Western District of North Carolina

CHARLOTTE, N.C. – On Wednesday, May 6, 2015, U.S. District Judge Robert J. Conrad, Jr. sentenced Nathan Thomas Mroz, 40, of Charlotte, to 51 months in prison and to two years of supervised release in connection with his scheme to steal money from his former employer, Andersen Heating & Cooling (Andersen), announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.   In April 2014, Mroz, the former Chief Finance Officer (CFO) for Andersen, a Mint Hill-based HVAC company, pleaded guilty to mail fraud in connection with his scheme.  Judge Conrad also ordered Mroz to pay approximately $4,000,000 in restitution.

Acting 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 2005 to 2013, Mroz was employed by Andersen as financial controller and later as CFO and had access to the company’s funds and books and records.  Court records show that over the course of his employment, Mroz exploited his position to create fake accounts payable invoices and to generate corresponding payments, which Mroz directed to himself or mailed to various credit cards he maintained. According to court documents, to cover up his scheme, Mroz fraudulently categorized the bogus company payments as legitimate business expenses in the company’s books and records. Court records reflect that Mroz spent the stolen money on personal expenditures, including vacations to Disneyland and Europe, luxury vehicles, private school tuition, jewelry, and a $115,000 home for his nanny, among others.  In all, court documents indicate that Morz stole approximately $4 million from Andersen.

In handing down the sentence, Judge Conrad noted that Mroz “abused his position of trust with respect to his controller and CFO functions” and that the execution of the scheme required “hundreds of acts of fraud and deceit” by Mroz.  Judge Conrad stressed the “devastating harm to the company” as a result of Mroz’s greed and the “calamitous effect of Mroz’s scheme on innocent groups of people.”

Judge Conrad also ordered defendant to forfeit a Charlotte residence that he had used stolen money to purchase for use by his nanny, as well as diamond jewelry valued at approximately $40,000.  The forfeiture was in addition to a payment in excess of $116,000 that defendant already made as restitution pursuant to his plea agreement.

Following the sentencing hearing Mroz was released on bond. He 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.

Acting U.S. Attorney Rose credited the FBI for the investigation leading to today’s sentence. She also thanked the Mint Hill Police Department for their invaluable assistance throughout the investigation.

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

CHARLOTTE, N.C. – Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina, today announced the annual meeting of the district’s White Collar and Securities Fraud Working Group.  The working group was formed in 2011 to combat financial fraud by bringing together key federal, state and local law enforcement and regulatory partners.  The working group targets a wide-range of financial schemes, including accounting fraud, Ponzi schemes and other finance-related matters.  The annual meeting, which was hosted by U.S. Attorney’s Office in Charlotte, focused on strengthening existing relationships identifying recent trends, discussing ongoing investigations and setting enforcement priorities.

Members of the working group include officials from the U.S. Attorney’s Office (USAO), U.S. Securities & Exchange Commission (SEC), U.S. Commodity Futures Trading Commission (CFTC), Federal Bureau of Investigation (FBI), U.S. Secret Service, Internal Revenue Service-Criminal Investigation (IRS-CI), U.S. Postal Inspection Service, Homeland Security Investigations, Federal Deposit Insurance Corporation, Office of the Inspector General (FDIC-OIG), the North Carolina Attorney General’s Office, the North Carolina Department of Secretary of State, Securities Division, the North Carolina State Bureau of Investigation (SBI), and the Mecklenburg County District Attorney’s Office.

“Since its formation in 2011, the working group has worked collaboratively on a range of investigations leading to the successful prosecution of cases involving a variety of financial fraud schemes,” said Acting U.S. Attorney Rose.  “Financial crimes can have devastating effects on the victims of fraud, who are not always able to fully recover their losses.  The working group’s accomplishments are a clear message to the public that we are committed to protecting investors from financial scams, safeguarding our financial systems from fraud and going after those who engage in unlawful financial activities,” Rose added.

Examples of prosecutions include:

•    United States v. Beaver: Chuckie Beaver pleaded guilty in November 2014 to one count of securities fraud for defrauding more than 30 investors of over $2 million dollars. From June 2012 to April 2014, Beaver induced over 30 victims falsely claiming their money would be invested in “Best Services, Inc.,” a company owned by Beaver and specializing in the repair of industrial electronic equipment.  Beaver solicited friends, neighbors, and fellow church members to invest with his company, claiming that his company needed more capital to purchase materials to complete a large number of outstanding repair orders from major corporations. To further the scheme, created and showed his investors bogus documents, including false repair orders indicating significant work activity, fake customer checks, and fake customer emails, giving a false impression he had strong relationships with major corporations.  Beaver awaits sentencing.

•      United States v. Burks: Paul Burks, president of ZeekRewards, was indicted in October 2014 on federal charges for operating an Internet Ponzi scheme and is awaiting trial. The indictment alleges that from January 2010 to August 2012, Burks was the owner of Rex Venture Group, LLC (RVG), through which he owned and operated Zeekler, a sham Internet-based penny auction company, and its purported advertising division, ZeekRewards   (collectively   “Zeek”).   The indictment alleges that   Burks and his conspirators induced victims – including over 1,500 victims in the Charlotte area – to invest more than $850 million in their fraudulent scheme.  Dawn Wright Olivares, Zeek’s Chief Operating Officer and Zeek’s Senior Technology Officer, Daniel C. Olivares, pleaded guilty in December 2013 to investment fraud conspiracy. Dawn Wright Olivares also pleaded guilty to tax fraud conspiracy.  Both defendants await sentencing.

•      United States v. Davey et. al.: Jonathan Davey was sentenced in January 2015 to 21 years in prison for his role in Ponzi scheme that defrauded victims of more than $40 million.  Davey, a certified public accountant and registered investment advisor, served as the “Administrator” for numerous hedge funds for the Black Diamond Ponzi Scheme, an investment fraud scheme that deprived 400 victims of more than $40 million. Davey collected over $11 million from victims with his own hedge fund, by falsely stating that he had done proper due diligence on Black Diamond and that he was operating a legitimate hedge fund with significant safeguards. As the Black Diamond scheme began to collapse, Davey and others started a derivative Ponzi scheme and collected over $5 million from new victim investors, and used the new victim money to make payments to old investors and to themselves.  Davey was one of 11 conspirators sentenced in the Black Diamond Ponzi scheme.  The conspirators’ prison terms ranged from six months to 40 years.

•      United States v. Femenia, et. al.: John W. Femenia, a former Wells Fargo investment banker, and three of his conspirators were sentenced in February 2015 to prison terms ranging from 6 to 60 months, arising from their participation on an insider trading conspiracy.   From March 2010 to December 2012, Femenia, Roger A. Williams, Kenneth M. Raby, Aaron M. Wens, Frank M. Burgess, Jr., and James A. Hayes conducted illegal insider trading activities based on stolen material non-public information, including information on Wells Fargo and its clients’ upcoming corporate mergers and acquisitions.

