Western District of North Carolina

CHARLOTTE, N.C. – A federal jury in Charlotte returned a guilty verdict late yesterday against Kimberlie L. Flemings, 49, of Mt. Holly, N.C. for her role in a $1 million fake car loan scheme, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  The jury found Flemings guilty of conspiracy to commit wire and bank fraud; wire fraud affecting financial institutions; and multiple counts of financial institution fraud. U.S. District Judge Robert J. Conrad presided over the trial. 

Two of Flemings’ co-conspirators, Stanley Reginald Barron, 38 of Cornelius, N.C. and Brian Lyles, 46, formerly of Jersey City, New Jersey, previously pleaded guilty to conspiracy to commit wire and bank fraud.  Lyles also pleaded guilty to bank fraud.  They are currently awaiting sentencings.

According to evidence presented at trial, witness testimony and filed court documents, from at least 2012 to 2015, Flemings, Barron, Lyles and others submitted dozens of fraudulent automobile and personal loan applications in their names, and the names of at least 30 other individuals they had recruited to participate in the scheme, to at least 19 banks and credit unions.  As a result of the fraudulent applications, the co-conspirators obtained more than $1 million in fraudulent loan proceeds.  To facilitate the fraud, the co-conspirators created fake automobile dealerships that purported to be the sellers of vehicles purchased with the fraudulent loans. The co-conspirators also set up bank accounts, websites, and addresses associated with these fake automobile dealerships, and created fictitious purchase orders which were submitted to the financial institutions as part of the loan application. 

Flemings, Barron and Lyles deposited the fraudulently-obtained checks from the financial institutions into accounts Barron controlled. After keeping a portion of the fraudulent loan proceeds, Barron distributed the rest to Flemings, Lyles, and others.  According to court records, the majority of the loans defaulted, causing losses to the impacted financial institutions.  To cover up the fraud, Barron and others made false statements to the defrauded banks and credit unions that attempted to collect on the debts, including that borrowers had been the victims of identity theft and that they had not authorized the loans.

Flemings is currently released on bond.  Each of the charges the defendant was convicted of carries a maximum sentence of 30 years in prison and a $1,000,000 fine. A sentencing date has not been set.

In making today’s announcement U.S. Attorney Murray thanked the Postal Inspection Service (USPIS) and the Office of Inspector General of the Federal Housing Finance Agency for their investigation of the case, and recognized the North Carolina Division of Motor Vehicles for their assistance.   

Assistant U.S. Attorneys Daniel Ryan and Taylor J. Philips of the U.S. Attorney’s Office in Charlotte are in charge of the prosecution. 

CHARLOTTE, N.C. – Xaver M. Boston, 29, of Charlotte, North Carolina, was convicted yesterday by a federal jury of six counts of sex trafficking and one count of using an interstate facility to promote a prostitution enterprise. The verdict was announced by Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division, U.S. Attorney Andrew Murray of the Western District of North Carolina, and Special Agent in Charge John Strong of the FBI Charlotte, North Carolina, Field Division. U.S. District Judge Robert J. Conrad, Jr. presided over the trial.

Evidence presented during the three day trial, including the testimony of three of the four victims identified in the indictment by their initials, revealed that Boston, who served in the U.S. Army as a reserve military policeman, operated an extensive sex trafficking enterprise in the Charlotte area between 2012 and September 2017, except for a brief period when he was deployed overseas. Boston recruited the victims—young women and one teenager who were all struggling with drug addictions—by promising to provide them with a place to live and drugs to feed their addictions. He also falsely promised them a house, car, and other material possessions. Boston then advertised them on Backpage.com for prostitution and collected the proceeds for his own profit.

After recruiting the victims, Boston controlled their supply of highly addictive drugs such as heroin and hydrocodone pills. Without the drugs, the victims would experience excruciating physical and mental pain and withdrawal symptoms. In order to coerce the victims to prostitute, Boston withheld their drugs until after they completed commercial sex acts, and he withheld it as punishment if they failed to turn over all of the prostitution proceeds or otherwise violated his rules.      

Evidence presented at trial also showed that Boston used violence to control and coerce the victims on occasion. For example, he choked one victim on multiple occasions, and he punched and slapped others as well. Boston also used a pistol to strike one victim in the face, breaking her nose.    

“The defendant in this case preyed upon young vulnerable women, exploiting their drug addictions and forcing them to engage in prostitution for his own profit,” said Acting Assistant Attorney General Gore. “The Civil Rights Division will continue its vigorous efforts to work with our federal and state partners to hold human traffickers accountable and vindicate the rights of victims.”

“Boston is a predator who ran a criminal enterprise that violated the most basic standards of human decency,” said U.S. Attorney Murray. “The defendant preyed on and abused vulnerable young women with the intention of exploiting them for his financial gain, and used violence and drugs to exert his control. My office will continue to prosecute sex traffickers and work with our law enforcement partners to identify those who engage in this illegal, dehumanizing business.”

“Xaver Boston promised his victims a better life, instead he robbed them of their civil rights and freedom to make a profit, now he will pay the price. The FBI devotes a significant amount of resources to help sex trafficking victims recover from the trauma they suffer at the hands of ruthless people like Boston,” said John Strong, Special Agent in Charge of the FBI in North Carolina.

After deliberating for seven hours, the jury found the defendant guilty of seven out of nine counts contained in the indictment. Boston is currently in federal custody. Each sex trafficking charge carries a minimum sentence of 15 years in prison and a maximum sentence of life, mandatory restitution and a $250,000 fine. A sentencing date has not been set.

The case was investigated by the FBI Charlotte, North Carolina, Field Division with assistance from the Charlotte-Mecklenburg Police Department. The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.

 

CHARLOTTE, N.C. - One year ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Sessions has made the centerpiece of the Department’s violent crime reduction strategy. 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.

Throughout the past year, we have partnered with all levels of law enforcement, local organizations, and members of the community to reduce violent crime and make our neighborhoods safer for everyone.

“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Jeff Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs.  I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local, and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face.  Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives, and restore safety to our communities.”  

“In this district, local, state, federal and tribal law enforcement have a long history of working together to protect our communities and reduce violent crime by identifying serial violent offenders, focusing on crime hot spots, and dismantling criminal enterprises,” said U.S. Attorney Murray.  “In addition to enforcement actions, as part of our strategy under the revitalized PSN program, we have expanded our existing partnerships and created new ones with important community stakeholders on our prevention, education and outreach efforts.  Using the additional resources we have received from the Justice Department, will further our mission to increase safety and reduce violent crime in neighborhoods across Western North Carolina,” said U.S. Attorney Murray.    

Enforcement Actions

Over the past year, the U.S. Attorney’s Office has worked with federal, state, local, and tribal law enforcement to identify and prosecute the most violent individuals who use firearms to commit violent crimes:

• On September 25, 2018, three Gaston County drug traffickers were sentenced to prison terms ranging from nine to 17.5 years.  The three men were responsible for trafficking multiple kilograms of crack cocaine.  Over the course of the investigation, law enforcement seized illegally possessed firearms, including one AK-47 assault rifle, one shotgun, four handguns, and ammunition. 

• On September 10, 2018, Johnny Obrian Leach, 31, of Gastonia, N.C. was sentenced to 180 months for possession of a firearm by a convicted felon.  Due to his prior offenses, that included Assault with Deadly Weapon Inflicting Serious Injury, Robbery with Dangerous Weapon, and First Degree Kidnapping, Leach received an enhanced sentence as an Armed Career Criminal.

• On September 4, 2018, two high-ranking leaders of the Nine Trey Gangsters set of the Bloods street gang, including the “Godfather” of the set, who also served as “Chairman” of the UBN, and a second leader who held the rank of “Worldwide High” were each sentenced to 20 years in prison for racketeering conspiracy.

• On August 23, 2018, 11 individuals were arrested on drug and gun charges as part of a PSN initiative in Mecklenburg County.

• On February 13, 2018, 44 individuals were arrested on federal and state drug and gun charges.  Over the course of the investigation, law enforcement recovered more than 27 firearms and illegal substances, including heroin, cocaine, crack cocaine, methamphetamine, marijuana, and MDMA (ecstasy) pills.

Community Partnerships

In addition to our law enforcement efforts to identify and prosecute violent offenders, as part of the U.S. Attorney’s Office’s PSN strategy, we have partnered with area schools and community-based organizations on initiatives focusing on prevention and education.

In August 2018, we partnered with the Asheville Police Department and the Buncombe County Sheriff’s Office to conduct the Law Enforcement Guiding Adolescent Lives (L.E.G.A.L.) training program in Asheville.  Volunteer officers and deputies, and 18 young men selected from the Asheville-based youth development program My Daddy Taught Me That, participated in this youth-oriented community outreach initiative, designed to foster positive interactions between young people and members of the law enforcement community. 

In partnership with Charlotte-Mecklenburg County Schools, Buncombe County Schools and Asheville City Schools, we continue to co-sponsor the Do the Write Thing writing challenge, which gives middle school students an opportunity to examine the impact of violence on their lives, by communicating what they have seen to be the causes of youth violence.  By encouraging students to make personal commitments to do something about the problem, the program ultimately seeks to empower them to reduce violence in their homes, schools and neighborhoods.

The U.S. Attorney’s Office is partnering with school districts to organize the Violence Prevention Youth Summits.  These summits are designed to encourage middle school and high school students to discuss the culture and climate within their schools, to develop conflict resolution skills, to discuss strategies for dealing with social pressures, and to brainstorm on solutions for creating a positive and inclusive school environment for students.  In addition to the summits, the Stand Up, Speak Out campaign, which the U.S. Attorney’s Office co-sponsors, encourages students to take the anti-bullying pledge and to make a positive change within their schools.

The U.S. Attorney’s Office is also working with faith-based organizations in the Asheville area to develop strategies for improving community relations and, specifically, relationships between law enforcement and minority groups.

Improvements to Community Safety

• The FBI’s official crime data for 2017 reflects that, after two consecutive, historic increases in violent crime, in the first year of the Trump

      Administration the nationwide violent crime rate began to decline.  The nationwide violent crime rate decreased by approximately one percent in 2017, while the nationwide homicide rate decreased by nearly one and a half percent.

• The preliminary information we have for 2018 gives us reason for optimism that our efforts are continuing to pay off. Public data from 60 major cities show that violent crime was down by nearly five percent in those cities in the first six months of 2018 compared to the same period a year ago.

• In Charlotte, homicides are down 37% compared to the same time last year, and violent crimes involving firearms are down 7%.

In support of the Department’s PSN programs throughout the country, the Attorney General also announced almost $28 million in grant funding to combat violent crime through PSN and another $3 million for training and technical assistance to develop and implement violent crime reduction strategies and enhance services and resources for victims of violent crime. Since the announcement of the reinvigoration of the PSN program in October 2017, the Justice Department has also increased the number of federal prosecutors focused on violent crime.  North Carolina has received nearly $1 million in PSN grants, $311,781 of which will be allocated to the Western District.  The U.S. Attorney’s Office was also allocated two Assistant U.S. Attorneys to focus on violent crime prosecutions. 

These enforcement actions and partnerships are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. Learn more about Project Safe Neighborhoods.

 

CHARLOTTE, N.C. – During National Substance Abuse Prevention Month, the Department of Justice announced it is awarding almost $320 million to combat the opioid crisis in America. The unprecedented funding will directly help those most impacted by the deadliest drug crisis in American history, including crime victims, children, families, and first responders.  U.S. Attorney Andrew Murray announced today that nearly $2.5 million will be awarded to five grantees in the Western District of North Carolina. 

“President Trump has made ending the opioid crisis a priority for this administration, and under his leadership, the Department of Justice has taken historic action,” said Attorney General Jeff Sessions. “Today we are announcing our next steps: investing $320 million into all three parts of the President’s comprehensive plan to end the epidemic: prevention, treatment, and enforcement. We are attacking this crisis from every angle—and we will not let up until we bring it to an end.”

“The solution to the opioid crisis is not going to be quick or easy.  To reverse this deadly trend, we have to implement a holistic, sustained and concerted effort, focusing on law enforcement action, treatment accessibility and community education and outreach.  The grants announced today will provide much-needed funding to communities located in the Western District, including Indian Country, that are dealing with the opioid epidemic.  The grants will be used to pay for technical assistance needs, to support drug courts, to enhance treatment efforts, and to provide assistance to youth impacted by the opioid crisis,” said U.S. Attorney Murray.   

The approximately $320 million awarded by the Department’s Office of Justice Programs (OJP) will be distributed in order to maximize effectiveness over the country.  A breakdown of all the grant funding can be found here.

In the Western District of North Carolina, the Eastern Band of Cherokee Indians will receive 713,035 to fund the planning and implementation of programs aimed at reducing opioid abuse, increasing accessibility to treatment, and to pay for staffing and treatment resources.

The Jackson County Sheriff’s Office will receive $256,795 in federal funding under BJA’s Justice and Mental Health Collaboration Program (JMHCP), to address the treatment needs of people using opioids. 

Gaston County will receive $708,279 under OJP’s Office for Victims of Crime’s (OVC) program, to help children and youth impacted by the opioid crisis.

Burke County has been awarded $500,000 and Buncombe County has been granted $249,644 to support drug court programs in each county.  Buncombe County has also been awarded $299,644 to enhance existing veterans’ treatment courts. 

In 2017, more than 72,000 Americans lost their lives to drug overdoses, an increase from the 64,000 overdose deaths in 2016, according to the Centers for Disease Control and Prevention. The majority of these deaths can be attributed to opioids, including illicit fentanyl and its analogues. October marks two important anti-drug events: Red Ribbon Week and National Prescription Drug Takeback Day. Red Ribbon Week takes place every year between October 23-31 and encourages students, parents, schools, and communities to promote drug-free lifestyles. The Drug Enforcement Administration’s (DEA) National Prescription Drug Take Back Day on October 27 aims to provide an opportunity for Americans to prevent overdose deaths and drug addictions before they start. DOJ expanded on DEA's Drug Takeback Days and collected more than 2.7 million pounds of expired or unused prescription drugs since April 2017. 

The Attorney General been resolute in the fight against the drug crisis in America. The Department assigned more than 300 federal prosecutors to U.S. Attorneys’ offices and hired more than 400 DEA task force officers, announced the formation of Operation Synthetic Opioid Surge, a new program to reduce the supply of deadly synthetic opioids in high impact areas, and created a new data analytics program called the Opioid Fraud and Abuse Detection Unit to assist 12 prosecutors sent to drug “hot spot districts.” In addition, the Department charged more than 3,000 defendants with trafficking in heroin, fentanyl, or prescription drugs in FY 2017, announced the first-ever indictments of Chinese nationals for fentanyl trafficking, and scheduled variants of fentanyl to prevent illicit drug labs from circumventing the law. In addition, DOJ executed the largest ever health care fraud enforcement action charging more than 600 defendants and DOJ also proposed rules consistent with President Trump's "Safe Prescribing Plan," requiring a reduction of ten percent in 2019 in manufacturing quotas. The Department dismantled AlphaBay, the largest criminal marketplace on the Internet and has already generated prosecutions in the fight against online drug trafficking through the Joint Criminal Opioid Darknet Enforcement Team (J-CODE). 

OJP provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP and its components can be found at: www.ojp.gov.

 

Seven U.S. citizens were charged in an indictment unsealed today for their roles in a Costa Rica-based telemarketing scheme that allegedly defrauded victims in the United States, including the elderly, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney R. Andrew Murray of the Western District of North Carolina announced.   

Roger Roger, 34, previously of Hialeah, Florida and currently residing in Costa Rica; Paul Andy Stiep, 26, of Miami, Florida; Manuel Mauro Chavez, 27, also of Miami; David Michael Nigh, 49, previously of Oklahoma and currently residing in Costa Rica; Mark Raymond Oman, 33, of Long Beach, Washington; Cole Anthony Parks, 33, of Pompano Beach, Florida; and Nicholas Richer, 24, of Nashua, New Hampshire, were charged in a 20-count indictment filed in the Western District of North Carolina with one count of conspiracy to commit wire and mail fraud, nine counts of wire fraud, one count of conspiracy to commit money laundering and nine counts of international money laundering. 

“According to the allegations in the indictment unsealed today, Roger Roger and his codefendants ran a telemarketing call center in Costa Rica that duped victims—including senior citizens—into sending money to claim bogus ‘sweepstakes prizes,” said Assistant Attorney General Benczkowski.  “This indictment further demonstrates that the investigation and prosecution of individuals who victimize seniors and other vulnerable populations are among the highest priorities for the Criminal Division and our law enforcement partners.”

“Scamming elderly people out of their life’s savings is deplorable,” said U.S. Attorney Murray.  “Most older Americans live on a fixed income, so when scammers come along and steal these elderly victims’ limited financial resources, our mission is to find the perpetrators and bring them to justice.”

The indictment alleges that the defendants worked for a telemarketing sweepstakes call center located in Costa Rica, which was supervised by Roger.  Telemarketers in the call center, including Roger, Parks, Nigh and other co-conspirators, allegedly called intended victims in the United States – including elderly persons – convincing them that they had won a substantial sweepstakes prize, but, to claim the prize, they needed to send funds, such as insurance or customs fees or taxes.  If a victim sent money, telemarketers called back seeking more money, telling the victims that there was a clerical error, or the prize had increased due to the disqualification of the grand prize winner, requiring payment of additional insurance, fees, taxes and customs duties, the indictment alleges.  Victims sent the funds either directly to Costa Rica, where they were retrieved by co-conspirators, including Oman and Parks, or, for victims reluctant to send money to Costa Rica, to co-conspirators in the United States, including Stiep, Chavez and Richer, who, for a portion of the victim proceeds, retrieved the funds and forwarded them to Costa Rica. The promised sweepstakes prize did not exist, and the defendants and their co-conspirators kept the victims’ money to fund the call center operations and for their personal benefit, the indictment alleges.

The named defendants and their co-conspirators allegedly used a variety of techniques to conceal their identities and perpetrate the fraud, including use of “phone names” (i.e., aliases) when communicating with victims and Voice over Internet Protocol (VoIP) technology to make it appear that they were calling from Washington, D.C. or other places in the United States.  They also allegedly often misrepresented that they were government agents or representatives, including from the IRS, Treasury Department or Federal Trade Commission.

An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the U.S. Postal Inspection Service, IRS Criminal Investigation and the FBI, with assistance from the Federal Trade Commission, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Interpol, the Department of State's Diplomatic Security Service and the Department of Justice’s international partners in Costa Rica.  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. 

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray joined the Department of Justice today in announcing more than $70 million in grant funding to bolster school security, educate and train students and faculty, and support law enforcement officers and first responders who arrive on the scene of a school violence incident, including $373,971 for the City of Waxhaw, N.C., and $13,892 for Yancey County in the Western District of North Carolina.

These grants are in addition to the funding to the National Association of School Resource Officers (NASRO), announced by Attorney General Sessions last week, to expand and update their curriculum to better support training programs. These combined grants will better protect students, teachers, faculty, and first responders across the United States. Additionally, the Department is awarding more than $64 million to state agencies to improve the completeness, quality, and accessibility of the nation’s criminal record systems, which will help law enforcement and increase the effectiveness of background checks.

