Western District of North Carolina

CHARLOTTE, N.C. – Three drug traffickers were sentenced to 10 years or more, for their involvement in two separate Organized Crime Drug Enforcement Task Force (OCDETF) investigations, 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); Nick Annan, Special Agent in Charge of ICE’s Homeland Security Investigations (HIS) in Atlanta and the Carolinas; Chief Robert C. Helton of the Gastonia Police Department (GPD); and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD).

Those sentenced by U.S. District Judge Robert J. Conrad, Jr. are:

• Pablo Munoz, 32, of Asheboro, N.C. was sentenced to 120 months, followed by five years of supervised release, for trafficking between 15 and 50 kilograms of cocaine.

• Don C. Hill, 41, of Gastonia, was sentenced to 132 months, followed by five years of supervised release, for trafficking between 10 and 30 ounces of crack cocaine.

• Roberto Mendoza, 28, of South El Monte, California, was sentenced to 121 months, followed by five years of supervised release, for trafficking one to three tons of marijuana.

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.

Munoz and Hill are part of an OCDETF investigation codenamed “Fox Run,” which has resulted in the conviction of more than 40 defendants on cocaine and crack cocaine trafficking, money laundering, and firearms charges.  The investigation is led by the FBI, HSI, and GPD, with assistance from the North Carolina State Bureau of Investigation, CMPD, Randolph County Sheriff’s Office, Asheboro Police Department, and North Carolina State Highway Patrol. 

Mendoza is part of OCDETF “Goldilocks,” which has resulted in the conviction of more than 65 defendants on marijuana trafficking, money laundering, and firearms charges, which is being led by HSI and CMPD, with assistance from the United States Marshals Service, Pineville Police Department, Cornelius Police Department, Mooresville Police Department, North Carolina Department of Alcohol Law Enforcement, and Los Angeles Sheriff’s Office.

The ongoing investigation and prosecution for the government in both OCDETF investigations is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – United States Attorney Jill Westmoreland Rose announced that during an early morning round-up FBI agents and Charlotte-Mecklenburg police officers arrested 19 individuals charged with federal and state drug offenses.  A federal criminal indictment returned on January 20, 2016, and unsealed today, names 20 defendants charged with multiple federal drug related offenses.  Eight others will be prosecuted in state court, bringing the total number of those charged in connection with the federal drug initiative to 28.   

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

The six-month joint federal and local investigation aimed at reducing drug distribution and drug related criminal activity and increasing community safety in Mecklenburg County was focused on the Belmont neighborhood in Charlotte.

 “This morning’s arrests are the result of a joint law enforcement investigation targeting an area of Charlotte that has been plagued by drug trafficking and drug-related criminal activity.  I want to thank our law enforcement partners for working together in this initiative to identify and remove the individuals who continue to pose a threat to our community,” said U.S. Attorney Rose in making today’s announcement.  “Also, let this be a warning, that as we work with our law enforcement partners to combat drug activity and violent crime throughout Mecklenburg County, we are keenly focused on specific neighborhoods where crime statistics are significant.  To the law abiding citizens who reside in these areas, we will continue to work hard to restore your neighborhoods as places where you can live and prosper.   To those who engage in criminal activity, our message is clear:  we will not sit on the sidelines while you continue to pollute our neighborhoods with drugs and crime,” Rose added.  

“The danger and chaos that drugs create in our local communities eats away at the ability of our citizens to live their lives peacefully.  These arrests are an outstanding example of what federal and local law enforcement can accomplish when we work together to target the individuals who threaten the safety and stability of our neighborhood streets,” said FBI’s SAC Strong.    

“The Charlotte-Mecklenburg Police Department will continue our relentless pursuit of community safety. We remain focused in our efforts and continue to work with our partner agencies to ensure neighborhoods like Belmont remain safe,” said Chief Putney.

The 20 defendants named in the federal indictment are each charged with conspiracy to distribute crack cocaine and related drug offenses.  They are:

• Emmanuel Gooding, 39, of Charlotte. (not arrested yet)

• Daniel Simpson, 32, of Charlotte.  (arrested)

• James Dixon, 48, of Charlotte. (arrested)

• Vinton Teeter, 35, of Charlotte. (arrested)

• Ricki Foster, 35, of Charlotte. (arrested)

• Lamont Davis, 39, of Charlotte. (arrested)

• Johnny Byrd, 38 of Charlotte. (arrested)

• Jasper Toney, Jr. 24, of Charlotte. (arrested)

• Miguel Mantic Perry, 36, of Charlotte. (not arrested yet)

• Tony William Robinson, 36, of Charlotte. (arrested)

• Derek Murphy, 41, of Charlotte. (arrested)

• Donald Jenkins, 62, of Charlotte. (arrested)

• Shawnda Craig-Houston, 41, of Charlotte. (arrested)

• Rodney Scott Smith, 45, of Charlotte. (arrested)

• Thomas Pearce, 26, of Charlotte. (not arrested yet)

•  Mckinza Feaster, 26, of Charlotte. (previously in federal custody)

• Andrea Hines, 45, of Charlotte. (arrested)

• Quanard Harrison, 38, of Charlotte. (arrested)

• Kenneth Wallace, 23, of Charlotte. (arrested)

• James Lamont Walker, 27 of Charlotte (arrested)

Sixteen of the 20 federal defendants were arrested this morning and one was already in federal custody.  Federal arrest warrants have been issued against Gooding, Perry and Pearce.

Today’s initiative netted eight additional defendants facing state drug charges.  The three arrested earlier today are Cleveland Little, Michael Young, Rochilla Harrell.  Three more individuals, Dontaie Patton, Tanisha Harris, and Charles Vaughn, Jr. are still wanted by law enforcement.  Brandon Monk and Rysuon Norris, were already in state custody on separate charges.

“My office is grateful for the strong working relationship we enjoy with the U.S. Attorney’s Office, the FBI and CMPD as we all work together to keep our communities safe from illegal drugs and criminal activity associated with those drugs,” said Andrew Murray, District Attorney for Mecklenburg County, whose office will be handling the prosecution of those charged with state offenses.

In making today’s announcement, U.S. Attorney Rose thanked District Attorney Murray, for his office’s continued collaboration and support.

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

The investigation was conducted by the FBI and CMPD.  U.S. Attorney Rose also thanked the U.S. Marshals Service, Gastonia Police Department and the Union County Sheriff’s Office for their assistance with this investigation. 

Assistant U.S. Attorneys William Bozin and Lambert Guinn of the U.S. Attorney’s Office in Charlotte are leading the prosecution.

 

ASHEVILLE, N.C. – The operator of two companies located in Franklin, N.C. pleaded guilty on Monday, January 25, 2016, to fraud by commodities pool operator and concealment of money laundering charges, for defrauding his investors of approximately $2.5 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. 

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

According to the criminal bill of information filed on January 12, 2016, and related plea documents, beginning in at least August 2011, Barry Carlton Taylor, 64, of Franklin, N.C., solicited investment funds from at least 18 victims totaling approximately $2.5 million.  Taylor operated two limited liability companies in Franklin, N.C., “OTC Investments, LLC” (OTC) and “Forex Currency Trade Advisors, LLC” (FCTA).  According to filed documents, Taylor misrepresented to his investor victims that he was an expert in the foreign currency exchange market (FOREX) and that their investments would be pooled into trading accounts which he would manage and use to invest in FOREX.  Taylor also falsely told his victims that he had created a computer software system that could track the FOREX market, which enabled him to make investments that generated very high rates of return, as much as 2.5% per month. 

According to court records, even though Taylor opened and maintained FOREX trading accounts in the names of his two companies neither company was registered as a commodity pool operator.  Court records also show that Taylor collected money from the individual victim investors and deposited the funds into these trading accounts, but he then withdrew more than half of the victims’ money and lost the rest due to trading losses, fees and commissions.  According to court records, by April 2015 there was very little or no investor funds remaining in the trading accounts Taylor controlled. 

According to court records, Taylor concealed the losses from his investors by sending the victims false monthly statements that fraudulently represented that the investors’ principal was intact and that they were realizing profits as promised.  Court records also indicate that Taylor used money from other principal investors to make Ponzi-style payments to investors who had asked Taylor to withdraw their profits on their promised returns.  Taylor also convinced some of the investors to reinvest their “commissions” rather than accepting payments.  

In furtherance of the fraudulent scheme, court records show that Taylor used a number of lies to further induce investors and to conceal the fraud.  For example, in January 2015, Taylor sent his customers fraudulent emails claiming that he had halted FOREX trading due to events involving the Swiss National bank.  In another example, court records show that Taylor created a fictitious entity and a fictitious person in order to send lulling emails to calm his investors, and later lied to victims telling them he was considering taking legal action against this fictitious individual who was supposedly responsible for their trading losses. 

Contrary to promises made to his victim investors, Taylor diverted over half a million dollars of the victims’ investment funds and used them to cover personal expense, such as restaurants, entertainment and shopping, among others.

Taylor was released on bond following his guilty plea. The fraud by commodities pool operator charge carries a maximum prison term of 10 years and a $1 million fine.  The concealment money laundering charge carries a maximum prison term of 20 years and a $500,000 fine.  A sentencing date for the defendant has not been set.

The case is being investigated FBI.  In making this announcement, U.S. Attorney Rose also thanked the U.S. Commodities Futures Trading Commission for their invaluable assistance in this investigation. 

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

CHARLOTTE, N.C. – Two men and a woman involved in a network of conspirators that targeted Medicaid by submitting fraudulent reimbursement claims have been sentenced to prison on health care fraud conspiracy charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Chief U.S. District Judge Frank Whitney sentenced today Alexander Bass, 42, and Torrey Darnell Moton, 45, both of Fuquay-Varina, N.C., to 32 and 25 months in prison, respectively, three years of supervised release and ordered both defendants to pay $370,372.37 as restitution to Medicaid.

On January 13, 2016, a third conspirator, LaChanda Clotiel Parks, 40, of Charlotte, was ordered to serve 28 months in prison followed by three years of supervised release and to pay  $352,565.69 in restitution for her 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 today’s announcement.

According to information in filed court documents and court proceedings, at various times between October 2012 and August 2013, Bass, Moton and Parks were part of a health care fraud ring that defrauded Medicaid by filing false claims for mental and behavioral health services to beneficiaries which were never actually provided.  According to court records, the network of conspirators executed the fraud through a number of mental and behavioral health services companies, including “United Rehabilitation Services” (URS) in Erwin, N.C., which was owned and operated by Bass and Moton. 

Court records show that Bass and Moton agreed to pay $4,000 per month to Cynthia Harlan, who is currently facing federal health care fraud charges, in exchange for coordinating the filing of fraudulent claims to Medicaid on behalf of URS.  At the direction of Harlan, Bass and Moton also paid another conspirator, who operated as the scheme’s patient-recruiter, to collect Medicaid beneficiary numbers which were then used to file the false claims.  Court records indicate that between January and July 2013, Harlan, Bass and Moton filed over $1.1 million in fraudulent claims, and Medicaid paid out approximately $370,000 directly to Bass and Moton.

According to court filings, Parks was responsible for generating some of the fake paperwork used to support the fraudulent claims, including fake intake sessions, fake clinical assessments and fabricated therapy notes.   

The three defendants will be ordered to report to the Federal Bureau of Prisons to begin serving their sentences upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The investigation was handled by the FBI with assistance from the North Carolina Medicaid Investigations Division. Assistant U.S. Attorney Kelli Ferry is in charge of the prosecution.

The investigation is the work of the Western District’s joint Health Care Fraud Task Force.  The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing  of  all  whistle  blower  complaints,  and  the  creation  of  investigative  teams  so  that individual agencies may focus their unique areas of expertise on investigations.  The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

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

 

CHARLOTTE, N.C. – The former Treasurer of a Charlotte area non-profit organization was sentenced on Tuesday, January 19, 2016, to 24 months in prison for stealing more than $344,262 from his employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Floyd Kevan Weaver, 53, of Charlotte, was also sentenced to two years of supervised release and was ordered to pay $344,262.71 as restitution.  Weaver pleaded guilty to one count of uttering counterfeit and forged securities in October 2015. 

U.S. Attorney Rose is joined in making this announcement by Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service.

According to filed court documents and court proceedings, from 2000 to 2013, Weaver was employed by a Charlotte-area non-profit organization.  As the non-profit’s elected Treasurer, Weaver was responsible for the organization’s financial affairs and acted as custodian of its funds.  Weaver previously admitted that from 2008 to 2013, he engaged in a scheme to defraud his employer by fraudulently diverting the organization’s funds for his personal benefit.  According to court records and the sentencing hearing, Weaver forged the name of one of the non-profit’s officers on the organization’s bank checks and deposited the forged checks into his own bank account.  He concealed the fraud by logging the stolen funds as travel expenses, mileage reimbursement, office supplies and postage.  According to court records, Weaver forged approximately 116 checks totaling more than $326,545, and also used the non-profit’s debit card to steal more than $17,717 for his personal use.  Court documents show that Weaver used the stolen money to purchase jewelry and a car, among other things.

Weaver will be ordered to report the Federal Bureau of Prisons to begin serving his sentence.  All federal sentences are served without the possibility of parole. 

The investigation was handled by the USPIS.  The prosecution for the government is being handled by Assistant United States Attorney Jenny Sugar of the U.S. Attorney’s Office in Charlotte.

STATESVILLE, N.C. – Angelina Marie Parker, 44, of Lincolnton, N.C., was sentenced on Monday, January 11, 2016, to serve 37 months in prison for stealing more than $253,000 from her former employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term, U.S. District Judge Richard Voorhees ordered Parker to serve three years of supervised release and to pay $158,134 as restitution.   

U.S. Attorney Rose is joined in making today’s announcement by Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division.

According to filed court documents and yesterday’s sentencing hearing, Parker was employed as an office manager by Piedmont Urgent Care of North Carolina, Inc. (Piedmont Urgent Care), formerly located in Hickory, N.C.  Parker was indicted on 23 counts of uttering forged securities (checks) in 2009.  According to court documents and evidence from the sentencing hearing, beginning in 2004, Parker used her position to embezzle over $250,000 from her employer.  Court records show that Parker executed the embezzlement scheme by generating unauthorized company checks payable in her name and the name of a relative.  According to court records and court proceedings, Parker forged the signatures of the doctors who owned Piedmont Urgent Care, and deposited the checks into her bank account and the bank accounts of relatives. Court records also show that Parker concealed her theft of Piedmont Urgent Care’s money by altering the accounting records in the healthcare company’s computer system.  Court records and evidence presented at sentencing indicate that Parker used the money to pay for personal expenses.  Parker pleaded guilty in September 2014, to three counts of uttering counterfeit securities, namely the company’s checks, with the intent to deceive the organization.

At the sentencing hearing, the court heard victim testimony regarding the initial discovery of Parker’s embezzlement and the substantial impact Parker’s fraud had on Piedmont Urgent Care, its employees and the company’s owners.  Sentencing testimony revealed that the physicians who owned Piedmont Urgent Care first became aware of Parker’s embezzlement in 2009, after switching accounting firms.  When the physician’s confronted Parker of the fraud she admitted to stealing money.  According to court records, Parker later admitted to another person who worked at Piedmont Urgent Care that she had been stealing as much as $5,000 a month for five years from the company.  According to victim testimony during yesterday’s sentencing hearing, Piedmont Urgent Care was unable to recover from the effects of Parker’s embezzlement, and eventually 12 employees lost their jobs when the healthcare company ceased its operations in 2014. 

In handing down Parker’s sentence, Judge Voorhees noted the substantial victim impact of Parker’s embezzlement and imposed the highest sentence of imprisonment pursuant to federal Sentencing Guidelines.

Parker will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole. 

The investigation was handled by the U.S. Secret Service.  In making today’s announcement, U.S. Attorney Jill Westmoreland Rose thanked the North Carolina State Bureau of Investigation for their invaluable assistance in this case. 

