Western District of North Carolina

ASHEVILLE, N.C. – Justin Nojan Sullivan, 20, of Morganton, North Carolina, appeared in federal court in Asheville, North Carolina today and pleaded guilty to one count of attempting to commit an act of terrorism transcending national boundaries.

The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division.  U.S. District Judge Martin Reidinger presided over Sullivan’s plea hearing.

“Sullivan was in contact and plotted with now-deceased Syria-based terrorist Junaid Hussain to execute acts of mass violence in the United States in the name of the Islamic State of Iraq and the Levant (ISIL),” said Acting Assistant Attorney General McCord. “Counterterrorism remains our highest priority and we will continue to identify and hold accountable those who seek to commit acts of terrorism within our borders.”

“Sullivan admitted in court today that he attempted to commit acts of terrorism transcending national boundaries by planning mass casualty shooting attacks on behalf of ISIL against innocent people in North Carolina and Virginia.  Sullivan also admitted he had frequent and direct communications with Junaid Hussain, one of ISIL’s prominent members in Syria, who asked Sullivan to make a video of the deadly attack,” said U.S. Attorney Rose.  “There is no more important work that we in the Department of Justice undertake than the fight against terrorism.  It is frightening to know that the defendant in this case was able to use social media to contact and seek advice from ISIL, a murderous organization.  Yet, it emboldens us to be fiercely aggressive and diligent in our efforts to combat this special kind of evil.” U.S. Attorney Rose added.            

“Justin Sullivan planned to kill hundreds of innocent people.  He pledged his support to ISIL and took calculated steps to commit a murderous rampage to prove his allegiance to the terrorist organization.  There is no higher priority for the FBI than to thwart the next terrorist attack.  This case is proof of what law enforcement agencies can accomplish to disrupt terrorist activities of any kind,” said Special Agent in Charge Strong.         

According to information contained in plea documents, starting no later than September 2014, Sullivan watched violent ISIL attacks on the Internet, such as beheadings, and collected them on his laptop computer.  Court records indicate that Sullivan openly expressed support for ISIL in his home and destroyed religious items that belonged to his parents. 

Beginning no later than June 7, 2015, Sullivan conspired with Junaid Hussain, a prominent ISIL member responsible for online recruitment and providing directions and inspiration for terrorist plots in Western countries, to plan mass shooting attacks in North Carolina and Virginia.  Sullivan discussed those plans on social media with an undercover FBI employee (UCE), who Sullivan attempted to recruit to join in such attacks.

Court documents indicate that Sullivan told the UCE via social media that it was better to remain in the United States to support ISIL than to travel.  Sullivan suggested that the UCE obtain weapons and told the UCE that he was planning to buy a semi-automatic AR-15 rifle at an upcoming gun show in Hickory, North Carolina.  On or about June 20, 2015, Sullivan attempted to purchase hollow point ammunition to be used with the weapon(s) he intended to purchase. 

According to court records, Sullivan had researched on the Internet how to manufacture firearm silencers and asked the UCE to build functional silencers that they could use to carry out the planned attacks.  Court records show that Sullivan told the UCE he planned to carry out his attack in the following few days at a concert, bar or club, where he believed as many as 1,000 people would be killed using the assault rifle and silencer. 

Filed documents indicate that over the course of Sullivan’s communications with Junaid Hussain, Hussain had asked Sullivan to make a video of his planned terrorist attack, to which Sullivan had agreed.

On or about June 19, 2015, the silencer, which was built according to Sullivan’s instructions, was delivered to him at his home in North Carolina, where Sullivan’s mother opened the package, according to court records.  Sullivan took the silencer from his mother and hid it in a crawl space under his house.  When Sullivan’s parents questioned him about the silencer, Sullivan, believing that his parents would interfere with his plans to carry out an attack, offered to compensate the UCE to kill them.  

In filed plea documents, Sullivan admitted that he took substantial steps towards carrying out terrorist attacks in North Carolina and Virginia by: (1) recruiting the UCE; (2) obtaining a silencer from the UCE; (3) procuring the money that would have enabled him to purchase the AR-15; (4) trying to obtain a specific type of ammunition that he believed would be the most “deadly”; (5) identifying separate gun shows where he and the UCE could purchase AR-15s; and (6) obtained coupons for the gun shows he planned for himself and the UCE to attend on June 20 or 21, 2015. 

According to filed documents, on June 19, 2015, Sullivan was arrested at his parents’ home, where law enforcement also executed a search warrant for the silencer and other items.  Law enforcement interviewed Sullivan on separate occasions following his arrest. Sullivan also provided false statements on his involvement in the murder of his neighbor, John Bailey Clark, who had been killed in December 2014. Sullivan later admitted that he had stolen the rifle from his father’s gun cabinet and hid it in the crawl space.  Forensic testing shows that the .22 rifle hidden by Sullivan was used to murder Mr. Clark. 

The grand jury alleged that Sullivan also killed Mr. Clark, but Sullivan did not admit to this act in his plea today.  However, in the plea documents filed, the United States Attorney set forth evidence supporting this allegation and specifically reserved the Government’s right to prove this additional conduct at Sullivan’s sentencing hearing. 

The District Attorney’s Office for North Carolina’s 25th Prosecutorial District, which includes Burke, Caldwell and Catawba Counties, is handling North Carolina’s prosecution of Sullivan for Clark’s murder. 

Sullivan is currently in federal custody.  According to the filed plea agreement, Sullivan pleaded guilty to Count Nine of the Superseding Indictment, which charged him with attempting to commit an act of terrorism transcending national boundaries, an offense that carries a maximum penalty of life in prison.  Under the plea agreement, the parties have agreed that a sentence of life in prison is an appropriate sentence.

            In making today’s announcement, Acting Assistant Attorney General McCord and U.S. Attorney Rose thanked District Attorney David Learner for his office’s continued assistance and coordination.  Both also praised the investigative efforts of the FBI, the Burke County Sheriff’s Office and the North Carolina State Bureau of Investigation in this case.  Acting Assistant Attorney General McCord and U.S. Attorney Rose also thanked the U.S. Postal Inspection Service’s Charlotte Division, the FBI’s Washington Field Office, the U.S. Attorney’s Office for the Eastern District of Virginia, the U.S. Customs and Border Protection in Charlotte, the North Carolina Highway Patrol and the Hickory Police Department for their assistance in this investigation.

The case is being prosecuted by Assistant U.S. Attorney Michael E. Savage of the Western District of North Carolina and Trial Attorney Gregory R. Gonzalez of the National Security Division’s Counterterrorism section. 

Justin Nojan Sullivan, 20, of Morganton, North Carolina, appeared in federal court in Asheville, North Carolina today and pleaded guilty to one count of attempting to commit an act of terrorism transcending national boundaries.

The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division.  U.S. District Judge Martin Reidinger presided over Sullivan’s plea hearing. 

“Sullivan was in contact and plotted with now-deceased Syria-based terrorist Junaid Hussain to execute acts of mass violence in the United States in the name of the Islamic State of Iraq and the Levant (ISIL),” said Acting Assistant Attorney General McCord.  “Counterterrorism remains our highest priority and we will continue to identify and hold accountable those who seek to commit acts of terrorism within our borders.”
            
“Sullivan admitted in court today that he attempted to commit acts of terrorism transcending national boundaries by planning mass casualty shooting attacks on behalf of ISIL against innocent people in North Carolina and Virginia.  Sullivan also admitted he had frequent and direct communications with Junaid Hussain, one of ISIL’s prominent members in Syria, who asked Sullivan to make a video of the deadly attack,” said U.S. Attorney Rose.  “There is no more important work that we in the Department of Justice undertake than the fight against terrorism.  It is frightening to know that the defendant in this case was able to use social media to contact and seek advice from ISIL, a murderous organization.  Yet, it emboldens us to be fiercely aggressive and diligent in our efforts to combat this special kind of evil.” U.S. Attorney Rose added.       
            
“Justin Sullivan planned to kill hundreds of innocent people.  He pledged his support to ISIL and took calculated steps to commit a murderous rampage to prove his allegiance to the terrorist organization.  There is no higher priority for the FBI than to thwart the next terrorist attack.  This case is proof of what law enforcement agencies can accomplish to disrupt terrorist activities of any kind,” said Special Agent in Charge Strong.         

According to information contained in plea documents, starting no later than September 2014, Sullivan watched violent ISIL attacks on the Internet, such as beheadings, and collected them on his laptop computer.  Court records indicate that Sullivan openly expressed support for ISIL in his home and destroyed religious items that belonged to his parents.  

Beginning no later than June 7, 2015, Sullivan conspired with Junaid Hussain, a prominent ISIL member responsible for online recruitment and providing directions and inspiration for terrorist plots in Western countries, to plan mass shooting attacks in North Carolina and Virginia.  Sullivan discussed those plans on social media with an undercover FBI employee (UCE), who Sullivan attempted to recruit to join in such attacks.

Court documents indicate that Sullivan told the UCE via social media that it was better to remain in the United States to support ISIL than to travel.  Sullivan suggested that the UCE obtain weapons and told the UCE that he was planning to buy a semi-automatic AR-15 rifle at an upcoming gun show in Hickory, North Carolina.  On or about June 20, 2015, Sullivan attempted to purchase hollow point ammunition to be used with the weapon(s) he intended to purchase.  

According to court records, Sullivan had researched on the Internet how to manufacture firearm silencers and asked the UCE to build functional silencers that they could use to carry out the planned attacks.  Court records show that Sullivan told the UCE he planned to carry out his attack in the following few days at a concert, bar or club, where he believed as many as 1,000 people would be killed using the assault rifle and silencer.  

Filed documents indicate that over the course of Sullivan’s communications with Junaid Hussain, Hussain had asked Sullivan to make a video of his planned terrorist attack, to which Sullivan had agreed. 

On or about June 19, 2015, the silencer, which was built according to Sullivan’s instructions, was delivered to him at his home in North Carolina, where Sullivan’s mother opened the package, according to court records.  Sullivan took the silencer from his mother and hid it in a crawl space under his house.  When Sullivan’s parents questioned him about the silencer, Sullivan, believing that his parents would interfere with his plans to carry out an attack, offered to compensate the UCE to kill them.   

In filed plea documents, Sullivan admitted that he took substantial steps towards carrying out terrorist attacks in North Carolina and Virginia by: (1) recruiting the UCE; (2) obtaining a silencer from the UCE; (3) procuring the money that would have enabled him to purchase the AR-15; (4) trying to obtain a specific type of ammunition that he believed would be the most “deadly”; (5) identifying separate gun shows where he and the UCE could purchase AR-15s; and (6) obtained coupons for the gun shows he planned for himself and the UCE to attend on June 20 or 21, 2015.  

According to filed documents, on June 19, 2015, Sullivan was arrested at his parents’ home, where law enforcement also executed a search warrant for the silencer and other items.  Law enforcement interviewed Sullivan on separate occasions following his arrest. Sullivan also provided false statements on his involvement in the murder of his neighbor, John Bailey Clark, who had been killed in December 2014.  Sullivan later admitted that he had stolen the rifle from his father’s gun cabinet and hid it in the crawl space.  Forensic testing shows that the .22 rifle hidden by Sullivan was used to murder Mr. Clark.  

The grand jury alleged that Sullivan also killed Mr. Clark, but Sullivan did not admit to this act in his plea today.  However, in the plea documents filed, the United States Attorney set forth evidence supporting this allegation and specifically reserved the Government’s right to prove this additional conduct at Sullivan’s sentencing hearing.  

The District Attorney’s Office for North Carolina’s 25th Prosecutorial District, which includes Burke, Caldwell and Catawba Counties, is handling North Carolina’s prosecution of Sullivan for Clark’s murder.  
            
Sullivan is currently in federal custody.  According to the filed plea agreement, Sullivan pleaded guilty to Count Nine of the Superseding Indictment, which charged him with attempting to commit an act of terrorism transcending national boundaries, an offense that carries a maximum penalty of life in prison.  Under the plea agreement, the parties have agreed that a sentence of life in prison is an appropriate sentence.

In making today’s announcement, Acting Assistant Attorney General McCord and U.S. Attorney Rose thanked District Attorney David Learner for his office’s continued assistance and coordination.  Both also praised the investigative efforts of the FBI, the Burke County Sheriff’s Office and the North Carolina State Bureau of Investigation in this case.  Acting Assistant Attorney General McCord and U.S. Attorney Rose also thanked the U.S. Postal Inspection Service’s Charlotte Division, the U.S. Secret Service, the North Carolina Highway Patrol, the U.S. Attorney’s Office of the Eastern District of Virginia, the FBI’s Washington Field Office and the Hickory Police Department for their assistance in this investigation.

The case is being prosecuted by Assistant U.S. Attorney Michael E. Savage of the Western District of North Carolina and Trial Attorney Gregory R. Gonzalez of the National Security Division’s Counterterrorism section. 

CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Alex Arnez Jones, 27, of Atlanta, Georgia, to 262 months in prison for a string of armed robberies of Charlotte-area businesses, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Whitney also ordered Jones to serve three years of supervised release and to pay $6,319 as restitution.

U.S. Attorney Rose 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 Kerr Putney of the Charlotte-Mecklenburg Police Department.

According to filed court documents and today’s sentencing hearing, between November 17, and November 23, 2015, Jones robbed five Charlotte-area businesses at gunpoint.  Court documents show that on November 17, Jones robbed a Boost Mobile store located on Central Avenue, a Fuel Mart gas station on North Tryon Street and a Subway restaurant on South Boulevard.  Upon entering each business, Jones brandished a firearm and demanded money from store employees. In one of the robberies, Jones pointed his firearm at a store employee, threating to shoot her if she did not comply.

Four days later, on November 21, 2015, Jones robbed Beautiful Hair Palace, a business located on Central Avenue in Charlotte. Jones entered the store and, brandishing his firearm, he ordered the store clerk to put store merchandise into a backpack he was carrying and to hand over all the cash from the register. According to court records, when the employee told Jones she did not have access to the register, Jones took $220 from the employee’s wallet.  On November 23, 2015, Jones entered iBeauty, a business located on North Tryon Street, posing as a customer interested in certain products.  After a few minutes inside the store, court records show that Jones pulled out his firearm and, pointing it at the store owner, he demanded cash and merchandise. 

Jones pleaded guilty in August 2016 to five counts of Hobbs Act Robbery and one count of use and carry of a firearm in furtherance of a crime of violence.

Jones is currently in federal custody, 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 the FBI and CMPD.  Assistant U.S. Attorney Craig Randall of the U.S. Attorney’s Office in Charlotte, prosecuted the case.     

CHARLOTTE, N.C. – United States Attorney Jill Westmoreland Rose announced today that five individuals are facing federal charges for their involvement in a heroin trafficking ring operating in Mecklenburg County.  A criminal indictment was returned on November 15, 2016, and was unsealed today in federal court, following the defendants’ arrests.  Eleven other members of the conspiracy are facing state drug charges. 

According to allegations contained in the criminal indictment, from on or about April 2015 to about November 2016, the defendants operated in a drug conspiracy responsible for trafficking heroin in Mecklenburg County and elsewhere. 

The five defendants named in the federal indictment are each charged with one count of conspiracy to distribute and to possess with intent to distribute heroin.  They are:

• Maggie Elizabeth Sanders, 36, of Concord, N.C. (arrested)
• Kevin Tyler Bell, 24, of Concord (arrested)
• Elyssa Breanne Shuford, 37, of Gastonia, N.C. (arrested)
• Jamie Nicole McDaniel, 31, of Concord (arrested)
• Joshua Dale Gregory, 28, of Concord (pending arrest)

In addition to the drug trafficking conspiracy charge, Kevin Bell and Jamie McDaniel are each charged with one count of possession with intent to distribute heroin, and Elyssa Shuford is charged with two counts of possession with intent to distribute heroin.  Maggie Sanders is also charged with one count of possession of a firearm in furtherance of a drug trafficking crime.

Eleven others are facing state charges for their involvement in the drug conspiracy. They are: Kenneth Junior Bell, Silas Lamont Swain, Monica Bell, Jessica Marie James, Christopher Godwin, Sara Dianne Weaver, Charles Thomas Anderson, Jason Eugene Lavender, Michael Todd Lowe, James Dillard Proctor, and Timothy Kyle Bennett.

Over the course of the investigation law enforcement seized in Mecklenburg and Cabarrus Counties more than ten kilograms of heroin and five firearms.  The drugs were shipped into the Western District of North Carolina from Mexico.

In making today’s announcement, U.S. Attorney Rose said, “The arrests in this case are part of my office’s ongoing effort to combat heroin trafficking rings throughout our district.  As heroin is quickly becoming the number one cause of overdose related deaths, not just in Western North Carolina but throughout the country, law enforcement agencies continue to ramp up the fight against drug trafficking conspiracies operating in our communities.”

