPD and the Secret Service.  The CMPD and the Secret Service have established a fully integrated partnership to combat the most significant organized criminal groups operating in Charlotte.  Through this partnership, this unit has successfully leveraged local and federal resources, personnel, expertise and authorities to identify and combat the criminals and criminal organizations that have the largest negative impact on the community.

Assistant U.S. Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte prosecuted the case.

 

 

CHARLOTTE, N.C. B U.S. District Judge Max O. Cogburn, Jr. sentenced late yesterday Keith Antonio Barnett, 47, of Gastonia, N.C., to 23 years in prison and six years of supervised release on drug conspiracy and related drug charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Murray is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; John Eisert, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Charlotte; Chief Robert C. Helton of the Gastonia Police Department; and Chief Joseph D. Ramey of the Gaston County Police Department.

According to filed court documents, the sentencing hearing, and evidence presented at Barnett’s trial, beginning from at least 2016, Barnett was part of a drug conspiracy operating in Gaston County, and was responsible for trafficking more than 280 grams of crack cocaine.  The evidence at trial also established that, in October 2017, while executing a search warrant at a Gaston County residence that was being used as a drug house, law enforcement arrested Barnett, and recovered more than 120 grams of crack cocaine, over 40 grams of cocaine, more than six grams of heroin, and approximately $3,000 in cash. 

A federal jury convicted Barnett in November 2018 of conspiracy to distribute and possession with intent to distribute crack cocaine; distribution and possession with intent to distribute crack cocaine; and possession with intent to distribute cocaine, crack cocaine, and heroin.

Barnett received an enhanced sentence because the Court found the defendant made credible threats of violence against witnesses, committed obstruction by testifying falsely at trial, and maintained a premises for distribution of controlled substance.

Barnett has a prior criminal history that includes two convictions for Possession of Crack Cocaine in 1991; Indecent Liberties with a Child in 1997; Criminal Domestic Violence of a High and Aggravated Nature in 2006; Failure to Register as a Sex Offender in 2010; and Failure to Register as a Sex Offender in 2013.

Barnett is currently in federal custody. All federal sentences are served without the possibility of parole.

This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF), which is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

In making today’s announcement U.S. Attorney Murray credited the FBI and HSI in Charlotte for their investigation of this case, and thanked the Gastonia Police Department and Gaston County Police Department for their invaluable assistance. 

Assistant U.S. Attorneys Steven R. Kaufman and Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.

 

CHARLOTTE, N.C. - Today, a federal grand jury in Charlotte returned a criminal bill of indictment against Susan Watson, 41, of Gastonia, N.C., charging her with wire fraud, for embezzling at least $200,000 from her employer, the North and South Carolina Division of a Non-Profit Company, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

Reginald A. DeMatteis, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, joins U.S. Attorney Murray in making today’s announcement.

According to allegations contained in the indictment, beginning in July 2015, Watson was employed as a payroll administrator for the North and South Carolina Division of a Non-Profit Company (Company A), at their office in Charlotte, N.C.  Company A’s employees received their paychecks through pre-paid debit cards, direct deposit, and by check.  As payroll administrator, Watson knew which employees were paid by pre-paid debit card and which were paid by direct deposit and check. Watson was also responsible for providing payroll information to Company A’s payroll processors, who used the information to load the employees’ pre-paid debit cards by drawing funds from Company A’s bank account.

The indictment alleges that from 2015 through November 2018, Watson exploited her position as payroll administrator to embezzle money from her employer, by using the personal identification information of Company A’s current and former employees to create fraudulent pre-paid debit cards in their names. Once the pre-paid debit cards were created, Watson loaded funds onto the pre-paid debit cards by logging in and accessing the payroll processors’ dedicated web portals to transmit and submit payroll information.  After activating the pre-paid debit cards, the indictment alleges that Watson used the pre-paid debit cards for her personal benefit, including to make ATM cash withdrawals.  In total, Watson embezzled at least $200,000 from the non-profit.

A federal summons for Watson has been issued.  The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine. 

All charges contained in the indictment are allegations.  The defendant is innocent until proven guilty beyond reasonable doubt in a court of law.

In making today’s announcement U.S. Attorney Murray thanked the United States Secret Service for their investigation of this case, and the Charlotte Mecklenburg Police Department for their invaluable assistance.

Assistant U.S. Attorney Caryn Finley of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Robert Pantori, Jr., 51, of Charlotte, was sentenced by U.S. District Judge Robert J. Conrad, Jr. to 108 months in prison on child pornography charges.  Judge Conrad also ordered Pantori to serve twenty years of supervised release and to register as a sex offender following his release from prison.

According to court documents and statements made in court, on January 27, 2017, law enforcement became aware that Pantori was using a peer to peer program to transport child pornography from his computer to another user’s computer via the internet.   Law enforcement executed a search warrant at Pantori’s residence, seizing his computer, and other electronic devices.  A forensic examination of those devices revealed that Pantori possessed numerous images and videos of children engaging in sexually explicit conduct, including children as young as four.

In July 2018, Pantori pleaded guilty to transportation and possession of child pornography.  He is currently in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

U.S. Attorney Murray thanked the Charlotte-Mecklenburg Police Department for their investigation of this case. 

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Judge Conrad also sentenced today Patrick Hinson, 34, of Dallas, N.C. to 97 months in prison, followed by twenty years of supervised release, for receiving child pornography.  Hinson was also ordered to register as a sex offender upon completion of his sentence.

According to court records, for more than a decade, Hinson used several peer to peer programs to search for and download child pornography.  Court records show that on or about December 19, 2015, Hinson knowingly used a peer to peer program to receive a child pornography video on his computer via the internet.  Law enforcement executed a search warrant at Hinson’s residence, seizing his computer.  A forensic examination of those devices revealed that Hinson possessed numerous images and videos of children engaging in sexually explicit conduct. 

In August 2018, Hinson pleaded guilty to receiving child pornography. 

U.S. Attorney Murray thanked the Federal Bureau of Investigation for their work on this case. 

Assistant U.S. Attorney Cortney Randall, of the U.S. Attorney’s Office in Charlotte, handled both prosecutions.

Both cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood mars060hals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

 

 

STATESVILLE, N.C. – United States Attorney Andrew Murray announced today that Curtis Lee Rucker, Jr. 36, of Statesville, was sentenced to 96 months in prison and three years of supervised release for illegally possessing a stolen firearm, with which he assaulted a female victim.  U.S. District Judge Kenneth D. Bell presided over Rucker’s sentencing.

Vince Pallozzi, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief David W. Addison of the Statesville Police Department join U.S. Attorney Murray in making today’s announcement.

According to court records, plea documents and statements made in court, on June 30, 2018, in the early hours of the morning, the Statesville Police Department received a 9-1-1 call for a domestic disturbance at the Times Gas Station, located at 1205 E. Garner Bagnal Blvd. in Statesville.   Court records show that the caller told the 9-1-1 operator that a male was assaulting a female with a firearm.  Officers arrived at the scene and observed an individual, later identified as Rucker, matching the caller’s description.  Officers arrested Rucker, and located nearby a firearm, loaded with two rounds of ammunition.

According to court records, officers spoke with two witnesses at the gas station who identified Rucker as the individual possessing the firearm.  The witnesses stated that Rucker assaulted the female victim with the firearm, and that during the assault the magazine fell from the firearm.  Rucker reinserted the magazine into the firearm and proceeded to chase the victim.  Rucker eventually discarded the firearm where it was later located by law enforcement. Surveillance video from the gas station shows Rucker exiting a vehicle at the gas station, assaulting the victim, striking her in the head with his firearm, and causing her to fall on the ground.  Once on the ground, Rucker pointed the firearm in the victim’s direction, and proceeded to kick and chase the victim around the vehicle, with the firearm pointed in her direction.  Law enforcement later determined that the seized firearm was a black Ruger LCP .380 handgun, which had been reported as stolen.

In February 2019, Rucker pleaded guilty to possession of a firearm by a felon.  Rucker, who was convicted in 2015 for felon in possession of a firearm in State court, is prohibited from possessing a firearm or ammunition. 

Rucker has been in federal custody and will be transferred to the custody of the federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole. 

In making today’s announcement U.S. Attorney Murray thanked the ATF and the Statesville Police Department for their investigation of this case.

Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.

STATESVILLE, N.C. – U.S. District Judge Kenneth D. Bell sentenced today Timothy Scott Hardin, 44, of Boone, N.C. to 180 months in prison and a lifetime of supervised release for receiving child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Judge Bell also ordered Alexander to register as a sex offender following his release from prison.

According to filed court documents and today’s sentencing hearing, on October 6, 2016, the Boone Police Department became aware that an individual, later identified as Hardin, was receiving child pornography over the internet. Hardin’s child pornography collection included multiple images and videos depicting children engaged in sexually explicit conduct, including images and videos depicting the rape of prepubescent girls.  According to court records, when law enforcement attempted to arrest Hardin at his residence, Hardin pulled a handgun from the waistband of his pants.  After a brief struggle with law enforcement over the firearm, Hardin was incapacitated.  Court records show that Hardin later told law enforcement that his plan had been to point his gun at the arresting officer and to force law enforcement to kill him.

In January 2019, Hardin pleaded guilty to receiving child pornography.  In making today’s announcement, U.S. Attorney Murray thanked the North Carolina State Bureau of Investigation and the Boone Police Department for their investigation of this case. 

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Yesterday, Judge Bell sentenced Joshua Dane Keener, 33, of Hickory, N.C. to 14 years in prison, followed by a lifetime of supervised release, for receiving visual depictions of a minor engaging in sexually explicit conduct. 

According to court records, following a complaint from a concerned citizen, law enforcement initiated an investigation into Keener, and discovered that Keener was receiving child pornography from an individual located in South Africa.  While Keener was being investigated for this case, law enforcement discovered that he was also communicating via messaging applications with a 14-year-old minor female in Indiana.  During these conversations, Keener requested and received videos of the minor engaging in sexually explicit conduct.  Law enforcement arrested Keener at a hotel in Hickory. Law enforcement found in Keener’s home sexually explicit videos and images of child pornography, including videos and images of toddlers. 

In February 2019, Keenan pleaded guilty to receiving child pornography. 

U.S. Attorney Murray thanked the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Charlotte, and the North Carolina State Bureau of Investigation for their work on this case. 

Assistant U.S. Attorney Cortney Randall, of the U.S. Attorney’s Office in Charlotte, handled both prosecutions.

Both cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood mars060hals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

ASHEVILLE, N.C. – Today, a federal grand jury in Asheville returned a criminal bill of indictment against former Buncombe County Commissioner Ellen Madans Frost, 64, of Asheville, N.C., charging her with conspiracy to commit federal program fraud, federal program fraud, and mail fraud, for her involvement in a scheme to use more than $575,000 in Buncombe County funds to sponsor equestrian activities in North Carolina and Florida, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. 

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Director Robert Schurmeier of the North Carolina State Bureau of Investigation (SBI); and Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI), join U.S. Attorney Murray in making today’s announcement.

Frost was elected as Commissioner for Buncombe County (the County) in November 2012, and continued to serve until December 2018.  According to allegations contained in the 11-count indictment, beginning in early 2014 through November 2017, Frost conspired with former County Manager, Wanda Skillington Greene, to execute a scheme to defraud the County of more than $575,000, by misapplying funds allocated to the County’s Economic Development Program to support various equestrian enterprises in North Carolina and Florida.  The indictment alleges that, as a horse owner and an avid supporter of equestrian activities including competitions and shows, Frost had a personal interest in supporting equestrian venues such as the Tryon International Equestrian Center (the Tryon Center) located in Polk County, and its affiliate, the Palm Beach International Equestrian Center located in Wellington, Florida.  