The prosecution for the government was handled by Assistant United States Attorneys Thomas O’Malley and Tiffany Mallory of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – The U.S. Attorney’s Office, law enforcement agencies and community organizations gathered today in recognition of “National Slavery and Human Trafficking Prevention Month,” announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. 

During an early morning press conference, U.S. Attorney Rose emphasized the importance of raising awareness and educating the public about human trafficking and highlighted the continued efforts of law enforcement and the Charlotte Metropolitan Human Trafficking Task Force against one of the most grievous crimes impacting our communities today. 

“Over the past five years, our response to the scourge of human trafficking has been persistent and aggressive.  The U.S. Attorney’s Office has worked hand-in-hand with our law enforcement partners, community organizations and victims’ services groups to forge a strong coalition against human trafficking and to put end in the sex trafficking of children.   While we’ve succeeded in raising public awareness, bringing perpetrators to justice and assisting victims rescued from a cycle of abuse and exploitation, our work is far from over.  As we move forward, we will continue our record of success and draw upon our collective resources to identify and assist trafficking victims and put behind bars those who seek to profit from the exploitation of other human beings,” said U.S. Attorney Rose.

“Human trafficking is a form of modern-day slavery. Homeland Security Investigations continues to pursue the perpetrators of this heinous crime as one of its highest priorities, via a coordinated global effort with our federal, state and local law enforcement partners,” said Special Agent in Charge of HSI Atlanta Nick Annan. “Over the past two years HSI has doubled its number of human trafficking arrest and we will continue our relentless pursuit to investigate and seek prosecution of these criminals while also ensuring the victims of this terrible crime are rescued and get the care they need.”

“Human trafficking victims are trapped in lives of misery, often beaten, starved, and forced to work as prostitutes or to take grueling jobs with little or no pay.  The FBI devotes a significant amount of resources to hold those accountable who sacrifice another person’s civil rights and freedom for their own profit,” said John A. Strong, Special Agent in Charge of the FBI in North Carolina. 

The Charlotte Metropolitan Human Trafficking Task Force comprises law enforcement agencies – including ICE-Homeland Security Investigations, the FBI, and the Charlotte-Mecklenburg Police Department – federal and state prosecutors and community organizations.  During today’s press conference, U.S. Attorney Rose praised the work of the task force for their ongoing collaboration and thanked its community partners for their unwavering commitment and critical assistance to rescued victims.  

 “Our community organizations have stepped up to the plate and have been incredible allies in our fight against human trafficking, by providing much-needed short and long-term assistance to those rescued from the hands of sex traffickers.  As the victims slowly begin to rebuild their lives, access to resources, including food, shelter, medical and mental health services and legal assistance, is critical.  Time and again, we have relied on our community groups to provide rescued victims with the recovery support they need, and their commitment and willingness to help has been nothing short of extraordinary,” said U.S. Attorney Rose. 

This morning’s press conference was followed by a half-day training workshop organized by the task force.  The workshop was open to the public with a special emphasis on members of the hospitality industry.  The goal of the training was to enhance participants’ understanding of human trafficking and highlight best practices for supporting law enforcement in combating sex trafficking.

* * *

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

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

 

CHARLOTTE, N.C. – A Newton, N.C. man appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to robbing three BB&T Bank branches in 2014, 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) in North Carolina and Chief Tracy Ledford of the Maiden Police Department.

A federal criminal indictment was filed on September 16, 2015, charging Joshua Paul Wilson, 33, with three counts of bank robbery, stemming from the bank robberies he carried out between April and June 2014.Court records show that on April 2, 2014, Wilson robbed a BB&T branch located in Maiden, N.C.Then on May 20, 2014, Wilson robbed a second BB&T branch, located in Claremont, N.C.Wilson robbed the third BB&T branch in Valdese, N.C. on June 14, 2014.According to court records and today’s plea hearing, Wilson entered each of the three bank branches wearing a hat and dark sunglasses and obtained money by intimidating the bank tellers. Wilson took $1,579 from the Maiden branch, $3,990 from the Claremont branch, and $8,927 from the Valdese branch.

Wilson is currently in federal custody.The statutory maximum sentence for each bank robbery charge is 20 years in prison and a $250,000 fine.A sentencing hearing for the defendant has not been scheduled yet.

The investigation was handled by the FBI and Maiden Police Department.In making today’s announcement U.S. Attorney Rose thanked the Claremont and Valdese Police Departments and the Catawba County Sheriff’s Office for their assistance with the investigation.

The prosecution is being handled for the government by Assistant U.S. Attorney Craig Randall of the U.S. Attorney’s Office in Charlotte.             

A Ukrainian national made his initial appearance today in federal court in Charlotte, North Carolina, after being extradited from Poland to face charges relating to a $10 million international money laundering operation, announced 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 and Special Agent in Charge John A. Strong of the FBI’s Charlotte Division.

Viktor Chostak, 34, of Ukraine, along with three other individuals, are charged in a 25-count indictment with conspiracy to commit money laundering, eleven counts of money laundering, conspiracy to commit computer fraud, conspiracy to transport stolen property, conspiracy to commit access device fraud, four counts of transporting stolen property and six counts of aggravated identity theft.

According to a redacted version of the indictment unsealed today, beginning in September 2007, Chostak and three other conspirators were members of an international money laundering organization.  The organization created and operated a sophisticated online infrastructure that allowed hackers to obtain and conceal stolen money, primarily from U.S. companies’ bank accounts, and transfer it to countries outside the United States.  The organization created seemingly legitimate websites for fake companies, then sent spam emails advertising employment opportunities.  When an individual responded to the spam solicitations, the organization put the applicant through what appeared to be a legitimate hiring process.  The organization falsely represented that the individual’s job was to receive payments from businesses into their personal bank accounts, withdraw the money, then wire the funds to the company’s partners overseas.  In reality, the individuals merely acted as money mules, processing hackers’ stolen proceeds and wiring them out of the country to other conspirators.  The organization allegedly laundered at least $10 million in stolen money from the United States overseas.

According to the indictment, Chostak recruited, hired and managed others who oversaw the money mule operations.  Chostak also allegedly worked with computer programmers to meet the needs of the organization’s online infrastructure.

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

The case is being investigated by the FBI’s Charlotte Division.  The Criminal Division’s Office of International Affairs also provided assistance.  The case is being prosecuted by Trial Attorneys Jocelyn Aqua and Ryan K. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Kevin Zolot of the Western District of North Carolina.

Chostak et al Indictment

CHARLOTTE, N.C.  – A Ukrainian national made his initial appearance today in federal court in Charlotte, North Carolina, after being extradited from Poland to face charges relating to a $10 million international money laundering operation, announced 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 and Special Agent in Charge John A. Strong of the FBI’s Charlotte, North Carolina, Division.

Viktor Chostak, 34, of Ukraine, along with three other individuals, are charged in a 25-count indictment with conspiracy to commit money laundering, eleven counts of money laundering, conspiracy to commit computer fraud, conspiracy to transport stolen property, conspiracy to commit access device fraud, four counts of transporting stolen property and six counts of aggravated identity theft.

According to a redacted version of the indictment unsealed today, beginning in September 2007, Chostak and three other conspirators were members of an international money laundering organization.  The organization created and operated a sophisticated online infrastructure that allowed hackers to obtain and conceal stolen money, primarily from U.S. companies’ bank accounts, and transfer it to countries outside the United States.  The organization created seemingly legitimate websites for fake companies, then sent spam emails advertising employment opportunities.  When an individual responded to the spam solicitations, the organization put the applicant through what appeared to be a legitimate hiring process.  The organization falsely represented that the individual’s job was to receive payments from businesses into their personal bank accounts, withdraw the money, then wire the funds to the company’s partners overseas.  In reality, the individuals merely acted as money mules, processing hackers’ stolen proceeds and wiring them out of the country to other conspirators.  The organization allegedly laundered at least $10 million in stolen money from the United States overseas.

According to the indictment, Chostak recruited, hired and managed others who oversaw the money mule operations.  Chostak also allegedly worked with computer programmers to meet the needs of the organization’s online infrastructure.

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

The case is being investigated by the FBI’s Charlotte Division.  The Criminal Division’s Office of International Affairs also provided assistance.  The case is being prosecuted by Trial Attorneys Jocelyn Aqua and Ryan K. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Kevin Zolot of the Western District of North Carolina.

 

CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced Jerry Lee Grier, Jr., 38, of Charlotte to 12 years in prison in connection with his scheme to defraud Wells Fargo Bank, N.A. (Wells Fargo) and for violating the terms of his supervised release, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Grier, who pleaded guilty in June 2015 to one count of bank fraud, was also ordered to pay $100,800 in restitution to Wells Fargo and to serve five years of supervised release following his release 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.

According to filed court documents and court proceedings, from December 2014 through April 2015, Grier engaged in a scheme to defraud Wells Fargo by fraudulently obtaining customer account information and using such information to conduct unlawful cash withdrawals and transactions. According to court documents, after obtaining the customer account information, Grier would contact Wells Fargo bank tellers and other employees located in Charlotte and elsewhere via cell phone and use the sensitive customer account information to impersonate legitimate Wells Fargo customers, often falsely claiming to be seeking assistance in accessing and transferring cash to various accounts. Grier used a variety of lies to induce the unlawful transfer of monies, for example, by telling Wells Fargo employees that he was in urgent need for cash because of an emergency. According to court documents Grier was arrested after conducting one such fraudulent withdrawal of $22,000 at a Wells Fargo branch in Norfolk, Virginia.

In handing down the 12 year sentence, Judge Conrad noted that Grier’s criminal fraud history was “unmatched by any fraud defendant” seen by the Court and that such history reflected an “extraordinary pattern of fraudulent activity” that had been undeterred by prior prison sentences. Judge Conrad found that Grier’s three prior federal bank fraud convictions, in addition to today’s federal bank fraud conviction, coupled with the multitude of his other state fraud convictions, caused significant harm to victims and demonstrated Grier’s complete and utter disregard for the law. Judge Conrad stressed that a paramount consideration in determining the sentence was the need to protect the public from Grier’s further criminal activity.

Grier has been in federal custody since April 2015, when he was arrested for violating the terms of his supervised release arising from his 2011 federal bank fraud conviction. 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.    

U.S. Attorney Rose credited the FBI for the investigation leading to today’s sentence.

Assistant U.S. Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte prosecuted the case.

 

 

CHARLOTTE, N.C. – A Charlotte grand jury has indicted Jason Adam Townsend, 39, of Raeford, N.C., on health care fraud and aggravated identity theft charges, in connection with a scheme that defrauded Medicaid of millions of dollars, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  The 10-count indictment was unsealed today, following Townsend’s appearance in court. 

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.

According to allegations contained in the indictment, in or about 2011, Townsend and another unindicted individual created Townhall Enterprises, LLC (Townhall), located in Raeford. Townhall provided billing services and credentialing services to mental health companies and other health providers.  The indictment alleges that as third-party billing provider, Townhall received information from its clients detailing claim information to be submitted to insurance companies and health care benefit programs, including Medicaid.

The indictment alleges that from in or about 2011 to in or about 2013, and at the direction of Cynthia Harlan, Townhall entered into contractor agreements with client agencies to provide billing services, including submitting claims to Medicaid, and in return receiving 5-7% of the reimbursed claims.  According to court records, Harlan owned and operated Heartland Consulting and Marketing, LLC (“Heartland”) in Charlotte, and held herself out as a consultant specializing in the operation of mental health companies and Medicaid reimbursement.  Harlan was indicted on health care fraud conspiracy and related charges in September 2015.  Townhall’s other client agencies included New Choices Youth and Family Services, operated by Sakeenah Davis and Kino Williams, Life Impact Solutions, LLC, owned and operated by Zaria Humphries, and Aliya Boss, all of whom have pleaded guilty federal charges in connection with the scheme.

According to allegations contained in the indictment, Townsend and Townhall received billing instructions for clients, such as Boss, Life Impact Solutions, LLC and others, directly from Harlan or others acting on Harlan’s behalf.  The indictment alleges that these instructions generally were contained in billing spreadsheets, which Harlan provided, containing relevant claim information, such as the Medicaid beneficiary name, date of birth, Medicaid ID number, the alleged dates of services, the alleged types of services and company that allegedly provided the services.  The indictment alleges that Townsend generally did not follow the instructions provided by Harlan and the client agencies, and instead he frequently billed two or three times the amount of services he was instructed to submit to Medicaid.  For example, the indictment alleges that instead of submitting claims to Medicaid requesting reimbursement for approximately 268 dates of therapy allegedly provided to 14 Medicaid beneficiaries, Townsend made up different claims, and increased the number of dates of service to over 400.

The indictment alleges that Townsend submitted millions of dollars in false claims, for which Medicaid reimbursed the providers. Townsend and Townhall were compensated by the client agencies for submitting the fraudulent claims.  The indictment also alleges that during the same time period, Townhall’s primary source of income was the fees it charged to clients obtained through Harlan.  

Townsend is charged with five counts of health care fraud conspiracy and five counts of aggravated identity theft and had his initial appeared today before U.S. Magistrate Judge David S. Cayer.  He was released on conditions from the court.   His detention hearing will be scheduled by the court in the coming days.  The health care fraud conspiracy charge carries a maximum prison term of 10 years and a $250,000 fine per count.  The aggravated identity theft charge carries a mandatory prison term of two years, consecutive to any other term of imprisonment.

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

The FBI conducted the investigation.  In making today’s announcement, U.S. Attorney Rose also thanked the North Carolina Medicaid Investigations Division for their assistance in this case.

The prosecution of the cases is handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Charlotte Office.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force.  The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing  of  all  whistle  blower  complaints,  and  the  creation  of  investigative  teams  so  that individual agencies may focus their unique areas of expertise on investigations.  The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at HHSTips@oig.hhs.gov.

CHARLOTTE, N.C. – James William Staz was sentenced today to 135 months in prison for embezzling more than $17 million from clients of the third-party payroll company he operated, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Chief U.S. District Judge Frank D. Whitney also sentenced Staz to two years of supervised release and ordered him to pay over $17 million as restitution.  Staz pleaded guilty in March 2015 to wire fraud, transactional money laundering and tax evasion.    

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 J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

According to court documents and today’s sentencing hearing, Staz operated a third-party payroll company, “Employee Services.Net, Inc.” (ESN), that provided various services to client companies, including processing payroll, collecting and paying employment taxes, and preparing and filing employment tax forms.  Court records show that Staz was ESN’s vice president and later the company’s president, and at its height, ESN had approximately 500 client companies nationwide.  According to court documents, ESN had access to the clients companies’ bank accounts and could draft directly the funds needed to cover expenses associated with the services it provided. 

Court records indicate that from 2008 to March 2014, Staz defrauded at least 113 ESN clients of approximately $17 million dollars intended for payroll and employment tax payments and used it to support his personal lifestyle.  Staz stole at least $3.7 million in client funds and used the money to pay for alcohol, strip club entertainment to include leaving a $5,000 tip, jewelry, a Mercedes Benz and a luxury home.  To conceal his embezzlement, court records show that Staz made false entries into ESN’s accounting system to make it appear as though the funds were used for legitimate client expenses. 

At today’s sentencing hearing, Judge Whitney said that Staz “victimized a lot of people, across the socio-economic spectrum and across the country,” including “non-profits that operate on a very tight budget.”  Judge Whitney also said that the defendant “probably victimized more individuals and legal entities than any other fraud scheme this court has ever seen,” adding, “that kind of reckless disregard for spending people’s money is horrifying.” 

James Staz has been in custody since his arrest in October 2014.   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.

At today’s sentencing hearing Judge Whitney granted the government’s motion to dismiss the charges against James Staz’s father and former codefendant, William James Staz, who is now deceased.  

The investigation for the case was handled by the FBI and IRS-CI.  Assistant U.S. Attorney Kelli H. Ferry of the U.S. Attorney’s Office, in Charlotte, prosecuted the case.