U.S. Attorney Rose thanked the Drug Enforcement Administration, ICE’s Homeland Security Investigations in Charlotte, the North Carolina State Highway Patrol, the Charlotte Mecklenburg Police Department, the Concord Police Department, the Gastonia Police Department, the Huntersville Police Department, the Mint Hill Police Department, the Kannapolis Police Department, the Iredell County Sheriff’s Office and the Wingate Police Department for their assistance in this case.

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

The federal defendants arrested today are currently in federal custody.  Their initial appearances were held in U.S. District Court before U.S. Magistrate Judge David S. Cayer.

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. 

Assistant U.S. Attorney Sanjeev Bhasker of the U.S. Attorney’s Office in Charlotte is handling the prosecution.

CHARLOTTE, N.C. – Dania Ramos, 41, formerly of Linconton, N.C., appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to failing to report to federal prison and contempt of court, 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 Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

According to filed documents and today’s court proceedings, on March 20, 2012, U.S. District Court Judge Robert J. Conrad, Jr. sentenced Ramos to 48 months in prison for her role in a false claims conspiracy, in case number 3:11cr75-04.  The conviction stemmed from Ramos’s role in a conspiracy to defraud the government by filing fraudulent tax returns seeking refunds totaling more than $5 million, by using stolen identity information of individuals in Puerto Rico. 

At her sentencing hearing, Ramos was ordered to abide by the previously imposed conditions of release, including that she immediately advise the court, defense counsel, and the U.S. Attorney in writing before any change of address; that she surrender to serve any sentence imposed; and that she travel only in the Western District of North Carolina.  Ramos was specifically advised by the court that the U.S. Marshals would send her a letter telling her when she would begin serving her sentence.

According to filed documents and today’s court proceedings, on April 16, 2012, the U.S. Probation Office received information that Ramos could not be located or contacted.   On or about May 8, 2012, the U.S. Marshals Service sent a report notification to Ramos via certified mail directing Ramos to report to FCI/SFF Hazelton WV on June 12, 2012.  Ramos failed to report as required and her whereabouts remained unknown until December 23, 2015, when Ramos was arrested at the border of Mexico and the United States in Texas attempting to enter the United States.

Ramos is currently in federal custody.  The failure to report charge carries a maximum prison term of 5 years and a $250,000 fine.  The criminal contempt charge carries a maximum prison term of life imprisonment or a fine.  A sentencing date for the defendant has not been set yet. 

The investigation was handled by the IRS-CI.  The prosecution for the government is being handled by Assistant U.S. Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – United States Attorney Jill Westmoreland Rose announced that eight individuals were arrested on Wednesday, November 9, 2016, on federal drug conspiracy charges for their involvement in a drug trafficking network operating in Charlotte and Greensboro, N.C.  The criminal complaint was unsealed today following the defendants’ court appearances in federal court.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina and Harold Scott, Jr., Special Agent in Charge, Office of Inspection - Washington Field Office of the Department of Homeland Security’s Transportation Security Administration (TSA) join U.S. Attorney Rose in making today’s announcement.

The eight defendants named in the criminal complaint were arrested on charges of conspiracy and attempt to distribute and to possess with intent to distribute Schedule I and Schedule II controlled substances; and distribution of controlled substances and possession with intent to distribute Schedule I and Schedule II controlled substances.  They are:

• Jamie Blunder, 48, of Charlotte.
• David Pate, 44, of High Point, N.C.
• Alafia Fowlkes, 42, of Jamestown, N.C.
• Samuel Little, 58, of Greensboro.
• Irvin Lampley, 56, of Greensboro.
• Aaron Dixon, 40, of Greenville, N.C.
• Cameron Roberts, 29, of Greensboro.
• Dennis Harrington, 47, of Greensboro.

A ninth defendant named in the charging document, Willie Nevius, 48, of Greensboro, has not been arrested yet.

According to allegations contained in the criminal complaint, beginning in at least December 2015, the defendants operated as a drug conspiracy responsible for trafficking cocaine, marijuana and other controlled substances in Charlotte and Greensboro.  The criminal complaint alleges that Blunder, a TSA officer, was the leader of the conspiracy and used a network of co-conspirators to transport and distribute the narcotics to and from Greensboro and elsewhere. According to the affidavit filed with the criminal complaint, the investigation to date indicates that while Blunder did not utilize the Charlotte Douglas Airport to traffic narcotics, he may have relied on his TSA position to avoid law enforcement detection while travelling to, within, and back from the Jamestown, High Point, and Greensboro areas.

In addition to last week’s arrest of the eight defendants, law enforcement executed multiple search warrants and recovered eight firearms, at least two kilograms of cocaine and more than $150,000 in cash.  Over the course of the investigation, law enforcement also recovered drug paraphernalia and packaging material consistent with kilogram-quantity cocaine wrapping and packaging. 

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

U.S. Attorney Rose thanked the FBI for leading the investigation and TSA for their invaluable assistance with this case.

Assistant U.S. Attorneys Corey Ellis and Lambert Guinn of the U.S. Attorney’s Office in Charlotte is prosecuting the case.

ASHEVILLE, N.C. – U.S. District Court Judge Max O. Cogburn, Jr. sentenced yesterday a Weaverville, N.C. man to 204 months in prison on child coercion and enticement charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Cogburn also ordered Benjamin Ernest Johnson, 39, to serve a lifetime of supervised release and to register as a sex offender after he is released from prison.  Johnson pleaded guilty in May 2016 to one count of Coercion and Enticement of a minor.

John A. Strong, Special Agent in Charge of the FBI in North Carolina, and Sheriff Van Duncan of the Buncombe County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.

“Johnson was a wolf among sheep, a predator who took advantage of his access to high school students and used his position of trust to sexually exploit impressionable young victims.  His conduct is not only a disgrace to all military personnel, it is also criminal. And for that, he will deservedly serve time in federal prison,” said U.S. Attorney Rose.

“Benjamin Johnson was trusted to advise young people about the benefits of a military career.  Instead, he used that access to manipulate children for his own vile sexual gratification.  The FBI has zero tolerance for those who prey on our children,” said Special Agent in Charge Strong.

“No form of sexual misconduct is ever acceptable anywhere in the Department of the Navy. Ensuring the safety of our Navy applicants and members of the communities we work in is our top priority.  Upon notice of the allegations of misconduct with a minor, the former service member was immediately removed from all recruiting duties and subsequently discharged from the Navy.  We will continue to train our Navy recruiters on appropriate behavior when working with Navy applicants and we will continue to enforce high standards and professional conduct,” said 
Commander Stan Dickerson, Commanding Officer Naval Recruiting District Raleigh.

According to filed court documents and yesterday’s sentencing hearing, in February 2014 Johnson was a United States Navy Petty Officer First Class on active duty stationed in Asheville.   Johnson’s duties were to conduct recruiting of high school students in Western North Carolina.  According to court records, sometime in the fall of 2013, Johnson was assigned as a recruiter at a high school in Buncombe County.  Over the course of his official duties as a recruiter, Johnson met child victim one (CV1), a 15-year-old female high school student who was enrolled in the school’s Naval Junior Reserve Officer Training Corps (NJROTC). Court records indicate that Johnson began to communicate with CV1 via instant messaging, and over the course of their exchanges Johnson solicited and received sexually explicit images of CV1.  Johnson also sent the minor sexually explicit images of himself.

According to court records, Johnson also solicited sexually explicit photos from another child victim (CV2) Johnson met in 2011 when the victim was a freshman in high school.  Johnson maintained a relationship with CV2 until March 2014.  Court records indicate that Johnson met the victim when he was a recruiter at CV2’s high school, where the victim was a NJROTC student.  According to court records, CV2 and Johnson became friends on social media after the victim enrolled in a different high school in the area.  Court records show that Johnson induced CV2 to send him multiple sexually explicit images of herself via instant messaging.  Johnson also sent CV2 multiple sexually explicit images of himself.  According to court records, CV2 indicated that she and Johnson had scheduled an upcoming trip to a military testing location and Johnson was going to use it as an opportunity to have physical contact with the victim. 

In announcing today’s sentence Judge Cogburn said, “This is a serious crime with a serious punishment.”

Johnson has been in custody since May 11, 2016.  He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentencings are served without the possibility of parole. 

The FBI and the Buncombe County Sheriff’s Office led the investigation and were assisted by the Asheville Police Department.  In making today’s announcement, U.S. Attorney Rose also thanked the Department of the Navy for their cooperation and assistance with the investigation.

Assistant United States Attorney David A. Thorneloe of the U.S. Attorney’s Office in Asheville prosecuted the case.

ASHEVILLE, N.C. – Crowell Farms, Inc. located in Asheville, and its owner pleaded guilty in federal court today to criminal violations of the Clean Water Act, 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 Special Agent in Charge Andy Castro of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Atlanta Area Office, and Judy Billings, Special Agent in Charge of the State Bureau of Investigations’ Diversion and Environmental Crimes Unit (SBI/ DECU).

A criminal bill of information filed in U.S. District Court on October 4, 2016, charged Crowell Farms, Inc. (Crowell Farms) and Michael Alexander Crowell, 65, of Asheville, with one count of violation of the Clean Water Act, in connection with the discharging of cow feces into the French Broad River.  According to filed documents and statements made in court, Crowell Farms is in the beef cattle farming business maintaining more than 150 cows and manages many acres of agricultural fields.  In the annual course of its operations, Crowell Farms disposes of thousands of pounds of solid and liquid animal waste, which are considered pollutants under the Clean Water Act.  Michael Crowell is the Operator Responsible-in-Charge (ORC) for the permitted waste disposal system at Crowell Farms.  As the ORC, Michael Crowell is responsible for ensuring that animal waste is properly disposed into the farm’s waste management system, namely in solids waste lagoons.

Michael Crowell admitted in court today that from in or about November 2015 through at least December 2015, he had installed bypasses at the farm’s waste lagoons that were discharging liquid animal waste into a tributary of the French Broad River.  Michael Crowell also admitted that he had trouble managing Crowell Farms’ waste management system and that he had installed the bypasses himself.  Filed documents show that Michael Crowell previously told inspectors he was aware that he had done “the wrong thing.”  Crowell Farms does not have a permit to discharge liquid waste to waters and it is only permitted to discharge it to an on-site land application system.  State inspectors further discovered that Crowell Farms does not own the proper land application equipment.

In addition to pleading guilty to violating the Clean Water Act, Crowell Farms has also agreed:  1) to pay a fine of $40,000 (reduced by the $27,000 fine paid to the State of North Carolina), which will be directed to entities that safeguard the French Broad River and other environmental concerns in the Southeast; 2) to serve a probationary term of three years during which regulators and investigators can inspect their records and facilities without notice and without a warrant; and 3) to design and implement a compliance plan subject to approval by the EPA.  At sentencing, Michael Crowell faces a maximum prison term of three years and an additional fine of $5,000 to $50,000.  A sentencing date has not been set yet.

The Clean Water Act is a federal law enacted to prevent, reduce and eliminate pollution, and to restore and maintain the chemical, physical, and biological quality of the Nation’s waters for the protection and propagation of fish and aquatic life and wildlife, for recreational purposes, and for the use of such waters for public drinking water, agricultural, and industrial purposes.  The French Broad River supplies drinking water to more than one million people and is frequently used for recreational water activities, such as swimming and kayaking.  It is also protected because it supports secondary recreation, including fishing, fish consumption, and agriculture.

   The investigation was led by the EPA’s Criminal Investigation Division and SBI’s DECU. Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte is prosecuting the case.

A Greensboro, North Carolina, woman was sentenced to 48 months in prison today for fleeing the United States after being sentenced to 60 months in prison for her role in managing a telemarketing scheme that induced victims to send money for a falsely promised sweepstakes prize, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

Jessica Anne Brown, 40, was sentenced by U.S. District Judge Robert J. Conrad Jr. of the Western District of North Carolina.  The 48-month sentence will run consecutive to the previously-issued 60-month sentence.  Brown pleaded guilty on June 1, 2016, to one count of failure to surrender for service of sentence and one count of contempt of court.

As part of her guilty plea, Brown admitted that she violated her court-ordered release conditions by removing her location monitor and using an unlawfully-obtained passport to flee to Canada after having been ordered to surrender for a 60-month prison sentence stemming from her role in managing an illegal call center in Costa Rica that defrauded hundreds of U.S. victims.  Brown further admitted that she fled to Canada with the intent of avoiding her sentence. 

This case was investigated by the U.S. Marshals Service, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and Department of State.  Trial Attorneys Gustav Eyler and William Bowne of the Criminal Division’s Fraud Section prosecuted the case.  The Canada Border Services Agency and the Criminal Division’s Office of International Affairs also provided substantial assistance.

The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.  Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

CHARLOTTE, N.C. – United States District Judge Robert J. Conrad, Jr. today sentenced a Charlotte man to 60 months in prison for his role in a securities fraud scheme involving bogus real estate investments, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Frank Enrique Lleras, 31, was also ordered to serve three years under court supervision after he is released from prison, and to pay $2.7 million dollars in restitution to his victims.

U.S. Attorney Rose 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 Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS).

According to documents filed with the court and today’s sentencing hearing, Lleras was the managing member of Optimum Income Property Investments, LLC (Optimum), a real estate investment company that purported to make money for victim investors by purchasing distressed and foreclosed real estate, and then reselling or leasing those properties. From about 2013 to about 2014, Lleras induced more than 20 victim investors from the Dominican Republic medical community to invest approximately $3,000,000 in the fraudulent real estate scheme.  According to court records, to execute the scheme, Lleras established bank accounts in the name of limited liability companies (LLCs) associated with each victim-investor, and then purported to purchase property for each victim in the name of those LLCs.

Court documents also show that to convince his victim investors the scheme was legitimate, Lleras provided fraudulent investment statements showing that victim investors had gained interest on their investments.  Lleras also provided fabricated deeds and bogus real estate tax bill receipts, causing victim investors to believe that their funds had been used as promised and that taxes on their properties had been paid.  Contrary to promises made to investors, court documents indicate that Lleras did not invest victim investor funds but instead diverted their money to other business ventures and to support his personal lifestyle, including to purchase expensive jewelry. 

Lleras pleaded guilty in January 2016 to one count of securities fraud and one count of wire fraud. He will be ordered to report to the Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The investigation of the case was led by the FBI and USPIS.  Assistant U.S. Attorney Corey F. Ellis of the U.S. Attorney’s Office in Charlotte prosecuted the case.

CHARLOTTE, N.C. – Jamel Ski Yates, a/k/a “Goo,” 43, of Charlotte, was sentenced yesterday by U.S. District Judge Robert J. Conrad, Jr. to 36 months in prison on federal wire fraud conspiracy charges for attempting to steal more than $1.3 million through unauthorized wire transfers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Yates was also ordered to serve two years under court supervision upon completion of his prison term and to pay $251,146 as restitution.   

Yates’ co-defendant, Anthony Shawn Wilkerson, 46, of East Point, Georgia, was also sentenced today, to a year and a day in prison followed by two years of supervised release and was ordered to pay $251,146 as restitution.  Wilkerson pleaded guilty to wire fraud conspiracy and wire fraud charges for his role in the conspiracy. 

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

Five additional defendants who conspired with Yates to execute the wire fraud scheme have been sentenced to date:

• Shaka Stayman was sentenced to 84 months in prison, after pleading guilty to wire fraud conspiracy and wire fraud charges.
• Dural Samuels was sentenced to 28 months in prison and was ordered to pay restitution of $252,730 after pleading guilty to wire fraud conspiracy and wire fraud charges.
• Barry Shade was sentenced to 12 months in prison and was ordered to pay restitution of $251,147 after pleading guilty to wire fraud conspiracy charges.
• Abiola O. Oginni was sentenced to one year and a day in prison after pleading guilty to wire fraud conspiracy charges.
• Dwayne A. Reynolds was sentenced to three years of probation and was ordered to pay restitution in the amount of $20,037 after pleading guilty to wire fraud conspiracy.

According to filed court documents and statements made in court, from about January 2010 through in or about January 2011, Yates and his co-conspirators engaged in a wire fraud scheme by unlawfully accessing multiple customer accounts maintained by a financial services company located in Charlotte.  Court records show that Yates was the insider who stole personally identifiable information (PII) of approximately 90 customers of the victim company, and provided that information to Samuels.  According to court records, using that information, Samuels used his network of co-conspirators, which included Stayman, Shade, Oginni, Wilkerson and Reynolds, to withdraw funds from the compromised victim company accounts and then deposit the stolen funds into the co-conspirators’ own bank accounts or the bank accounts of other individuals (also known as “money mule accounts”).  