“President Trump and his administration will ensure the safety of every American school,” Attorney General Jeff Sessions said. “Earlier this year he signed into law the STOP School Violence Act, which provides grant funding to develop anonymous school threat reporting systems, to implement school building security measures, and to train students, school personnel, and law enforcement on how to prevent school violence. Today I am announcing $70 million in these grants to hundreds of cities and states across America. These grants will go a long way toward giving young people and their families both safety and peace of mind.”

“The safety of our students, faculty and staff in our District’s school systems is paramount.  Nothing is more important to parents than knowing their children can learn in a safe environment, away from danger and out of harm’s way.  The federal grants awarded to the City of Waxhaw and to Yancey County will help further school safety and enhance each school district’s existing violence prevention program,” said U.S. Attorney Murray.

The Office of Justice Program’s (OJP) Bureau of Justice Assistance (BJA) and the Office of Community Oriented Policing Services (COPS Office) together are making more than 220 awards to jurisdictions across the country to help make schools more secure. The awards, granted through three funding streams, will provide new technology for reporting systems and other threat deterrent measures and create school safety training and education programs for school administrators, staff, students, and first responders. This includes the support for existing crisis intervention teams and the creation of new ones.

• The COPS Office School Violence Prevention Program (SVPP) will provide nearly $25 million to 91 jurisdictions for school safety measures including coordination with law enforcement, training for law enforcement to prevent student violence against others and self, target hardening measures, and technology for expedited notification of law enforcement during an emergency.
• BJA’s STOP School Violence Threat Assessment and Technology Reporting Program will provide 68 awards valued at more than $19 million. This funding supports training to create and operate threat assessment and crisis intervention teams and to develop technology for local or regional anonymous reporting systems. This technology may be in the form of a mobile phone application, hotline, or website.
• The STOP School Violence Prevention and Mental Health Training Program, also managed by BJA, will provide training and education on preventing violence and effectively responding to related mental health crises. This program will fund 85 awards at nearly $28 million.

The grants are authorized by the STOP School Violence Act, which are intended to improve school security by helping students and teachers reduce exposure to risks, prevent acts of violence, and quickly recognize and respond to violent attacks.

The Department also announced that it has awarded more than $64 million to state agencies to improve the completeness, quality, and accessibility of the nation’s criminal record systems. These grants are administered by the Bureau of Justice Statistics, part of OJP. Approximately $43 million in funding will be administered through the National Criminal History Improvement Program (NCHIP), and nearly $21 million will be awarded under the National Instant Criminal Background Check System (NICS) Act Record Improvement Program.  These grant programs help states automate and upgrade records accessed by the firearms background check system.  This year, at the direction of the Attorney General, the Department prioritized funding for projects that improve accessibility of criminal history records, domestic violence convictions, and information on persons who are prohibited from possessing firearms for mental-health related reasons.

The Department is also investing over $1 million in research to better understand the factors behind mass shooting incidents. The grant awards, made by the Department’s National Institute of Justice (NIJ), part of OJP, support scientific investigations that will examine factors that contribute to mass violence, identify any patterns in mass shootings, analyze psychological and social life histories of mass shooters and community-level predictors of mass violence, and will examine firearm purchasing patterns of known mass shooters in order to create a risk prediction tool.  

For addition information on today’s grant announcements, visit www.bja.gov or www.cops.usdoj.gov. 

NOTE: The breakdown of the STOP School Violence Grants can be found here: STOP School Violence Threat Assessment and Technology Reporting Program, STOP School Violence Prevention and Mental Health Training Program, and COPS Office School Violence Prevention Program

CHARLOTTE, N.C. – Andrew Murray, U.S. Attorney for the Western District of North Carolina announced that U.S. District Judge Robert J. Conrad, Jr. sentenced Robert M. Boston, 54, of Hickory, N.C., to 120 months in prison and 2 years of supervised release for his role in defrauding victims of more than $25 million. A federal jury convicted Boston on all counts of conspiracy, wire fraud, securities fraud and money laundering following a five-day trial in December 2017. Judge Conrad also sentenced Boston’s co-defendant, Robert S. LaBarge, to 2 years in prison and 2 years of supervised release. Judge Conrad further ordered that Boston is liable for more than $27,366,733.59 million in restitution to victims, and ordered him to forfeit his interest in several properties.

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

According to filed court documents and evidence presented at trial, Boston and LaBarge defrauded franchisees, investors, and lenders of their start-up company, Zloop. Through their fraud, the defendants obtained millions of dollars, much of which was spent on expensive personal real estate, a private plane, and the racing career of Boston’s son. Evidence at trial indicated that Boston caused Zloop to spend more money on his son’s racing career than the entire operational revenue of the company before it went bankrupt. According to evidence presented at trial, while inquiring about the potential purchase of a private island, Boston wrote, “My son is a NASCAR driver. I spend 5 Million a year so he can play race car driver.”

According to previously filed court documents, trial evidence and witness testimony, Boston and LaBarge founded Zloop, an electronic waste recycling firm, in 2012 and began marketing Zloop franchises the same year.  Court records show that Boston concealed crucial information from franchisees, including that Boston’s former company had filed bankruptcy, that Boston had filed personal bankruptcy, that Boston had a judgment against him for fraud, and that Boston had been held liable in an action alleging that he had knowingly submitted false financial documentation to a bank to obtain a $2.9 million line of credit. When Boston was warned that, according to the company’s attorney, concealing this information from the franchisees of Zloop would be fraud, he wrote, “it is my decision how I want to move forward.”

Beginning on or about December 2012, Boston and LaBarge caused Zloop to raise money through the sale of equity.  To sell equity in the company, Boston and LaBarge caused a misleading private placement memo (“PPM”) to be sent to investors who invested millions in Zloop.  Evidence at trial demonstrated that the PPM contained material half-truths and omissions, including the omission of the litigation and bankruptcy history of Boston, that Zloop was planning to use the investors’ money to pay off a $4 million debt that it owed to a prior lender, and that Boston and LaBarge had already caused Zloop to spend more than $1.5 million on their personal real estate. Evidence at trial also indicated that the books and records of Zloop had been falsified to conceal the personal real estate expenses.

Evidence at trial also demonstrated that Boston promised investors that their money would be held until the offering closed, but he instead spent their money on the same day that much of it came in.  When Zloop investors sought the return of their money in or about the middle of 2013, Zloop sought a loan from an individual identified as Victim 1. To do so, Boston repeatedly falsified emails to make the company look more attractive to Victim 1.

According to trial evidence, Boston induced Victim 1 to secure a $14 million line of credit from a bank. After Boston and LaBarge caused Zloop to draw approximately $3.5 million from that line of credit, they spent hundreds of thousands of dollars on, among other things, a private plane, a new Corvette, and a new Grand Cherokee.  Zloop subsequently drew an additional $1.3 million from the credit card line, of which more than $500,000 was spent on racing-related expenditures and approximately $79,808 on a suite at a professional football stadium.  

LaBarge pleaded guilty to conspiracy to commit wire fraud on November 2, 2017.

During the sentencings, Judge Conrad commented that Boston engaged in a “pattern and practice of deception over a long period of time involving a variety of financial instruments to take other peoples’ money and to use it for himself,” and that he was “motivated by greed and to promote a lavish lifestyle on the backs of others, all of whom deserved honest representations.” Boston’s “substantial” sentence, according to the Court, was necessary to deter others who may be tempted by greed. Judge Conrad also noted that although LaBarge “raised concerns” about Boston’s conduct, he squelched them, and said that LaBarge’s actions constituted a “velleity:” a desire not amounting to action.

The FBI led the investigation.  Assistant U.S. Attorneys Taylor J. Phillips and Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.

ASHEVILLE, N.C.  – A major law enforcement operation targeting drug trafficking in and around Indian Country in North Carolina has resulted in the arrest of more than 75 individuals on federal, state and tribal charges, announced Secretary of Interior Ryan Zinke and Andrew Murray, U.S. Attorney for the Western District of North Carolina. 

The undercover operation, led by the Department of Interior’s (DOI) Opioid Reduction Task Force, in coordination with the Drug Enforcement Administration (DEA), the Cherokee Indian Police Department and multiple federal, state, and local law enforcement agencies, began in March 2018, and aimed at disrupting and dismantling drug distribution networks operating in and around the Qualla Boundary. 

In addition to the 76 arrests announced today in connection with DOI’s Opioid Reduction Task Force operation, a concurrent two-year investigation spearheaded by the Bureau of Indian Affairs’ Division of Drug Enforcement and the DEA led to the previous arrest of 56 additional individuals responsible for trafficking opiates and methamphetamine in Indian Country, bringing the total number of those arrested to 132.

To date, the joint investigations have yielded a seizure of more than 3.8 pounds of heroin and Fentanyl; more than 18 pounds of methamphetamine; over 270 Fentanyl and Oxycodone tablets; and more than 100 kilograms of marijuana, with a combined street value of over $1.82 million. Over the course of the investigation, law enforcement also seized five illegally possessed firearms.

“First and foremost, Bravo Zulu to the dozens of law enforcement professionals who are on the front lines and putting their own lives at risk to take these deadly drugs off the streets. President Trump and I could not be prouder of their work,” said Secretary Zinke. “It’s heartbreaking to see the scale of the problem, and rather than further stigmatizing victims, we are cracking down on the dealers who are selling out our children, selling out our communities, and selling out our nation. The Trump Administration is serious about ending the opioid crisis and that means both treatment of those suffering as well as eradicating the drugs from our communities. This week’s law enforcement action gets us closer to that goal.”

“The Eastern Band of Cherokee Indians is a community that has been hard hit by the opioid epidemic. Drug distribution, drug-fueled crimes, and drug abuse pose a grave threat to the safety, stability, cultural preservation, and well-being of the tribal community,” said U.S. Attorney Murray.  “The Justice Department and my office are committed to working with our law enforcement partners to stem the flow of drugs onto the Qualla Boundary, and to reduce the opioid abuse epidemic that has devastated Indian Country.”

“Dangerous and deadly drugs, both licit and illicit, see no boundaries,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division.  “If the drugs are destined for the inner city, rural suburbia or Indian Country, regardless, the outcome is the same: they destroy dreams, communities, families and lives. The Eastern Band of Cherokee Indians community, and adjoining areas elsewhere, have felt the sting of drug abuse and addiction. DEA, its law enforcement partners and the U.S. Attorney’s Office are committed to making our communities safer by removing those who push these deadly substances. This investigation was a huge success because of the spirited efforts between DEA, its federal, state, local and tribal law enforcement partners and the subsequent prosecution by the U.S. Attorney’s Office and state and tribal prosecutors.”

“I am extremely grateful to the Secretary of the Interior, the BIA and the multiple state and local agencies who helped make this operation a success.  The arrest of these drug dealers is a critical step towards ensuring that the Eastern Band of Cherokee Indians is able to provide the healthy environment our people deserve.” Principal Chief Richard Sneed.   

Twelve individuals face federal drug offenses. They are:

• Dontavius Juan Cox, 26, of Sylva, N.C.
• Derek Wilson Driver, 26, of Cherokee, N.C.
• David Charles Fisher, 56, of Bryson City, N.C.
• Timothy Mark Grady, 43, Bryson City, N.C.
• Kandace Rhean Griffin, 29, of Cherokee, N.C.
• Kenneth Dean Griffin, 51, Cherokee, N.C.
• Kevin Dewayne Huskey, 47, of Bryson City, N.C.
• Saryna Michelle Miller, 22, of Bryson City, N.C.
• Jeremy Dwayne Morton, 21, of Bryson City, N.C.
• Javier Fernando Perez, 27, of Norcross, Georgia.
• David William Smith, 30, of Sylva, N.C.
• Dee Anna Wike, 45, of Cherokee, N.C.

 

Those arrested will have their initial hearings in federal court on Friday.  Federal arrests warrants have been issued for Cox and Perez.  Other offenses fall under tribal, state and local jurisdictions.

The charges contained in the indictments 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 Bureau of Indian Affairs; the DEA; the Cherokee Indian Police Department; the Swain County Sheriff’s Office; the Jackson County Sheriff’s Office; the McDowell County Sheriff’s Office; the Henderson County Sheriff’s Office; the Rutherford County Sheriff’s Office; the Buncombe County Sheriff’s Office; the Asheville Police Department; the North Carolina State Bureau of Investigation; the North Carolina State Highway Patrol; and the U.S. Marshals Service for their coordinated efforts throughout this investigation.

Assistant U.S. Attorney John Pritchard and Special Assistant U.S. Attorney Alexis Solheim, of the U.S. Attorney’s Office in Asheville, are in charge of the federal prosecutions.

Last year, Attorney General Jeff Sessions announced a series of new actions by the Justice Department to support law enforcement and maintain public safety in Indian Country.  Among the actions announced was the deployment of the expanded Tribal Access Program for National Crime Information (TAP), which is designed to provide the Eastern Band of Cherokee Indians and other federally-recognized tribes with access to national crime information databases for criminal and civil purposes.  TAP allows tribes to more effectively serve and protect their nations’ citizens by ensuring the exchange of critical data across the Criminal Justice Information Services (CJIS) systems and other national crime information systems.  

The Office of Tribal Justice also created the Indian Country Federal Law Enforcement Coordination Group, an unprecedented partnership that brings together sworn federal agents and key stakeholders from 12 federal law enforcement components with responsibilities in Indian Country, with the goal of increasing collaboration and coordination among law enforcement and enhancing the response to violent crime in Indian Country.

“As a member of the Native American Issues Subcommittee of the Attorney General’s Advisory Council, addressing substance abuse and violent crime in Indian Country is a priority,” said U.S. Attorney Murray. “My office is committed to supporting our tribal law enforcement partners and tribal leadership to identify and dismantle drug networks operating in and around Indian Country, and to provide greater access to technology, information, and funding, as we work jointly to increase public safety within the tribal community,” said U.S. Attorney Murray. 

CHARLOTTE, N.C. – The Department of Justice announced today that Health Management Associates, LLC (HMA), formerly a major U.S. hospital chain headquartered in Naples, Florida, will pay over $260 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States.  This global settlement also resolves False Claims Act allegations against two Charlotte-area hospitals, Lake Norman Regional Medical Center and Davis Regional Medical Center.

“Today’s settlement demonstrates the government’s commitment to hold companies accountable for the abuse of government healthcare programs,” said Andrew Murray, United States Attorney for the Western District of North Carolina.  “My office will continue to steadfastly use the False Claims Act to safeguard the integrity of our healthcare system and protect taxpayer dollars from healthcare providers that engage in this type of fraudulent activity.”

The government alleged that HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services, paid remuneration to physicians in return for patient referrals, and submitted inflated claims for emergency department facility fees.  Lake Norman Regional Medical Center and Davis Regional Medical Center, are two HMA hospitals in which the alleged fraudulent scheme was carried out.

Today’s settlement resolves multiple allegations against HMA for both criminal and civil liability.  As part of today’s settlement, HMA agreed to pay $62.5 million to resolve HMA’s liability for submitting false claims between 2008 and 2012 as part of a corporate-wide scheme to increase inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65.  The government alleged that the inpatient admission of these beneficiaries was not medically necessary, and that the care needed by, and provided to, these beneficiaries should have been provided in a less costly outpatient or observation setting. 

HMA agreed to pay $61,839,718 to the United States and $706,084 to participating States. HMA also agreed to pay $12 million to resolve allegations that from September of 2009 through December of 2011, certain HMA hospitals submitted claims to Medicare and Medicaid seeking reimbursement for falsely inflated emergency department facility charges. HMA agreed to pay $11,028,000 to the United States and $972,000 to participating States to settle HMA’s inflated billing practices.

This settlement resolves certain claims brought by Doctors Thomas L. Mason, Steven G. Folstad and their company Mid-Atlantic Emergency Medical Associates (MEMA), in a qui tam complaint filed on September 23, 2010 in the Western District of North Carolina.  MEMA, Mason and Folstad’s company, provided contracted emergency department physician service to HMA at Lake Norman Regional Medical Center and Davis Regional Medical Center.  Mason and Folstad alleged that because they resisted HMA’s efforts to enact this scheme, HMA fired MEMA and awarded the contract for emergency department services to EmCare, Inc. (EmCare), a large national emergency department services company.  Mason and Folstad also named EmCare as a defendant in their complaint.  The settlement amount of $62.5 million and $12 million resolves allegations of fraud included in doctors Mason and Folstad’s complaint.  EmCare previously settled its civil liability with the government in December 2017 for $29.6 million. More information on EmCare’s settlement can be found here.

Mason and Folstad filed their complaint under the qui tam provisions of the False Claims Act, which allows private citizens with knowledge of potential fraud to file a complaint on behalf of the United States.  These whistleblowers, known as relators under the statute, often bring corporate wrongdoing to the attention of the United States.

“The efforts of relators like Doctors Mason and Folstad are essential to protecting the integrity of our Medicare and Medicaid systems,” said U.S. Attorney Murray.  “We thank them for bringing these allegations to the United States.”

Under the False Claims Act, the United States investigates relators’ allegations, often with assistance from relators and their counsel, to determine if it will intervene in the case. 

“Relators’ counsel has provided invaluable assistance to the United States during this long investigation,” said Murray.  “Such assistance greatly enhances government resources allowing us to more effectively fight fraud on government programs.”

 

 

CHARLOTTE, N.C. – Three Gaston County drug trafficker were sentenced in federal court yesterday to prison terms ranging from nine to 17.5 years, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Quinton Lavar Brown, 34, of Gastonia, was sentenced to 210 months in prison and five years of supervised release; Antwan Lamar Floyd, 35, of Gastonia, was sentenced to 144 months in prison and five years of supervised release; and Maurice Terrell Robinson, 29, of Dallas, N.C. was sentenced to 110 months in prison, followed by 6 years of supervised release.  Chief U.S. District Judge Frank D. Whitney presided over the sentencing hearings.

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

According to court documents and information presented at the sentencing hearings, the three men were responsible for trafficking multiple kilograms of crack cocaine in and around Gaston County.  Court records show that, over the course of the investigation, law enforcement recovered from the defendants’ stash houses and residences more than $24,931 in cash, 74 grams of cocaine, 1.5 kilograms of marijuana, a money counter and four sets of digital scales.  In addition, law enforcement seized illegally possessed firearms, including one AK-47 assault rifle, one shotgun, four handguns, and ammunition. 

Brown, who engaged in drug trafficking while on supervised release for a previous federal drug and racketeering conspiracy conviction, pleaded guilty on May 2, 2018, to conspiracy to distribute and to possess with intent to distribute crack cocaine. Floyd pleaded guilty to conspiracy to distribute and to possess with intent to distribute crack cocaine on April 11, 2018. Robinson, who was also on supervised release in connection with a previous federal drug, racketeering conspiracy and Hobbs Act Robbery conviction, pleaded guilty to possession with intent to distribute crack cocaine on December 19, 2017. 

All three defendants are currently in federal custody 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.

            These convictions stem from an Organized Crime Drug Enforcement Task Force (OCDETF) investigation.  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.

            These cases are also part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN.

            In making today’s announcement U.S. Attorney Murray thanked the Federal Bureau of Investigation, Charlotte Division, and the Gastonia Police Department for their investigation of the case.

            Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte was in charge of the prosecution.

A federal jury in Charlotte, North Carolina convicted a Charlotte man today of conspiracy to defraud the government, 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.