 

 

CHARLOTTE, N.C. - U.S. Attorney Jill Westmoreland Rose announced today that the Western District of North Carolina (WDNC) collected $129,598,713.70 in criminal and civil actions in Fiscal Year 2015 (FY 2015).  Of this amount, $12,327,951.04 was collected in criminal actions and $117,270,762.66 was collected in civil actions.* 

 

Attorney General Loretta E. Lynch announced on Thursday, December 3, 2015, that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The total includes all monies collected asw a result of Justice Department-led enforcement actions and negotiated. civil settleents. It includes more than $16.2 billion in payments made directly to the Justice Department, and more than $6.8 billion in indirect payments made to other federal agencies, states and other designated recipients.  Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department's combined appropriations for the 94 U.S. Attorney's Offices and the main litigating divisions in that same period.

“The lawyers and staff of this Office work diligently to protect the citizens of our district and deliver justice.  We also strive to ensure that criminals are not enriched by their conduct, criminal and civil debts are recovered, and restitution is paid to victims of crimes.  A portion of the recovered funds is also returned to the federal treasury to support much needed victim services and to fund ongoing federal, state and local law enforcement efforts and initiatives,” said U.S. Attorney Rose.  “It is important to highlight that as a federal agency the Department of Justice, through the work of its employees, collects seven and a half times the amount it costs to run the agency.  I would call that a good return on the public’s investment,” Rose added.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  While restitution is paid to victims, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

In December 2002, in US v. Reid (3:02-cr-169), Douglas W. Reid was sentenced to 51 months in prison for his involvement in an investment fraud scheme. In FY 2015, $4,118,255 was collected and applied toward the restitution ordered by the court, closing the debt in this case.

In U.S. v. Simmons (3:10-cr-23), WDNC collected $3,055,938, and the money was transferred to the U.S. Clerk of Court to be distributed to victims in this criminal case.  Keith Franklin Simmons and his conspirators orchestrated a Ponzi scheme that defrauded 400 victims of more than $40 million.  A total of 11 defendants were convicted in connection with this case, with the mastermind of the scheme, Simmons, currently serving a 40-year sentence.  Also in FY 2015, in U.S. v. Le (3:14-cr-110) the office collected $1,041,288.52 from Dr. Le, who was sentenced to 18 months in prison in September 2015, on healthcare fraud and tax evasion charges. 

In FY 2015, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.  The Western District of North Carolina conducted a joint investigation with the Justice Department’s Civil Division into Adventist Hospital system, which resulted in a recovery of $115 million for the Medicare program. The investigation was based on two qui tam complaints filed in the Western District of North Carolina. 

Additionally, the Western District of North Carolina also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $9,166,511,236.73 in cases pursued jointly with these offices.  Of this amount, $5,694,936.73 was collected in criminal actions and $9,160,816,300 was collected in civil actions.  For example, in FY 2015, WDNC collected $5,600,250 million as part of Duke Energy Carolinas LLC and Duke Energy Progress Inc.’s settlement with the U.S. Attorney’s Offices for the Western, Middle and Eastern Districts of North Carolina. 

Additionally, working with partner agencies and divisions, WDNC collected $12,015,903 in asset forfeiture actions in FY 2015.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used, among other purposes, to restore funds to crime victims.

* In measuring collections recovered in FY 2015, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2015.

CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced Michael Francis Egan, III, 33, formerly of Charlotte, to 24 months in prison and two years of supervised release on conspiracy to commit securities and wire fraud charges, in connection with a fraudulent investment scheme, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Conrad also ordered Egan to pay more than $300,000 as 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. 

 According to filed court documents and today’s sentencing hearing, from August 2007 to February 2012, Egan carried out a fraudulent investment scheme by inducing his victims to enter into various fictitious business and investment contracts.  According to court records, Egan promised his investor victims that he would invest their money in various projects, including Halloween and holiday themed attractions, land development, and television shows, among others.  To further induce his victims, Egan lied about his financial background and personal assets and about his professional connections and investments.  For example, Egan falsely told his victims he was a close associate and friend of the CEO of a major bank, a close associate or employee of a well-known investment mogul and that he owned a percentage of well-known hotels and casinos in Las Vegas.  Instead of investing the victims’ money as promised, Egan used it to fund his lifestyle and to pay for personal expenses such as rent, his car lease, groceries and pet care.  According to court records, Egan defrauded more than 14 victims of over $300,000.  Egan pleaded guilty to the charges in April 2015.    

At today’s sentencing hearing, Judge Conrad described Egan’s conduct as “a long-term fraud scheme with numerous acts of deception and fraud.” Judge Conrad also noted the defendant’s “predatory nature of the stealing of money […] considering the amount of money, the amount of victims […] and the defendant’s cunning on innocent victims.”

Egan will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole. 

The FBI investigated the case.  The prosecution was handled by Assistant U.S. Attorney Kevin Zolot of the Western District of North Carolina. 

CHARLOTTE, N.C. – On Thursday, December 3, 2015, Chief U.S. District Judge Frank D. Whitney sentenced Reginald Lashawn Lockhart, 31, of Charlotte to serve to 44 months in prison and three years of supervised release in connection with the 2014 assault of two Deputy U.S. Marshals, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Whitney ordered Lockhart’s sentence to be served consecutive to the 15 year prison term Lockhart is serving for a firearms offense.

U.S. Attorney Rose is joined in making today’s announcement by Kelly M. Nesbit, United States Marshal of the United States Marshals Service for the Western District of North Carolina and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division.

According to filed court documents and court proceedings, on September 3, 2015, Lockhart appeared in federal court for his sentencing proceedings relating to a firearms violation charge.  According to court records, after Lockhart was handed down the 180 month prison term for that conviction, the defendant assaulted two Deputy U.S. Marshals who were escorting him from the courtroom.  Court records show that Lockhart made physical contact with the two deputies and inflicted bodily injury upon them.  According to statements made during the sentencing hearing, Lockhart had threatened and assaulted other deputy marshals on other occasions.  Lockhart also assaulted a Mecklenburg County detention officer in June 2013, and was even making threats to assault guards within the past week.  Lockhart pleaded guilty to two counts of assaulting an officer in April 2015. 

Lockhart has been in federal custody since November 2012 for his previous federal offense.  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 the U.S. Marshals Service and the FBI.  The case was prosecuted by Assistant United States Attorney Don Gast of the U.S. Attorney’s Office in Charlotte.

 

CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney today sentenced John Wesley Clark, 43, of Charlotte, to 30 months in prison on wire fraud and tax fraud charges, receiving over $576,000 in payments for fraudulent warranty claims, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Clark was also ordered to serve two years under court supervision after his release from prison and to pay $576,669.75 in restitution to Samsung and $184,710.00 as restitution to the IRS.  He pleaded guilty to one count of wire fraud and one count of filing a false tax return in June 2015.

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

According to the filed court documents and today’s sentencing hearing, Clark was the owner and operator of various Charlotte-area appliance repair companies, including JA Appliance Co; Fitzgerald Appliance Co; BR Appliance; C&A Appliance Co.; D&L Appliance Co.; and J&S Appliance Co.  Court records show that beginning in at least 2010 and continuing through 2012, Clark, who is also known as John Isaacs, Jonathan Fitzgerald, and JA Adams, defrauded a major electronics company based in New Jersey by submitting false and fraudulent warranty work order claims, for warranty work that was not performed.  According to court records, Clark, sometimes using an alias, established his companies as authorized service centers for the major electronics company.  He then submitted the fraudulent warranty work orders that listed, among other things, false customer information, false addresses, false part numbers, and false repair dates. Clark received $576,000 in payments for the fraudulent warranty claims.   

Court records also show that for tax years 2010 through 2012, Clark failed to report all of the income he obtained through the fraudulent warranty claims on his federal tax returns.  Additionally, Clark filed fraudulent forms W-2 with his federal tax returns that falsely stated that tax withholding had been paid over to the IRS. 

Clark will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

* * *

In a separate case, on Monday, November 30, 2015, Judge Whitney also sentenced Sammie Marks, 42, of Matthews, N.C., to 12 months and 1 day in prison and one year of supervised release on a tax evasion charge.  He was also ordered to pay $158,614 as restitution to IRS. 

According to court records, Marks was the owner of “Marks Metal and Salvage,” located in Charlotte.  Court records in that case show that between tax years 2009 and 2013, Marks deposited checks and cash receipts from his businesses and its customers totaling over $1.1 million into his personal bank account, which he did not include in his personal or business tax returns filed with IRS.  As a result of the unreported gross receipts, Marks had additional tax liability of $158,614. 

The investigation into Clark was handled by IRS-CI and the U.S. Postal Inspection Service.  Marks’ investigation was handled by IRS-CI.  Both cases were prosecuted by Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced Stephon Deangleo Caldwell, 28, of Charlotte, to 108 months in prison for a firearms offense, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Caldwell was also ordered to serve 2 years under court supervision following his prison sentence.  

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 (CMPD).

According to filed court documents and today’s sentencing hearing, on or about December 1, 2014, CMPD officers were attempting to serve Caldwell multiple state warrants at his residence in Charlotte.  Court records show that Caldwell began shooting at the officers with his firearm, a Sig Sauer Model P232 pistol.  Officers returned fire striking Caldwell who then attempted to flee on foot, but was apprehended shortly thereafter.  According to court records, Caldwell is a member of the United Blood Nation gang and has a prior felony conviction which prohibits him from possessing or carrying a firearm.  Caldwell pleaded guilty in April 2015, to one count of possession of a firearm by a convicted felon.

At the sentencing hearing, prosecutors urged Judge Whitney to impose a sentence that promotes respect for the law, stating that we must send a message that violence against our law enforcement officers will not be tolerated.

Caldwell has been in federal custody since December 2014.  Upon designation of a federal facility, he will be transferred to the custody of the Federal Bureau of Prisons.  All federal sentences are served without the possibility of parole.

The investigation was handled by the FBI and CMPD. The prosecution was handled by Assistant United States Attorneys Elizabeth Greene and William Bozin of the U.S. Attorney’s Office in Charlotte.

STATESVILLE, N.C. – Nine methamphetamine traffickers have been sentenced over a two-day period to prison terms ranging from one to 17.5 years, as a result of two related Organized Crime Drug Enforcement Task Force (OCDETF) investigations, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

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

The following defendants were sentenced on Monday, November 30, 2015:

• Justo Manuel Gonzalez, 29, of Newton, N.C. was sentenced to 210 months in prison, followed by five years of supervised release (5:14-cr-59).

• Christopher Waylon Joyner, 31, of Sparta, N.C., was sentenced to 131 months in prison, followed by five years of supervised release (5:15-cr-69).

• Christopher Everett Triplett, 35, of Hudson, N.C. was sentenced to 75 months in prison, followed by four years of supervised release (5:14-cr-50).

• Marixa Dawn Hart, 27, of Warrensville, N.C., was sentenced to 31 months in prison, followed by three years of supervised release (5:15-cr-7).

• Paul Lewis King, Jr., 71, of North Wilkesboro, N.C. was sentenced to nine months in prison, followed by two years of supervised release, nine of which in home detention (5:15-cr-34)

The following defendants were sentenced on Tuesday, December 1, 2015:

• Anthony Lee Day, 40, of Crumpler, N.C., was sentenced to 130 months in prison, followed by five years of supervised release (5:15-cr-5).

• Brian Len Ledford, 39, of Newton, N.C. was sentenced to 78 months in prison, followed by three years of supervised release (5:15-cr-14).

• Miguel Angel Cerda-Rodriguez, 29, of Conover, N.C. was sentenced to 46 months in prison, followed by five years of supervised release (5:14-cr-77)

• Rene Antonio Garcia, 54, of Hickory, N.C. was sentenced to time served (approximately one year) followed by four years of supervised release (5:14-cr-82).\

The two OCDETF investigations, codenamed “Dixie Crystal” and “Lay Low,” are being led by HSI and DEA, respectively, with the assistance of the Caldwell County Sheriff’s Office, Lenoir Police Department, Catawba County Sheriff’s Office, and Hickory Police Department, and law enforcement agencies throughout North Carolina and Texas, Georgia, and Tennessee. 

According to court documents, to date, more than 80 individuals have been convicted as a result of the two related investigations.  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 more than 10 kilograms of crystal methamphetamine, $100,000 in U.S. currency and other assets, and numerous 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.

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. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Paul Edward Baalerud, 56, formerly of Charlotte, to 14 years in prison on child pornography charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Baalerud was also sentenced to a lifetime of supervised release and was ordered to register as a sex offender.

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, Charlotte Division and Chief Kerr Putney of the Charlotte Mecklenburg Police Department.

According to filed documents and statements made in court, from about December 2013 to January 2014, law enforcement became aware that an individual, later identified as Baalerud, was sharing child pornography using peer to peer software.  The investigation revealed that Baalerud possessed a collection of child pornography, consisting of 99 images and videos depicting children, including toddlers, being sexually abused.  According to today’s court proceedings, Baalerud also molested three children, all under the age of three.  Baalerud pleaded guilty in July 2015 to one count of transportation of child pornography.

Baalerud has been in federal custody since October 2014 and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility.  Federal sentences are served without the possibility of parole.

The investigation was handled by CMPD and FBI.  Assistant U.S. Attorney Cortney S. Randall of the U.S. Attorney’s Office in Charlotte prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative 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. – Today, Chief U.S. District Judge Frank D. Whitney sentenced Lonnie Shawn Hopson, 33, of Brooklyn, New York to 37 months in prison for a wire fraud conspiracy involving 453 gift cards containing stolen credit and debit card numbers, announced Jill Westmoreland Rose, United States Attorney for the Western District of North Carolina.  Judge Whitney also ordered Hopson to serve two years of supervised release and to pay restitution totaling $1,083, which Hopson paid prior to his sentencing.  

According to information contained in filed documents and statements made in court:

On July 21, 2013, Homeland Security Transportation Safety Administration (TSA) employees at Charlotte Douglas International Airport (Charlotte airport) discovered numerous mag-stripe payment cards while searching outbound checked luggage.  Officers with the Charlotte Mecklenburg Police Department (CMPD) responding to the call recovered approximately 453 gift/prepaid mag-stripe payment cards in Hopson’s luggage, who was scheduled to board an outbound flight.  Law enforcement also seized from Hopson $1,816 in cash and two driver’s licenses – a New Jersey driver’s license in the name of another person baring Hopson’s photo, and a New York driver’s license with Hopson’s name and photo.  Subsequent investigation revealed that the New Jersey driver’s license was a counterfeit license and had a driver’s license number assigned to another person.  Further investigation also revealed that the recovered gift/prepaid cards in Hopson’s luggage had been re-encoded with stolen credit or debit account numbers.  Hopson pleaded guilty in May 2015 to one count of wire fraud conspiracy. 

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

In making today’s announcement, U.S. Attorney Rose thanked the United States Secret Service, TSA and CMPD for their assistance with this investigation.  Assistant U.S. Attorney Tom O’Malley of the U.S. Attorney’s Office in Charlotte prosecuted the case.

 

CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney today sentenced Jennifer Ann Champagne, 40, of Gastonia, N.C. to 40 months in prison, for stealing more than $590,000 from her former employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Whitney also ordered Champagne to serve one year of supervised release and to pay restitution in the amount of $594,208.01.  Champagne pleaded guilty in July 2015 to making and possessing forged and counterfeit securities, wire fraud and access device fraud. 

U.S. Attorney Rose is joined in making today’s announcement by Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division.

According to filed court documents and today’s sentencing hearing, from 2006 to 2013, Champagne worked as an office manager and bookkeeper at a Charlotte-based company specializing in the construction and repair of tennis courts and running tracks.  In that capacity, Champagne had access to the company’s safe, computer accounting programs, online bank accounts, security passwords and other confidential information, but was not authorized to sign company checks, or use the company’s bank accounts or credit card accounts outside of the normal course of business. 