•    United States v. Gandy et. al.: Terry Gandy was sentenced in December 2014 to 57 months in prison for stealing over $2 million from more than 30 investors. Gandy mainly targeted his former co-workers at Philipp Morris and solicited funds from them, promising rates of 20% to 30% annual rates of return.  Gandy used the victims’ money to fund his own personal lifestyle, including luxury hotels, multiple trips to Las Vegas, cash withdrawals at Las Vegas casinos, luxury cars, and to pay purported “profits” to other investors who asked for their money. To support his fraudulent scheme, Gandy provided his victims false account statements depicting bogus and over-inflated account balances. His conspirator, John Reid Perkins, was sentenced to 64 months in jail for his role in the scheme.

• United States v. Hunter: Toby Hunter is scheduled to be sentenced on May 6, 2015, for his role in securities fraud scheme that was part of the racketeering conspiracy related to the Operation Wax House investigation. Hunter and his conspirators targeted professional athletes and doctors as well as their personal and professional acquaintances and convinced them to invest in a series of sham corporations controlled by the Enterprise. They collectively stole over $27 million from more than 50 investor victims, including monies that the investor victims were induced to obtain as loans from financial institutions. The Enterprise used the victims’ money to finance its mortgage fraud operations and to support its members’ lifestyles.   

• United States v. Mason: James Mason pleaded guilty in June 2014 to conspiracy to commit securities fraud and tax evasion for running a $5 million foreign currency investment fraud.  Mason used most of investor victims’ money for his personal and familial living expenses, including purchasing a $435,000 home for his daughter and a $52,000 Lincoln vehicle for himself. Mason, who did not inform his investors about his 2000 federal wire fraud conviction, unsuccessfully invested a small amount of investor money.  He currently awaits sentencing.

• United States v. McDougal:  Claude Darrell McDougal pleaded guilty in July 2014 to securities fraud for orchestrating a Ponzi scheme and defrauding his victims of over $2.5 million. From 2006 to 2010, McDougal induced over 25 investors from Charlotte and elsewhere by promising their money would be invested in securities, in the form of promissory notes offered by US Financial Alliance Consultants, LLC (Financial Alliance).  McDougal created the Charlotte-based company in 2005, but it was never registered as a dealer of securities in North Carolina or elsewhere. McDougal was also not registered to sell securities in North Carolina or another state.  McDougal is awaiting sentencing.

• United States v. Rand: Michael Rand was sentenced in April 2015 to 120 months in prison on conspiracy and obstruction of justice            charges in connection with federal investigation into a seven-year accounting fraud conspiracy at Beazer Homes USA, Inc. (“Beazer”).  Rand was Beazer’s Chief Account Officer and directed an accounting fraud  conspiracy to falsify  reported  profits  at Beazer by lying to Beazer’s auditors, fraudulently achieving earnings targets, falsifying Beazer’s books and records, and deceiving the public by boosting and lowering company earnings.  Rand was convicted of wire fraud  conspiracy, conspiracy to commit securities fraud, to make false and misleading statements to auditors and accountants, to circumvent Beazer’s internal accounting controls, and to falsify the books, records, and accounts of Beazer.

•    United States v. Shepherd: James Alexander Shepherd was sentenced in February 2015 to 84 months in prison for defrauding more than 100 investors of over $6 million. From 2006 to 2013, Shepherd defrauded investors, primarily in Union County, of approximately $6 million. Shepherd carried out the fraud by promising his victims returns on their investments in funds he owned and controlled, among other things. In about 2006, Shepherd began misappropriating some of the investors’ money and used it to pay other investors, to trade in his personal accounts, and to fund the operations of a newsletter he distributed nationwide. Shepherd also used the money to fund his personal lifestyle, including to pay for a $2 million home.

•    United States v. Wright: C. David Wright was sentenced to 48 months in October 2014 for running a $1 million Ponzi scheme that he referred to as a “Commodity Investment Group.” Wright told investors that he invested in hedge funds, commodities, and Quick Trip service stores.  In reality, Wright diverted victim money to a side-business he owned, used it to make Ponzi payments, and to fund his own lifestyle.

•    Bank of America Residential Mortgage-Backed Securities (RMBS): In addition to collaborating on criminal enforcement matters, the U.S. Attorney’s Office and the SEC brought a historic civil fraud suit against Bank of America in August 2013 concerning an $850 million mortgage securitization.  As part of the historic $16.65 billion settlement reached in August 2014, Bank of America acknowledged that it marketed this securitization as being backed by bank-originated “prime” mortgages that were underwritten in accordance with its underwriting guidelines, when, in fact, Bank of America knew that a significant number of loans in the security were “wholesale” mortgages originated through mortgage brokers. The bank sold these RMBS to federally backed financial institutions without conducting any third party due diligence on the securitized loans and without disclosing key facts to investors in the offering documents filed with the SEC.

        “Our annual meeting provides an opportunity to renew and strengthen ties with our regulatory and law enforcement partners.  As a member of the group, I am proud of the work we’ve accomplished,” said Assistant U.S. Attorney (AUSA) Mark T. Odulio, who represents the U.S. Attorney’s Office in the working group.

            For tips on how to identify investor scams and for additional information on investor fraud please visit: www.stopfraud.gov.    

CHARLOTTE, N.C. – The remaining three of the 27 defendants charged in connection with an investigation into drug trafficking and illegal firearm possession in Catawba County were sentenced today, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.

Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Chief Tom Adkins of the Hickory Police Department (HPD) join Acting U.S. Attorney Rose in making today’s announcement.

Lavoris Hector, 27, of Hickory, N.C., was sentenced to 10 years in prison, followed by five years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine.  Kenneth Norman, 36, of Hickory, pleaded guilty to possession with intent to distribute crack cocaine and was sentenced to 15 months in prison followed by three years of supervised release.  Tyree Rhinehardt, 22, of Hickory, was sentenced to 12 months and one day in prison and three years of supervised release.  He pleaded guilty to aiding and abetting possession with intent to distribute crack cocaine.

According to filed court documents and court proceedings, the defendants were charged following a seven-month investigation which began in October 2012, targeting individuals who participated in illegal drug transactions and gun trafficking in and around Hickory.  Over the course of the investigation law enforcement seized more than 80 firearms, including 53 handguns, 19 rifles, 10 shotguns and one short barrel shotgun.   Law enforcement also seized more than 1,425 grams of narcotics, including over 1,125 grams of cocaine and more than 230 grams of marijuana, with a total street value of over $55,000.