As alleged in the indictment, in or about 2014, Frost began to speak with Greene about Frost’s desire to support the Tryon Center and related equestrian activities on behalf of the County.  As a result, Frost and Greene developed a scheme to enter into sponsorship and advertising contracts with the Tryon Center, the Palm Beach International Equestrian Center, and affiliated equestrian enterprises, and to pay for those contracts using monies from the County’s Economic Development Incentive Fund.  The equestrian enterprises were unaware of the criminal nature of the scheme, including the lack of authorization for Frost and Greene to enter into these negotiations and agreements without the knowledge and approval of the Board of Commissioners, as required by State law.

The indictment alleges that Greene and Frost took steps to cover the fraudulent scheme and to hide the County’s involvement in these unauthorized sponsorship and advertising contracts, by using the funds to promote the Asheville Regional Airport (the Airport), even though the Airport is an independent entity not governed or funded by the County.  To perpetuate the cover-up, Greene and Frost ensured that the contracting parties understood that all sponsored events, signage, and advertisements would bear the name and logo of the Asheville Regional Airport, and that no signage or advertisements would be in the name of Buncombe County, even though the County was the paying sponsor.  Frost and Greene never informed other County Commissioners about the existence of these contracts, or that County funds were used to pay for the contracts on behalf of the Airport. 

The indictment alleges that, in addition to promotional material and advertising for the Airport, the County’s sponsorship contracts guaranteed access to amenities at the two equestrian venues exclusive to high-level sponsors.  Specifically, the Tryon Center contract included access to a “Members Only” VIP area known as the Legends Club, “one (1) premium location VIP pavilion table,” a “full spread buffet, and a premium selection of liquor, beer, and wine,” and premium VIP parking.  Entrance to the Legends Club and use of the VIP table was limited to persons whose names were on the admission list.  The indictment alleges that the individual who ordinarily served as the contact person and approved the use of the County-funded table at the Legends Club was Frost, and anyone who wanted to obtain permission to use the table and be added on the admission list had to contact her.  The indictment further alleges that during the 2015 and 2016 seasons at the Tryon Center, Frost repeatedly used the VIP table, and invited her friends and other guests to attend the events.  Furthermore, Frost did not disclose to the other Commissioners the existence of the VIP table, nor her use of it.

According to allegations in the indictment, on at least two occasions prior to the signing of the sponsorship and advertising contracts, Frost and Greene sought to advance their fraudulent scheme to use County money to promote equestrian activities at the Tryon Center, by inviting to dinner individuals affiliated with the equestrian enterprises and the Asheville business community.  The two dinners, totaling $5,877.94, took place at Asheville-area hotels, and were paid for by Greene using her personal credit card, for which she was later reimbursed by the County.  Neither Frost nor Greene informed the other members of the Board of Commissioners about these dinners.

In addition to the dinners, the indictment alleges that Greene and Frost took at least two County-funded trips related to this scheme.  One trip was to Wellington, Florida, to attend the “Winter Equestrian Festival” at the Palm Beach International Equestrian Center, during a time Frost and Greene would have access to the VIP table.  The second trip was to Saratoga Springs, New York, which Frost and Greene took supposedly to visit the equine quarantine facility in Newburgh, New York, and to explore the possibility of establishing such a facility near the Asheville airport.  As the indictment alleges, Greene and Frost never visited the facility in Newburgh during the trip.  Instead, the pair attended horse races, and visited a large private farm where a horse once owned by Frost was stabled.  The total cost of the two trips was $8,841.56.  On both occasions, Greene paid for all travel expenses for herself and Frost, and later received full reimbursement by the County.

The indictment alleges that other members of the Board of Commissioners eventually learned about approximately $26,000 of payments after an article was published in an Asheville newspaper.  Even then, Greene took steps to cover the extent of fraud, forging documents to reduce the apparent amounts that the County paid for the sponsorships and advertising, and falsely maintaining that the expenditures were the entirety of the County’s payments to the equestrian enterprises. 

The indictment further alleges that Frost did not tell, at any time, any of the other Commissioners that she had already known of payments being made to the aforementioned equestrian enterprises, or that she knew County funds were used to pay for sponsorships and advertising on behalf of the Airport.  Frost also did not tell any of the other Commissioners that she was aware of the existence of contracts between the County and the equestrian enterprises, or inform them of the full amounts of those contracts.  Furthermore, as alleged in the indictment, as recently as November 2017, Frost continued to conceal the extent of her knowledge and participation in the scheme, and went as far as to be quoted in a local paper as saying that she was “surprised as everyone at the amount” of the contracts, stating that this was “absolutely not” a good expense.

A federal summons for Frost has been issued.  All charges contained in the indictment are allegations.  The defendant is innocent until proven guilty beyond reasonable doubt in a court of law.

The federal program fraud conspiracy charge carries a maximum penalty of five years in prison.  The maximum prison term for each federal program fraud charge is 10 years, and the mail fraud charges each carry a maximum prison term of 20 years.

Wanda Greene previously pleaded guilty to public corruption and to other charges for unrelated schemes involving the misuse of County funds and is awaiting sentencing.

In making today’s announcement U.S. Attorney Murray commended the FBI, IRS-CI and the SBI for their investigation of this case, and noted that the investigation into corruption within the Buncombe County Government is ongoing.

 

CHARLOTTE, N.C. – Lili Bian, a 59-year old citizen of China, and a lawful permanent resident of the United States living in Charlotte, appeared in federal court today and pleaded guilty to failing to report a foreign bank account with a balance exceeding $10,000, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  U.S. Magistrate Judge David C. Keesler presided over Bian’s guilty plea. 

Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI) and :  Robert J. Murphy, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office join U.S. Attorney Murray in making today’s announcement.

According to court documents and today’s court proceedings, Bian admitted that on or about June 30, 2015, she knowingly and willfully failed to file with the Department of the Treasury a Foreign Bank and Financial Account Form TD F 90-22.1 (FBAR), as is required by all citizens or residents in the United States who had a financial interest in, or signature or other authority over a financial account in a foreign country with an aggregate value of more than $10,000.  The FBAR requires the filer to identify the financial institution with which the account is held, the type of account, the account number, and the maximum value of the account during the calendar year of which the FBAR is filed.  Bian admitted in court today that, during calendar year 2014, she failed to report that she had an interest in, or signature authority over, a financial account at FungChen Securities, a financial institution located in China, with an aggregate value of more than $10,000.  

Bian’s son, Shi Yun Zhou, was sentenced in January 2019 to nine years in prison on drug trafficking conspiracy and money laundering conspiracy charges.  Pursuant to her plea agreement, Bian has agreed to forfeit over $3 million in U.S. currency, funds, and other assets, including multiple residences and luxury vehicles, many of which are titled in both Bian and Zhou’s names, and were previously identified for forfeiture in the Zhou case.

The charge of willful failure to file an FBAR carries a maximum prison term of five years and a $250,000 fine.

In making today’s announcement, U.S. Attorney Murray thanked IRS-CI and the DEA for their investigation of this case, and commended the U.S. Marshals Service, the Pineville Police Department, the Cornelius Police Department, the Charlotte-Mecklenburg Police Department, the Mint Hill Police Department, the Huntersville Police Department, the Monroe Police Department, and the Gastonia Police Department for their invaluable assistance.

Assistant U.S. Attorneys Sanjeev Bhasker and Caryn Finley are in charge of the prosecution.  Assistant U.S. Attorney Benjamin Bain-Creed is handling the forfeiture proceedings.

 

CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte indicted Suleman Alhassan, 36, a Ghanaian national residing in Charlotte, on wire and mail fraud conspiracy and mail fraud changes, for perpetrating romance and precious metal scams totaling more than $1,000,000 against older victims, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  The criminal indictment was unsealed in federal court today, following Alhassan’s arrest.

David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service, and John Eisert, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Charlotte join U.S. Attorney Murray in making today’s announcement.

According to allegations contained in the indictment, beginning in or about March 2016, Alhassan and his unindicted co-conspirators operated a romance scheme based, in part, in Ghana and in Charlotte.  The indictment alleges that Alhassan and his co-conspirators, using fake identities, used online dating websites and other methods to target potential fraud victims, who were frequently elderly, with false promises of a romantic relationship.  As part of the scheme and in addition to developing fake romantic relationships with the victims, Alhassan and others falsely claimed to own large quantities of gold located in Ghana and falsely told victims that the victims needed to send funds via wire transfer services, money orders, and in cash to Alhassan and his co-conspirators to help ship the gold from Ghana to the United States, or to another foreign country, where the gold could be sold.  The indictment further alleges that Alhassan and his co-conspirators falsely told the victims that they would receive a share of the profits when the gold was sold or brought into the United States.

According to the indictment, Alhassan and his co-conspirators further induced victims to send funds under the guise of securing travel documents for the person with whom the victim believed to be in a romantic relationship. To induce the victims to send even more money, Alhassand and his co-conspirators used fictitious problems, including problems with travel visas, customs related issues, etc.  The indictment alleges that Alhassan and his co-conspirators continued to call, text, and e-mail the victims and insist that additional payments be made for new fees, until the victims either ran out of money or discovered the fraudulent nature of the scheme. The indictment alleges that the total loss associated with the scheme is more than $1,000,000.

Alhassan made his initial appearance in federal court this morning, before U.S. Magistrate Judge David S. Cayer. The mail and wire fraud conspiracy charge and each mail fraud charge carry a maximum prison term of 20 years and a $250,000 fine. 

The details contained in this indictment are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

USPIS and HSI are leading the investigation.  Assistant United States Attorney Jenny G. Sugar, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.

In March 2019, Andrew Murray, U.S. Attorney for the Western District of North Carolina, announced the Office’s Elder Justice Initiative, which aims to combat elder financial exploitation by expanding efforts to investigate and prosecute financial scams that target seniors; educate older adults on how to identify scams and avoid becoming victims of financial fraud; and promote greater coordination with law enforcement partners. For more information please visit: /usao-wdnc/elder-justice-initiative

CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte indicted Andrivia Wells, also known as Tina Smith, Tina Harris, Andrivia Smith, and Andrivia Harris, 52, of Charlotte, on June 20, 2019, on charges of  aiding and assisting in the preparation of fraudulent tax returns for her clients, filing false tax returns for herself in 2013 through 2017, failing to file a 2018 tax return for herself, and obstructing the criminal investigation by the Internal Revenue Service (“IRS”) by destroying records, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  The criminal indictment was unsealed in federal court today, following Wells’ arrest.

Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI) joins U.S. Attorney Murray in making today’s announcement.

According to allegations contained in the indictment, beginning in at least 2011 and continuing through June 2019, Wells owned and operated Rush Tax Services, a return preparation business with multiple locations in Charlotte. The indictment alleges that through Rush Tax Service, between 2013 and 2017, Wells prepared, or caused to be prepared, more than 6,000 tax returns.  Rush Tax Services received over $1.2 million in fees from her clients. The tax preparation fees were taken directly from the clients’ tax refunds and in many cases the clients were unaware of how much they were being charged, which was frequently more than $500.

According to allegations in the indictment, Wells prepared income tax returns for clients for 2013 through 2016 that claimed false filing statuses, false American Opportunity and education credits, false Schedule C businesses, and false fuel tax credits, in order to inflate refunds paid by the IRS. The indictment also alleges that, in addition to filing fraudulent income tax returns for her clients, Wells falsified her own income tax returns by underreporting the fees she earned in her tax preparation business for tax years 2014, 2015, 2016, and 2017, and in 2018, she failed to file any tax return with the IRS.   In addition, her 2012 through 2017 tax returns also falsely claimed American Opportunity credits and fuel tax credits, and the incorrect filing status. 