According to court records, Champagne stole money from her former employer by signing the company’s President’s name on forged checks and then altering the company’s books and records to hide the theft.  Among other things, court records show that Champagne embezzled over $260,000 by forging 100 company checks in her name and her husband’s landscaping business.  She also used the company’s credit card to make more than 400 unauthorized charges totaling over $40,000.  In total, court records show that Champagne’s scheme caused the company a loss of more than $590,000. 

In handing down Champagne’s sentence, Judge Whitney said that in the interest of general deterrence he gave the defendant a tough sentence because he did not want “people taking the risk of embezzling over one-half million dollars and thinking they’re only going to do a small amount of time in prison.”  Judge Whitney also noted that that a sentence involving breach of trust should reflect the amount of money taken and the length of time involved in the fraudulent scheme, in Champagne’s case, seven years.

Champagne will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole. 

The investigation was handled by the U.S. Secret Service.  The prosecution for the government was handled by Assistant U.S. Attorney Kenneth Smith of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced Boggs Paving, Inc. (Boggs Paving), its president and part-owner, Carl Andrew “Drew” Boggs, III, and four others on charges stemming from the illegal use of a disadvantaged business enterprise to obtain government-funded construction contracts, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. 

Marlies T. Gonzalez, Regional Special Agent in Charge, U.S. Department of Transportation, Office of Inspector General (DOT-OIG), Region IV; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation (IRS-CI), join U.S. Attorney Rose in making today’s announcement.

Drew Boggs, 51, of Waxhaw, N.C. was sentenced to 30 months in prison and two years of supervised release, and received a $15,000 fine after pleading guilty to conspiracy to defraud the United States Department of Transportation (USDOT) and money laundering conspiracy.  Kevin Hicks, 44, of Monroe, N.C., was sentenced to two years of probation and was ordered to pay a $2,000 fine, after pleading guilty to conspiracy to defraud USDOT and money laundering conspiracy.  Greg Miller, 61, of Matthews, N.C., was sentenced to 15 months in prison and two years of supervised release, Greg Tucker, 42, of Oakboro, N.C., was sentenced to two years of probation and was ordered to pay a $1,000 fine, and John Cuthbertson (a/k/a Styx Cuthbertson), 70, of Monroe, was sentenced to two years of probation, three of which will be served in home confinement, and was ordered to pay a $2,000 fine.  They each pleaded guilty to one count of conspiracy to defraud USDOT.  Judge Cogburn sentenced the company, Boggs Paving, to pay a $500,000 fine.  A fifth codefendant, Arnold Mann, 56, of Fort Mill, S.C., was previously sentenced to a term of probation, after pleading guilty to one count of conspiracy to defraud USDOT.

According to documents filed in the case, statements made in court and today’s sentencing hearings, from 2003 through 2013, Boggs Paving, Drew Boggs, and their codefendants engaged in a scheme by which they fraudulently obtained federally and state funded construction contracts by falsely certifying that a disadvantaged business enterprise (DBE), or a small business enterprise (SBE) would perform and be paid for portion of the work on those contracts.  The purpose of USDOT’s DBE program is to increase the participation of such businesses in federally-funded public construction and transportation-related projects. 

According to court records, Boggs Paving and the codefendants used Monroe-based Styx Cuthbertson Trucking Company, Inc. (“Styx”), a road construction hauler and a certified DBE and SBE, to help obtain the government-funded construction contracts.  Court documents show that the codefendants took steps to conceal their fraud, including running payments for the work performed through a nominee bank account in Styx’s name and using magnetic decals bearing the “Styx” company logo to cover the “Boggs” logo on company trucks, among others.  According to court records, the majority of the money was funneled back to Boggs Paving and its affiliates, and John Cuthbertson, owner of Styx, received kickbacks for allowing his company’s name and DBE status to be used by Boggs Paving. 

Court records show that from June 2004 to July 2013, Boggs Paving was the prime contractor on 35 federally-funded contracts, and was a subcontractor for two additional contracts, worth over $87.6 million.  Boggs Paving claimed DBE credits of approximately $3.7 million on these contracts for payments purportedly made to Styx.  Styx only received payments of approximately $375,432 for actual work on these contracts, court records show. 

In court today, Judge Cogburn described the DBE program as laudable and emphasized the imortance of deterrence in sentencing the defendants.    

The investigation of the case was handled by USDOT-OIG, FBI and IRS.  Assistant United States Attorneys Jenny G. Sugar and Michael E. Savage of the U.S. Attorney’s Office in Charlotte handled the prosecution.             

CHARLOTTE, N.C. – Jamel Ski Yates, a/k/a “Goo,” 42, of Charlotte, was arrested today on federal wire fraud conspiracy and wire fraud charges, for attempting to steal more than $1 million through unauthorized wire transfers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  A federal grand jury returned the superseding criminal indictment against Yates on Wednesday, November 18, 2015, and it was unsealed today, following Yates’ court appearance before U.S. Magistrate Judge David C. Keesler. 

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.

In addition to Yates, six others have already been charged or sentenced for their involvement in the conspiracy:

• Shaka Stayman, 34, of Atlanta, was sentenced to 84 months in prison, after pleading guilty to wire fraud conspiracy and wire fraud charges.

• Barry Shade, 38, of Tamarac, Florida, was sentenced to 24 months and was ordered to pay restitution of $251,147 after pleading guilty to wire fraud conspiracy charges.

• Dural Samuels, 43, of Charlotte, pleaded guilty in September 2015 to wire fraud conspiracy and wire fraud and is currently awaiting sentencing.

• Abiola O. Oginni, 34, of McDonough, Georgia, and Dwayne A. Reynolds, 30, of Snellville, Georgia, have each pleaded guilty to wire fraud conspiracy and are currently awaiting sentencing.

• Anthony Shawn Wilkerson, 45, of Riverdale, Georgia, is currently facing wire fraud conspiracy and wire fraud charges.

According to allegations contained in Yates’ indictment, other filed court documents in this and related cases, and statements made in court:

From at least in or about January 2010 through in or about January 2011, Yates and his conspirators engaged in a financial fraud scheme by which they unlawfully accessed multiple customer accounts maintained by a financial services company located in Charlotte.  Yates was the insider who allegedly stole the account holders’ information and gave it to Samuels.  Samuels then used a network of conspirators, including Stayman, Shade, Oginni, Wilkerson and Reynolds, who either used their own bank accounts or the bank accounts of other individuals also known as “money mule accounts,” into which the stolen funds were deposited. The conspirators executed numerous fraudulent wire transfers, taking money out of the compromised customer accounts and depositing it into the money mule accounts.  The stolen money was then retrieved from the mule accounts through multiple cash withdrawals. 

Yates had initial appearance today in federal court and was released on bond.  The wire fraud conspiracy offense and the wire offense each carry a maximum prison term of 20 years and a $250,000 fine. 

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

The investigation is being handled by the FBI.Assistant U.S. Attorney Thomas O’Malley, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.

 

CHARLOTTE, N.C. – Amy Hilty, 38, formerly of Stanley, N.C. and now residing in  Dalton, Ohio, appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to stealing nearly $400,000 from her former employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Hilty pleaded to one count of wire fraud and one count of tax evasion. 

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, from 2008 to 2012, Hilty was employed as accounting manager for a company located in Huntersville, N.C.  As the company’s accounting manager, Hilty’s responsibilities included preparing the company’s financial statements, maintaining QuickBooks, preparing payroll and making bank deposits.  According to court records, Hitly used her access to the company’s accounting system to divert company funds to bank accounts she controlled.  According to court records, Hilty covered her fraud by falsely recording the stolen funds in the company’s books and records as supplies, owner withdrawals and travel expenses, among others.  In this manner, court records show that Hilty embezzled $390,156.73 from the company during the relevant time period and used the money to purchase a new home and a BMW vehicle.  Court records also show that for tax years 2008 through 2011, Hilty did not file federal income tax returns, and failed to report the diverted income and her salary from the victim company, totaling $520,976.17. 

Hilty was released on bond after her plea hearing.  The wire fraud charge carries a maximum prison term of 20 years and a $250,000 fine.  The tax fraud charge carries a maximum prison term of five years and a $250,000 fine.  As part of her plea agreement, Hilty has agreed to pay restitution, the amount of which will be determined by the Court at sentencing.   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. — A resident of Charlotte, North Carolina, pleaded guilty on Tuesday in the U.S. District Court of the Western District of North Carolina to conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. 

According to court documents and statements in court, Daniel Heggins and his co-conspirator Joan Clark of Charlotte conspired to defraud the United States by filing false tax returns.  Heggins recruited individuals with debts, such as home mortgages or car loans and created false Forms 1099-OID falsely characterizing the amount of the debts as income.  Heggins and Clark then prepared and filed false Forms 1040 that requested refunds from the Internal Revenue Service (IRS) based on the false Forms 1099-OID.  Heggins and Clark caused the returns to be filed at the IRS office in Charlotte.  Sixteen false tax returns claiming more than $4 million in fraudulent refunds were filed with the IRS as part of the scheme.  According to court documents, Clark and another individual, Marlowe Williams, filed three false tax returns, requesting $900,000 in fraudulent refunds from the IRS and received $601,780.

Heggins faces a statutory maximum sentence of five years in prison and a $250,000 fine. On Nov. 5, Clark, also pleaded guilty to two counts of conspiracy to defraud the United States.  She faces a statutory maximum sentence of five years in prison and a $250,000 fine for each conspiracy count.  On Nov. 9, Williams of New London, North Carolina, pleaded guilty to conspiring with Clark to defraud the United States.  He faces a statutory maximum sentence of five years in prison and a $250,000 fine.  On Sept. 24, Cheryl Jones of Chicago, Illinois, pleaded guilty to presenting a materially false document to the IRS.  Jones submitted false tax returns to the IRS at the direction of Heggins and Clark.  She faces a statutory maximum sentence of one year in prison and a $10,000 fine.

The court has not yet set sentencing dates for any of the defendants.

Acting Assistant Attorney General Ciraolo commended special agents of IRS – Criminal Investigation and the FBI, who investigated the case, and Assistant U.S. Attorney Mike Savage of the Western District of North Carolina and Trial Attorney Todd P. Kostyshak of the Justice Department’s Tax Division, who prosecuted the case.

 

 

CHARLOTTE, N.C. – U.S. Attorney for the Western District of North Carolina Jill Westmoreland Rose and the Department of Justice announced today the first 10 tribes to participate in an initial User Feedback Phase of the Tribal Access Program for National Crime Information (TAP), a program to provide federally recognized tribes the ability to access and exchange data with national crime information databases for both civil and criminal purposes.

In the Western District of North Carolina, the Eastern Band of Cherokee Indians has been selected to participate in this initial phase of the TAP.

“As one of the tribes selected to participate in the initial phase of TAP, the Eastern Band of Cherokee Indians and its criminal justice agencies will gain greater access to federal crime information databases and crime solving tools that can be used to effectively serve and protect their communities.  My office has a strong history of working closely with our tribal counterparts, and through this program we will continue to support our tribal partners’ mission of keeping the citizens of the Qualla Boundary safe,” said U.S. Attorney Rose.

The User Feedback Phase will grant access to national crime information databases and technical support to the following tribes: the Cherokee Nation of Oklahoma, the Eastern Band of Cherokee Indians of North Carolina, the Keweenaw Bay Indian Community of Michigan, the Oneida Indian Nation of New York, the Pascua Yaqui Tribe of Arizona, the Suquamish Indian Tribe of the Port Madison Reservation of Washington, the Shoshone-Bannock Tribes of the Fort Hall Reservation of Idaho, the Tulalip Tribes of Washington, the Confederated Tribes of the Umatilla of Oregon, and the White Mountain Apache Tribe of the Fort Apache Reservation of Arizona.

“This innovative program will allow an unprecedented sharing of critical information between tribal, state and federal governments, information that could help solve a crime or even save someone’s life,” said Deputy Attorney General Sally Quillian Yates.  “This initial phase of TAP will help us understand the information gaps and the best ways to use this service to strengthen public safety in Indian country.  The TAP program is a reflection of the Justice Department’s commitment to the government-to-government relationship, to overcoming barriers, and building strong partnerships with American Indian and Alaska Native people.  The department will continue to work with Congress for additional funding to more broadly deploy the program.”

TAP will support tribes in analyzing their needs for national crime information and help provide appropriate solutions, including a state-of-the-art biometric/biographic computer workstation with capabilities to process finger and palm prints, take mugshots, and submit records to national databases, as well as the ability to access the FBI’s Criminal Justice Information Service (CJIS) systems for criminal and civil purposes through the Department of Justice.  TAP will also provide specialized training and assistance for participating tribes.

This initial phase, funded by the Office of Justice Programs’ Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) and supported with technical assistance from the Office of the Chief Information Officer, will focus on assisting tribes that have law enforcement agencies. In the future, the department will seek to address the needs of the remaining tribes and find a long-term solution.

While in the Tribal Law and Order Act of 2010 Congress required the Attorney General to ensure that tribal officials that meet applicable requirements be permitted access to national crime information databases, the ability of tribes to fully participate in national criminal justice information sharing via state networks has been dependent upon various regulations, statutes and policies of the states in which a tribe’s land is located.  Therefore, improving access for tribal law enforcement to federal crime information databases has been a departmental focus for several years.  In 2010, the department instituted two pilot projects, one biometric and one biographic, to improve informational access for tribes.  The biographic pilot continues to serve more than 20 tribal law enforcement agencies.

Departments of Justice and Interior Working Group

In 2014, the Departments of Justice and the Interior (DOI) formed a working group to assess the impact of the pilots and identify long-term sustainable solutions that address both criminal and civil needs of tribes.  The outcome of this collaboration was the TAP, as well as an additional program by the DOI’s Bureau of Indian Affairs (BIA) that provides tribes with national crime information prior to making child placement decisions in emergency circumstances.  Under the BIA Purpose Code X Program, social service agencies of federally recognized tribes will be able to view criminal history information accessed through BIA’s Office of Justice Services, which will conduct name-based checks in situations where parents are unable to care for their children.

For more information on TAP, visit: www.justice.gov/tribal/tribal-access-program-tap.

For more information about the Justice Department’s work on tribal justice and public safety issues, visit:  www.justice.gov/tribal.

STATESVILLE, N.C. B A federal jury sitting in Statesville delivered  a guilty verdict against Eduardo Trejo-Munoz, a/k/a “Lalo,” 23, of Hickory, N.C., for trafficking high purity crystal methamphetamine worth over $5 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Following a two-day trial which ended late yesterday, Trejo-Munoz was convicted of five charges, 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; and Chief Tom R. Adkins of the Hickory Police Department.

According to 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.  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 Operation “Lay Low,” codenamed after Trejo-Munoz’s nickname, which is part of an extensive investigation by 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 16, 2014, and will remain in custody until his sentencing date, which has not yet been set.  Trejo-Munoz faces a statutory mandatory minimum sentence of 10 years to life in prison, as well as a fine of up to $10,000,000.

The case was investigated by the DEA, HSI, the Catawba County Sheriff’s Office, Hickory Police Department, North Carolina State Bureau of Investigation, and North Carolina State Highway Patrol.The prosecution of this OCDETF investigation is being handled by Assistant U.S. Attorney Steven R. Kaufman.

CHARLOTTE, N.C. – A criminal indictment was unsealed today in federal court charging Troy Barnes, 53, of Riverview, Michigan, with wire fraud conspiracy and wire fraud,  for operating a $6.8 million Internet Ponzi scheme that defrauded more than 10,000 investor victims worldwide, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Barnes’ conspirator, Kristine Louise Johnson, of Aurora, Colorado, pleaded guilty in June 2015 to wire fraud conspiracy for her role in the scheme.

