Western District of North Carolina

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced David Duane Banchetto, 43, of Gastonia, N.C., to 36 months in prison and three years of supervised release for his role in a series of car break-ins at Pisgah National Forest, announced R. Andrew Murray, United States Attorney for the Western District of North Carolina. Banchetto was also ordered to pay restitution to all the victims for the costs of the vehicle repairs and for the value of the property that was stolen. 

Greg Wiest, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff David A. Mahoney of the Transylvania County Sheriff’s Office join U.S. Attorney Murray in making today’s announcement.

According to court documents and today’s sentencing hearing, Banchetto and co-defendants, Elija Antwon Hope, Heather Nicole Postell, Montzerrath Tello-Aguilar and Kaleb Alexander Weaver engaged in a scheme to break into cars at Pisgah National Forest, to steal credit cards, debit cards and other items from vehicles parked in the area. Court records show that on June 29, 2017, law enforcement began to receive reports of multiple vehicle break-ins in that area.  In the days that followed, at least five vehicle breaking and entering cases had been reported.  Over the course of the investigation, law enforcement recovered surveillance videos and pictures from local businesses where the stolen credit/debit cards had been used. On July 16, 2017, law enforcement arrested the five co-conspirators after a suspicious vehicle was reported in an area of Pisgah National Forest.  According to court records, law enforcement determined that Banchetto was the person responsible for breaking out the windows of the vehicles from which the items were stolen.  On November 22, 2017, Banchetto pleaded guilty to destruction of property on national lands.

Tello-Aquilar was previously sentenced to six months in prison and two years of supervised release. The remaining three co-defendants, Hope, Postell and Weaver, are currently awaiting sentencing.

In announcing today’s sentence Judge Reidinger referred to the national forests and parks of the Western District of North Carolina as “national treasure” and property of all citizens, noting that these types of crimes deter people from coming and enjoying them.

The Transylvania Sheriff’s Office and HSI led the investigation.

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In a separate case, Judge Reidinger also sentenced today Mack Blaine Whittle, 32, of Anderson, S.C., to 33 months in prison and three years of supervised release for a series of car break-ins at Pisgah National Forest and the Blue Ridge Parkway in June 2017.  Whittle was also ordered to pay restitution to the victims for the costs of the vehicle repairs and for the value of the property he stole. According to court records, Whittle broke into parked vehicles, stealing cash, debit cards and other items, including a firearm. Over the course of the investigation, law enforcement determined that Whittle had attempted to pawn unsuccessfully some of the stolen items, including the firearm.  Law enforcement also determined that Whittle had a prior conviction and was prohibited from possessing a firearm. Whittle’s co-defendant, Lisha Nicole Minor, admitted that she had been with Whittle when the vehicle break-ins occurred, and that she had been using her cell phone to look up the values of some of the stolen items. She was also sentenced today to 14 months in prison and three years of supervised release.

U.S. Attorney Murray thanked the U.S. Forest Service, the Transylvania County Sheriff’s Office and the Brevard Police Department for their investigation of the case.

Assistant United States Attorney Richard Edwards, of the U.S. Attorney’s Office in Asheville, prosecuted both cases.

 

CHARLOTTE, N.C. – Ronald Shane Hough, 50, of Mt. Holly, N.C. pleaded guilty to federal charges for his role in a fraudulent debt collection scheme operating out of Mecklenburg County, announced R. Andrew Murray, United States Attorney for the Western District of North Carolina.

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

Hough appeared before U.S. Magistrate Judge David C. Keesler and admitted he was a collections manager for Direct Processing LLC (Direct Processing), a fraudulent debt collection company.  According to documents filed in connection with the guilty plea, while working there, Hough and others defrauded victims by using fraudulent misrepresentations and threatening and abusive tactics to induce victims to pay money they purportedly owed.  The fraudulent tactics included using fictitious company names in communications with victims and falsely representing that there was pending litigation or charges against victims.  The filed criminal bill of information states that, between January 2013 and July 2014, Hough and others at Direct Processing defrauded thousands of individuals throughout the United States of between $550,000 and $1,000,000. 

“Hough is a financial predator who harassed, bullied and tricked victims into paying off debts that, in many instances, were not owed.  The victims targeted by the scheme, some of whom were elderly, were forced to pay off debts, many times fictitious, just to get the harassing calls to stop.  Protecting Americans from financial exploitation is a priority for this office and we will continue to go after fraudulent debt collection companies that use threats and lies to force victims into submitting to demands for money,” said U.S. Attorney Murray.

Hough pled guilty to conspiracy to commit mail and wire fraud.  The maximum prison term for the charge is five years.  A sentencing date has not yet been set.

The Federal Bureau of Investigation led the investigation.  Assistant United States Attorney William M. Miller, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.  

 

CHARLOTTE, N.C. – United States Attorney R. Andrew Murray announced today that eight individuals are facing federal drug conspiracy charges for their involvement in a narcotics distribution ring operating in Mecklenburg County.  A federal criminal indictment was filed on February 22, 2018, and was unsealed late yesterday in federal court following arrests conducted during an early morning round-up. 

“The federal charges announced today are the culmination of a 10-month investigation into a drug conspiracy responsible for distributing large quantities of methamphetamine and heroin in the Western District.  The arrests of these individuals are a testament to the high level of cooperation between our federal and local law enforcement counterparts as we work together to achieve our common goal: to disrupt drug networks from operating in this district and to stem the flow of drugs they pour into our communities,” said U.S. Attorney Murray. 

“Drug abuse is a growing concern across North Carolina.  Drug dealers victimize our communities, strain law enforcement resources, and diminish quality of life for everyone.  The FBI will continue to join forces with our state and local law enforcements partners to track down these offenders to end the deadly cycle of drug abuse in our communities,” said John Strong, Special Agent in Charge of the FBI in North Carolina.

“This investigation is a good example of what ATF agents do on a daily basis.  It also reflects our commitment to removing drug traffickers and their co-conspirators from our streets.  ATF will continue to work collaboratively with our federal, state and local investigative partners to identify and apprehend violent career criminals and keep our communities safe,” said Wayne Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

“The role of IRS, Criminal Investigation in narcotics investigations is to follow the money, which enabled us to financially disrupt and dismantle this major drug trafficking organization. We were proud to provide this financial expertise as we worked alongside our law enforcement partners to bring these criminals to justice,” said Matthew D. Line, Acting Special Agent in Charge for IRS-CI.

“We will continue to work with our federal partners to identify and arrest anyone who brings these dangerous and highly-addictive drugs into our community,” said Charlotte-Mecklenburg Police Chief Kerr Putney. “They are destroying families. We must do everything we can to combat these deadly drugs and the many crimes they bring with them," said Charlotte-Mecklenburg Police Chief Kerr Putney.

“We are grateful for the hard work of all the federal agents, local officers and federal prosecutors who participated in this long term drug investigation.  Unfortunately, heroin and methamphetamine has impacted virtually every community in the country, including Union County, and we must continue to use all available resources to protect our citizens and bring dealers to justice.  Too many families have lost loved ones as a result of this epidemic, so every drug dealer taken off the street is potentially saving someone’s life,” said Union County Sheriff Eddie Cathey.

“I commend the work and efforts of all the individual officers and agents involved in this investigation.  This investigation demonstrates the value of professional partnerships across jurisdictional lines and sharing resources to keep our communities safe,” said Gastonia Police Chief Robert C. Helton

According to allegations contained in the criminal indictment and other filed court documents, from 2015 until the present, the defendants operated as a drug conspiracy responsible for trafficking methamphetamine and heroin in Mecklenburg County and surrounding areas.  The defendants named in the 33-count indictment are all charged with conspiracy to distribute and to possess with intent to distribute methamphetamine.   Some of the defendants face additional drug trafficking and money laundering offenses.  Those named in the indictment are:

• Emilio Mejia, 28, of Charlotte. (arrested)
• Rodolfo Medina, 47, of Charlotte. (arrested)
• Jose Javier Reyes, 19, of Charlotte. (previously arrested on a complaint)
• Mauco Contreras, 21, of Charlotte. (arrested)
• Kevin Eliezer Velasquez Melendez, 18, of Concord, N.C. (previously arrested on a complaint)
• Alejandro Jose Lopez Ceballos, 20, residence unknown. (arrested)
• Martha Olivia Placencia Beltran, 48, of Charlotte. (arrested)
• Edgar Jesus Magana, 24, of Charlotte. (arrested)

 

Rodolfo Medina, Jose Reyes, and Kevin Velasquez Melendez are also charged with conspiracy to possess with intent to distribute heroin and possession with intent to distribute heroin.  Emilio Mejia, Kevin Velasquez Melendez, Mauco Contreras, and Alejandro Ceballos are charged with additional counts of distribution and possession with intent to distribute methamphetamine.  Rodolfo Medina and Martha Beltran are also facing charges of international money laundering, stemming from money transfers of drug proceeds wired to Mexico.

A separate criminal indictment was filed charging Brandy Nicole Short, 34, of Gastonia, N.C. with possession with intent to distribute methamphetamine, bringing the total number of those arrested in connection this investigation to nine.

The penalties associated with the drug charges range from a mandatory minimum of 10 years in prison and a maximum of up to life in prison and a monetary fine of up to $10 million. The money laundering charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

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 praised the outstanding efforts of special agents of the Federal Bureau of Investigation (FBI), under the direction of Special Agent in Charge John A. Strong; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge Wayne Dixie; the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI) under the direction of Acting Special Agent in Charge Matthew D. Line; officers of the Charlotte-Mecklenburg Police Department under the direction of Chief Kerr Putney; the Gastonia Police Department under the direction of Chief Robert C. Helton; the Monroe Police Department under the direction of Chief J. Bryan Gilliard; and deputies of the Union County Sheriff’s Office under the direction of Sheriff Eddie Cathey.  U.S. Attorney Murray also noted the invaluable assistance provided by the North Carolina National Guard Counterdrug Program.  

Assistant U.S. Attorneys Jennifer Dillon and Special Assistant U.S. Attorney Erik Lindahl of the U.S. Attorney’s Office in Charlotte are 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.

CHARLOTTE, N.C. Jonathan Cortez, 24, of Charlotte, was sentenced today to 135 months in prison and five years of supervised release on drug charges, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.  

Greg Wiest, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas 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 court records, on February 13, 2017, an undercover officer contacted Cortez to arrange the purchase of 15 kilograms of cocaine.  The undercover officer made arrangements to meet with Cortez and another individual at a residence in Mint Hill, N.C., to purchase seven kilograms of cocaine at first, and another eight kilograms at a later time.  On the same day, court records show that law enforcement observed Cortez heading toward the meeting location.  When law enforcement attempted to stop Cortez’s vehicle, Cortez sped away, eventually crashing the vehicle.  Cortez then fled in a second vehicle, but he was taken into custody by law enforcement a short while later. 

After Cortez was apprehended, law enforcement executed a search warrant at his residence and seized over seven kilograms of cocaine and two handguns. Cortez has prior felony convictions and he is prohibited from possessing a firearm.  

In May 2017, Cortez pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute cocaine. 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 HSI and CMPD for investigating the case. 

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

This case was brought as 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 and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.

 

CHARLOTTE, N.C. – U.S. Attorney R. Andrew Murray announced today that Charles Gary Humphrey, 42, of Charlotte, was sentenced to 151 months in prison for transporting child pornography.  Chief U.S. District Judge Frank D. Whitney also ordered Humphrey to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.

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 filed court documents and today’s sentencing hearing, on October 9, 2015, law enforcement became aware that an individual, later identified as Humphrey, was using a peer-to-peer network to view and trade child pornography online.  On January 25, 2016, Humphrey transported 55 files that contained a mix of child pornography and child erotica to an undercover FBI agent. Law enforcement executed a search warrant at Humphrey’s residence, seizing his computer. A forensic examination of the computer revealed that it contained more than 5,000 image images and videos of children engaging in sexually explicit conduct.  Court records show that some of the images and videos contained identified victims of 25 different series of child pornography. 

The FBI’s Crimes Against Children Squad investigated the 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 the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

CHARLOTTE, N.C. – Clarence Robert Brown, Jr., 61, of Charlotte, was sentenced today to 10 years in prison for possessing videos depicting child pornography, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Max. O. Cogburn, Jr. also ordered Brown to serve 20 years of supervised release.

Brown pleaded guilty on September 25, 2017, to possessing child pornography on his computer.  At the time, Brown was on supervised release for a 2005 federal conviction of possession and transportation of child pornography, for which he had served five years in prison.  According to the terms of his supervised release for the prior conviction, Brown was prohibited from owning a computer, an internet hub, or any device that could access the internet, without obtaining approval from the U.S. Probation Office.  On August 15, 2016, a probation officer discovered the computer and thumb drives at Brown’s home while conducting a routine visit. 

According to court records, Brown admitted to purchasing the items so he could access the internet, even though he knew he could not “have the internet.”  A forensic analysis of Brown’s computer revealed that it contained child pornography.  

“This is Brown’s second federal conviction for possessing sexually explicit material depicting minors,” said U.S. Attorney Murray.  “The online exploitation of children is a serious crime and the 10-year prison term imposed by the Court reflects that.  The lengthy sentence also ensures that Brown can no longer harm and victimize innocent children.”

In making today’s announcement, U.S. Attorney Murray thanks the FBI and the U.S. Probation Office in the Western District of North Carolina for investigating the case. 

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

CHARLOTTE, N.C. – The Justice Department announced today the results of the largest coordinated sweep of elder fraud cases in history.   The cases involve more than 250 defendants from around the globe who victimized more than a million Americans, most of whom were elderly. 

According to the Justice Department’s announcement, the cases include criminal, civil, and forfeiture actions across more than 50 federal districts.  Of the defendants, 200 were charged criminally.  In each case, offenders engaged in financial schemes that targeted or largely affected seniors.  In total, the charged elder fraud schemes caused losses of more than half a billion dollars.  

In the Western District of North Carolina, combating the financial exploitation of the elderly is an important part of the U.S. Attorney’s Office broader emphasis on fraud targeting vulnerable populations. 

“Each year, millions of older Americans become victims of financial fraud.  The impact can be devastating both psychologically and financially.  As part of the U.S. Attorney’s Office’s commitment to protecting vulnerable populations, we are enhancing our efforts to educate the elderly about investment fraud schemes and consumer scams to protect them from financial exploitation.  We will also investigate and prosecute financial predators who unabashedly steal from older Americans causing irreparable financial harm,” said U.S. Attorney R. Andrew Murray.

“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions.  “Today’s actions send a clear message:  we will hold perpetrators of elder fraud schemes accountable wherever they are.  When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains.  Today is only the beginning.  I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”

The actions announced today charged a variety of fraud schemes, ranging from mass mailing, telemarketing and investment frauds to individual incidences of identity theft and theft by guardians.  A number of cases involved transnational criminal organizations that defrauded hundreds of thousands of elderly victims, while others involved a single relative or fiduciary who took advantage of an individual victim.  The schemes charged in these cases caused losses to more than a million victims.

Federal Prosecutions by the U.S. Attorney’s Office

Alan Peter Darcy, 80, of Murphy, N.C., was sentenced on Thursday, February 15, 2018, to 108 months in prison on wire fraud charges, in connection with an investment fraud scheme that defrauded multiple victims, some of whom were elderly, of more than $800,000.  In addition to the prison term, Darcy was ordered to serve three years under court supervision and to pay restitution in the amount of $740,028.43.  According to court records and the sentencing hearing, between February 2012 to June 2016, Darcy carried out the fraud scheme by inducing his victims to invest in a variety of bogus financial instruments and products.  Darcy did so by claiming that he had access to, and multiple successes with, specialized opportunities for obtaining private banking instruments and engaging in lucrative trading opportunities not available to the general public.

Court documents state that Darcy also induced victims to part with their money by lying about how the victims’ money would be used or invested, and about when and how Darcy and his businesses would be compensated.  Instead of holding the victims’ money in escrow or in trust accounts for the victims as he had promised, Darcy deposited the money into bank accounts he controlled and spent more than $400,000 of the victims’ money to fund his personal lifestyle, including personal expenditures such as entertainment, travel and the purchase of a used Jaguar automobile. 