The indictment further alleges that after being notified she was the subject of a criminal investigation and after being served a summons for records of Rush Tax Service, on the very day the summons response was due, which was May 15, 2017, a fire was intentionally set at Rush Tax Service’s Beatties Ford Road location.  The fire destroyed client files, financial records, and computer hardware. 

Wells was arrested yesterday and made her initial appearance in federal court today before U.S. Magistrate Judge David S. Cayer. Each count of aiding and assisting the filing of false tax returns and filing false tax returns for herself carries a maximum prison term of three years.  The failure to file charge carries a maximum sentence of one year.  The statutory penalty for destroying records is a maximum of no more than 20 years in prison.

The details contained in this indictment are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

IRS-CI is leading the investigation.  The U.S. Attorney’s Office in Charlotte is in charge of the prosecution.

 

CHARLOTTE, N.C. – Fentanyl dealer Dennis Darnell Sturdivant, 39, of Charlotte, appeared before U.S. Magistrate Judge David C. Keesler today, and pleaded guilty to drug trafficking conspiracy, possession with intent to distribute Fentanyl, and distribution and possession with intent to distribute Fentanyl, announced the U.S. Attorney’s Office for the Western District of North Carolina. Sturdivant, a designated Career Offender, is facing a mandatory minimum sentence of 120 months in federal prison. A sentencing date has not been set.

According to filed plea documents and today’s plea hearing, in 2015, the Charlotte Mecklenburg Police Department (CMPD) learned that Sturdivant was selling heroin and Fentanyl in the greater Charlotte area.  Court records show that between 2015 and up until he was arrested in October 2018, Sturdivant made multiple Fentanyl drug sales, and sold approximately forty-seven (47) grams of Fentanyl.  According to today’s plea hearing and admissions he made in court, Sturdivant was on supervised release for a previous federal drug conviction when he was arrested on the new charges.  As part of the plea agreement, Sturdivant also forfeited over $88,000 in drug proceeds, found inside his residence.

According to the Drug Enforcement Administration (DEA), Fentanyl is a synthetic opioid that is 80-100 times stronger than morphine. Fentanyl is added to heroin to increase its potency, or be disguised as highly potent heroin. Clandestinely-produced Fentanyl is primarily manufactured in Mexico. Many users believe that they are purchasing heroin and actually do not know that they are purchasing Fentanyl, often resulting in overdose deaths. Additional information including a Fentanyl fact sheet can be found here.

U.S. Attorney Andrew Murray Announces the Western District’s Heroin and Opioid Prevention and Enforcement (H.O.P.E.) Task Force

Today, U.S. Attorney Murray announced the formation of the Western District’s Heroin and Opioid Prevention and Enforcement (H.O.P.E.) Task Force.  This multi-agency team of experienced federal and state investigators located in the Western District of North Carolina will work with federal criminal prosecutors and attorneys to identify abusive practices by participants in the opioid pharmaceutical supply chain, and prosecute drug trafficking networks that distribute lethal heroin and opioids into our communities.  The H.O.P.E. Task Force brings together multiple federal and state agencies to bring the full force of criminal, civil, and administrative enforcement efforts against doctors, pharmacies, pill mills, and other participants in irresponsible and reckless distribution of opioids in the Western District.

The Task Force will focus on coordinating investigations, information sharing, identifying trends throughout the region, investigating whistleblower complaints, and the creation of cross-agency investigative teams so each agency task force member can bring its area of expertise on investigations.  

The Task Force builds upon existing partnerships between the agencies, and its work reflects a heightened effort to reduce heroin and opioid abuse, to increase prevention through outreach efforts, and to educate the public about the dangers of counterfeit drugs, heroin abuse and opioid addiction.

In making today’s announcement, U.S. Attorney Murray thanked the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation Division, the Department of Health and Human Services – Office of the Inspector General, the U.S. Postal Inspection Service, the North Carolina State Bureau of Investigation, the North Carolina Medicaid Investigations Division, and the North Carolina Department of Insurance, among others, which are members of the H.O.P.E. Task Force.

“The mission of the H.O.P.E. Task Force is to save lives,” said U.S. Attorney Murray.  “Heroin and opioid abuse are a real public health crisis that threatens the stability of our communities. We must act now. I want to thank all partner agencies on the task force for contributing their unique expertise and resources in our fight against this epidemic, and for their unwavering commitment to protecting our communities from the devastation of heroin and opioid abuse and addiction.”

U.S. Attorney Murray also thanked CMPD for handling the investigation into Sturdivant, with the assistance of the DEA. Assistant United States Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, is in charge of Sturdivant’s prosecution.

CHARLOTTE, N.C. – A federal grand jury sitting in Charlotte indicted Elizabeth Pigatt, 46, of Charlotte, on June 20, 2019, on charges of  aiding and assisting in the preparation of fraudulent tax returns for her client and filing false tax returns for herself, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. 

Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI) joins U.S. Attorney Murray in making today’s announcement.

According to allegations contained in the indictment, beginning in at least 2012 and continuing through 2016, the defendant owned and operated Pigatt Taxes Quick, a tax return preparation business located in Charlotte.  The indictment alleges that Pigatt prepared income tax returns for clients that claimed false education credits, false Premium Tax Credits, and false Schedule C businesses to inflate refunds paid by the IRS.  In addition to filing fraudulent income tax returns for her clients, Pigatt falsified her own income tax returns by underreporting the fees she earned in her tax preparation business for tax years 2013, 2014, and 2015, and in her 2012 through 2015 tax returns, Pigatt also falsely claimed education credits and the incorrect filing status. 

According to allegations in the indictment, Pigatt prepared or caused to be prepared more than 430 tax returns for tax years 2011 through 2015 that claimed total refunds of more than $2 million. Pigatt allegedly received at least $95,000 in fees from her clients which were taken directly from her clients’ refunds.  In some cases, the indictment alleges that Pigatt’s clients were unaware of how much they were being charged, which was frequently between $250 and $500. 

As alleged in the indictment, Pigatt regularly failed to provide her clients with copies of their prepared and filed tax returns.  Some clients received correspondence from the IRS after their taxes were filed questioning items on the tax returns. The indictment alleges that Pigatt refused to assist the clients with questions from the IRS.

The indictment further alleges that Pigatt also prepared a false 2015 income tax return for an undercover IRS agent, which included false education credits. 

Pigatt faces a maximum possible sentence of three years in prison on each count, as well as a period of supervised release, restitution, and monetary penalties.

The details contained in this indictment are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

IRS-CI is leading the investigation.  The U.S. Attorney’s Office in Charlotte is in charge of the prosecution.  

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that three felons, prosecuted separately, have been sentenced to prison on gun possession charges. U.S. District Judge Martin Reidinger presided over the sentencing hearings.

Dennis MacAuthor Rice, 50, of Barnardsville, N.C., was sentenced to 77 months in prison and three years of supervised release.  According to court records, on June 5, 2018, an undercover officer with the Buncombe County Anti-Crime Taskforce (BCAT) and another individual met with Rice.  During the meeting, the undercover officer purchased from Rice a firearm with a magazine that contained three rounds of ammunition.  Rice was convicted in August 2014 of Possession of a Stolen Motor Vehicle and, as a result of that conviction, he is prohibited from possessing a firearm.

Brandon Kendrick James, 33, of Greensboro, N.C., was sentenced to 57 months in prison and three years of supervised release.  Court records show that on October 1, 2018, Buncombe County Sheriff’s Office deputies responded to a call regarding a dispute in Candler, N.C., in which James was involved. While on the scene, law enforcement found in the glove compartment of James’ vehicle a semi-automatic pistol loaded with one round of ammunition in the chamber. Next to the firearm was a large capacity magazine, loaded with 15 rounds of ammunition.  James was previously convicted of selling cocaine, and is prohibited from possessing a firearm.

Steven Vincent Thomas White, 33, of Asheville, was sentenced to 24 months in prison and three years of supervised release. According to court records, on July 25, 2018, a deputy with the Buncombe County’s Sheriff’s Office conducted a traffic stop of the vehicle White was driving. Over the course of the traffic stop, law enforcement recovered a loaded firearm from a backpack that belonged to White, located inside the vehicle. White has a prior federal drug conspiracy conviction and is prohibited from possessing a firearm. White was on federal supervised release at the time he committed the offense. 

In making todays’ announcement, U.S. Attorney Andrew Murray thanked the Buncombe County Sheriff’s Office, the Asheville Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Federal Bureau of Investigation for their assistance in their respective investigations.

Special Assistant United States Attorney (SAUSA) Alexis Solheim prosecuted all three cases.  Ms. Solheim is a state prosecutor with the office of the 30th Prosecutorial District, and was assigned by District Attorney Ashley Welch to serve a SAUSA with the U.S. Attorney’s Office in Asheville.  Ms. Solheim is duly sworn in both state and federal courts.  The SAUSA position is a reflection of the partnership between the office of the 30th Prosecutorial District and the United States Attorney’s Office.  The SAUSA position helps ensure the effective and vigorous prosecution of federal court cases that impact the counties within the 30th Prosecutorial District. 

 

ASHEVILLE, N.C. – Gabriel Zagazeta, 31, of Hendersonville, N.C. was sentenced today by U.S. District Judge Martin Reidinger to 22.5 years for enticing and luring minors into producing child pornography through popular smart phone apps, announced U.S. Attorney Andrew Murray of the Western District of North Carolina.  Zagazeta was also ordered to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.  

John Eisert, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Charlotte; Robert Schurmeier, Director of the North Carolina State Bureau of Investigation; and Chief Herbert Blake of the Hendersonville Police Department join U.S. Attorney Murray in making today’s announcement.

According to filed court documents and today’s sentencing hearing, Zagazeta used multiple smart phones apps to contact minors, and lured them into creating and sending him sexually explicit images and videos of themselves. For example, court records show that on May 16, 2016, Zagazeta created an account with a smart phone app that allows users to create and share self-produced music videos and lip syncing videos.  The app, which is popular among young children and teenagers, also enables users to chat and exchange self-produced images and videos.  One such minor encountered by Zagazeta was a 12-year-old female from Minnesota, who Zagazeta convinced to send him a total of 65 sexually explicit images of herself. 

Zagazeta also used another popular app which allows users to conduct video chats and exchange images and videos. Through this app, Zagazeta encountered a 10-year-old girl from Alabama, and, while pretending to be a teenage boy, Zagazeta engaged in sexually explicit conversations with the victim, and solicited sexually explicit videos and images from the minor. 

On December 15, 2016, law enforcement officers executed a search warrant at Zagazeta’s residence, and seized computer devices, hard drives, and two smart phones.  A forensic analysis of the seized items revealed that the devices contained a total of 1001 images and 1099 videos of children engaging in sexually explicit conduct.  Some of the images and videos found in Zagazeta’s possession were those of the victims Zagazeta had contacted through the smart phone apps. 

On January 4, 2019, Zagazeta pleaded guilty to coercing a minor to engage in sexually explicit conduct. 

In making today’s announcement, U.S. Attorney thanked the Hendersonville Police Department for leading the investigation and HSI and SBI for their substantial assistance with this case.

The U.S. Attorney’s Office in Asheville prosecuted the case, which was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

CHARLOTTE, N.C. – Nickolas M. Godfrey, 41, of Fort Mill, South Carolina, was sentenced today to 37 months in prison for securities fraud, wire fraud, and transactional money laundering in connection with a $1 million investment fraud scheme and a related tax evasion scheme, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term imposed, Godfrey was also ordered to serve two years under court supervision and to pay restitution of more than $1.6 million.

U.S. Attorney Murray is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Matthew D. Line, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI). 