According to court records, the co-conspirators attempted to withdraw more than $1.3 million from the compromised customer accounts by executing multiple wire transfers ranging from $6,000 to $48,000.  They then deposited the stolen funds into the money mule accounts and retrieved it through multiple cash withdrawals.  According to court records, the co-conspirators were able to steal more over $300,000 through their wire fraud scheme.

Yates and Wilkerson will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility to begin serving their prison terms.  All federal sentences are served without the possibility of parole.  

The investigation was led by the FBI.  Assistant U.S. Attorney Thomas O’Malley, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that U.S. District Judge Robert J. Conrad, Jr. handed down life sentences to two MS-13 gang members convicted of murder.

In April 2016, a federal jury convicted Miguel Zelaya, 22, of Charlotte, of conspiracy to participate in racketeering activity (RICO), murder in aid of racketeering, 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 Jose Orlando Ibarra.  

Luis Ordonez-Vega, 37, of Concord, N.C. was convicted of RICO conspiracy, murder in aid of racketeering, 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 Noel Navarro Hernandez.

A third MS-13 gang member, Jorge Garcia, 27, of Charlotte, was also sentenced today to 70 months in prison and two years of supervised release, after pleading guilty to a RICO conspiracy and attempted murder in aid of racketeering charges.

According to filed court documents, trial evidence and statements made in court:

From at least in or about 2009 to about May 2015, the three men along with 34 other co-defendants named in a federal indictment, were members of the MS-13 gang, a criminal organization with over 6,000 members in the United States and 30,000 members internationally.  MS-13 originated in Los Angeles, California, and has spread to states across the country, including in North Carolina.  The gang’s members are mostly immigrants or descendants of immigrants from El Salvador and other Central and Latin American countries.  In North Carolina, some of the active MS-13 members are divided into different groups, or “cliques,” which include the “Trece Locos Salvatrucha,” the “Hollywood Locos Salvatrucha,” the “Charlotte Locotes Salvatrucha,” the “Centrales Locos Salvatrucha,” and the “Coronados Little Cycos Salvatrucha,” among others.  The different cliques work together to carry out criminal acts, to protect the interests of the criminal enterprise, and to assist each other in avoiding law enforcement detection. 

MS-13 members adhere to a set of gang rules and pay dues which fund the gang’s criminal activities and support other gang members or their families in the U.S and abroad.  Gang members are also expected to protect the name, reputation, and status of the gang and its members, and to punish through acts of violence and intimidation those who disrespect the gang.  Some MS-13 members signify their affiliation with the gang by wearing blue, black and white color clothing and certain “Mara Salvatrucha,” or “MS-13” tattoos.

Members of MS-13 in Charlotte participated in multiple meetings at various times to discuss gang-related matters and to plan the commission of future crimes for the benefit of the gang.  They were also responsible for numerous criminal acts including murder and attempted murder. 

 Zelaya, a/k/a “Most Wanted” and “Ne Ne”, is a member of the “Coronados Little Cycos Salvatrucha” clique.  On December 18, 2013, Zelaya shot and killed Jose Orlando Ibarra, an associate of a rival gang, “The Latin Kings.”  Zelaya admitted to law enforcement that he shot Jose Ibarra because Ibarra owed him money for a gun and because Ibarra and his brother, a Latin King member, had been looking for one of Zelaya’s “homies” with a shotgun. 

Ordonez-Vega, a/k/a “Big Boy,” is a self-admitted member of MS-13 from Nassau County, New York, and a member of the “Brentwood Locos Salvatrucha” clique.  Ordonez-Vega has “MS” tattooed across his stomach and “La Mara Salvatrucha” tattooed across his chest. On June 6, 2013, Ordonez-Vega shot and killed Noel Navarro Hernandez in a strip mall parking lot in Charlotte.  Ordonez-Vega and other MS-13 members targeted Navarro because they believed that Navarro was a rival gang member because of the way he talked, wore red, and his haircut.

Twenty-nine other MS-13 gang members were previously sentenced in connection with this case:

• Raul Contreras was sentenced to 360 months in prison and three years of supervised release.
• Oscar Trejo was sentenced to 300 months in prison and three years of supervised release.
• Cesar Garcia-Perez was sentenced to 276 months in prison and three years of supervised release.
• Daniel Navarro was sentenced to 240 months in prison and three years of supervised release.
• Jose Danny Argueta was sentenced to 228 months in prison and two years of supervised release.
• Milton Chavarria was sentenced to 228 months in prison and three years of supervised release.
• Alexis Villalta-Morales was sentenced to 204 months in prison and two years of supervised release.
• Christian Pena was sentenced to 180 months in prison.
• Carlos Almonte was sentenced to 144 months in prison and two years of supervised release.
• Luis Funes-Rivera was sentenced to 144 months in prison and two years of supervised release.
• Albert Vela-Garcia was sentenced to 78 months in prison and two years of supervised release.
• Jose Moran-Celis was sentenced to 72 months in prison and two years of supervised release.
• Marlon Vasquez-Maldonado was sentenced to 72 months in prison and three years of supervised release.
• Rene Lopez-Ventura was sentenced to 66 months in prison and two years of supervised release.
• Jose Manuel Linares was sentenced to 60 months in prison and two years of supervised release.
• Juan Bergamasco-Suarez was sentenced to 57 months in prison and two years of supervised release.
• Neris Gutierrez was sentenced to 51 months in prison and two years of supervised release.
• Jose Vasquez was sentenced to 46 months in prison and two years of supervised release.
• Luis Erazo was sentenced to 37 months in prison and two years of supervised release.
• Raul Guardado was sentenced to 36 months in prison and three years of supervised release.
• Jonathan Noble was sentenced to 36 months in prison and two years of supervised release.
• Jaime Turcios was sentenced to 36 months in prison and three years of supervised release.
• Rosendo Rivas was sentenced to 30 months in prison and two years of supervised release.
• Jorge Perez was sentenced to 27 months in prison and two years of supervised release.
• Marvin Fuentes-Canales was sentenced to 24 months in prison and two years of supervised release.
• Saul Gavidia was sentenced to 21 months in prison and three years of supervised release.
• Victor Pineda was sentenced to 21 months in prison and two years of supervised release.
• Angel Hernandez was sentenced to 21 months in prison.
• Fec Rodriguez-Vareal was sentenced to 15 months in prison and one year of supervised release.

Two more defendants, Jorge Sosa and William Gavidia, were previously convicted at trial and are currently awaiting sentencing.  Sosa was convicted of RICO conspiracy, attempted murder in aid of racketeering and 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, that being attempted murder in aid of racketeering.  Gavidia was convicted of RICO conspiracy.     

Three others remain fugitives.  They are Miriam Barilles-Escamilla, Salvador Ruiz, and Luis Villalta.

In making today’s announcement U.S. Attorney Rose thanked the Charlotte Division of the FBI and ICE’s Homeland Security Investigations for leading the joint investigation, along with North Carolina’s Alcohol Law Enforcement and the Charlotte-Mecklenburg Police Department.

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.

Assistant U.S. Attorneys Elizabeth Greene and William Miller of the U.S. Attorney’s Office in Charlotte are prosecuting the case.

CHARLOTTE, N.C. – A federal jury convicted Patrick Emanuel Sutherland, 48, of Charlotte, of filing false tax returns and obstructing a federal grand jury investigation charges, 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 Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

According to filed court documents and evidence presented at trial, from at least 2007 to 2015, Sutherland was an actuary, and the owner and operator of numerous companies in the insurance and financial industries.  Between 2007 and 2010, Sutherland engaged in an elaborate scheme to conceal a substantial amount of income.  Trial evidence established that Sutherland filed false tax returns with the IRS which underreported business receipts and personal income of approximately $2 million in income received from an offshore bank account in Bermuda, as well as from domestic sources.  For example, according to the evidence, despite receiving substantial income for the relevant time period, Sutherland reported a combined income of approximately $276,697, and paid less than a mere $10,000 in total federal income taxes.  During the same four-year period, Sutherland’s lifestyle and expenditures for personal living expenses far exceeded his total income reported on his individual tax returns, including over $80,000 in private school tuition for his daughter and high end jewelry purchases.

According to evidence presented at trial, witness testimony and filed court documents, to conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister’s company.  In reality, most of these funds were insurance commissions due to Sutherland or were funds obtained from a brokerage account in Bermuda which Sutherland controlled.

Trial evidence established that Sutherland worked with offshore insurance companies and some of his commissions had to be paid to an offshore intermediary.  Sutherland used his Bermuda-based shell company, Steward Technology Services Limited (STS) to funnel personal and business funds to Sutherland’s U.S. bank accounts.  On numerous occasions, Sutherland mischaracterized the wire transfers from STS’s bank account in Bermuda to Sutherland’s various domestic accounts as capital contributions and loans. 

Evidence presented at trial demonstrated that on several occasions between June 2012 and September 2012, Sutherland sought to obstruct a federal investigation by providing fraudulent documents, including records of sham loans and documents purportedly reflecting his lack of control over his foreign business bank account in Bermuda.

The federal jury delivered the guilty verdict following a five-day trial.  Sutherland is currently released on bond.  The penalty for filing a false tax return is a maximum term of three years in prison and a $250,000 fine per count.  The obstruction of official proceedings charge carries a maximum term of 20 years in prison and a $250,000 fine.

IRS-CI led the investigation.  Assistant United States Attorneys Jenny G. Sugar and Daniel Ryan of the U.S. Attorney’s Office in Charlotte prosecuted the case.     

CHARLOTTE, N.C. – Dean Paul Stitz, 47, of Matthews, N.C. was sentenced yesterday by U.S. District Judge Robert J. Conrad, Jr. to 121 months in prison on child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Stitz was also ordered to serve a lifetime of supervised release and to register as a sex offender.

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

According to court documents and information introduced at the sentencing hearing, from about May to about July 2014, law enforcement became aware that Stitz was using a peer-to-peer network to distribute child pornography on the Internet.  According to court records, law enforcement executed a search warrant at Stitz’s residence, seizing his laptop computer and an external hard drive. Forensic analyses of those devices revealed that Stitz possessed well over 600 images and videos of child pornography, some of which depicted minors engaging in sadistic and masochistic conduct.       

Stitz pleaded guilty in April 2016 to one count of distribution of child pornography.  He 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. 

The investigation was led by FBI.  Assistant U.S. Attorney Lambert Guinn 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 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

CHARLOTTE, N.C. – U. S. Attorney Jill Westmoreland Rose announced today that Michael E. “Mike” Savage and Richard Edwards, Assistant United States Attorneys (AUSAs) in the Charlotte and Asheville offices of the U.S. Attorney for the Western District of North Carolina will lead the efforts of this Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections.  AUSAs Savage and Edwards have been appointed to serve as District Election Officers (DEOs) for the Western District of North Carolina and in that capacity they are responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.  

United States Attorney Rose said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud.  The Department of Justice will act promptly and aggressively to protect the integrity of the election process.” 

The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur.  The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day. 

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input.  It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them.  For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law.  Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.

The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of election fraud or voting rights abuses on election day on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Rose stated that AUSA/DEOs Mike Savage and Don Gast will be on duty in this District while the polls are open.  They can be reached by the public at the following telephone numbers: 

In Charlotte: 704-344-6222 and in Asheville: 828-271-4661

In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day.  The local FBI field office can be reached by the public at 704-672-6100.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to voting.section@usdoj.gov or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

United States Attorney Rose said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate.   It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”

CHARLOTTE, N.C. –  U.S. Attorney Jill Westmoreland Rose announced that James Randall Long, MD, 56, of Lexington, N.C., appeared before U.S. Magistrate Judge David S. Cayer and pleaded guilty to unlawful distribution of Fentanyl, a Schedule II controlled substance.  Dr. Long admitted today in court that he prescribed the drug outside the scope of his professional practice to a woman with whom he was romantically involved, knowing that she was abusing the drug to further her addiction to opiates.

U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Jim Schandevel, Special Agent in Charge of the North Carolina State Bureau of Investigation’s Western District Office; and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department.

Fentanyl is a powerful opioid drug typically prescribed by doctors to help patients manage chronic pain symptoms. Those addicted to opiates often turn to Fentanyl for its intense euphoric effects and commonly rely on the drug as a substitute for heroin.  Fentanyl is significantly more potent than heroin with potentially fatal side effects.

“Dr. Long admitted he abused the public trust placed in him as a physician authorized to dispense controlled substances and misused his medical license to prescribe a potentially lethal drug to a woman he knew had a substance abuse problem.  As opioid addiction is becoming the number one cause of drug overdose deaths in the United States, my office is committed to investigating and prosecuting those who serve as sources of supply.  From the street corner to a doctor’s office, anyone who distributes these potentially deadly substances poses a significant threat to public health safety and is subject to investigation and prosecution,” said U.S. Attorney Rose.                                                                                                                                                                                                                                     

According to court records and filed plea documents, Dr. Long admitted that shortly after meeting the woman in 2014 and until July 2015, he provided her prescriptions for Fentanyl outside the scope of his professional practice and not for a legitimate medical purpose.  Dr. Long also admitted he knew the woman was not using the drug according to its prescribed use but was instead abusing it to further her addiction.  Dr. Long further admitted that during that time, he wrote and authorized Fentanyl prescriptions in the woman’s name and in the name of several other individuals, some of whom were not patients of Dr. Long and did not know prescriptions were being filled in their name. 

Dr. Long pleaded guilty to distribution and possession with intent to distribute Fentanyl by an authorized registrant outside the scope of professional practice and not for a legitimate medical purpose. He was released on bond following today’s plea hearing. The penalty for the charge carries a maximum prison term of twenty years and a $1,000,000 fine.

The investigation was led by DEA with assistance from CMPD and SBI.  U.S. Attorney Rose thanked the Mint Hill Police Department and the Gastonia Police Department for their help in the investigation. 

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

CHARLOTTE, N.C. – Frank Alton Moody, II, 56, of Arden, N.C., pleaded guilty to federal charges for his role in conspiring to steal over $2 million from client companies and using the money to fund their exorbitant salaries, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Two of Moody’s conspirators, Jerry Wayne Overcash, 67, of Charlotte, and John Bernard Thigpen, 60, of Rock Hill, S.C., previously pleaded guilty and were sentenced for their roles in the conspiracy.

U.S. Attorney Rose is joined in making today’s announcement by Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

According to documents filed with the court, Moody was the Chairman of the Board of CenterCede Services Inc. (CenterCede), a payroll services company with clients in Charlotte and elsewhere.  CenterCede was established in August 2010 by Overcash and Moody, to assume business operations of The Resource Solutions Group (TRSG).  Court documents in related cases indicate that, similar to CenterCede, TRSG had been a payroll services company until it was shut down by IRS in August 2010, for failing to pay more than $9 million in federal payroll taxes TRSG collected from its clients.  Moody served as Chairman of the Board at TRSG. 

Court documents show that from November 2010 to November 2011, CenterCede purportedly provided payroll preparation and processing services to its clients.  As such, CenterCede collected funds from its clients to pay the client companies’ federal tax obligations, gross payroll for the clients’ employees, worker’s compensation, and unemployment insurance, among others, as well as fees due to CenterCede.  Contrary to their representations to clients, the conspirators did not pay the clients’ federal taxes in appropriate amounts and by the applicable deadlines. 

Instead, Moody and his co-conspirators agreed, with the intent to defraud the company’s clients and the IRS, not to remit to the IRS the full tax liabilities of CenterCede’s clients.  Client funds were then diverted to pay the salaries of Moody, Overcash and others, and to cover CenterCede’s growing liabilities.

To keep the scheme afloat, the conspirators paid only those obligations necessary to keep their ongoing cash flow crisis a secret from clients.  As reflected in court documents, the conspirators favored what they called “priority” clients, attempted to keep those priority clients from learning about monthly cash shortfalls and frequently paid those clients’ obligations ahead of other non-priority clients.  “Priority” clients generally had large payrolls with deposits necessary to fund CenterCede’s short-term cash needs and keep the scheme afloat. 

Court records show that when clients inquired about failures to pay obligations, the conspirators took steps to conceal the fraud by providing false excuses and misleading explanations.  According to the indictment to which Moody pleaded guilty, when a client company asked why its tax payments had not been paid, Moody wrote “John [Thigpen] has told me it was a over site [sic] in the Tax department and all is fixed. No problems with [victim client company].”  In truth and fact, that client’s taxes had been intentionally unpaid in favor of the payment of “priority” client obligations. 

The conspiracy charge carries a maximum of five years in prison and a $250,000 fine.  As part of his plea agreement, Moody has agreed to pay restitution to his victims, the amount of which will be determined by the Court. 