The following defendants have been sentenced to date, in connection with the case:

• Kerston Deshawn Edwards was sentenced to 188 months in prison and four years of supervised release.  He pleaded guilty to possession with intent to distribute crack cocaine.
• Damion Eugene Houston was sentenced to 120 months in prison and five years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine.
• Jonathan Marquis Meyers was sentenced to 96 months in prison and four years of supervised release.  He pleaded guilty to possession with intent to distribute crack cocaine.
• Traquon Rashaad Davis was sentenced to 84 months in prison and four years of supervised release.  He pleaded guilty to possession with intent to distribute crack cocaine and possession of a firearm in furtherance of a drug trafficking crime.
• Brandon Jaqwan Sifford was sentenced to 81 months in prison and five years of supervised release.  He pleaded guilty to possession with intent to distribute crack cocaine and possession of a firearm in furtherance of a drug trafficking crime.
• Christopher Durand Myers was sentenced to 78 months in prison and three years of supervised release.  He pleaded guilty to aiding and abetting possession with intent to distribute crack cocaine.
• Damion Jordan Armstrong was sentenced to 77 months in prison and five years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine and possession of a firearm by a felon.
• Anthony Roger Mull was sentenced to 77 months in prison and four years of supervised release. He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine and possession of a firearm by a felon.
• Xavier Ahmad Cade was sentenced to 68 months in prison followed by two years of supervised release.  He pleaded guilty to possession of a firearm by a felon.
• Keon Maurquie Gaither was sentenced to 64 months in prison and three years of supervised release.  He pleaded guilty to one count of conspiracy to possess with intent to distribute crack cocaine and possession of a firearm by an obliterated serial number.
• William Shalon Linebarger was sentenced to 63 months in prison and four years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine.
• Anthony Lamar Mason was sentenced to 63 months in prison and three years of supervised release.  He pleaded guilty to aiding and abetting possession with intent to distribute crack cocaine.
• Brandon Colbert was sentenced to 60 months in prison and four years of supervised release.  He pleaded guilty to possession with intent to distribute crack cocaine.
• Donald Lavar Ramseur was sentenced to 60 months in prison and four years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine and three counts of aiding and abetting possession with intent to distribute crack cocaine.
• Cortez Lamar Rogers was sentenced to 47 months in prison and three years of supervised release.  He pleaded guilty to felon in possession of a firearm.
• Chaetez Sean Clayton was sentenced to 46 months in prison and three years of supervised release.  He pleaded guilty to possession with intent to distribute crack cocaine.
• Larry Elwood Steptoe was sentenced to 46 months in prison and three years of supervised release.  He pleaded guilty to possession with intent to distribute crack cocaine.
• Donnell Lavon Thomas was sentenced to 38 months in prison and one year of supervised release.  He pleaded guilty to possession of a firearm by a felon.
• Larry Jermaine Linebarger was sentenced to 37 months imprisonment and three years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine and aiding and abetting possession with intent to distribute crack cocaine.
• Kadeem Jamal Albright was sentenced to 33 months in prison and three years of supervised release.  He pleaded guilty to two counts of possession with intent to distribute crack cocaine; one count of conspiracy to possess with intent to distribute crack cocaine and one count of aiding and abetting possession with intent to distribute crack cocaine.
• Antonio Rashawn Whitworth was sentenced to 33 months in prison and three years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine.
• Kianta Martese Davis was sentenced to 30 months in prison followed by threeyears of supervised release.He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine.
• Kenteze Rayvon Martin was sentenced to 30 months in prison and three years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine.
• Eric Jay Ramirez was sentenced to 30 months in prison and three years of supervised release. He pleaded guilty to felon in possession of a firearm.
• Paris Michael Thompson was sentenced to 27 months in prison and three years of supervised release.  He pleaded guilty to conspiracy to possess with intent to distribute crack cocaine.
• Isreal Lerock Linebarger was sentenced to probation.  He pleaded guilty to one count of unlawful dealing in firearms.
• Marquice Tyrone Streeter was sentenced to time served.  He pleaded guilty to conspiracy with intent to distribute crack cocaine.

The investigation was conducted by the ATF and Hickory PD.Assistant U.S. Attorney Jennifer Dillon of the U.S. Attorney’s Office in Charlotte is leading the prosecution.

STATESVILLE, N.C. – Today, a federal judge sentenced Martin Martinez Saldana, 44, of West Jefferson, N.C., to life in prison on conspiracy to distribute and to possess with intent to distribute methamphetamine and possession of a short-barreled shotgun charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.

Acting U.S. Attorney Rose is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; B.W. Collier, Acting Director of the North Carolina State Bureau of Investigation (SBI); and Sheriff James Williams of the Ashe County Sheriff’s Office (ACSO).

According to filed court documents and evidence presented at Saldana’s four-day trial in March 2014, from as early as 2011 through the end of 2012, Saldana and his conspirators distributed in Ashe County and elsewhere more than 20 pounds of near-pure crystal methamphetamine, also known as “ice.” Trial evidence established that the high level of purity of the methamphetamine indicates it originated from a Mexican “super lab” with an estimated street-level value of more than $1 million. The evidence at trial also established that when law enforcement executed a search warrant at Saldana’s residence they seized four handguns, including a revolver hidden under his mattress, and an illegal short-barreled shotgun, as well as ammunition. Over the course of the investigation, law enforcement also seized five real properties in Ashe County worth over $500,000 combined, $50,000 in cash, one vehicle, one-quarter kilogram of methamphetamine “ice” and drug packaging materials. Among the seized items also were three images of Santa Muerte, who has been adopted by drug traffickers as folk “patron saint.”

Saldana was indicted by a federal grand jury on December 13, 2012, which indictment was superseded on August 20, 2013.  He has been in federal custody since his arrest on December 12, 2012, when law enforcement discovered that Saldana was planning to go to Mexico.

Acting U.S. Attorney Rose commended the DEA in Charlotte, ACSO, SBI, and ATF for the investigation leading to the successful prosecution of Martin Martinez Saldana, and also thanked the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Alleghany Sheriff’s Office, and the Boone Police Department for the assistance in this case. Assistant U.S. Attorney Steven R. Kaufman handled the prosecution of the case.

CHARLOTTE, N.C. – A South Carolina man charged with sex trafficking of a minor was arrested yesterday in Columbia, S.C., announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  On April 22, 2015, a federal grand jury returned the two-count criminal indictment against Martin Allen Meggett, 27, of West Columbia, S.C. 

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

The indictment alleges that on or about September 9, 2014 and September 10, 2014, in Mecklenburg County, Meggett knowingly harbored, transported, provided and obtained by any means a person he knew was under 18 for the purpose of engaging in a commercial sex act.  The indictment also alleges that Meggett transported the minor across state lines for the purposes of prostitution.

Following his arrest, Meggett had his initial appearance in federal court in Columbia where he remains in federal custody.  He will be transferred to the Western District of North Carolina to appear before a U.S. Magistrate Judge when the court schedules his arraignment and detention hearings.

The penalty for each count is a mandatory minimum of 10 years and a maximum of life in prison.  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.

The investigation of the case was jointly handled by the FBI and the York County Sheriff’s Office.  The prosecution of the case is handled by Assistant U.S. Attorney Kimlani Ford, of the U.S. Attorney’s office in Charlotte.

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

CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced Michael T. Rand, 52, of Sandy Springs, Ga., to 120 months in prison and to three years of supervised release on conspiracy and obstruction of justice charges in connection with federal investigation into a seven-year accounting fraud conspiracy at Beazer Homes USA, Inc. (“Beazer”), announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  In July 2014, a federal jury convicted Rand of the charges following a two-week retrial.  Rand, who was the former Chief Accounting Officer for Beazer, was previously found guilty in October 2011, however that verdict was later vacated due to juror misconduct, which prompted the presiding judge to order Rand’s retrial.

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.