According to filed court documents and today’s proceedings, from 2012 to at least 2015, Godfrey obtained more than $1 million by engaging in a Ponzi scheme through his company, Coast to Coast Business Funding LLC (Coast to Coast), which purportedly provided short-term cash advances to businesses.  Over the course of the scheme, Godfrey induced at least 20 victims to invest with Coast to Coast, by falsely representing that the company was successfully generating substantial revenue.  Godfrey maintained a website for Coast to Coast, which also falsely represented that the company was accredited by the Better Business Bureau. To further solicit investments from victims, Godfrey made numerous false representations to victims, including promising returns of as much as 73.5%.

Contrary to promises made to victim investors, Godfrey used victims’ money to pay for personal expenditures and for the expenses of his other businesses, and to make Ponzi-type payments to earlier victims. 

When victims complained about missed payments and demanded more information, Godfrey tried to appease them by creating fake documents, including fake financial statements for Coast to Coast, and a fake list of clients to which Coast to Coast had purportedly provided financing.

In addition to the investment fraud scheme, Godfrey engaged in in a tax evasion scheme by evading the payment of tax liabilities assessed by the IRS related to his ownership and operation of two hair salons, Bliss Day Spa & Salon (Bliss) in Pineville, N.C., and Alter Ego Salon & Day Spa (Alter Ego) in Charlotte.  Godfrey committed tax evasion by, among other things, failing to pay federal employment taxes that he had withheld from the paychecks of employees at Bliss and Alter Ego, and taking multiple steps to thwart the IRS’ collection efforts. For example, Godfrey commingled the amounts withheld from his employees’ paychecks with other business and personal funds, including money obtained from victim investors, and used those funds to pay for personal expenses. Godfrey also lied to IRS employees attempting to collect the unpaid taxes. In addition, Godfrey filed individual U.S. Federal Income Tax Returns for the years 2009 through 2012 that failed to report accurately the net income he received from his businesses.

In imposing the sentence, Judge Cogburn noted the “serious, serious fraud” committed by Godfrey that harmed several ordinary citizens, and the need to deter others from committing similar fraud and tax evasion in the future.

In making today’s announcement, U.S. Attorney Murray thanked the FBI and IRS-CI for their investigation of the case.

Assistant United States Attorney Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, handled the prosecution.

CHARLOTTE, N.C. – Cynthia Williams-Singleton, 41, of Charlotte, appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to wire fraud, for misusing her access to the retirement accounts of victims, some of whom were elderly, to steal more than $458,722, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

Reginald A. DeMatteis, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, joins U.S. Attorney Murray in making today’s announcement.

According to plea-related documents and today’s court proceedings, from December 2016 to June 2018, Williams-Singleton was a customer service representative with a call center located in Charlotte, for a company identified in court documents as “Company 1.” As a call center representative, Williams-Singleton worked on accounts associated with “Client A,” and had access to Company 1’s data systems that contained, among other things, retirement fund records for Client A’s benefit plan participants and their beneficiaries. 

As Williams-Singleton admitted in court today, during the relevant time period, she engaged in a scheme to defraud Client A’s benefit plan participants and their beneficiaries by fraudulently transferring funds from their accounts to bank accounts under her control.  During the course of the scheme, Williams-Singleton fraudulently withdrew approximately $458,772.88 in participant and beneficiary funds from approximately eight participant accounts without authorization. Generally, the holders of the participant accounts victimized by Williams-Singleton were persons over the age of 70.

According to court documents, to carry out the scheme, Williams-Singleton used her misused her access to the victims’ personally identifiable information and retirement fund records to make unauthorized changes to beneficiary data and to make unauthorized transfers of funds from Client A’s plan participants’ retirement accounts into bank accounts in her own name or under her control. Williams-Singleton typically accessed a participant’s account when the participant contacted the call center. After speaking with the participant and discovering that the participant was unsure or unaware of his or her account balance, Williams-Singleton informed the participant that the participant’s account was either empty, or had less than it did. She then added herself, her relatives and others, as beneficiaries of that participant’s account.  Court records show that Williams-Singleton sometimes added her residential address and personal cell phone numbers as contact information on the account.

During today’s plea hearing, Williams-Singleton admitted that she diverted funds from the participants’ accounts to herself and other newly-added beneficiaries, and that, at times, Williams-Singleton called the call center and impersonated relatives of participants. Williams-Singleton further admitted to falsely reporting the death of the some participants in order to initiate the process of disbursement of funds to the beneficiaries that been fraudulently added.

Williams-Singleton is currently released on bond.  The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine. A sentencing date for the defendant has not been set.  

The investigation was handled by the U.S. Secret Service. Assistant U.S. Attorney Jenny Sugar, with the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today Christopher Eric Alexander, 42, of Valdese, N.C. to 90 months in prison and a lifetime of supervised release for receiving child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Judge Reidinger also ordered Alexander to register as a sex offender following his release from prison.

U.S. Attorney Murray is joined in making today’s announcement by John Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.   

According to court documents and information introduced at the sentencing hearing, law enforcement became aware that an individual in Burke County, later identified as Alexander, was using a file sharing website to receive child pornography.  Over the course of the investigation, law enforcement determined that between May 24, 2017, and April 15, 2018, Alexander received and possessed a total of 34 videos and 419 images of child pornography, some of which depicted prepubescent minors engaging in sadistic and masochistic conduct with adults.  Alexander also admitted distributing child pornography through the file sharing service.

On October 5, 2018, Alexander pleaded guilty to receiving child pornography. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a facility.  Federal sentences are served without the possibility of parole.

The investigation was handled by the FBI.  The case was prosecuted by the U.S. Attorney’s Office in Asheville.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

CHARLOTTE, N.C. – U.S. Attorney Murray announced today that Luis Analberto Pineda-Anchecta, 37, a Honduran national, has been charged by a federal criminal complaint with illegal reentry of a deported alien.  Court records show that Pineda-Anchecta was previously deported in 2006.  A second individual, Rudy Aroldo Aguillar-Arevallo, 34, also a Honduran national, has been charged by a separate federal criminal complaint of unlawful reentry and possession of ammunition by an illegal alien. Aguillar-Arevallo was previously deported in 2010.

As alleged in the criminal complaint, on or about May 15, 2019, the Charlotte Mecklenburg Police Department (CMPD) arrested Pineda-Anchecta for the offenses of Assault on a Female, Communicating Threats, Injury to Personal Property Over $200, Larceny of Property or Goods with a Value Over $1000, and Simple Assault.  On May 16, 2019, U.S. Immigration and Customs Enforcement’s (ICE), Enforcement and Removal Operations (ERO) filed a detainer with the Mecklenburg County Sheriff’s Office, which requests notification of that person’s presence at that facility and places a hold on that person so that immigration officers may have a reasonable period of time to determine that person’s true identity, immigration status and criminal history.

The criminal complaint alleges that, on May 17, 2019, after Pineda-Anchecta paid the bond amount set by a state magistrate judge, the Mecklenburg County Sheriff’s Office did not honor the detainer, released Pineda-Anchecta, and did not notify ICE. The complaint further alleges that on or about May 23, 2019, Pineda-Anchecta engaged in a standoff with a CMPD SWAT team that lasted several hours.  Because he engaged in additional criminal conduct, CMPD re-arrested Pineda-Anchecta and charged him with Assault on a Female, Communicating Threats, Assault on a Person by Strangulation and Inflicting Physical Injury, Violation of a Domestic Violence Order, and First-Degree Kidnapping of a Person Over 16.  The complaint alleges that on May 24, 2019, ICE filed another detainer with the Mecklenburg County Sheriff’s Office.  However, on June 1, 2019, after Pineda-Anchecta paid the bond amount set by a state magistrate judge, the Mecklenburg County Sheriff’s Office did not honor the detainer, released Pineda-Anchecta, and did not notify ICE about his release from custody.

According to the criminal complaints, on or about June 2, 2019, ICE deployed members of its Charlotte-based Fugitive Operations Team and special agents from the Charlotte Homeland Security Investigations office to locate Pineda-Anchecta.  The team located and arrested Pineda-Anchecta and Aguillar-Arevado on immigration violations while they were sitting in a vehicle that contained a loaded firearm and firearm ammunition. 

Pineda-Anchecta and Aguillar-Arevalo will have their initial appearance in federal court in the coming days.  The illegal reentry charge carries a maximum prison term of 2 years and a $250,000 fine.  The unlawful possession of a weapon by an alien charge carries a maximum prison sentence of 10 years and a $250,000 fine.

The charges contained in the complaints are allegations. The defendants are presumed innocent until proven guilty beyond reasonable doubt in a court of law.

In making today’s announcement U.S. Attorney Murray thanked ICE’s Enforcement and Removal Operations and ICE’s Homeland Security Investigations.

Assistant U.S. Attorney Kenneth Smith is in charge of the prosecution.

CHARLOTTE, N.C. – An Ohio man was found guilty late yesterday for his role in a $7 million telemarketing scheme that defrauded primarily elderly victims in the United States from call centers in Costa Rica.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina, Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s Charlotte Divison, Acting Special Agent in Charge William Cheung of the IRS Criminal Investigation’s (CI) Cincinnati Field Office, Special Agent in Charge Matthew D. Line of the IRS CI Charlotte Field Office and Special Agent in Charge John Strong of the FBI’s Charlotte Field Office made the announcement. 

Following a five-day jury trial, Donald Dodt, 76, originally of Cleveland, Ohio, was convicted of one count of conspiracy to commit wire fraud and mail fraud, two counts of mail fraud, eight counts of wire fraud, one count of conspiracy to commit international money laundering and 10 counts of international money laundering.

According to evidence presented at trial, Dodt worked in a call center in Costa Rica in which co-conspirators, who posed as representatives of the District of Columbia Department of Consumer and Regulatory Affairs and federal agencies, including the U.S. Federal Trade Commission, and who also posed as federal judges, contacted victims in the United States — primarily senior citizens – to tell them that that they had supposedly won a substantial “sweepstakes” prize.  After convincing victims that they stood to receive a significant financial reward, the co-conspirators told victims that they needed to make a series of up-front cash payments before collecting, purportedly for items like insurance fees, taxes and import fees.  Co-conspirators used a variety of means to conceal their true identity, such as Voice over Internet Protocol (VoIP) services provided by Dodt that made it appear that they were calling from Washington, D.C., and other places in the United States. 

As the evidence presented at trial illustrated, Dodt was an integral part of this scheme in that he knowingly provided services that were necessary for the scheme to operate and that facilitated the concealment and, ultimately, success of the scheme for many years.  Specifically, Dodt provided and maintained VoIP phone technology and assigned phone numbers associated with locations in the United States through which members of the conspiracy were able to make the fraudulent calls to victims in the United States and conceal their identities and location.  Dodt specifically assigned virtual phone numbers with area codes associated with Washington, D.C., to make it appear that the calls originated from within the United States and that also bolstered conspirators’ misrepresentations that they were representatives of government agencies located in Washington.  Dodt also warned the co-conspirators if certain numbers were “hot” – i.e., there were customer complaints or law enforcement inquiries – and replaced those phone numbers with new phone numbers that the co-conspirators then used in furtherance of the scheme, the evidence showed.

Dodt and his conspirators stole more than $7 million from victims, the evidence showed.    

This case was investigated by the U.S. Postal Inspection Service, Internal Revenue Service Criminal Investigation and the FBI with assistance from the Federal Trade Commission and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The case is being prosecuted by Fraud Section Trial Attorneys William Bowne, Jennifer Farer and Philip Trout.  The U.S. Attorney’s Office for the Western District of North Carolina provided substantial assistance with this matter. 

The Western District’s Elder Justice Initiative

In March 2019, the U.S. Attorney’s Office and the FBI in North Carolina announced the Western District’s Elder Justice Initiative, which aims to combat elder financial exploitation by expanding efforts to investigate and prosecute financial scams that target seniors; educate older adults on how to identify scams and avoid getting ripped off by scammers; and promote greater coordination with law enforcement partners.