The investigation for the case is being handled by USPIS and IRS-CI.  Assistant U.S. Attorneys Corey F. Ellis and Taylor J. Phillips of the U.S. Attorney’s Office in Charlotte are in charge of the prosecution.

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced yesterday Dina R. Garfinkel, a.k.a. Dina Drake, Dina Lebovitch, and Ruth Lebovitch, to 41 months in prison on mail fraud charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Garfinkel, 69, of New York City, was also ordered to serve three years under court supervision after she is released from prison and to pay $400,000 as restitution to her victims.

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.

According to filed documents and statements made in court, Garfinkel was the owner and operator of Nikki B. Designs, LLC, a jewelry store located in Flat Rock, N.C.  From about 2012 through April 2013, Garfinkel defrauded 12 wholesale companies of at least $400,000 in merchandise she had ordered on consignment, commonly referred to in the jewelry industry as “on memo.”  Court records show that using an alias, Garfinkel would contact wholesalers located throughout the United States and order diamonds and/or jewelry on memo.  According to court records, in most instances in order to establish trust and rapport with the victim companies, Garfinkel made quick payments for the initial orders she received.  This caused the wholesalers to send Garfinkel additional merchandise, for which she either did not pay, partially paid, or paid using worthless checks.  According to statements made in court, Garfinkel has three previous convictions for carrying out the same scheme in New York and in Florida. 

Garfinkel pleaded guilty to mail fraud in April 2016.  She is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  Federal sentences are served without the possibility of parole.

The investigation was led by HSI. Assistant U.S. Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville prosecuted the case.

ASHEVILLE, N.C. – The United States Attorney’s Office has partnered with Asheville City Schools to launch an empowerment initiative for middle school students, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  The one-day youth summit was co-sponsored by the University of North Carolina – Asheville, the Sparc Network and the Grove Park Inn. 

Approximately 200 students selected from Asheville Middle School attended the summit, which was held on the campus of UNC-Asheville.  The goal of the summit was to encourage middle school students to discuss the culture and climate within their schools, to share their experiences with classmates, and to develop solutions for creating a positive school environment for students. 

“All students deserve the opportunity to reach their full potential and to thrive within their schools without fear of harassment, violence or bullying,” said U.S. Attorney Rose.  “When students are engaged and learn how to become agents of change, they are empowered to proactively address conflict, solve problems and foster a more positive school experience for all students.  The summit is an opportunity for character development and positive growth.”

During the one-day summit, student leaders from Asheville Middle School discussed their concerns about their school’s current environment and developed strategies to address social pressures, including bullying.  Over the course of the summit, students participated in student-led discussions, brainstormed on ways to help support all students have a positive school experience and developed action plans to address the needs of their school. 

“Our partnership with the U.S. Attorney’s Office and our collaboration with our community partners has been incredible,” said Superintendent Baldwin following today’s summit.  “I want to thank everyone who is supporting our efforts in our students’ voice initiative and for supporting important changes for our city and our school district.”

In addition to the interactive workshops, students also heard from Professor Michelle Horton of Wake Forest University and Founder & CEO of YOUniversity; Mr. Reggie Bean, author of Unfinished: 40 Lessons on Purpose, Self, and Becoming a Man; Dr. Pamela White, Superintendent of Asheville City Schools; April Dockery Principal of Asheville Middle School; Chief Tammy Hooper of the Asheville Police Department; and Chancellor Mary Grant of UNC-Asheville.

In making today’s announcement U.S. Attorney Rose thanked UNC-Asheville for hosting the summit and giving the students an opportunity to gather, and the Grove Park Inn and the Sparc Network for their support of this very important initiative. 

CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced yesterday Reginald Glenn Patterson to 151 months in prison on drug conspiracy and money laundering charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Patterson, 45, of Los Angeles, California, was also ordered to serve 10 years under court supervision after he is released from prison.

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.

According to filed documents and statements made in court, Patterson was indicted in 2003 for his involvement in a drug conspiracy operating in the Charlotte area.  He was arrested on federal charges in Los Angeles, California, in May 2003, and was subsequently released on a $50,000 bond.  Court records show that in June 2005, Patterson failed to appear for his sentencing hearing in Charlotte and was declared a fugitive.  According to court records, law enforcement obtained information on Patterson’s whereabouts over the course of an unrelated drug trafficking investigation and arrested Patterson in June 2015 in central California.  Patterson previously admitted in court to trafficking over 3,000 kilograms of marijuana in and around Charlotte.

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

The investigation was led by HSI and CMPD. Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte prosecuted the case.

ASHEVILLE, N.C. – United States Attorney Jill Westmoreland Rose announced today that a federal grand jury sitting in Asheville has returned a criminal indictment against Seth Pickering, charging him with one count of first degree murder for allegedly killing his daughter, Lila Pickering.  Seth Pickering, 36, of Leicester, N.C. was arrested on state charges on September 9, 2016 for Lila Pickering’s murder.  On September 13, 2016, a criminal complaint was filed by the U.S. Attorney’s Office, bringing federal charges against Seth Pickering in connection with Lila Pickering’s death.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Neal D. Labrie, Chief Ranger of the Blue Ridge Parkway; and Sheriff Van Duncan of the Buncombe County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.

The criminal bill of indictment alleges that on September 9, 2016, Seth Pickering did unlawfully kill a human being within the boundaries of the Blue Ridge Parkway, that person being his daughter, Lila Pickering, who had not attained the age of 18 years and was under his care and control.  The indictment further alleges that Seth Pickering killed Lila Pickering willfully, deliberately, maliciously and with premeditation, and in the perpetration of child abuse, that being knowingly and intentionally causing death and bodily injury to a child.

Seth Pickering is currently in federal custody.  He is scheduled to appear in federal court today.  The penalty for first-degree murder is life in prison or death.  The indictment includes a Notice of Special Sentencing Factors which could permit the United States to seek the death penalty.  The Department of Justice has not yet announced whether it will seek the death penalty.

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

            In making today’s announcement U.S. Attorney Rose thanked the FBI, the National Park Service and the Buncombe County Sheriff’s Office for their investigation of the case. 

            Assistant U.S. Attorneys Don Gast and David Thorneloe of the U.S. Attorney’s Office in Asheville are prosecuting the case.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that over $2.8 million in grant funding has been awarded in the Western District through the Department of Justice, Office of Community Oriented Policing (COPS office) COPS Hiring Program (CHP), aimed at creating and/or rehiring 23 career law enforcement positions. 

“The federal grants awarded build upon the Justice Department’s work to provide our local law enforcement partners with the resources they need to protect and serve their communities.  The funds will be used to address specific law enforcement officers’ needs and to advance public safety through community policing and crime prevention efforts,” said U.S. Attorney Rose. 

The three agencies awarded the grants in the Western District are the Charlotte Mecklenburg Police Department ($1,875,000), the Mooresville Police Department ($500,000) and the Monroe Department of Public Safety ($500,000).

CHP provides funding directly to state, local and tribal law enforcement agencies for the hiring and rehiring of entry-level career law enforcement officers in an effort to create and preserve jobs and increase community policing capacity and crime prevention efforts.  The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has invested over $14 billion to advance community policing  The complete list of award recipients can be found here: http://www.cops.usdoj.gov/default.asp?Item=2888.

National Community Policing Week

U.S. Attorney Rose also announced today that the Department of Justice has designated the week of October 3-7, 2016, as the inaugural National Community Policing Week.  One of the key priorities of the Justice Department is to support and promote strong relationships between law enforcement and our communities.  Community policing is a public safety philosophy based on partnership and cooperation between law enforcement and the individuals, families, and communities we serve and protect every day. At the center of community policing is the idea that all members of the community have a stake in the safety of our neighborhoods where we live and work and need to work together in solving the crime challenges our communities face.

“Community policing is about law enforcement partnering with communities to promote public safety and to proactively address the factors that give rise to crime and disorder.  When the relationship between law enforcement and civilians is based on mutual trust and respect, our communities are safer, our neighborhoods are stronger and our citizens are more united. Trust, respect and mutual understanding is key to solving community problems.  My Office is committed to promoting trust and building strong bonds between law enforcement and the communities we serve,” said U.S. Attorney Rose. 

To promote Community Policing Week, the three U.S. Attorney’s Offices for the Western, Middle and Eastern Districts of North Carolina will hold a Community Policing Round Table for Sheriffs, Police Chiefs, and District Attorneys, on Friday, October 7, in Greensboro, N.C.  U.S. Attorney Rose will participate on a panel to discuss best practices in community policing and to highlight collaborative programs and policing practices designed to advance public safety, strengthen police-community relations and foster mutual trust between local police officers and neighborhood residents. 

For more information regarding National Community Policing Week please visit https://www.justice.gov/ag/community-policing-tour.

ASHEVILLE, N.C. – A settlement has been reached by the United States and the Eastern Band of Cherokee Indians (EBCI) with Duke Energy Carolinas, LLC (Duke Energy) regarding a fire that burned over 2,300 acres of Tribal forest lands in the Big Cove area, announced the U.S. Attorney’s Office for the Western District of North Carolina and Principal Chief Patrick Lambert of the Eastern Band of Cherokee Indians.

The fire started on April 27, 2009 and burned for a week before being extinguished by fire fighters from the Bureau of Indian Affairs (BIA), the United States Forest Service (USFS), the National Parks Service (NPS), the U.S. Fish and Wildlife Service (USFWS), and the Cherokee Fire Department.

“Today’s settlement provides rightful compensation to EBCI for damage caused to Tribal forests.  A portion of the monetary settlement will also compensate the agencies involved in the suppression of the fire and rehabilitation activities required as a result of the blaze.  This settlement underscores the successful collaboration and continued cooperation between federal and Tribal partners over the course of this case,” said the U.S. Attorney’s Office in a statement today.

“When I took office last year, my priority was the protection and accountability of our Tribal resources.  This includes our lands, our finances, and services to our members.  We have relationships with many local, state and federal agencies that work together to ensure safety and prosperity for the constituents and customers we serve,” said Chief Lambert.  “I thank Duke Energy for that gesture of respect.  We are excited to bring our lands back under our ownership in Trust with the United states.  It is good to know moving forward that we can work together to right any wrongs, and negotiate issues head-on for the public to have resolution,” Chief Lambert added.

As part of the settlement, Duke Energy has agreed to pay $1.7 million dollars, of which $1,210,128 will be paid to EBCI in compensation for damage to Tribal forests. The remaining $489,872 will be paid to federal agencies and the Cherokee Police Department for suppression, enforcement, and rehabilitation costs.  The funds will be distributed among the federal agencies and Cherokee Fire Department based on costs incurred in responding to the fire.

In addition to the monetary settlement, Duke Energy has agreed to convey 35 acres of land located in close proximity to Kituwah, one of the seven Cherokee “Mothertowns” and known as the birthplace of the Cherokee people. In 1996, the EBCI purchased Kituwah, which according to Cherokee history is the place where the first Cherokee man and woman were born.  Duke Energy’s transfer of the 35 acres of land recognizes the importance Kituwah plays in Cherokee culture, heritage, history and identity.  EBCI will protect and preserve Kituwah for future generations.

In making today’s announcement, the U.S. Attorney’s Office commended the teamwork and dedication of the federal agencies and Tribal officials and praised their coordination and outstanding work leading to today’s settlement with Duke Energy.

The Department of Interior, BIA, USFS, NPS, USFWS, the EBCI Office of Attorney General and the Cherokee Fire Department led the investigation. 

Assistant United States Attorneys Gill P. Beck and Brook Andrews with the Western District of North Carolina represented the United States and Hannah Smith, Senior Associate General, represented the Eastern Band of Cherokee Indians.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that $2,116,025 in federal grants were awarded in September 2016 to local law enforcement agencies and community organizations in the Western District of North Carolina.  The federal grants were awarded by the Office on Violence Against Women (OVW) and the Office of Justice Programs’ Bureau of Justice Assistance (BJA) and National Institute of Justice (NIJ).

A total of $1,081,143 was administered to two grantees by OVW, a component of the U.S. Department of Justice that focuses on reducing violence against women and administering justice for and services to victims of domestic violence, dating violence, sexual assault, and stalking.  The two grants awarded by OVW in the Western District are:

Justice for Families Program:  Under this program, a total of $600,000 has been awarded to the Mediation Center in Asheville, N.C., and its collaborative partners, Pisgah Legal Services, Safelight, and North Carolina’s Twenty Ninth Judicial District-29B, which includes Henderson, Polk and Transylvania Counties.  The award will be used to open a supervised visitation and exchange center in Henderson County to serve at least 50 families, and to train 400 court and court-related personnel on domestic violence, dating violence and sexual assault.      

Rural Domestic Violence, Dating Violence, Sexual Assault and Stalking Assistance Program (Rural Program):  Under this program, a total of $481,143 was awarded to the Shelter Available for Family Emergency, Inc. of Transylvania County (SAFE).  SAFE is a non-profit organization that has responded to domestic and sexual violence in Transylvania County.  Through this program, SAFE will expand outreach and services to remote mountain communities, build new services for the growing Latino population and enhance the community’s response to sexual violence through the development of a Sexual Assault Response Team. 

Another $728,780 was awarded via BJA’s Edward Byrne Memorial Justice Assistance Grant (JAG) Program to local police departments in six cities and sheriff’s offices in four counties throughout the Western District.  The JAG Program, allows states and units of local government, including tribes, to support a broad range of activities to prevent and control crime based on their own local needs and conditions. 

Under this program, the City of Charlotte ($493,021), Gaston County ($63,290), the City of Asheville ($55,150), the City of Hickory ($31,020), the City of Monroe ($18,651), the City of Statesville ($17,657), Iredell County ($15,029), the City of Shelby ($13,683), Wilkes County ($10,928), and Haywood County ($10,351) will use their share to address  the needs of local police departments and sheriffs’ offices, through the funding of local initiatives, technical assistance, training personnel, equipment, supplies, and information systems as needed.

Also, $306,102 was awarded by the Office of Justice Programs’ National Institute of Justice (NIJ) to the City of Charlotte, under the DNA Capacity Enhancement and Backlog Reduction Program (CEBR). The Charlotte-Mecklenburg Police Department will use the funding awarded via this program to reduce the backlog of forensic biology/DNA cases, meet Quality Assurance Standards, and maintain current laboratory capabilities.

“Each year, federal grants deliver much-needed resources and financial assistance to local police departments, sheriff’s offices and community organizations throughout the Western District.  The awards are used to address a broad range of needs, and to assist local efforts in reducing crime, improving public safety and increasing access to resources and services within communities,” said U.S. Attorney Rose.           

The Office on Violence Against Women (OVW) currently administers 24 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 Office of Justice Programs (OJP) provides innovative leadership to federal, state, local, and tribal justice systems, by disseminating state-of-the art knowledge and practices across America, and providing grants for the implementation of these crime fighting strategies.  Current OJP funding opportunities can be found at: http://ojp.gov/funding/Explore/CurrentFundingOpportunities.htm.

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. In order to achieve such goals, BJA programs illustrate the coordination and cooperation of local, state, and federal governments. 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 and it is dedicated to improving knowledge and understanding of crime and justice issues through science. NIJ provides objective and independent knowledge and tools to reduce crime and promote justice, particularly at the state and local levels. For additional information and to locate a funding opportunity please visit: http://www.nij.gov/funding/Pages/welcome.aspx.

CHARLOTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that Jamell Lamon Cureton, 24, and Malcolm Jarrel Hartley, 23, pleaded guilty to murder and related charges, for their respective roles in the 2014 double-murder of Douglas and Deborah London in Lake Wylie, S.C.  Cureton also took responsibility for a previously unsolved murder, the death of Kwamne Donqurius Clyburn, in August 2013 in Charlotte. U.S. District Court Judge Max O. Cogburn, Jr. presided over today’s plea hearings.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Chief Kerr Putney of the Charlotte-Mecklenburg Police Department; and Sheriff Bruce Bryant of the York County Sheriff’s Office in South Carolina join U.S. Attorney Rose in making today’s announcement. 

At today’s court appearance, Cureton pleaded guilty to a total of 10 counts: two counts of murder in aid of racketeering for the deaths of Douglas and Deborah London; two counts of use and carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the deaths of Douglas and Deborah London; one count of racketeering conspiracy; one count of Hobbs Act robbery; one count of assault with a dangerous weapon in aid of racketeering activity; one count of use or carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence; one count of murder in aid of racketeering for the death of Kwamne Donqurius Clyburn; and one count of use and carry of a firearm 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.

Hartley pleaded guilty to a total of five counts: two counts of murder in aid of racketeering for the deaths of Douglas and Deborah London; two counts of use and carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the deaths of Douglas and Deborah London; and one count racketeering conspiracy.