According to court documents and evidence presented at trial, between October 2007 and May 2016, Arthur Joseph Gerard III assisted clients in hiding income and assets from the Internal Revenue Service (IRS) using straw companies and bank accounts opened in the names of those companies.  In particular, Gerard conspired with his client, Reuben DeHaan, to hide from the IRS over $2.7 million in gross receipts earned by DeHaan through his holistic medicine business. Gerard recruited his friend, Richard H. Campbell Jr., into the scheme to serve as a nominee on DeHaan’s bank accounts.  Gerard also assisted DeHaan in the filing of false documents with the IRS to obstruct the IRS’ collection efforts.  Gerard charged DeHaan a fee of between $1,000 and $2,500 for each straw company he created.  In total, Gerard’s conduct caused a tax loss of approximately $560,000.

​Gerard faces a statutory maximum of five years in prison, as well as a period of supervised release, restitution, and monetary penalties.  DeHaan and Campbell each previously pleaded guilty and have been sentenced.

​Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney William Miller and Trial Attorney Mara Strier of the Tax Division, who prosecuted 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 Charlotte man today of conspiracy to defraud the government, 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.

According to court documents and evidence presented at trial, between October 2007 and May 2016, Arthur Joseph Gerard III assisted clients in hiding income and assets from the Internal Revenue Service (IRS) using straw companies and bank accounts opened in the names of those companies.  In particular, Gerard conspired with his client, Reuben DeHaan, to hide from the IRS over $2.7 million in gross receipts earned by DeHaan through his holistic medicine business. Gerard recruited his friend, Richard H. Campbell Jr., into the scheme to serve as a nominee on DeHaan’s bank accounts.  Gerard also assisted DeHaan in the filing of false documents with the IRS to obstruct the IRS’ collection efforts.  Gerard charged DeHaan a fee of between $1,000 and $2,500 for each straw company he created.  In total, Gerard’s conduct caused a tax loss of approximately $560,000.

​Gerard faces a statutory maximum of five years in prison, as well as a period of supervised release, restitution, and monetary penalties.  DeHaan and Campbell each previously pleaded guilty and have been sentenced.

​Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Murray commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney William Miller and Trial Attorney Mara Strier of the Tax Division, who prosecuted the case.  

CHARLOTTE, N.C. – United States Attorney Andrew Murray announced today that 16 individuals are facing federal drug conspiracy charges for their involvement in a drug distribution ring.  A federal criminal indictment was filed on August 23, 2018, and was unsealed today in federal court. 

“The 16 individuals charged in the criminal indictment are alleged to have been part of a drug ring that distributed methamphetamine, cocaine and marijuana in Western North Carolina,” said U.S. Attorney Murray.  “Working with our law enforcement partners, we will continue to investigate drug traffickers and dismantle drug networks that feed the deadly cycle of drug abuse, and jeopardize the safety and stability of our communities.”

Robert J. Murphy, Special Agent in Charge of the DEA Atlanta Field Division said, “All participating agencies played a crucial role in the eradication of this poly-drug distribution network. Their methamphetamine, cocaine and marijuana trafficking activities posed a threat to the quality of life in Western North Carolina. The dismantling of this organization makes the affected areas a safer place today. DEA thanks its federal, state and local law enforcement counterparts and the U.S. Attorney’s Office who had a direct impact in making this investigation a success.” 

“ATF is proud to have been a part of a collaborative effort with our federal, state and local law enforcement partners. Today’s federal charges will dissolve this drug network, which will have a positive impact on the level of gun violence, violent crime and drug activity in the area,” said Wayne Dixie, Special Agent in Charge of ATF’s Charlotte Field Division.

According to allegations contained in the criminal indictment, from 2014 until August 2018, the defendants operated as a drug conspiracy responsible for trafficking methamphetamine, cocaine and marijuana in Western North Carolina, centered in and around Catawba County.  The conspiracy extended well beyond North Carolina to Georgia, Texas, California, Illinois, Mexico and elsewhere, and involved the trafficking of multi-kilogram quantities of narcotics.  The 16 defendants named in the indictment are all charged with conspiracy to distribute and to possess with intent to distribute methamphetamine, cocaine, and marijuana.  Some of the defendants face additional offenses related to drug trafficking.  Those named in the indictment are:

• Juan E. Villarreal, 28, of Hickory, N.C.
• Jesus Bedolla, 25, of Sweetwater, Tennessee
• Tommy Warren Boyett, 33, of New London, N.C.
• Joey Antoine Carroll, 32, of Lincolnton, N.C.
• Ricardo Cervantes-Sanchez, 39, of Hickory, N.C.
• Ivan Garcia-Arcos, 34, of Newton, N.C.
• Clayton Ismael Rivera-Trejo, 22, of Hickory, N.C.
• David Charles McIntosh, 37, of Conover, N.C.
• Manuel Bernarno Martinez, Jr., 33, of Alamo, Texas
• Ricky Joe Moses, 39, of Conover, N.C.
• Cindy Santillan, 25, of Taylorsville, N.C.
• Daniel Santillan, 36, of Hickory, N.C.
• Martin Vidal Santillan, 53, of Hickory, N.C.
• Rogelio Vidal Santillan, 51, of Hickory, N.C.
• Juan Manuel Villagomez, 29, of Hickory, N.C.
• Raymundo Villarreal, 21, of Newton, N.C.
   

McIntosh, Carroll, Juan Villarreal and Raymundo Villarreal are also charged with separate counts of distribution and possession with intent to distribute methamphetamine.  Juan Villarreal and Raymundo Villlarreal face additional charges of attempt to possess with intent to distribute marijuana.

Each defendant in the indictment is facing a mandatory minimum sentence of 10 years in prison and a maximum of up to life in prison and a monetary fine of up to $10 million.

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 commended the work of the Drug Enforcement Administration with the assistance of the Federal Bureau of Investigation; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Secret Service; the United States Probation Office; the North Carolina State Bureau of Investigation; the Catawba County Sheriff’s Office; the Alexander County Sheriff’s Office; the Hickory Police Department; the Newton Police Department; the Lincolnton Police Department; the Maiden Police Department; and the Cornelius Police Department.  U.S. Attorney Murray also thanked the DEA’s offices in McAllen, Texas; Louisville, Kentucky; Indianapolis, Indiana; and Knoxville Tennessee, and the 9th Judicial Drug Task Force in Tennessee for their assistance in this case.

Assistant U.S. Attorney William Bozin of the U.S. Attorney’s Office in Charlotte is prosecuting the case.

This prosecution is part of an extensive investigation by 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 level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

The Department of Justice today filed a Statement of Interest in In re Kaiser Gypsum Co. in the United States Bankruptcy Court for the Western District of North Carolina.  In the case, Kaiser Gypsum Company and Hanson Permanente Cement Inc. propose the establishment of a new asbestos trust under 11 U.S.C. § 524(g), a section of the Bankruptcy Code that provides the framework for responding to the unique issues associated with asbestos liability.

“In recent years, alarming evidence has emerged of fraud and mismanagement inside asbestos trusts,” said Principal Deputy Associate Attorney General Jesse Panuccio.  “Asbestos victims should feel certain that they will receive compensation when they are promised it, but fraudulent claims and mismanagement call that promise into question. In addition, the United States and all who depend on Medicare are harmed when Medicare is not reimbursed for treatment costs that have been paid by trust funds. With today’s Statement of Interest, the Department sends a clear message that we will not tolerate fraudulent conduct that cheats asbestos victims and the United States.  This is just one action the Department will take to increase the transparency and accountability of asbestos trusts, and we are grateful for the many partners we have in that mission, including the many state attorneys general who have brought attention to this issue.  We encourage anyone with information about fraud or mismanagement of asbestos trusts to report it to the Department of Justice.”

Congress enacted 11 U.S.C. § 524(g) to create a comprehensive mechanism for addressing injuries caused by asbestos.  Under section 524(g) plans, asbestos-related claims may be channeled to a special trust created under the bankruptcy plan of reorganization, which then assumes responsibility for both the defense and payment of those claims.  The trusts are managed by trustees, who often must secure support for major decisions from a “trust advisory committee” (TAC), whose members are often the same attorneys who represented asbestos claimants during the bankruptcy.  Since 1994, more than 60 such trusts have been established by chapter 11 debtors with asbestos-related liabilities.  According to the Government Accountability Office, asbestos bankruptcy trusts paid $17.5 billion from 1988 through 2011, and more recent studies estimate higher amounts.

In recent years, both courts and researchers have expressed growing concern that the trusts, enabled by a lack of oversight or accountability, may be paying fraudulent claims and mismanaging funds.  In 2014, the same bankruptcy court in which the United States today filed its statement of interest found a substantial pattern of fraud in another case, In re Garlock Sealing Technologies, LLC, 504 B.R. 71 (Bankr. W.D.N.C. 2014).  The court found that, in a sample of 15 civil asbestos cases, in each and every case key evidence about asbestos exposure had been improperly misrepresented or withheld.  In three instances, plaintiffs made claims against defendants to whose products they had previously represented they had never been exposed.  Similarly, several studies have demonstrated problems caused by the lack of oversight.  One study found that, in the study period, people without malignant asbestos injury accounted for 86 percent of all claims made to the trusts and 37 percent of all trust payments.  Another found that many of the claim forms submitted by the same claimants and law firms to different trusts contradicted each other.  The secrecy with which many trust claims are submitted, allowed, and paid has made it nearly impossible to detect when plaintiffs are seeking a recovery based on misrepresentations.

The United States’ Statement of Interest argues that the plans currently on file in this case do not have sufficient safeguards in place to prevent fraud and abuse.  The Statement also indicates that the United States will object to any plan that lacks critical provisions to ensure transparency and accountability and to prevent fraudulent claims and mismanagement of the trust funds, including provisions: that require compliance with the Medicare Secondary Payer Statute; that notify claimants of their potential obligation to reimburse Medicare; that prevent excessive administrative costs and attorney contingency fees; that avoid conflicts of interest among members of the TAC; and that prevent payments to those who cannot demonstrate exposure to the defendants’ products or who have made inconsistent claims in other asbestos proceedings.  The United States is filing this Statement of Interest now to allow the parties sufficient time to address the concerns it raises.

Finally, in addition to filing the Statement of Interest, the Department also responded today to letters from 19 state attorneys general regarding concerns over asbestos trusts.

The Department will continue to look for opportunities to increase the transparency of asbestos trusts and protect the interests of legitimate claimants and the United States.  The Department will also investigate conduct related to asbestos trusts that is illegal under federal law.  If anyone has information on asbestos trust fraud or mismanagement, the Department welcomes the reporting of that information so that it may pursue all appropriate means under federal law to ensure that asbestos trusts operate lawfully and responsibly.

This matter has been handled by the Department’s Civil Division with assistance from the U.S. Trustee Program and the U.S. Attorney’s Office for the Western District of North Carolina.

CHARLOTTE, N.C. – U.S. Attorney R. Andrew Murray announced that, late yesterday, Johnny Obrian Leach, 31, of Gastonia, N.C. was sentenced to 180 months in prison and three years of supervised release for possession of a firearm by a convicted felon.  U.S. District Judge Robert J. Conrad, Jr. presided over the sentencing.

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

According to court documents and today’s sentencing hearing, on November 7, 2017, Leach possessed a loaded .22 caliber Walther pistol.  Leach’s prior convictions, which include Assault with Deadly Weapon Inflicting Serious Injury on April 24, 2004; two counts of Robbery with Dangerous Weapon and two counts of First Degree Kidnapping on October 20, 2005; and two counts of Robbery with Dangerous Weapon on October 26, 2005, prohibit Leach from possessing firearms.  At today’s sentencing hearing Leach received an enhanced sentence as an “Armed Career Criminal.”

Leach pleaded guilty to possession of a firearm by a convicted felon in February 2018.  He is currently in federal custody and will be transferred to custody of the Federal Bureau of Prisons upon designation of a federal facility.  Federal sentences are served without the possibility of parole.

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

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

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.   Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced a repeat offender to 27 years in prison for production of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Estefano Gerardo Lopez, 26, of Charlotte, was also ordered to spend the rest of his life under court supervision and to register as a sex offender after he is released from prison.

According to court documents and information introduced at the sentencing hearing, Lopez pleaded guilty in April 2015 in Cumberland County Superior Court to soliciting a minor by computer.  According to court records, Lopez met a 12-year-old victim online and traveled to Fayetteville, N.C. to meet the minor, where he was arrested by law enforcement.  Lopez was sentenced to probation.  A condition of Lopez’s probationary sentence involved warrantless searches. 

On August 6, 2015, Lopez’s probation officer, accompanied by officers with the Charlotte-Mecklenburg Police Department, conducted a warrantless search at Lopez’s residence.  Court records show that law enforcement located on Lopez’s cell phone images of child pornography, which were hidden in a password-protected phone application. Law enforcement recovered additional child pornography on Lopez’s computer, including videos of Lopez sexually abusing a young child.  According to court records, in addition to the child pornography, law enforcement also located numerous chats that Lopez had engaged in using the phone application “KIK messenger.”  In these chats, Lopez identified himself as a teenage boy, and chatted with others who identified themselves as 12 or 13 years old.  Over the course of the chats, the defendant solicited pornography images of the minor victims, and sent them pornographic pictures of a minor, which Lopez pretended was him.

Lopez pleaded guilty to production of child pornography in February 2018.  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. 

In making today’s announcement, U.S. Attorney Murray thanked the Charlotte-Mecklenburg Police Department for their investigation of this case.

Assistant U.S. Attorney Cortney Randall, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat t4he 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. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced a former elementary school music teacher to 121 months in prison for possession and transportation of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term imposed, Judge Conrad ordered Benjamin McMiller, 33, of Charlotte, to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.

Chief Kerr Putney of the Charlotte-Mecklenburg Police Department joins U.S. Attorney Murray in making today’s announcement.

Filed court documents show that on September 20, 2016, McMiller streamed child pornography to another person using Omegle.com (Omegle), a free website where users can video or text chat.  According to court records, the child pornography McMiller streamed via Omegle depicted a minor female engaging in sexually explicit conduct with an adult male.  Law enforcement identified McMiller’s IP address as the one used to access the website.  On November 8, 2016, law enforcement conducted a search of McMiller’s residence and recovered multiple electronic devices, including McMiller’s computer, a USB drive, and an external hard drive, which the defendant initially denied possessing.  A forensic examination of McMiller’s devices revealed that the defendant possessed 88 images and 54 videos of child pornography, some of which depicted prepubescent children being sexually abused.

McMiller pleaded guilty to possession and transpiration of child pornography in February 2018.  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. 

The Charlotte-Mecklenburg Police Department investigated the case.  Assistant U.S. Attorney Cortney Randall, of the U.S. Attorney’s Office in Charlotte, was in charge of the prosecution.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat t4he 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.

Two high-ranking leaders of the Nine Trey Gangsters set of the United Blood Nation (UBN or Bloods) street gang, including the “Godfather” of the set, who also served as “Chairman” of the UBN, and a second leader who held the rank of “Worldwide High” were each sentenced today to 20 years in prison for racketeering conspiracy. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, and Special Agent in Charge John A. Strong of the FBI Charlotte, North Carolina Field Division, made the announcement.

Pedro Gutierrez, aka Magoo, Light and Inferno, 45, of New York City, New York, was sentenced by Chief Judge Frank D. Whitney to serve 20 years in prison.  James Baxton, aka Frank White and Grown, 44, of New York City, New York, was also sentenced by Judge Whitney to serve 20 years in prison.  Both of these sentences will be served consecutively to the defendants’ current New York State sentences.  Pedro Gutierrez, James Baxton, and Cynthia Gilmore, aka Cynthia Young and Lady Bynt, 42, of Raleigh, North Carolina, had been convicted by a federal jury sitting in Charlotte on May 17, following a two-week trial.  Cynthia Gilmore is awaiting sentencing.

“With today’s sentencings of two violent gang leaders, including the purported Godfather of the Nine Trey Gangsters, law enforcement has delivered yet another devastating blow to the Nine Trey Gangsters and the United Blood Nation,” said Assistant Attorney General Benczkowski.  “The defendants committed crimes that spanned the East Coast, including trafficking deadly narcotics in North Carolina and New York and ordering a gang war in North Carolina.  As demonstrated by the 61 defendants now adjudicated guilty in this case, when federal, state, and local law enforcement work together in sustained efforts, we can disrupt and erode violent prison and street gangs.”

“Drugs, thefts, guns, violent assaults, and murders are all crimes the Bloods commit every day to protect their turfs, increase their territory, control and recruit members, and intimidate rival gangs,” said U.S. Attorney Murray.  “And all of it happens right here, in our neighborhoods, where honest, hard-working people are simply trying to raise their children without the fear of harm.  We cannot overlook or underestimate the long-term impact of gangs on the well-being and prosperity of communities where gang activity is present.  That is why the dismantling of criminal enterprises district-wide is both a priority for my office and a goal we share with law enforcement agencies throughout the Western District of North Carolina.”

In February 2017, President Trump directed the Department of Justice “to reduce crime in America,” and Attorney General Jeff Sessions has made violent crime reduction and eliminating gangs a priority during his tenure. In June 2018, the Attorney General announced the largest increase in Assistant U.S. Attorneys—311 new prosecutors, including eight in North Carolina—to combat violent crime and carry out other Department priorities.

Additionally, Attorney General Sessions last year announced a reinvigorated Project Safe Neighborhoods program aimed at reducing the rising tide of violent crime in America. The U.S. Attorney’s Office for the Western District of North Carolina is an active participant in PSN.

Deputy Attorney General Rod Rosenstein mentioned many of these announcements and more when he delivered remarks in August to the 17th Annual Gangs Across the Carolinas Conference, a conference which Attorney General Sessions delivered remarks to in August 2017.

“These leaders of the UBN thought they were untouchable, continuing to run their criminal enterprise from inside state prison,” said FBI Special Agent in Charge Strong.  “The lengthy federal sentences they received today send a strong message to anyone who tries to fill the criminal void they leave behind.  Do not be mistaken, we’ll come after you next with the full strength of our federal, local, and state law enforcement partners.” 

According to court documents and evidence presented at trial, the UBN is a violent criminal street gang operating throughout the east coast of the United States since it was founded as a prison gang in 1993.  UBN members are often identified by their use of the color red, and can also often be identified by common tattoos or burn marks.  Examples include: a three-circle pattern, usually burned onto the upper arm, known as a “dog paw”; the acronym “M.O.B.,” which stands for “Member of Bloods”; the words “damu,” or “eastside”; the number five; the five-pointed star; and the five-pointed crown.  UBN members have distinct hand signs and written codes, which are used to identify other members and rival gang members.  The Nine Trey Gangster set of the UBN refer to themselves as “Billies.”

According to court documents and evidence presented at trial, the UBN is governed by a common set of 31 rules, known as “The 31,” which were originally written by the founders of the UBN.  Members of the UBN are expected to conduct themselves and their illegal activity according to rules and regulations set by their leaders.  Prominent among these is a requirement to pay monthly dues to the organization, often in the amounts of $31 or $93.  A percentage of these funds are transferred to incarcerated UBN leadership in New York; these funds also are used locally to conduct gang business.  UBN gang dues are derived from illegal activity performed by subordinate UBN members including narcotics trafficking, robberies, wire fraud, and bank fraud, among other forms of illegal racketeering activities.

According to court documents and evidence presented at trial, the Nine Trey Gangsters’ leadership proceeds in rank, from lowest to highest, from “Scrap,” “1-Star General” through “5-Star General,” “Low,” “High,” and “Godfather.” 