Public Education

“Education is an important component of our efforts to protect our seniors from suffering financial devastation in the hands scammers.  Knowing about the different types of financial investment schemes, what to look out for, what questions to ask, and what to do if contacted by fraudsters is key to avoid getting ripped off by unscrupulous individuals trying to gain access to older Americans’ nest eggs.”

In making today’s announcement, U.S. Attorney Murray cautioned all Americans to look out for scams targeting the elderly, including:

• “Lottery phone scams,” in which callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
• “Grandparent scams,” which convince seniors that their grandchildren have been arrested and need bail money;
• “Romance scams,” which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
• “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming that victims owe back taxes;
• “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians.

 

The U.S. Attorney’s Office has conducted educational seminars for elderly investors on avoiding investment fraud schemes and safeguarding savings from potential fraudsters. 

The seminars cover a broad range of topics, including the most common types of investment fraud scams targeting the elderly, red flags to watch out if approached by someone touting an investment opportunity, tips on how to avoid becoming the victim of an investment scheme, and who to contact to report a suspicious investment offer or if you have been the victim of an investment scam.

Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP.  The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov. 

 

CHARLOTTE, N.C. – A federal jury sitting in Charlotte convicted Jose Antonio Hendricks, 59, of Charlotte, of possession, receipt and transportation of child pornography following a two-day trial, announced R. Andrew Murray U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Robert J. Conrad, Jr. presided over the trial.

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.

“Child predators often seek shelter in the anonymity the internet offers to exploit and harm innocent children.  This is a global epidemic that we must confront with an aggressive, technology-driven response,” said U.S. Attorney Murray.  “Today’s guilty verdict sends a message that the internet is no longer a safe haven for those who engage in child sexual exploitation.  Online predators will be located, prosecuted and ultimately removed from society and away from vulnerable children.”

According filed court documents, trial evidence and witness testimony, on October 14, 2014, law enforcement became aware that an individual, later identified as Hendricks, was using a peer-to-peer network to view and to trade child pornography online.  Trial evidence established that between October 2014 and February 2015, law enforcement connected to the IP address, later identified as Hendricks’, approximately 70 times.  During a vast majority of these sessions, law enforcement were able to confirm that Hendricks was sharing either child pornography or child erotica.

According to evidence presented at trial, law enforcement executed a search warrant at Hendrick’s residence on March 12, 2015, seizing a tablet and the tablet’s SD card.  A forensic examination of the devices revealed that they contained numerous images of child pornography.  There was also evidence that Hendricks was accessing numerous child pornography websites that include sadistic or masochistic images of children.  

The charges for transportation of child pornography and receipt of child pornography carry a minimum sentence of five years and a maximum of 20 years in prison.  The charges for possessing and accessing child pornography carry a maximum sentence of 20 years.  A sentencing date has not been set.

The FBI’s Crimes Against Children Squad investigated the case.   Assistant U.S. Attorneys Cortney Randall and William Stetzer of the U.S. Attorney’s Office in Charlotte are 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.

CHARLOTTE, N.C. – The former bookkeeper of a company located in Watauga Co. admitted in federal court today to embezzling more than $1.5 million from her employer and committing tax fraud, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. Connie S. Franklin, 58, of Boone, N.C. appeared before U.S. Magistrate Judge David C. Keesler and pleaded guilty to one count of bank fraud and one count of filing false tax returns.

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

According to filed documents and today’s court proceedings, from 2008 until 2016, Franklin perpetrated a scheme to embezzle funds from the bank account of the company where she worked as bookkeeper, by falsely signing the names of the victim company’s executives to company checks made payable to herself. To conceal the fraud, Franklin then falsely coded the transactions as “freight” expenses in the victim company’s books and records. Court documents state that during the roughly nine-year scheme, Franklin embezzled approximately $1,595,472.82.

According to the filed charging document, Franklin also understated her taxable income by more than $1.4 million during the course of the scheme. For example, despite having a taxable income of $332,579 in 2015, Franklin reported an income of only $49,398. In total, court records show that Franklin understated her tax liability by more than $330,000.

Franklin is currently released on bond.  The bank fraud charge carries a maximum of 30 years in prison and a $1,000,000 fine. The maximum penalty for the charge of filing a false tax return is three years in prison and a $100,000 fine.  A sentencing date has not been set.

USSS and IRS-CI led the investigation. U.S. Attorney Murray also thanks the Boone Police Department and the Watauga County District Attorney’s Office for their significant assistance over the course of the investigation. Assistant U.S. Attorney Taylor J. Phillips of the U.S. Attorney’s Office, in Charlotte is in charge of the prosecution.

CHARLOTTE, N.C. – A federal jury convicted John Daley Strothers, 59, of Charlotte, on four counts of using a false document in a federal matter, making a false statement to obtain a passport, possession of a fraudulent identification document (birth certificate) and making a false statement to federal agents, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Murray is joined in making today’s announcement by Richard J. Ingram, Special Agent in Charge, Diplomatic Security Service, Washington Field Office, U.S. Department of State.

According to filed court documents and evidence presented at trial, Strothers engaged in fraudulent conduct to obtain a United States passport in the name of his alias Giovanni Daliente Strassini. Trial evidence established, on September 28, 2015, Strothers submitted an application for a United States passport at a postal facility in Charlotte. In support of the passport application, Strothers attached an Ohio birth certificate that was altered. The birth certificate Strothers submitted identified him in the name of his alias “Giovanni Daliente Strassini,” and it contained several other fraudulent alterations. Because of these alterations, Strothers’ application was referred to the fraud section of the United States passport processing center in Charleston, South Carolina. A witness from that section testified that they screen passport applications and the documents attached to them to ensure that only applicants who establish their true identities and prove their citizenship statuses are issued a United States passport.

During trial, a witness from the Ohio Department of Health, Bureau of Vital Statistics, testified that nobody under the name “Giovanni Daliente Strassisni” had even been born in the State of Ohio. Trial evidence also established that the true birth certificate for the Strothers was issued in the name “John Daley Strothers.” Trial evidence further established that Strothers had previously submitted his true birth certificate, identifying himself as “John Daley Strothers,” in connection with a prior application for a United States passport submitted on October 7, 1996.

Finally, the Government’s evidence will show that Strothers participated in a voluntary interview with Special Agents of the U.S. Department of State’s Diplomatic Security Service on or about March 1, 2016. During that interview, Strothers falsely stated that “Giovanni Daliente Strassini” was his birth name and that he did not submit an application for a United States passport on October 7, 1996.

The federal jury delivered the guilty verdict following a one and a half day trial. Strothers is currently released on bond. The penalty for using a false writing in a federal matter and giving false statements to federal agents is a maximum term of five years in prison and a $250,000 fine. The penalty for passport application fraud is a maximum term of ten years in prison and a $250,000 fine. The penalty for possessing a fraudulent identification document is a maximum of 15 years in prison and a $250,000 fine.

A sentencing date for the defendant has not been set.

The U.S. Department of State’s Diplomatic Security Service led this investigation. Assistant United States Attorneys Kenneth Smith and Casey Arrowood of the U.S. Attorney’s Office in Charlotte prosecuted the case.

CHARLOTTE, N.C. – Multiple teams of federal, state and local law enforcement agents and officers arrested 44 individuals over the course of the past two days, in a coordinated takedown that began early Monday morning, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. Of those arrested, 12 face federal gun and drug charges and 32 are charged with state offenses. Federal arrest warrants have been issued for three more individuals, bringing the total number of those who will be prosecuted federally to 15.

Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; North Carolina Secretary of Public Safety Eric A. Hooks; and Chief Kerr Putney, of the Charlotte-Mecklenburg Police Department (CMPD), join U.S. Attorney Murray in making today’s announcement.

“This morning’s arrests are the result of a joint eight month investigation into repeat offenders who disregard public safety, violate our nation’s gun and drug laws, and pose a threat to the community,” said U.S. Attorney Murray. “U.S. Attorney General Jeff Sessions directed U.S. Attorneys’ Offices across the country to reinvigorate Project Safe Neighborhoods (PSN), a program that has been historically successful in reducing violent crime. Today’s coordinated action is one component of my office’s comprehensive PSN strategy, which focuses on bringing together all levels of law enforcement to address violent crime, and partnering with our local communities to create an environment where all citizens can safely live, work and prosper.”

“This operation is a great example of the ATF/CMPD Violent Crime Task Force working with our investigative partners to remove violent individuals and career criminals from our communities,” said ATF Special Agent in Charge Dixie.

“These operations play an important role in keeping our community safe. Crime fighting and prevention is more than a strategy, it’s a priority. As we work to engage young people in positive ways, we also will continue to focus on violent, repeat offenders who bring illegal drugs and guns into our neighborhoods,” said Charlotte-Mecklenburg Police Chief Putney. “We will continue to work together with our state and federal partners, along with our formal and informal community leaders, to identify and remove dangerous criminals from our community.”

“This collaboration between federal, state, and local law enforcement sends a clear message that our state has zero tolerance for those committing violent crimes,” said Public Safety Secretary Hooks. “If you choose to engage in this kind of criminal activity, you will be arrested and brought to justice.”

The 12 arrested today on federal charges are:

• Abdul Nafir Barilford, 35, residence unknown.
• Mark Jefferson Belton, 29, of Charlotte.
• Amos Lamar Burch, 34, of Charlotte.
• Rodney Funderburk, 38, residence unknown.
• Elontrae Ali Glenn, 23, of Rock Hill, S.C.
• Rodriquez Harris, 43, of Charlotte.
• Rakeem McCullough, 28, of Charlotte.
• David DeAngelo McNeil, 37, of Charlotte (in federal custody).
• Rodriquez Neal, 23, of Charlotte. Rashad Taylor, 26, of Charlotte.
• Jimmy Ward, 42, of Cherryville, N.C. (previously in state custody)
• Montique Williams, 30, of Charlotte.
   

Daryl Brown, 49, Carlos Massey, 34, and Ishmerai Hem Ef Muhammad El, 37, of Charlotte, are still wanted by law enforcement.  (Table below lists charge(s) for each defendant)

The ATF/CMPD Violent Crime Task Force worked jointly with CMPD’s Vice & Narcotics unit, the U.S. Marshals Service, the North Carolina Department of Public Safety, and federal and state prosecutors to identify violent and repeat offenders in the Charlotte-Mecklenburg area engaging in illegal firearm activity, drug sales, and other criminal acts.

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. Law enforcement seized more firearms and controlled substances while executing arrest and search warrants over the past two days.

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 commends the ATF and CMPD for their investigative efforts, and thanks the U.S. Marshals Service, the North Carolina Department of Public Safety’s Adult Correction and Juvenile Justice, Special Operations and Intelligence Unit, and the Mecklenburg County District Attorney’s Office for their invaluable assistance throughout this investigation.

Assistant U.S. Attorney Lambert Guinn, of the U.S. Attorney’s Office in Charlotte, is in charge of the federal prosecutions.

Name

Charge(s)

Abdul Nafir Barilford 3:18-cr-36

Felon in possession of a firearm

Mark Jefferson Belton 3:18-cr-48

Distribution and possession with intent to distribute crack cocaine and possession of a firearm in furtherance of a drug trafficking crime

Daryl Brown 3:18-cr-44

Distribution and possession with intent to distribute crack cocaine and felon in possession of a firearm

Amos Lamar Burch 3:18-cr-40

Distribution and possession with intent to distribute crack cocaine and felon in possession of a firearm

Rodney Funderburk 3:18-cr-47

Distribution and possession with intent to distribute crack cocaine and felon in possession of a firearm

Elontrae Ali Glenn 3:18-cr-42

Distribution and possession with intent to distribute heroin and felon in possession of a firearm

Rodriguez Harris 3:18-cr-38

Felon in possession of a firearm

Carlos Massey 3:18-cr-37

Felon in possession of a firearm

Rakeem McCullough 3:18-cr-50

Distribution and possession with intent to distribute cocaine and crack cocaine, felon in possession of a firearm and possession of a firearm in furtherance of a drug trafficking crime

David DeAngelo McNeil 3:18-cr-45

Distribution and possession with intent to distribute crack cocaine

Ishmerai Hem Ef Muhhammad El 3:18-cr-41

Distribution and possession with intent to distribute cocaine and crack cocaine and felon in possession of a firearm

 

Name

Charge(s)

Rodriquez Neal 3:18-cr-43

Distribution and possession with intent to distribute cocaine and crack cocaine and felon in possession of a firearm

Rashad Taylor 3:18-cr-49

Distribution and possession with intent to distribute cocaine

Jimmy Ward 3:18-cr-46

Distribution and possession with intent to distribute 50 grams or more of methamphetamine

Montique Williams 3:18-cr-39

Felon in possession of a firearm

ASHEVILLE, N.C. – Seth Willis Pickering, 38, of Leicester, N.C. pleaded guilty today to first-degree murder for killing his daughter, Lila Pickering, within the boundaries of the Blue Ridge Parkway, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. 

 “Our hearts go out to Lila’s family.  No action by the criminal justice system can soothe the pain of their loss,” said U.S. Attorney Murray in announcing today’s guilty plea. “This is an outcome reached after consideration of all the facts and circumstances of this case.  By allowing the defendant to plead guilty and serve a life sentence without the possibility of parole, we will spare the family the trauma of a lengthy trial and decades of appeals.  We hope this resolution brings some comfort to the family of Lila Pickering.”

Seth Pickering appeared before U.S. District Judge Max. O. Cogburn, Jr. 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’s plea agreement, which the Court has accepted, provides that the defendant will receive a sentence of life in prison without any possibility of parole for his crime.    

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

In making today’s announcement U.S. Attorney Murray thanks 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 are in charge of the prosecution.

 

 

Two individuals were found guilty yesterday for their roles in a $10 million telemarketing scheme that defrauded primarily elderly victims in the United States from call centers in Costa Rica.    

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and U.S. Attorney R. Andrew Murray of the Western District of North Carolina made the announcement. 

Following a three-day jury trial, Andrew Smith, 45, of San Jose, Costa Rica, and Christopher Lee Griffin, 44, a U.S. citizen who previously resided in San Jose, Costa Rica, were convicted of one count of conspiracy to commit wire fraud, eight counts of wire fraud, one count of conspiracy to commit money laundering and seven counts of international money laundering.  Sentencing has not yet been set by U.S. District Court Judge Robert J. Conrad of the Western District of North Carolina, who presided over the trial.

“Andrew Smith and Christopher Lee Griffin orchestrated a brazen telemarketing scheme from Costa Rica and stole more than $10 million,” said Acting Assistant Attorney General Cronan.  “But what makes their crimes especially reprehensible is the harm they caused to a significant number of elderly victims.  Attorney General Jeff Sessions has called those who exploit our senior citizens ‘cowards,’ and these convictions demonstrate that the Department of Justice will aggressively pursue cowards like these, no matter where they reside.”

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

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

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

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

STATESVILLE, N.C. – U.S. Attorney R. Andrew Murray announced today that Joseph Howard Davis, 34, of Charlotte, was sentenced to 260 months in prison on drug trafficking and firearms offenses. U.S. District Judge Richard L. Voorhees also ordered Davis to serve 10 years under court supervision upon completion of his prison term. In July 2017, a federal jury This case was brought as 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.

According to filed court documents and evidence introduced during Davis’ two-day trial, from in or about 2014 to October 2016, Davis participated in a conspiracy to distribute methamphetamine in and around Catawba county and elsewhere in the Western District.  Court records show that over the course of the investigation law enforcement seized from Davis approximately two ounces of 96% pure methamphetamine and two rifles.  Davis has a previous felony conviction and is prohibited from possessing a firearm.

* * *

In a separate case, Judge Voorhees also sentenced today Shea David Byrd, 44, of Lenoir, N.C. to 15 years in prison, and Patrick Neal Bates, 50, of Hickory, N.C. to 10 years in prison on methamphetamine trafficking offenses. Byrd and Bates were each ordered to serve five years of supervised release after they are released from prison.

All 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. All federal sentences are served without the possibility of parole.