According to previous court filings, admissions contained in filed plea documents and today’s plea hearings:

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.  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.

Cureton, a.k.a. “Assassin” and “Murda Mel,” 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, a.k.a. “Silent” and “Bloody Silent,” 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, Nana Yaw Adoma and David Lee Fudge robbed “The Mattress Warehouse” store, owned by the victims, Douglas and Deborah London, in Pineville, N.C.  Federal charges were subsequently filed against 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 Daquan Lamar Everrett, Randall Avery Hankins, II, Nehemijel Maurice Houston, Briana Shakeyah Johnson, Ibn Rashaan Kornegay, Centrilla Shardon Leach, and Rahkeem Lee McDonald to plan the murders of Douglas and Deborah London.  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.”  The gang’s leadership authorized Hartley to proceed with the murder, and on or about October 23, 2014, Johnson drove Hartley to South Carolina, where Hartley shot and killed Douglas and Deborah London at their home. 

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. 

Today in court, Cureton also admitted that on August 22, 2013, Cureton, Adoma and Akheem McDonald murdered Kwamne Donqurius Clyburn, after luring him to Pressley Road Neighborhood Park, in Charlotte.  Cureton admitted in court papers that the three gang members 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. 

“Cureton is responsible for the murders of three people, Kwamne Donqurius Clyburn, and Douglas and Deborah London.  In 2013, Cureton participated in Clyburn’s murder to protect the gang’s reputation and to send a message to anyone who falsely claimed to be a Bloods member.  A year later, Cureton ordered and orchestrated the murder of Douglas and Deborah London, and directed Hartley to take the lives of two innocent victims,” said U.S. Attorney Rose.  “It is our hope that today’s guilty pleas will help bring closure to the families and friends of the three victims and allow the healing process to begin. We are thankful to the victims’ families for their continued support throughout this prosecution.  I also commend the FBI for their outstanding investigative work and excellent cooperation and coordination with our local law enforcement partners in North and South Carolina,” Rose added.

 “Jamell Cureton and Malcolm Hartley are violent and ruthless men who used their gang affiliations to commit heinous crimes against innocent victims.  Due to the incredible cooperation and coordination between the FBI and our local law enforcement partners, they had no choice except to admit their crimes and accept their fate to spend the rest of their lives in federal prison.  The FBI is pleased that the victims’ families will not have to relive the nightmare of what happened to their loved ones during a long trial,” said John Strong, the Special Agent in Charge of the Charlotte Division of the FBI. 

At sentencing, Cureton and Hartley face a mandatory sentence of life in prison.  In addition to Cureton and Hartley, co-defendants Fudge, Everett, Kornegay, Leach, Johnson, Houston and Rahkeem Lee McDonald previously pleaded guilty to federal charges, bringing to nine the total number of defendants who have entered guilty pleas in connection this prosecution.  Sentencing dates for those defendants have not been set.

Three additional defendants, Adoma, Hankins and Ahkeem McDonald currently each face racketeering conspiracy charges.  Ahkeem McDonald and Adoma are also charged with murder in aid of racketeering and use and 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 is also charged with Hobbs Act Robbery, assault with a dangerous weapon in aid of racketeering activity and use or carry of a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence for his role in the mattress store robbery.  Randall Hankins is also charged with two counts of murder in aid of racketeering and two counts of use and 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 deaths of Douglas and Deborah London.

The investigation was led by the FBI with the invaluable assistance of CMPD and the York County Sheriff’s Office.  In making today’s announcement U.S. Attorney Rose also thanked York County Solicitor Kevin Brackett for his support and 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. – Yesterday, Senior U.S. District Judge Graham Mullen sentenced a Huntersville man to 30 months in prison for his role in a securities fraud scheme involving fraudulent bonds, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Charles Edwin Abrams, a.k.a Charles Edwin Klutz and Charles Edwin Donovan, 53, was also ordered to serve two years under court supervision after he is released from prison, to pay $828,284 in restitution to victims, and to undergo mental health treatment.

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

According to information contained in filed documents and yesterday’s sentencing hearing, Abrams and his co-conspirator, Mark Burgin, engaged in a securities fraud scheme by promoting a fraudulent investment known as the Mexican “Pink Lady” Bonds (bonds).  Court records indicate that Abrams induced his victims to invest in the fraudulent bond scheme by making numerous false and fraudulent claims about the value of the bonds and the anticipated return on the victims’ investment.  For example, according to court records, Abrams told potential investors that the bonds were issued in 1899 by the “United States of Mexico,” that the bonds had a value of 5% interest compounded daily, and that victim investors would receive billions of dollars upon the sale of the bonds.  Court records also show that, in furtherance of the conspiracy and to bolster the fraudulent scheme’s credibility, on at least two occasions Abrams introduced Burgin to potential victim investors as a former Special Agent with the FBI.  Abrams also represented himself to be a former U.S. Navy SEAL, when in fact he never served in the military.

According to court records, Abrams induced a total of seven known investors to invest $828,284 in the fraudulent bond scheme.  Instead of purchasing the bonds with the investors’ funds as promised, the co-conspirators used the money for their personal benefit, including the purchase of luxury vehicles, jewelry, and to pay off investors from previous fraudulent schemes.

During the sentencing hearing, one of Abrams’ victims addressed the Court and spoke of the devastating financial impact she has suffered as result of the scheme, including not being able to retire and that she “no longer trusts anyone.”

Abrams pleaded guilty in May 2016 to one count of wire fraud conspiracy and one count of securities fraud conspiracy. 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 led by the FBI.  Assistant United States Attorney Kenneth M. Smith, of the U.S. Attorney’s Office in Charlotte prosecuted the case.

CHARLOTTE/RALEIGH/GREENSBORO – The United States Attorney’s Offices for the Western, Middle, and Eastern Districts of North Carolina, in partnership with the Drug Enforcement Administration and the Federal Bureau of Investigation, announce the formation of the Federal Opioid Reduction Alliance for North Carolina, a  coordinated state-wide effort to address the increasing dangers posed to the residents of North Carolina by heroin and opiate distribution, abuse, and overdose.  The Alliance will work together with State and local partners to increase awareness, prevention efforts, and prosecutions related to heroin and other opioids in North Carolina.  By implementing the attached Strategic Initiative, the United States Attorneys’ Offices hope to complement existing efforts across the state and enhance the ability of law enforcement to keep our communities safe. 

In conjunction with the announcement of the Alliance, the United States Attorneys’ Offices will hold several events in observance of Prescription Opioid and Heroin Epidemic Awareness Week, September 18-24, 2016.

Within the Western District:

• September 19, 2016 – “We Are a Community United Against Heroin,” is a daylong heroin and opiate addiction awareness summit hosted by the U.S. Attorney’s Office in partnership with the DEA, the Eastern Band of Cherokee Indians and the Cherokee Indian Police Department, on the rising of prescription opiates and heroin abuse and the epidemic of heroin related overdose deaths on the reservation and surrounding areas in western North Carolina.  This summit will educate community members, law enforcement and service providers about opiate and heroin distribution, the physiological effects of the drugs and introduce the community to interventions and best practices that are available within the boundaries of the EBCI and the western North Carolina region.  

Within the Eastern District:

• September 20, 2016 - An Executive Session for Law Enforcement to discuss heroin & opioid abuse, distribution, and overdose issues.  All Police Chiefs, Sheriffs, and Federal Law Enforcement Agency heads within the Eastern District of North Carolina are welcome to attend. 

• September 22, 2016 - A Community Town Hall at the Pullen Park Community Center in Raleigh from 6:00 – 8:00 p.m. The opiate crisis we face is not just a crime problem, it is a community public health problem, and we hope you will join us for this important event.

Within the Middle District:

• September 20, 2016 - A Opiate Awareness Meeting at the Wesleyan Academy, Performing Arts Center, 1915 N. Centennial Ave., High Point, NC. The opiate crisis we face is not just a crime problem, it is a community public health problem, and we hope you will join us for this important event.

• September 22, 2016 - An Executive Session for Law Enforcement to discuss heroin & opioid abuse, distribution, and overdose issues.  All Police Chiefs, Sheriffs, State and Federal Law Enforcement Agency heads within the Middle District of North Carolina are welcome to attend.

ASHEVILLE, N.C. – Today, the U.S. Attorney’s Office for the Western District of North Carolina in partnership with the U.S. Drug Enforcement Administration, the Eastern Band of Cherokee Indians (EBCI) and the Cherokee Indian Police Department hosted a day long community awareness summit on the epidemic of heroin and prescription opioid abuse and the related overdose deaths in Indian Country and surrounding areas in western North Carolina. 

“Heroin addiction is not a public health concern.  It is a public health crisis.  The alarming rate of deaths attributed to heroin overdoses in the Western District of North Carolina and the increasing rate of addiction to opiates and prescription drugs demand our immediate attention,” said U.S. Attorney Jill Westmoreland Rose.  “As law enforcement we cannot arrest our way out of this epidemic.  The Justice Department’s three-pronged approach combines law enforcement action with prevention and treatment efforts.  Stemming the flow of drugs, stopping more people from using opiates, and treating those who have become addicted requires coordination and collaboration with our state, local and tribal partners, community leaders, healthcare providers, service groups and community members.  Working together we can succeed in implementing a comprehensive strategy that offers viable solutions, delivers sustainable results, and brings relief to afflicted communities,” U.S. Attorney Rose added.

Approximately 110 professionals from the fields of law enforcement, medicine, substance abuse and treatment, and interested community members attended the summit, held at the Chief Joyce Dugan Cultural Arts Center in Cherokee, N.C. Speakers from federal and local law enforcement agencies, medical experts and representatives of community organizations presented on a broad range of topics including: the alarming rise in heroin and opioid addiction; prevention efforts and available treatment options; heroin trafficking trends within the boundaries of the Eastern Band of Cherokee Indians and surrounding areas; and tribal, state, local and federal law enforcement efforts to stem the flow of opiates in the area.

U.S. Attorney Rose thanked the DEA, the Eastern Band of Cherokee Indians and the Cherokee Indian Police Department for co-sponsoring the event and emphasized the importance of the conference stating that, “Today’s summit is part of our ongoing effort to bring attention to heroin addiction and opioid drug abuse and to continue to build upon our collaborative efforts with law enforcement, the healthcare field and our community partners to confront this epidemic and address the problem in real and meaningful ways.”

****** MEDIA ADVISORY *******

ASHEVILLE, N.C. – The U.S. Attorney’s Office for the Western District of North Carolina in partnership with the U.S. Drug Enforcement Administration, the Eastern Band of Cherokee Indians and the Cherokee Indian Police Department is hosting a community awareness summit on the rising of prescription opiates and heroin abuse and the epidemic of heroin related overdose deaths on the reservation and surrounding areas in western North Carolina.  The summit will be held on MONDAY, SEPTEMBER 19, 2016 at 9:00 A.M. EDT.

U.S. Attorney Jill Westmoreland Rose and Principal Chief Patrick Lambert of the Eastern Band of Cherokee Indians will deliver the day’s opening remarks.  Speakers and panel participants will discuss a variety of topics, including but not limited to, prescription drug and heroin abuse and addiction, overdose-related fatalities, law enforcement efforts to stem the flow of drugs, availability of community resources, outreach efforts and education to affected communities.  This summit will educate community members, law enforcement and service providers about opiate and heroin distribution, the physiological effects of the drugs and introduce the community to interventions and best practices that are available within the boundaries of the EBCI and the western North Carolina region.   

Help from the media in advancing news of this summit to encourage attendance by parents, teachers, faith-based organizations and other community leaders would be valuable in spreading the message. Attendance is free of charge but seating is limited. 

Media is invited to cover the event from 9:00 to 10:00 a.m., beginning with welcome remarks of agency representatives who will also be available for on-camera interviews.   

PRESENTERS:          Jill Westmoreland Rose, United States Attorney, Western District of North Carolina

                              Principal Chief Patrick Lambert, Eastern Band of Cherokee Indians

                              Chris Fletcher, Special Agent, U.S. Drug Enforcement Administration

                              Richard Hutchinson, Special Agent, U.S. Drug Enforcement Administration Department

                              Dr. Steven Lloyd, Internal Medicine

                              Local Health Officials

                              Victims of Heroin and Opioids

WHAT:                    Heroin & Opioid Awareness Summit

WHEN:                    Monday, September 19, 2016, at 9:00 A.M. EDT

WHERE:                   Chief Joyce Dugan Cultural Arts Center

                               Cherokee Central Schools

                               260 Elk Crossing Lane

                                Cherokee, NC

                                (Enter through the Cherokee Middle School)

NOTE: Please arrive no later than 8:45 a.m. All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials.  Press inquiries regarding logistics should be directed to Lia Bantavani at Lia.Bantavani@usdoj.gov or 704-338-3140.

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A federal jury today convicted a Naples, Florida, man of engaging in a child exploitation enterprise and related charges for creating and running a website dedicated to the sexual abuse of children.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina; Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division; Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division; and Special Agent in Charge Paul Wysopal of the FBI’s Tampa, Florida, Division made the announcement.

Steven W. Chase, 57, was found guilty of one count of engaging in a child exploitation enterprise, one count of advertising child pornography, three counts of transportation of child pornography and one count of possession of child pornography.  The jury also returned a special verdict determining that Chase should be ordered to forfeit all property derived from, involved in, or traceable to his criminal activities, to include his Naples residence.

Evidence at trial established that Chase created and served as the primary administrator of a highly-sophisticated global enterprise dedicated to the sexual abuse of children, via a website that operated on the Tor anonymity network, through which he and more than 150,000 other members authored and viewed tens of thousands of postings involving child pornography.  Images and videos shared through the website were highly categorized towards victim age and gender, as well as the type of sexual activity, according to trial evidence.  Testimony at trial also established that website members employed advanced technological means in order to undermine law enforcement’s attempts to identify them, including the use of a hidden service on the Tor network and elaborate file encryption.

Chase was arrested following a court-authorized search of his home on Feb. 19, 2015.  Forensic examination of a computer and devices seized pursuant to the search revealed that he was in possession of thousands of images depicting the sexual abuse of children as young as toddlers. 

Chase’s co-defendants Michael Fluckiger, 46, of Portland, Indiana, and David Lynn Browning, 47, of Wooton, Kentucky, the co-administrator and global moderator of the website, respectively, pleaded guilty in December 2015 to engaging in a child exploitation enterprise for their roles in helping Chase run the website.

The FBI’s Violent Crimes Against Children Section, Major Case Coordination Unit and Digital Analysis and Research Center led the investigation, with assistance from the FBI’s Charlotte, Tampa and Boston Field Offices.  Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Cortney Randall of the Western District of North Carolina prosecuted the case.

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

CHARLOTTE, N.C. – U.S. District Judge Max Cogburn, Jr., sentenced Dawn Wright Olivares, 48, and Daniel C. Olivares, 34, both of Clarksville, Ark., to 90 and 24 months in prison, respectively, for their involvement in an $850 million Internet Ponzi scheme that promised victims a bogus return on investments, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. 

The two Arkansas residents were associated with the Lexington, N.C. based Rex Venture Group, LLC (RVG), which owned and operated Zeekler and ZeekRewards.  In addition to the prison term imposed, Judge Cogburn also ordered each defendant to serve three years under court supervision.  The restitution amount will be set at a later date.

Michael Rolin, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join U.S. Attorney Rose in making today’s announcement.

According to filed court documents and today’s sentencing hearings, from January 2010 through August 2012, Dawn Wright Olivares, her step-son, Daniel Olivares, and Paul Burks, the owner of RVG, conspired with each other and engaged in Ponzi scheme that raised more than $850 million through a sham internet-based penny auction company named “Zeekler” and its purported advertising division “ZeekRewards” (collectively “Zeek”).  According to court records, the conspirators induced more than 900,000 victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from its penny auctions, and that the public could share in such profits through investment in ZeekRewards.  Court documents indicate that, at one point, the conspirators claimed that investors would be guaranteed a 125% return on their investment.

Court records show that the co-conspirators represented that victim-investors in ZeekRewards could participate in the Retail Profit Pool (RPP), which supposedly allowed victims collectively to share 50% of Zeek’s daily net profits.  The co-conspirators did not keep books and records needed to calculate such daily figures.  Instead, Burks simply made up the daily “profit” numbers.  Contrary to the conspirators’ claims, the true revenue from the scheme did not come from the penny auction’s “massive profits.”  Instead, approximately 98% of all incoming funds came from victim-investors, which were then used to make Ponzi-style payments to earlier victim investors.