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

According to filed court documents, Barnes was the owner of “Work with Troy Barnes, Inc.” (WWTB), which did business over the Internet under the name of “The Active Community” (TAC).  Barnes was the President and Marketing Director of WWTB responsible for promoting the online scheme.  Johnson served as TAC’s Chief Financial Officer, and managed TAC’s day-to-day operations, including the company’s bank accounts.  Filed court documents indicate from about April 2014 to February 2015, Barnes induced victims to invest money in TAC, claiming “Achieve is the answer to all of our prayers…” and falsely promising investors would receive a bogus 700% return on their investment.  Barnes also told his victims they could make as much money as they wanted claiming the investment was “never-ending,” when, in fact, TAC operated solely as a pyramid scheme and initial investors were paid with later victims’ money. Barnes also falsely touted TAC as a “lifetime income plan,” with “limitless returns, even though by August 2014, Barnes and Johnson had discussed TAC’s inevitable shortfall and knew that TAC did not have sufficient funds to cover weekly payouts to investors, much less operating expenses.

According to court filings, as the scheme grew in size and scope, Barnes and his conspirators concealed the true nature of the scheme through multiple misrepresentations.  According to court records, when the conspirators became concerned that the use of the term “investment” would draw scrutiny from regulators, they instructed victim-investors that “We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.”  Even when TAC was unable to operate because their payment processor concluded that TAC was indeed operating a Ponzi scheme and ceased doing business with the company, Barnes and his conspirators lied to victims, falsely stating that “The only reason that [TAC] is not paying out today is that our processor can’t handle the volume of money we are paying our members.” 

According to court records, in order to sustain the scheme, Barnes and his conspirators encouraged investors to “re-purchase” positions in the matrix, thereby reducing the amount of money needed to pay out to early investors and enabling the fraudsters to prolong the scheme.  As indicated in court documents, the investment scheme began to crumble when payment processors stopped processing the Ponzi payments to victim-investors.  By the time the scheme collapsed in February 2015, the conspirators had defrauded over 10,000 investors in the Charlotte-area and worldwide, and owed victim-investors at least $51 million in purported investment returns, yet only had available approximately $2.6 million. According to court records, over the course of the scheme, Barnes used over $140,000 of the victims’ money for his own enrichment.

Barnes had his initial appearance today and was released on bond.  Johnson’s sentencing hearing has been set for November 19, 2015, before U.S. District Judge Max O. Cogburn, Jr.

The case was investigated by the U.S. Secret Service.  In making today’s announcement, U.S. Attorney Rose thanked the Denver Regional Office of the Securities and Exchange Commission for its assistance with the case.

Assistant U.S. Attorney Corey F. Ellis is in charge of the prosecution.

CHARLOTTE, N.C. – Daniel H. Williford, 57, of Fleetwood, N.C. was sentenced on Tuesday, October 27, 2015 to 110 months in prison for operating a Ponzi scheme that defrauded nearly 100 investors, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  In addition to the prison term, U.S. District Judge Max O. Cogburn, Jr. ordered Williford to serve three years of supervised release and to pay $17,915,013.35 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) in North Carolina.

According to filed court documents and statements made in court, from January 2007 through July 2013, Williford operated a fraudulent investment scheme, through which he obtained more than $44 million from over 200 investors in Charlotte and elsewhere, causing nearly $18 million in losses to more than 100 investors by the time the scheme collapsed.  Court records show that Williford lied to his victims, promising their money would be invested in wireless internet equipment, internet towers, and other facilities and companies.  According to court records, rather than investing the victims’ money as promised, Williford used the majority of the funds to run a Ponzi-style scheme and used a portion to fund his personal lifestyle.  Court records show that over course of the fraud, Williford invested only $7.7 million of the victims’ money and used approximately $32 million to pay some of his victims’ supposed “profits” on their investments and to cover personal expenses.

Court records also show that even after Williford ceased having any legitimate business operations, he continued to solicit money from investors for several years.  One victim told the court yesterday evening that he was Williford’s co-pilot in a commercial airliner, and that Williford had literally defrauded him on the runway before takeoff.  Other victims spoke about being unable to retire, declaring bankruptcy, losing children’s college savings, and one victim told the court he would have to sell his businesses, jeopardizing the jobs of over 50 employees as a result of the fraud.  Williford pleaded guilty to securities fraud in July 2014.

Judge Cogburn said that Williford’s lengthy sentence was intended to “frighten those who will think about doing this, to make them think twice about stealing other people’s money” and to make such people realize “that going to prison for that long is not worth it.”  Judge Cogburn also noted that the victims “will suffer a long time,” and pointed to the “callousness and huge period of time in which [Williford] took these people’s money” as a basis for the sentence.

The FBI investigated the case.  Assistant U.S. Attorney Dan Ryan of the U.S. Attorney’s Office in Charlotte prosecuted the case.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established 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’s 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.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.”

CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced today Chuckie Beaver, 52, of Ellenboro, N.C. to 57 months in prison for defrauding more than 30 investors of over $2 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Judge Cogburn also ordered Beaver to serve three years under court supervision after he is released from prison.

Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS) join U.S. Attorney Rose in making today’s announcement.

According to information contained in court documents and today’s sentencing hearing, Beaver was the sole owner of “Best Services, Inc.,” (Best Services), a company specializing in the repair of industrial electronic equipment.   Court records show that from June 2012 to April 2014, Beaver induced over 30 victims, including friends, neighbors, and fellow church members, to invest in his fraudulent scheme, falsely claiming that his company needed additional capital to purchase materials to complete a large number of outstanding repair orders from major corporations.  To further the scheme, Beaver created and showed his investors fake documents, including bogus repair orders indicating significant work activity, fake customer checks, and fake customer emails, giving a false impression he had strong relationships with major corporations.

Court records show that Beaver often gave his victims post-dated checks at the time of their initial investment, written for the full amount of the promised investment plus as much as 100% interest.  According to court records, when the investors’ checks were returned by the bank for insufficient funds, Beaver made up a number of excuses to his victims, and, in some instances, he induced the victims to invest additional funds with the promise of even greater returns.  Beaver previously admitted in court that contrary to what he promised his investors, he used their money to pay for personal expenses and to make payments to earlier investors, commonly referred to as Ponzi payments.  In total, over the course of the scheme, Beaver defrauded more than 30 individuals from Mecklenburg, Gaston, Cleveland and Lincoln counties of more than $2 million. Beaver pleaded guilty to securities fraud in November 2014.

In announcing Beaver’s sentence, Judge Cogburn said that, “Everybody needs to watch out for this defendant” and stated that he did not trust anything the defendant said.  “It is obvious he is a con man,” Judge Cogburn noted, adding, “Once a con man always a con man.”

Beaver 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 Secret Service and USPIS.  Assistant United States Attorney Kevin Zolot, of the U.S. Attorney’s Office in Charlotte prosecuted the case.

CHARLOTTE, N.C. – The former co-owner and operator of a Charlotte-area company providing services to Medicaid beneficiaries with intellectual/developmental disabilities has admitted to defrauding the government program of over $2 million, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Eric Bernard Mitchell, 43, of Charlotte, appeared before U.S. Magistrate Judge David S. Cayer and pleaded guilty to health care fraud and money laundering charges.

U.S. Attorney Rose is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

According to filed court documents and today’s plea hearing, from about 2007 to about 2009, Mitchell co-owned and operated Angelic Community and Family Services, L.P. (Angelic), which provided alternative care to Medicaid recipients with intellectual/developmental disabilities in a non-institutional setting.  Angelic later became defunct, and in 2009, Mitchell assisted in the creation of another company, identified in court documents as “Company #1,” which provided the same type of services as Angelic.  Mitchell operated significant portions of Company #1’s business and had exclusive control of the company’s bank accounts.  Both Angelic and Company #1 were approved by Medicaid to provide such services to beneficiaries and to receive reimbursement from the government program.

According to court records, in or about 2006, Mitchell created an unincorporated company, Mitchell Connor & Associates (MCA), which provided operational services to Company #1, including the submission of reimbursement claims to Medicaid.  Mitchell admitted in court today that from about October 2009 to about June 2014, he submitted through MCA fraudulent claims to Medicaid on behalf of Company #1, seeking reimbursement for services which were never provided to beneficiaries with developmental disabilities.  Mitchell also admitted that he submitted the fraudulent claims using the Medicaid beneficiary information of former clients of Angelic, who Mitchell knew were approved to receive such services.  Over the course of the scheme, Mitchell admitted to submitting at least $2.5 million in fraudulent claims using the beneficiaries’ stolen information and to receiving over $2 million in payments from Medicaid.

According to court records, Medicaid directed payments for Company #1’s reimbursement claims, including the fraudulent ones, to multiple bank accounts exclusively controlled by Mitchell.  Over the course of the conspiracy, Mitchell used portions of the Medicaid funds to cover personal expenses, including to make multiple car payments to a Mercedes dealer and to pay for various car repair services. 

Mitchell was released on bond after the plea hearing.  The health care fraud charge and the money laundering charge each carry a maximum prison term of 10 years.  A sentencing date for Mitchell has not been set yet.

The investigation was handled by HHS-OIG and IRS-CI.   U.S. Attorney Rose also thanked the North Carolina Medicaid Investigations Division for their assistance.  Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte is prosecuting the case.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force.  The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing  of  all  whistle  blower  complaints,  and  the  creation  of  investigative  teams  so  that individual agencies may focus their unique areas of expertise on investigations.  The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

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

CHARLOTTE, N.C. – Jose Delarosa, also known as “Chino” or “Pretty,” was sentenced on Monday, October 26, 2015, to 240 months in prison for his role as a major supplier of marijuana based in California, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Delarosa, 36, of Moreno Valley, California, was also ordered to forfeit $48,000 in cash seized, to pay a $25 million money judgment and to serve five years of supervised release upon his release 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 Atlanta and the Carolinas and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department.

According to information contained in filed documents and court proceedings, Delarosa was involved in a marijuana trafficking conspiracy that spanned from coast to coast.  According to court records, from about 2009 to about May 2014, Delarosa was a major marijuana supplier, responsible for trafficking 10 to 30 tons of marijuana from the Los Angeles area to the east coast, including to Charlotte, Florida, Georgia, and South Carolina, as well as other locations throughout the country.  Court records show that Delarosa transported the drugs via a network of couriers flying on commercial flights.  The couriers flew to California, each time carrying approximately $50,000 in cash in carry-on luggage and returned to Charlotte with approximately 100 pounds of marijuana per trip hidden in checked baggage.

This Organized Crime Drug Enforcement Task Force (OCDETF) investigation, code-named “Operation Goldilocks,” has resulted in the dismantling of the organization and the seizure of more than $1 million of drug proceeds, 600 pounds of marijuana, and 13 firearms.  The investigation has also netted the successful prosecution of 65 defendants, with three fugitives remaining.

The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General’s drug strategy to reduce the availability of illegal drugs by identifying and targeting the major trafficking organizations, eliminating the financial infrastructure of drug organizations by emphasizing financial investigations and asset forfeiture, redirecting federal drug enforcement resources to align them with existing and emerging drug threats, and conducting expanded, nationwide investigations against all the related parts of the targeted organizations.

This ongoing OCDETF investigation is being led by HSI and CMPD, assisted by several state and local law enforcement agencies, including the Gastonia Police Department, the Concord Police Department, the Mooresville Police Department, the Pineville Police Department, the Huntersville Police Department, the Kannapolis Police Department, the Cornelius Police Department, the Waxhaw Police Department, North Carolina Alcohol Law Enforcement, North Carolina State Bureau of Investigation, the Iredell County Sheriff’s Office, the Union County Sheriff’s Office, and the Culver City, California Police Department.  The prosecution for the government is being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

In addition to Delarosa, the following 68 defendants have been charged in connection with Operation Goldilocks:

3:10-cr-238, Coleman et al:

1. Parker Coleman – 720 months in prison, followed by 10 years supervised release.
2. Stephanie Peppers – 54 months in prison, followed by 4 years supervised release.
3. Shaunda Shenal McAdoo – 36 months in prison, followed by 3 years supervised release.
4. Ryann Chancler Lewis – 87 months in prison, followed by 5 years supervised release.
5. Samantha Jo Schmidlin – 27 months in prison, followed by 3 years supervised release.
6. Nolan Robertson – 41 months in prison, followed by 4 years supervised release.
7. Leah Patience Davis – 24 months of probation.
8. Leon Edgar Robertson –84 months in prison, followed by 4 years supervised release.
9. Mark Eric Dorsey, II – 96 months in prison, followed by 5 years supervised release.
10. Wendell Jerrod Robinson – 72 months in prison, followed by 4 years supervised release.
11. Davon Clifton Harris – 60 months in prison, followed by 3 years supervised release.
12. Christopher Seaton McKneely – 37 months in prison, followed by 4 years supervised release.
13. Gerren Ezekiel Darty – 188 months in prison, followed by 5 years supervised release.
14. Glenn O’Neil Carrera – 87 months in prison, followed by 3 years supervised release.
15. William Pierce – 36 months in prison, followed by 3 years’ supervised release.
16. Rico Lamont Grier – 36 months in prison, followed by 3 years supervised release.
17. Harold Manigault – 30 months in prison, followed by 3 years supervised release.
18. Mark Rene Hunt – 46 months in prison, followed by 4 years supervised release.
19. Jason Lee Banks – 78 months in prison, followed by 3 years supervised release.
20. Megan Amelia Baehr – 41 months in prison, followed by 4 years supervised release.

3:10-cr-245, Crockett et al:

1. Ahmed Daniel Crockett – 235 months in prison, followed by 5 years supervised release.
2. Goldie Frances Crockett – 60 months in prison, followed by 3 years supervised release.
3. Sharon Kelsey-Brown – 60 months in prison, followed by 3 years supervised release.
4. Robert Jonathan Brown – 58 months in prison, followed by 5 years supervised release.
5. Shondu Lamar Lynch – 96 months in prison, followed by 4 years supervised release.

3:11-cr-18, Romero Lamont Massey – 60 months in prison, followed by 4 years supervised release.

3:11-cr-46, Lasonya White – 24 months of probation.

3:11-cr-85, Thomas Diggs, III – 12 months and 1 day in prison, followed by 2 years supervised release.

3:11-cr-09, Jerry Davis – 48 months in prison, followed by 3 years supervised release.

3:11-cr-256, Saulsberry et al:

1. Kamia Arekai Saulsberry – 36 months of probation.
2. Kisha Dorsey – 44 months in prison, followed by 4 years supervised release.
3. Robert Earl Dorsey, Jr. –48 months in prison, followed by 3 years supervised release.
4. Ashley Rae Williams – 6 months in prison, followed by 3 years supervised release.
5. Tonisha Deshon Williams –70 months in prison, followed by 4 years supervised release.
6. Vincent Talbot – 72 months in prison, followed by 4 years supervised release.
7. Kevin Lamont Stanfield, Jr. – 42 months in prison, followed by 4 years supervised release.
8. Danny Hance – 37 months in prison, followed by 3 years supervised release.

3:11-cr-287, Thomas Lavon Smith, Jr. – 168 months in prison, followed by 5 years supervised release.

3:11-cr-337, Logie et al:

1. Tavarus Shamaco Logie – 210 months in prison, followed by 5 years supervised release.
2. Crystal Alethea Easter – 36 months in prison, followed by 4 years supervised release.
3. Don Levon Marsh – 48 months in prison, followed by 4 years supervised release.
4. Anthony Silva Alegrete – 54 months in prison, followed by 5 years supervised release.
5. Ronald C. Hargette – 60 months in prison, followed by 4 years supervised release.
6. Sandra Anita Landers – 27 months in prison, followed by 3 years supervised release.
7. Evelyn Chantell LaChapelle – 87 months in prison followed by 4 years supervised release.
8. Natalia Christina Wade – 6 months in prison, followed by 3 years supervised release.
9. Francine Vanessa Williams – 87 months in prison followed by 4 years supervised release.
10. Marvin Ray Wilburn – 30 months in prison, followed by 2 years supervised release.
11. Corvain T. Cooper –life in prison.
12. Leamon Keishan Moseley – 36 months in prison, followed by 2 years supervised release.
13. Gregory Wall – pled guilty; 46 months in prison, followed by 4 years’ supervised release
14. Dana Lamont Adams –60 months in prison, followed by 4 years supervised release.
15. Lamar Andrew Harris – 50 months in prison, followed by 3 years supervised release.
16. Clyde Monroe Wilburn – currently a fugitive.