These prosecutions stem from an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the conviction of more than 200 defendants on methamphetamine trafficking and firearms charges.  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 agencies and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

In making today’s announcement U.S. Attorney Murray thanks Gregory L. Wiest, Acting 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; Chief Thurman Whisnant of the Hickory Police Department; and Sheriff Chris Bowman of the Alexander County Sheriff’s Office for their agencies’ coordination and assistance throughout these investigations.

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

 

ASHEVILLE, N.C. – Three men involved in an international online child pornography ring responsible for producing and sharing thousands of images and videos of child pornography were sentenced today by U.S. District Judge Max O. Cogburn, Jr., announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. 

Gregory L. Wiest, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Van Duncan of the Buncombe County Sheriff’s Office join U.S. Attorney Murray in making today’s announcement.

Dane William Anderson, 32, of Candler, N.C., was sentenced to 20 years in prison; Samuel Heineman, IV, 54, of Marietta, Pennsylvania, previously residing in Berlin, Germany, was sentenced to 21 years in prison; and Mark Christopher Klein, 38, of Hugo, Minnesota, was sentenced to 16 years in prison. All three defendants were also ordered to serve a lifetime of supervised release and to register as sex offenders after they are released from prison.

“The three men sentenced today were part of a sinister network of online child predators, responsible for producing and amassing child pornography on a scale rarely seen. It took law enforcement nearly a year to shift through and analyze Anderson’s massive collection of disturbing images and videos,” said U.S. Attorney Murray.  “While this sentence will never repair the trauma suffered by the victims in this case, it does, hopefully, send a message of deterrence to other would-be offenders.”

“This was a heinous child predator conspiracy, crossing international and state borders,” said acting HSI Special Agent Wiest.  “Our deepest concern is for the victims of these horrible crimes and we hope today’s sentencing can help them continue on the path of recovery.”

According to court documents and other court records, from 2002 through 2015, the three men were members of a child pornography ring referred to as the “Rippernet,” that produced child pornography through “capping.” Capping is a sophisticated method of producing child pornography by tricking victims, in this case teenage boys, into performing sexually explicit acts in front of webcams, and capturing the video to create new child pornography.  Court records show that the defendants induced their young victims by creating false online personas of adolescent girls, specifically developed to be sexually explicit and enticing.  

Court records show that law enforcement identified Anderson as an individual responsible for producing images and videos of child pornography, which he traded with others via a peer-to-peer file trading software.  According to court records, a forensic analysis of devices seized from Anderson’s home revealed that the defendant possessed more than 17,000 videos and 10,000 images of files depicting the abuse of children.  Court records also show that Anderson was the “archivist” of the ring, responsible for collecting and organizing the child pornography in files, and distributing the images and videos to his capper associates.

Court records show that Anderson learned the capping method from Heineman, who was the most prolific producer of child pornography using the capping method.  According to court records, Heineman taught Anderson “the art of capping.”  In turn, Anderson taught the method to other group members, including Klein.  Court records indicate that the combined number of known production victims among the three defendants is over 2,290.

Anderson pleaded guilty to one count of production and one count of possession of child pornography.  Heineman and Klein each pleaded guilty to one count of conspiracy to sexually exploit a child.  All three defendants are currently in the custody of the United States Marshal pending their designation to a federal Bureau of Prisons facility.  All federal sentences are served without the possibility of parole. 

In making today’s announcement U.S. Attorney Murray thanks HSI for leading the investigation. U.S. Attorney Murray also thanks the Buncombe County Sheriff’s Office for their assistance in this case. The U.S. Attorney’s Office in Asheville prosecuted the case.

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

According to filed court documents and court proceedings, between November 20, 2015, and February 10, 2016, McCoy robbed six hotels and businesses in Cherokee, Swain and Jackson counties.  According to court records, on November 20, 2015, at approximately 3:40 a.m., McCoy brandished a knife to an employee of the Quality Inn located in Swain County, in Indian Country.  McCoy demanded money, and obtained approximately $150 from the desk drawer and $30 from the employee’s wallet.  Court records show that McCoy also told the employee, “I’ve hit all these hotels.” Twenty minutes later, on November 20, 2015, at approximately 4:00 a.m., McCoy entered the Baymont Inn, also in Swain County, in Indian Country.  McCoy again brandished a knife and demanded money from a hotel employee, who gave McCoy approximately $140 in cash.

 

On January 26, 2016, at approximately 10:40 p.m., McCoy brandished a knife and demanded money from a clerk at the Fairfield Inn and Suites located in Jackson County, in Indian Country.  When the hotel employee attempted to call 911, McCoy grabbed her, threw her in a corner, and cut her hand with the knife causing the employee to sustain injuries.  McCoy fled with $225 in cash.  Then, on January 30, 2016, at approximately 9:45 p.m., McCoy brandished a knife and demanded money from an employee at Ric’s Smoke Shop in Jackson County, in Indian country.  McCoy told the victim to open the cash drawer, and ordered the victim to lay down on the floor.  McCoy left the store with $1,724 in cash and a Gatorade drink.

According to court records, on February 9, 2016, at approximately 11:10 a.m., McCoy entered a Dollar General Store in Whitter, N.C., in Jackson County.  Court records show that McCoy approached the register with three food items and asked the store clerk about telephone cards.  Then, McCoy pulled out a knife and demanded money from the clerk.  McCoy fled the store with $442.38 in cash.   

A day later, on February 10, 2016, at approximately 3:26 a.m., McCoy and his co-defendant, David James Littlejohn, entered a Microtel Inn located in Bryson City, N.C.  A guest of the hotel, identified as “R.E.” was in the lobby.  McCoy jumped behind the counter and ordered R.E. to come behind the counter as well.  R.E refused.  McCoy jumped on the counter, pulled a large fixed knife and went towards R.E., with Littlejohn following behind him.  McCoy, holding the knife, asked R.E. multiple times where the woman was that worked the hotel desk.  McCoy pointed the knife at R.E. and told R.E. to get on the ground.  R.E. laid down on the floor, and McCoy told Littlejohn to get everything from R.E.’s pockets and said if R.E. moved then cut him.  Littlejohn took R.E.’s wallet, $45 in cash and other items while McCoy went behind the front desk.  A store employee heard the commotion, walked into the lobby and saw R.E. on the floor.  Littlejohn grabbed the employee and forced her to the floor, then took from her the key for the cash drawer and gave it to McCoy.  McCoy opened the drawer and took $200.  After ripping all the phones out of the wall, both McCoy and Littlejohn ran out of the front door.  

McCoy previously pleaded guilty to one count of robbery within Indian Country, one count of assault with a dangerous weapon, and two counts of Hobbs Act robbery.  Littlejohn was also sentenced today to 70 months in prison, followed by three years of supervised release, and was ordered to pay $1,090 as restitution.  Littlejohn pleaded guilty to one count of Hobbs Act robbery. 

 

Both defendants are currently in federal custody and will be transferred into 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 thanks the Cherokee Indian Police Department, the Bryson City Police Department, and the Jackson County Sheriff’s Office for their investigation of the case.

 

Assistant U.S. Attorney Chris Hess, of the U.S. Attorney’s Office in Charlotte, and Special Assistant U.S. Attorney Justin Eason of the Office of the Tribal Prosecutor for the Eastern Band of Cherokee Indians prosecuted the case.

                                                           

                                                           

CHARLOTTE, N.C. – U.S. Attorney R. Andrew Murray announced that $1,542,442.33 will be distributed to Appalachian State University (ASU) following successful civil forfeiture proceedings against money seized from bank accounts controlled by alleged fraudsters and money launderers who targeted the higher education institution. 

 

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, Charlotte office.

 

“Today’s announcement is an example of the results we get when we use civil forfeiture laws to swiftly stop crime and provide financial relief to victims of fraud,” said U.S. Attorney Murray.  “In this case, the FBI located and seized the stolen funds even before criminal investigative targets had been identified or a criminal case had been filed. Under these circumstances, civil forfeiture is the only area of law that enables law enforcement to swiftly obtain warrants to secure stolen funds, and to prevent the perpetrators of fraud from accessing them.  Identifying and seizing ill-gotten gains and returning forfeited funds to victims is a priority for my office.  I will use all of the tools at my disposal to make victims whole, and civil asset forfeiture is an invaluable tool in that arsenal.”

 

According to allegations contained in the civil forfeiture complaint, beginning in or around December 2016, one or more alleged fraudsters convinced ASU staff to forward over $1.9 million to one or more companies operated by them.  According to court records, the fraudsters posed in emails as a legitimate construction company building ASU’s new health sciences facility.  After receiving the funds, the alleged fraudsters used numerous bank wire transfers to launder the money among various companies.

 

Court records indicate that, upon discovery of the fraud, ASU notified the FBI and fully assisted in the investigation.  The FBI ultimately located $1,542,442.33 of the money dispersed in multiple bank accounts and obtained forfeiture seizure warrants for it, preventing the wrongdoers from absconding with ASU’s funds.  Following that, the U.S. Attorney’s Office filed a civil complaint in federal court. Upon conclusion of the civil forfeiture case, the Department of Justice’s Money Laundering and Asset Recovery Section authorized distribution of all forfeited funds to ASU.

 

In making today’s announcement, U.S. Attorney Murray commended the work of the FBI.  U.S. Attorney Murray also thanks ASU officials for their prompt efforts to notify law enforcement of the fraud.

 

Assistant United States Attorney Benjamin Bain-Creed of the United States Attorney’s Office in Charlotte handled the proceedings. (Docket No. 5:17-cv-81)

 

Criminal and Civil Actions Collections in Fiscal Year 2017

 

In Fiscal Year 2017, the Western District of North Carolina (WDNC) collected $23,476,979.90 in criminal and civil actions.  Of this amount, $4,719,016.01 was collected in criminal actions and $18,757,963.89 was collected in civil actions.  Additionally, WDNC worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $7,216,680.36 in cases pursued jointly with these offices.  Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2017. 

 

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

 

The U.S. Attorney’s Office, working with partner agencies and divisions, also collected $2,768,013 in asset forfeiture actions in FY 2017.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

 

“Every day, federal prosecutors and staff in the U.S. Attorney’s Office work hard to protect the citizens of the Western District of North Carolina and to ensure that criminals do not profit from their illegal activities,” said U.S. Attorney Murray.  “Their diligent efforts enable us to achieve justice, recover taxpayer dollars, secure restitution for victims of federal crimes, and protect the public from fraud, waste and abuse.”

 

ASHEVILLE, N.C. – Michael Christopher Estes, 46, formerly of Tazewell, Tennessee, appeared before U.S. Magistrate Judge Dennis Howell today and pleaded guilty to one count of unlawful possession of explosive material, in connection with the October 2017 incident at the Asheville Regional Airport, announced R. 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 and Chief Tammy Hooper of the Asheville Police Department.

 

According to today’s plea hearing and documents filed with the court, shortly after 12:30 a.m. on October 6, 2017, Estes walked onto the grounds of the Asheville Regional Airport carrying a package containing an explosive device he had constructed. The explosive device was inside two plastic bags, each tied in a knot, which Estes placed outside the entrance of the airport’s baggage claim area.  

 

According to court documents, Estes constructed the device using material that is known to explode violently when coming in contact with a flame or other ignition source.  Court records show that the explosive device also contained nails and a shotgun cartridge.  Shrapnel, nails or ball bearings often are added to such devices to increase the devastation inflicted by the explosion. According to plea documents, the words “FOR GOD & COUNTRY” were written on the strike strip of a matchbox attached to the device.  Another message, “FOR ALL THE V/N VETS OUT THERE!!!,” was written on the tape attaching a portion of a clock to the device.  The alarm on the clock was positioned to go off at 6:00, but it was not actually set.

 

At approximately 6:30 a.m. on October 6, 2017, the Asheville Regional Airport Authority Department of Public Safety was alerted to the presence of a “suspicious bag” outside the terminal building.  Law enforcement responded to the scene and evacuated passengers and employees from the baggage claim area. According to court documents, bomb technicians rendered the device safe and it tested positive for explosive material.  Law enforcement released a photograph of Estes, and arrested the defendant the following day in an area not far from the airport.

 

Estes admitted in court today that he purchased the material and constructed the explosive device he placed at the airport.  Court documents show that Estes told law enforcement that we were getting ready to “fight a war on U.S. soil,” and that terrorists were coming to the United States.  Estes told law enforcement that he believed that federal agencies were unprepared to fight the terrorists.  Estes also told law enforcement that his intention was not to hurt the public but to devise a training scenario.  He also said that he placed the device at the airport so it would be picked up by law enforcement, so that law enforcement would “now know how” to make a similar device.  Estes also admitted to staging a backpack in the woods across from the airport.  Law enforcement located the backpack, which contained some of the material Estes used to construct the device.

 

Estes is currently in federal custody. The maximum penalty for unlawful possession of explosive material at an airport is five years in prison and a $250,000 fine.  A sentencing date for the defendant has not been set yet. 

 

The investigation was led by the FBI and the Asheville Police Department.  In making today’s announcement U.S. Attorney Murray thanks the North Carolina State Bureau of Investigation and the Asheville Regional Airport Authority Department of Public Safety for their invaluable assistance and coordination in this case.

 

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

 

CHARLOTTE, N.C. – Richard Wyatt Davis, Jr. 41, formerly of Cornelius, N.C., appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to one count of securities fraud and one count of tax evasion, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.    

 

U.S. Attorney Murray is joined in making today’s announcement by 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).

 

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.  These payments exceeded the amount he was entitled under fund materials.  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 today’s plea hearing and filed court documents, 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. 

 

Davis is currently released on bond.  The securities fraud charge carries a maximum prison term of 20 years and a $5,000,000 fine.  The tax evasion charge carries a maximum prison term of 5 years and a $250,000 fine.  A sentencing date for the defendant has not been set yet. 

 

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 are in charge of the prosecution.

 

STATESVILLE, N.C. – On Wednesday, January 11, 2018, U.S. District Judge Richard L. Voorhees sentenced Haley Raquel Rhodes, 23, of Blowing Rock, N.C. to 60 months in prison and five years of supervised release on drug trafficking charges, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Rhodes pleaded guilty in September 2017 to one count of methamphetamine trafficking conspiracy and one count of possession with intent to distribute methamphetamine.

 

Wayne Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Sheriff Len Hagaman of the Watauga County Sheriff’s Office join U.S. Attorney Murray in making today’s announcement.  

 

According to filed court documents and statements made in court, from November 2016 to March 2017, Rhodes conspired with others to distribute methamphetamine in Mecklenburg and Watauga Counties.  Court records show that law enforcement became aware that Rhodes was transporting large amounts of methamphetamine from Charlotte to Watauga County.  On March 27, 2017, while Rhodes was driving her vehicle through Watauga County, law enforcement conducted a traffic stop.  Prior to stopping her vehicle, law enforcement observed Rhodes throw a black case out of the driver’s window of the car.  Court records show that law enforcement recovered the black case, which contained methamphetamine packaged in multiple bags.  Law enforcement also seized from Rhodes’ vehicle drug paraphernalia and $5,170 in cash.

 

According to court records, Rhodes told law enforcement that she regularly traveled to Charlotte to pick up methamphetamine, which she then brought back to Watauga County to sell.  In total, Rhodes was responsible for receiving and distributing at least 1.5 kilograms of methamphetamine. 

 

Rhodes is currently in federal custody. She 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.

 

ATF and the Watauga County Sheriff’s Office investigated the case.  Special Assistant U.S. Attorney Erik Lindahl prosecuted the case.

CHARLOTTE, N.C. – Today, the U.S. Attorney’s Office and the Charlotte Metropolitan Human Trafficking Task Force (CMHTTF) co-sponsored a one-day event, focusing on training workers and volunteers who provide support services to victims of human trafficking, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.

 

January 11th is Human Trafficking Awareness Day.  The President also has designated January as National Slavery and Human Trafficking Prevention Month. 

 

“Human trafficking exploits the most vulnerable members of our society.  The perpetrators of this heinous crime are depraved criminals who inflict terrible pain and trauma upon their victims and rob them of their dignity.  Even after rescued, victims of human trafficking experience a long and difficult healing process,” said U.S. Attorney Murray in making today’s announcement.  “I want to thank the members of the task force for partnering with my office to offer this valuable training opportunity to our local service providers.  Human trafficking affects all of us.  No community is immune from this criminal activity.  Working together with our law enforcement partners and community organizations we will continue to raise awareness and educate the public about this terrible crime.”