In addition to promising massive returns on investments, the conspirators used a number of ways to promote Zeek to current and potential investors.  For example, the conspirators hosted weekly conference calls and leadership calls, where participants could call in and listen to Burks, Dawn Wright Olivares and others make false representations intended to encourage victim-investors to continue to invest money and to recruit others to invest in Zeek.  Burks and Dawn Wright Olivares also organized and attended “Red Carpet Events,” where victim investors came to hear details of the scheme in person.  During these events, Burks and his conspirators made false representations about the massive retail profits generated by Zeek.  They also used electronic and print media, including websites, emails and journals, to make false and misleading statements about the success of Zeekler to recruit victim investors.

As the Ponzi scheme grew in size and scope it became unsustainable and it eventually began to unravel as the outstanding liability resulting from the bogus 125% return on investment continued to rise beyond control.  By August 2012, the conspirators fraudulently represented to the collective victims that their investments were worth nearly $3 billion, but had no accurate books and records to even determine how much cash on hand was available to pay such liability.  Contrary to representations made to victim investors, at that time, the conspirators had only $340 million available to pay out investors. 

According to court records, Dawn Wright Olivares was closely involved in the strategic operations and ultimately served as the Chief Operations Officer of Zeek.  Dawn Wright Olivares also owned 95% of Wandering Phoenix, LLC, a company that she used, among other things, to receive payments from Zeek and RVG.  During the course of the conspiracy, Dawn Wright Olivares and Wandering Phoenix received approximately $7.2 million in victim funds.

Daniel Olivares was RVG’s senior technology officer and was responsible for, among other things, database design, management and operations for Zeek.  During the course of the conspiracy, Daniel Olivares personally enriched himself with victim funds totaling approximately $3.1 million.  Other unnamed co-conspirators also personally enriched themselves with millions of dollars of victim funds.

Dawn Wright Olivares and Dan Olivares previously pleaded guilty to one count of investment fraud conspiracy.  Dawn Wright Olivares also pleaded guilty to one count of tax fraud conspiracy. 

In July 2016, a federal jury convicted Paul Burks of wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy, following a three-week trial.  Burks is currently awaiting sentencing.

In making today’s announcement, U.S. Attorney Rose thanked the U.S. Secret Service and IRS-CI for investigating the case, and the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance with the investigation.   

The prosecution is handled by Assistant United States Attorneys Jenny Grus Sugar and Corey Ellis of the U.S. Attorney’s Office in Charlotte.

Additional information and updated court filings about this and related cases filings can be accessed at the district’s website: http://www.justice.gov/usao/ncw/ncwvwa.html.

STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees sentenced yesterday Eduardo Trejo-Munoz, a/k/a “Lalo,” 24, of Hickory, N.C., to 262 months in prison and five years of supervised release for trafficking high purity crystal methamphetamine worth over $5 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  In November 2015, Trejo-Munoz was convicted of five charges following a two-day federal trial, including conspiracy to distribute and to possess with intent to distribute methamphetamine and possession of methamphetamine with intent to distribute.

U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas; Sheriff Coy Reid of the Catawba County Sheriff’s Office; Sheriff Alan C. Jones, of the Caldwell County Sheriff’s Office; and Chief Thurman Whisnant of the Hickory Police Department.

According to filed court documents, the sentencing hearing and evidence presented at trial, from in or about 2013 through September 2014 in Catawba and Mecklenburg counties and elsewhere, Trejo-Munoz trafficked more than 50 kilograms of near-pure crystal methamphetamine, which constitutes approximately 500,000 dosage units, with a street value of more than $5 million.  Evidence presented at trial established that, over the course of the investigation, law enforcement purchased 133 grams of methamphetamine from Trejo-Munoz.  According to court records, law enforcement also seized another 54 grams of methamphetamine from the defendant, as well as drug paraphernalia and a handgun with laser site from his residence.

This prosecution stems from investigation of the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the conviction of more than 55 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 entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

Trejo-Munoz has been in federal custody since September 2014 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 case was investigated by the DEA, HSI, the Catawba County Sheriff’s Office, the Caldwell County Sheriff’s Office and Hickory Police Department, the North Carolina State Bureau of Investigation, and the North Carolina State Highway Patrol.The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman.

ASHEVILLE, N.C. B A federal criminal complaint was filed today charging Seth Willis Pickering, 36, of Leicester, N.C. with murder for the death of his daughter, Lila Pickering, 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 John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Neal D. Labrie, Chief Ranger of the Blue Ridge Parkway; and Sheriff Van Duncan of the Buncombe County Sheriff’s Office.

The affidavit filed with the criminal complaint alleges that late afternoon on September 9, 2016, Seth Pickering took Lila Pickering from the residence of the custodian where the victim had been placed temporarily by the Buncombe County Department of Health and Human Services (DHHS).  Seth Pickering was only authorized to have supervised visitation with his daughter.  The complaint alleges that the Buncombe County Sheriff’s Office responded to a call by the victim’s custodian regarding a missing juvenile, and were in the process of gathering information to initiate a report and issue an alert to law enforcement agencies.  Meanwhile, two U.S. Park Rangers on routine patrol on the Blue Ridge Parkway (the “Parkway”) observed Seth Pickering’s vehicle parked along the shoulder of the Parkway near mile marker 393.  The Rangers also observed a male and a juvenile female (later determined to be Seth and Lila Pickering) walking down a steep embankment.  Knowing that there were no trails, picnic areas, or camp sites in the area, the Rangers began to investigate.  The complaint alleges that as one of the Rangers approached the area where Seth Pickering and his daughter were located, Seth Pickering stabbed Lila Pickering with a knife, killing her.

Seth Pickering is currently in state custody and is expected to appear in U.S. District Court on the federal charges upon his transfer to federal custody.

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

In making today’s announcement U.S. Attorney Rose thanked the FBI, the National Park Service and the Buncombe County Sheriff’s Office for their investigation of the case.

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

ASHEVILLE, N.C. – On Tuesday, September 6, 2016, U.S. District Max O. Cogburn, Jr. sentenced two sisters to 87 months in prison and five years of supervised release on drug trafficking charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Melissa Sigmon, 29, and Shana Sigmon, 26, both of Sylva, N.C. each pleaded guilty to one count of distribution of methamphetamine.

According to filed court documents and yesterday’s sentencing hearings, from about September 2014 to about January 2015, Melissa and Shana Sigmon were members of a drug network responsible for trafficking large quantities of methamphetamine in Georgia and Western North Carolina.  Shana Sigmon ’s fiancée was running the distribution ring from inside a Georgia prison, where he was serving time for a narcotics trafficking offense.  According to court records, Shana and Melissa Sigmon accepted multi-pound shipments of methamphetamine and then re-distributed the drugs to wholesale customers throughout Georgia and Western North Carolina.  According to court records, over the course of the investigation Shana Sigmon was responsible for trafficking more than 14.5 kilograms of methamphetamine and Melissa Sigmon trafficked more than 12.5 kilograms of methamphetamine.

The 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. 

U.S. Attorney Rose thanked the DEA, the North Carolina State Bureau of Investigation, the Jackson County Sheriff’s Office, the Swain County Sheriff’s Office, and the Catawba County Sheriff’s Office for handling the investigation. Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville prosecuted the case.

CHARLOTTE, N.C. –U.S. District Judge Robert J. Conrad, Jr. sentenced today James Ronald Helms, Jr., 49, of Monroe, N.C., to 210 months in prison, followed by four years of supervised release on drug conspiracy charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Helms was also ordered to forfeit $47,813 in drug proceeds.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Sheriff Eddie Cathey of the Union County Sheriff’s Office and Chief J. Bryan Gilliard of the Monroe Police Department join U.S. Attorney Rose in making today’s announcement.

According to filed court documents and today’s sentencing hearing, on or about April 2015, law enforcement became aware that Helms was selling methamphetamine and cocaine from his residence located in Monroe.  In or about June 2015, law enforcement executed a search warrant, seizing from Helms’ residence more than two (2) kilograms of methamphetamine with over               95% purity, over half a kilogram of cocaine, $47,813 in cash and a vehicle which contained narcotics.  Court records show that law enforcement also seized from Helms’ residence 13 firearms, including two SKS assault rifles and ammunition. 

In March 2016, Helms pleaded guilty to two counts of conspiracy to distribute and to possess with intent to distribute methamphetamine and 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 announcing today’s sentence, Judge Conrad stated, “The time has come to protect the community. Defendant’s drug trafficking life has caught up with him. He has done too much evil.”

The FBI, the Union County Sheriff’s Office and the Monroe Police Department handled the investigation. Assistant U.S. Attorney Sanjeev Bhasker of the U.S. Attorney’s Office in Charlotte prosecuted the case.

CHARLOTTE, N.C. –United States Attorney Jill Westmoreland Rose announced today that the U.S. Attorney’s Office partnered with the Hickory Police Department to present the Law Enforcement Guiding Adolescent Lives (LEGAL) program in Hickory, N.C.  LEGAL is a youth-oriented community outreach initiative designed to offer young people guidance on having positive interactions with members of the law enforcement community. 

The one-day program was held earlier today in Hickory, at LP Frans Stadium.  Hickory Police Chief Thurman Whisnant and his officers worked closely with the U.S. Attorney’s Office to implement the initiative and to develop a curriculum that was informative, meaningful and fun for its participants.  Volunteer officers with the Hickory Police Department and 20 youths selected from the Young People of Integrity group and the Hickory Youth Council participated in the program. 

This was the second event held as part of the LEGAL outreach initiative.  Over the summer, the U.S. Attorney’s Office partnered with the Buncombe County Sheriff’s Office and the Asheville Police Department to launch the pilot program, with the goal of collaborating with local law enforcement in Western North Carolina to implement the initiative throughout the district. 

“This program is extremely valuable both to the young people and the volunteer law enforcement officers who participated today.  The goal of the initiative is to establish positive police/youth relationships through education and open dialogue, and to foster the principles of mutual respect by learning from each other,” said U.S. Attorney Rose.  “In doing so, we seek to foster a life changing experience for the participants and to develop a scenario whereby law enforcement officers and young people have more effective and ultimately more safe interactions within their communities.”

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

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

“The young men and women who took part in today’s program will benefit greatly from their participation.  My officers volunteered many hours and worked diligently to make sure this program was a success.  Those who participated were given very good practical information and each group had an opportunity to learn from each other.  I want to thank the U.S. Attorney’s Office for partnering with the Hickory Police Department to bring this important initiative to Hickory’s youth,” said Chief Whisnant.

U.S. Attorney Rose thanked Chief Whisnant for his support of the LEGAL initiative. U.S. Attorney Rose also thanked the law enforcement officers and youth for participating in the program, and emphasized the importance of continuing to develop and support initiatives that promote positive youth development and enhance interactions between police and youth.

Three individuals were charged in an indictment unsealed yesterday for their roles in a $2.5 million high-yield investment fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

Robert Leslie Stencil, 59, of Charlotte, North Carolina; Daniel Thomas Broyles Sr., 59, of Beverly Hills, California; and Kristian Francis Sierp, 45, of Costa Rica, all U.S. citizens, were charged in an indictment returned on Aug. 18, 2016, in the Western District of North Carolina with one count of conspiracy to commit wire fraud and mail fraud, five counts of mail fraud and eight counts of wire fraud.  In addition, Stencil and Broyles were charged with two counts of money laundering and Sierp was charged with four counts of international money laundering.  Stencil surrendered to authorities this morning and will have his initial court appearance today.  Sierp was previously arrested in Fort Lauderdale, Florida, on separate charges and has been detained pending trial.  A trial date has not been set.  

The indictment alleges that since January 2012, Stencil, Broyles and Sierp worked to sell stock in Niyato Industries Inc., a Nevada corporation that Stencil owned and operated from Charlotte.  Through various publications and sales pitches, Stencil, Broyles and Sierp allegedly marketed Niyato as a manufacturer of compressed natural gas (CNG) automobiles and a distributor of CNG fuel that had patented technology, valuable contracts and high-profile executives.  According to the indictment, Stencil, Broyles and Sierp also sold investors on a promise that Niyato was planning an imminent stock IPO that would reap pre-IPO investors a tenfold return on their investments.

Stencil, Broyles and Sierp are alleged to have known that, in reality, Niyato had no facilities, products, patents or plans for an imminent IPO, but rather was merely a vehicle for inducing investor funds.  Broyles and Sierp allegedly directed investors to mail or wire funds to Stencil, who then paid half the funds to Broyles and Sierp and kept the remainder for personal expenses.  In addition, Broyles and Sierp are alleged to have used high-pressure sales tactics to encourage investments from their victims, many of whom were elderly.  According to the indictment, Sierp operated under a fake name from a telemarketing call center that he owned and operated in Costa Rica.

According to the indictment, Stencil, Broyles, Sierp and their co-conspirators were responsible for causing at least $2.5 million in losses to more than 140 U.S. citizens and businesses. 

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

The U.S. Postal Inspection Service and Internal Revenue Service-Criminal Investigation conducted the investigation, which was supervised by the Criminal Division’s Fraud Section.  Fraud Section Trial Attorneys William Bowne and Gustav Eyler are prosecuting the case.  

The CEO of Preferred Merchants LLC, a financial services company based in Napa, California, was sentenced today in the U.S. District Court for the Western District of North Carolina to 15 months in prison for engaging in an elaborate obstruction of justice scheme to conceal from the government millions of dollars, which were subject to a freeze order and seizure warrant.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina; Special Agent in Charge Michael Rolin of the U.S. Secret Service’s Charlotte, North Carolina, Field Division; and Special Agent in Charge Thomas J. Holloman III of the Internal Revenue Service-Criminal Investigation (IRS-CI) Charlotte Field Office made the announcement.

On March 23, Jaymes Meyer, aka James Meyer, 47, pleaded guilty to one count of obstruction of justice.  In addition to imposing the prison term, U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina entered a monetary judgment of $4.8 million against Meyer.

According to the plea agreement, in or about 2012, the U.S. Securities and Exchange Commission’s (SEC’s) Division of Enforcement commenced a securities fraud investigation concerning a Ponzi scheme centering on Rex Ventures Group LLC (RVG), a North Carolina-based company for which Preferred Merchants held millions in assets in treasury and trust accounts.  As a result of its investigation, the SEC filed a civil enforcement action against RVG, resulting in an order freezing all of RVG’s assets and appointing a receiver to marshal, manage and distribute remaining RVG assets to impacted investors.  The U.S. Secret Service also obtained a seizure warrant of RVG assets held by Meyer through Preferred Merchants.  Meyer admitted that in August 2012, the SEC informed him of, among other things, the investigation and the freeze order and requested that Meyer freeze any RVG assets in his possession, custody or control. 

According to the plea agreement, in response to this request, Meyer misled the SEC by falsely implying that Preferred Merchants did not exercise dominion or control over any RVG assets when, in fact, Meyer controlled approximately $17.4 million in RVG assets.  Meyer further admitted that he wired approximately $4.8 million from an RVG trust account to a brokerage account under his control after learning about the SEC’s investigation and used that money to purchase homes in Napa and the Turks and Caicos, and took additional measures to conceal his RVG assets.

Meyer also admitted that throughout the pending civil litigation surrounding the RVG scheme, he made fraudulent and misleading statements to the U.S. District Court for the Western District of North Carolina, the SEC and the court-appointed receiver during depositions.

In connection with his plea agreement, Meyer consented to the $4.8 million money judgment entered against him and forfeited the homes that he purchased in the Turks and Caicos and Napa as proceeds of the obstruction of justice offense. 

The U.S. Secret Service and IRS-CI investigated the case.  Assistant U.S. Attorney Jennifer Grus Sugar of the Western District of North Carolina and Trial Attorneys Kevin Lowell and Brian D. Frey of the Criminal Division’s Asset Forfeiture and Money Laundering Section – Bank Integrity Unit prosecuted the case. 

ASHEVILLE, N.C. – U.S. Attorney Jill Westmoreland Rose announced today that Roy Lee Ross, Jr., a.k.a. Daniel Alfred Sullivan, Jr, 64, of Morganton, N.C., is facing multiple federal charges for defrauding the U.S. Department of Veterans Affairs (the VA) by receiving veteran benefits based on fraudulent service-connected disabilities. 

Kim Lampkins, Special Agent in Charge of the Mid-Atlantic Field Office, Washington, D.C., of the U.S. Department of Veterans Affairs, Office of Inspector General (VA-OIG), joins U.S. Attorney Rose in making today’s announcement.

According to allegations contained in the federal indictment, Ross enlisted in the United States Army (the Army) in September 1973 under his true name.  While in the Army, the defendant was stationed in the United States and in West Germany, but never served in Vietnam or Korea, was not in the Special Forces, and never sustained any service-connected injuries.  The indictment alleges that while stationed in Hawaii in 1978, the defendant was determined to be Absent Without Leave (AWOL), and a “Deserter Verification” was issued for him.  Ross was later apprehended and eventually requested to be discharged rather than undergo a court-martial.  Ross’s official Department of Defense form known as “DD Form 214” or “Report of Separation,” indicates that the defendant was discharged “Under Conditions Other Than Honorable.”