The charges against Rand arise from a government investigation involving Beazer and its employees that began in March 2007.  In July 2009, Beazer was charged with, among other things, participation in the conspiracy and securities fraud with Rand.  Beazer accepted responsibility for those charges and, in a deferred prosecution agreement, agreed to pay restitution of $50 million.  Rand was indicted by a federal grand jury in August 2010.

“As the Chief Accounting Officer of a publicly-traded company, Rand had an obligation to Beazer’s investors and the public to abide by accounting rules and maintain proper books and records that accurately reflected the company’s financial status.  Corporate corruption erodes the public’s trust in our financial system which can have an adverse effect on our economy.  Rand’s sentence reflects the seriousness of his offense and underscores my office’s commitment to protecting Americans from executives that engage in corporate fraud,” said Acting U.S. Attorney Rose.

“As evidenced by the significant efforts of the investigative and prosecutive team, the FBI remains committed to holding corporate executives responsible for any and all malfeasance which affects America’s financial markets. The ordinary investor should have confidence in the accuracy of corporate accounting requirements and rest assured that executives who place their personal interests above all others will be held responsible. The two juries who heard the complicated testimony in this matter clearly agreed with this position,” stated John A. Strong, Special Agent in Charge for the Charlotte Division of the FBI.

A federal jury found that, while serving as Beazer’s Chief Account Officer, Rand directed an accounting fraud conspiracy to falsify reported profits at Beazer by lying to Beazer’s auditors, fraudulently achieving earnings targets, falsifying Beazer’s books and records, and deceiving the public by boosting and lowering company earnings.  Rand was convicted of conspiracy to commit securities fraud, to make false and misleading statements to auditors and accountants, to circumvent Beazer’s internal accounting controls, and to falsify the books, records, and accounts of Beazer.   He was also convicted of engaging in wire fraud conspiracy.

According to court documents and evidence presented at Rand’s second trial, Rand executed the conspiracy in two main ways: Between 2005 and 2006, Rand entered into a hidden oral side agreement with another company through one of its employees, which was designed to allow Beazer to obtain cash and to improperly report revenue from purported “sales” of model homes.  This activity was in direct contravention of the accounting rules and hidden from Beazer’s auditors.  Between 2000 and 2007, Rand directed a scheme to commit securities fraud and create false books and records at Beazer by practicing “cookie jar accounting,” which allowed Rand and others to falsely report profits in Beazer’s publicly reported financial statements.

The jury also convicted Rand of obstruction of justice in relation to a federal grand jury investigation.  Trial evidence showed that after being notified of the federal grand jury’s investigation of Beazer in March 2007, Rand deleted nearly 6,000 emails, obstructing the grand jury investigation then focused on the separate investigation into mortgage fraud at Beazer.

Finally, the jury convicted Rand of lying to hinder an investigation by making numerous false statements to investigators on behalf of the Audit Committee of Beazer’s Board of Directors, after learning that such false statements would be reported to the FBI and the U.S. Attorney’s Office.

In announcing today’s sentence, Judge Conrad described the defendant’s conduct as Chief Accounting Officer at Beazer as “criminal, dishonest and corrupt,” with “repeated acts to cook the books,” and as a result, “illegality became a norm” at Beazer. The Court emphasized that its sentence was intended to deter others because our “markets depend on the integrity of accounting officers.”

Following the sentencing hearing Rand was released on bond.  He 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.

Acting U.S. Attorney Rose credited FBI special agents for the investigation leading to today’s sentence.  She also thanked the U.S. Securities & Exchange Commission for their invaluable assistance throughout the investigation.

Assistant U.S. Attorneys Kurt W. Meyers and Maria K. Vento of the U.S. Attorney’s Office in Charlotte prosecuted the case.

ASHEVILLE, N.C. – William “Billy” Franklin Johnston, the owner of one of North Carolina’s largest dairy farms located in Fletcher, N.C., was sentenced today to four years of probation, six months of which he has to spend in home detention, for his role in the discharging of cow feces into the French Broad River, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  U.S. Magistrate Judge Dennis L. Howell also ordered Johnston to pay a $15,000 fine.  The dairy company, Tap Root Dairy, LLC (Tap Root), was also fined $80,000 and was placed on a four-year probationary term.  The company is also required to abide by a comprehensive environmental compliance plan.

Acting U.S. Attorney Rose is joined in making today’s announcement by Special Agent in Charge Maureen O’Mara of the U.S. Environmental Protection Agency, Criminal Investigation Division (EPA-CID), Atlanta Area Office, and B. W. Collier, Acting Director of the North Carolina State Bureau of Investigation (SBI).

A criminal bill of information filed in U.S. District Court on November 11, 2013, charged Tap Root and Johnston, 62, of Mills River, N.C., with one count of violation of the Clean Water Act, in connection with the discharging of cow feces into the French Broad River.  Johnston, the owner of Tap Root, is also a Board Member of the North Carolina Department of Agriculture and currently serves as a Council member for the Town of Mills River.

According to filed documents and statements made in court, Tap Root maintains several hundred cows and manages hundreds of acres of crop fields in Fletcher.  In the annual course of its operations, Tap Root disposes millions of pounds of solid and liquid animal waste, which are considered pollutants under the Clean Water Act.  Court documents indicate that beginning in 2009, Johnston let his certification lapse as Operator in Charge (OIC) of Tap Root’s animal waste management system.  Despite receiving repeated warnings and notices, court records show that as of December 4, 2012, Tap Root still had not designated a valid OIC to oversee its waste management system. Furthermore, according to filed documents, from September 3, 2012 to December 4, 2012, for a total of 93 days, Johnston and the Tap Root employees had failed to check and maintain the levels of cow waste in their on-site waste containment lagoons.  According to court records, this resulted in the spillover and discharge of 11,000 gallons of cow feces and other waste into the French Broad River on December 4, 2012.  Testing by the North Carolina Department of Environment and Natural Resources concluded that the fecal coliform level where the waste stream meets the river was 99,000 parts per million, whereas anything above 800 parts per million is indicative of a release.  Even downstream, testing found that the fecal coliform level was 2,200 parts per million.

“Agriculture is an important sector of Western North Carolina’s economy but it should not thrive at the expense of public health.  Environmental protection laws are in place to ensure appropriate land use and safeguard our communities from potentially harmful pollutants,” said Acting U.S. Attorney Rose.

“As one of North Carolina’s largest dairies, Tap Root Dairy Farm has an obligation to protect the surrounding community from pollution,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in North Carolina.  “Animal wastes are considered pollutants under the Clean Water Act because when discharged illegally, they can cause serious damage to the environment and put human health at risk.  Today’s sentencing shows that those who violate our nation’s environmental laws will be held accountable for their crimes.”

The Clean Water Act is a federal law enacted to prevent, reduce and eliminate pollution, and to restore and maintain the chemical, physical, and biological quality, of the Nation’s waters for the protection and propagation of fish and aquatic life and wildlife, for recreational purposes, and for the use of such waters for public drinking water, agricultural, and industrial purposes. The French Broad River supplies drinking water to more than one million people and is frequently used for recreational water activities, such as swimming and kayaking. In 2012, North Carolina listed the French Broad River from Mud Creek to NC Highway 146 as “impaired” for fecal coliform bacteria.  Tap Root is located on this impaired section of the French Broad River.