In addition to the criminal prosecution of perpetrators, the Elder Justice Initiative aims to raise awareness through outreach, including a series of seminars to educate older adults and prevent victimization.  Our next such seminar is scheduled for June 10, 2019, at 10:00 a.m. at the Tyvola Senior Center.  This seminar is free of charge.  

Flyer for Seminar at Tyvola Senior Center

Among the topics covered will be financial fraud and scams targeting seniors, including:

• Lottery phone scams – in which the callers convince seniors that a large fee or taxes must be paid before they can receive lottery winnings.
• Grandparent scams – which convince seniors that their grandchildren are in trouble and need money to make rent, repair a car, or even money for bail.
• Romance scams – which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose.
• IRS imposter scams – which defraud victims by posing as IRS agents and claiming that victims owe back taxes.
• Sham business opportunities – which convince victims to invest in lucrative business opportunities or investments.

The seminar will also focus on prevention and how to avoid falling victim to a financial scam.  Some of such tips on preventing becoming a victim of fraud are:

• Don’t share personal information with anyone you don’t know.
• Don’t pay a fee for a prize or lottery winning.
• Don’t click on pop-up ads or messages.
• Delete phishing emails and ignore harassing phone calls.
• Don’t send gift cards, checks, money orders, wire money, or give your bank account information to a stranger.
• Don’t fall for a high-pressure sales pitch or a lucrative business deal.
• If a scammer approaches you, take the time to talk to a friend or family member.
• Keep in mind that if you send money once, you’ll be a target for life.
• Remember, it’s not rude to say, “NO.”
• A good rule of thumb is, if it’s too good to be true, it’s likely a scam.

 

            For more information about the Elder Justice Initiative, please visit: https://www.justice.gov/usao-wdnc/elder-justice-initiative.  To view our Public Service Announcement, please visit: https://youtu.be/qBGGAA7Mxbo

 

 

A federal jury in Charlotte, North Carolina, convicted a former tax return preparer of filing false tax returns for her clients and herself, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.

“Tax return preparers who, for themselves or others, prepare fraudulent returns and otherwise manipulate our tax system will be prosecuted for their conduct and be held accountable,” said Principal Deputy Assistant Attorney General Zuckerman.

“For more than three years, Smith used false entries, including fabricated wages and business expenses, to capitalize on the Earned Income Tax Credit, which resulted in higher refunds for her clients. Smith earned more than $300,000 between 2013 and 2015 for preparing tax returns and failed to report the bulk of that income on her own tax returns. We are committed to protecting the integrity of our tax system by prosecuting tax return preparers, who use their knowledge to cheat the system and commit tax crimes,” said U.S. Attorney Murray.

“Knowingly preparing and filing fraudulent tax returns is a crime,” said Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge Matthew D. Line. “IRS Criminal Investigation is committed to pursuing dishonest return preparers to hold them accountable to the fullest extent of the law.”

According to court documents and evidence presented at trial, Aminta Smith, 32, of Charlotte prepared income tax returns for clients that claimed false education credits, false W-2 wages, and false Schedule C businesses to inflate the refunds paid by the IRS.  In addition to filing fraudulent income tax returns for her clients, Smith falsified her own income tax returns by underreporting the fees she earned in her tax preparation business for tax years 2013- 2015  and failing to disclose that she was in engaged in the operation of a tax preparation business.

U.S. District Judge Max O. Cogburn of the Western District of North Carolina set sentencing for a later date. The defendant faces as a maximum possible sentence of three years prison on each count, as well as a period of supervised release, restitution, and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Caryn Finley and Trial Attorney Allison Garnett 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.

CHARLOTTE, N.C.  – A federal jury in Charlotte, North Carolina, convicted a former tax return preparer, Aminta Smith, 32, of Charlotte, of filing false tax returns for her clients and herself, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Andrew Murray for the Western District of North Carolina.

“Tax return preparers who, for themselves or others, prepare fraudulent returns and otherwise manipulate our tax system will be prosecuted for their conduct and be held accountable,” said Principal Deputy Assistant Attorney General Zuckerman.

“For more than three years, Smith used false entries, including fabricated wages and business expenses, to capitalize on the Earned Income Tax Credit, which resulted in higher refunds for her clients. Smith earned more than $300,000 between 2013 and 2015 for preparing tax returns and failed to report the bulk of that income on her own tax returns. We are committed to protecting the integrity of our tax system by prosecuting tax return preparers, who use their knowledge to cheat the system and commit tax crimes,” said U.S. Attorney Murray.

“Knowingly preparing and filing fraudulent tax returns is a crime,” said Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge Matthew D. Line. “IRS Criminal Investigation is committed to pursuing dishonest return preparers to hold them accountable to the fullest extent of the law.”

According to court documents and evidence presented at trial, Smith prepared income tax returns for clients that claimed false education credits, false W-2 wages, and false Schedule C businesses to inflate the refunds paid by the IRS.  In addition to filing fraudulent income tax returns for her clients, Smith falsified her own income tax returns by underreporting the fees she earned in her tax preparation business for tax years 2013- 2015  and failing to disclose that she was in engaged in the operation of a tax preparation business.

A sentencing date has not been set. Smith faces as a maximum possible sentence of three years prison on each count, as well as a period of supervised release, restitution, and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Caryn Finley and Trial Attorney Allison Garnett of the Tax Division, who are prosecuting the case.

 

 

CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today David Flores, 35, of Dallas, Texas, to 121 months in prison and five years of supervised release on drug conspiracy charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

Robert J. Murphy, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, joins U.S. Attorney Murray in making today’s announcement.

According to court documents and today’s sentencing hearing, Flores was part of a drug conspiracy that trafficked cocaine from Texas to North Carolina.  In October 2017, DEA agents seized 23 kilograms of cocaine near Nashville, Tennessee, from a vehicle en route to North Carolina.  According to court documents, the driver and passenger of the vehicle had been contracted by Flores to transport the cocaine from Texas to members of the drug conspiracy located in Lincolnton, N.C.  Two other members of the conspiracy served as cocaine distributors, operating out of a residence in Maiden, N.C.

Flores, a Mexican national, pleaded guilty in 2018 to conspiracy to distribute and to possess with intent to distribute cocaine.  He is currently in federal custody and will be transported to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.  Flores’s co-conspirators were previously sentenced as follows:

• Saul Martinez-Ochoa – 10 years in prison and five years of supervised release.
• Alexander Garoutte – 80 months in prison and three years of supervised release.
• Ruben Silva-Malicote – 46 months in prison and two years of supervised release.

The DEA, Tennessee State Police, and the Lincoln County Sheriff’s Office were part of the investigation of the case. Assistant U.S. Attorney William Bozin was in charge of the prosecution.

This case is the result of the Organized Crime Drug Enforcement Task Force (OCDETF).  OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

 

 

 

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that the U.S. Attorney’s Office is partnering with the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) and the Statesville Police Department to implement a crime reduction strategy in the City of Statesville, that focuses enforcement efforts on the area’s most violent offenders.  In addition to increased federal prosecutions, the strategy calls for partnering with local prevention and reentry programs to increase community safety.

“Project Safe Neighborhoods (PSN) is the centerpiece of the Justice Department’s strategy to reduce violent crime,” said U.S. Attorney Murray. “PSN’s multi-faceted approach enables us to work with ATF and the Statesville Police Department to assess the needs of the community and implement a crime reduction strategy that is truly impactful.  PSN calls for identifying and removing repeat and violent criminals off the streets through federal prosecution to bring immediate relief to the community.  Going beyond that, we will work with Statesville PD and community stakeholders to collaborate on a holistic approach to reduce violent crime.”

 “ATF appreciates the great working relationship with the U.S. Attorney’s Office and the Statesville Police Department.  We are committed to removing repeat and violent offenders from the streets of Statesville to keep the community safe. This collaborative effort displays what the law enforcement community can accomplish when we work together.  It also displays ATF’s firm commitment to the Department of Justice’s Project Safe Neighborhoods initiative,” said Ben Gibbons, ATF’s Acting Special Agent in Charge. 

“The Statesville Police Department is committed to increasing the quality of life for all citizens in our community. In continuing with maintaining our dedication to the City of Statesville, we must address the violent criminals impacting our children and harming our residents. Our partnership is a beneficial and necessary relationship to address the crime complaints within our jurisdiction,” said Chief David W. Addison of the Statesville Police Department.

Enforcement Actions

On May 23, 2019, a federal grand jury sitting in Charlotte returned the following three federal indictments:

Matthew Charles Wesley, 32, and Melita Desiree Nesbit, 36, both of Statesville, are charged with conspiracy to distribute and to possess with intent to distribute methamphetamine and aiding and abetting, and possession of a firearm in furtherance of a drug trafficking crime.  Wesley is also charged with one count of possession of a firearm by a felon. Both Wesley and Nesbit were arrested today.  ATF and Statesville PD investigated the case.  The prosecution is handled by Assistant United States Attorney Lambert Guinn.

Keyon Shaqual Miller, 29, of Statesville, is charged with two counts of distribution and possession with intent to distribute crack cocaine.  He is also charged with three counts of possession of a firearm by a felon, for illegally possessing one SKS rifle and three semi-automatic pistols.  Miller was arrested by law enforcement today.  The investigation was led by ATF, the North Carolina State Bureau of Investigation, the Statesville Police Department, and the Iredell County Sheriff’s Office. Assistant United States Attorney Christopher Hess is in charge of the prosecution.

Anthony Jerod Ravenell, 27, of Statesville, is charged with three counts of possession of a firearm by a felon, for illegally possessing five firearms on three different occasions, including three revolvers and two pistols.  Ravenell is currently in state custody and will be transferred to federal custody to appear in court on the federal charges. ATF and Statesville PD investigated the case.  The prosecution is handled by Assistant United States Attorney Lambert Guinn.

The charges contained in the indictments are allegations.  The defendants are presumed innocent unless and until they have been proven guilty beyond a reasonable doubt in a court of law.  

Devin Robert Lee Tate, 33, of Statesville, was sentenced today to 46 months in prison for a firearms offense.  According to today’s sentencing hearing, over the course of a traffic stop law enforcement determined that Tate possessed a loaded firearm.  Tate attempted to flee from the scene but was apprehended a short time later. Court records show that Tate has a prior conviction and is therefore prohibited from possessing firearms and/or ammunition. In addition to the prison term imposed, Tate was also ordered to serve two years under court supervision after he is released from prison.  ATF and the Iredell County Sheriff’s Office investigated the case.  Assistant United States Attorney Robert Gleason handled the prosecution.

These cases were brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.

For more information about PSN, please visit: https://www.justice.gov/usao-wdnc/project-safe-neighborhoods-psn.

An Ohio man was found guilty today for his role in an $7 million telemarketing scheme that defrauded primarily elderly victims in the United States from call centers in Costa Rica.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina, Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s Charlotte Division, Acting Special Agent in Charge William Cheung of the IRS Criminal Investigation’s (CI) Cincinnati Field Office, Special Agent in Charge Matthew D. Line of the IRS CI Charlotte Field Office and Special Agent in Charge John Strong of the FBI’s Charlotte Field Office made the announcement. 

Following a five-day jury trial, Donald Dodt, 76, originally of Cleveland, Ohio, was convicted of one count of conspiracy to commit wire fraud and mail fraud, two counts of mail fraud, eight counts of wire fraud, one count of conspiracy to commit international money laundering and 10 counts of international money laundering.