3:13-cr-18, Lopez et al:

1. Octavio Lopez – 57 months in prison, followed by 5 years supervised release.
2. Enrique Leonardo Lemus – 70 months in prison, followed by 3 years supervised release.
3. Gustavo Campos Garcia – 84 months in prison, followed by 3 years supervised release.
4. Roberto Mendoza – pending sentencing (3:14-cr-164)
5. Edgar Milian – 57 months in prison, followed by 2 years supervised release.
6. Cristian Deylah West – 24 months in prison, followed by 4 years supervised release.

3:13-cr-40, Andrew Scott Lowery – 46 months in prison, followed by 3 years supervised release.

3:13-cr-132, Darrick Leon Johnson – 120 months in prison, followed by 5 years supervised release.

3:14-cr-252, Sergio Arturo Ibarra – pending sentencing (3:15-cr-164)

3:15-cr-42, Erik J. Jeter – pending guilty plea hearing.

3:14-mj-72, Jose Rene Ibarra – currently a fugitive.

3:14-mj-73, Dennis Delarosa – currently a fugitive.

CHARLOTTE, N.C. – A Charlotte gang member of the United Blood Nation, also known as “UBN” or “the Bloods,” was sentenced in federal court today for illegally possessing and selling stolen firearms, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad ordered Dominic Xavier McDonald a/k/a “Bombay,” 28, to serve 188 months in prison, followed by five years of supervised release. McDonald committed this offense while on supervised release for a previous federal gun conviction. McDonald received fifteen months imprisonment to run consecutively for his supervised release violations for a total of 203 months imprisonment.

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, and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD).

“Convicted felons who possess firearms pose a great threat to the community,” said U.S. Attorney Rose. “McDonald stole and sold firearms while he was still under court supervision for previous gun crimes. With today’s outcome, we’ve put an end McDonald’s continued disregard for the law and removed this brazen criminal from the community.”

“ATF is committed to keeping our communities safe by reducing firearms and violent crimes. This case is another example of how ATF actively investigates and apprehends individuals who acquire firearms through burglaries and subsequently sell them to criminals in the Charlotte Metro area. Today’s result could not have occurred without the outstanding partnership between ATF and the Charlotte Mecklenburg Police Department,” stated ATF Special Agent in Charge Hyman.

In December 2014, a criminal indictment charged McDonald with four counts of possession of a firearm by a convicted felon. According to filed documents and statements made in court, between October 15, 2014 and October 28, 2014, McDonald illegally obtained six firearms, which he then sold to other individuals. According to court records, the firearms included two pistols, two rifles, and two revolvers, one of which McDonald bragged about taking from the home of a Charlotte-Mecklenburg police officer. The two rifles McDonald sold were among several stolen from a residence McDonald and his conspirators burglarized during the relevant time period. McDonald pleaded guilty to the charges in March 2015.

McDonald has been in custody since January 2015. He will be transferred to the custody of the Federal Bureau of Prisons upon the designation of a federal facility. All federal sentences are served without the possibility of parole.

The investigation was handled by the ATF and CMPD. The case was prosecuted by Assistant United States Attorney Jennifer L. Dillon of the U.S. Attorney’s Office in Charlotte.

 

CHARLOTE, N.C. – Briana Shakeyah Johnson, 19, of Concord, N.C., appeared before U.S. Magistrate Judge David C. Keesler today and pleaded guilty to conspiracy to participate in racketeering activity (RICO) and murder in aid of racketeering charges, for her involvement in the murders of Douglas and Deborah London, announced U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

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.

This is the sixth defendant this week pleading guilty to charges stemming from this investigation.  Five other members of the United Blood Nation (UBN or Bloods) pleaded guilty on Tuesday, October 20, 2015 for their involvement in the conspiracy and murders.  Ibn Rashaan Kornegay, Rahkeem Lee McDonald, Daquan Lamar Everett, Centrilia Shardon Leach and David Lee Fudge, pleaded guilty to RICO conspiracy.  Fudge and McDonald also pleaded guilty to murder in aid of racketeering, for the murders of Douglas and Deborah London.  Fudge also pleaded guilty to Hobbs Act Robbery for his role in the May 2014 armed robbery of the Pineville area mattress store owned by the Londons.

Federal charges against the remaining six gang members, Jamell Lamon Cureton, Nana Yaw Adoma, Randall Avery Hankins, Malcolm Jarrel Hartley, Nehemijel Maurice Houston and Ahkeem Tahja McDonald, are still pending.

According to filed court documents and court proceedings, Johnson, a/k/a “Breezy B” a/k/a “Breezy V,” was an associate of gang members of the Charlotte-area Valentine Blood set of the UBN.  Court documents show that Johnson met Hartley in April 2014 and became his girlfriend.  According to court documents, on or about May 25, 2014, Cureton, Adoma and Fudge robbed “The Mattress Warehouse,” store owned by the Londons. The three were later charged in connection with that robbery.  According to court records, Cureton and other gang members discussed that Douglas London was the only eye witness that could identify Cureton and that he needed to be eliminated. As an associate of the Bloods, Johnson was present at gang meetings during which the murder of the Londons was discussed and planned.

In court documents filed with the plea agreement, Johnson admitted she agreed to drive Hartley to South Carolina to murder the Londons.  Johnson also admitted that on October 23, 2014, she drove Hartley to the London’s residence in Lake Wylie, S.C., and that she waited in the car while Hartley shot both victims.  According to court records, Johnson then drove Hartley back to Charlotte, first stopping at Rahkeem McDonald’s house to dispose of the gun.  The two of them then returned to Hartley’s apartment where they met with other gang members.  According to filed documents, while at the apartment, Hartley described the victims’ murders and the group celebrated.  Hartley was ultimately “ranked up” within the gang for murdering the Londons.

Johnson is currently in federal custody. Her sentencing date has not been scheduled yet. The RICO conspiracy charge carries a maximum penalty of life in prison.  The maximum penalty for murder in aid of racketeering is death or life in prison.

Charges against the remaining six gang members are still pending.  Cureton, Adoma, Hankins, Hartley, Houston and Ahkeem Tahja McDonald are changed with RICO conspiracy.  Cureton, Hankins and Hartley are also charged with two counts of murder in aid of racketeering and two counts of use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in death, for the murders of the Londons.  Hartley faces two additional charges of possession of a firearm by a felon.  Cureton and Adoma are also charged with Hobbs Act Robbery, assault with a dangerous weapon in aid of racketeering activity, and use or carry a firearm in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence for their involvement in the mattress store robbery.  Cureton and Ahkeem McDonald are also facing charges of 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 resulting in death, in connection with the August 2013 murder of Kwamne Donqurius Clyburn, who was allegedly murdered for falsely claiming to be a member of the Bloods.

The FBI, CMPD and the York County Sheriff’s Office investigated the case.Assistant U.S. Attorneys Elizabeth Greene and Don Gast are in charge of the prosecution.

CHARLOTTE, N.C. – Attorney General Loretta Lynch presented 279 Justice Department employees and 33 individuals, including two Assistant United States Attorneys in the Western District of North Carolina, with Attorney General Awards at a ceremony held today in Washington, D.C.  These annual awards recognize department employees and other individuals for their dedication to carrying out the Department of Justice’s mission.  

“The individuals being honored today stand out within a department that holds all of its employees and partners to an extremely high standard of excellence,” said Attorney General Lynch.  “They have put in long hours, made immense sacrifices, and, in some cases, placed themselves in harm’s way.  They have taken on issues that once seemed intractable, and made progress on problems that once seemed impossible.  And their outstanding work is an inspiration to public servants everywhere.”

The Attorney General’s Award for Distinguished Service is the Justice Department’s second-highest award for employee performance.  The recipients of this award exemplify the highest commitment to the department’s mission.  Twelve Distinguished Service Awards were presented this year to individuals or teams of people.  Two of those recipients are Assistant United States Attorneys (AUSAs) in the Western District of North Carolina, Mark T. Odulio and Daniel S. Ryan.

“Today, Mr. Odulio and Mr. Ryan were recognized for their exemplary work in advancing the critical mission of the Justice Department.This prestigious award symbolizes their skills as lawyers and their dedication as public servants to the pursuit of justice.Their work exemplifies our ongoing commitment to uphold the rule of law and to deliver justice to the people in our district,” said U.S. Attorney Rose.

Mr. Odulio and Mr. Ryan received the award for their exceptional service and outstanding legal work in connection with the Department of Justice’s record breaking $16.65 billion settlement with Bank of America (the Bank), concerning the Bank’s origination and securitization of residential mortgages.AUSAs Odulio and Ryan spearheaded the Western District’s investigation of the Bank as part of the broader efforts of the Attorney General’s Residential Mortgage Backed Securities (RMBS) Working Group. Mr. Odulio and Mr. Ryan worked with other U.S. Attorney’s Offices, Justice Department components and state officials across the United States to complete the investigation of the Bank’s fraudulent conduct which resulted in investors suffering millions of dollars in losses.The dedicated efforts of Mr. Odulio, Mr. Ryan and the RMBS Working Group ensured that Bank of America was held accountable for its fraudulent conduct, substantial compensation was provided for federal entities supported by American taxpayers, and impacted homeowners received much-needed financial relief.

AUSAs Odulio and Ryan handle complex financial fraud matters investigated and litigated in the Western District.In that capacity, Mr. Odulio and Mr. Ryan develop leads, direct investigations, and prosecute cases in federal court on behalf of the United States, both civilly and criminally.In performing their duties, AUSAs Odulio and Ryan work closely with federal and state law enforcement partners and numerous regulatory and administrative agencies.

Mr. Odulio received both his undergraduate and JD degrees from the University of Maryland.

Mr. Ryan received his undergraduate degree from the University of Notre Dame and his JD from Harvard School of Law.

In making today’s announcement, U.S. Attorney Rose thanked Mr. Odulio and Mr. Ryan for their tireless dedication to fulfilling the Justice Department’s mission and noted that it is an honor and a privilege to recognize them both for their accomplishments and public service.

CHARLOTTE, N.C. – Demarcus Donte Ivey, 34, of Charlotte, has been indicted on robbery and gun charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. A federal grand jury sitting in Charlotte returned the two-count indictment on Tuesday, October 20, 2015, charging Ivey with Hobbs Act Robbery and use of a firearm during and in furtherance of a crime of violence resulting in death.

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 Mecklenburg County District Attorney Andrew Murray join U.S. Attorney Rose in making this announcement.

“Crimes of violence uniquely affect the community and specifically the victims of such crimes.  In this district, we work closely with our state counterparts and make prosecutorial decisions that maximize our options and ensure that the appropriate venue is utilized, whether it is state or federal court.  Given the factors and circumstances of this case, Ivey’s federal prosecution will best meet the ends of justice,” said U.S. Attorney Rose, who is also handling Ivey’s prosecution. 

“A man’s life was cut short because of the ruthless and callous actions of a violent killer.  Today’s indictment is the result of an intense investigation between federal and local law enforcement agencies committed to holding accountable offenders who put the safety of our communities at risk,” said Strong, FBI’s Special Agent in Charge.

“The strong partnership between my office and the U.S. Attorney’s Office creates a coordinated effort between state and federal prosecutors working here in Mecklenburg County to ensure that our resources are shared to best protect this community and seek justice in every case,” said District Attorney Murray.

“This indictment sends a very strong message to those who engage in violent criminal activity.  The Charlotte-Mecklenburg Police Department and our partner agencies will continue to be steadfast in our focus to keep the community safe,” said CMPD Chief Putney.

According to the allegations contained in the charging document, in or about September 2009, Ivey robbed Club Nikki’s, which is located in Charlotte. The indictment alleges that over the course of the robbery, Ivey shot and killed Adrian Youngblood, who was a patron at Club Nikki’s.

The Hobbs Act Robbery offense carries a maximum of 20 years in prison, and the offense related to the use, carry, brandish and discharge of a firearm during and in furtherance of a crime of violence resulting in death carries a minimum of 10 years and a maximum of life in prison.

Ivey is currently in state custody and will be transferred to the custody of the U.S. Marshals to appear in court on the federal charges.

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 this announcement, U.S. Attorney Rose praised the investigative work of the FBI and CMPD and thanked the Mecklenburg County District Attorney’s Office for their continued support and cooperation with this case.

U.S. Attorney Rose is in charge of Ivey’s prosecution.

CHARLOTTE, N.C. – Chief U.S. District Judge Frank D. Whitney sentenced today Alberto Gasca, 31, of Los Angeles, California, to serve 128 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.  Gasca pleaded guilty in February 2015 to conspiracy to possess with intent to distribute heroin.

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.

According to filed court documents and today’s sentencing hearing, beginning in 2012, Gasca was a major drug distributor based in California, responsible for smuggling bulk drug shipments from Mexico.  Court records show that Gasca used an extensive transportation network of couriers to traffic the heroin and other drugs, including methamphetamine, from Los Angeles to distribution cells throughout the United States, including the Charlotte area.  According to court documents, Gasca’s couriers typically transported the heroin hidden in false compartments of large rolling suitcases.  Law enforcement arrested Gasca in September 2014 in California.  According to court records, at the time of his arrest, law enforcement seized from Gasca’s residence $108,000 in cash, drug scales, plastic packaging, kilogram wrappers, two kilograms of heroin, more than five ounces of methamphetamine and a ledger.  Gasca’s prosecution is part of an ongoing investigation into drug trafficking of heroin from Mexico.  Over the course of the investigation, law enforcement seized approximately 50 pounds of heroin, and approximately $170,000 identified as drug proceeds.

Six other conspirators have been sentenced to date in connection with this investigation.  Hector Manuel Castaneda Gastelo and Yolanda Gonzalez were each sentenced to 20 years in prison; Marcelino Rivera Vorquez was sentenced to 7.5 years in prison; Fernando Hernandez was sentenced to 7.25 years in prison; and Benjamin Villanueva Estrada was sentenced to 6.5 years in prison.  Another conspirator, Omar Kamirez Lizama is awaiting sentencing.

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.

Gasca 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 case was investigated by the DEA in Charlotte.In making today’s announcement, U.S. Attorney Rose thanked the Ontario, California Police Department and the DEA’s Office in Los Angeles for their assistance with this investigation. Assistant U.S. Attorney Elizabeth Greene of the U.S. Attorney’s Office in Charlotte is handling the prosecution.

Charlotte, N.C. – A federal grand jury has indicted two former executives of Swisher Hygiene Inc. (Swisher) on securities fraud and obstruction of justice charges, announced U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.  Joining in today’s announcement is Special Agent in Charge John A. Strong of the FBI’s Charlotte Division.

Swisher’s former chief financial officer, Michael Kipp, 61, of Charlotte, and certified public accountant and Swisher’s former director of external reporting, Joanne Viard, 36, of Santa Rosa Beach, Florida, have been charged in connection with a securities fraud conspiracy allegedly carried out at Swisher throughout fiscal year 2011 and a subsequent obstruction of justice scheme in 2012.  The federal indictment was returned late afternoon and Kipp and Viard are scheduled to make their initial appearances in federal court on Tuesday, Oct. 20, 2015.

“My office has a long record of holding corporate executives accountable for their criminal conduct,” said U.S. Attorney Rose.  “Today’s charges continue to make clear that regardless of title or position, my office will prosecute corporate executives who engage in financial fraud schemes that defraud the investing public and undermine the integrity of our financial markets.  We will work diligently to uncover such fraud, no matter how pernicious the cover-up.”