The investigation of this case was conducted by special agents of the EPA’s Criminal Investigation Division, and SBI’s Diversion and Environmental Crimes Unit. The prosecution is being handled by Assistant United States Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – A federal criminal indictment charging Marlin D. Haley, 22, of Charlotte, with two counts of destroying and delaying U.S. mail was returned by a federal grand jury on Thursday, April 23, 2015, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Haley was arrested this morning and had his initial appearance before U.S. Magistrate Judge David S. Cayer.

Paul Bowman, Area Special Agent in Charge of the United States Postal Service, Office of Inspector General joins Acting U.S. Attorney Rose in making today’s announcement.

According to the criminal indictment and court proceedings, on two separate occasions on March 22, 2015 and April 6, 2015, in Mecklenburg County, Haley unlawfully did and attempted to secret, destroy, delay and open U.S. Mail entrusted to him for delivery.  The indictment alleges that Haley dumped the mail instead of delivering it to the addressed recipients.

Haley faces a maximum penalty of five years in prison and a $250,000 for each count.

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

This case was investigated by USPS, Office of the Inspector General. Assistant U.S. Attorney Kenneth Smith is prosecuting the case.

Acting U.S. Attorney Jill Westmoreland Rose released the following statement on the sentencing of David Petraeus:

“Good afternoon.  David Petraeus appeared before U.S. Magistrate Judge David Keesler of the Western District of North Carolina today and admitted to the unauthorized removal and retention of classified information and lying to the FBI and CIA about his possession and handling of classified information.  Petraeus was sentenced to a two-year probationary term and was ordered to pay $100,000 fine.  I want to thank my colleagues at DOJ National Security Division, the Charlotte FBI office for leading the investigation, as well as all our investigative partners for their work on the case.”

CHARLOTTE – Acting U.S. Attorney Jill Westmoreland Rose released the following statement on the sentencing of David Petraeus:

“Good afternoon.David Petraeus appeared before U.S. Magistrate Judge David Keesler of the Western District of North Carolina today and admitted to the unauthorized removal and retention of classified information and lying to the FBI and CIA about his possession and handling of classified information.Petraeus was sentenced to a two-year probationary term and was ordered to pay $100,000 fine.I want to thank my colleagues at DOJ National Security Division, the Charlotte FBI office for leading the investigation, as well as all our investigative partners for their work on the case.”

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DO NOT REPLY TO THIS MESSAGE.  IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.

 

CHARLOTE, N.C. – A second superseding federal indictment was unsealed this morning charging 12 alleged gang members with racketeering conspiracy, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Of the 12 defendants charged, seven face additional charges, including murder in aid of racketeering and related firearms violations, which potentially expose those defendants to the federal death penalty.

Of the 12 defendants named in the indictment, three were previously arrested on federal armed robbery charges and two are in custody in South Carolina on state murder charges.  Law enforcement arrested seven of the alleged gang members during an early morning round-up.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; Kevin Brackett, Solicitor for York and Union Counties in South Carolina; Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department; and Sheriff Bruce Bryant of the York County Sheriff’s Office in South Carolina join Acting U.S. Attorney Rose in making today’s announcement.

“The individuals charged today have alleged ties to a ruthless street gang that uses fear, intimidation, and even murder to protect the interests of their criminal organization,” said Acting U.S. Attorney Rose.  “My Office will work closely with our law enforcement partners, in North Carolina and across state lines, to identify and prosecute violent gang offenders and deliver justice to victims of gang violence.”

“From the moment the FBI became involved in the investigation of the murders of Douglas and Deborah London, agents, task force officers, and other FBI employees worked tirelessly to find those responsible.  Together with our law enforcement partners, we have discovered and unraveled a dangerous criminal enterprise that spread a web of violence without regard for innocent lives,” said John A. Strong, Special Agent in Charge of the FBI in North Carolina.           

The indictment charges each of the 12 alleged gang members with RICO conspiracy.  The named defendants are:

• Jamell Lamon Cureton a/k/a “Assassin,” a/k/a “Murda Mel,” 22, of Charlotte.
• Nana Yaw Adoma a/k/a “Ratchet,” 20, of Charlotte.
• David Lee Fudge a/k/a “Flames” a/k/a “Flame,” 22, of Pineville, N.C.
• Daquan Lamar Everett a/k/a “Day Day,” 20, of Charlotte.
• Randall Avery Hankins, II a/k/a “Foe,” 20, of Charlotte.
• Malcolm Jarrel Hartley a/k/a “Silent” a/k/a “Bloody Silent,” 21, of Charlotte.
• Nehemijel Maurice Houston a/k/a “Mijel” a/k/a “Swagg Out,” 20 of Charlotte.
• Briana Shakeyah Johnson a/k/a “Breezy B” a/k/a “Breezy V” 19, of Concord, N.C.
• Ibn Rashaan Kornegay a/k/a “IB,” 35, of Greenville, N.C.
• Centrilia Shardon Leach a/k/a “CeCe,” 31, of Charlotte.
• Ahkeem Tahja McDonald a/k/a “Lil Keem” a/k/a “Savage,” 21, of Charlotte.
• Rahkeem Lee McDonald a/k/a “Hitman” a/k/a “Big Keem,” 22, of Charlotte.

In addition to the RICO conspiracy charge, Cureton, Fudge, Hankins, Hartley, Johnson and Rahkeem McDonald are 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 October 2014 murders of Douglas and Deborah London.  Hartley faces two additional charges of possession of a firearm by a felon.

“The murder of a witness is more than just a violent assault calculated to shut down a prosecution,” said Solicitor Kevin Brackett, “it is an attack on the rule of law.  It indicates a degree of contempt for the criminal justice system that deserves society’s harshest penalty.”

The unsealed indictment also charges Cureton and Ahkeem McDonald with one count of murder in aid of racketeering and one count of use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in death in connection with the August 2013 murder of Kwamne Donqurius Clyburn.

Cureton, Adoma and Fudge are also charged with one count of Hobbs Act Robbery, one count of assault with a dangerous weapon in aid of racketeering activity, and one count of 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 the May 2014 armed robbery of the Pineville area mattress store owned by Douglas and Deborah London.

“These indictments send 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 Chief Rodney D. Monroe of Charlotte Mecklenburg Police.

According to the allegations contained in the second superseding indictment filed in federal court, other publicly filed documents and statements made in court, from at least in or about 2012 to present:     

The 12 defendants were members of the “United Blood Nation,” a criminal enterprise commonly known as “UBN,” or the “Bloods.” The defendants operated as a Racketeer Influenced and Corrupt Organization (RICO), responsible for carrying out violent acts for the purpose of protecting and furthering the gang’s power, intimidating communities and rival gangs, enriching its members and providing financial assistance to incarcerated UBN members, and obstructing law enforcement from identifying and prosecuting other gang members. 