According to evidence presented at trial, Dodt worked in a call center in Costa Rica in which co-conspirators, who posed as representatives of the District of Columbia Department of Consumer and Regulatory Affairs and federal agencies, including the U.S. Federal Trade Commission, and who also posed as federal judges, contacted victims in the United States — primarily senior citizens – to tell them that that they had supposedly won a substantial “sweepstakes” prize.  After convincing victims that they stood to receive a significant financial reward, the co-conspirators told victims that they needed to make a series of up-front cash payments before collecting, purportedly for items like insurance fees, taxes and import fees.  Co-conspirators used a variety of means to conceal their true identity, such as Voice over Internet Protocol (VoIP) services provided by Dodt that made it appear that they were calling from Washington, D.C., and other places in the United States. 

As the evidence presented at trial illustrated, Dodt was an integral part of this scheme in that he knowingly provided services that were necessary for the scheme to operate and that facilitated the concealment and, ultimately, success of the scheme for many years.  Specifically, Dodt provided and maintained VoIP phone technology and assigned phone numbers associated with locations in the United States through which members of the conspiracy were able to make the fraudulent calls to victims in the United States and conceal their identities and location.  Dodt specifically assigned virtual phone numbers with area codes associated with Washington, D.C., to make it appear that the calls originated from within the United States and that also bolstered conspirators’ misrepresentations that they were representatives of government agencies located in Washington.  Dodt also warned the co-conspirators if certain numbers were “hot” – i.e., there were customer complaints or law enforcement inquiries – and replaced those phone numbers with new phone numbers that the co-conspirators then used in furtherance of the scheme, the evidence showed.

Dodt and his conspirators stole more than $7 million from victims, the evidence showed.    

This case was investigated by the U.S. Postal Inspection Service, Internal Revenue Service Criminal Investigation and the FBI with assistance from the Federal Trade Commission and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The case is being prosecuted by Fraud Section Trial Attorneys William Bowne, Jennifer Farer and Philip Trout.  The U.S. Attorney’s Office for the Western District of North Carolina provided substantial assistance with this matter. 

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray participated in a presentation and dedication event this afternoon, hosted by Charlotte Habitat, during which a selected homeowner was formally presented with a key to a new home constructed by community and law enforcement volunteers.  The property onto which the new home was built was previously forfeited to the United States, as part of a 2014 federal criminal prosecution involving drug trafficking and money laundering offenses. 

In 2018, the property, which is located in the Hidden Valley community, was transferred to Charlotte Habitat through Operation Goodwill, a federal program designed to assist neighborhood communities impacted by drug trafficking and other violent criminal activity via transfers of federally forfeited properties to state or local governments, designated contractors or transferees, in support of drug abuse treatment, drug and crime prevention and education, housing, job skills, or other community-based public health and safety programs. Charlotte Habitat demolished the old structure and built a new home for a family selected by the organization. This is the second time in the Western District of North Carolina that a federally forfeited property has been transferred to a community partner through the Operation Goodwill program.

In making today’s announcement U.S. Attorney Murray said, “This property has been transformed from a drug-infested epicenter of criminal activity to a brand new home built for a deserving family.  I want to thank all of our law enforcement partners for working with my Office and Charlotte Habitat to complete this project.  The new home is a symbol of what we can accomplish when we all work together to support our communities and bring about positive change.”

“For Charlotte Habitat, the house in the Hidden Valley community represents a transition from despair to promise. This is a story of redemption,” said Laura Belcher, Charlotte Habitat President and CEO. “A property that once served as a hub of destruction for so many lives, is now a haven of hope for a hardworking young family. We could not be more pleased to have had the privilege of working with the Department of Justice and the Charlotte-Mecklenburg Police Department to achieve this end.”

In addition to handling the criminal case, forfeiture action, and administrative matters related to the property, prosecutors and staff with the U.S. Attorney’s Office, deputy U.S. Marshals, and Charlotte-Mecklenburg police officers volunteered at the construction site to help build the new home, alongside Habitat community volunteers. Construction was completed in early May, and the key to the property was formally presented to the selected family at today’s event.

Operation Goodwill was established in 1997 and revised in 2010 to streamline the transfer process.  Any designated non-profit organization can apply to participate in the program.  To participate, interested organizations are required to enter into a Memorandum of Understanding (MOU) with the Department of Justice.  The MOU outlines the specific requirements for the property transfer and provides certain obligations the selected organization must fulfil for a period of five years.  Final approval for the property transfer must be granted by the Attorney General of the United States.

CHARLOTTE, N.C. –  Communities across the United States gather during National Police Week to remember law enforcement officers who made the ultimate sacrifice in the line of duty, to share their stories of courage and sacrifice, and to honor their memory.

“During National Police Week we pay tribute to America’s fallen law enforcement offices who made the ultimate sacrifice. Together with our fallen heroes’ families, friends and fellow officers we come together to grieve for their loss, celebrate their lives and honor their legacy,” said Andrew Murray, U.S. Attorney for the Western District of North Carolina.

In 1962, President Kennedy proclaimed May 15 as National Peace Officers Memorial Day, and the calendar week in which May 15 falls as National Police Week.  Established by a joint resolution of Congress in 1962, National Police Week pays special recognition to those law enforcement officers who have lost their lives in the line of duty for the safety and protection of others.

This year, the names of 371 U.S. law enforcement officers killed in the line of duty will be added to the National Law Enforcement Officers Memorial in Washington, D.C., including the names of 158 officers who were killed in 2018, and 213 officers who died earlier in history but whose stories of sacrifice had not been previously documented.  North Carolina State Trooper Brandon Peterson will be inducted into the National Law Enforcement Officers Memorial. Trooper Peterson passed away unexpectedly on April 7, 2017.  At the time of his death, Trooper Peterson was assigned to Highway Patrol Troop G, which covers Yancey, Mitchell, Avery and Madison Counties.

U.S. Attorney Murray also stated, “Along with remembering the officers who made the ultimate sacrifice, National Police Week is a time to recognize the contributions of all police officers from around the country, who put themselves at harm’s way each day to protect our communities and our neighborhoods.  I want the entire law enforcement community to know that they have our unwavering support and appreciation.” 

The names of all 371 fallen officers nationwide will be formally dedicated during the 31st Annual Candlelight Vigil on the evening of May 13, 2019 to be held on the National Mall.

 

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that Paul Delavan Knoke, 77, a retired Air Force Lieutenant Colonel residing in Asheville, was sentenced to 180 months in prison on child pornography charges.  U.S. District Judge Martin Reidinger also ordered Knoke to a lifetime of supervised release, and to register as a sex offender after he is released from prison.

U.S. Attorney Murray is joined in making today’s announcement by John Eisert, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Charlotte, and Interim Chief Wade Wood of the Asheville Police Department.

“For decades, Knoke inflicted horrific and sustained sexual abuse upon innocent children entrusted in his care,” said U.S. Attorney Murray.  “When Knoke wasn’t physically abusing children, he was turning to a digital screen to view and share child pornography.  As result of the 15-year sentenced imposed today, there will be one less sexual predator among us.”

“No one expects a lieutenant colonel to be a sexual predator, but in child exploitation cases, we continually see individuals in positions of trust prey on innocent children,” said Acting Special Agent in Charge John Eisert. “Our HSI special agents and local law enforcement partners are committed to uncovering these crimes against children and ensuring that the perpetrators are prosecuted to the fullest extent of the law.”

“I want to express my gratitude to our federal law enforcement partners and the U.S. Attorney’s office for their vital partnerships in removing dangerous child sexual predators from our community. The Asheville Police Department is proud of our detectives that worked tirelessly in this partnership to bring about a successful prosecution of Knoke which resulted in sentencing to federal prison. We are committed to continuing our coordinated investigations to bring such individuals to justice and to protect our children,” said Chief Wade Wood.

According to court documents and statements made in court, in June 2017, law enforcement became aware that Knoke was viewing child pornography online.  Law enforcement executed a search warrant at the residence where Knoke was residing at the time and seized multiple computers, thumb drives, other devices, and printouts that belonged to Knoke.   A forensic analysis of Knoke’s items revealed that Knoke possessed an extensive collection of sexually explicit images of minor males which he had shared with other offenders.  Court records also show that Knoke admitted that he sexually abused at least eight minors entrusted in his care at various times for more than three decades. Investigators estimate that Knoke committed over 1,500 contact offenses against the children in his care.  Knoke pleaded guilty in August 2018 to five counts of receipt of child pornography, three counts of distribution of child pornography, and one count of possession of child pornography.

Knoke has been in federal custody since June 2018 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  Federal sentences are served without the possibility of parole.

The investigation was handled by Homeland Security Investigations and the Asheville Police Department.  In making today’s announcement, U.S. Attorney Murray also thanked the U.S. Department of Veteran’s Affairs Police and the Air Force Office of Special Investigations for their substantial assistance in this case.

Luis Permont, Special Agent with the Air Force Office of Special Investigations, said “I thank Homeland Security Investigations and the Asheville Police Department for their coordination and collaboration in this investigation.  Together, we worked as a cohesive unit to ensure the truth about Knoke’s activities was revealed.  The Office of Special Investigations relies heavily on our relationships with our local and federal law enforcement partners to protect the safety of men, women and children in the United States.  I hope the successful outcome of this investigation will bring closure to the victims of Knoke’s actions and their families.”

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice, aimed at combating the growing online sexual exploitation of children.  By combining resources, federal, state and local agencies are better able to locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue those victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Two individuals from Costa Rica were sentenced to 25 and 20 years in prison today for their roles in a $10 million telemarketing scheme that defrauded primarily elderly victims in the United States from call centers in Costa Rica.    

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina, Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s Charlotte Division, Acting Special Agent in Charge William Cheung of the IRS Criminal Investigation’s (CI) Cincinnati Field Office and Special Agent in Charge John Strong of the FBI’s Charlotte Field Office made the announcement. 

Andrew Smith, 46, and Christopher Lee Griffin, 45, both of San Jose, Costa Rica, were sentenced by U.S. District Judge Robert J. Conrad of the Western District of North Carolina to 25 years and 20 years in prison, respectively.  Judge Conrad also ordered Smith to pay $10,222,838.76 in restitution to be paid jointly and severally with his co-conspirators and forfeit $406,324.96. Griffin was ordered to pay $9,612,590.39 in restitution to be paid jointly and severally with his co-conspirators and forfeit $182,439.  Following a three-day jury trial in February 2018, Smith and Griffin were each convicted of one count of conspiracy to commit wire fraud, eight counts of wire fraud, one count of conspiracy to commit money laundering, and seven counts of international money laundering. 

“Andrew Smith and Christopher Lee Griffin participated in a deplorable scam to defraud hard-working elderly Americans out of millions of dollars,” said Assistant Attorney General Benczkowski.  “The severe sentences imposed today represent a significant victory in our continuing efforts to fight elder fraud and protect some of the most vulnerable members of the U.S. public.  These sentences should serve as a strong deterrent to anyone seeking to enrich themselves by taking part in similar scams.”

“Smith and Griffin used shameless tricks and brazen lies to convince victims their dream of financial security had come true.  That dream soon turned into a devastating nightmare, one that took a financial and emotional toll on the victims, many of whom were elderly,” said U.S. Attorney Murray.  “The depravity of this scheme is reflected in the sentence handed down to these two criminals, for it takes a special kind of wickedness to steal from the elderly.  Today’s sentence also underscores our commitment to stopping financial scams and holding offenders accountable for their actions, no matter where they are.”

“We are proud to work alongside our federal law enforcement partners in efforts to target those individuals who take advantage of the American public, especially our vulnerable older Americans, for illegal profits,” said Inspector in Charge McGinnis.  “Anyone who engages in deceptive practices like this should know they will not go undetected and will be held accountable, regardless of where they are.”