Based on evidence introduced during the trial, Gutierrez was a “Godfather” of the Nine Trey Gangsters and had served since 2003 as the “Chairman” of the council that governs the UBN.  Gutierrez, together with James Baxton and Omari Rosero, considered themselves “the last ones that God put in power” over the UBN.  As the Godfather of the set, Gutierrez, along with Baxton, conducted gang business and participated in the distribution of gang dues while incarcerated in the New York State Department of Corrections. Trial evidence also established that Gutierrez ordered a gang war in North Carolina in 2011, directing that members of the Bloods gang attack and kill members of a renegade gang called Pretty Tony. The war resulted in numerous injuries among inmates and the lockdown of five North Carolina prisons for six months.

Trial evidence also established that Baxton was a “Worldwide High” of the Nine Trey Gangsters and that, while incarcerated in the New York State Department of Corrections, Baxton trafficked heroin within the prison system and engaged in wire fraud by threatening the relatives of other incarcerated inmates.

In all, 61 defendants have been adjudicated guilty in this case, including the two defendants who were found guilty at trial and sentenced today; 58 defendants have previously pleaded guilty in this investigation.  This includes 10 defendants in high-ranking leadership positions:

• Montraya Antwain Atkinson, aka Hardbody, 31, of Raleigh, North Carolina, pleaded guilty to racketeering conspiracy.  According to the factual basis of his plea agreement, Atkinson admitted to holding the leadership rank of “High,” and admitted to possessing marijuana and cocaine with intent to distribute, and to purchasing and selling powder cocaine;
• Adrian Nayron Coker, aka Gotti, 28, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy and three counts of possession with intent to distribute narcotics.  According to the factual basis of his plea agreement, Coker admitted to holding the leadership rank of “Low,” and to possessing a stolen firearm and ammunition, despite having previously been convicted of a felony.  Coker was also recorded discussing a potential murder of a rival gang member.  Coker was sentenced on June 18, to a term of 140 months in prison;
• Bianca Kiashie Harrison, aka Lady Gunz, 28, of Midway Park, North Carolina, pleaded guilty to racketeering conspiracy.  According to the factual basis of her plea agreement, Harrison admitted to holding the leadership rank of “High,” and to participating, at facilities within the New York Department of Corrections, in gang leadership meetings with alleged UBN Godfathers Gutierrez and Baxton.  Harrison was sentenced on June 18, to a term of 32 months in prison;
• Quincy Delone Haynes, aka Black Montana, 39, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy and three counts of trafficking cocaine.  According to the factual basis of this plea agreement, Haynes admitted to holding the leadership rank of “Low.”  Haynes was sentenced on Aug. 15, to a term of 64 months in prison;
• Bobby Earl Hines, aka Swahili Red, 35, of North Carolina, pleaded guilty to racketeering conspiracy.  According to the factual basis of his plea agreement, Hines admitted to holding the leadership rank of “High”;
• Barrington Audley Lattibeaudiere, aka Bandana and Bobby Seale, 31, of Fort Lauderdale, Florida, pleaded guilty to racketeering conspiracy and conspiracy to commit wire fraud.  According to the factual basis of his plea agreement, Lattibeaudiere admitted to holding the leadership rank of “High,” and coordinating the transmission of hundreds of dollars of UBN gang dues to Gutierrez and Baxton. Lattibeaudiere further admitted to participating in a scheme to make and attempt to make over $64,000 in purchases using fraudulent credit and gift cards.  Lattibeaudiere was sentenced on June 19, to serve 56 months in prison;
• MyQuan Lamar Nelson, aka Dripz, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and conspiracy to possess with intent to distribute heroin, and according to the factual basis of his plea agreement admitted to holding the leadership rank of “Low;”
• Omari Rosero, aka Uno B, 41, of Elmira, New York, pleaded guilty to racketeering conspiracy.  During his plea, Omari Rosero admitted to holding the leadership rank of “High,” and to serving as an acting “Godfather” of the entire UBN.  Rosero was sentenced on July 31, to a sentence of 87 months in prison, to be served federally after completing a sentence in New York State;
• Porsha Talina Rosero, aka Lady Uno B, 35, of Syracuse, New York, pleaded guilty to racketeering conspiracy.  Rosero admitted to participating in the distribution of gang dues, and to participating in a phone call during which Omari Rosero stated that a suspected cooperator would be “faded straight up.”  Porsha Rosero was sentenced on July 31, to serve 21 months in prison; and
• Tywlain Wilson, aka 5 Alive, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy, possession with intent to distribute marijuana, and firearm possession in furtherance of a drug trafficking crime.  According to the factual basis of his plea agreement, Wilson admitted to holding the leadership rank of “Low.”  Wilson was sentenced on July 30, to serve 82 months in prison.

The following 33 defendants have also pleaded guilty and have been sentenced in this investigation:

• Sherman Devante Addison, aka Ace, 24, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy.  Addison was sentenced on Aug. 15, to serve 33 months in prison;
• Freddrec Deandre Banks, aka Drec and Banga, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.  Banks was sentenced on Aug. 14, to serve 33 months in prison;
• Destinee Danyell Blakeney, aka Lady Rude, 23, of Morven, North Carolina, pleaded guilty to racketeering conspiracy.  Blakeney was sentenced on July 31, to serve 18 months in prison;

• Shakira Monique Campbell, aka Lady Rage, 24, of Charlotte, North Carolina, pleaded guilty to possession of cocaine.  Campbell was sentenced to serve eight months in prison;
• Alex Levi Cox, aka Quick, 28, of Loris, South Carolina, pleaded guilty to racketeering conspiracy.  Cox was sentenced on Aug. 21, to serve 17 months in prison;
• Richard Diaz, aka Damu, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Diaz was sentenced on Aug. 15, to serve 33 months in prison;
• Christopher Dentre Hamrick, aka Red Dot, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon.  Hamrick was sentenced on May 30, to serve 64 months in prison;
• Lavaughn Antonio Hanton, aka Killem and Billy-D, 35, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Hanton was sentenced on Aug. 21, to 216 months in prison;
• Anthony ONeil Harrison, aka Ant, 20, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Harrison was sentenced on June 25to serve 27 months in prison;
• Delonte Maurice Hicks, aka BBB Shooter and Black, 29, of Bennettsville, South Carolina, pleaded guilty to racketeering conspiracy.  Hicks was sentenced on May 31, to serve 24 months in prison;
• Raheam Shumar Hopper, aka Bone, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.  Hopper was sentenced on June 20, to serve 27 months in prison;
• Donl Lequintin Hunsucker, aka Remy, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Hunsucker was sentenced on Aug. 15, to serve 52 months in prison;
• Muhammad John Jackson, aka Picasso, 33, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Jackson was sentenced on Aug. 21, to serve 27 months in prison;
• Terrence Thomas Johnsom, aka Sypher, 41, of Durham, North Carolina, pleaded guilty to racketeering conspiracy.  Johnsom was sentenced on May 30, to serve 57 months in prison;
• Joe Tarpeh Johnson, aka JR, Big Pusha and Kutthroat, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud.  Johnson was sentenced on April 28, to serve 31 months in prison;
• Latif Nakia Antoine Johnson, aka Billy Solo, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Johnson was sentenced on July 9, to serve 18 months in prison;
• Rashad Monte King, aka Billy Kilo Montana, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  King was sentenced on July 30, to serve 25 months in prison;
• David Matthew Lowe, aka Gucci, 26, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.  Lowe was sentenced on May 29, to serve 24 months in prison;
• Charles Kenyon Lytle, aka Kam, 40, of Concord, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon.  Lytle was sentenced on Aug. 22, to serve 46 months in prison;
• Brandon Theodore Manning, aka Billy B, 29, of Columbia, South Carolina, pleaded guilty to racketeering conspiracy.  Manning was sentenced on July 31, to serve 21 months in prison;
• Travis McClain, aka Fridaay Daa Thuurteenth, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  McClain was sentenced on Aug. 14, to serve 27 months in prison;
• Isaac Nabah McIntosh, aka Mac, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  McIntosh was sentenced on July 30, to serve 18 months in prison;
• D’Angelo De’Mara McNeil, aka Dutch, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  McNeil was sentenced on June 20, to serve 33 months in prison;
• Kolawole Olalekan Omotosho, aka Rugged Red, 19, of Jacksonville, North Carolina, pleaded guilty to racketeering conspiracy.  Omotosho was sentenced on May 29, to serve 33 months in prison;
• James Brandin Pegues, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Pegues was sentenced on May 29, to serve 33 months in prison;
• Deshawn Deonta Peterkin, aka Proo, 29, of Wallace, South Carolina, pleaded guilty to racketeering conspiracy.  Peterkin was sentenced on June 25, to serve 21 months in prison;
• Austin Demontry Potts, aka Big Tek and B-Tek, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Potts was sentenced on May 29, to serve 30 months in prison;
• Rashad Sattar, 20, of Lauderdale Lakes, Florida, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud.  Sattar was sentenced on Aug. 22, to serve 33 months in prison;
• Anthony Bernard Smith, aka Redd Lion, 25, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy.  Smith was sentenced on April 23, to serve 44 months in prison;
• Cedric Surratt, aka Hollywood, 5-Star and Lingo, 30, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Surratt was sentenced on June 20, to serve 28 months in prison;
• Peatrez Lamar Teaste, aka P-Wheezy, 25, of Loris, South Carolina, pleaded guilty to racketeering conspiracy.  Teaste was sentenced on Aug. 21, to serve 109 months in prison;
• Lavon Christopher Turner, aka Hungry, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud.  Turner was sentenced on April 23, to serve 35 months in prison; and
• Jesse James Watkins, aka Showtime, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy.  Watkins was sentenced on July 30, to serve 27 months in prison.

The following 15 defendants have also pleaded guilty and are awaiting sentencing in this case:

• Aaron Demitri Alexander, aka A Dawg, 25, of Charlotte, North Carolina, pleaded guilty on July 9, to racketeering conspiracy;
• Antarious Quashard Byers, aka Bang, 25, of Shelby, North Carolina, pleaded guilty on Aug. 28, to racketeering conspiracy;
• Renaldo Rodregus Camp, aka Rodeo and Drop, 40, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession with intent to distribute cocaine;
• Brandon Khalil Covington, aka Blokka, 25, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm in furtherance of drug trafficking;
• James Walter Dowdle, aka Staxx, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and use of a firearm in furtherance of a crime of violence;
• John Paul Durant, aka JP, Glock and Gudda, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Shamon Movair Goins, aka Rugie, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;
• Jasmin Reikeem Hicks, aka Rude, 28, of Morven, North Carolina, pleaded guilty to racketeering conspiracy;
• Juan Cruz Leon, aka Jefe, 22, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;
• Terry Lavon Maddox, aka Turbo, 27, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and possession with intent to distribute cocaine base;
• Robert Allen McClinton, aka Trigga, 29, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and two counts of possession with intent to distribute cocaine base;
• Christopher Lashon Miller, aka Dro, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Christopher O’Brien Moore, aka Ratchet, 23, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
• Isaiah Devon Stallworth, aka Zay and Juice, 25, of Charlotte, North Carolina, pleaded guilty on Jan. 5, to racketeering conspiracy and to use of a firearm in furtherance of a crime of violence; and
• Jhad Elijah Thorbourne, aka Flight, 24, of Charlotte, North Carolina, pleaded guilty on July 19, to racketeering conspiracy.

The investigation was conducted by the FBI; the Charlotte Mecklenburg Police Department; the Shelby Police Department; the Cleveland County Sheriff’s Office; the Gastonia Police Department; the North Carolina State Highway Patrol; the Mecklenburg County Sheriff’s Office; the North Carolina Division of Adult Correction and Juvenile Justice; the North Carolina Department of Motor Vehicles; the U.S. Federal Probation; the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the IRS Criminal Investigation; the U.S. Postal Inspection Service; the U.S. Army Criminal Investigation Command; and the New York Department of Corrections and Community Supervision, Office of Special Investigations.  Trial Attorneys Andrew L. Creighton and Beth Lipman of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Matt Warren and Christopher Hess for the Western District of North Carolina are prosecuting the case.

This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Forces (OCDETF) Program.  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 level 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. – Two high-ranking leaders of the Nine Trey Gangsters set of the United Blood Nation (UBN or Bloods) street gang, including the "Godfather" of the set, who also served as "Chairman" of the UBN, and a second leader who held the rank of "Worldwide High" were each sentenced today to 20 years in prison for racketeering conspiracy.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, and Special Agent in Charge John A. Strong of the FBI Charlotte, North Carolina Field Division, made the announcement.

Pedro Gutierrez, aka Magoo, Light and Inferno, 45, of New York City, New York, was sentenced by Chief Judge Frank D. Whitney to serve 20 years in prison. James Baxton, aka Frank White and Grown, 44, of New York City, New York, was also sentenced by Judge Whitney to serve 20 years in prison. Both of these sentences will be served consecutively to the defendants’ current New York State sentences. Pedro Gutierrez, James Baxton, and Cynthia Gilmore, aka Cynthia Young and Lady Bynt, 42, of Raleigh, North Carolina, had been convicted by a federal jury sitting in Charlotte on May 17, following a two-week trial. Cynthia Gilmore is awaiting sentencing.

"With today’s sentencings of two violent gang leaders, including the purported Godfather of the Nine Trey Gangsters, law enforcement has delivered yet another devastating blow to the Nine Trey Gangsters and the United Blood Nation," said Assistant Attorney General Benczkowski. "The defendants committed crimes that spanned the East Coast, including trafficking deadly narcotics in North Carolina and New York and ordering a gang war in North Carolina. As demonstrated by the 61 defendants now adjudicated guilty in this case, when federal, state, and local law enforcement work together in sustained efforts, we can disrupt and erode violent prison and street gangs."

"Drugs, thefts, guns, violent assaults, and murders are all crimes the Bloods commit every day to protect their turfs, increase their territory, control and recruit members, and intimidate rival gangs," said U.S. Attorney Murray. "And all of it happens right here, in our neighborhoods, where honest, hard-working people are simply trying to raise their children without the fear of harm. We cannot overlook or underestimate the long-term impact of gangs

on the well-being and prosperity of communities where gang activity is present. That is why the dismantling of criminal enterprises district-wide is both a priority for my office and a goal we share with law enforcement agencies throughout the Western District of North Carolina."

In February 2017, President Trump directed the Department of Justice "to reduce crime in America," and Attorney General Jeff Sessions has made violent crime reduction and eliminating gangs a priority during his tenure. In June 2018, the Attorney General announced the largest increase in Assistant U.S. Attorneys—311 new prosecutors, including eight in North Carolina—to combat violent crime and carry out other Department priorities.

Additionally, Attorney General Sessions last year announced a reinvigorated Project Safe Neighborhoods program aimed at reducing the rising tide of violent crime in America. The U.S. Attorney’s Office for the Western District of North Carolina is an active participant in PSN.

Deputy Attorney General mentioned many of these announcements and more when he delivered remarks in August to the 17th Annual Gangs Across the Carolinas Conference, a conference which Attorney General Sessions delivered remarks to in August 2017.

"These leaders of the UBN thought they were untouchable, continuing to run their criminal enterprise from inside state prison," said FBI Special Agent in Charge Strong. "The lengthy federal sentences they received today send a strong message to anyone who tries to fill the criminal void they leave behind. Do not be mistaken, we’ll come after you next with the full strength of our federal, local, and state law enforcement partners."

According to court documents and evidence presented at trial, the UBN is a violent criminal street gang operating throughout the east coast of the United States since it was founded as a prison gang in 1993. UBN members are often identified by their use of the color red, and can also often be identified by common tattoos or burn marks. Examples include: a three-circle pattern, usually burned onto the upper arm, known as a "dog paw"; the acronym "M.O.B.," which stands for "Member of Bloods"; the words "damu," or "eastside"; the number five; the five-pointed star; and the five-pointed crown. UBN members have distinct hand signs and written codes, which are used to identify other members and rival gang members. The Nine Trey Gangster set of the UBN refer to themselves as "Billies."

According to court documents and evidence presented at trial, the UBN is governed by a common set of 31 rules, known as "The 31," which were originally written by the founders of the UBN. Members of the UBN are expected to conduct themselves and their illegal activity according to rules and regulations set by their leaders. Prominent among these is a requirement to pay monthly dues to the organization, often in the amounts of $31 or $93. A percentage of these funds are transferred to incarcerated UBN leadership in New York; these funds also are used locally to conduct gang business. UBN gang dues are derived from illegal activity performed by subordinate UBN members including narcotics trafficking, robberies, wire fraud, and bank fraud, among other forms of illegal racketeering activities.

According to court documents and evidence presented at trial, the Nine Trey Gangsters’ leadership proceeds in rank, from lowest to highest, from "Scrap," "1-Star General" through "5-Star General," "Low," "High," and "Godfather."

Based on evidence introduced during the trial, Gutierrez was a "Godfather" of the Nine Trey Gangsters and had served since 2003 as the "Chairman" of the council that governs the UBN. Gutierrez, together with James Baxton and Omari Rosero, considered themselves "the last ones that God put in power" over the UBN. As the Godfather of the set, Gutierrez, along with Baxton, conducted gang business and participated in the distribution of gang dues while incarcerated in the New York State Department of Corrections. Trial evidence also established that Gutierrez ordered a gang war in North Carolina in 2011, directing that members of the Bloods gang attack and kill members of a renegade gang called Pretty Tony. The war resulted in numerous injuries among inmates and the lockdown of five North Carolina prisons for six months.

Trial evidence also established that Baxton was a "Worldwide High" of the Nine Trey Gangsters and that, while incarcerated in the New York State Department of Corrections, Baxton trafficked heroin within the prison system and engaged in wire fraud by threatening the relatives of other incarcerated inmates.