 

Today’s training was developed by the Justice Department’s Office for Victims of Crime Training and Technical Assistance Center (OVC TTAC). The objective of the training was the proper implementation of trauma-informed and victim-centered service provision to victims of human trafficking.  More than 140 participants from local community organizations received instruction and information in four key areas: 1) understanding trauma-informed and victim-centered approaches when providing services to sex and labor trafficking victims; 2) conducting appropriate and meaningful needs assessments that ensure victim safety and meet ethical standards of care; 3) identifying and utilizing tools, resources, methods, and approaches that consider polyvictimization, trauma recovery, and short- and long-term needs; and 4) understanding gaps in service provision and creating strategies to close those gaps.

 

In addition to today’s training, the U.S. Attorney’s office, in partnership with the task force, has conducted trainings for law enforcement officers, hospital workers, health care providers, hospitality industry workers, social workers and various community and volunteer groups. 

 

In January 2017, the U.S. Attorney’s Office’s anti-trafficking efforts resulted in a 40-year prison sentence for Kenwaniee Vontorian Tate, following his conviction at trial for sex trafficking of a minor, sex trafficking by fraud, and committing sex trafficking of a minor while being required to register as a sex offender. In April 2017, a Charlotte man, Zerrell Ross Fuentes, his wife, Brianna Leshay Wright, and his mother, Tanya Marie Fuentes were charged with federal sex trafficking offenses for engaging in a conspiracy to sex traffic three minor victims.  The case is still pending.

 

In making today’s announcement, U.S. Attorney Murray thanked the First Presbyterian Church for hosting today’s event. 

 

For more information on human trafficking and victim services, including a video series and resource guide to raise awareness about human trafficking in the United States, please visit the Justice Department’s Office for Victims of Crime website at https://ovc.ncjrs.gov/humantrafficking/

 

If you are the victim of a human trafficking or may have information about a potential trafficking situation, call the National Human Trafficking Resource Center (NHTRC) at 1-888-373-7888.  NHTRC is a national, toll-free hotline, with specialists available to answer calls from anywhere in the country, 24 hours a day, seven days a week, every day of the year related to potential trafficking victims, suspicious behaviors, and/or locations where trafficking is suspected to occur. To submit a tip to the NHTRC online please visit https://humantraffickinghotline.org/report-trafficking. 

 

You can also contact ICE-Homeland Security Investigations at 1-866-DHS-2-ICE (1-866-347-2423) or the Charlotte Office of the FBI at 704-672-6100.

CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced the leader of a fraudulent identification document conspiracy to 39 months in prison, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Juan Diego Gonzalez-Campos, 30, of Mexico, will also be subject to deportation proceedings upon the completion of his federal sentence.  Gonzalez-Campos previously pleaded guilty to conspiracy to produce fraudulent identification documents, aggravated identity theft and possession of firearm ammunition by an alien.

Greg Wiest, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas, joins U.S. Attorney Murray in making today’s announcement.

According to filed court documents and today’s sentencing hearing, from February 2016 to March 2017, Gonzalez-Campos and his co-defendants, Faustino Pelaez-Arellanes, Anabel Salinas-Marin, Hector Tellez-Crisanto, and Socorro Garcia-Merida, engaged in an illegal scheme to produce and transfer fraudulent identification documents, including but not limited to, Social Security cards, birth certificates, and state driver’s licenses.  Gonzalez-Campos sold the falsified documents to numerous individuals, including to undocumented aliens, knowing the documents would be used as proof of eligibility to remain and work in the United States. 

As the ringleader of the conspiracy, Gonzalez-Campos sold the fraudulent documents to individuals that Gonzalez-Campos either knew or were referred to him by his co-defendants.  Court records also show that Gonzalez-Campos and his co-conspirators charged customers between $270 and $1,000 per document, depending on the type of fraudulent identification provided.  According to court records and today’s sentencing hearing, Campos-Gonzalez often produced documents using stolen Social Security numbers of American citizens, to which the conspirators referred as “good numbers,” which often caused impacted individuals problems with filing tax returns and their credit. 

In addition to the fraudulent identification conspiracy, law enforcement recovered 25 Remington Golden Saber High Performance Jacket 9mm luger rounds, which Gonzalez-Campos possessed unlawfully.

In announcing Gonzalez-Campos’s sentence, Judge Cogburn said, “The stealing of identities of real people is causing serious problems in this country.”

Gonzalez-Campos 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.   

ICE-HSI led the investigation. Assistant United States Attorney Kenneth Smith, of the U.S. Attorney's Office in Charlotte, is prosecuting the case.

CHARLOTTE, N.C. – A debt collection company employee was sentenced yesterday to four years in prison for aggravated identity theft and bank fraud, involving a scheme to steal the personally identifiable information of local residents to obtain over $200,000 worth of new credit cards and a car loan, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, U.S. District Judge Max O. Cogburn, Jr. ordered Justin Frank Pettway, 30, of Charlotte, to serve five years under court supervision and to pay $226,517 in restitution to four major banks defrauded by Pettway’s identity fraud scheme. 

 

David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS), and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD) join U.S. Attorney Murray in making today’s announcement.

 

According to the indictment, information contained in court filings, and court proceedings, from late 2015 to 2016, Pettway was employed by a South Carolina-based debt collection company.  Through his employment, Pettway was able to use a national company’s Internet service that provides debt collection companies with computer and smartphone access to numerous public and proprietary databases containing individuals’ extensive personally identifiable information (PII).  That information, which includes names, current and former residential addresses, social security numbers, dates of birth, telephone numbers and other historical and current information, is typically required to apply for new credit cards and loans.

 

Pettway unlawfully used the Internet service to input the residential addresses of local residents and steal their most current identity information. Pettway then used the stolen identity information to file fraudulent applications for loans and credit cards over the Internet and by telephone in the names of the identity theft victims. 

 

Court documents show that once the defrauded banks notified Pettway that approved credit cards had been placed in the mail, Pettway drove to the identity theft victims’ residences, stole the issued credit cards from the victims’ mailboxes, and then used the credit cards until they were disabled by the banks.  Typically, the identity theft victims did not learn of the new unauthorized credit cards issued in their names until they received subsequent credit card billing statements in the mail.  

 

According to court records, Pettway charged $226,517 to the unauthorized credit cards to obtain cash from ATMs and goods and services from merchants. Pettway also purchased a Corvette from an out-of-state car dealer using a $58,000 car loan obtained in the name of an identity theft victim.

 

Pettway 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 U.S. Postal Inspection Service in Charlotte and the Charlotte Mecklenburg Police Department, and noted that the case is the result of the Charlotte Financial Crimes Task Force (CFCTF).  The task force was formed in early 2016 by the U.S. Postal Inspection Service and currently comprises over 25 local, state and federal law enforcement agencies located in the Western District of North Carolina. The goal of the taskforce is to focus on the identification and development of financial fraud investigations in the Charlotte area.

 

Assistant U.S. Attorney Thomas O’Malley of the U.S. Attorney’s Office in Charlotte prosecuted the case.  

CHARLOTE, N.C. – Six members of the United Blood Nation gang (UBN or Bloods) were sentenced yesterday to terms ranging from 13 years to life in prison, for conspiracy to participate in racketeering activity (RICO) and related charges, stemming from the 2014 double-murder of Douglas and Deborah London and the 2013 murder of Kwamne Clyburn, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina

 

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

 

U.S. District Judge Max O. Cogburn, Jr. presided over the sentencing hearings and ordered Rahkeem Lee McDonald, 25, of Charlotte, to serve life in prison, following his guilty plea to RICO conspiracy and murder in aid of racketeering charges in connection to the Londons’ murder.

 

David Lee Fudge, 24, of Pineville, N.C., was ordered to serve 26 years in prison and five years of supervised release.  Fudge pleaded guilty to RICO conspiracy and murder in aid of racketeering for the Londons’ murder, and Hobbs Act robbery for his role in the robbery of the Pineville-area mattress store owned by the couple. 

 

Ibn Rashaan Kornegay, 38, of Greenville, N.C., was sentenced to 23 years in prison and five years of supervised release.  Nehemijel Maurice Houston, 23, of Charlotte, was sentenced to 20 years in prison and five years of supervised release.  Daquan Lamar Everrett, 23, of Charlotte, was sentenced to 13 years in prison and five years of supervised release, and Centrilla Shardon Leach, 33, of Charlotte, was ordered to serve 13 years in prison and five years of supervised release.  Each defendant pleaded guilty to one count of RICO conspiracy.

 

Judge Cogburn previously sentenced Jamell Lamon Cureton and Malcolm Jarrel Hartley to life in prison in connection to the double-murder of Douglas and Deborah London.  Cureton received a second life sentenced for the unrelated murder of Kwamne Clyburn in 2013.

 

Four more defendants who were previously convicted at trial or have pleaded guilty in connection with the case are currently awaiting sentencing: 

 

Randall Hankins, II, Nana Yaw Adoma, and Akheem Tahja McDonald, were convicted of racketeering conspiracy charges in October 2017.  Hankins was also convicted of two counts of murder in aid of racketeering and two counts of use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence for his role in the murder of the Londons. 

 

Adoma and Akheem McDonald were each convicted of one count of murder in aid of racketeering and one count of use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in death, stemming from Clyburn’s murder.  Adoma was also convicted of one count of assault with a dangerous weapon in aid of racketeering and one count of use or carry of a firearm in relation to a crime of violence and possession of firearm in furtherance of a crime of violence, for his role in the armed robbery of the Londons’ business.  Briana Shakeyah Johnson has also pleaded guilty to RICO conspiracy and murder in aid of racketeering charges for her involvement in the Londons’ murder.

 

According to previous court filings, admissions contained in filed plea documents, trial evidence and the sentencing hearings:

 

Beginning in at least or about 2012, the defendants were members of the Bloods and carried out violent acts for the purpose of protecting and furthering the gang’s power.  Court documents show that the defendants operated according to a common set of Bloods’ rules and participated regularly in gang meetings to discuss, among other things, the commission of crimes, including robbery and murder.

 

On May 25, 2014, Cureton, Adoma and Fudge robbed The Mattress Warehouse in Pineville, owned by Douglas and Deborah London.  In the months that followed, Cureton, a high-ranking “5-Star General” within the gang, communicated with Hartley and other UBN members, including the defendants sentenced yesterday, to plan the murders of Douglas and Deborah London.  According to court records, Cureton and other gang members discussed that Douglas London was the only eye-witness who could identify Cureton and therefore needed to be eliminated.

 

The gang’s leadership authorized Hartley to proceed with the murder and on October 23, 2014, Johnson drove Hartley to South Carolina, where Hartley shot and killed the couple at their home.  Following the couple’s murder, Cureton explained in a letter sent from prison that he ordered the murder of Douglas London because he was going to testify against him in court, and described Deborah London as “collateral damage.” 

 

According to court records, after the murders Hartley was “ranked up” or “promoted” to a 2-Star General for carrying out the leadership’s orders.  Cureton ordered the gang to remain silent about the murders and told Hartley that from that point forward the topic of the victims’ murders was not to be discussed, authorizing action against anyone who talked about it.  Kornegay also conducted a telephone gang meeting with other UBN gang members during which he directed them to lay low to avoid contact with law enforcement.

Johnson, Hankins, Adoma, and Akheem McDonald are currently in federal custody.  The maximum penalty associated with the charges of which they are convicted is life in prison.  The defendants’ sentences will be determined by the Court, taking into consideration the federal sentencing guidelines and statutory sentencing factors.  A sentencing date has not been set yet.

                     

The investigation was led by the FBI, with the invaluable assistance of CMPD and the York County Sheriff’s Office. 

 

Assistant U.S. Attorney Don Gast is prosecuting the case.

CHARLOTE, N.C. – Lonnie Brown, Jr. 48, of Charlotte, was sentenced today by U.S. District Judge Max O. Cogburn, Jr. to 11 years in prison and five years of supervised release on drug trafficking conspiracy charges, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. 

 

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

 

According to filed court documents and today’s sentencing hearing, from about August 2014, Lonnie Brown, Constance Graves, Carol Fonseca and Tormeka Graves operated a drug conspiracy responsible for trafficking large amounts of cocaine and crack cocaine in Mecklenburg County.  According to filed court documents, Brown was the leader of the drug network and had established himself as a supplier of cocaine to several neighborhoods in the Charlotte area.  Court records also show that, while he was operating the drug conspiracy, Brown was on federal probation for two prior federal drug convictions. 

 

Co-defendant Carol Fonseca was Brown’s girlfriend and partner in the cocaine distribution network, and obtained the cocaine from a Hispanic supplier.   Constance Graves and Tormeka Graves purchased drugs from Brown and Fonseca, in some instances as much as a kilogram at a time.  According to filed court documents, Brown previously admitted that he was responsible for trafficking between five and 15 kilograms of cocaine.

 

Tomeka Graves, Carol Fonseca, and Constance Graves have been sentenced to 132, 24 and 18 months in prison, respectively.  Brown 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 investigation was handled by ATF and CMPD.  Assistant U.S. Attorney Dana Washington is prosecuting the case.

CHARLOTTE, N.C. – U.S. Attorney R. Andrew Murray announced today that seven members and associates of a Charlotte-area hip-hop group known as the “FreeBandz Gang” or “FBG” have been indicted on federal charges in connection with a $1.2 million bank and identity theft fraud scheme. 

 

The indictment charges James Murray Willingham, Jr., 23, Damonte Withers, 27, Deandre Howze, 23, Jeffrey Monteith, 22, Quadarius Thomas, 23, Laerek Williams, 25 and Nemiah Davis, 25, all of Charlotte, with multiple counts of conspiracy, bank fraud, wire fraud, and aggravated identity theft.  Withers and Thomas are also charged with firearms related offenses.

 

A federal grand jury returned the 46-count indictment on December 13, 2017.  The indictment was unsealed today, following the arraignment of Laerek Williams.  Withers, Williams, and Howze were arrested by law enforcement on Friday, December 15, 2017. Willingham, originally indicted for his role in the identity fraud scheme in September, remains in federal custody.  Davis is in custody on unrelated state charges in Ohio pending his transfer to the Western District of North Carolina for his initial appearance.  Quadarius Thomas and Jeffrey Monteith have not been arrested yet.

 

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;  Matthew C. Quinn, Acting 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 allegations contained in the indictment, the defendants are members or associates of the Charlotte-area group known as FBG.  According to the indictment, FBG members identify themselves through Facebook groups, social media hashtags, tattoos, and clothing that includes FBG iconography.  The indictment further alleges that FBG members use social media to raise their profile by posting hip-hop music videos and images on YouTube and Facebook that depict the members with guns, large quantities of cash, jewelry, and automobiles.  The indictment alleges that members of FBG, including the defendants, financed their lavish lifestyles by engaging in fraud.

 

As alleged in the indictment, from February 2014 through September 2017, Withers, Howze, Monteith, Thomas, Williams, and Davis defrauded financial institutions through a check-cashing scheme involving worthless checks.  According to the indictment, the conspirators carried out the scheme by depositing fake or stolen checks into straw bank accounts and then quickly withdrawing the funds before the banks completed the check-clearing process.  The indictment alleges that, in some instances, the conspirators paid individuals to open new bank accounts or to let the conspirators use their existing accounts and PIN numbers to carry out the fraud.  In other cases, the indictment alleges that members of the conspiracy stole ATM cards and PINs in order to access the bank accounts. 

 

According to the indictment, the worthless checks deposited into the bank accounts either were stolen or had been altered.  According to the indictment, within days of the worthless check deposits, Withers, Howze, Monteith, Thomas, Williams, and Davis withdrew as much money as possible from the straw accounts through ATM withdrawals, money order purchases, debit card purchases, and point of sale cash withdrawals, commonly referred to as getting “cash back.”   The indictment alleges that by the time the banks had finished the check clearing process and had identified the deposited checks as worthless, the members of the conspiracy had completed the fraudulent activity with the straw accounts.  The indictment alleges the conspirators caused losses of more than $235,000 to the victim financial institutions.