“Quite simply, the conduct in this case is egregious. This investigation uncovered a fraudulent telemarketing scheme that generated millions of dollars through a web of financial lies that preyed on countless elderly victims, all so these defendants could line their pockets with stolen money,” said IRS-CI Acting Special Agent in Charge Cheung.  “These types of investigations are often solved most efficiently through a multiple-agency approach to crime fighting.”

“Years ago, our parents taught us not to talk to strangers.  Their advice has proven to be timeless,” said FBI Special Agent in Charge Strong.  “Strangers are reaching out to us on social media, sending us emails, calling our homes and cell phones.  If you fall for a scam, you can bet your life, they will call you again.  They might have a different sales pitch or a sob story, but they are the same crooks.  These prison sentences should serve as a warning to the thieves, the FBI and our law enforcement partners will work tirelessly to find you and put you out of business for good.”

According to evidence presented at trial, both Smith and Griffin worked in a call center in Costa Rica in which conspirators, who posed as representatives of the U.S. Securities and Exchange Commission and the Federal Trade Commission (FTC), contacted victims in the United States to tell them that that they had won a substantial “sweepstakes” prize.  After convincing victims, many of whom were elderly, that they stood to receive a significant financial reward, the conspirators told victims that they needed to make a series of up-front payments before collecting their supposed prize, purportedly for items like insurance fees, taxes and import fees.  Conspirators used a variety of means to conceal their true identities, such as Voice over Internet Protocols, which made it appear that they were calling from Washington, D.C., and other places in the United States.  According to trial testimony, one elderly victim who indicated she was going to stop paying was warned by a conspirator that they knew where she and her family lived.

Smith and Griffin arranged for victims to transmit payments through international wire transfers directly to Costa Rica or through “runners,” who collected money from victims in the United States and forwarded payment to Smith, Griffin and others in Costa Rica, according to evidence presented at trial.  Runners dispatched by Smith and his co-conspirators met elderly victims at their homes to collect bags of cash, which they in turn remitted to Costa Rica, the evidence showed. 

Smith, Griffin and their conspirators stole more than $10 million from victims, the evidence showed.     

This case was investigated by the U.S. Postal Inspection Service, IRS-CI and the FBI, with assistance from the FTC and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The case is being prosecuted by Trial Attorneys William Bowne and Jennifer Farer and Assistant Chief Anna Kaminska of the Criminal Division’s Fraud Section.  The U.S. Attorney’s Office for the Western District of North Carolina provided substantial assistance with this matter.  The Criminal Division’s Office of International Affairs, U.S. Department of State’s Diplomatic Security Service and Bureau of Consular Affairs, along with government authorities in Costa Rica, provided critical assistance with the extradition of these defendants. 

The Justice Department today announced a settlement with Robert Hatfield to resolve a lawsuit alleging that he violated the Fair Housing Act and the Equal Credit Opportunity Act by subjecting 17 actual and prospective female residents of homes he owned in Wilkes County, North Carolina, to sexual harassment over the course of more than 10 years.

Under the settlement, which the parties filed today with the U.S. District Court for the Western District of North Carolina, Hatfield has agreed to pay a total of $600,000, which includes $550,000 in monetary damages to former and prospective residents, as well as a $50,000 civil penalty. The settlement also permanently bars Hatfield from participating in the rental, sale, or financing of residential properties, and requires that he relinquish his ownership interest in all such properties.

“Abusing power and control over housing and credit by committing acts of sexual harassment is an abhorrent and intolerable violation of every woman’s right to equal housing and credit opportunities,” said Assistant Attorney General Eric Dreiband. “The Justice Department, through its Sexual Harassment in Housing Initiative, will continue to aggressively enforce federal anti-discrimination laws against property managers and owners who cause women to feel unsafe in their homes.”

“Using a woman’s need for housing and safety as leverage to obtain sexual favors is behavior that is both illegal and depraved,” said Andrew Murray, U.S. Attorney for the Western District of North Carolina. “Hatfield’s settlement underscores my office’s commitment to continue to vigorously enforce the federal civil rights laws to combat sexual harassment in housing and to hold accountable those who violate these statutes.” 

The complaint, filed in 2017, alleged that Hatfield ran a real estate business that involved not only operating residential rental properties, but also selling homes through “owner financing,” meaning he extended credit to individuals to purchase homes that he owned. The lawsuit alleged that he subjected actual and prospective female residents of these homes to sexual harassment by making unwanted sexual advances and comments, groping or otherwise touching their bodies without consent, offering to reduce or eliminate down payments, rent, and loan obligations in exchange for sexual favors, and taking or threatening to take adverse action against residents when they refused or objected to his advances.

In October 2017, the Justice Department launched an initiative to combat sexual harassment in housing. In April 2018, the Department announced the nationwide rollout of the initiative, including three major components: a new joint Task Force with the Department of Housing and Urban Development to combat sexual harassment in housing, an outreach toolkit to leverage the Department’s nationwide network of U.S. Attorney’s Offices, and a public awareness campaign, including the launch of a national Public Service Announcement.

Since launching the initiative, the Justice Department has filed nine lawsuits alleging a pattern or practice of sexual harassment in housing. The Justice Department has filed or settled 14 sexual harassment cases since January 2017, and has recovered over $2.2 million for victims of sexual harassment in housing.

The Justice Department’s Civil Rights Division enforces the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit discrimination in housing and lending.  More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov, or contact HUD at 1-800-669-9777 or through its website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp.

CHARLOTTE, N.C. – The Justice Department and the U.S. Attorney’s Office for the Western District of North Carolina today announced a settlement with Robert Hatfield to resolve a lawsuit alleging that he violated the Fair Housing Act and the Equal Credit Opportunity Act by subjecting 17 actual and prospective female residents of homes he owned in Wilkes County, North Carolina, to sexual harassment over the course of more than 10 years.

Under the settlement, which the parties filed today with the U.S. District Court for the Western District of North Carolina, Hatfield has agreed to pay a total of $600,000, which includes $550,000 in monetary damages to former and prospective residents, as well as a $50,000 civil penalty. The settlement also permanently bars Hatfield from participating in the rental, sale, or financing of residential properties, and requires that he relinquish his ownership interest in all such properties.

“Abusing power and control over housing and credit by committing acts of sexual harassment is an abhorrent and intolerable violation of every woman’s right to equal housing and credit opportunities,” said Assistant Attorney General Eric Dreiband. “The Justice Department, through its Sexual Harassment in Housing Initiative, will continue to aggressively enforce federal anti-discrimination laws against property managers and owners who cause women to feel unsafe in their homes.”

“Using a woman’s need for housing and safety as leverage to obtain sexual favors is behavior that is both illegal and depraved,” said Andrew Murray, U.S. Attorney for the Western District of North Carolina.  “Hatfield’s settlement underscores my office’s commitment to continue to vigorously enforce the federal civil rights laws to combat sexual harassment in housing and to hold accountable those who violate these statutes.” 

The complaint, filed in 2017, alleged that Hatfield ran a real estate business that involved not only operating residential rental properties, but also selling homes through “owner financing,” meaning he extended credit to individuals to purchase homes that he owned. The lawsuit alleged that he subjected actual and prospective female residents of these homes to sexual harassment by making unwanted sexual advances and comments, groping or otherwise touching their bodies without consent, offering to reduce or eliminate down payments, rent, and loan obligations in exchange for sexual favors, and taking or threatening to take adverse action against residents when they refused or objected to his advances.

The settlement agreement can be found here. 

In October 2017, the Justice Department launched an initiative to combat sexual harassment in housing.  In April 2018, the Department announced the nationwide rollout of the initiative, including three major components: a new joint Task Force with the Department of Housing and Urban Development to combat sexual harassment in housing, an outreach toolkit to leverage the Department’s nationwide network of U.S. Attorney’s Offices, and a public awareness campaign, including the launch of a national Public Service Announcement.

Since launching the initiative, the Justice Department has filed nine lawsuits alleging a pattern or practice of sexual harassment in housing.  The Justice Department has filed or settled 14 sexual harassment cases since January 2017, and has recovered over $2.2 million for victims of sexual harassment in housing.

The Justice Department’s Civil Rights Division enforces the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit discrimination in housing and lending.  More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at fairhousing@usdoj.gov, or contact HUD at 1-800-669-9777 or through its website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp

CHARLOTTE, N.C. –  U.S. Attorney Andrew Murray recognized 21 officers and agents from 13 local, state and federal law enforcement agencies during the Western District’s inaugural “Excellence in the Pursuit of Justice” awards ceremony, for their outstanding performance and investigative work in cases prosecuted by the U.S. Attorney’s Office.

The following agencies and law enforcement officials were presented with awards at today’s ceremony:

• Asheville Police Department - Sonia Escobedo, Task Force Officer with the Drug Enforcement Administration.
• Bureau of Alcohol, Tobacco, Firearms & Explosives – Special Agent Brent Vossekuil.
• Charlotte Mecklenburg Police Department – Jeff King, Matt Mescan, Kevin Stuesse, and Fred Thomas.
• Federal Bureau of Investigation - Special Agents Jim Granozio, Andy Romaguolo, Jason Milhone, and Doug Curran.
• Homeland Security Investigations – Special Agent Klarisa Zaffark.
• Huntersville Police Department – Detective Brad Myers, Task Force Officer with Homeland Security Investigations.
• IRS – Criminal Investigation Division- Special Agent Tyiesha Nixon.

• Monroe Police Department - Barney Malone.
• North Carolina State Bureau of Investigation – Special Agents Casey Drake and Matt Davis.

• Union County Sheriff’s Office - Daniel Stroud.

• United States Postal Inspection Service – Inspector Randy Berkland.

• United States Probation Office – U.S. Probation Officer John Holiday.

• Union County Sheriff’s Office - Daniel Stroud.

During his remarks at today’s ceremony U.S. Attorney Murray said, “I congratulate the award recipients for their tireless efforts to achieve extraordinary results.  I also thank all of our local, state and federal law enforcement officers and agents for their service, and for risking their lives each day to protect the citizens of the Western District of North Carolina, to enhance community safety, and to do justice.”

In addition to the district awards, 10 additional investigators and prosecutors received the Organized Crime Drug Enforcement Task Force (OCDETF) award for their prosecution of the MS-13 gang.  This is the first time the Western District of North Carolina has received this prestigious national award, which was presented by Adam Cohen, Director of the OCDETF program, to the following recipients:

• William Miller, Assistant U.S. Attorney (AUSA) with the U.S. Attorney’s Office for the Western District of North Carolina, and former AUSA Beth Greene.
• Susan Conrad, Julian Igualada, Barton Jenkins, Ernesto Negron, and Justin Telford with the Federal Bureau of Investigation.
• Michael Tobin with Homeland Security Investigations.
• Kevin Wallin and Timothy White with the Charlotte-Mecklenburg Police Department.

“I am honored that my Office’s federal prosecutors and investigators with our law enforcement counterparts are among the recipients of this national recognition. In this district, we have a longstanding history of collaboration with our law enforcement partners, and on behalf of my office and the citizens of the Western District, I am thankful for their outstanding work, their coordination and their continued support.”

 

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that William Richard Hilliard, Jr., 49, of Cherryville, N.C., pleaded guilty to child pornography charges for secretly recording nude videos of underage females aboard his yacht.  U.S. Magistrate Judge W. Carleton Metcalf presided over Hilliard’s guilty plea.

According to the indictment and filed plea documents, Hilliard was arrested on June 11, 2018, by Myrtle Beach, South Carolina law enforcement officers on charges of video voyeurism.  Hilliard was the owner of a yacht called “Yachts O’ Trouble,” and he had been discovered secretly recording nude videos of unsuspecting females aboard his yacht, including minor and adult guests. Court records show that as a result of the events surrounding his arrest, the FBI coordinated an extensive multi-state and multi-agency investigation. 