In all, 61 defendants have been adjudicated guilty in this case, including the two defendants who were found guilty at trial and sentenced today; 58 defendants have previously pleaded guilty in this investigation. This includes 10 defendants in high-ranking leadership positions:

 Montraya Antwain Atkinson, aka Hardbody, 31, of Raleigh, North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of his plea agreement, Atkinson admitted to holding the leadership rank of "High," and admitted to possessing marijuana and cocaine with intent to distribute, and to purchasing and selling powder cocaine;

 Adrian Nayron Coker, aka Gotti, 28, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy and three counts of possession with intent to distribute narcotics. According to the factual basis of his plea agreement, Coker admitted to holding the leadership rank of "Low," and to possessing a stolen firearm and ammunition, despite having previously been convicted of a felony. Coker was also recorded discussing a potential murder of a rival gang member. Coker was sentenced on June 18, to a term of 140 months in prison;

 Bianca Kiashie Harrison, aka Lady Gunz, 28, of Midway Park, North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of her plea agreement, Harrison admitted to holding the leadership rank of "High," and to participating, at facilities within the New York Department of Corrections, in gang leadership meetings with alleged UBN Godfathers Gutierrez and Baxton. Harrison was sentenced on June 18, to a term of 32 months in prison;

 Quincy Delone Haynes, aka Black Montana, 39, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy and three counts of trafficking cocaine. According to the factual basis of this plea agreement, Haynes admitted to holding the leadership rank of "Low." Haynes was sentenced on Aug. 15, to a term of 64 months in prison;

 Bobby Earl Hines, aka Swahili Red, 35, of North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of his plea agreement, Hines admitted to holding the leadership rank of "High";

 Barrington Audley Lattibeaudiere, aka Bandana and Bobby Seale, 31, of Fort

 

Lauderdale, Florida, pleaded guilty to racketeering conspiracy and conspiracy to commit wire fraud. According to the factual basis of his plea agreement, Lattibeaudiere admitted to holding the leadership rank of "High," and coordinating the transmission of hundreds of dollars of UBN gang dues to Gutierrez and Baxton. Lattibeaudiere further admitted to participating in a scheme to make and attempt to make over $64,000 in purchases using fraudulent credit and gift cards. Lattibeaudiere was sentenced on June 19, to serve 56 months in prison;

 MyQuan Lamar Nelson, aka Dripz, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and conspiracy to possess with intent to distribute heroin, and according to the factual basis of his plea agreement admitted to holding the leadership rank of "Low;"

 Omari Rosero, aka Uno B, 41, of Elmira, New York, pleaded guilty to racketeering conspiracy. During his plea, Omari Rosero admitted to holding the leadership rank of "High," and to serving as an acting "Godfather" of the entire UBN. Rosero was sentenced on July 31, to a sentence of 87 months in prison, to be served federally after completing a sentence in New York State;

 Porsha Talina Rosero, aka Lady Uno B, 35, of Syracuse, New York, pleaded guilty to racketeering conspiracy. Rosero admitted to participating in the distribution of gang dues, and to participating in a phone call during which Omari Rosero stated that a suspected cooperator would be "faded straight up." Porsha Rosero was sentenced on July 31, to serve 21 months in prison; and

 Tywlain Wilson, aka 5 Alive, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy, possession with intent to distribute marijuana, and firearm possession in furtherance of a drug trafficking crime. According to the factual basis of his plea agreement, Wilson admitted to holding the leadership rank of "Low." Wilson was sentenced on July 30, to serve 82 months in prison.

The following 33 defendants have also pleaded guilty and have been sentenced in this investigation:

 Sherman Devante Addison, aka Ace, 24, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy. Addison was sentenced on Aug. 15, to serve 33 months in prison;

 Freddrec Deandre Banks, aka Drec and Banga, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Banks was sentenced on Aug. 14, to serve 33 months in prison;

 Destinee Danyell Blakeney, aka Lady Rude, 23, of Morven, North Carolina, pleaded guilty to racketeering conspiracy. Blakeney was sentenced on July 31, to serve 18 months in prison;

 Shakira Monique Campbell, aka Lady Rage, 24, of Charlotte, North Carolina, pleaded guilty to possession of cocaine. Campbell was sentenced to serve eight months in prison;

 Alex Levi Cox, aka Quick, 28, of Loris, South Carolina, pleaded guilty to racketeering conspiracy. Cox was sentenced on Aug. 21, to serve 17 months in prison;

 Richard Diaz, aka Damu, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Diaz was sentenced on Aug. 15, to serve 33 months in prison;

 Christopher Dentre Hamrick, aka Red Dot, 29, of Shelby, North Carolina, pleaded guilty

 

to racketeering conspiracy and to possession of a firearm by a convicted felon. Hamrick was sentenced on May 30, to serve 64 months in prison;

 Lavaughn Antonio Hanton, aka Killem and Billy-D, 35, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Hanton was sentenced on Aug. 21, to 216 months in prison;

 Anthony ONeil Harrison, aka Ant, 20, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Harrison was sentenced on June 25to serve 27 months in prison;

 Delonte Maurice Hicks, aka BBB Shooter and Black, 29, of Bennettsville, South Carolina, pleaded guilty to racketeering conspiracy. Hicks was sentenced on May 31, to serve 24 months in prison;

 Raheam Shumar Hopper, aka Bone, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Hopper was sentenced on June 20, to serve 27 months in prison;

 Donl Lequintin Hunsucker, aka Remy, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Hunsucker was sentenced on Aug. 15, to serve 52 months in prison;

 Muhammad John Jackson, aka Picasso, 33, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Jackson was sentenced on Aug. 21, to serve 27 months in prison;

 Terrence Thomas Johnsom, aka Sypher, 41, of Durham, North Carolina, pleaded guilty to racketeering conspiracy. Johnsom was sentenced on May 30, to serve 57 months in prison;

 Joe Tarpeh Johnson, aka JR, Big Pusha and Kutthroat, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Johnson was sentenced on April 28, to serve 31 months in prison;

 Latif Nakia Antoine Johnson, aka Billy Solo, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Johnson was sentenced on July 9, to serve 18 months in prison;

 Rashad Monte King, aka Billy Kilo Montana, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. King was sentenced on July 30, to serve 25 months in prison;

 David Matthew Lowe, aka Gucci, 26, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Lowe was sentenced on May 29, to serve 24 months in prison;

 Charles Kenyon Lytle, aka Kam, 40, of Concord, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon. Lytle was sentenced on Aug. 22, to serve 46 months in prison;

 Brandon Theodore Manning, aka Billy B, 29, of Columbia, South Carolina, pleaded guilty to racketeering conspiracy. Manning was sentenced on July 31, to serve 21 months in prison;

 Travis McClain, aka Fridaay Daa Thuurteenth, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McClain was sentenced on Aug. 14, to serve 27 months in prison;

 Isaac Nabah McIntosh, aka Mac, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McIntosh was sentenced on July 30, to serve 18 months in prison;

 D’Angelo De’Mara McNeil, aka Dutch, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McNeil was sentenced on June 20, to serve 33 months in prison;

 

 Kolawole Olalekan Omotosho, aka Rugged Red, 19, of Jacksonville, North Carolina, pleaded guilty to racketeering conspiracy. Omotosho was sentenced on May 29, to serve 33 months in prison;

 James Brandin Pegues, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Pegues was sentenced on May 29, to serve 33 months in prison;

 Deshawn Deonta Peterkin, aka Proo, 29, of Wallace, South Carolina, pleaded guilty to racketeering conspiracy. Peterkin was sentenced on June 25, to serve 21 months in prison;

 Austin Demontry Potts, aka Big Tek and B-Tek, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Potts was sentenced on May 29, to serve 30 months in prison;

 Rashad Sattar, 20, of Lauderdale Lakes, Florida, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Sattar was sentenced on Aug. 22, to serve 33 months in prison;

 Anthony Bernard Smith, aka Redd Lion, 25, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy. Smith was sentenced on April 23, to serve 44 months in prison;

 Cedric Surratt, aka Hollywood, 5-Star and Lingo, 30, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Surratt was sentenced on June 20, to serve 28 months in prison;

 Peatrez Lamar Teaste, aka P-Wheezy, 25, of Loris, South Carolina, pleaded guilty to racketeering conspiracy. Teaste was sentenced on Aug. 21, to serve 109 months in prison;

 Lavon Christopher Turner, aka Hungry, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Turner was sentenced on April 23, to serve 35 months in prison; and

 Jesse James Watkins, aka Showtime, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Watkins was sentenced on July 30, to serve 27 months in prison.

The following 15 defendants have also pleaded guilty and are awaiting sentencing in this case:

 Aaron Demitri Alexander, aka A Dawg, 25, of Charlotte, North Carolina, pleaded guilty on July 9, to racketeering conspiracy;

 Antarious Quashard Byers, aka Bang, 25, of Shelby, North Carolina, pleaded guilty on Aug. 28, to racketeering conspiracy;

 Renaldo Rodregus Camp, aka Rodeo and Drop, 40, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession with intent to distribute cocaine;

 Brandon Khalil Covington, aka Blokka, 25, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm in furtherance of drug trafficking;

 James Walter Dowdle, aka Staxx, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and use of a firearm in furtherance of a crime of violence;

 John Paul Durant, aka JP, Glock and Gudda, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;

 Shamon Movair Goins, aka Rugie, 28, of Charlotte, North Carolina, pleaded guilty to

 

racketeering conspiracy;

 Jasmin Reikeem Hicks, aka Rude, 28, of Morven, North Carolina, pleaded guilty to racketeering conspiracy;

 Juan Cruz Leon, aka Jefe, 22, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;

 Terry Lavon Maddox, aka Turbo, 27, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and possession with intent to distribute cocaine base;

 Robert Allen McClinton, aka Trigga, 29, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and two counts of possession with intent to distribute cocaine base;

 Christopher Lashon Miller, aka Dro, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;

 Christopher O’Brien Moore, aka Ratchet, 23, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;

 Isaiah Devon Stallworth, aka Zay and Juice, 25, of Charlotte, North Carolina, pleaded guilty on Jan. 5, to racketeering conspiracy and to use of a firearm in furtherance of a crime of violence; and

 Jhad Elijah Thorbourne, aka Flight, 24, of Charlotte, North Carolina, pleaded guilty on July 19, to racketeering conspiracy.

The investigation was conducted by the FBI; the Charlotte Mecklenburg Police Department; the Shelby Police Department; the Cleveland County Sheriff’s Office; the Gastonia Police Department; the North Carolina State Highway Patrol; the Mecklenburg County Sheriff’s Office; the North Carolina Division of Adult Correction and Juvenile Justice; the North Carolina Department of Motor Vehicles; the U.S. Federal Probation; the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the IRS Criminal Investigation; the U.S. Postal Inspection Service; the U.S. Army Criminal Investigation Command; and the New York Department of Corrections and Community Supervision, Office of Special Investigations. Trial Attorneys Andrew L. Creighton and Beth Lipman of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Matt Warren and Christopher Hess for the Western District of North Carolina are prosecuting the case.

This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. 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 level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

 

ASHEVILLE, N.C. – Today, Seth Willis Pickering, 38, of Leicester, N.C. was ordered to serve life in prison for killing his daughter, Lila Pickering, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Max O. Cogburn, Jr. presided over the sentencing hearing.

On February 9, 2018, Pickering pleaded guilty to first-degree murder, and admitted to killing his daughter on September 9, 2016, within the boundaries of the Blue Ridge Parkway. Pickering further admitted that he killed Lila Pickering, who had not attained the age of 18 years and was under his care and control, willfully, deliberately, maliciously and with premeditation.

Pickering 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 handing down today’s sentence, Judge Cogburn said that "there was no excuse for what happened," and stated that Pickering "killed a child to punish social services and his wife."

U.S. Attorney Murray thanked the FBI, the National Park Service and the Buncombe County Sheriff’s Office for their investigation of the case.

Assistant U.S. Attorneys David Thorneloe and John Pritchard of the U.S. Attorney’s Office in Asheville prosecuted the case.

 

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Rudolph Carryl, 67, of Oyster Bay, N.Y., has been indicted by a federal grand jury on charges of securities fraud, wire fraud, and money laundering.  The federal indictment was filed under seal on August 22, 2018, and was unsealed yesterday after Carryl’s initial appearance in federal court in New York, following his arrest at a halfway house in Brooklyn, N.Y.

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

According to allegations contained in the indictment, Carryl, who held himself out as an investment advisor, operated Carryl Capital Management (CCM), an investment management firm with offices in New York City.  CCM maintained a website that purported the firm adhered to rigorous risk control measures, and was dedicated to achieving the investment goals for its clients.

In or about February 2015, the indictment alleges that Carryl solicited victim M.G. to give Carryl money to invest in stock on M.G.’s behalf. M.G., a retired nurse who resided in North Carolina, was also Carryl’s childhood friend. Over the next couple of months, M.G. wired approximately $64,000 to an account controlled by Carryl, based on Carryl’s misrepresentations that M.G.’s money would be used to purchase stocks on M.G.’s behalf. The indictment alleges that rather than purchasing any stock as promised, Carryl used much of the victim’s money on personal and other unrelated expenses, and withdrew a substantial amount of it in cash. M.G. invested additional amounts with Carryl throughout 2015 and 2016.

The indictment further alleges that in or about May 2015, Carryl solicited victims W.B., a retired United States Air Force veteran, and his wife A.B.,  who resided in North Carolina, to invest approximately $350,000 in a purported investment fund being managed by Carryl (the Fund). To induce the retired couple to part with their money, Carryl claimed that he was a successful investment adviser who managed investments for the country of Saudi Arabia and that he was friends with wealthy celebrities. Carryl also lied by falsely promising that the victims’ money would be invested in safe investments and that they would not lose any principal.  Carryl also told the retired couple that he was going to invest his own money in the Fund, which was not true. Furthermore, Carryl falsely claimed that if W.B. and A.B. sustained any investment losses, those would come out of Carryl’s investment first, which offered further “protection” to them.

After W.B. and A.B. wired their funds to Carryl, he sent an email to the couple that purported to identify the various stocks within their portfolio, which included well-known companies.  The the indictment alleges that, contrary to his representations, Carryl did not buy all of the stocks as promised.  Instead, he used much of W.B. and A.B.’s funds on personal and other unrelated expenses and to make substantial cash withdrawals. 

In the months that followed, despite repeated requests by certain victims for statements reflecting the status of their investments, Carryl never provided any statements, and instead made numerous false claims that their investments were doing well and making money. 

Carryl also never disclosed to his victims that he had been the target of a federal criminal investigation, nor that he later pleaded guilty to wire fraud charges related to a separate investment scheme in another state.  In fact, the indictment alleges that, while Carryl was falsely telling W.B. of his intention to liquidate the victim’s investment so that Carryl could retire and travel the world, Carryl was awaiting sentencing in federal court.

Carryl was sentenced in New York on or about August 9, 2017, to 12 months and one day in prison.  After his sentencing but before he reported to the federal Bureau of Prisons (BOP) to carry out his sentence, Carryl continued to be in contact with W.B., assuring W.B. that his investments were doing well, all the while failing to disclose any information about his conviction or his impending report date to BOP.   

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. 

The securities fraud charge carries a maximum prison term of 20 years and a $5 million fine.  Each count of wire fraud carries a maximum prison term of 20 years and a $250,000 fine.  And, each count of transactional money laundering carries a maximum prison term of 10 years and a fine of up to $250,000. 

In making today’s announcement U.S. Attorney Murray thanks the FBI for its investigation leading to today’s charges. 

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

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

 

ASHEVILLE, N.C. – Carl Jack Hall, 51, of Asheville, N.C. was sentenced today by U.S. District Judge Martin Reidinger to 108 months in prison on charges of possession and receipt of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term imposed, Judge Reidinger ordered Hall to serve a lifetime of supervised release and to register as a sex offender.

According to court documents, the prosecution of this case stems from the FBI’s investigation into “Playpen,” a sophisticated child pornography website that operated on the anonymous “TOR” network.  Using the dark web, Playpen’s more than 150,000 total members, anonymously stored and shared with each other videos and images that depicted children being sexually abused.  Court records show that the website also included discussion forums pertaining to the sexual exploitation of children, including tips for grooming children and avoiding detection by law enforcement.

Court documents show that, over the course of the investigation, the FBI identified a member of the website who went by the name “Amoura,” later determined to be Hall.  In July 2015, law enforcement conducted a search warrant at Hall’s residence and seized his laptop.  A forensic analysis of the laptop revealed that Hall possessed hundreds of images of children being sexually abused.  A web browser for the TOR network was also located on the computer, and contained a bookmark for the Playpen website.  Hall initially lied to an FBI agent about his knowledge of TOR, and denied any knowledge of child pornography or of the Playpen website on his device. 

On January 19, 2018, a federal jury convicted Hall of possession and receipt of child pornography.

In making today’s announcement, U.S. Attorney Murray commended the work of the FBI and highlighted the success of this operation which to date has led to the arrest of at least 350 U.S.-based individuals nationwide, the prosecution of 25 producers of child pornography, and the prosecution of at least 51 alleged hands-on abusers. Also, 55 American children who were subjected to sexual abuse have been rescued.

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

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 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.justice.gov/psc.

 

             

A Charlotte, North Carolina tax return preparer pleaded guilty today to aiding and assisting in the preparation of a false tax return, 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.

According to documents and information provided to the court, from 2011 through 2017, Shawanda Elmore owned and operated C and W Tax Professionals, a tax return preparation business in Charlotte, North Carolina.  Elmore fraudulently sought to inflate her clients’ tax refunds by claiming false education credits, as well as false itemized deductions and businesses expenses.  Elmore’s conduct caused a tax loss to the Internal Revenue Service (IRS) of over $500,000.

Elmore faces a statutory maximum sentence of three years in prison, 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 conducted the investigation, and Trial Attorneys Alexander Effendi and Lauren Archer of the Tax Division, who are prosecuting the case.

CHARLOTTE, N.C. – Benjamin Abraham, 60, of Charlotte, was sentenced today by U.S. District Judge Robert J. Conrad, Jr. to 41 months in prison in connection with a $3.5 million investment scheme involving jewelry, precious metals and gemstones, announced the U.S. Attorney’s Office for the Western District of North Carolina.  Abraham was also ordered to serve two years of supervised release and to pay $2,034,537 in restitution.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Office and David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) join the U.S. Attorney’s Office in making today’s announcement.

According to filed court documents and today’s sentencing hearing, Abraham, a well-known Charlotte-area jeweler, operated a number of businesses engaged in the wholesale and retail sale of diamonds, precious metals and jewelry, including Benjamin Diamonds, LLC, Benjamin Jewelers, LLC, Global Trading LLC, G&I USA, LLC and other related entities. From at least December 2012 through May 2017, Abraham executed a financial fraud scheme involving investments in jewelry, precious metals and gemstones, among other things, and induced at least seven victim-investors to invest over $3.5 million, resulting in losses of more than $2 million. 

To induce his victims to fund the investment scheme, filed court documents show that Abraham made a number of fraudulent representations, including that the victims’ money would be used for short-term investments in gold or other precious metals, to invest in diamonds and jewelry obtained from estates, and to buy other large diamonds which would be sold for profit.  Abraham also lied to investors about his past successes and profits from engaging in such investments, misrepresented the security of the investments and made false representations about the rate of return and the duration of the investments.  At times, Abraham also falsely represented that he had unique access to estate sales due to his connections and that he would be also be investing his own money.

Court records show that when victims asked about the status of their investments, Abraham gave numerous false explanations, and, at times, provided victims with checks from accounts that Abraham knew did not have sufficient funds to cover the checks and continued to lie when he was confronted about the dishonored checks.

According to court records, rather than invest the victims’ money as promised, Abraham used it to fund his lifestyle, to keep his struggling businesses afloat, to pay pre-existing debts, and to make Ponzi-style payments to other victim-investors.

In sentencing Abraham today, Judge Conrad emphasized the seriousness of Abraham’s crimes, the fact that Abraham continued to defraud victims after he was approached by federal law enforcement agents, and the need to specifically deter Abraham from future criminal conduct.  Judge Conrad also cited the need provide general deterrence to those, like Abraham, who would engage in difficult to detect financial frauds.

The FBI and USPIS led the investigation. Assistant United States Attorneys Dallas Kaplan and Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, prosecuted the case. 

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that after a ten-month joint investigation, FBI agents and CMPD officers arrested 11 individuals during an early morning round-up.  Ten of those arrested face federal charges and one was arrested on state offenses. Two others currently in state custody have also been indicted federally, bringing the total number of those charged as part of this Project Safe Neighborhoods (PSN) initiative to 13.   