 

The indictment also alleges that between October 2016 and November 2017, Willingham, Withers, Howze, and other co-conspirators engaged in an identity theft scheme.  According to the indictment, the conspirators used the Internet to obtain the personal identifying information (“PII”) of victims, including social security numbers, dates of birth and home addresses. The fraudsters then used the PII to manufacture fake forms of identification (IDs) in the victims’ names, and used the fake IDs to obtain credit, goods, and services in the victims’ names, including automobile loans, cellular telephones, and apartments.  In many cases, the mobile devices were resold for profit.  The indictment alleges that the conspirators netted more than $1,000,000 in goods and services in this manner.

 

The indictment charges Willingham with wire fraud conspiracy, wire fraud, bank fraud, and aggravated identity theft.  Withers is charged with conspiracy to commit bank and wire fraud, bank fraud, wire fraud, possession of device-making equipment, possession of a document-making implement, aggravated identity theft, and possession of a firearm by a convicted felon.  Howze is charged with conspiracy to commit bank and wire fraud, bank fraud, possession of device-making equipment, and aggravated identity theft.  Monteith is charged with bank fraud conspiracy, bank fraud, and aggravated identity theft.  Thomas is charged with bank fraud conspiracy, aggravated identity theft, and possession of a firearm by a convicted felon.  Williams is charged with conspiracy to commit bank fraud, bank fraud, and aggravated identity theft.  Davis is charged with bank fraud conspiracy, bank fraud, and aggravated identity theft.

 

 

The conspiracy to commit bank fraud and bank fraud charges each carry a maximum term of 30 years in prison and a $1,000,000 fine. The wire fraud conspiracy and wire fraud charges each carry a prison term of 20 years and a $250,000 fine.  The possession of device-making and document-making charges each carry a maximum prison term of 15 years and a $250,000 fine.  The aggravated identity theft charge carries mandatory term of two years in prison per count, to be served consecutively to any other term of imprisonment imposed.  The firearm possession charge carries a maximum prison term of 10 years and a $250,000 fine.

 

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

 

In making today’s announcement, U.S. Attorney Murray thanked the U.S. Postal Inspection Service in Charlotte, the United States Secret Service’s Charlotte Field Office, and the Charlotte Mecklenburg Police Department, and noted that the case is the result of the Charlotte Financial Crimes Task Force (CFCTF).  The task force was formed in early 2016 by the U.S. Postal Inspection Service and currently comprises over 25 local, state and federal law enforcement agencies located in the Western District of North Carolina. The goal of the taskforce is to focus on the identification and development of financial fraud investigations in the Charlotte area. Based on crime trends in the area, the task force began to focus its efforts on violent offenders with lengthy criminal histories who are committing fraud. 

 

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

The Justice Department today announced settlements with two physician groups, EmCare Inc. (EmCare) and Physician’s Alliance Ltd (PAL), for allegedly receiving illegal remuneration in exchange for patient referrals to hospitals owned by the now-defunct Health Management Associates (HMA).

 

Dallas-based EmCare provides physicians to hospitals to staff their Emergency Departments (EDs).  Under the settlement with EmCare, the physician group will pay $29.6 million to resolve allegations that, from 2008 through 2012, EmCare received remuneration from HMA to recommend patients be admitted to HMA hospitals on an inpatient basis when the patients should have been treated on an outpatient basis.  On average, Medicare pays at least three times as much for an inpatient admission as it does for outpatient care.  As part of the alleged scheme, HMA made certain bonus payments to EmCare ED physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increased admissions of patients who came to the ED. 

             

In a separate settlement, PAL, headquartered in Lancaster, Pennsylvania, and three of its executives, Lee Meyers, Michael Warren, M.D. and Wallace Longton, M.D., agreed to resolve allegations that, from 2009 until 2012, PAL accepted illegal remuneration from HMA to refer patients to two HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center.  Under the settlement, PAL and its executives will pay $4 million plus a percentage of proceeds from the sale of PAL’s interest in a joint venture with HMA.         

 

“These settlements demonstrate our commitment to ensuring that physician judgment is not compromised by illegal inducements,” said Acting Assistant Attorney General for the Justice Department’s Civil Division, Chad A. Readler.  “Patient care decisions should be based on the needs of patients rather than the financial interests of physicians.”

 

Envision Healthcare Corporation (Envision) has also entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General as part of the resolution of the EmCare matter.  EmCare is a subsidiary of Envision.

 

“Improper physician inducements not only compromise sound medical decision-making, but also cost American taxpayers millions in unnecessary medical costs,” said U.S. Attorney for the Western District of North Carolina Andrew Murray.  “Such kickback arrangements will not be tolerated.”

 

“These physicians prioritized their own financial interests over the needs of their patients,” said United States Attorney Louis D. Lappen for the Eastern District of Pennsylvania.  “Such conduct compromises patient care and undermines the integrity of our nation’s federal health care programs. This settlement should serve as a warning to all providers who allow financial incentives to displace their medical judgment.”

 

“The Hippocratic oath enjoins physicians to do no harm, not maximize profits by pocketing illegal referral payments,” said Nicholas DiGiulio, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “Physicians that stray from their oath should not be surprised when they come under law enforcement scrutiny.” 

 

"This settlement is a direct result of the FBI's dedication to hold companies accountable for their role in healthcare fraud and abuse, and it would not have been possible without the teamwork between FBI Atlanta, the FBI Headquarters' Major Provider Response Team, DOJ, and our partners," said FBI Assistant Director Stephen E. Richardson. "Since 2011, the FBI and our partners have returned over $1.25 Billion to private and public healthcare programs from these "whistleblower" investigations. The FBI is committed to safeguarding the public's trust in a health care system that places patient care, not financial gain, as their primary focus."

 

Under the qui tam, or whistleblower, provisions of the False Claims Act, private individuals may sue on behalf of the government for false claims and share in any recovery.  The EmCare settlement resolves a qui tam lawsuit filed by Drs. Thomas Mason and Stephen Folstad, whose medical practice, MEMA, previously supplied ED physicians to two HMA hospitals in North Carolina.  In connection with the settlement, Drs. Mason and Folstad will receive $6,222,907.  

 

In a separate action, George E. Miller and Michael J. Metts, former HMA hospital executives, filed suit in the Eastern District of Pennsylvania alleging the scheme between PAL and HMA.  Miller’s and Metts’ share of the settlement has not yet been determined.

 

The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice and, in the EmCare matter, the United States Attorney’s Office for the Western District of North Carolina, and in the PAL matter, the United States Attorney’s Office for the Eastern District of Pennsylvania.  The investigations were conducted by the Office of Inspector General of the United States Department of Health and Human Services and the Federal Bureau of Investigation. 

 

The cases are captioned United States ex rel. Mason et al., Case No. 1:14-cv-579 (D.D.C.), and United States ex rel. Miller & Metts v. HMA, et al, Case No. 14-00339 (D.D.C.).  

 

The claims resolved by the settlements are allegations only, and there has been no determination of liability.

CHARLOTTE, N.C. – The Department of Justice today announced a settlement with Dallas based EmCare, Inc. a subdivision of Envision Healthcare Corporation that provides physicians to hospitals to staff their Emergency Departments (EDs).  EmCare agreed to pay $29.8 million to resolve claims that, from 2008 to 2012, EmCare received remuneration from non-defunct Health Management Associates (HMA) to increase Medicare admissions at HMA Hospitals by recommending admission for patients whose medical care should have been billed as outpatient or observation services.  These recommendations allegedly caused the medically unnecessary admission of Medicare beneficiaries.

 

On average Medicare pays at least three times as much for an inpatient admission as it does for care billed as observation or an ED visit.  As part of the alleged scheme, HMA made certain bonus payments to EmCare ED physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increased ED admissions. 

 

Envision Healthcare Corporation has also entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General as part of its resolution of these matters.

 

“Improper physician inducements not only compromise sound medical decision-making, but also cost American taxpayers millions in unnecessary medical costs,” said U.S. Attorney for the Western District of North Carolina Andrew Murray.  “Such kickback arrangements will not be tolerated.”

           

The settlements resolve allegations filed in lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  Drs. Thomas Mason, Stephen Folstad and their medical practice, MEMA, which, until 2009, supplied ED physicians to HMA hospitals, Lake Norman Regional Medical Center and Davidson Regional Medical Center, in the Charlotte, North Carolina metropolitan area, filed suit against HMA and EmCare in the Western District of North Carolina.  In connection with this settlement, Drs. Mason and Folstad and their medical practice will receive $6,222,907 of the funds recovered from EmCare.  The settlement also resolves claims against made in a related case filed by former EmCare employee Jacqueline Meyer in the District of South Carolina.

 

“We thank Drs. Mason and Folstad for their invaluable contribution in this case.  Together with their lawyers, they provided vital assistance to the government throughout this case.  Without information from citizens like Drs. Mason and Folstad detecting fraud and conserving government program funds would be far more difficult,”  said U.S Attorney Murray.

 

The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice, the United States Attorneys’ Offices for the Western District of North Carolina and the District of South Carolina.  The investigation was conducted by the Office of Inspector General of the United States Department of Health and Human Services, the Federal Bureau of Investigation, and the Medicaid Investigations Unit of the State of North Carolina Attorney General’s Office. 

A Bosnian Serb residing in North Carolina pleaded guilty today lying to obtain lawful permanent resident status by concealing his military status and criminal activity during the war in Bosnia.  Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan and Special Agent in Charge Nick Annan of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Atlanta made the announcement. 

 

Milan Trisic, 54, most recently residing in Charlotte, North Carolina, pleaded guilty to a single count of obtaining a Permanent Resident Card, commonly referred to as a “green card,” by making materially false claims and statements.  Trisic entered his plea before Magistrate Judge David S. Cayer in the U.S. District Court in Charlotte.

 

“Those who seek to come to this country must respect our laws,” said Attorney General Sessions. “Entering this country on the basis of fraud is unacceptable. The American people can be assured that this Department is working every day to protect them from the threat posed by criminals who seek to take advantage of our generous immigration system. I want to commend our Homeland Security Investigators and DOJ attorneys for achieving justice in this case.”

 

According to the admissions made in connection with his plea, Trisic, an ethnic Serb with Bosnian citizenship, is a lawful permanent resident of the United States living in North Carolina.  On Nov. 3, 2016, Trisic possessed a green card that was unlawfully obtained.  In response to questions on his legal permanent resident application, Trisic knowingly concealed his military service in the Bratunac Brigade, a unit in the Army of the Serb Republic; concealed his criminal activity in Bosnia and Herzegovina, and lied about his whereabouts during the war in Bosnia and Herzegovina in the early and mid-1990s.

 

As part of his plea of guilty, Trisic admitted that he served in the Army of the Serb Republic as a member of the Bratunac Brigade during various tours of duty between April 1992 and January 1996, at a time when Bosnia and Herzegovina was in the midst of a civil war.  Due to its proximity to Serbia, in 1992 forces both aligned with and from Serbia began an ethnic cleansing campaign against the non-Serbian population in and around Bratunac.  Trisic admitted that he engaged in various unlawful activities while serving with the Bratunac Brigade, such as the unlawful beating, detention and transportation of Muslim prisoners.  Additionally, Trisic admitted that the Bratunac Brigade, operating primarily in eastern Bosnia and Herzegovina, was one of the military units responsible for the July 1995 Srebrenica massacre that resulted in the deaths of between 7,000 and 8,000 Bosnian Muslim men.

 

Trisic also admitted that he knowingly lied about his whereabouts during the war in Bosnia.  In order to obtain refugee status, Trisic falsely claimed that he resided in Serbia during the war, when in fact he actually resided in Bratunac, Bosnia, where he served as part of the Bratunac Brigade.  Trisic later used his illegally obtained status as a refugee to unlawfully obtain permanent resident status in the United States.

 

Sentencing is not yet scheduled.  As part the plea agreement, Trisic will be ordered removed from the United States upon completion of his sentence.

 

This case is the result of an investigation conducted by HSI.

 

Trial Attorneys Frank G. Rangoussis and Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Kenneth Smith from the Western District of North Carolina are prosecuting the case.

ASHEVILLE, N.C. – William Robert Garberding, 62, of Brevard, N.C. was sentenced late yesterday to 120 months in prison for enticing a minor using the Internet, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term imposed, U.S. District Judge Martin Reidinger ordered Garberding to serve a lifetime of supervised release and to register as a sex offender.

U.S. Attorney Murray is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief John Phillip Harris, Jr. of the Brevard Police Department.

 

According to filed court documents and the sentencing hearing, on November 17, 2015, an individual identified as “BA” reported to law enforcement that she had located some material of concern posted on Garberding’s social media account, who at the time was staying at BA’s residence.  According to court records, over the course of the investigation, law enforcement discovered that Garberding was using social media to exchange messages and images of a sexual nature with a 13-year-old girl living in Kentucky.  According to court records, Garberding knew the victim was underage, and he had falsely told the minor victim that he was 16-years-old. 

Court records show that a forensic analysis of Garberding cellular phone revealed that he had downloaded 55 images of child pornography.  In addition, over the course of the investigation, law enforcement discovered multiple messages between Garberding and the minor, in which Garberding solicited the minor to engage in sexually explicit conduct. 

Garberding pleaded to one count of enticing a minor via the Internet and is currently in federal custody.  In making today’s announcement, U.S. Attorney Murray thanked the Minneapolis Division of the FBI for their assistance with the investigation.

In a separate case, Judge Reidinger also sentenced yesterday James Eugene Patty, Jr., 49, of Maryville, Tennessee, to 108 months in prison on transportation of child pornography charges.  Patty was also ordered to serve a lifetime of supervised release and to register as a sex offender. 

According to filed court documents and court proceedings, in September 2016, law enforcement located an online advertisement soliciting a partner to engage in sexual conduct and advertising “the younger the better.”  Posing as a 14-year-old female, a law enforcement officer responded to the ad, and proceeded to engage in multiple exchanges with Patty, which were sexual in nature.  Court records show that, over the course of the online exchanges, Patty told the “minor” that he was interested in bondage, and sent the “minor” sexual images that depicted bondage. 

According to court records, after exchanging multiple online and text messages, Patty was arrested by law enforcement on October 5, 2016, after he drove from Tennessee to Asheville to meet the minor female.  At the time of his arrest, Patty was a sheriff deputy with the Blount County Sheriff’s Office in Tennessee.  During the course of the investigation, law enforcement found child pornography images in Patty’s cellular phone, including the images he had transmitted to the “minor.”

Patty pleaded guilty to one count of transportation of child pornography.  He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

U.S. Attorney Murray thanked the North Carolina State Bureau of Investigation, the Boone Police Department and the Asheville Police Department for their investigation.

The U.S. Attorney’s Office in Asheville prosecuted both cases.

ASHEVILLE, N.C. – Today, U.S. District Judge Martin Reidinger sentenced John Kershaw Barrette, 38, of Jacksonville, Florida, to 96 months in prison and three years of supervised release on bank robbery charges, announced R. 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.

 

According to filed court documents and today’s sentencing hearing, on January 3, 2017, at approximately 11:00 a.m., Barrette, wearing a faded red wig, entered the Asheville Savings Bank located at 1012 Patton Avenue, in Asheville.  Court records show that Barrette waited in line with a cellular phone to his ear, which he appeared to be using.  When it was his turn to approach the teller, Barrette handed the teller a note and placed a large envelope on the counter.  The note instructed the teller to give Barrette cash in denominations of $100 and $50.  The note also warned the teller that the envelope contained a bomb, which Barrette could remotely activate using his cellular phone.  The note further instructed the teller to wait eight minutes before calling the police.  According to court records, the teller, afraid that Barrette would activate the explosive device if she did not do as instructed, complied with Barrette’s demands.  Barrette fled the location with $3,250 in cash, leaving the purported bomb on the counter.  Court records indicate that law enforcement determined that the device was a sham.

According to filed court documents, on the same day shortly before 1:00 p.m., Barrette, wearing the same faded red wig, entered the PNC Bank located at 1007 Smokey Park Highway, in Candler, N.C.  Barrette again presented the teller with an envelope that he claimed contained a bomb and demanded money from the teller.  The teller complied out of fear that Barrette would detonate the bomb.  After receiving $3,180.00 in cash, Barrette fled the bank, leaving on the counter the envelope containing the purported bomb, which was again ultimately determined to be a sham device.  Barrette was apprehended by law enforcement shortly thereafter.