As UBN members, the defendants operated according to a common set of Bloods’ rules, also known as “The 31,” followed the gang’s ranking system, used the communication codes and language affiliated with the gang, and used distinctive markings, tattoos and colors to indicate allegiance to the gang.   The defendants also regularly participated in gang meetings, during which they collected gang dues, planned actions against individuals suspected of cooperating with law enforcement, discussed the commission of crimes to include robbery and murder, and made plans to obstruct justice and to prevent the prosecution of other UBN gang members, among others.

On or about May 25, 2014, Cureton, Adoma and Fudge robbed “The Mattress Warehouse,” located in Pineville, N.C.  Cureton committed the robbery at gun point, while Adoma served as the lookout man and Fudge the getaway driver.  During the robbery, Cureton and Douglas London exchanged gunfire, Cureton was injured and the three conspirators fled the scene.  Cureton sought medical treatment at an area hospital and was arrested on state charges related to the robbery.  A criminal indictment bringing federal armed robbery and related charges against Cureton and Adoma was filed in Charlotte on November 18, 2014. In a first superseding indictment filed on January 21, 2015, Fudge was added as a third defendant for his role the robbery.

Over the next five months, the defendants exchanged correspondence and conducted numerous in-person and telephonic gang meetings, during which they discussed and planned the murder of Douglas London, the only eyewitness to the robbery.  On or about October 23, 2014, Johnson drove Hartley to South Carolina, where Hartley shot and killed Douglas and Deborah London at their home.  Shortly after, Cureton ordered the gang to remain silent about the Londons’ murders.  Kornegay also conducted a telephone gang meeting with other UBN gang members, during which he directed them to lay low to avoid contact with law enforcement.

The indictment further charges Cureton and Ahkeem McDonald with the murder of Kwamne Donqurius Clyburn.  According to the indictment, on or about August 22, 2013, the two gang members shot and killed Kwamne Clyburn for “false claiming,” that is, claiming to be a UBN member when he was not.

Nine defendants are currently in federal custody and had their initial appearances in Charlotte today.  Law enforcement arrested Kornegay in Greenville and he appeared in federal court in Raleigh.  Hartley and Johnson will be extradited from South Carolina in the coming days.

A chart identifying each defendant’s charges and maximum penalties is attached below. The indictment contains a notice of special sentencing factors, which provides for a greater sentence for those defendants charged with offenses related to the murders.  The defendants’ sentences will be determined by the Court, after considering the federal sentencing guidelines and statutory sentencing factors.

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.

At today’s press conference announcing the charges, Acting U.S. Attorney Rose praised the outstanding investigative work of the FBI, CMPD and the York County Sheriff’s office and noted that the investigation is still ongoing.Ms. Rose also thanked the York County Solicitor’s Office for their continued support and cooperation with the case.

Assistant U.S. Attorneys Elizabeth Greene and Don Gast are in charge of the prosecution.

ASHEVILLE, N.C. – On Thursday, April 16, 2015, U.S. District Judge Martin Reidinger sentenced Robert Lemarr, 42, of Leicester, N.C. to 12.5 years in prison on child pornography charges, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Lemarr was ordered to serve a lifetime of supervised release, to register as a sex offender, and to pay $20,000 as restitution to his victims.

B.W. Collier, Acting Director of the North Carolina State Bureau of Investigation (SBI) and Acting Asheville Police Chief Steve Belcher join Acting U.S. Attorney Rose in making today’s announcement.

According to court documents and the sentencing hearing, on or about August 2014, Lemarr did knowingly transport and aid and abet the transportation of child pornography.  Court records indicate that on or about December 2012, Lemarr possessed over 100,000 images of child pornography, including images of toddlers and infants.  Lemarr pleaded guilty to one count of transportation of child pornography and one count of possession of child pornography and has been in federal custody since April 2014.  The case was investigated by the Asheville Police Department and the State Bureau of Investigation and assisted by the North Carolina Internet Crimes Against Children Task Force.

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Judge Reidinger also sentenced on Tuesday, April 14, 2015, Robert Maillet, 56, of Asheville, N.C., to 148 months in prison.  According to court records, Maillet pleaded guilty in April 2014 to one count of receiving child pornography and one count of possession of child pornography.  According to court documents and court records, law enforcement discovered approximately 8,000 images of child pornography in computer hardware that were seized from Maillet’s residence. In addition to the prison term, Judge Reidinger also ordered Maillet to a lifetime of supervised release and to pay $3,000 as restitution to a victim of child pornography.  Mailett has been in federal custody since January 2014.  The case was investigated by Homeland Security Investigations, SBI, and the Asheville Police Department.

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

 

CHARLOTTE, N.C. – The owner and operator of Charlotte-area laundromats pleaded guilty to tax evasion today, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Teng Lor, 55, of Matthews, N.C., appeared before U.S. Magistrate Judge David S. Cayer and admitted to concealing from the Internal Revenue Service (IRS) significant personal earnings derived from his businesses, “T&C Equipment, Inc.” (T&C Equipment) and “LOR Enterprises, Inc.” (LOR Enterprises).

Thomas J. Holloman, III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) joins Acting U.S. Attorney Rose in making today’s announcement.

According to the filed court documents and today’s plea hearing, between tax years 2010 and 2012, Lor deposited cash receipts from the two businesses totaling over $1.5 million into his business and personal bank accounts.  Court records show that the deposits were structured to avoid the filing of currency transaction reports.  According to court records, during the relevant time period, Lor failed to disclose or provide records from all of the bank accounts to his tax return preparer.  Court records indicate that for tax years 2010 through 2012, T&C Equipment and LOR Enterprises earned additional gross receipts totaling approximately $744,162 that Lor failed to report on the corporate tax returns filed with the IRS.  As a result of the unreported gross receipts, Lor had additional taxable income of $544,261.   Court records show that for the same tax years, Lor also failed to report all of his income on his individual state income tax returns.

Lor pleaded guilty to one count of tax evasion.  The charge carries a maximum penalty of five years in prison and a $250,000 fine.  As part of today’s plea agreement, Lor has agreed to pay restitution, the amount of which will be determined by the Court at Lor’s sentencing hearing, which has not been scheduled yet.  Lor was released on bond following his plea hearing.

The investigation of the case was handled by IRS-CI.  The case is being prosecuted by Assistant United States Attorney Jenny G. Sugar of the U.S. Attorney’s Office in Charlotte.       

ASHEVILLE, N.C. – Jose Salvador Lantigua, 62, of Jacksonville, Florida, has been charged with passport fraud and aggravated identity theft, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. His wife, Daphne Sylvia Simpson, 57, of Sapphire, N.C., has also been charged with one count of making false statements to a federal agent in connection with the case.

Scott Moretti, Special Agent in Charge of the Washington Field Office, U.S. Department of State, Diplomatic Security Service; B.W. Collier, Acting Director of the North Carolina State Bureau of Investigation (NC SBI); Steven M. Watkins, Director of the North Carolina Division of Motor Vehicles License and Theft Bureau (NC DMV L&T); Sheriff Chip Hall of the Jackson County Sheriff’s Office; and Chief Phil Harris, of the Brevard Police Department join Acting U.S. Attorney Rose in making todays’ announcement.