According to allegations contained in the indictment, at least by June 2007, Ross began to falsely represent himself to the Charles George VA Medical Center (the VAMC) in Asheville, as a U.S. Army veteran named “Daniel Alfred Sullivan, Jr.”  The indictment alleges that the defendant claimed that he had served in the Special Forces, that he had been wounded in combat, and that he had been honorably discharged from the Army.  The indictment further alleges that Ross claimed he was suffering from nightmares caused by his wartime service and his combat-related injuries.  As a result of his misrepresentations, in 2007, Ross was diagnosed with suffering from service related Post Traumatic Stress Disorder (PTSD) and began receiving health benefits from the VA. 

The indictment alleges that in 2012, based on the PTSD diagnosis and other multiple false statements regarding his military service, including his fictitious injuries, honors and medals received, Ross filed for, and was granted, disability-based compensation at a rate of 60%, he was given a retroactive lump sum of $18,349 and began receiving a monthly tax-free compensation of $1,026.  Then, in 2014, the defendant filed a second claim for “increased evaluation” seeking additional disability-based compensation.  The indictment alleges that Ross, still using the name Sullivan, claimed he had been shot in the neck during combat, and that he was suffering from physical pain due to his service-connected injury.  As a result of Ross’s false statements and accounts, his disability rating was increased, reflecting an increase in his monthly tax-free compensation to $1,743.48.  Then in 2015, still falsely claiming to be Daniel Sullivan, the defendant filed a third claim for “increased evaluation,” claiming that he was suffering from cervical (neck) impairment and pain, due to his injuries while on active duty.   The defendant was eventually granted his claim, and Ross received a $3,490.95 back payment award and his monthly disability payment was increased to $2,906.83.

The indictment alleges that in addition to his disability benefits, the defendant received approximately $57,000 in health care benefits from the VA, to which he was not lawfully entitled.  The defendant also defrauded the VA’s Beneficiary Travel Program, after filing claims for mileage reimbursement in connection with his medical appointments.  Lastly, the indictment alleges that Ross defrauded the Veterans Retraining Assistance Program (VRAP), by receiving $10,218.14 in VRAP payments.  The VRAP program offers up to 12 months of training assistance at a VA-approved educational program and it is available to unemployed veterans who meet certain criteria.  

“The actions of the defendant are contrary to the code of military conduct,” said U.S. Attorney Rose.  “As alleged in the indictment, Ross received thousands of dollars in VA benefits based on lies and a fabricated military career.  Ross allegedly conjured up stories about fighting in multiple wars and receiving the Purple Heart, a distinguished medal presented to our country’s bravest wounded in combat.  Now, the scheme has been exposed and Ross, a disgraced deserter, must answer for his actions in a federal court.”

The federal criminal indictment charges Ross with one count of executing a scheme to defraud a health benefit organization (the VA), which carries a maximum penalty of 10 years in prison and a $250,000 fine; and two counts of making false statements in connection with the delivery of health care benefits by the VA, which carries a maximum penalty of five years in prison and a $250,000 fine. He is also charged with two counts of stealing from the VA, a charge that levies a potential maximum prison term of five years and a $250,000 fine, and one count of a making false claim for travel benefits from the VA, which carries a potential maximum prison term of five years and a $250,000 fine. 

The charges contained in the 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 the VA-OIG for their investigation of the case.  Assistant U.S. Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville is in charge of the prosecution.

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced late yesterday Lowney Yohnagalegi Crow, 33, of Cherokee, N.C. to 87 months in prison on charges of assault resulting in serious bodily injury, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Martin Reidinger also ordered Crow, who is an enrolled member of the Eastern Band of Cherokee Indians, to serve three years under court supervision after he is released from prison.

U.S. Attorney Rose 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 James Dike Sneed of the Cherokee Indian Police Department (CIPD).

“Crow’s then-fiancé suffered unspeakable violence by the man who claimed to love her.  Crow beat his victim as she begged him to stop, telling her his intent was to make sure she never walked again.  Then afterwards, Crow left the victim to suffer in pain overnight, finally agreeing to call for medical help after he instructed her on what to say about the cause of her injuries,” said U.S. Attorney Rose.  “What Crow did to his victim is what millions of others suffer each day: domestic violence and physical, emotional, and psychological abuse at the hands of a loved one.  Domestic violence can happen to anyone regardless of race, age, sexual orientation, ethnicity, religion, or gender, and it affects people of all socioeconomic backgrounds and education.  It can also happen to intimate partners who are married, living together, or dating.  I urge victims of domestic violence to reach out to my office, to law enforcement, to a local organization, or a loved one to alert them to their situation and to report this heinous crime.  Help is available to assist domestic violence victims and to get them on a path to safety,” Rose added.

According to information contained in filed court documents and yesterday’s sentencing hearing, on March 30, 2014, officers with CIPD arrived to Crow’s residence in response to a 911 call regarding an attempted rape and assault at that location. The female victim, who was Crow’s fiancé at the time, told law enforcement officers that another individual had come into Crow’s house and attempted to sexually assault her.  The officers found the alleged perpetrator laying on the floor inside Crow’s residence unconscious and in need of medical attention.

The following day, on March 31, 2014, the victim called 911 again, this time requesting transportation to the hospital because she was hurt.  According to court records, at first, the victim declined to speak in detail to law enforcement and the emergency medical personnel on the scene regarding her severe injuries on her knees and abdomen.  Crow also denied knowing who injured the victim when he was questioned.  Court records show that later the same day and after Crow had left the hospital, the victim told law enforcement that Crow was the person who had assaulted her, after he accused her of being unfaithful to him.  The victim told law enforcement that Crow had used a wooden baseball bat to hit her the night before, that the beating had lasted approximately 45 minutes, and that Crow only stopped hitting her when the bat he was using broke.

According to court records, the morning after the incident, Crow had carried the victim to the bathroom because she was unable to walk and finally agreed to get her medical attention for her injuries.  Crow also told the victim to tell the police that he was not responsible for her injuries.  According to court records, the victim suffered multiple fractures in her legs, hands and other parts of her body.  She also required several surgeries and physical therapy before she could walk again. 

An arrest warrant against Crow was issued in January 2015, following the filing of a federal complaint against him.  Crow was located in California where he was arrested in January 2016.  He pleaded guilty in April 2016 to one count of intentional assault resulting in serious bodily injury.  He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

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

If you or someone you know is the victim of domestic violence, please call the National Domestic Violence Hotline at 1-800-799-SAFE (7233), 1-800-787-3224 (TTY), or visit: http://www.thehotline.org

ASHEVILLE, N.C. – Today, U.S. District Judge Martin Reidinger sentenced a South Carolina man to 75 months in prison on false claims conspiracy and aggravated identity theft charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.   Carmichael Cornilus Hill, 34, of Greenville, S.C. was also ordered to serve three years under court supervision and to pay $219,118 as restitution to the Internal Revenue Service.

Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service; and Michael Rolin, Special Agent in Charge of the United States Secret Service, Charlotte Field Division, join U.S. Attorney Rose in making today’s announcements.

According to court records and today’s sentencing proceedings, Hill provided his two co-conspirators, Senita Birt Dill and Ronald Jeremy Knowles, with fraudulently-obtained personal identification information of individuals which Dill and Knowles used to file more than 1,000 false tax returns resulting in the collection of more than $3.5 million in fraudulent tax refunds.  According to court records, Hill obtained the individuals’ personal information (including names, dates of birth and social security numbers) through a variety of ways, including from an unindicted co-conspirator with access to that information.  Hill then provided that information to Dill and Knowles for use in the tax fraud scheme. Court records indicate that Hill provided approximately 26% of the stolen identifications used to file the fraudulent returns. 

Court records indicate that Dill and Knowles shared with Hill and other co-conspirators the fraudulently-obtained refunds.  Court records also show that, at times, Hill permitted Dill to directly deposit the fraudulent refunds into his bank account.

Hill pleaded guilty in April 2016 to one count of false claims conspiracy and one count of aggravated identity theft.  He will be ordered to report the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

Dill and Knowles, formerly of Mill Spring, N.C., were previously sentenced to 324 and 70 months in prison, respectively, for their involvement in the conspiracy.  Two additional defendants, Yolanda Kitson and Cara Michelle Banks were sentenced to 72 and 70-month prison terms for their participation in the tax fraud scheme.

The investigation was handled by IRS-CI, USPIS, and the U.S. Secret Service. 

Assistant U.S. Attorney Don Gast of U.S. Attorney’s Office in Asheville was in charge of the prosecution.

ASHEVILLE, N.C. – Forrest Dakota Hill, 23, of Easley, South Carolina, was sentenced to federal prison today for 200 months for the 2015 murder of a male victim on federal land, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Martin Reidinger also ordered Hill to serve five years of supervised release upon completion of his prison term. 

U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Steven Kloster, Chief Ranger of the Great Smoky Mountains National Park, and Chief James Dike Sneed of the Cherokee Indian Police Department (CIPD).

According to court filings, plea documents and today’s sentencing hearing, on March 29, 2015, CIPD received a 911 call alerting officers to a stabbing that had taken place inside Oconaluftee Baptist Church, commonly known as the Smokemont Baptist Church, located within the boundaries of the Great Smoky Mountains National Park.  Court records indicate that paramedics responding to the scene determined that the male victim had been stabbed and was deceased.  According to court records, Hill, the victim and another individual drove to the church together, and over the course of their visit, Hill stabbed the victim with a knife during an unprovoked attack, causing the victim’s death.  Following the fatal stabbing, Hill and his companion left the church and returned to Harrah’s Cherokee Casino where they picked up a companion and then departed for another local hotel.

According to court records, the victim was stabbed at least 16 times in the chest, back, neck and elsewhere.  Court records indicate that the victim’s cause of death was “internal hemorrhage due to multiple stab wounds.” 

“It takes a depraved person to kill another human being, but an evil one to carry out the murder inside a religious institution founded upon the belief in the sanctity of human life,” said U.S. Attorney Rose.  “While we can never replace their loved one, we hope that Hill’s lengthy prison term will bring closure to the victim’s family and friends.”

“Today’s sentence ensures that a killer has been taken off our streets.  I want to thank NPS and CIPD for their invaluable assistance with this investigation.  This case is an example of federal and tribal law enforcement working together to bring justice to the citizens of western North Carolina,” said FBI Special Agent in Charge Strong. 

“The National Park Service appreciates the coordination and cooperation of all involved agencies to bring this case to a successful prosecution,” said Chief Ranger Kloster.

Hill pleaded guilty to a second degree murder charge in April 2016.  He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

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

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced today a Transylvania Co. man to 41 months in prison for a federal firearms violation, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Bobie James Gibbens, 27, of Penrose, N.C. was also ordered to serve three years under supervised release upon completion of his prison term. 

U.S. Attorney Rose is joined in making today’s announcement by C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, Sheriff David A. Mahoney of the Transylvania County Sheriff’s Office and Chief John Phillip Harris, Jr. of the Brevard Police Department.

“Gibbens is a convicted felon who illegally possessed a loaded sawed-off shotgun and ammunition in a house occupied by young children.  Unlawful gun possession is a serious offense and my office is committed to working closely with our law enforcement partners to identify and prosecute those who violate federal firearms laws,” said U.S. Attorney Rose.

“This investigation is another example of ATF working with our law enforcement partners to enforce the federal firearms laws and to keep our communities safe,” said ATF Special Agent in Charge Hyman.

According to filed court documents and statements made in court, on January 14, 2016, officers from the Transylvania County Narcotics Task Force executed a state search warrant at Gibbens’ residence.  Court records show that while executing the search warrant, law enforcement recovered from the residence a Harrington & Richardson Topper Junior model 88 .410 gauge shotgun which had a sawed-off barrel and various caliber ammunitions, as well as narcotics and other drug paraphernalia.  Court records show that Gibbens has multiple prior state offenses, including felony possession of stolen goods, breaking and entering, and sale/delivery of a controlled substance, and he is prohibited from possessing a firearm.   Gibbens pleaded guilty in May 2016 to one count of possession of a firearm by a convicted felon. 

Gibbens is currently in federal custody and he 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, the Transylvania County Sheriff’s Office and the Brevard Police Department. Assistant U.S. Attorney Don Gast of the U.S. Attorney’s Office in Asheville prosecuted the case.

ASHEVILLE, N.C. – Erik Corbin Peterson, 47, of Black Mountain, N.C. was sentenced today by U.S. District Judge Martin Reidinger to 75 months in prison on child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Peterson was ordered to serve a lifetime of supervised release and to register as a sex offender.  Peterson was also ordered to pay $17,000 in restitution to known victims of child pornography.

Sheriff Van Duncan of the Buncombe County Sheriff’s Office joins U.S. Attorney Rose in making today’s announcement.

According to court documents and information introduced at the sentencing hearing, in December 2013, law enforcement received a tip that an online user was using his e-mail to send child pornography via the Internet.  Law enforcement determined that the e-mail account belonged to Peterson, who used it frequently to send to and receive from other unknown e-mail users images depicting the sexual abuse of children.  In May 2014, law enforcement executed a search warrant at Peterson’s residence seizing a laptop computer, a desktop computer and an external hard drive.  Forensic analyses of those devices revealed that Peterson possessed more than 1,000 images of child pornography, some of which depicted prepubescent minors engaging in sadistic and masochistic conduct.  

In making today’s announcement, U.S. Attorney Rose said, “Peterson traded online images depicting the horrendous sexual exploitation of children.  Then, he had the audacity to describe his depraved conduct as ‘a kind of game that he and some of his friends started.’  The sexual exploitation of innocent and vulnerable victims is not a game. It is a crime.  And it is the type of criminal activity that my office takes very seriously.  We hope today’s sentence delivers a clear message that possessing, receiving and sharing child pornography will land you in jail for a long time.”

Peterson pleaded guilty in April 2016 to one count of possession of child pornography.  He 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 Buncombe County Sheriff’s Office for their investigation of 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

STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees handed down prison terms ranging from as much 235 to 51 months to 15 methamphetamine traffickers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

The 15 defendants sentenced today and yesterday in U.S. District Court in Statesville are:

• Gregory Ryan Ellis, 39, of Jefferson, N.C. was sentenced to 235 months, followed by 5 years of supervised release. (5:15-cr-68)

• Todd Phillip Radar, 39, of Tonawanda, New York, was sentenced to 235 months, followed by 5 years of supervised release. (5:15-cr-45)

• Teofilo Salinas Cervin, 44, of Mexico, was sentenced to 210 months, followed by 5 years of supervised release. (5:16-cr-20)

• William Mitchell Lee Pope, 36, of Connelly Springs, N.C., was sentenced to 146 months, followed by 5 years of supervised release. (5:15-cr-44)

• Donald Ray Newton, 34, of Byron, Georgia, was sentenced to 131 months, followed by 5 years of supervised release. (5:15-cr-57)

• Eric Germaine Summers, 29, of Statesville, was sentenced to 121 months, followed by 5 years of supervised release. (5:15-cr-73)

• Adam Houston Stokes, 29, of Sherman Oaks, California, was sentenced to 120 months, followed by 5 years of supervised release. (5:15-cr-78)

• Codey Wayne Michaels, 25, of Valdese, N.C., was sentenced to 120 months, followed by 5 years of supervised release. (5:15-cr-76)

• Anthony Gwyn Lackey, 39, of North Wilkesboro, N.C., was sentenced to 92 months, followed by 5 years of supervised release. (5:15-cr-68)

• Ryan Lewis Craig, 33, of Conover, N.C., was sentenced to 83 months, followed by 4 years of supervised release. (5:15-cr-46)

• Blake Adam Masters, 27, of Clarkesville, Georgia, was sentenced to 78 months, followed by 4 years of supervised release. (5:15-cr-50)

• Lindsey Jordan Price, 22, of Taylorsville, N.C., was sentenced to 63 months, followed by 3 years of supervised release. (5:15-cr-44)

• Jennifer Irene Brown, 35, of Mooresville, N.C., was sentenced to 63 months, followed by 3 years of supervised release. (5:15-cr-50)

• Xavier Watson, 25, of Virginia Beach, Virginia, was sentenced to 51 months, followed by 3 years of supervised release. (5:13-cr-25

These prosecutions stem from an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) investigation led by ICE’s Homeland Security Investigations (HSI), and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), with the assistance of the North Carolina State Bureau of Investigation, North Carolina State Highway Patrol, Alexander County Sheriff’s Office, Alleghany County Sheriff’s Office, Ashe County Sheriff’s Office, Boone Police Department, Caldwell County Sheriff’s Office, Catawba County Sheriff’s Office, Hickory Police Department, Iredell County Sheriff’s Office, Lenoir Police Department, Lincoln County Sheriff’s Office, Mooresville Police Department, Pineville Police Department, Statesville Police Department, Burke County Task Force, and a host of law enforcement agencies throughout North Carolina, Texas, Georgia, and Tennessee.        