In April 2017, Barrette pleaded guilty to one count of bank robbery. 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 FBI, the Asheville Police Department and the Buncombe County Sheriff’s Office for their investigation of the case.

Assistant U.S. Attorney Daniel Bradley, of the U.S. Attorney’s Office in Asheville, prosecuted the case.

CHARLOTTE, N.C. – Tonya Leshun Hall, 43, of Atlanta, Georgia, was sentenced to six months in prison yesterday for lying in federal court, following her guilty plea to a criminal contempt charge, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.  Chief U.S. District Judge Frank D. Whitney presided over the case.

According to court documents, Hall testified in August 2016 during a pair of hearings in a civil lawsuit between plaintiff Antonio Stukes and defendant Debra Antney filed in U.S. District Court.  Stukes was shot in a shoot-out along Independence Boulevard in February 2011 by members of a security detail working for rapper Waka Flocka Flame, whose given name is Juaquin Malphurs.  In connection with the civil suit, Stukes sought to enforce a judgment for compensatory and punitive damages obtained against Antney, who is Waka Flocka’s mother, and various business entities allegedly under Antney’s control. 

Court documents show that Hall testified on Antney’s behalf during the hearings on August 25 and August 30, 2016.  During those hearings, Hall opined that, based on her review of Antney’s finances, Antney had “no money” to satisfy the judgment entered against her in the civil suit.  In support of her opinion, Hall represented she had graduated from Emory University with a degree in accounting and was licensed as a certified public accountant in Georgia. 

In yesterday’s hearing in federal court, Hall admitted that her claims about her credentials were not true.  Hall did not graduate from Emory and was never licensed as a CPA.  During the sentencing hearing, Judge Whitney explained that Hall’s lies “misled” the court in its assessment of Antney's ability to satisfy the judgment in the civil suit.  In announcing Hall’s sentence, Judge Whitney highlighted the “need to promote respect for the law” and the importance of truthfulness in the justice system.

Hall pleaded guilty to one count of criminal contempt. She will be ordered to report to the Federal Bureau of Prisons to begin serving her sentence, upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The criminal contempt case was prosecuted by the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – A federal jury convicted Robert M. Boston, 54, of Hickory, N.C., of conspiracy, wire fraud, securities fraud and money laundering for his role in defrauding victims of more than $25 million, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. The jury delivered the guilty verdict following a five-day trial, which began on Monday December 4, 2017.

 

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 co-defendant Robert 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 concealing this information from the franchisees of Zloop would be fraud, he wrote, “it is my decision how I want to move forward.”

 

Beginning in 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.

 

Both Boston and LaBarge are released on bond pending sentencing.  The penalty for each of the conspiracy, wire fraud and securities fraud charges carry a maximum term of 20 years in prison. The maximum penalty for the money-laundering conspiracy charge is 10 years in prison.  A sentencing date has not been set.

 

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. –  Joseph Frank Korzelius, 47, of Tryon, N.C. was sentenced yesterday to 24 months in prison for fraudulently billing Medicaid for more than $450,000 in false claims for mental and behavioral health services he did not provide, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term imposed, U.S. District Judge Martin Reidinger ordered Korzelius to serve three years of supervised release and to pay $436,229.08 as restitution to Vaya Health, the administrator of Medicaid funds in Western North Carolina.

 

U.S.  Attorney Murray is joined in making today’s announcement by North Carolina Attorney General Josh Stein.

 

According to court documents and the sentencing hearing, from October 2013 to November 2016, Korzelius, a licensed professional counselor and a Medicaid-approved provider of mental and behavioral health services, owned and operated Western Carolina Counseling Services, located in Tryon.  Korzelius was also employed as a school guidance counselor at Tryon Elementary School in Polk County. According to court records, Korzelius identified students and their siblings from his work at Tryon Elementary and used those potential beneficiaries’ information to access these individuals’ personal information. The defendant then used that information to create and submit billings for individual psychotherapy services when, in fact, no such services were provided. 

 

Court documents show that Korzelius had minimal documentation to support his billings for services he fraudulently represented that he provided. Further, many recipients who Korzelius billed for indicated they never sought or received services from either Korzelius or Western Carolina Counseling Services. Filed court documents show that Korzelius controlled the bank accounts where the Medicaid approved reimbursements were deposited. During the course of his scheme, Korzelius submitted over $450,000 in false claims and received $436,229.08 in reimbursements for those fraudulent claims. 

 

Korzelius pleaded guilty to one count of health care fraud.  He 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.

 

The investigation was handled by the North Carolina Department of Justice, Medicaid Investigations Division (MID), and was prosecuted in the Western District of North Carolina by Special Assistant United States Attorney Timothy Rodgers through the MID’s participation in the Western District’s joint Health Care Task Force. The Task Force is a multi-agency team of federal and state investigators, working in conjunction with Civil and Criminal Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system and reducing the potential for health care fraud in the future. The Task Force builds upon existing partnerships between agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars. 

 

If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at HHSTips@oig.hhs.gov.  To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

CHARLOTTE, N.C. – R. Andrew Murray was sworn in today as United States Attorney for the Western District of North Carolina.  Mr. Murray was nominated by President Donald Trump on September 11, 2017, and was unanimously confirmed by the United States Senate on November 9, 2017.  Chief U.S. District Judge Frank D. Whitney administered the oath of office to U.S. Attorney Murray this morning.

 

 “It is an honor to serve as the United States Attorney for the Western District of North Carolina,” said U.S. Attorney Murray. “The U.S. Attorney’s Office has an important mission: to enforce our nation’s federal laws and to protect the citizens of this district.  It is a privilege to lead such a talented group of public servants dedicated to the pursuit of justice, and I look forward to working with our federal, state, local and tribal law enforcement partners on our shared commitment to serve and protect all communities throughout the Western District.”

 

As the top federal law enforcement officer in the district, U.S. Attorney Murray will now lead one of the busiest U.S. Attorney’s Offices in the country, currently employing approximately 80 federal prosecutors and staff, located in Charlotte and in Asheville.  The office serves nearly three million residents throughout the 32 westernmost counties of the state of North Carolina, including residents of the Eastern Band of Cherokee Indian reservation.

 

As a senior attorney practicing law in Mecklenburg County since 1992, Mr. Murray has a wide breadth of knowledge and experience in leadership and criminal law.  Prior to becoming the United States Attorney, Mr. Murray served as the elected District Attorney of North Carolina’s 26th Prosecutorial District, which covers all of Mecklenburg County.  He is also a retired United States Coast Guardsman. 

 

Mr. Murray began his law career in 1992 at the Mecklenburg County District Attorney’s Office, where he served for three years as an Assistant District Attorney, working on several special prosecution teams.  Mr. Murray went on to practice law in the private sector, as criminal defense attorney and later as managing partner of a law firm focusing on criminal law.  Mr. Murray’s passion for public service and his desire to give back to the community led him back to the District Attorney’s Office.  He was elected as District Attorney in 2010 and was re-elected to the position in 2014.  As District Attorney, Mr. Murray focused his efforts on incorporating innovative strategies and forging strong partnerships to ensure the efficient and effective prosecution of state cases in Mecklenburg County.

 

Mr. Murray also serves as a leader in the state and national prosecutorial communities. He served as a member of the North Carolina Conference of District Attorneys’ executive committee, and from 2015 to 2016 served as the Conference’s President.  Mr. Murray was also selected to join the North Carolina Commission on the Administration of Law and Justice, a multidisciplinary group tasked with conducting a comprehensive evaluation of the State’s judicial system and making recommendations to strengthen the State’s courts. Mr. Murray is also a member of the Board for the Association of Prosecuting Attorneys’ Major County Prosecutors Council, comprised of district attorneys from across the nation working together to tackle challenges faced by prosecutors.

 

Mr. Murray joined the United States Coast Guard in 1980.  Following his separation from active service, he continued to serve the United States through the U.S. Coast Guard Reserve.  After 35 years of combined active and reserve military service, Mr. Murray retired from the U.S. Coast Guard as a Captain (O-6).

 

Following his active duty service, Mr. Murray attended the University of North Carolina at Charlotte, where he earned a degree in Political Science in 1989. Mr. Murray received his Juris Doctor in 1992, from the University of North Carolina School of Law.  Mr. Murray is a member of the North Carolina State Bar and the Mecklenburg County Bar.     
 

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced that hiring grants for community policing officers were awarded to two local law enforcement agencies in the Western District of North Carolina.

 

The U.S. Department of Justice’s Office of Community Oriented Policing Services (COPS Office) COPS Hiring Program awarded $480,963 to the Haywood County Sheriff’s office to fund the hiring of four officers, and $375,000 to the Statesville Police Department to fund the hiring of three officers.   

 

In making the announcement U.S. Attorney Rose said, “One of the Justice Department’s top priorities is to create safer neighborhoods by removing criminals from the streets and reducing violent and gun crime. The two hiring grants will provide our local law enforcement partners with the resources they need to strengthen their ability to fight violent crime and to protect the well-being of citizens in their communities.”

 

The Haywood County Sheriff’s Office and the Statesville Police Department were among the 179 law enforcement agencies across the nation awarded a combined 98,495,397 through the COPS Hiring Program. 

 

The COPS Office is the component of the U.S. Department of Justice responsible for advancing the practice of community policing by providing grant funding directly to state, local and tribal law enforcement agencies to support hiring additional law enforcement officers for three years to address specific crime problems.  Since 1994, the COPS Office has invested more than $14 billion to help advance community policing.

 

For a complete list of award recipients, please visit: https://cops.usdoj.gov/pdf/2017AwardDocs/chp/Award_List.pdf

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced yesterday a Waynesville, N.C. man to 114 months in prison on child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Travis Lindsey Mehaffey, 39, was also ordered to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Sheriff Greg Christopher of the Haywood County Sheriff’s Office; and Chief Bill Hollingsed of the Waynesville Police Department join U.S. Attorney Rose in making today’s announcement.

According to court documents and information introduced at the sentencing hearing, on January 6, 2017, a Walmart shopper in Waynesville found an SD card near a checkout lane.  The shopper turned the SD card over to law enforcement, after finding that it contained images and videos of children engaging in sexually explicit conduct.  Law enforcement determined that the SD card belonged to Mehaffey.  According to court records, forensic analyses of the SD card and other devices that belonged to Mehaffey revealed that the defendant possessed more than 114 videos and 754 images of child pornography, some of which depicted prepubescent minors engaging in sadistic and masochistic or other lewd and lascivious conduct. 

 

Mehaffey pleaded guilty on June 14, 2017, to one count of receipt of child pornography and was released on bond pending sentencing.  On September 27, 2017, Mehaffey was arrested for violating the condition of his release that prohibits him from using, purchasing, possessing or otherwise obtaining any computer or electronic device capable of accessing the Internet.  According to court records, during a search of Mehaffey’s residence, a United States Probation officer found an unreported cellphone hidden under the defendant’s mattress.  Court records indicate that Mehaffey admitted to using the cellphone to view child pornography on the Internet.

 

Mehaffey is 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. 

 

U.S. Attorney Rose thanked the FBI, the Haywood County Sheriff’s Office and the Waynesville Police Department for their investigation of this case.

 

Special Assistant United States Attorney (SAUSA) Christopher Hess prosecuted the case.  Mr. Hess is a state prosecutor with the office of the 30th Prosecutorial District assigned as SAUSA to the U.S. Attorney’s Office in Asheville.  Mr. Hess is duly sworn in both state and federal courts, and prosecutes in federal court cases that  impact the counties within the 30th Prosecutorial District. 

 

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

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today Tony Lee Stanfield, 53 of Villa Rica, Georgia, to 120 months in prison and five years of supervised release for possession with intent to distribute methamphetamine, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. 

C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Sheriff Chris Francis of the Rutherford County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.

 According to filed court documents and court proceedings, law enforcement became aware that on January 20, 2017, Stanfield would be delivering methamphetamine from Georgia to Rutherford County to an individual who was cooperating with law enforcement.  When Stanfield arrived at the agreed upon location he was arrested by law enforcement.  Court records show that law enforcement found in Stanfield’s vehicle more than 440 grams of methamphetamine, scales, smoking paraphernalia, and knives.  According to court records, Stanfield told law enforcement that his supplier of methamphetamine was his co-defendant, Roger Darryl Brooks.  Stanfield also told law enforcement that that Brooks would pay him $500 for transporting the methamphetamine to someone in Rutherford County.

 

 Stanfield pleaded guilty to one count of possession with intent to distribute methamphetamine.  Brooks is currently detained and. charged with one count of conspiracy to possess with intent to distribute methamphetamine.

 

* * *

 

In a separate case, Judge Reidinger also sentenced today Kevin Christopher Makerson, 44, of Rutherfordton, N.C., to 46 months and three years of supervised release after he pleaded guilty to one count of possession with intent to distribute crack cocaine.  According to court documents, law enforcement arrested Makerson after other drug distributors identified him as their source of supply of crack cocaine. According to court records, at the time of his arrest, Makerson was on supervised release for a previous cocaine trafficking offense. He is serving 30 months for violating the terms of that supervised release, after which he will begin serving the 46 months imposed in this case.

 

ATF and the Rutherford County Sheriff’s Office led both investigations.  Assistant U.S. Attorney John Pritchard, of the U.S. Attorney’s Office in Asheville, prosecuted both cases.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that October 28th is National Prescription Drug Take Back Day and the Drug Enforcement Administration (DEA) has partnered with state, local and tribal law enforcement agencies to give the public an opportunity to prevent pill abuse and theft by safely disposing prescription drug medications at designated locations. The one-day event will be held from 10:00 a.m. to 2:00 p.m. at designated collections sites across the district, and it is an effort to rid homes of potentially dangerous, expired, unused and unwanted prescription drugs.

“Prescription drug abuse has reached epidemic proportions in our country, including in this district.  Prescription drugs are the second most commonly used category of drugs, behind marijuana and ahead of cocaine, heroin, and methamphetamine combined.  They are highly addictive and can devastate families that may suffer from the deadly overdose of a loved one.  Prescription Drug Take Back Day offers an opportunity to remove potentially harmful medications from our homes and to dispose of them in a safe and environmentally responsible manner,” said U.S. Attorney Rose.

Last April, the DEA collected over 26,420 pounds of unwanted prescription drugs in North Carolina.  On a national level, Americans turned in 450 tons (900,000 pounds) of prescription drugs.  Overall, in its 13 previous Take Back events, DEA and its partners have collected over 8.1 million pounds – more than 4,050 tons – of pills. The disposal service is free and anonymous.  The DEA cannot accept liquids, needles, or sharps, only pills or patches.

 

Rates of prescription drug abuse in the United States are alarmingly high, as are the number of accidental poisonings and overdoses due to these drugs.  Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet.  According to the Centers for Disease Control and Prevention, 91 Americans die each day from an opioid overdose.  Some painkiller abusers move on to heroin:  Four out of five new heroin users started with painkillers.  This initiative addresses the public safety and public health issues that surround medications stored in home cabinets, becoming highly susceptible to diversion, misuse, and abuse.

 

In addition, Americans are advised that their usual method of disposing unwanted medicines – flushing them down the toilet or throwing them in the trash – pose potential safety and health hazards.  Take Back events ensure environmentally responsible disposal of unwanted prescription medications. 

 

For more information or to locate a collection site near you, go to the DEA Prescription Drug Take Back Day web site at https://takebackday.dea.gov//#collection-locator where you can search by zip code, city, or state, or by calling 800-882-9539.

 

The U.S. Attorney’s Office and DEA encourage parents, along with their children, to educate themselves about the dangers of legal and illegal drugs by visiting the DEA’s interactive websites at https://www.justthinktwice.gov, https://www.getsmartaboutdrugs.gov and http://www.dea.org.

 

CHARLOTTE, N.C. – Adolbo Albarran-Flores, 43, of Charlotte, was sentenced today by U.S. District Judge Robert J. Conrad, Jr. to 36 months in prison and two years of supervised release, for unlawful possession of a firearm by an alien, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  

U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD).