According to allegations contained in the federal indictment, on or about November 18, 2014, Lantigua lied on his application for a U.S. passport, falsely representing that his name was “Ernest Allen Wills.”  According to court records, to support his passport application, Lantigua allegedly provided a birth certificate in the name “Ernest Allen Wills,” and, as proof of identity, Lantigua allegedly used a fraudulently-obtained North Carolina license issued in the victim’s name but bearing Lantigua’s photo.  Court records show that Lantigua is the subject of an ongoing investigation in Florida, for allegedly faking his own death to fraudulently obtain life insurance money.  The indictment charges Lantigua with one count of knowingly making a false statement on a passport and one count of aggravated identity theft.  Law enforcement arrested Lantigua in Brevard, N.C., on March 21, 2015, and he remains in federal custody.

Lantigua’s wife, Daphne Simpson, has also been charged with one count of making a false statement to law enforcement.  According to allegations contained in the indictment, Simpson lied when she told a special agent that the man who was with her at the time was “Ernest Wills” who was her “friend,” when Simpson knew that the man was actually her husband, Lantigua.  Simpson was arrested in Florida on March 21, 2015, by the Florida Division of Insurance Fraud and currently remains in state custody.  Simpson is facing insurance fraud and related state charges for filing fraudulent insurance claims and receiving a $500,000 payout from one of Lantigua’s life insurance policies.  The federal court in Asheville will schedule Simpson’s initial appearance on the federal charges in the coming days.

If convicted of the offenses, Lantigua faces a maximum of 10 years in prison and a $250,000 fine for the passport fraud charge.  The aggravated identity theft charge carries a minimum mandatory sentence of two years to be served consecutively with any other sentence imposed.  Simpson faces a maximum of five years in prison and a $250,000 fine for the false statement charge.

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 is being handled by the U.S. Department of State’s Diplomatic Security Service, assisted by NC-SBI, NCDMV&T, Jackson Co. Sheriff’s Office and Brevard PD.Assistant U.S. Attorney Don Gast, of the U.S. Attorney’s Office in Asheville, is prosecuting the case.

CHARLOTTE, N.C. – Kamraz Rezapour, 53, formerly of Creston, N.C. was sentenced today to 108 months in prison for defrauding consumers of nearly $5 million by misbranding erectile dysfunction drugs and selling them as “all natural” herbal supplements, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Chief U.S. District Judge Frank D. Whitney also sentenced Rezapour to three years of supervised release and ordered the defendant to pay a $15,000 fine and $44,100.52 in restitution.  The Court also ordered the forfeiture of the proceeds of Rezapour’s crimes, including over $1.5 million in seized funds, gold and silver coins, along with a condominium located in Tampa, Florida.

David W. Bourne, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), Miami Field Office, and Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS), join Acting U.S. Attorney Rose in making today’s announcement.

According to filed court documents and today’s sentencing hearing, beginning in 2009 through April 2013, Rezapour defrauded consumers of nearly $5 million, by falsely claiming that the erectile dysfunction products he sold were “100 % safe and natural.”  Court records show that Rezapour was the owner and operator of Nutrition for Health, Inc. and Mojo Risen, LLC., which sold dietary supplements, male enhancement drugs and erectile dysfunction drugs, including “Mojo Risen,” “Mojo Sensation” and “VajiVedic.”  Court documents indicate that Rezapour advertised Mojo Risen and the other erectile dysfunction pills as non-prescription, “all natural” herbal supplements, when, in fact, the products contained ingredients similar to prescription drugs such as Viagra, which require FDA approval to market and distribute.  Rezapour previously admitted that in order to induce consumers to purchase his Mojo Risen, Rezapour repeatedly claimed that the sexual enhancement products were “100% safe and natural” and without “harsh and dangerous side effects.”  Rezapour failed to list the prescription ingredients in the packaging and advertising material for the supplements he sold, including bearing the symbol “Rx only” on labels, a requirement for all prescription drugs, and did not include any warnings about the possible adverse side effects of his products.

According to court records, Rezapour received the ingredients from a supplier in China.  Court records indicate that the packages were falsely labeled as containing “paint products,” among other things, to evade detection by the U.S. Customs authorities and the FDA.  Rezapour ultimately distributed his products nationwide, including to customers located in Charlotte, and netted more than $4.9 million in payments for the mislabeled products.

Rezapour pleaded guilty in February 2014 to one count of wire fraud and two counts of drug misbranding, and has been detained since April 2013.  Rezapour 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 into Rezapour was conducted by FDA-OCI and USPIS, with the assistance of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.  The prosecution is handled by Assistant U.S. Attorney Kelli Ferry.

In June 2013, the FDA issued a warning against Mojo Risen, advising consumers not to purchase or to discontinue using this product immediately.  The FDA also advised consumers who have experienced any negative side effects as a result of using this product to consult a health care professional as soon as possible.  For more information please visit:

https://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/medicationhealthfraud/ucm355904.htm

CHARLOTTE, N.C. – On Wednesday, March 25, 2015, U.S. District Judge Robert J. Conrad, Jr. sentenced Jessica Ordonez, 38, of Belmont, N.C. to 24 months in prison on tax evasion and filing false tax returns, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Judge Conrad also ordered Ordonez to serve one year under court supervision following her release from prison and to pay $288,302.63 as restitution.

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 (IRS-CI).

According to court records and the sentencing hearing, Ordonez was the owner of Tax Pros (a/k/a “Ordonez Tax Services”), which provided tax preparation and other services and had offices in Gastonia and Morganton, N.C. Court documents show that between 2004 and 2012 Ordonez prepared at least 100 false tax returns for 23 taxpayers, using fraudulent Individual Taxpayer Identification Numbers (ITINs).  According to court records, Ordonez used false Additional Child Tax Credit and other false information to prepare the fraudulent returns, which entitled her clients to large fraudulent tax refunds.  The tax loss associated with the fraudulent returns was approximately $202,217.  In addition to filing the false returns, court records indicate that Ordonez failed to report her own income on her individual tax returns for tax years 2009 to 2011, with a corresponding tax loss of $86,085.  Ordonez pleaded guilty in April 2014 to one count of tax evasion and one count of aiding and assisting in the preparation and presentation of a false tax return.

In handing down Ordonez’s sentence, Judge Conrad emphasized that Ordonez had engaged in very serious fraud over a long period of time and noted the seriousness of the offenses and the importance of deterrence in tax fraud cases.

Ordonez has been released on bond and will be ordered to report to the Federal Bureau of Prisons to begin serving her sentence upon designation of a federal facility.  All federal sentences are served without the possibility of parole.

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

CHARLOTTE, N.C. – A federal grand jury returned a criminal indictment today against Jimmy Lee Williams, 47, charging him with 29 felony charges in connection with a fraudulent check fraud scheme that allegedly netted more than $650,000 in postage stamps and other merchandise, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Williams is also known by several aliases including Jimmy Williamson.

Thomas L. Noyes, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division;  and B.W. Collier, Acting Director of the North Carolina State Bureau of Investigation join Acting U.S. Attorney Rose in making todays’ announcement.