“This morning’s round-up was the result of a joint law enforcement investigation into drug dealing and drug related criminal activity in and around the Lakewood Community in Charlotte,” said U.S. Attorney Murray.  “Today’s coordinated action is part of our PSN strategy, which calls upon all levels of law enforcement to combine forces to reduce drug distribution and drug-fueled crimes in our neighborhoods, and to increase community safety.”   

Those arrested today on multiple federal charges of distribution and possession with intent to distribute crack cocaine are: Ashley Bennet, 22, of Charlotte; Travis Burris, 21, of Charlotte; Charles Berry, 49, of Charlotte; Andre Booker, 23, of Charlotte, Lemuel Carr, 21, of Charlotte; Marcus Hammonds, 33, of Charlotte; Jonathan Means, 38, of Charlotte; Jermaine Monroe, 37, of Charlotte; Robert Fitzgerald Moore, 53, of Charlotte; and Dandre Morrison, 30, of Charlotte.  Ashley Bennet, and Travis Burris are also charged with conspiracy to distribute and to possess with intent to distribute crack cocaine. Marcus Gregory was also arrested today on state charges.

Two individuals currently in state custody now face federal offenses.  Shea Roseboro, 28, is charged with distribution and possession with intent distribute crack cocaine, and Kwame Hakeem Crawford, 27, is charged with possession of a firearm by a convicted felon. 

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 commends the FBI and CMPD for their investigative efforts, and thanks the U.S. Marshals Service for their assistance with this morning’s arrests.  U.S. Attorney Murray also thanks the North Carolina Department of Public Safety’s Adult Correction and Juvenile Justice, and the Mecklenburg County District Attorney’s Office for their collaboration with this investigation.

Assistant U.S. Attorney Lambert Guinn of the U.S. Attorney’s Office in Charlotte is leading the prosecution.

 

CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Anthony Latrel Player, 28, of Charlotte, to 10 years in federal prison for conspiracy to distribute and to possess with intent to distribute heroin, possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Player was also ordered to serve four years under court supervision after he is released from prison.

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 Kerr Putney of the Charlotte Mecklenburg Police Department, join U.S. Attorney Murray in making today’s announcement.

According to filed court documents and today’s sentencing hearing, beginning in December 2016, law enforcement identified Player as a regional drug trafficker of a Drug Trafficking Organization (DTO) distributing heroin in the greater Charlotte area.  Court records show that Player trafficked over 100 grams of heroin, often mixed with other drugs, to include Fentanyl. Court records also show that on January 26, 2017, Player sold approximately two grams of heroin for $200 to a 27-year-old female, who later died of a drug overdose.  Player continued to sell heroin until he was arrested in July 2017. Court records show that over the course of the investigation, law enforcement determined that Player conducted drug sales at or near a playground in Charlotte, and, at times, he used the playground equipment as a designated drop-off area for drugs and money.  On July 25, 2017, law enforcement executed a search warrant at Player’s residence, seizing narcotics, $545 in cash, and two loaded firearms.

In sentencing Player, Judge Cogburn commented on this nation’s opioid epidemic, and stated that Player’s drug cocktails had a devastating effect on the community.

Player 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 thanks the DEA and CMPD for leading this investigation.  Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

 

ASHEVILLE, N.C. – United States Attorney Andrew Murray announced today that the U.S. Attorney’s Office for the Western District of North Carolina partnered with the Asheville Police Department (APD) and the Buncombe County Sheriff’s Office (BCSO) to conduct the Law Enforcement Guiding Adolescent Lives (L.E.G.A.L.) training program in Asheville.  L.E.G.A.L. is a youth-oriented community outreach initiative, designed to foster positive interactions between young people and members of the law enforcement community. 

The one-day program was held earlier today in Asheville, at the Buncombe County Training Center. Volunteer APD officers and BCSO deputies, and 18 young men selected from the Asheville-based youth development program My Daddy Taught Me That (MDTMT), participated in today’s training. 

The APD and the BCSO worked closely with the U.S. Attorney’s Office to implement the program and to develop a curriculum that was informative, meaningful and fun for the participants. 

“This program is extremely valuable for the young people and the volunteer law enforcement officers who participated in today’s training.  The goal of this outreach effort is to provide a scenario for positive interactions between law enforcement officers and our youth, to foster positive relationships, and to promote mutual respect toward one another through education,” said U.S. Attorney Murray.  “This experience can be eye-opening for all participants, leading to more effective, and ultimately safer, interactions between law enforcement officers and young people within our communities.”

“My Daddy Taught Me That is a program designed to uplift and support the development and education of youth and young males,” said MDTMT Founder Keynon Lake.  “Our mission is to foster and empower boys to become healthy men, and to develop into the leaders of tomorrow.  This is facilitated through education, hands-on activities, and participation in innovative and unique events, like L.E.G.A.L.  Today’s training will have a positive and long-lasting effect on all the young men who participated.”   

The four-hour program began with youth participants receiving legal and practical skills orientation.  During this session, participants received basic legal background information from an Assistant United States Attorney, on searches related to traffic stops, public area encounters, and home encounters.  Participants also received practical instruction on their rights and on interacting with law enforcement in a safe and positive manner. 

Following the legal orientation, participants had an opportunity to utilize their newly-acquired skills by engaging with law enforcement officers in simulated police interactions.  After each simulated interaction, participants and law enforcement officers engaged in role-reversals, designed to foster a better understanding of each group’s standpoint, and to offer an opportunity to share each other’s perspective.  Following the simulated encounters, participants engaged in free dialogue with law enforcement volunteers during a roundtable luncheon. 

In his opening remarks to the group, U.S. Attorney thanked everyone for participating in the training, and noted that L.E.G.A.L. is an example of the outreach component of the Western District’s Project Safe Neighborhoods (PSN) crime reduction program, which was reinvigorated by the Justice Department last year.

“Our overarching goal is to reduce violent crime and make our neighborhoods safer for everyone.  To achieve that, we must develop and implement youth outreach programs throughout the Western District of North Carolina that enhance youth development and promote positive interactions between law enforcement and young people in the community.”

U.S. Attorney Murray also thanked Asheville Police Chief Tammy Hooper, Buncombe County Sheriff Van Duncan, and Keynon Lake for their support of the L.E.G.A.L. program and commended each for doing their part to keep our communities and help all our youth thrive.

MDTMT is a youth development program designed to support young males, ages 12 to 19, through advocacy, education, and mentoring.  For more information on MDTMT, please visit http://mydaddytaughtmethat.org. 

 

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger yesterday sentenced a repeat offender to 15 years in prison for receipt of child pornography, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Nathaniel Guru Thompson, 31, of Asheville, was also ordered to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.

“Thompson is the type of criminal that needs to be removed from society and put into a prison cell, where he can no longer harm children,” said U.S. Attorney Murray.  “There is a misconception among some that viewing child pornography is a lesser offense.  Let me set the record straight: viewing, sharing, or receiving images that depict children being sexually abused is a crime that is just as serious and heinous as of those who perpetrate the depicted sexual abuse on the children.  I commend the Asheville Police Department, the North Carolina Internet Crimes Against Children (ICAC) Task Force, and the U.S. Probation Office for joining us in our efforts to protect the most vulnerable members of our society and bring perpetrators like Thompson to justice.”

According to court documents and information introduced at the sentencing hearing, Thompson was convicted in 2011 in the Western District of North Carolina of possession of child pornography.  As part of his sentence, the Court ordered Thompson to serve a lifetime of federal supervised release.  On July 10, 2017, law enforcement located at Thompson’s residence an internet enabled cell phone, which was in violation of the terms of his supervised release. After conducting a full forensic analysis of Thompson’s cell phone and a removable storage card, law enforcement determined that Thompson possessed more than 1,380 images of child pornography, and over 72 child pornography videos.  Court records show that the images and videos, which Thompson had intentionally downloaded between May 1, and July 10, 2017, depicted infants, prepubescent children, and sadistic and masochistic conduct.  Court records further show that Thompson had regularly viewed the images and the videos, as recently as July 10, 2017, which is the date the device was seized by law enforcement.

Thompson pleaded guilty to receipt of child pornography in March 2018. 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. 

The Asheville Police Department conducted the investigation.  In making today’s announcement U.S. Attorney Murray thanks the U.S. Probation Office and the North Carolina Internet Crimes Against Children (ICAC) Task Force for their invaluable assistance with the case.  The U.S. Attorney’s Office in Asheville was in charge of the prosecution.

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.

ASHEVILLE, N.C. – Kasey Lynn Keffer, 40, of Sylva, N.C., was sentenced today to 100 months in prison and three years of supervised release on robbery charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Keffer’s co-defendants, Mitchum Scott Turpin and Tillmon Gene Fortner, were previously sentenced to 120 and 78 months in prison, respectively, for their involvement in the robbery.

Chief Doug Pheasant, of the Cherokee Indian Police Department, joins U.S. Attorney Murray in making today’s announcement.

According to court documents and court proceedings, on October 29, 2017, the three co-defendants met at Keffer’s residence in Sylva, N.C., and discussed being short of money.  Keffer identified the victim, a 72-year-old male and an enrolled member of the Eastern Band of Cherokee Indians, as someone who had money.  Later the same day, Keffer drove Turpin and Fortner to the victim’s apartment, located within the Indian reservation in Cherokee, N.C.  Turpin, followed by Fortner, entered the victim’s apartment, where Turpin pointed a pistol at the victim and robbed him of $762.  Turpin then ordered the victim into a closet.  Keffer, Turpin and Fortner fled the scene in Keffer’s vehicle, and were apprehended shortly thereafter.  Court records show that law enforcement later determined Turpin’s pistol to be a pellet gun.

All three defendants previously pleaded guilty to robbery charges.  They are currently in 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 Cherokee Indian Police Department for their investigation of the case and the Maggie Valley Police Department for their assistance.  

Special Assistant United States Attorney Justin Eason, of the U.S. Attorney’s Office in Asheville, prosecuted the case. 

ASHEVILLE, N.C. – U.S. Attorney Andrew Murray announced today that Timothy Lane Plemmons, 35, of Fairview, N.C. was sentenced to 138 months in prison for possession with intent to distribute methamphetamine.  U.S. District Judge Martin Reidinger also sentenced Plemmons to five years of supervised release upon completion of his prison term. Plemmons’ previous convictions in North Carolina, including numerous assault convictions, contributed to his sentence.

“After multiple encounters with our justice system, the Court determined that Plemmons’ drug dealing and repeated criminal conduct pose a danger to our community, and handed down a lengthy prison term.  My Office is committed to increasing public safety by identifying repeat offenders for federal prosecution, and removing them from our streets by securing lengthy prison terms,” said U.S. Attorney Murray.

According to today’s sentencing hearing and documents filed with the Court, on October 26, 2016, during a probation search at Plemmons’ residence, law enforcement discovered methamphetamine and digital scales.  An analysis of the seized methamphetamine by the Drug Enforcement Administration (DEA) determined that it weighted more than 290 grams and had a purity level of over 99%.  Plemmons pleaded guilty to the drug charge on February 28, 2018.

Plemmons is currently in custody and will be transferred to the custody of the federal Bureau of Prisons to begin serving his sentence 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 thanks the DEA, the Buncombe County Sheriff’s Office, and the North Carolina Division of Adult Correction and Juvenile Justice for their investigation of this case. 

Assistant United States Attorney John Pritchard of the U.S. Attorney’s Office in Asheville prosecuted the case. 

CHARLOTTE, N.C. – Alan F. Luboff, 51, of Parkland, Florida, was sentenced yesterday by U.S. District Judge Max O. Cogburn, Jr. to 15 months in prison and three years of supervised release on wire fraud charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Judge Cogburn also ordered the defendant to pay restitution in the amount of $119,900. 

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in North Carolina joins U.S. Attorney Murray in making today’s announcement.

According to documents filed with the Court and yesterday’s sentencing hearing, Luboff was the operator of “Triple Play Sales,” a computer store located in Coral Springs, Florida.  As part of his operation of Triple Play Sales, Luboff purchased and sold computer products and earned commission on those transactions.  Court records show that on January 25, 2018, Luboff emailed a past business associate, identified in court documents as “S.F.,” proposing a transaction to help Luboff finance 600 central processing units (CPUs).  S.F. is a business owner and resident of Cornelius, N.C. 

According to court records, Luboff falsely represented to the victim that if S.F. gave him $131,400 to help purchase the CPUs, Luboff would provide S.F. with a $20,000 profit within one week.  To further induce S.F. to give him the money, Luboff lied to the victim and said that he was going to invest $30,000 of his own money to complete the transaction.  The victim wired $131,400 to Triple Play Sales in accordance with Luboff’s instructions. 

According to court records, contrary to what he told S.F., Luboff did not have a proposed transaction for CPUs lined up, and Luboff had no intention of using S.F.’s money to purchase CPUs. Rather, Luboff spent S.F.’s money on personal expenditures, such as to pay for car insurance and law care expenses, among other things.

When S.F. confronted Luboff about his failure to return S.F.’s principal and income from the transactions, Luboff told the victim a series of lies, including that federal law enforcement agents had frozen the money because a party to the purported transaction had business overseas.

In handing down Luboff’s sentence, Judge Cogburn said that the defendant engaged in “classic lulling,” and that the sentence is important to deter others.  Judge Cogburn also increased the defendant’s sentencing range because the defendant caused falsified documents to be submitted to the government during the course of the investigation.

Luboff will be ordered to report to the federal Bureau of Prisons to begin serving his sentence 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 thanks the FBI for investigating the case, and the Cornelius Police Department for their invaluable assistance over the course of the investigation.

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

 

CHARLOTTE, N.C. – Today, Ernest Keith. 51, of Charlotte, was sentenced by U.S. District Judge Max O. Cogburn, Jr. to 41 months in prison and two years of supervised release in connection with a fraudulent shipping services scheme, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Judge Cogburn also ordered the defendant to pay restitution totaling $721,707.37. 

David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service, joins U.S. Attorney Murray in making today’s announcement.

According to filed documents and statements made in court, Keith executed a mail fraud scheme that defrauded FedEx Corporation (“FedEx”) and individuals throughout the United States, by purportedly offering shipping services to customers at reduced prices. Court records show that, from February 2012 to March 2016, Keith used multiple addresses in and around Charlotte to create FedEx Freight shipping accounts for various sham companies.  Keith then solicited customers via the internet, and induced them to use his purported shipping services at a reduced cost.  Customers paid Keith for the purported shipping services via various money transmitting services, including but not limited to, Western Union, Moneygram, and Paypal.  Using the fraudulent FedEx Freight accounts he had created for his sham companies, Keith arranged to have the customers’ shipments picked up by FedEx, but instead of paying FedEx for their shipping services, Keith kept the customers’ money.

Court records show that when FedEx began holding shipments it identified as associated with Keith’s sham companies, Keith purported to make payments via telephone, which were later rejected by the bank due to insufficient funds.  Court records show that, after Keith’s scheme began to unravel and he was no longer able to use companies, accounts, or addresses associated with him, Keith fraudulently arranged shipments using the name and/or billing address of an existing FedEx Freight customer, which had no affiliation with Keith or the shipper, resulting in the invoices being erroneously sent to that unaffiliated company.

Court records show that Keith induced approximately 200 individuals to use his purported shipping services to arrange for more than 390 shipments.  Keith also used more than 20 different FedEx accounts he created to facilitate his shipping services scheme, as well as multiple accounts associated with unrelated third parties, resulting in a loss of more than $680,000.

Keith is currently in custody and will be transferred to the custody of the federal Bureau of Prisons to begin serving his sentence 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 thanks USPIS for their investigation of this case.

Assistant United States Attorneys Jenny G. Sugar and Maria Vento, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

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ASHEVILLE, N.C. – A criminal bill of indictment was returned yesterday by a federal grand jury sitting in Asheville, charging Derek Shawn Pendergraft, 20, of Asheville, N.C., with second degree murder for killing a co-worker, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Pendergraft was previously arrested on a federal criminal complaint in connection with the murder.

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; Neal D. Labrie, Chief Ranger of the Blue Ridge Parkway; and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation (SBI).

According to allegations contained in the indictment and the filed criminal complaint, on the evening of July 24, 2018, Pendergraft, an employee of the Pisgah Inn on the Blue Ridge Parkway, reported that a co-worker, identified in court documents as “S.E.,” was missing.  Court documents allege that when initially interviewed by investigators, Pendergraft stated that he and S.E. both got off work shortly after 4:00 p.m., and decided to go for a hike on an unnamed trail near the employee housing area of the Pisgah Inn.  Pendergraft stated that shortly after starting their hike it began to rain, and S.E. decided to return to the housing area while he continued to hike.  Court documents allege that Pendergraft stated that on his way back, upon reaching the point where he last saw S.E., Pendergraft saw S.E.’s umbrella and hat lying on the ground. Pendergraft informed the management staff at the Pisgah Inn that she was missing.  Rangers and first responders searched the area and located S.E.’s body lying off an embankment, near a trail, within the boundary of the Blue Ridge Parkway, in Transylvania County, in the Western District of North Carolina.

According to allegations contained in the charging documents, on the evening of July 25, 2018, the manager of the Pisgah Inn contacted law enforcement and advised that Pendergraft was in her office and had made statements regarding the death of S.E.  Law enforcement arrived at the Pisgah Inn, interviewed Pendergraft, and arrested him shortly thereafter in connection with S.E.’s murder. 

Pendergraft is currently in custody.  The second degree murder charge carries a maximum penalty of life in prison. 

An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.

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. 

The prosecution is being handled by Assistant U.S. Attorneys Don Gast and John Pritchard, of the U.S. Attorney’s Office in Asheville.

ASHEVILLE, N.C. – Today, a federal grand jury in Asheville returned a criminal bill of indictment, charging three former top Buncombe County officials, Wanda Skillington Greene, 67, Jon Eugene Creighton, 66, and Amanda (Mandy) Louise Stone, 59, all of Buncombe County, with wire fraud and aiding and abetting; conspiracy to commit an offense against the United States; receipt of bribes and kickbacks and aiding and abetting; and federal program fraud and aiding and abetting, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  

“Rooting out public corruption at all levels of government is one of my Office’s most critical responsibilities,” said U.S. Attorney Murray.  “I want to thank the FBI, IRS-Criminal Investigation Division, and the North Carolina State Bureau of Investigation for their incredible diligence and commitment to conducting a thorough and objective investigation, which has led to today’s indictment.”

“When public officials put aside the best interest of the American public and choose to line their own pockets, we are all impacted.  These type of crimes are at the center of the fight against public corruption.  The FBI is dedicated to working with our law enforcement partners in the Western District of North Carolina to root out public corruption at any level of office,” said John Strong, Special Agent in Charge of the FBI Charlotte Field Office.

“The SBI considers investigations involving violations of the public trust to be among our highest priority cases.  We were privileged to work with the FBI, IRS-CI and the U.S. Attorney’s Office of the Western District of North Carolina to hold these defendants accountable for their actions,” said Director Robert L. Schurmeier of the North Carolina State Bureau of Investigation (SBI).

According to allegations contained in the 32-count criminal bill of indictment:

Wanda Greene was appointed as County Manager for Buncombe County (the County) in 1997, and remained in that position until her retirement in June 2017.  As County Manager, Greene had the authority to approve the awarding of certain contracts between the County and private contractors, including contracts for engineering and consulting services.