According to court documents, evidence submitted during Albarran-Flores’s trial, and today’s sentencing hearing, on or about October 12, 2016, a work crew from the defendant’s company “A+ Rooter” was performing plumbing work afterhours at the Azteca Restaurant, located on Woodlawn Road in Charlotte.  According to trial evidence, a surveillance video from the restaurant showed Albarran-Flores firing a handgun, allegedly, to scare off a person the defendant claimed was trying to break into one of his company’s work vans.  According to court records, when a CMPD officer in a marked car responded to the shots, Albarran-Flores raised his arm towards the officer and pointed a gun.  The officer then fired a shot in the defendant’s direction.  Court records show that Albarran-Flores pretended to be shot before throwing the weapon in a bush beside the restaurant.  Law enforcement later recovered the firearm, a Smith & Wesson, Model M&P 9, 9mm, and eight shell casings consistent with the handgun.  A native and citizen of Mexico, Albarran-Flores was convicted at trial on June 8, 2017.

 

In imposing the sentence, Judge Conrad found that Albrarran-Flores, knowing a person was a law enforcement officer, assaulted such officer during the course of the offense in a manner that created a substantial risk of serious bodily injury.  

 

Albarran-Flores 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 defendant will also be subject to deportation proceedings upon the completion of his federal sentence.

ICE-HSI led the investigation assisted by CMPD.  Assistant United States Attorney Kenneth Smith, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.             

CHARLOTTE, N.C. – Kendell Rashad Bowden, 26, of Charlotte, was sentenced today by U.S. District Judge Robert J. Conrad, Jr. to 66 months in prison and three years of supervised release for bank fraud conspiracy and aggravated identity theft charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

 

U.S. Attorney Rose is joined making today’s announcement by David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS), Matthew Quinn, Acting Special Agent in Charge of the United States Secret Service, Charlotte Field Office, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD).

 

According to court documents and today’s sentencing hearing, between December 2015 and July 2016, Bowden defrauded individuals and financial institutions by using stolen personal identification information (PII) to obtain fraudulent credit card accounts at retails stores in Mecklenburg and Iredell counties.  Bowden accessed and used, or attempted to access and use, the stolen identities of at least 10 individuals.  Court records show that Bowden also used PII of one victim and a corresponding fake driver’s license, to obtain auto bank loans and to purchase two vehicles.  In total, Bowden’s fraudulent conduct resulted in losses of more than $96,000.

 

According to court records, in February 2017, while he was on bond on the federal charges, Bowden used the PII of another victim to obtain a credit card in the victim’s name.  Court records indicate that Bowden accidentally sent to his probation officer a text message, which contained the victim’s PII.  Court records show that Bowden then called his probation officer and asked him to delete the text message, telling the probation officer that text was intended for Bowden’s sister. 

 

Bowden is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons. All federal sentences are served without the possibility of parole.

 

In making today’s announcement, U.S. Attorney Rose thanked USPIS, USSS and CMPD for their investigation, which are members of the Charlotte Financial Crimes Task Force (CFCTF).  The task force was formed in early 2016 by the U.S. Postal Inspection Service and currently consists of over 25 local, state and federal law enforcement agencies located in the Western District of North Carolina. The goal of the taskforce is to focus on the identification and development of financial fraud investigations in the Charlotte area. Based on crime trends in the area, the task force began to focus its efforts on violent offenders with lengthy criminal histories who are committing fraud. 

 

Assistant U.S. Attorney Kimlani M. Ford, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

 

CHARLOTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that a federal jury seated in Charlotte has returned guilty verdicts against three United Blood Nation (UBN or Bloods) gang members on multiple charges for crimes related to the gang’s racketeering activities, including three murders.  U.S. District Judge Max O. Cogburn, Jr. presided over the three-week trial, which began on September 21, 2017.

 

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 join U.S. Attorney Rose in making today’s announcement.

 

The jury convicted Randall Hankins, II, a/k/a “Foe,” 23, Nana Yaw Adoma, a/k/a “Ratchet,” 22, and Akheem Tahja McDonald, a/k/a “Lil Keem” or “Savage,” 23, of racketeering conspiracy charges.  Hankins was also convicted of two counts of murder in aid of racketeering, for his role in the 2014 murders of Douglas and Deborah London, and two counts of use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the death of Douglas and Deborah London.

 

Adoma and Akheem McDonald were convicted of one count of murder in aid of racketeering for the 2013 murder of Kwamne Donqurius Clyburn, and one count of use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the death of Kwamne Donqurius Clyburn.  Adoma was also convicted of one count of assault with a dangerous weapon in aid of racketeering and one count of use or carry of a firearm in relation to a crime of violence and possession of firearm in furthertance of a crime of violence, for his role in the armed robbery of a business owned by the Londons.

 

Two co-defendants, Jamell Lamon Cureton and Malcolm Jarrel Hartley, were previously sentenced to life in prison for the murders of the Londons and related racketeering activity charges.  Cureton received a second life sentence for his involvement in the murder of Kwamne Clyburn.  Seven co-defendants have pleaded guilty to racketeering conspiracy charges and are currently awaiting sentencing.  They are: David Lee Fudge a/k/a “Flames” or “Flame;” Daquan Lamar Everett a/k/a “Day Day;” Nehemijel Maurice Houston a/k/a “Mijel” or “Swagg Out;” Briana Shakeyah Johnson a/k/a “Breezy B” or “Breezy V;” Ibn Rashaan Kornegay a/k/a “IB;” Centrilia Shardon Leach a/k/a “CeCe;” and Rahkeem Lee McDonald a/k/a “Hitman” or “Big Keem.”

 

According to court filings, trial evidence, witness testimony, admissions contained in filed plea documents and other court proceedings:

 

Beginning at least in or about 2012, Cureton, Hartley and their co-defendants were members of the United Blood Nation gang (UBN or Bloods) in Charlotte.  As UBN members, the defendants carried out violent acts for the purpose of protecting and furthering the gang’s power.  The defendants operated according to a common set of Bloods’ rules and participated regularly in gang meetings to discuss, among other things, the commission of crimes, including robbery and murder.

 

Cureton is a member of the Charlotte-area UBN and holds the rank of 5-Star General.  As early as 2007, Cureton reported his affiliation with the UBN as a Valentine Blood.  Law enforcement seized Cureton’s UBN “Book of Knowledge,” wherein he was identified as a 3-Star General and has since been promoted to a 5-Star General.  As a 5-Star General, Cureton commanded the gang’s activities in the area.  Hartley is also a member of the Charlotte-area Valentine Blood set of the UBN.  Hartley was “ranked up,” or “promoted,” to a 2-Star General, following the murders of Douglas and Deborah London.

 

On or about May 25, 2014, Cureton, Adoma and Fudge robbed “The Mattress Warehouse,” in Pineville, N.C., owned by Douglas and Deborah London.  A federal indictment charged Cureton, Adoma and Fudge in connection with the robbery.  In the months that followed, Cureton communicated with Hartley and other UBN gang members and associates, including co-defendants Everrett, Hankins, Houston, Johnson, Kornegay, Leach, and Rahkeem McDonald to plan the murders of the Londons.  In a letter Cureton sent from prison, Cureton explained that he ordered the murder of Douglas London because the victim was going to testify against him in court, and described Deborah London as “collateral damage.” 

 

According to evidence presented at trial and witness testimony, after the gang’s leadership authorized Hartley to proceed with the murder, Hankins gave Hartley the gun he used to carry out the murders.  Hankins also gave Hartley a plastic shopping bag and instructed him to wrap the bag around the gun so the spent cartridges would fall in the bag and would not be found at the murder scene.  On or about October 23, 2014, Johnson drove Hartley to South Carolina, where Hartley shot and killed Douglas and Deborah London at their home.  According to trial evidence and witness testimony, sometime after the murders, Hankins sent Kornegay a text with a link to a news story about the couple’s murders.

 

Following the Londons’ murders, UBN leadership directed the gang members to “lay low” and to avoid contact with law enforcement. Cureton also told Hartley that from that point forward the topic of the victims’ murders was forbidden to be discussed and authorized action against any person who talked about it.  Witnesses testified that Hankins was upset that other gang members had been “ranked-up,” or promoted within the ranks of the gang, as a result of the murders, except him. 

 

Trial evidence also established that on August 22, 2013, Cureton, Adoma and Akheem McDonald murdered Kwamne Donqurius Clyburn, after luring him to Pressley Road Neighborhood Park, in Charlotte.  According to evidence presented at trial, Clyburn sustained seven gunshot wounds by two different firearms.  Two of the gunshot wounds were to the back of Clyburn’s head.  According to witness testimony and as Cureton previously admitted in court papers, Cureton, Adoma and Akheem McDonald murdered Clyburn because they suspected that Clyburn was “false claiming” (falsely claiming to be a Bloods member), and because Clyburn failed a “DNA check,” meaning that they could not verify Clyburn’s claim to be a Blood. 

 

Hankins, Adoma and Akheem McDonald are currently in federal custody.  The maximum penalty associated with the charges of which they were convicted is life in prison.  The defendants’ sentences will be determined by the Court, taking into consideration the federal sentencing guidelines and statutory sentencing factors.  A sentencing date has not been set yet.

                     

In making today’s announcement, U.S. Attorney Rose commended the FBI for their investigation of the case and thanked CMPD for their assistance.  U.S. Attorney Rose also thanked the York County Sheriff’s Office and York County Solicitor Kevin Brackett for their assistance throughout the investigation and prosecution of this case.

 

Assistant U.S. Attorneys Elizabeth Greene and Don Gast are prosecuting the case.

 

 

CHARLOTTE, N.C. – Today, a Charlotte woman pleaded guilty to wire fraud for embezzling money from a non-profit organization that provides charitable assistance to individuals experiencing financial hardships, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Leah S. Belk, 48, of Charlotte, entered a plea of guilty before U.S. Magistrate Judge David S. Cayer.

 

Matthew Quinn, Acting Special Agent in Charge of the United States Secret Service, Charlotte Field Office, joins U.S. Attorney Rose in making today’s announcement.

 

According to the filed plea agreement and other court documents, from August 2010 to March 2017, Belk engaged in a scheme to defraud her employer (the Company), and an affiliated non-profit organization (the Foundation), of which she was a board member, by embezzling funds intended to provide charitable assistance to employees faced with financial hardships.  According to court records, the Foundation received funding primarily from donations made by the Company’s employees through payroll deductions.

 

Court records show that members of the Foundation’s board of directors, which was comprised of Company employees, evaluated applications received from Company employees to determine whether to award financial assistance based on the employee’s need and the events that contributed to the hardship.  The Foundation typically paid an approved employee’s expenses directly by issuing checks payable to the employee’s mortgage or utility companies to cover the employee’s bills.  The Foundation also purchased Company gift cards to provide to awarded applicants in times of need.

 

According to court records, Belk was an employee of the Company from 1992 until her termination in March 2017.  From 2006 until her termination, Belk was also a member of the Foundation’s board of directors and acted as the Foundation’s secretary.  Court records show that Belk performed administrative tasks in connection with the Foundation’s operations, including: assembling and logging applications reviewed by the board; communicating directly with applicants; coordinating the initiation and processing of checks to be paid on behalf of awarded applicants; and maintaining control over Company gift cards purchased by the Foundation to provide employees in need. 

 

Belk admitted in plea documents and in court today that, beginning in August 2010 through March 2017, she used Foundation funds intended for needy Company employees to pay for personal expenses, including her mortgage and utility bills.  Belk also admitted to falsifying and modifying applications and other Foundation documents to cover the fraud. Specifically, Belk admitted to modifying approved applications and documents after payments had been made to awarded applicants, to cause the issuance of additional checks to cover her own personal expenses using Foundation funds.  Belk also diverted applications from the board, and falsified and reused board approval forms, to approve payments and the issuance of checks to cover personal expenses.  Belk also modified rejected applications to falsely reflect that they had been approved, and, based on the falsified approvals, Belk directed the issuance of checks to pay for her personal expenditures.  Court records also show that Belk used Company gift cards intended for needy employees to make purchases for herself.

 

Over the course of the scheme, Belk falsified documents and diverted payments for her own benefit in approximately 45 separate incidents.  In total, Belk fraudulently diverted more than $77,000 in Foundation funds.

 

Belk pleaded guilty today to one count of wire fraud and was released on bond. The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine.  A sentencing date has not been set yet.

 

U.S. Secret Service led the investigation.  Assistant United States Attorney William Miller, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

 

 CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that $5,270,994 in federal grants have been awarded to local law enforcement agencies, non-profit organizations, and tribal government programs in the Western District of North Carolina.  The federal grants are administered by multiple awarding agencies, which are components of the Justice Department’s Office of Justice Programs (OJP).

 

“Federal grants are an important funding source for a broad spectrum of agencies in the Western District.  Local law enforcement, non-profit service providers, community organizations and tribal governments count on federal grants to supplement their resources, launch new initiatives, support existing programs, and provide important services to their communities.  The awarded grants will be used to enhance the Justice Department’s and my Office’s efforts to reduce violent crime, assist victims of crime, enhance access to services and increase public safety throughout this district,” said U.S. Attorney Rose.    

 

The recipients of the grants are:

 

City of Charlotte: Two federal grants totaling $1,431,708 were awarded to the Charlotte-Mecklenburg Police Department (CMPD). Specifically, $1,125,606 will be used to sustain and expand CMPD’s current testing of Sexual Assault Kits (SAKs), to reduce the existing number of SAKs in its inventory, and to update CMPD’s current technology related to SAKs.  Another $306,102 has been awarded to enhance CMPD’s current DNA analysis process, to reduce the current number of DNA cases and to maintain CMPD’s laboratory capabilities.

Mecklenburg County: The County will receive a total of $718,794 in federal grants, of which $368,798 will be used to support the County’s implementation of the Mecklenburg County Systemic Response Plan to the opioid crisis, including, to gather information about and enhance services to targeted populations. The Mecklenburg County Community Support Services Department will receive a $349,996 federal grant, to provide housing and supportive services to 20 victims of domestic violence, sexual assault, dating violence or stalking and their families.

Eastern Band of Cherokee Indians (EBCI): As the recipients of three federal grants totaling $1,720,442, EBCI will apply the awarded funds to combat violence against women in Indian Country, improve public safety, serve victims of crime, increase access to victim services including housing and legal assistance, coordinate outreach and awareness activities, and support youth programs in Indian Country. 

30th Judicial District Domestic Violence-Sexual Assault Alliance: The grantee has been awarded $600,000 toward increasing victim advocacy and providing comprehensive legal services to victims of domestic violence, sexual assault, dating violence and stalking in Cherokee, Clay, Graham, Haywood, Jackson, Macon and Swain Counties in Western North Carolina. 

Haywood County:  As recipient of a $450,000 grant, the County will collaborate with the 30th Judicial District Domestic Violence-Sexual Assault Alliance to provide centralized and comprehensive services to victims of domestic violence, sexual assault, dating violence and stalking.  A portion of the funds will be used to provide sexual assault training for law enforcement officers, technical assistance related to investigations, and services to specific victims.

Helpmate, Incorporated:  Awarded $350,000, Helpmate, in cooperation with the Housing Authority of the City of Asheville, will use the grant to provide, among other things, permanent housing and supportive services to 20 survivors of domestic violence, sexual assault, dating violence or stalking and their families.

 

Office of Justice Programs (OJP) and current OJP funding opportunities can be found at: https://ojp.gov/funding/index.htm

 

The Office on Violence Against Women (OVW) administers grant programs authorized by the Violence Against Women Act (VAWA) of 1994 and subsequent legislation.  For a list of OVW grant programs and additional grant funding information please visit: http://www.justice.gov/ovw/grant-programs.

 

The Bureau of Justice Assistance (BJA) provides leadership and assistance to local criminal justice programs that improve and reinforce the nation’s criminal justice system.  BJA’s goals are to reduce and prevent crime, violence, and drug abuse and to improve the way in which the criminal justice system functions. BJA works closely with programs that bolster law enforcement operations, expand drug courts, and provide benefits to safety officers. BJA Funding announcements are posted at: https://www.bja.gov/funding.aspx.