As Hilliard admitted in court today, law enforcement discovered that, over the course of eight to ten years, Hilliard had secretly produced multiple secret recordings of at least 16 child victims at various locations in North and South Carolina, including aboard his yacht, in his homes, in various hotel rooms, and elsewhere.  Court records also show that, at times, Hilliard produced secret recordings of victims he had hired as babysitters for his young children, and used multiple hidden devices to record his victims from different angles while they were using the shower and changing clothes.  Some of the victims were as young as five years old.

Hilliard pleaded guilty to production of child pornography, which carries a mandatory minimum sentence of 15 years and a maximum of 30 years in prison and a $250,000 fine, and possession of child pornography, which carries a maximum prison term of 20 years and a $250,000 fine.

In making today’s announcement, U.S. Attorney Murray thanked the FBI’s Charlotte Division, the Myrtle Beach Police Department, the Horry County Police Department, and the Cleveland County Sheriff’s Office for their investigation of this case with assistance from FBI Knoxville, FBI Birmingham, Homeland Security Investigations, the Cherryville Police Department and the Gastonia Police Department.   The U.S. Attorney’s Office in Asheville is in charge of the prosecution.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice, aimed at combating the growing online sexual exploitation of children.  By combining resources, federal, state and local agencies are better able to locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue those victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

ASHEVILLE, N.C. – United States Attorney Andrew Murray announced today that law enforcement have dismantled a drug ring operating in Asheville, charging eight of its members with drug conspiracy and drug and firearm-related offenses.  The 35-count criminal indictment was returned by the federal grand jury on April 2, 2019, and was unsealed today.

The two-year joint federal, state and local investigation aimed at reducing drug distribution and drug related criminal activity and increasing community safety in Buncombe County.  The indictment alleges that the drug ring operated in Asheville and trafficked heroin, cocaine, crack cocaine, methamphetamine, prescription drugs and other narcotics.  Over the course of the investigation, law enforcement seized drugs, 12 firearms and ammunition, and $153,674 in cash.

“The federal charges against the eight defendants are the result of a joint law enforcement investigation targeting an area of Asheville that has been plagued by drug trafficking and drug-related criminal activity,” said U.S. Attorney Murray. “The danger and violence that drugs and guns create in our local communities erode our citizens’ ability to live peaceful lives.  I want to thank our law enforcement partners for working together to identify individuals who threaten the safety and stability of our neighborhood streets.”

“Today, we have removed dangerous criminals from the Buncombe County community. These poly-drug traffickers will no longer be able to deliver deadly doses of poison to this community. This investigation was a success because of the great working relationship that DEA has with its federal, state, local counterparts and the U.S. Attorney’s Office,” said Robert J. Murphy, Special Agent in Charge of the DEA Atlanta Field Division, which oversees North Carolina.

"The Asheville Police Department is committed to bettering the lives of the residents of Asheville,” said Interim Chief Wade Wood, of the Asheville Police Department. “This joint operation addressed an area of our city that has seen an increase in violence and drug-related activity over the course of the past year. Federal and local partnerships are critical in addressing such criminal networks, and I would like to thank the United States Attorney’s Office and the DEA for their continued support and efforts.”    

The eight defendants named in the indictment are each charged with conspiracy to distribute and to possess with intent to distribute heroin, cocaine, crack cocaine, marijuana, Oxycodone, Adderrall, and Xanax, and related possession and distribution charges.  They are:

• Prophet Karim Hadialim Allah, 47, of Leicester, North Carolina.        
• Rodney Dejuan Allison, 43, of Asheville.     
• William Luther Downs, Jr., 26, of Asheville.                 
• Harry James Odum, 57, of Asheville.
• Derrick Maurice Perry, 25, of Asheville.
• Teresa Day Shuping, 47, of Hickory, North Carolina.
• Elliot Norris Smith, 25, of Atlanta, Georgia.
• Jeffrey Allen Wright, 41, of Leicester.
   

In addition to the drug conspiracy charges, Allison, Downs, Perry, Smith and Wright are also charged with firearms related offenses.  (See chart below for federal charges and penalties for each defendant).

Five defendants are in custody.  Federal arrest warrants have been issued against Perry, Smith and Shuping.

The charges contained in the indictment are allegations.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

In making today’s announcement, U.S. Attorney Murray thanked the Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations, the Asheville Police Department, the Buncombe County Anti-Crime Task Force, the Buncombe County Sheriff’s Office, the Black Mountain Police Department, and the Wilkes County Sheriff’s Office for leading the investigation.  U.S. Attorney Murray also thanked the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and the North Carolina State Bureau of Investigation for their assistance in this case.

Assistant U.S. Attorney Thomas Kent, of the U.S. Attorney’s Office in Asheville, is leading the prosecution.

This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Eric Dewayne Leak, 41, of Raleigh, N.C. pleaded guilty to money laundering conspiracy in connection with a bribery scheme involving college athletes.  

North Carolina Secretary of State Elaine F. Marshall, John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation (NCSBI) join U.S. Attorney Murray in making today’s announcement. 

“Leak used the ill-gotten gains of one criminal scheme to fund another, and in the process potentially exposed student-athletes, their respective schools, and their families to scandal and tangible harm. This serial fraudster will now have to face the consequences of his corrupt ways,” said U.S. Attorney Murray. 

“Today’s guilty plea underlines the message that when you come to North Carolina as an athlete agent you had better follow the law,” said Secretary Marshall. “We have demonstrated again that we can and will enforce the law, which is largely designed to protect student-athletes from having their careers damaged. The investigators did exemplary work on this investigation, and I thank the U.S. Attorney’s Office for its continued partnership in reaching today’s successful conclusion.”

“This is a prime example of what happens when you have compelling investigative work and a strong collaboration with other law enforcement and criminal justice agencies,” said Director Schurmeier. “For the NCSBI, it’s about integrity and fairness. It’s disappointing to know there are individuals who intentionally take advantage of our young people for personal gain and when that happens we want them brought to justice,” added Schurmeier.

According to plea documents and the bill of information, Leak was the owner of Hot Shots Sports Management, LLC (Hot Shots), a business in Raleigh, N.C., that provided, among other things, financial management services to professional athletes, including helping to transition student athletes from collegiate athletics into the National Football League (NFL) and the National Basketball Association (NBA). Leak admitted today in court that, from 2012 through 2015, he and others associated with Hot Shots executed a scheme to use the proceeds of previous criminal activity to promote new unlawful activity involving the payment of bribes to college athletes.

According to court records, from 2012 to 2014, Leak was the owner and executive director of Nature’s Reflections, LLC, (Nature’s Reflections) a mental health company with locations in Greensboro and Durham, N.C. Nature’s Reflections was enrolled as a Medicaid provider and received millions of dollars in direct reimbursements from Medicaid. From 2011 to 2013, Leak was involved in the payment of illegal kickbacks regarding the business of Nature’s Reflections. In March 2018, Leak pleaded guilty in federal court in the Middle District of North Carolina for his role in that scheme. 

Court records show that Leak used money he made from the illegal scheme involving Nature Reflections’ to bribe college athletes, all of whom had received athletic scholarships and other benefits from their respective schools. Leak admitted in court today that, on multiple occasions from 2012 through 2015, he provided student-athletes, and on at least one occasion a student-athlete’s family member, with cash, clothes, loans, hotels rooms, entertainment, transportation, and other things of value, to influence those student-athletes to retain the services of Hot Shots. As Leak knew, the payment of bribes to student-athletes exposed the student-athletes’ schools to tangible economic harm, including, among other things, monetary fines, restrictions on athlete recruitment and the distribution of athletic scholarships, and the potential ineligibility of the schools to participate in various NCAA programs and tournaments.

Leak entered his guilty plea before U.S. Magistrate Judge David S, Cayer. The money laundering conspiracy charge carries a maximum prison term of 20 years and a $500,000 fine.  Leak remains in custody. A sentencing date has not been set.

The Securities Division of the North Carolina Secretary of State, the North Carolina State Bureau of Investigation, and FBI investigated the case. Assistant U.S. Attorney Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.

 CHARLOTTE, N.C. – A federal jury convicted late yesterday Laurence A. Sessum, 46, and Jacqueline Dianne Okomba, 50, both of Charlotte, of conspiring to commit wire fraud in connection with a fraudulent debt collection scheme that defrauded victims throughout the United States of at least $5.7 million, announced Andrew Murray, United States Attorney for the Western District of North Carolina.  Sessum was also convicted of wire fraud, conspiracy to commit money laundering, and obstruction of justice.  Okomba was also convicted of obstruction of justice.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division, joins the U.S. Attorney’s Office in making today’s announcement.

According to filed court documents, trial evidence and witness testimony, from October 2013 to January 2017, Sessum was the owner and operator of Direct Processing LLC (Direct Processing) a fraudulent debt collection company located in Mecklenburg County.  Sessum was also the leader and organizer of the debt scheme.  His codefendant, Okomba, was the registered agent and member-owner of Direct Processing, who also worked as a manager in charge of overseeing other company collectors and managed the finances and bank accounts of Direct Processing.

As part of the scheme, Sessum purchased lists of purportedly outstanding accounts, which they used to make fraudulent debt collections.  Sessum intentionally sought out lists of old and unenforceable debts.  Direct Processing used a dialer service to leave automated messages for victims, directing them to contact the company to resolve the purported debts.  To induce victims to call back, the automated messages often contained fraudulent and misleading information, including that there was “possible pending litigation” against the victims, or that there was a “process server” attempting to locate them.

When the victims returned the calls, they were connected with collectors working for Direct Processing.  The collectors made similar threats and fraudulent statements about the purported debts and regularly used prepared scripts, including scripts handed out by Direct Processing management, that were designed to scare and intimidate victims to pay the purported debts.  The collectors used fake “shake names” when making calls to the victims, claiming that they were “retained” to “investigate” and “file” charges against the victims.  Collectors also told victims that the sheriff was prepared to serve victims with legal documents, and in some cases threatened victims with jail.  The defendants’ scheme harmed many elderly and retired victims, several of whom testified at trial about the lies and threats they were told to induce them to make payments.

Direct Processing also sent victims fraudulent documents, prepared to look like legal documents that had been filed in court, demanding restitution.  Using threats and other intimidating tactics, company collectors regularly collected amounts that were not owed or they were not authorized to collect. One victim testified during trial that Direct Processing’s aggressive and fraudulent collections tactics made her feel “devastated” out of concern that she would be sent to jail if she failed to pay.  That victim lost $1,250 in the scheme.

To disguise the fraudulent nature of the business, collectors often used fake company names when communicating with victims.  In addition, Sessum directed others to establish nominee bank accounts, which were used to pay operational and other expenses associated with the fraudulent debt collection company.

When Sessum learned the FBI had seized funds held in an account associated with Direct Processing, Sessum, Okomba, and others removed Direct Processing computers, documents, and records from a location associated with the company in order to impede the federal investigation.  When FBI agents arrived at the location to execute a search warrant, they found computer accessories, such as monitors, at collectors’ cubicles but no desktop units.  When FBI agents questioned Okomba about the computers that had been removed, Okomba falsely told the agents that Direct Processing did not own any computers.

Sessum and Okomba are awaiting sentencing and face up to 20 years’ imprisonment on each count of conviction.

The Federal Bureau of Investigation investigated the case.  Assistant United States Attorneys William M. Miller and Dallas J. Kaplan, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.

In March 2019, Andrew Murray, U.S. Attorney for the Western District of North Carolina, announced the Office’s Elder Justice Initiative, which aims to combat elder financial exploitation by expanding efforts to investigate and prosecute financial scams that target seniors; educate older adults on how to identify scams and avoid becoming victims of financial fraud; and promote greater coordination with law enforcement partners. For more information please visit: /usao-wdnc/elder-justice-initiative.