Creighton began working for Buncombe County in March 1982.  From 1985 until he retired in December 2017, Creighton was the Director of the County’s Department of Planning and Development.  As part of his duties, Creighton negotiated contracts between the County and private contractors, and was responsible for signing such contracts on behalf of the County.  From 1997 until his retirement, Creighton also had a dual appointment as Assistant County Manager.

Stone began working for Buncombe County in the 1980s.  In 1994, she became the Assistant Director of County’s Department of Social Services, and later became Department’s Director in 2001.  Beginning 2005, Stone also had a dual appointment, along with Creighton, as Assistant County Manager.  She held both positions until she became County Manager upon Greene’s retirement.  Stone retired from the County in June 2018.

An unnamed individual, identified in the indictment as “the Contractor,” was a licensed Professional Engineer.  From the mid-1980s through 2018, the Contractor was the agent and contractor for three businesses (Company A until 2014, Company B during 2014 through 2016, and his own company, Company C, from 2014 through 2018).  During the relevant time period, the Contractor obtained a combined total of more than $15 million in contracts with Buncombe County for consulting and engineering services. 

During the relevant time period, Greene, Creighton and Stone used their official positions to enrich and benefit themselves, and, in doing so, they deprived Buncombe County citizens of their right to the honest services of the defendants.  The kickback and bribery scheme the defendants engaged in involved, among other things, multiple, all-expense paid trips, meals, tickets to sporting events, and spa treatments paid for by the Contractor.  The defendants solicited and accepted these gifts, payments, and other things of value from the Contractor, in exchange for awarding County contracts to the Contractor and the businesses he was affiliated with at the time.   

Prior to 2014, Greene, Creighton, Stone, and other County personnel, went on trips that were in some way connected to legitimate County business.  During these trips, the Contractor provided them with such things of value as expensive meals, wine, and other excursions.  By 2014, Greene, Creighton, and Stone began to solicit and accept trips, valuable gifts, and other things of value from the Contractor that were entirely unrelated to any legitimate County business.  The all-expense paid pleasure trips were to destinations within the U.S. such as Key West, Boston, Martha’s Vineyard, Napa Valley, and the Grand Canyon, and to international cities, including Vienna, Budapest, Cartagena, and Vancouver.  At some time in 2015, Greene prepared a written list of specific places and dates she wanted to travel, and instructed Creighton to pass the list to the Contractor, which Creighton did.  On June 6, 2016, during a text message exchange with Creighton and Stone about future trips to be paid by the Contractor, Greene wrote: “Agent needs to know we love and want pool and dinner on island . . . . We should think Gulf Coast or Bahamas for January trip and celebrate Mandy’s birthday at a new place.”

On some occasions, the defendants charged the County directly for airfare for trips that coincided with official meetings happening in the vicinity.  However, the majority of the travel arrangements were made using the Contractor’s credit card information, which the defendants had access to, or, in Creighton’s case, using the Contractor’s actual credit card. During these trips, the Contractor would generally charge the additional expenses to his credit cards when he accompanied the County employees.  For the trips during which the Contractor did not accompany the County employees, the defendants used a copy of the Contractor’s credit card to pay for any travel expenses they incurred.

At other times, in order to earn extra rewards points, Creighton used his own credit card to pay for lodging and other expenses, for which he was later reimbursed by the Contractor.  As another way to help Creighton earn more rewards points, during some of the trips, the Contractor stayed at separate hotels, paid for the rooms using Creighton’s credit card, and then reimbursed Creighton for those charges.  In order for the Contractor and Creighton to be able to use each other’s credit cards, Greene and Creighton caused personnel in the County’s Human Resources Department to create false official Buncombe County employee identification cards, one with the Contractor’s photograph but with Creighton’s name and title, and the other with Creighton’s photograph but with the Contractor’s name and a false title as a County employee.

In addition to receiving these all-expense paid vacations from the Contractor, the defendants also took advantage of these trips to defraud the County in at least two other ways:  First, the defendants did not use annual leave for these trips, but rather falsely claimed that they traveled on official County business, and claimed to have worked for the duration of the trip.  This enabled them to preserve their hours of annual leave, which they later “sold” to the County, thereby receiving monetary payments to which they were not legally entitled. 

Specifically, at various times between 2011 and 2017, the County paid Greene more than $360,000 for approximately a total of 3,216 hours of her unused leave, some of which was related to these trips.  Similarly, Stone received more than $130,000 from the County for unused leave between 2007 and her retirement in 2018, and Creighton received more than $89,000 for unused leave between 2011 and his retirement in 2017.  A portion of their unused hours for which they were paid was related to these trips.

The second way in which the defendants used their trips to defraud the County was by submitting reimbursement requests for the cost of meals and incidental expenses they supposedly incurred during their travel, even though their meals and expenses were actually being paid for by the Contractor. 

Furthermore, Buncombe County often unwittingly funded the briberies and kickbacks of its own officials.  The Contractor kept detailed internal records of the costs of the tickets, lodging, meals, and other benefits that he provided to the defendants on each trip.  The Contractor then tied these expenses to the various projects for which he had obtained contracts with the County on behalf of Companies A, B, and C.  The Contractor often sent invoices to, and was reimbursed by, the County, in amounts approximate of those travel expenses, claiming that the invoices were for the completion of specific portions of the relevant contract, instead of the improper expenditures.  Thus, by paying these invoices, which often required Creighton’s approval, the County was essentially reimbursing the Contractor for the cost of the kickbacks to its County officials. 

In addition to the criminal charges, the indictment contains a notice of forfeiture and probable cause, seeking a forfeiture money judgment against the defendants in the amount of at least $400,000, which is the amount constituting the proceeds of the violations alleged in the indictment.

Greene, Creighton, and Stone have been ordered to appear on a summons.  Each wire fraud and aiding and abetting charge carries a maximum penalty of 20 years in prison and a $250,000 fine.  The conspiracy charge carries a maximum prison term of five years and a $250,000 fine.  The receipt of bribes and kickbacks and aiding and abetting charge and the federal program fraud charge each carry a maximum prison term of 10 years and a $250,000 fine.

Additional Charges Brought Against Wanda Greene

A separate superseding indictment also charges Greene with six counts of tax fraud, in addition to the pending wire fraud, federal program fraud, and money laundering charges filed against her on June 5, 2018, in connection with a $2.3 million scheme involving the purchase of whole life insurance policies for herself and other county employees using misappropriated Buncombe County funds. 

The superseding indictment alleges that Wanda Greene filed with the IRS false federal tax returns for years 2012 through 2017.  Specifically, the indictment alleges that, for each corresponding year, Greene filed false Individual Income Tax Returns, Forms 1040, which misstated her taxable income, and failed to report to the IRS additional income she received through her embezzlement and whole life insurance policies schemes.

Also pending, are the federal charges filed against Greene in April 2018, for misusing government credit cards to make approximately $200,000 worth of improper purchases.

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

In making today’s announcement U.S. Attorney Murray commended the work of 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.

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

CHARLOTTE, N.C. – United States Attorney Andrew Murray announced today that a former Transportation Security Administration (TSA) Officer was sentenced to 25 years in prison on drug trafficking conspiracy and gun charges.  U.S. District Judge Robert J. Conrad, Jr. also sentenced Jamie Blunder, 50, of Charlotte, to five years of supervised release.

According to filed court documents, exhibits entered at Blunder’s trial, witness testimony, and today’s sentencing hearing, from 2002 to 2016, Blunder was part of a drug conspiracy responsible for trafficking large quantities of cocaine and crack cocaine.  Blunder and his network of co-conspirators transported and distributed the narcotics in Charlotte, Greensboro, N.C., Greenville, N.C., and elsewhere.  According to court records, Blunder did not utilize the Charlotte Douglas Airport to traffic narcotics, though, at times, he relied on his TSA position to avoid law enforcement detection while travelling between and within, the Jamestown, N.C., High Point, N.C. and Greensboro areas.  Over the course of the investigation, law enforcement seized at least eight firearms, more than two kilograms of cocaine and more than $150,000 in cash.    

On July 7, 2017, a federal jury convicted Blunder of conspiracy to distribute and possession with intent to distribute cocaine and crack cocaine, and possession of a firearm in furtherance of a drug trafficking crime. 

Four of Blunder’s co-conspirators have already been sentenced.  Aaron Dixon, 41, of Greenville, N.C., was sentenced to 75 months in prison and three years of supervised release; David Pate, 45, of High Point, was sentenced to 67 months in prison and three years of supervised release; Samuel Little, 60, of Greensboro, was sentenced to 60 months in prison and two years of supervised release; and Irvin Lampley, 58, of Greensboro, was sentenced to 21 months in prison and three years of supervised release.

In making today’s announcement, U.S. Attorney Murray thanked the FBI for leading the investigation, the North Carolina Highway Patrol, the Charlotte Mecklenburg Police Department, and TSA for their invaluable assistance with this case.

Assistant U.S. Attorneys Lambert Guinn and Dana Washington of the U.S. Attorney’s Office in Charlotte are in charge of the prosecution.

ASHEVILLE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Brandy Marie Grogan, 36, of Waynesville, N.C. to 15 years in prison and five years of supervised release on drug and gun 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 Wayne Dixie Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, Sheriff Greg Christopher of the Haywood County Sheriff’s Office, Chief William Hollingsed of the Waynesville Police Department, and Chief Russell Gilliland of the Maggie Valley Police Department.

According to filed court documents and today’s sentencing hearing, in early 2017, law enforcement learned that Grogan was selling and distributing methamphetamine in and around Haywood County.   On January 17, 2017, Haywood County law enforcement conducted a traffic stop of the vehicle Grogan was driving.  Inside her vehicle, law enforcement located a black bag which contained a large amount of methamphetamine.  Elsewhere in the vehicle, law enforcement found other narcotics, including cocaine and marijuana, and $4,376 in cash.  Officers also recovered from Grogan a .22 magnum caliber handgun.  Law enforcement executed a search warrant at Grogan’s residence and seized scales, drug paraphernalia, six handguns and two shotguns.  A stolen handgun was later recovered from inside the glove box of Grogan’s vehicle. Grogan was charged with state criminal offenses in connection with this incident. 

According to court records, on July 20, 2017, law enforcement stopped Grogan for driving above the speed limit in Haywood County.  Law enforcement searched Grogan’s vehicle and located a black bag in the passenger side floorboard that contained methamphetamine and other narcotics, and a loaded Sig Sauer .40 caliber pistol.  Deputies also located $2,097 in Grogan’s left front pants pocket.

In February 2018, Grogan pleaded guilty to possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime.  She 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.

The ATF, the Haywood County Sheriff’s Office, Waynesville Police Department, and the Maggie Valley Police Department investigated the case. 

Assistant U.S. Attorney Christopher Hess, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.   Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

 

ASHEVILLE, N.C. – On Thursday, August 2, 2018, Jose Hector Alvarado, 44, a citizen of El Salvador who was residing in Cherokee County, N.C., was sentenced to 78 months in prison and 15 years of supervised release, for traveling in interstate commerce to engage in illicit sexual conduct with two minors, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Max O. Cogburn, Jr. also ordered Alvarado to register as a sex offender after he is released from prison. 

According to filed court documents and court proceedings, on March 19, 2016, Alvarado drove a 13-year-old girl and a 14-year-old girl from Cherokee County, N.C., to Anderson, S.C. for the purpose of engaging in sex with the minors there.  Upon arriving in Anderson, Alvarado bought gifts for the minors and then rented a motel room.  Court records show that the minors contacted their parents and informed them of their whereabouts.  The parents alerted local law enforcement and the minors were rescued.

Alvarado pleaded guilty on October 26, 2017, to traveling in interstate commerce to engage in illicit sexual conduct.  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. Alvarado will also be subject to deportation proceedings upon the completion of his federal sentence.

In making today’s announcement, U.S. Attorney Murray thanked ICE/Homeland Security Investigations and the Cherokee County Sheriff’s Office for their investigation of this case.

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

ASHEVILLE, N.C. – A federal criminal complaint was filed today charging Derek Shawn Pendergraft, 20, of Asheville, N.C., with second degree murder, 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; Neal D. Labrie, Chief Ranger of the Blue Ridge Parkway; and Robert Schurmeier, Director of the North Carolina State Bureau of Investigation (SBI).

According to allegations in the filed criminal complaint, on the evening of July 24, 2018, Pendergraft, an employee of the Pisgah Inn on the Blue Ridge Parkway, reported that a co-worker, identified in the complaint as “S.E.,” was missing.  The complaint alleges that, when initially interviewed by investigators, Pendergraft stated that he and S.E. both got off work shortly after four p.m. and decided to go for a hike on an unnamed trail near the employee housing area of the Pisgah Inn.  Pendergraft stated that shortly after starting their hike it began to rain and S.E. decided to return to the housing area while he continued to hike.  According to the complaint, Pendergraft stated that on his way back, upon reaching the point where he last saw S.E., Pendergraft saw her umbrella and hat lying on the ground.  Pendergraft stated that he immediately began to search for S.E. and informed the management staff at the Pisgah Inn that she was missing.  Rangers and first responders searched the area and located S.E.’s body lying off an embankment, near a trail, within the boundary of the Blue Ridge Parkway, in Transylvania County, in the Western District of North Carolina.

The complaint alleges that, on the evening of July 25, 2018, the manager of the Pisgah Inn contacted law enforcement and advised that Pendergraft was in her office and had confessed to killing S.E.  Law enforcement arrived at Pisgah Inn, interviewed Pendergraft, and arrested him shortly thereafter in connection with S.E.’s murder. 

Pendergraft is currently in custody.  The charge carries a maximum penalty of life in prison. 

A complaint is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond reasonable doubt in a court of law.

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. 

The prosecution is being handled by Assistant U.S. Attorney Don Gast, of the U.S. Attorney’s Office in Asheville.

 

CHARLOTTE, N.C. – Zerrell Ross Fuentes, 24, and his wife, Brianna Leshay Wright, 25, both of Charlotte, appeared in federal court today and pleaded guilty to sex trafficking three minor victims, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.

According to filed plea documents and statements made in court, between April 28, 2016 and May 8, 2016, Fuentes, his wife, Brianna Wright, and his mother and indicted co-conspirator, Tanya Marie Fuentes, engaged in the sex trafficking of three minor victims.  Zerrell Fuentes admitted in court today that, while he was in jail, he recruited three underage victims, via telephone, to engage in prostitution to earn money for his bond.  Zerrell Fuentes arranged for 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, and Brianna Wright’s phone was used to post prostitution advertisements for the minor victims on the Internet.  She also provided her own telephone number on the ads, as a means of communication to arrange “dates” between the minors and customers, and transported the victims to and from the arranged prostitution appointments.  

Zerrell Fuentes and Brianna Wright remain in custody. A sentencing date has not been set. Tanya Fuentes is charged with conspiracy to commit sex trafficking, sex trafficking of a minor, conspiracy to transport a minor to engage in prostitution, and transportation of a minor to engage in prostitution.  Those charges are still pending.

The penalty for sex trafficking related offenses 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 commended the law enforcement agents and officers from Homeland Security Investigations and the Charlotte Mecklenburg Police Department who are members of the FBI’s Human Trafficking Task Force for their investigation.  He also thanked the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives for their assistance in this case.

 

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

 

CHARLOTTE, N.C. – Ronteeni Pak Belk, 40, of Charlotte, N.C., was sentenced to 180 months in prison on Hobbs Act robbery and felon in possession of a firearm charges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Max O. Cogburn, Jr. also ordered Belk to serve three years under court supervision after he is released from prison. 

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

On March 13, 2017, Belk robbed at gun point the Cash America Pawn located at 5200 North Tryon Street in Charlotte.  According to filed court documents and statements made in court, at approximately 9:00 a.m., Belk entered the store, pointed a silver handgun at employees, and demanded money.  A female employee complied and gave Belk cash from the store’s cash registers. Court records show that Belk also demanded personal items from the individuals inside the store.  The same female employee and a customer gave Belk their wallets.  Belk then fired a shot into the ground and left the scene.  Soon after Belk left the store, the female employee called 911 to report the robbery. 

 

According to court records, CMPD officers located Belk driving a black Hyundai Elantra and began to follow him.  Belk attempted to evade the officers, and eventually crashed his vehicle at N. Graham Street and W. Sugar Creek Road.  Belk fled the scene on foot and was apprehended shortly thereafter in a wooded lot in the 5700 block of N. Graham Street. At the scene, officers recovered a chrome Raven Arms .25 caliber pistol and four live rounds, a glove, and the store employee’s wallet.  The cash from the store’s register was recovered near the intersection where Belk had crashed his vehicle. 

At the time of the offense, Belk was a convicted felon and was prohibited from possessing a firearm.  Court records indicate that due to Belk’s prior criminal convictions for robbery with a dangerous weapon, he qualified for a sentencing enhancement as an armed career criminal.

Belk 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.   

In making today’s announcement, U.S. Attorney Murray thanked the FBI and CMPD for leading the investigation.

Assistant United States Attorney William Bozin, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.   Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

 

The U.S. Attorney’s Office for the Western District of North Carolina announced today that federal charges will not be filed against former Asheville Police Department Officer Christopher Hickman, following an investigation into the August 25, 2017, arrest incident involving Officer Hickman and Mr. Johnnie Rush.

In making today’s announcement, U.S. Attorney Andrew Murray stated, “The U.S. Attorney’s Office for the Western District of North Carolina, the Justice Department’s Civil Rights Division, and the Federal Bureau of Investigation conducted a thorough and independent review of all evidence related to this case.  After careful examination, the U.S. Attorney’s Office has determined that the evidence does not give rise to a prosecutable violation of the federal criminal civil rights laws.”      

The U.S. Attorney’s Office takes allegations of civil rights violations involving law enforcement officers very seriously and we ensure such allegations are investigated fully and completely.

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Gill Paul Beck, Sr., a longtime federal prosecutor with the U.S. Attorney’s Office for the Western District of North Carolina, was among the 23 North Carolina lawyers inducted into the North Carolina Lawyers Weekly Hall of Fame.  The ceremony for the Class of 2018 was held on June 26th at the City Club in downtown Raleigh.  

Mr. Beck is an Assistant United States Attorney (AUSA) in Asheville, and currently serves as the Civil Chief of the Office’s Civil Division.  Prior to joining the Western District, Mr. Beck served as the Civil Chief for the U.S. Attorney’s Office in the Middle District of North Carolina. A 26-year federal prosecutor, Mr. Beck guides the handling of the Office’s civil caseload, including representing the United States and federal agencies in federal and state courts. AUSA Beck is a past recipient of the Attorney General’s Distinguished Service Award, the NC Lawyers Weekly Lawyer of the Year (2016), and the NC Bar Association’s Citizen-Lawyer Award. He was born and raised in Lenoir, North Carolina.

Mr. Beck served as the first Army Judge Advocate to command a two-star U.S. Army Reserve unit, and also commanded the Army Reserve Legal Command.  Over the course of his military career, Major General Beck has served the United States overseas, including in 2005 in Iraq, where he led a joint legal team prosecuting terrorists. During 2007, as an Associate Deputy General Counsel in the Office of General Counsel, Department of Defense, in the Pentagon, he provided legal advice on Iraq and Afghanistan issues in support of the surge in Iraq, and in 2008, he served as Executive Officer to the Army General Counsel, who was responsible for supervising Army attorneys throughout the world. From 2009-2011, he served as the Chief Judge (Individual Mobilization Augmentee) to the Army Court of Criminal Appeals. For his service, Major General Beck has been awarded the Bronze Star, the Legion of Merit, and numerous other awards.