 

The National Institute of Justice (NIJ) is the research, development and evaluation agency of the U.S. Department of Justice, dedicated to improving knowledge and understanding of crime and justice issues through science. For additional information and to locate a funding opportunity please visit:

http://www.nij.gov/funding/Pages/welcome.aspx.

Today, Attorney General Jeff Sessions announced several Department of Justice actions to reduce the rising tide of violent crime in America. Foremost of those actions is the reinvigoration of “Project Safe Neighborhoods,” 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.

 

In announcing this recommitment to Project Safe Neighborhoods, the Attorney General issued a memo directing United States Attorneys to implement an enhanced violent crime reduction program that incorporates the lessons learned since Project Safe Neighborhoods launched in 2001.

 

In a statement on the program, the Attorney General said:

"According to the FBI, the violent crime rate has risen by nearly seven percent over the past two years, and the homicide rate has risen by more than 20 percent. We cannot be complacent or hope that this is just an anomaly: we have a duty to take action.

 

“Fortunately, we have a President who understands that and has directed his administration to reduce crime. The Department of Justice today announces the foundation of our plan to reduce crime: prioritizing Project Safe Neighborhoods, a program that has been proven to work.

 

“Let me be clear – Project Safe Neighborhoods is not just one policy idea among many. This is the centerpiece of our crime reduction strategy.

 

“Taking what we have learned since the program began in 2001, we have updated it and enhanced it, emphasizing the role of our U.S. Attorneys, the promise of new technologies, and above all, partnership with local communities. With these changes, I believe that this program will be more effective than ever and help us fulfill our mission to make America safer."

 

The Attorney General also announced the following Department of Justice initiatives to help reduce violent crime:

-Additional Assistant United States Attorney Positions to Focus on Violent Crime – The Department is allocating 40 prosecutors to approximately 20 United States Attorney’s Offices to focus on violent crime reduction.

 

-More Cops on the Streets (COPS Hiring Grants) – As part of our continuing commitment to crime prevention efforts, increased community policing, and the preservation of vital law enforcement jobs, the Department will be awarding approximately $98 million in FY 2017 COPS Hiring Grants to state, local, and tribal law enforcement agencies.

 

-Organized Crime and Drug Enforcement Task Force’s (OCDETF) National Gang Strategic Initiative –The National Gang Strategic Initiative promotes  creative enforcement strategies and best practices that will assist in developing investigations of violent criminal groups and gangs into enterprise-level OCDETF prosecutions.  Under this initiative, OCDETF provides “seed money” to locally-focused gang investigations, giving state, local, and tribal investigators and prosecutors the resources and tools needed to identify connections between lower-level gangs and national-level drug trafficking organizations.

 

-Critical Training and Technical Assistance to State and Local Partners –The Department has a vast array of training and technical assistance resources available to state, local and tribal law enforcement, victims groups, and others.  To ensure that agencies in need of assistance are able to find the training and materials they need, OJP will make available a Violence Reduction Response Center to serve as a “hot line” to connect people to these resources. 

 

-Crime Gun Intelligence Centers (CGIC) – The Department has provided grant funding to support a comprehensive approach to identifying the most violent offenders in a jurisdiction, using new technologies such as gunshot detection systems combined with gun crime intelligence from NIBIN, eTrace, and investigative efforts.  These FY 2017 grants were awarded to Phoenix, AZ, and Kansas City, MO. 

 

-Expand ATF’s NIBIN Urgent Trace Program – The Department will expand ATF’s NIBIN Urgent Trace Program nationwide by the end of the year.  Through this program, any firearm submitted for tracing that is associated with a NIBIN “hit” (which means it can be linked to a shooting incident) will be designated an “urgent” trace and the requestor will get information back about the firearm’s first retail purchaser within 24 hours, instead of 5 to 6 business days.

CHARLOTTE, N.C. – The former Treasurer of a Fraternal Order of Police Lodge, Timothy James Brewer, 63, of Newton, N.C., has been indicted on wire fraud charges for embezzling more than $110,000 from the non-profit organization, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  The federal grand jury returned the criminal indictment on September 19, 2017, and it was unsealed this morning following Brewer’s court appearance before U.S. Magistrate Judge David C. Keesler.

 

U.S. Attorney Rose 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.

According to allegations contained in the bill of indictment, from 2005 to 2016, Brewer worked for the Catawba County Fraternal Order of Police Lodge #26 (FOP), located in Newton, and was elected to serve as its Treasurer.  As fiduciary of the FOP, Brewer was responsible for the financial affairs of the organization to include acting as the custodian of the funds.

Over the course of his employment at the FOP, the indictment alleges that Brewer engaged in a scheme to defraud the FOP by fraudulently diverting the organization’s funds for his personal benefit. As alleged in the indictment, Brewer fraudulently obtained approximately $110,134.64 from the FOP and converted the funds for his personal gain without any authority from the FOP.  Brewer was the sole recipient of bank and credit card statements which were mailed directly to his residence, thereby concealing the nature of the purchases from the FOP. 

 

The indictment alleges that Brewer misused an FOP credit card, of which Brewer was an authorized user, for personal use, and successfully converted approximately $61,875.03 for his personal gain.  Brewer also used an FOP bank account to pay the balance on a personal credit card, and converted approximately an additional $48,259.61 for his own personal gain without any authority from the FOP.  According to allegations in the indictment, Brewer used the fraudulently converted funds to pay for, among other things, restaurants, hotels and medical bills.

 

Brewer has been released on bond.  The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine.

 

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

 

The investigation was handled by USPIS assisted by the Newton Police Department.  Assistant United States Attorney Jenny Sugar, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

A pharmacy manager from Burnsville, North Carolina, pleaded guilty for her role in the fraudulent diversion of prescription drugs and money laundering, the Department of Justice announced today.

 

Karen Ann Turner, 37, pleaded guilty in the Western District of North Carolina to one count of conspiracy to commit wire fraud and one count of money laundering.  Turner was charged in connection with a fraudulent scheme that operated out of pharmacies in Burnsville, North Carolina, and Travelers Rest, South Carolina.  As a part of that scheme, Turner bought prescription drugs at lower prices by falsely stating that the drugs would be used to fill patient prescriptions through the pharmacies that she operated.  Instead of using the drugs for patient prescriptions, Turner sold them at higher prices to unauthorized drug wholesalers.  Some of the prescription drugs that Turner bought and sold were in short supply.  Turner laundered the profits of her fraud scheme by transferring them through bank accounts that she controlled.  Sentencing will be scheduled at a later date. 

 

“The Department of Justice is committed to prosecuting those who fraudulently divert prescription drugs from their authorized and controlled distribution system,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “These fraud schemes increase the risk that patients will receive ineffective or unsafe drugs, and can expose hospitals to exorbitant prices for drugs that are in short supply.”

 

“We rely on pharmacies to safeguard the integrity of our prescription drug system and to protect public safety.  Turner’s financially motivated scheme is particularly troubling because it removed prescription drugs from lawful distribution channels, potentially putting consumers’ health at risk,” said U.S. Attorney Jill Westmoreland Rose for the Western District of North Carolina.

 

As part of her guilty plea, Turner admitted that she operated two pharmacies to fraudulently obtain prescription drugs at low prices that were only available to pharmacies that agreed to use the drugs to fill patient prescriptions.  Instead of using the drugs to fill prescriptions as she said she would, Turner sold the drugs to drug wholesalers for more than she paid, taking the drugs out of their controlled distribution system.

 

“When prescription drugs are diverted from the legal supply chain, there is no longer any assurance that the products are safe and effective for their intended uses,” said Special Agent in Charge Justin D. Green of the Food and Drug Administration’s (FDA) Office of Criminal Investigations’ Miami Field Office.  “Today’s announcement should serve as a reminder of the FDA’s continued focus on criminals that put profits ahead of the U.S. public health by distributing prescription drugs outside the legitimate supply chain.”

 

This case is being prosecuted through the coordinated efforts of the U.S. Attorney’s Office for the Western District of North Carolina and the Civil Division’s Consumer Protection Branch, with assistance from FDA’s Office of Chief Counsel.  The criminal investigation was conducted by FDA’s Office of Criminal Investigations.

 

For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Western District of North Carolina, visit its website at https://www.justice.gov/usao-wdnc.

WASHINGTON - A pharmacy manager from Burnsville, North Carolina, pleaded guilty for her role in the fraudulent diversion of prescription drugs and money laundering, the Department of Justice announced today.

Karen Ann Turner, 37, pleaded guilty in the Western District of North Carolina to one count of conspiracy to commit wire fraud and one count of money laundering.  Turner was charged in connection with a fraudulent scheme that operated out of pharmacies in Burnsville, North Carolina, and Travelers Rest, South Carolina.  As a part of that scheme, Turner bought prescription drugs at lower prices by falsely stating that the drugs would be used to fill patient prescriptions through the pharmacies that she operated.  Instead of using the drugs for patient prescriptions, Turner sold them at higher prices to unauthorized drug wholesalers.  Some of the prescription drugs that Turner bought and sold were in short supply.  Turner laundered the profits of her fraud scheme by transferring them through bank accounts that she controlled.  Sentencing will be scheduled at a later date. 

“The Department of Justice is committed to prosecuting those who fraudulently divert prescription drugs from their authorized and controlled distribution system,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “These fraud schemes increase the risk that patients will receive ineffective or unsafe drugs, and can expose hospitals to exorbitant prices for drugs that are in short supply.”

“We rely on pharmacies to safeguard the integrity of our prescription drug system and to protect public safety.  Turner’s financially motivated scheme is particularly troubling because it removed prescription drugs from lawful distribution channels, potentially putting consumers’ health at risk,” said U.S. Attorney Jill Westmoreland Rose for the Western District of North Carolina.

As part of her guilty plea, Turner admitted that she operated two pharmacies to fraudulently obtain prescription drugs at low prices that were only available to pharmacies that agreed to use the drugs to fill patient prescriptions.  Instead of using the drugs to fill prescriptions as she said she would, Turner sold the drugs to drug wholesalers for more than she paid, taking the drugs out of their controlled distribution system.

“When prescription drugs are diverted from the legal supply chain, there is no longer any assurance that the products are safe and effective for their intended uses,” said Special Agent in Charge Justin D. Green of the Food and Drug Administration’s (FDA) Office of Criminal Investigations’ Miami Field Office.  “Today’s announcement should serve as a reminder of the FDA’s continued focus on criminals that put profits ahead of the U.S. public health by distributing prescription drugs outside the legitimate supply chain.”

This case is being prosecuted through the coordinated efforts of the U.S. Attorney’s Office for the Western District of North Carolina and the Civil Division’s Consumer Protection Branch, with assistance from FDA’s Office of Chief Counsel.  The criminal investigation was conducted by FDA’s Office of Criminal Investigations.

 

CHARLOTTE, NC – Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina announced today a settlement reached with Bank of America (the Bank) to resolve the United States’ investigation of certain trading activity by the Bank’s New York “Swaps Desk” involving trading ahead of, or “pre-hedging,” block futures trades with its counterparties and then obstructing the CME Group Inc.’s (CME) investigation of the trading.  As part of the settlement, the Bank, among other things, agreed to pay $2.5 million, to report certain suspected misconduct to the United States, and to improve and enhance the Bank’s compliance risk management program.

 

The Bank’s settlement with the United States was reached in 2015 and is announced today in conjunction with the announcement made by the Commodity Futures Trading Commission (CFTC) of its settlement with Merrill, Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), following its investigation into Merrill Lynch’s supervision and recordkeeping failures for conduct related to the Bank’s trading activity (See CFTC Press Release http://www.cftc.gov/PressRoom/PressReleases/pr7615-17).   

 

“The settlement underscores the expectation that everyone, from Wall Street to main street, act honestly and ethically in their financial transactions.  The financial system depends on the integrity of everyone involved in it.  The settlement reinforces our expectation that firms effectively monitor their employees and deal candidly with all regulators and law enforcement agencies,” said U.S. Attorney Rose. 

 

According to the Statement of Facts admitted to by the Bank as part of the settlement, at least three former traders on its New York Swaps Desk eavesdropped on calls between certain large financial institution counterparties and Bank salespersons about block futures trades without announcing their presence and then used information obtained by eavesdropping to enter into transactions to hedge the Bank’s expected risk from those block futures trades.  This practice was referred to as, among other things, “pre-hedging.”  The traders pre-hedged by executing trades in the same contract as the block futures trades and in other correlated products. 

 

The Bank also admitted in the Statement of Facts that during the period from at least January 1, 2009 through at least December 31, 2010, the CME began investigating numerous block futures trades entered into by the Swaps Desk.  In response to the CME’s inquiries, an internal spreadsheet identifying several potential instances of pre-hedging was generated by the business unit, but it was not shared with the Bank’s Legal and Compliance professionals.  Further, the traders did not disclose to the Bank that they had eavesdropped on calls and pre-hedged their expected risk before the block futures trades were executed.  Rather, the traders promoted within the Bank the explanation that any appearance of pre-hedging resulted from inaccurate timestamps.

 

The Statement of Facts also acknowledged that during interviews with the CME, the traders provided misleading answers by, among other things, failing to disclose that they pre-hedged block trades and, instead, again suggesting that the appearance of pre-hedging resulted from inaccurate timestamps.  Following these interviews, the Bank submitted a letter to the CME falsely stating that, among other things, the traders “did not have advance knowledge of a block trade such as to enable them to engage in any trading prior to the execution of the block.”

 

After learning of the government’s investigation, the Bank retracted its December 6, 2010 letter and informed the CME that the traders had traded ahead of block futures trades.

 

The investigation was led by the Federal Bureau of Investigation (FBI), Charlotte Division, and the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), Northeast Region.  In making today’s announcement, U.S. Attorney Rose thanked the CFTC and the National Futures Association for their assistance. 

 

Assistant U.S. Attorneys Daniel Ryan and Taylor Phillips, of the U.S. Attorney’s Office in Charlotte, represented the United States in the matter.

 

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that a Charlotte area jeweler has been indicted on fraud charges in connection with a $3.5 million investment scheme involving jewelry, precious metals and gemstones.  A federal grand jury returned the 18-count indictment against Benjamin Abraham, 59, on Tuesday, September 19, 2017, charging him with one count of wire fraud, and multiple counts of concealment money laundering and transactional money laundering.  The indictment was unsealed today, following Abraham’s initial appearance.

 

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 join U.S. Attorney Rose in making today’s announcement.

 

According to allegations contained in the indictment, Abraham 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.  The indictment alleges that from at least December 2012 through at least May 2017, Abraham executed a financial fraud scheme involving investments in jewelry, precious metals and gemstones, among other things.  During the course of the scheme, Abraham induced at least seven victim-investors to invest over $3.5 million, resulting in losses of more than $2 million.  The indictment alleges that instead of investing 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.

 

According to court records, to induce his victims to part with their money, 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.  The indictment alleges that 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 induced victims by falsely representing that he had unique access to estate sales due to his connections and that he would be also be investing his own money.

In order to continue the fraud scheme and to avoid detection, the indictment alleges that when victims asked about the status of their investments, Abraham gave numerous false explanations.  He also 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 allegations contained in the indictment, in or around early 2016, after a number of banks refused to maintain bank accounts over which Abraham had signatory authority, Abraham began using bank accounts not associated with his name.  The indictment alleges that Abraham formed Global Trading LLC, and caused his wife and an employee to open several bank accounts in the name of that business. The charging document alleges that Abraham did not have signatory authority over the accounts but nevertheless caused financial transactions to be conducted in those accounts. The indictment also alleges that Abraham directed several financial transactions in one of those accounts to conceal information about the proceeds of the investment scheme, including the nature, ownership and source of the funds.

 

Abraham appeared today before U.S. Magistrate Judge David C. Keesler.  The wire fraud count carries a maximum prison term of 20 years and a $250,000 fine.  The concealment money laundering charges carry a maximum prison term of 20 years and a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater, per count.  The transactional money laundering charges carry a maximum prison term of 10 years and a $250,000 fine per count. 

 

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. 

 

In making today’s announcement U.S. Attorney Rose thanked USPIS and the FBI for their investigation which led to today’s charges.  Assistant United States Attorneys Daniel Ryan and Dallas Kaplan, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.