To date, more than 90 individuals have been convicted as a result of the long term investigation.  Court records show that the drug trafficking organizations involved have trafficked methamphetamine worth millions of dollars.  Over the course of the investigation, law enforcement seized multiple kilograms of crystal methamphetamine, $100,000 in U.S. currency, and dozens of firearms. 

OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.

In making today’s announcement U.S. Attorney Rose thanked all the law enforcement agencies involved for their investigative efforts.  Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.

CHARLOTTE, N.C. B Jucorey Deonte Pruitt, aka Corey Deonte Pruitt, 25, of Charlotte, appeared in court today and pleaded guilty to a perjury charge for lying under oath during a federal trial, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. Magistrate Judge David S. Cayer presided Pruitt’s plea hearing.  

U.S. Attorney Rose is joined in making today’s announcement by Daniel R. Salter, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Chief Kerr Putney of the Charlotte Mecklenburg Police Department; Chief J. Bryan Gilliard of the Monroe Police Department; and Sheriff Eddie Cathey of the Union County Sheriff’s Office.

According to filed documents and statements made in court, Pruitt committed perjury during his testimony at the criminal trial of DeMorius Lamar Anderson (3:11-cr-3).  Anderson was on trial on multiple federal charges including drug conspiracy, Hobbs Act Robbery and firearm violations.  According to court records, Pruitt was a witness for the government and had agreed to testify regarding his knowledge of Anderson’s involvement in the drug conspiracy and other material information against Anderson. 

According to court records, on August 9, 2012, while under oath and in an effort to aid Anderson, Pruitt denied knowledge of Anderson’s participation in the drug conspiracy.  Pruitt’s assertions under oath were contradictory to prior statements he had made to law enforcement.  During his testimony, Pruitt stated that he had previously lied to law enforcement regarding Anderson’s criminal activity, including his role in the drug conspiracy.  Court records indicate that later that same evening, on jail house recordings, Pruitt admitted he lied to federal agents at trial.  Anderson was eventually convicted by a jury and was sentenced to more than 37 years in prison.

“Pruitt chose to lie on the witness stand to protect one of his criminal associates.  Despite Pruitt’s false testimony, the defendant was convicted by a jury and is serving a lengthy prison term.  Now it’s Pruitt’s turn to sit in the defendant’s chair for lying under oath,” said U.S. Attorney Rose.  “Perjury tarnishes our justice system and jeopardizes the integrity of judicial proceedings.  Liars do not belong in the courtroom,” Rose added.

Pruitt is currently in federal custody.  The perjury charge carries a maximum prison term of five years and a $250,000 fine.  A sentencing date has not been set yet.

The investigation was handled DEA, CMPD, Monroe PD and the Union County Sheriff’s Office. The prosecution is being handled by the Assistant U.S. Attorney Sanjeev Bhasker of the U.S. Attorney’s Office in Charlotte.

STATESVLLE, N.C. – Joshua Lynn Cook, 32, of Hiddenite, N.C. was sentenced yesterday by U.S. District Judge Richard L. Voorhees to 89 months in prison on child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Cook was also ordered to serve a lifetime of supervised release and to register as a sex offender.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division and Sheriff Chris Bowman of the Alexander County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.

According to court documents and information introduced at the sentencing hearing, on April 14, 2014, law enforcement became aware that Cook was downloading and sharing child pornography on the Internet.  On the same date, Cook shared child pornography with an undercover agent at least three times using a peer-to-peer network.  During subsequent searches, law enforcement seized Cook’s electronic devices, including a computer and a cellphone.  Forensic analyses of those devices revealed that Cook possessed more than 6,000 images and 427 videos of child pornography, some of which depicted prepubescent minors engaging in sadistic and masochistic or other violent conduct.   Some of the images and videos contained identified victims of 123 different series of child pornography produced in various places, such as Washington, Germany and France.    

Cook pleaded guilty in January 2016 to one count of transportation, one count of receipt and one count of possession of child pornography.  He 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 and the Alexander County Sheriff’s Office for their investigation of this case. Assistant U.S. Attorney Cortney Randall of the U.S. Attorney’s Office in Charlotte was in charge of the prosecution.

This case was brought as part of Project Safe Childhood, a nationwide initiative 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

CHARLOTTE, N.C. –   U.S. Attorney Jill Westmoreland Rose announced that a consent motion for entry of order and settlement agreement were filed in federal court today, involving the sale of a property located at 3300 Queen City Drive, Charlotte, N.C., formerly known as Red Roof Inn. 

In September 2015, the United States filed a civil complaint against the former Red Roof Inn property under federal forfeiture laws, alleging that the property had been used over several years to commit or to facilitate the commission of federal violations of law, including sex trafficking of minors, the transportation of minors for criminal sexual activity and felony drug trafficking crimes. 

Federal forfeiture laws allow the United States to seek the forfeiture of property used to commit or facilitate the commission of certain offenses, in instances where the property owners have failed to take reasonable steps to reduce such crime.  The complaint in this case alleged that the property owners, or their managing agents, had been repeatedly advised by the Charlotte Mecklenburg Police Department of the ongoing criminal activity at the motel and advised of specific measures that should be put in place to reduce criminal activity.  The complaint further alleged that despite such notice and advisements, criminal activity at the motel continued.

Today, U.S. Attorney Rose announced that Shreeji Hospitality Queen City, LLC, (Shreeji), the former owner of the Red Roof Inn, has reached an agreement with the United States whereby the former Red Roof Inn property has been sold to a third party not related to the previous owner.  This third party has also signed the federal settlement agreement and agreed, among other things, to invest $300,000 in the property to make improvements; to seek affiliation with a national chain hotel; and to impose specific rules and procedures to reduce crime to include: 1) installing a 24-hour video surveillance security system; and 2) ensuring the property does not rent rooms by the hour.  Also pursuant to that agreement, and without admitting liability or guilt, Shreeji has agreed that $175,000 of the proceeds from the sale of the property will be paid to the United States.  Thereafter, the United States will dismiss the civil case.

In making today’s announcement, U.S. Attorney Rose said that the United States may seek, in civil actions, the forfeiture of motels and other commercial properties where high levels of criminal activity occur and where the owners of such properties fail to take reasonable steps to reduce crime at such locations.

U.S. Attorney Rose also commended the Federal Bureau of Investigation, the U.S. Marshals Service and the Charlotte Mecklenburg Police Department for collaborating to achieve today’s outcome.

Copies of the civil complaint, the settlement agreement and related filed documents may be found at U.S. v. Real Property Located at 3300 Queen City Drive, Charlotte, North Carolina, a/k/a Red Roof Inn, 3:15-CV-429.

CHARLOTTE, N.C. – Wayne C. Parker, Jr., the former headmaster of a Huntersville area parochial school is facing federal charges for embezzling nearly $9 million from the school and its affiliated church, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  A criminal bill of information was filed (today) in federal court, charging Parker with one count of wire fraud. 

U.S. Attorney Rose 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 Cleveland L. Spruill of the Huntersville Police Department.

“For more than a decade, church members, parents, teachers, students and generous donors put their trust in Parker t lead their school and fulfill its goals and mission.  Instead, Parker misused his access to the school and church’s finances, treating their bank accounts as an endless cookie jar, dipping in repeatedly to fund his lavish lifestyle.  Parker then went to great lengths to conceal his fraud and to prevent law enforcement and others from uncovering the truth,” said U.S. Attorney Rose.  “If Parker’s moral compass was not enough to stop him from breaking the law and ripping off those who put their faith in him, a good dose of American justice will.”

“It takes an especially ruthless person to steal money intended to educate children and promote religion and use it to bankroll an extravagant lifestyle you’d otherwise never be able to afford.  Wayne Parker forced pay cuts for teachers during the great recession to fund building a million dollar lake home, bought multiple properties, a boat, even gold, all using the funds that rightfully belonged to a school and its affiliated church.  The FBI will work tirelessly to uncover and expose these types of crimes, no matter what lengths offenders take to try and hide their fraudulent schemes,” said FBI’s Special Agent in Charge Strong.       

 “I am pleased that we were able to work with the FBI to put an end to more than a decade of thievery by Parker and that this investigation has resulted in charges being brought against him,” said Huntersville Police Chief Spruill.  “His selfish actions violated the faith and trust of the church, the parents, the students and the community that he was entrusted with serving.” 

According to allegations contained in filed court documents, from about January 2000 to in or about August 2014, Parker executed a scheme to defraud his employer, a parochial school (School) and its affiliated church (Church), both located in Huntersville, of at least $9 million, by embezzling Church and School bank funds to pay for his personal expenses and the personal expenses of an unnamed co-conspirator.  

Parker, 59, of Mooresville, N.C., joined the Church in 1991.  Court documents allege that sometime after joining the Church, Parker became volunteer treasurer, giving him access to and control over the Church bank accounts.  In 1996, Parker was hired as Headmaster of the School, which was founded in 1994 by members of the Church.  As headmaster, Parker was responsible for the administration of the School and its finances and had control over its bank accounts.

As alleged in filed court documents, beginning in at least 2000, Parker began stealing money from the Church and School and used it to pay for personal expenses.  For example, in 2000, when he needed extra money to build a house for his family in Mooresville, Parker stole approximately $100,000 from the School and Church to complete the project.  Over the next 14 years, court documents allege that Parker used School and Church funds to pay for numerous expenses, including, among other things, the purchase of multiple plots of real estate; the building of two homes, one costing over a million dollars; vacations around the world; luxury vehicles; luxury dining; Carolina Panthers preferred seats licenses; credit card bills; a boat and jet skis; gold and silver coins; and gifts for family and friends. 

According to court records, as part of the scheme to siphon School and Church funds, and to hide his theft, Parker opened approximately 29 checking accounts, obtained 26 credit cards, seven loans, and created nine limited liability companies.

As alleged in filed court documents, in addition to embezzling funds for his own use, Parker also embezzled School and Church funds at the direction of an unnamed co-conspirator.  Court documents allege that beginning in 2000, Parker issued additional paychecks to the co-conspirator above and beyond what he was entitled to by the terms of the co-conspirator’s employment.  As the scheme progressed overtime, in addition to extra salary checks, Parker used Church and School funds to pay for the co-conspirator’s personal expenses, including college tuition, medical bills, taxes, cars, and credit card bills.

As part of his scheme, and to hide his embezzlement activities from the School’s governing board, Parker created a false, fraudulent and fictitious document from an accounting firm purporting to be the results of an audit, court documents allege.  The document falsely stated that the School had been through a full audit and received an unqualified opinion letter giving the School a clean financial bill of health.

According to allegations contained in court documents, in the summer of 2014, after the Church leadership became suspicious of Parker’s activities and called for an independent audit, Parker intentionally stole and destroyed school financial records in an attempt to prevent law enforcement and others from discovering the nature and extent of his embezzlement activities. Additionally, Parker sold one of the houses that he had constructed with embezzled funds to one of his children, for a significantly undervalued price, to hide his crimes and prevent law enforcement from seizing that property.  In total Parker’s scheme resulted in a loss of at least $9 million dollars to the Church and School.

A plea agreement was also filed today, and Parker is expected to appear before a U.S. Magistrate Judge to formally enter his guilty plea when the court schedules the plea hearing.  The wire fraud charge carries maximum prison term of 20 years and a $250,000 fine.  As part of his plea agreement, Parker has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. 

The investigation was handled by the FBI and the Huntersville Police Department.  The prosecution for the government is being handled by Assistant United States Attorney Kevin Zolot of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced that a federal jury sitting in Charlotte retuned a guilty verdict today against the former CEO of ZeekRewards for operating a $900 million Internet Ponzi scheme.  Following a three-week trial, the jury convicted Burks, 69, of Lexington, N.C., of wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy. 

Michael Rolin, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join U.S. Attorney Rose in making today’s announcement.

“For nearly two years, Burks used deceit and dishonesty to engineer an extensive Ponzi scheme that amassed millions of dollars from thousands of victims, many in the Western District of North Carolina. This massive scam is one of the largest in breadth and scope ever prosecuted by this office.  I commend the United States Secret Service and the IRS agents who worked closely with our prosecutors to unravel Burk’s fraud and to obtain a conviction against the mastermind of a scheme that has left so many victims with substantial losses.  I want to remind the public to steer clear of ‘get rich’ schemes and to follow the old adage that if it looks too good to be true, it likely is,” said U.S. Attorney Rose. 

“Today’s verdict is the result of a joint investigative effort and it is representative of the commitment the U.S. Secret Service and our partners have towards ensuring those intent on defrauding the citizens of North Carolina and the United States are held accountable,” said Special Agent in Charge Rolin.  

According to filed court documents, court proceedings, evidence introduced at trial and witness testimony:

From January 2010 through August 2012, Paul Burks was the owner of Rex Venture Group, LLC (RVG), through which he owned and operated Zeekler, a sham Internet-based penny auction company, and its purported advertising division, ZeekRewards (collectively “Zeek”).   Burks and his conspirators induced more than 900,000 victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from its penny auctions, and that the public could share in such profits through investment in ZeekRewards. Burks and his conspirators, including Zeek’s former Chief Operating Officer Dawn Wright Olivares and her step-son and Zeek’s Senior Technology Officer Daniel C. Olivares, claimed at one point that investors would be guaranteed a 125% return on their investment.

Burks and his conspirators represented that victim-investors in ZeekRewards could participate in the Retail Profit Pool (RPP), which supposedly allowed victims collectively to share 50% of Zeek’s daily net profits.  Burks and his conspirators did not keep books and records needed to calculate such daily figures.  Instead, Burks simply made up the daily “profit” numbers.  Contrary to the conspirators’ claims, the true revenue from the scheme did not come from the penny auction’s “massive profits.”  Instead, approximately 98% of all incoming funds came from victim-investors, which were then used to make Ponzi-style payments to earlier victim investors.

In addition to promising massive returns on investments, Burks and his conspirators used a number of ways to promote Zeek to current and potential investors.  For example, the conspirators hosted weekly conference calls and leadership calls, where participants could call in listen to Burks and others make false representations intended to encourage victim-investors to continue to invest money and to recruit others to invest in Zeek.  Burks also organized and attended “Red Carpet Events,” where victim investors came to hear details of the scheme in person.  During these events, Burks and his conspirators made false representations about the massive retail profits generated by Zeek.  They also used electronic and print media, including websites, emails and journals, to make false and misleading statements about the success of Zeekler to recruit victim investors.

As the Ponzi scheme grew in size and scope it became unsustainable and it eventually began to unravel as the outstanding liability resulting from the bogus 125% return on investment continued to rise beyond control.  By August 2012, Burks and his conspirators fraudulently represented to the collective victims that their investments were worth nearly $3 billion, but had no accurate books and records to even determine how much cash on hand was available to pay such liability.  Contrary to representations made to victim investors, at that time, Burks and his conspirators had only $340 million available to pay out investors.  Over the course of the scheme, Burks diverted approximately $10.1 million to himself. 

Burks also failed to file corporate tax returns or to make corporate tax payments for his companies, among other things.  In addition, for tax year 2011, Burks issued fraudulent IRS Forms 1099s, causing victim-investors to file inaccurate tax returns for phantom income they never actually received.

Burks will remain free on bond.  A sentencing date for the defendant has not been set yet.  The wire and mail fraud conspiracy charge, the mail fraud charge and wire fraud charge each carry a maximum prison term of 20 years and a $250,000 fine.  The tax fraud conspiracy charge carries a maximum prison term of five years and a $250,000 fine.  

Burks’ co-conspirators, Dawn Wright Olivares, Zeek’s Chief Operating Officer, and her step-son and Zeek’s Senior Technology Officer, Daniel C. Olivares, pleaded guilty in December 2013 to investment fraud conspiracy.  Dawn Wright Olivares also pleaded guilty to tax fraud conspiracy.  Both defendants currently await sentencing.

In making today’s announcement, U.S. Attorney Rose thanked the U.S. Secret Service and IRS-CI for investigating the case, and the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance with the investigation.   

The prosecution is handled by Assistant United States Attorneys Jenny Grus Sugar and Corey Ellis of the U.S. Attorney’s Office in Charlotte.

Additional information and updated court filings about this and related cases filings can be accessed at the district’s website: http://www.justice.gov/usao/ncw/ncwvwa.html.