“As alleged in the indictment, these corporate executives were entrusted to fairly and accurately report the earnings of their employer; instead, they manipulated and falsified the numbers putting the hard earned money of shareholders at risk and undermining the laws in place to protect our financial markets,” said Special Agent in Charge Strong.  “The FBI will root out corporate fraud wherever it exists and ensure those who engage in such practices are held accountable.”

Today’s charges follow the Oct.7, 2015, announcement that Swisher had entered into a deferred prosecution agreement with the United States, in which Swisher accepted and acknowledged responsibility for the conduct of its former employees and agreed to pay a $2 million penalty.  Formal charges were also filed on Oct. 7, 2015, against Swisher’s former senior-level accounting employee, John Pierrard, who is scheduled to enter his guilty plea on Tuesday, Oct. 20, 2015, for his role in the alleged accounting fraud conspiracy.

According to allegations contained in the indictment and documents filed in related cases:

Throughout fiscal year 2011, Kipp, Viard and their conspirators engaged in an accounting fraud scheme to ensure that Swisher’s reported earnings had met or exceeded executive management’s forecasts, and to conceal the existence of the fraud from Swisher’s auditors, Wells Fargo, the investing public and others.  Some of the fraudulent methods  Kipp, Viard and their conspirators used to manipulate Swisher’s books and records to fraudulently increase the company’s income included reducing expenses by moving them from the company’s profit and loss statement to its balance sheet as well as engaging in what is commonly referred to as “cookie jar” accounting. 

The accounting fraud scheme began to unravel when Swisher’s then-controller pushed back on making a fraudulent entry during the year end close.  The controller wrote in an email, “I’ll run it by BDO [Swisher’s auditors] so we’re on the same page,” to which Kipp responded, “You’ll run it by me since I’m the chief accounting officer. I’m out of patience with this.”  The controller persisted in his refusal to book the fraudulent entry and Kipp fired him.  Swisher’s audit committee learned of the controller’s allegations and promptly commissioned an independent internal investigation.  After the allegations of fraud were reported, Kipp and Viard almost immediately began to engage in misleading conduct to conceal the accounting fraud conspiracy and to obstruct justice by lying to the investigators hired by the audit committee.

Approximately 11 months following the announcement of the investigation, Swisher filed restated financial reports for the first three quarters of 2011 and filed its Form 10-K for the 2011 year.  The restatement reflected, among other things, that Swisher had substantially overstated its earnings and significantly understated its losses during the relevant time period.

The indictment charges Kipp and Viard each with one count of conspiracy to commit securities fraud, to falsify books, records and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants; one count of securities fraud; one count of wire fraud; and one count of obstruction of justice.  Kipp is also charged with one count of bank fraud.  The conspiracy charge carries a maximum prison term of five years.  The securities fraud, wire fraud and obstruction offenses each carry a maximum prison term of 20 years.  The bank fraud charge carries a maximum prison term of 30 years.

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

U.S. Attorney Rose praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges.  Rose also thanked the U.S. Securities and Exchange Commission for their assistance in the investigation.

Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are assigned to this case.

Former Senior Level Corporate Employee to Plead Guilty to Securities Fraud Conspiracy

A federal grand jury in Charlotte, North Carolina, has indicted two former executives of Swisher Hygiene Inc. (Swisher) on securities fraud and obstruction of justice charges, announced U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.  Joining in today’s announcement is Special Agent in Charge John A. Strong of the FBI’s Charlotte Division. 

Swisher’s former chief financial officer, Michael Kipp, 61, of Charlotte, and certified public accountant and Swisher’s former director of external reporting, Joanne Viard, 36, of Santa Rosa Beach, Florida, have been charged in connection with a securities fraud conspiracy allegedly carried out at Swisher throughout fiscal year 2011 and a subsequent obstruction of justice scheme in 2012.  The federal indictment was returned late afternoon and Kipp and Viard are scheduled to make their initial appearances in federal court on Tuesday, Oct. 20, 2015.

“My office has a long record of holding corporate executives accountable for their criminal conduct,” said U.S. Attorney Rose.  “Today’s charges continue to make clear that regardless of title or position, my office will prosecute corporate executives who engage in financial fraud schemes that defraud the investing public and undermine the integrity of our financial markets.  We will work diligently to uncover such fraud, no matter how pernicious the cover-up.”

“As alleged in the indictment, these corporate executives were entrusted to fairly and accurately report the earnings of their employer; instead, they manipulated and falsified the numbers putting the hard earned money of shareholders at risk and undermining the laws in place to protect our financial markets,” said Special Agent in Charge Strong.  “The FBI will root out corporate fraud wherever it exists and ensure those who engage in such practices are held accountable.”

Today’s charges follow the Oct.7, 2015, announcement that Swisher had entered into a deferred prosecution agreement with the United States, in which Swisher accepted and acknowledged responsibility for the conduct of its former employees and agreed to pay a $2 million penalty.  Formal charges were also filed on Oct. 7, 2015, against Swisher’s former senior-level accounting employee, John Pierrard, who is scheduled to enter his guilty plea on Tuesday, Oct. 20, 2015, for his role in the alleged accounting fraud conspiracy.

According to allegations contained in the indictment and documents filed in related cases:

Throughout fiscal year 2011, Kipp, Viard and their conspirators engaged in an accounting fraud scheme to ensure that Swisher’s reported earnings had met or exceeded executive management’s forecasts, and to conceal the existence of the fraud from Swisher’s auditors, Wells Fargo, the investing public and others.  Some of the fraudulent methods  Kipp, Viard and their conspirators used to manipulate Swisher’s books and records to fraudulently increase the company’s income included reducing expenses by moving them from the company’s profit and loss statement to its balance sheet as well as engaging in what is commonly referred to as “cookie jar” accounting.  

The accounting fraud scheme began to unravel when Swisher’s then-controller pushed back on making a fraudulent entry during the year end close.  The controller wrote in an email, “I’ll run it by BDO [Swisher’s auditors] so we’re on the same page,” to which Kipp responded, “You’ll run it by me since I’m the chief accounting officer. I’m out of patience with this.”  The controller persisted in his refusal to book the fraudulent entry and Kipp fired him.  Swisher’s audit committee learned of the controller’s allegations and promptly commissioned an independent internal investigation.  After the allegations of fraud were reported, Kipp and Viard almost immediately began to engage in misleading conduct to conceal the accounting fraud conspiracy and to obstruct justice by lying to the investigators hired by the audit committee. 

Approximately 11 months following the announcement of the investigation, Swisher filed restated financial reports for the first three quarters of 2011 and filed its Form 10-K for the 2011 year.  The restatement reflected, among other things, that Swisher had substantially overstated its earnings and significantly understated its losses during the relevant time period.

The indictment charges Kipp and Viard each with one count of conspiracy to commit securities fraud, to falsify books, records and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants; one count of securities fraud; one count of wire fraud; and one count of obstruction of justice.  Kipp is also charged with one count of bank fraud.  The conspiracy charge carries a maximum prison term of five years.  The securities fraud, wire fraud and obstruction offenses each carry a maximum prison term of 20 years.  The bank fraud charge carries a maximum prison term of 30 years. 

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

U.S. Attorney Rose praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges.  Rose also thanked the U.S. Securities and Exchange Commission for their assistance in the investigation. 

Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are assigned to this case.

CHARLOTTE, N.C. – The former Treasurer of a Charlotte area non-profit organization appeared in court today and admitted to stealing more than $344,262 from his employer, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Floyd Kevan Weaver, 53, of Rock Hill, S.C. pleaded guilty to one count of uttering counterfeit and forged securities before U.S. Magistrate Judge David C. Keesler.

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.

According to filed court documents and today’s court proceedings, from 2000 to 2013, Weaver was employed by a non-profit organization located in Charlotte.  As the non-profit’s elected Treasurer, Weaver was responsible for the organization’s financial affairs and acted as custodian of its funds.  Weaver admitted in court today that from 2008 to 2013, he engaged in a scheme to defraud his employer by fraudulently diverting the organization’s funds for his personal benefit.

According to court records, Weaver executed the scheme by forging the name of one of the non-profit’s officers on the organization’s bank checks and depositing those checks into his own bank account.  To conceal the fraud, Weaver mischaracterized the stolen funds as travel expenses, mileage reimbursement, office supplies and postage.  Weaver admitted that he forged approximately 116 checks totaling more than $326,545.  Weaver also admitted to using the non-profit’s debit card to steal more than $17,717 for his personal use.  Court documents show that Weaver used the stolen money to purchase jewelry and a car, among other things.

Weaver was released on bond following his guilty plea.  The charge carries a maximum prison term of 10 years and a $250,000 fine.  As part of his plea agreement, Weaver has agreed to pay restitution, the amount of which will be determined by the Court at sentencing.   A sentencing date for the defendant has not been set yet.

The investigation was handled by the USPIS.  The prosecution for the government is being handled by Assistant United States Attorney Jenny Sugar of the U.S. Attorney’s Office in Charlotte.

ASHEVILLE, N.C. – Patrick John Stone, 29, of Gloucester, Virginia was sentenced today by U.S. District Judge Martin Reidinger to serve 180 months in federal prison on child pornography production charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Stone was also placed on a lifetime of supervised release and was ordered to register as a sex offender.

Joining U.S. Attorney Rose in making today’s announcement is B.W. Collier, Acting Director of the North Carolina State Bureau of Investigation.

According to filed court documents and today’s sentencing hearing, Stone maintained an Internet account which he used to communicate in chatrooms and via video conferencing.  Stone admitted in filed court documents that while he resided in Cleveland County, N.C., he met the minor female via a chat website.   Stone also admitted to telling the minor victim he was 17 years old.  According to court records, between September 9, 2012, and November 1, 2012, Stone caused the minor to engage in sexually explicit conduct which Stone recorded without the minor’s knowledge.  A forensic examination of Stone’s seized computers revealed that he possessed numerous images of child erotica and child pornography videos.

Stone pleaded guilty in February 2015 to one count of production of child pornography and is currently in federal custody.  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 the SBI.  The case was prosecuted by the U.S. Attorney’s Office in Asheville.

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

ASHEVILLE, N.C. – Ronald Shannon Sosebee, 38, of Brevard, N.C. was sentenced on Thursday, October 15, 2015, by U.S. District Judge Martin Reidinger to serve 12 months and one day in federal prison for sexually touching and propositioning another person without that person’s permission, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  Sosebee was also ordered to serve a lifetime of supervised release and to register as a sex offender.

Joining U.S. Attorney Rose in making today’s announcement is Lee Boyd, United States Forest Service Patrol Captain.

According to filed court documents and the sentencing hearing, on or about June 24, 2014, Sosebee approached the male victim near Sleepy Gap Overlook, located on the Blue Ridge Parkway, while the male hiker was resting after hiking on a trail.  Court records show that Sosebee asked the male hiker if they could hike down the trail together, to which the victim agreed, and the two proceeded to walk, crossing into the Pisgah National Forest.  According to court records, after a short distance, Sosebee made an unsolicited sexual remark and touched the victim sexually without permission.  The victim resisted Sosebee’s sexual contact, ran toward his campsite and reported the incident to law enforcement.  Sosebee was arrested shortly thereafter.   

Sosebee pleaded guilty to engaging in sexual contact with another person without that other person’s permission and is currently in federal custody.  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 the United States Forest Service and the National Park Service.  The case was prosecuted by the U.S. Attorney’s Office in Asheville.

 

ASHEVILLE, N.C. – Ashlyn Nichole Carothers, 23, of Cherokee, N.C. was sentenced on Thursday, October 15, 2015, to 180 months in prison for her involvement in a robbery on the Indian reservation, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.  U.S. District Judge Martin Reidinger also ordered Carothers to serve three years of supervised release and to pay $30,166.45 as restitution.

U.S. Attorney Rose is joined by Interim Chief James Dike Sneed of the Cherokee Indian Police Department in making this announcement.

According to court records and yesterday’s sentencing hearing, on or about September 30, 2012, in Jackson County, George Lee Nobles robbed and killed a victim outside a motel located on the Eastern Band of Cherokee Indians Reservation.  Carothers acted as Nobles’ get-away driver.  According to filed court documents, Carothers admitted knowing Nobles had stolen the victims’ purse and that later she and Nobles burned the victim’s purse but kept the $5,000 cash they had found in the victim’s wallet.  Carothers pleaded guilty in March 2014 to one count of robbery by force and violence within Indian Country and aiding and abetting. Nobles is currently facing charges for first degree murder and related offenses in state court.

Carothers has been in custody since October 2013.  She will be transferred to the Federal Bureau of Prisons upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

The Cherokee Police Department handled the investigation assisted by the North Carolina State Bureau of Investigation.  Assistant U.S. Attorney Don Gast and Special Assistant U.S. Attorney Jason Smith prosecuted the case.

CHARLOTTE, N.C. – Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina, announced the filing of criminal charges against Swisher Hygiene, Inc. (“Swisher”) and a former senior-level corporate accounting employee in connection with accounting fraud at Swisher.  Joining in the announcement is John A. Strong, Special Agent in Charge of the FBI in North Carolina.  The criminal charges relate to Swisher’s scheme to defraud the investing public by materially misrepresenting Swisher’s financial position throughout fiscal year 2011.

U.S. Attorney Rose also announced that Swisher, a publicly-traded hygiene and sanitation solutions company based in Charlotte, has entered into a deferred prosecution agreement with the government, in which it accepts responsibility for the accounting fraud scheme and agrees to pay a $2 million monetary penalty.

Former senior-level corporate accounting employee John Pierrard, 49, of Delray Beach, Florida, has also agreed to plead guilty for his role in Swisher’s scheme to manipulate its books and records to fraudulently inflate reported earnings.

“Our financial markets depend on corporate executives and employees honestly reporting their financial results.  When they fail to do so, we all suffer.  Today’s filings make clear that my Office will continue to work tirelessly to root out financial fraud.  And, we will continue to hold criminally responsible both corporations and the individuals who run and work at those corporations when they cook the books.  The investing public deserves nothing less,” said U.S. Attorney Rose.

“When companies fraudulently misrepresent their earnings and overall financial strength through illicit accounting practices, not only do shareholders suffer, but the integrity of our financial market is put at risk.  Corporate fraud at any level will not be tolerated,” said FBI’s Special Agent in Charge Strong.

According to the bills of information filed for both Swisher and Pierrard, the purpose of the accounting fraud scheme was to ensure that Swisher consistently reported that its adjusted earnings had met or exceeded executive management’s forecasts and to conceal the existence of the fraud from, among others, its auditors, the financial institution with which it had an ongoing credit agreement and the investing public.

According to court filings, when adjusted earnings were falling short of the target, Swisher and its conspirators used various methods to fraudulently manipulate the books and records in order to hit certain adjusted earnings targets.  For example, court documents show that in some instances Swisher took expenses that were supposed to be booked to Swisher’s profit and loss statement and moved them to the balance sheet, fraudulently reducing expenses and thereby increasing income.  In other examples, when acquiring companies, Swisher inflated certain liabilities that were established for contingent earn-outs, and then fraudulently reduced those liabilities, resulting in increased income.  In other instances, court documents show that Swisher engaged in what is commonly referred to as “cookie jar” accounting, by inflating reserves during the process of acquiring other businesses and then fraudulently reducing those reserves and increasing income.  For example, according to court filings, as part of the process of closing the books for the third quarter of fiscal year 2011, Swisher made several fraudulent entries in its books and records on a Saturday, weeks into the close process, increasing in one day its September adjusted “earnings” from $2.4 million to $3.5 million.

According to filed documents, the accounting fraud scheme began to unravel when a Swisher employee, identified as Executive A, fired the Controller after he refused to book a fraudulent entry.  When the Controller’s allegations were brought to the attention of Swisher’s Audit Committee approximately a month later, it promptly commissioned an independent internal investigation.