Mr. Beck received his Bachelor’s Degree from Appalachian State University (Summa Cum Laude), his J.D. from Duke University School of Law (High Honors), and his Master’s Degree from the U.S. Army War College. 

CHARLOTTE, N.C. – U.S. Attorney Andrew Murray announced today that Larry Brandon Moore, 31, of Gastonia, N.C. was sentenced to 27 months in prison, followed by three years of supervised release, for threatening to kill Gaston County District Attorney Locke Bell and Assistant District Attorney (ADA) Deborah Gulledge.    

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

According to court documents and court proceedings, on March 1, 2017, while incarcerated in the Avery Mitchell Correctional Institution in Spruce Pine, N.C., Moore mailed a letter to a ADA Gulledge, in which he threatened to kill her and to murder her family.  ADA Gulledge had successfully prosecuted Moore on state charges for sexually exploiting a minor, which resulted in Moore’s conviction and incarceration.  Moore also threatened to kill two detectives employed by the Gastonia Police Department. 

On or about March 1, 2017, Moore also sent a letter to Gaston County District Attorney Locke Bell, threatening to kill Mr. Bell’s family, to punish the District Attorney and to hold him accountable for ADA Gulledge’s actions.

Moore pleaded guilty to two counts of mailing threatening communications. 

In announcing today’s sentence, U.S. District Judge Robert J. Conrad, Jr. stated in open court, “The fact that the defendant committed the offense while serving an active term of incarceration for exploitation of a minor justified a sentence at the very top of the sentencing guideline range.”

The FBI led the investigation. Assistant U.S. Attorney Dana Washington, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

 

CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced Richard Wyatt Davis, Jr. 41, formerly of Cornelius, N.C., to 90 months in prison and two years of supervised release for securities fraud and tax evasion, announced the U.S. Attorney’s Office for the Western District of North Carolina.    

Reginald DeMatteis, Special Agent in Charge of the United States Secret Service, Charlotte Field Office, and Matthew D. Line, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join the U.S. Attorney’s Office in making today’s announcement.

According to filed documents and today’s court proceedings, between 2010 and February 2015, Davis defrauded approximately 75 victims of $9.3 million, by inducing them to invest in investment funds Davis controlled, such as DCG Real Assets, as well as other investments, including H2O, LLC and Basalt Exploration. According to court records, Davis recruited his victim-investors by making a series of false and fraudulent representations about where their money would be invested.  For example, Davis told investors that he would use their funds to invest in natural resources and assets such as real estate, gold mines, and water production, and touted these investments as a safe alternative to the stock market. 

In reality, Davis used investor funds to pay for administrative and overhead expenses and to repay other investors.  Davis also used some of the money to make direct and indirect payments to himself.  Court records show that Davis assured victims that their assets were growing in value despite lacking sufficient financial information to make these claims. 

According to court records, Davis generally targeted investors residing in and around Charlotte. His clients included professional athletes and individuals Davis recruited through his church. Davis also spoke at events for “preppers” and survivalists, thereby targeting victim-investors who were fearful of the stock market and the banking system. Davis preyed upon these investors’ fears of traditional financial markets and took advantage of their trust into someone who shared their religious views. Court records show that a number of Davis’s victim investors had rolled over their entire retirement savings into his funds. 

According to filed documents and today’s court proceedings, for tax years 2009 through 2012, Davis transferred more than $5 million of investor funds into bank accounts in his own name and in the names of Richard Davis Enterprises and Davis Financial, Inc.  Davis used some of these funds, as well as funds directly out of other accounts of Davis’s businesses, on personal expenditures totaling over $2 million.  However, Davis filed false tax returns for 2009 and 2011, which reflected negative total income and failed to file individual income tax returns for 2010 and 2012. 

In announcing today’s sentence, Judge Conrad said that the defendant engaged in “very significant fraudulent conduct” for a long period of time, causing harm to many and noted that he put “victims in a position from which they can never recover.” Judge Conrad emphasized the need for the sentence to reflect the seriousness of the offense, but he also considered the need to avoid unwarranted sentencing disparities.

The investigation was handled by the USSS and IRS-CI.  Assistant U.S. Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte and Assistant U.S. Attorney Daniel Bradley of the U.S. Attorney’s Office in Asheville prosecuted the case.

 

CHARLOTTE, N.C. – Andrew Murray, U.S. Attorney for the Western District of North Carolina, announced today that Damonte Withers, 29, of Charlotte, pleaded guilty in federal court to bank fraud conspiracy, wire fraud conspiracy, and aggravated identity theft charges in connection to a bank and identity theft scheme. 

Withers’ co-defendants, James Willingham, Jr., 24; Deandre Howze, 23; Jeffrey Monteith, 22; and Laerek Williams, 26; as well as co-conspirators Alexsandera Mobley, 28; Lakesiah Norman, 37; and Sharrieff Pope, 25, all of Charlotte, previously entered guilty pleas for their involvement in the conspiracy.

U.S. Attorney Murray is joined in making today’s announcement by David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service;  Reginald DeMatteis, Special Agent in Charge of the U.S. Secret Service, Charlotte Field Office; and Chief Kerr Putney of the Charlotte Mecklenburg Police Department.

According to filed plea documents and today’s plea hearing, Withers, also known as “Tony da Boss” on social media, and his co-conspirators, were members of a local hip-hop group known as the “FreeBandz Gang” or “FBG.” 

According to court documents, from February 2014 through January 2016, Withers conspired with others to commit bank fraud by engaging in what is commonly known as a “card-cracking” scheme.  As part of the scheme, Withers and his co-conspirators recruited individuals to hand over their bank account ATM/debit cards and PINs in exchange for the promise of an easy pay-day.  Withers and other members of FBG would then deposit fraudulent or stolen checks into the bank accounts using the corresponding ATMs or mobile banking applications, triggering a credit to the account.  Court records show that Withers and his co-conspirators would then quickly withdraw cash from the accounts, before the banks could determine the deposited checks were worthless.

Filed documents also show that from October 2016 to December 2017, Withers and members of FBG conspired to commit wire fraud using victims’ stolen identities to fraudulently acquire cellular phones, tablets and other goods so they could resell them for profit.  Court records show that Withers and other members of the conspiracy obtained victims’ names, Social Security Numbers, dates of birth, and other personal identifying information, and used that information to manufacture fake IDs, which they then used to complete fraudulent credit applications in the identity theft victims’ names.  Over the course of the investigation, law enforcement found Withers to be in possession of several items used to manufacture the fictitious identification cards, and of the personal identifying information of at least 18 individuals.

According to plea documents and today’s proceedings, Withers admitted to causing between $550,000 and $1.5 million in losses as a result of his fraud.

U.S. Magistrate Judge David S. Cayer presided over Withers’ guilty plea.  Withers was released on bond following today’s hearing.  A sentencing date has not been set.

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

Assistant United States Attorney Dallas J. Kaplan of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.

CHARLOTTE, N.C. – A grand jury sitting in Charlotte returned a federal indictment yesterday, charging Bryant Riyanto Budi, 26, of Matthews, N.C. with attempted possession of radioactive material with intent to cause death and use of interstate commerce facilities in the commission of murder-for-hire.  Budi was arrested on Friday, June 1, 2018, for attempting to hire a hitman via the internet to murder a Charlotte-area resident.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Nick S. Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas join U.S. Attorney Murray in making today’s announcement.

According to allegations contained in the charging documents, in April and May 2018, Budi contacted an HSI undercover agent (UCA) located in Buffalo, New York via the internet to conduct a murder-for-hire.  Court documents allege that Budi used online usernames, encrypted messaging platforms, and encrypted email services to disguise his true identity from the undercover agent. During the course of communications between Budi and the UCA, Budi hired the UCA to murder an individual who resides in the Charlotte area, identified in court documents as “C.S.”

Court documents allege that in April and May 2018, Budi also contacted an FBI online covert employee (OCE) via the internet to purchase a lethal dose of a radioactive substance.  In his communications with the OCE, Budi expressed his intent to use the radioactive substance to kill an unnamed individual.  Budi also instructed the FBI OCE to ship the radioactive substance to an address in Charlotte.  On May 22, 2018, the OCE advised Budi a package containing the radioactive substance was shipped.  On May 31, 2018, the package containing an inert substitute for the radioactive material ordered by Budi was delivered to an address in Charlotte as instructed by Budi.  On June 1, 2018, at approximately 11:15 p.m., Budi was arrested.

The charge of attempted possession of radioactive material with intent to cause death carries a maximum term of life in prison.  The use of interstate commerce facilities in the commission of murder-for-hire charge carries a maximum prison term of 10 years.

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

In making today’s announcement U.S. Attorney Murray thanked HSI in Buffalo, New York and Charlotte; the FBI in Charlotte and supporting FBI field offices; the FBI’s Weapons of Mass Destruction Directorate in Washington, D.C.; the U.S. Attorney’s Office for the Western District of New York, and the Department of Justice’s National Security Division.

Assistant U.S. Attorney Casey Arrowood of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution, assisted by Trial Attorney Bridget Behling, of the National Security Division.

ASHEVILLE, N.C. – Howard Trade Elkins, 44, of Hendersonville, N.C. was sentenced late yesterday to 24 months in prison on wire fraud charges for embezzling client funds from his law office’s trust account, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Martin Reidinger also ordered Elkins to serve two years of supervised release upon completion of his prison term. 

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

According to court filings, plea documents and court proceedings, Elkins was an attorney with a private practice in Hendersonville.  From 2012 to 2017, Elkins engaged in a scheme to embezzle from his law office’s trust account.  During the relevant time period, Elkins served as an attorney for estates of deceased individuals.  Among his duties as the estate attorney, Elkins received funds from various sources into his law firm’s trust account, and used such funds to pay various debts and inheritances as directed.  According to court records, Elkins would, at times, deposit funds from estate clients into his law firm’s trust account, but did not use the funds as directed. Instead, Elkins embezzled the funds and used it to support his own lifestyle, to gamble, to make lulling payments to other victim clients and to satisfy potential debts and demands related to his legal work.

“Elkins’ clients trusted him and relied on him to carry out his duties as their attorney. Instead, Elkins used his law firm’s trust account as his personal piggy bank,” said U.S. Attorney Murray.  “Elkins’ misconduct is reprehensible and, more importantly, it erodes the public’s trust in our legal system,” said U.S. Attorney Murray.    

Elkins pleaded guilty in November 2017 to wire fraud.  He will be ordered to report to the federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility.  

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

CHARLOTTE, N.C. – Assistant United States Attorneys (AUSAs) Cortney Randall and Benjamin Bain-Creed of the U.S. Attorney’s Office in the Western District of North Carolina were among the 162 members of the Department of Justice recognized by Deputy Attorney General Rod Rosenstein, and Executive Office for U.S. Attorneys (EOUSA) Director James Crowell, IV at the 34th Director’s Awards Ceremony today in Washington D.C.

The Western District of North Carolina was one of 35 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.

In addressing the award recipients and guests, Deputy Attorney General Rod Rosenstein said, “Today’s honorees earned the esteem of their colleagues.  But most importantly, they earned the gratitude of our fellow citizens — the people whose communities you made safer, whose lives you improved, and whose trust you rewarded. Today, we pause to honor and recognize a small portion of your work.”

In making today’s announcement R. Andrew Murray, U.S. Attorney for the Western District of North Carolina said, “Assistant United States Attorneys Cortney Randall and Benjamin Bain-Creed were recognized for their exemplary work with the investigation and prosecution of individuals involved in criminal conduct that can only be described as horrific. As a result of the trial team’s skills and tenacity, the perpetrators received substantial prison sentences, which will prevent them from further harming children.  This prestigious award undoubtedly speaks to Cortney and Ben’s competence as lawyers and their dedication as public servants to furthering our mission of delivering justice and protecting the people of this District.”

AUSAs Randall and Bain-Creed, along with Department of Justice Trial Attorney Reginald Jones and FBI Special Agent Dan Alfin, received the Director’s Award for Superior Performance by a Litigative Team for their work on United States v. Steven W. Chase, et al (5:15-cr-15). The case involved the investigation and prosecution of administrators and users of “Playpen,” a highly sophisticated, global enterprise dedicated to the sexual exploitation of children, organized via a members-only website that operated on the dark web.  Playpen’s administrators and more than 150,000 other members spent more than 4,000,000 hours in just over six months writing and viewing tens of thousands of postings relating to sexual abuse of children as young as infants and toddlers. 

Following guilty pleas by co-defendants Michael Fluckiger of Portland, Indiana and David Lynn Browning, of Wooten, Kentucky, a federal jury in the Western District of North Carolina convicted lead site administrator, Steven W. Chase, of Naples, Florida, of engaging in a child exploitation enterprise and related charges.  The court sentenced Fluckiger and Browning to 20 years in prison, and Chase to 30 years in prison.  All three defendants were also ordered by the Court to serve a lifetime of supervised release.  The Court further ordered Chase to forfeit his Naples residence from which he administered the site, and ordered all defendants to pay restitution to their victims.

To date, the investigation has resulted in 350 U.S. arrests and 548 international arrests, the prosecution of 51 hands-on child sex abusers and 25 producers of child pornography, and the identification or rescue of 55 American children and 296 sexually abused children around the world.  This investigation and prosecution pioneered investigative work into the dark web that left an impact worldwide.

AUSA Randall received her undergraduate degree in Psychology from Davidson College, and her JD from Georgetown University Law Center. 

AUSA Bain-Creed received his Bachelor of Arts in English from the University of Southern Mississippi, and his JD from the University of Florida.  He also holds a Master’s Degree in English from the University of Florida. 

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.

 

 

 

 

 

 

ASHEVILLE, N.C. – Johnathan Hill, 25, of Cherokee, N.C. was sentenced yesterday to 48 months in prison for his role in the 2015 murder of a male victim at Smokemont Baptist Church, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Martin Reidinger also ordered Johnathan Hill to serve two years of supervised release upon completion of his prison term. 

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Jared St. Clair, Acting Chief Ranger of the Great Smoky Mountains National Park, and Chief Doug Pheasant of the Cherokee Indian Police Department (CIPD) are making today’s announcement with U.S. Attorney Murray.

According to court filings, plea documents and the sentencing hearing, on March 29, 2015, CIPD received a 911 call alerting officers to a stabbing that had taken place inside Oconaluftee Baptist Church, commonly known as the Smokemont Baptist Church, located in the Great Smoky Mountains National Park.  Paramedics responding to the scene determined that the male victim had been stabbed and was deceased.  According to court records, Johnathan Hill, Forrest Dakota Hill, and the victim drove to the church together.  Over the course of their visit, Forrest Hill stabbed the victim with a knife during an unprovoked attack, causing the victim’s death.  Court records show that the victim had been stabbed at least 16 times in the chest, back, neck and elsewhere.

Following the stabbing, Johnathan Hill and Forrest Hill, who are not related, drove away from Smokemont Baptist Church. Along the way, Johnathan Hill tossed through the car window the handle of the knife he believed to have been used in the attack. After that, the two men drove to the home of Johnathan Hill’s relatives, where the two men burned the clothes they wore during the stabbing.

In December 2017, Johnathan Hill pleaded guilty to a charge of accessory after the fact to second degree murder. Forrest Hill was previously sentenced to more than 16 years in prison on second degree murder charges.

The investigation was handled by the FBI, NPS and CIPD. Assistant U.S. Attorney John Pritchard of the U.S. Attorney’s Office in Asheville prosecuted the case.

ASHEVILLE, N.C. – A grand jury sitting in Asheville returned a federal criminal indictment today, charging Marion Kent Covington, 63, and Diane Mary McKinny, 65, both of Rutherfordton, N.C., with a conspiracy to commit wire fraud in connection with an unemployment insurance benefits scheme, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. 

Nick S. Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas; Robert Schurmeier, Director of the North Carolina State Bureau of Investigation; and Rafiq Ahmad, Special Agent in Charge of the Department of Labor-Office of the Inspector General, join U.S. Attorney Murray in making today’s announcement.

According to allegations contained in the indictment, at all relevant times, Covington was the president, owner, and registered agent of Diverse Corporate Technologies, (“DCT”), a plastics manufacturing company located in Rutherford County, N.C.  McKinny worked for Covington at DCT.  The indictment alleges that, in late 2008, DCT was struggling financially, so the co-defendants developed and implemented a scheme to defraud the State of North Carolina by placing DCT employees on Unemployment Insurance Benefits (“UI Benefits”), while those employees continued to work at the business in excess of what was permitted by the program eligibility requirements. The indictment alleges that the scheme allowed DCT to reduce the cost-of-labor component of its cost-of-goods-sold, thereby increasing its net profitability.    

The indictment alleges that in November or December 2008, in order to accomplish the scheme, the co-defendants “laid off” nearly all of the employees at DCT.  The co-defendants provided some employees with separation notices and instructed them as to how to file their own claims for UI Benefits.  Those employees received UI Benefits based on their asserted “totally unemployed” status.  Next, the indictment alleges, Covington called a business meeting at DCT and informed the remaining DCT employees that the company could no longer afford to pay their wages, and that they therefore would be placed on UI Benefits, but that Covington expected the employees to continue to work at DCT, just as they had before they were laid off, in order to help the business survive.  The indictment alleges that Covington used his position of authority within his church community, which included most, if not all, of the employees at DCT, to coerce the employees to comply. Around the same time, McKinny filed claims for UI Benefits on behalf of the employees whom Covington had required to continue working at DCT while they received UI Benefits.  In filing the necessary information for UI Benefits, McKinny certified the claimants’ initial and continuing eligibility to receive those benefits.  

The indictment alleges that, at Covington’s direction, at least five of the employees for whom McKinny made claims for UI Benefits then continued to work at DCT on a full-time or near-full-time basis while collecting UI Benefits every week.  Through the operation of the scheme outlined above, the co-defendants obtained more than six months of free labor for DCT, paid for by the government, instead of by the business itself. 

The indictment further alleges that by September 2009, several other businesses run by members of the same church community to which Covington and McKinny belonged, and employing many members of that same church community, were facing their own financial struggles related to the economic downturn.  According to the indictment, the co-defendants then began to promote the fraud that they had devised at DCT to other members of the church community. 

In addition to promoting the scheme to other business owners, Covington implemented the scheme a second time, with McKinny’s help, at Integrity Marble, Inc., d/b/a Integrity Marble & Granite, another for-profit company that Covington owned and managed, in or about March of 2010.  Covington then implemented a variation of the scheme a third time at Sky Catcher Communications, Inc., a company he managed, in or about May of 2011. 

In total, between November 2008 and March 2013, the scheme resulted in over $250,000 in fraudulent claims for UI Benefits by employees who continued to work full-time or near-full-time at businesses owned or managed by co-conspirators, and who were therefore ineligible to claim those UI Benefits.

Covington and McKinny are charged with conspiracy to commit wire fraud affecting a financial institution, which carries a maximum prison term of 30 years and a maximum fine of $1,000,000.  They have been ordered to appear on a summons in federal court. 

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

In making today’s announcement U.S. Attorney Murray commended HSI, SBI, and the Department of Labor for their investigation of the case.  U.S. Attorney Murray also thanked District Attorney Ted Bell, of the Rutherford County District Attorney’s Office, for his assistance and support throughout the investigation.

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