The filed bill of information for Pierrard also describes a conspiracy to obstruct justice by misleading the investigators Swisher retained to conduct the independent investigation into the allegations of accounting fraud.  Charging documents filed against Swisher and Pierrard note that during the ensuing audit committee investigation executives provided false and/or misleading information in an effort to cover up the accounting fraud scheme.

In the deferred prosecution agreement, Swisher accepts and acknowledges responsibility for the conduct of its former employees as described in the bills of information and agrees to cooperate fully with the United States in its continuing investigation of the fraud.  The agreement also recognizes Swisher’s substantial cooperation with the United States to date, including the steps promptly taken by the audit committee upon discovery of the unlawful conduct to thoroughly investigate the unlawful conduct, to take remedial measures to address the unlawful conduct and to minimize the chance that such unlawful conduct would reoccur, as set forth in more detail in the agreement.

In the agreement, Swisher also agrees to pay a $2 million financial penalty, such penalty reflecting the fact that Swisher’s auditors have noted a substantial doubt that the Company’s ability to continue as a going concern and the concern that a greater fine would jeopardize the solvency of the company and put at risk the employment of its approximately 1,000 employees who were not involved in the wrong-doing.

Both bills of information charge one count of conspiracy to commit securities fraud, to falsify books, records, and accounts of Swisher, and to make misleading statements to Swisher’s auditors and accountants.  Pierrard faces a maximum prison term of five years for the conspiracy charge. In determining a defendant’s actual sentence, the Court will consider the U.S. Sentencing Guidelines, which are not binding but provide advisory sentencing ranges.  A plea agreement for Pierrard was also filed today and he is expected to appear before a U.S. magistrate judge to formally enter his guilty plea when the hearing is scheduled by the Court.

U.S. Attorney Rose praised the FBI for its outstanding work in leading the ongoing investigation that resulted in the filing of these charges.  She also thanked the U.S. Securities & Exchange Commission for their assistance in the investigation.

Assistant U.S. Attorneys Mark T. Odulio and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are in charge of the prosecution.

CHARLOTTE, N.C. – A Hickory physician pleaded guilty today to health care fraud charges for submitting to Medicare and Medicaid over $467,376 in fraudulent reimbursement claims, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Wayne Vincent Wilson, 54, entered his guilty plea before U.S. Magistrate Judge David S. Cayer.

Acting U.S. Attorney Rose is joined in making today’s announcement by Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region.

According to filed court documents, Wilson is a licensed family practitioner and owner and operator of Wayne Wilson, MD Family Practice (the Practice) located in Hickory.  At today’s plea hearing, Wilson admitted that from 2007 to 2014, he engaged in a scheme to defraud Medicare and Medicaid by submitting fraudulent reimbursement claims totaling more than $467,376 for services that were never provided to beneficiaries.  The fraudulent claims resulted in payments of at least $210,120 to Wilson and the Practice.

According to plea documents, Wilson “added and padded” his Medicaid and Medicare reimbursements with these false claims because he believed that Medicaid did not pay him enough for his services.  Court records show that in some instances Wilson perpetrated the fraud by adding non-existent services, such as nerve conduction studies, strep tests, and pulmonary stress tests among others, to actual patient office visits.  In other instances, Wilson fabricated entire office visits and submitted fraudulent claims for dates that patients were not even seen at the office.

According to admissions reflected in the plea documents, beginning in 2005, Wilson contracted with an individual identified as “D.D.” to perform nerve conduction studies, and sought reimbursement for those services through the Practice.  In February 2012, D.D. terminated his relationship with Wilson and the Practice.  Court records show that Wilson continued to submit fraudulent reimbursement claims to Medicare and Medicaid, falsely stating that he had performed nerve conduction studies for beneficiaries, even though Wilson did not have the equipment or the expertise to provide such studies.

Wilson pleaded guilty to two counts of health care fraud and was released on bond after the hearing.  The maximum prison term for each health care fraud count is 10 years and a $250,000 fine.  Wilson has also agreed to pay restitution, the final amount of which will be determined by the Court at sentencing, which has not been set yet. 

HHS-OIG conducted the investigation.  HHS-OIG conducted the investigation.  The prosecution of the case is handled by Assistant U.S. Attorney Kelli Ferry and Special Assistant U.S. Attorney Timothy Rodgers.  Mr. Rodgers is a Special Deputy Assistant Attorney General with the North Carolina Department of Justice Medicaid Investigations Division.  The SAUSA position is reflection of the partnership between the Medicaid Investigations Division and the United States Attorney that helps ensure the effective and vigorous prosecution of Medicaid fraud.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force.  The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing  of  all  whistle  blower  complaints,  and  the  creation  of  investigative  teams  so  that individual agencies may focus their unique areas of expertise on investigations.  The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at HHSTips@oig.hhs.gov.

CHARLOTTE, N.C. – A criminal bill of information was filed today in federal court in Charlotte, charging a Chinese businessman, Xiwen Huang, 55, of Charlotte, with one count of theft of trade secrets, announced Acting U.S. Attorney Jill Westmoreland Rose and Special Agent in Charge John A. Strong, of the FBI’s Charlotte Division.  A plea agreement was also filed today and Huang is expected to appear in court on Friday, October 2, 2015, at 10:30 a.m. to enter his formal guilty plea.

“After having received the benefit of an American education, the defendant worked for companies in the U.S. which developed technology for the U.S. government and private enterprises.  The defendant then stole secret information from these entities to bring back to China to benefit himself and others.  For this reprehensible conduct the defendant is going to federal prison.  We will do the same to other industry thieves in a continued effort to protect American intellectual property and maintain fairness in the marketplace,” said Acting U.S. Attorney Rose.

“For years Xiwen Huang targeted U.S. companies intending to steal the intellectual property others had worked so diligently to develop.  The research and product development information he stole from a North Carolina business put our state’s economy and people’s jobs at risk.  The FBI will work tirelessly to hold accountable the criminals who try to profit off the work of others,” said John Strong, Special Agent in Charge of the Charlotte Division of the FBI.   

According to court documents filed today, from about 2006 through May 2015, Huang engaged in a scheme to steal trade secrets from multiple companies within the United States, and intellectual property from the United States government, to further his aspirations of forming and operating his own company in the People’s Republic of China (China).  Huang is a native of China and naturalized U.S. Citizen.

Filed court documents show that prior to coming to the United States to obtain his doctorate degree in Chemical Engineering, Huang wrote that he “had a dream of learning more advanced technology to serve [his] homeland” of China and decided that to “fulfill [his] wish” he needed to go abroad and then “return to China with [his] newly acquired methodology and research skills to teach in China.”

According to court records, Huang came to the United States in 1998 to study and work.  From approximately December 2004 until he was fired by his employer in approximately March 2014, court records show that Huang stole proprietary and confidential information, including trade secret information and other intellectual property belonging to a Government Research Facility and two United States companies, with the intent to use the stolen information for the economic benefit of himself, a Chinese company, and others.

Filed court documents show that Huang stole a large amount of intellectual property from the Government Research Facility, including technology related to military vehicle fuel cells.  Court records also show that Huang stole from one U.S. company more than 500 documents containing confidential and proprietary information, including trade secret information related to 30 different products with research and development costs associated therewith of more than $65 million.  According to court records, Huang stole from a second U.S. company, more than 100 documents containing trade secret, confidential and proprietary information with research and development costs associated therewith of more than $25 million.

Court documents filed today show that upon being fired from the second U.S. company in 2014, Huang returned to China and began working for a Chinese company in a managerial role.  According to court records, Huang took with him to China all of the intellectual property and trade secrets he stole with the intent to use that stolen property to further his personal goals and the business interests of the Chinese company.

According to court records, after returning to China, upon attaining his goals first annunciated in 2003, Huang recounted his accomplishments of stealing U.S. intellectual property in a document he titled, “Trip of Dream Realization.”  In the document, translated from Chinese, court records show that Huang states in sum and substance: “Throughout these 16 years, I always have a dream of returning to China to develop my ambition.  In order to realize this dream, I have worked in US national research academies [laboratories], largest chemical companies in the world. I have also worked in small companies in the US.  My goal was to learn, digest, accumulate, and make preparations for realizing the dream. . .Consequently, I started scheming, planning that last for close to 2 years, and returned to China formally in this year, and initiated my own ‘Trip of Dream Realization’. . . As the main thrust during the country’s development, it is necessary an obligatory for our generation to fulfill our share of responsibility in contributing towards the societal progress of China.”

Huang has been in federal custody since May 2015, when he was arrested following his return from China.  He has agreed to plead guilty to stealing trade secrets from multiple U.S. companies. The theft of trade secrets charge carries a maximum term of 10 years in prison.  In determining Defendant’s actual sentence, the Court will consider the U.S. Sentencing Guidelines, which are not binding but provide advisory sentencing ranges.

The Charlotte Division of the FBI is investigating the case.  Assistant United States Attorneys Kevin Zolot and Maria K. Vento of the U.S. Attorney’s Office in Charlotte are handing the prosecution for the government.

CHARLOTTE, N.C. – On Monday, September 28, 2015, U.S. District Court Judge Max O. Cogburn, Jr. sentenced the leader of an organized retail crime ring that sold and distributed over $12 million in stolen over-the-counter (“OTC”) drugs and health-and-beauty (HBA) products, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Steve Hale, 66, of Terrell, N.C., was sentenced to 97 months in prison followed by three years of supervised release after serving his prison term.  Hale also was ordered to pay a $3,100 special assessment, to forfeit a sports boat and $332,195 in seized funds and to pay restitution to his victims, the amount of which will determined by the Court at a later date.

Acting U.S. Attorney Rose is joined in making today’s announcement by Matthew Quinn, Assistant Special Agent in Charge of the United States Secret Service, Charlotte Field Division; Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); Chief James W. Buie of Gaston County Police Department; and Chief Robert C. Helton of the Gastonia Police Department.

In April 2014, a federal jury convicted Hale of interstate transportation of stolen goods conspiracy, interstate transportation of stolen goods, making false statements in income tax forms, failure to collect employee income and FICA taxes, and obstruction of justice.

Hale was the last of eight defendants convicted and sentenced for organized retail crime offenses resulting from arrests made in “Operation Cash Back,” a multi-agency investigation into the buying and selling of stolen OTC drugs and HBA products that began in September 2010.  Hale’s codefendants were previously sentenced to prison terms ranging from 18 to 86 months.  In addition to the prison terms, prior forfeiture orders included more than $29,000 in seized cash, 20 motor vehicles, two real estate properties and a forfeiture money judgment of $7 million.

According to filed court documents, court proceedings and evidence submitted at Hale’s trial, Hale and his conspirators participated in what is known in the retail industry as Organized Retail Crime (“ORC”) and Organized Retail Theft (“ORT”).  Court documents show that from 2006 to March 2011, the defendants engaged in a scheme whereby they bought and sold stolen over-the-counter products, including medications and dietary supplements, and health and beauty aid products. According to court records, organized retail theft begins with individuals, known as “boosters,” who shoplift popular OTC and HBA products from the shelves of various pharmacy and retail stores.  The individuals who operated as “boosters” in this conspiracy stole OTC and HBA products from stores in North Carolina, South Carolina West Virginia, Georgia, Pennsylvania and Connecticut.  The “boosters” then sold the shoplifted goods far below retail and wholes prices to first-level “fences.”   First-level fences in turn served as middlemen between the “boosters” who stole the OTC and HBA products from retail merchant stores and second-level fences who further distributed the stolen goods to a higher-level fence or distributor, who then distributed the stolen products back into the retail marketplace.

According to court records and court hearings, Hale’s conspirators served as first-level fences, purchasing stolen OTC and HBA products from “boosters.”  The first-level fence conspirators then sold the stolen OTC and HBA products to Hale, a second-level fence, at prices far below the retail and wholesale prices of the stolen goods.  Hale paid cash to his first-level fence conspirators, who in turn paid cash to “boosters” for the stolen OTC drugs and HBA products.

According to court records and court hearings, OTC and HBA goods stolen by “boosters” must be “cleaned,” which means removing retail store security labels, tags, stickers, and pricing labels, before they can be reintroduced into the retail marketplace through the various levels of fences.  Hale provided the necessary cleaning services for stolen OTC drugs and HBA products before shipping the stolen goods to higher-level fences in illegal distribution channels. One of Hale’s previously convicted conspirators, Jeff Telsey, owner and operator of JCA Enterprises in Boca Raton, Florida, served as a third-level fence who repacked the stolen goods in industry-standard “case packs” for resale into the retail marketplace. The amount of stolen property involved in the investigation from 2006 to 2011 exceeded $16 million.

Hale’s bond was revoked in April 2014, and remains in federal custody.  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 the Secret Service, IRS-CI, the Gaston County Police Department and the Gastonia Police Department.  This prosecution was handled by Assistant United States Attorneys Tom O’Malley and Ben Bain-Creed of the Western District of North Carolina.

ASHEVILLE, N.C. – Jacob Thomas Pearce, 23, of Golden, Colorado, was sentenced today by U.S. District Judge Martin Reidinger, to serve 120 months in prison for transporting a minor for the purpose of engaging in sexual activity, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Judge Reidinger also ordered Pearce 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 Acting U.S. Attorney Rose in making today’s announcement.

 According to court documents and today’s sentencing hearing, on or about September 6, 2014, Pearce traveled from Golden, Colorado, to Asheville to meet a 13-year old female victim with whom he had been communicating online and via text messages.  Court records show that Pearce picked up the minor from Asheville, and together they travelled through Tennessee, ultimately arriving in Austin, Texas, on September 8, 2014.   According to court records, Pearce engaged in sexual acts with the minor over the two-day period they travelled across state lines.  Law enforcement located Pearce’s vehicle near Brackettville, Texas, and Pearce was taken into custody.  Court records indicate that Pearce admitted to knowing the victim was a minor prior to leaving Colorado.  In April 2015, Pearce pleaded guilty to one count of transportation of a minor with intent to engage in sexual activity.

Pearce is currently in federal custody.  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 case was investigated by the FBI.  Assistant U.S. Attorney Don Gast the case of the Western District of North Carolina prosecuted the case.

CHARLOTTE, N.C. – Patrick Emanuel Sutherland, 47, of Charlotte, was indicted by a federal grand jury sitting in Charlotte for filing false tax returns and obstructing a federal grand jury investigation, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  The indictment was returned on September 17, 2015, and was unsealed today in federal court.

Acting 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 allegations contained in the indictment, from 2007 to the present, Sutherland was an actuary, and the owner and operator of numerous companies in the insurance and financial industries.  The indictment alleges that between 2007 and 2010, Sutherland and his affiliated companies received deposits from domestic and foreign sources exceeding $2.5 million, yet Sutherland fraudulently underreported his business receipts and his personal income to the IRS by more than $1.5 million.  For example, despite receiving substantial income for years 2007 to 2010, Sutherland reported a combined income of approximately $276,697, and paid a mere $12,483 in total federal income taxes.  During the same three-year period, Sutherland’s lifestyle and expenditures for personal living expenses far exceeded his total income reported on his individual tax returns, the indictment alleges.

According to allegations in the federal indictment, to conceal the fraud, Sutherland falsely claimed that international wires to his domestic bank accounts were loans from his sister and her company.  In reality, the indictment alleges, most of these funds were insurance commissions due to Sutherland or were funds obtained from a brokerage account in Bermuda which Sutherland controlled.

The indictment alleges that because Sutherland worked with offshore insurance companies, some of his commissions had to be paid to an offshore intermediary.  The indictment alleges that 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.  According to allegations contained in the indictment, 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.

According to the indictment, on several occasions between June 2012 and September 2012, Sutherland attempted to obstruct a federal investigation by providing fraudulent documents, including fictitious loan agreements and documents purportedly alleging his lack of control over STS’s bank account in Bermuda.

Sutherland had his initial appearance today in federal court.  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.

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.

IRS-CI is handling the investigation.  Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte is in charge of the prosecution.