According to allegations contained in the indictment, in two separate time periods between November 2010 to present, Williams used two different networks of conspirators to defraud U.S. Post Offices and other businesses in the Southeast region.  According to the indictment, Williams provided counterfeit checks and fake identification to his 16 accomplices, who used them to buy postage stamps, gift cards and other merchandise from U.S. Post Offices, retail stores and warehouses throughout North and South Carolina, Virginia, Maryland and the District of Columbia.

According to the indictment, Williams and/or his accomplices purchased postage stamps and other goods with a total face value of more than $650,000 using counterfeit or fraudulent checks.  In the first scheme, Williams used counterfeit checks manufactured by Ronald Carr, who was charged last year in a related case with bank fraud and defrauding the United States.  In the second scheme, Williams used checks drawn on his own closed accounts and the bank accounts of accomplices he met in prison and through youth football leagues in the Concord, North Carolina area.  One such accomplice, Javorick Moore, was convicted in a related case in 2014 in the Eastern District of Virginia of defrauding the post office and other offenses.  In both schemes, Williams’ accomplices gave the stamps they obtained to Williams, who then sold them to an Internet company in California as well as a North Carolina pawn shop, typically for 50%-70% of the face value.  Williams carried out the first scheme while released on bond for a violation of a condition of supervised release arising from a previous federal conviction.

Williams has been charged with two counts of conspiracy which each carry a maximum prison term of five years and a $250,000 fine; five counts of making & counterfeit securities which carry a maximum of 10 years in prison and a $250,000 fine per count; five counts of theft of government property which carry a maximum of 10 years in prison and a $250,000 fine per count; five counts of receiving stolen government property which carry a maximum of 10 years in prison and a $250,000 fine per count; five counts of scheme to obtain bank property which carry a maximum of 30 years in prison and a $1 million fine per count; three counts of interstate transportation of stolen property which carry a maximum of 10 years in prison and a $250,000 fine per count; and one count of concealment money laundering which carries a maximum of 20 years in prison and a $500,000 fine.

Williams is currently in federal custody.  He will be ordered to appear in court on the charges in the coming days.

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.

USPIS, the FBI, and NC SBI investigated the case.  Assistant U.S. Attorney Michael Savage, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

 

Defendants among 91 Charged in Operation Wax House

CHARLOTTE, N.C. – Denetria Myles, 43, of Charlotte, Frank DeSimone, 42, of Charlotte, and William Brown, 35, of Matthews, N.C., were sentenced by U.S. District Court Judge Graham C. Mullen on Wednesday, February 18, 2015, on federal racketeering charges, announced the U.S. Attorney’s Office for the Western District of North Carolina. One additional defendant was sentenced earlier this month for his role in the scheme.

The U.S. Attorney’s Office 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).

These convictions are the latest in Operation Wax House, an investigation which began in 2007. Of the 91 individuals charged, eighty-nine defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives.

Myles was sentenced to 51 months in prison followed by three years of supervised release. Myles served the conspiracy as a buyer, seller, promoter, and licensed notary. In total, the fraudulent transactions Myles participated in resulted in more than $2 million in losses to financial and lending institutions, with Myles receiving nearly a quarter million in exchange for her crimes. Myles was convicted at trial in October 2013 of racketeering conspiracy and bank fraud.

DeSimone was sentenced to 51 months in prison, followed by two years of supervised release. According to court records and Wednesday’s sentencing hearing, DeSimone operated as a promoter in the investment fraud operations and was involved with multiple fraudulent companies controlled by the Enterprise. In sentencing DeSimone, Judge Mullen noted that an active sentence was necessary to protect the public from further crimes of this defendant. DeSimone pleaded guilty for his role in the RICO conspiracy in November 2013.

Brown was sentenced to 48 months in prison followed by one year of supervised release. According to court records and Wednesday’s sentencing hearing, Brown served the racketeering Enterprise as a promoter in its mortgage fraud operations. As part of the racketeering Enterprise, Brown was involved in at least ten separate mortgage fraud transactions, resulting in losses of approximately $3 million, and he received more than $780,000 in fraudulent kickbacks. According to court records, over the course of the conspiracy Brown also engaged in identity theft. Brown pleaded guilty for his role in the RICO conspiracy in October 2013.

Earlier this month, on February 3, 2015, Judge Mullen also sentenced Sean Williams, 46, of Huntersville, N.C. to 30 months in prison followed by two years of supervised release. Williams was a licensed loan officer and a certified public accountant, who owned and operated a mortgage company, which he used to process loan applications for mortgage fraud transactions, resulting in a total loss of more than $5 million. Williams pleaded guilty to mortgage fraud charges.

Of the 26 six defendants charged in RICO Indictment, 15 await sentencing, including three of the scheme’s leaders. The fourth leader, Ramin Amini, 46, last known address Tehran, Iran, is one of two international fugitives.

Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Operation Wax House prosecution is being handled for the government by Assistant United States Attorney Maria K. Vento.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’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 the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The names and case numbers of the all the defendants charged to date in Operation Wax House are listed below, organized by their alleged role in the scheme.

 

 

 

CHARLOTTE, N.C. – A South Carolina man appeared before U.S. Magistrate Judge David C. Keesler today and admitted to operating an illegal gambling enterprise in Gaston County, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina.  Lenny Steen, Jr. 65, of Spartanburg, S.C. pleaded guilty to one count of running an illegal gambling business and one count of money laundering.

In January 2015, Steen’s conspirator, Clarence Larry Calhoun, 71, of Gastonia, N.C. pleaded guilty to the same charges for his role in the illegal gambling scheme.

Ryan L. Spradlin, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas joins Acting U.S. Attorney Rose in making todays’ announcement.

According to filed court documents and court proceedings, from about 2012 to October 2014, Calhoun and Steen owned and operated an illegal video poker gambling business in Gaston County.  According to court records, Calhoun provided management advice and capital, while Steen was responsible for the day-to-day operations of the business.  According to court records, the gambling business, known as “Mr. Lenny’s Place,” operated out of a large warehouse in Gaston County and was open 24 hours a day, 7 days a week.  Court records show that, at its height, the gambling establishment housed approximately 63 video poker machines, employed more than eight employees and generated, on an average, more than $10,000 per day.

According to court records and court proceedings, the two men split the profits in half.  Court records show that Steen collected the cash and concealed it in retail bags, and personally delivered half of the profits to Calhoun.  Calhoun hid the gambling profits in PVC piping, while Steen transported his share to South Carolina and directed others to store the cash, court records show. Court records also indicate that law enforcement seized more than $4 million in cash over the course of the investigation.

At sentencing, the defendants face a maximum prison term of five years and a $250,000 fine for the charge stemming from running the gambling operation, and a maximum of 20 years in prison and a $500,000 fine or twice the amount of criminally derived proceeds for the money laundering charge.Both men have been released on bond and currently await sentencing.

HSI investigated the case.Assistant U.S. Attorney Kevin Zolot, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.

CHARLOTTE, N.C. - With the deadline for filing income tax returns approaching next month, Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina, and Thomas J. Holloman, III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI), jointly announce recent tax fraud prosecutions and deliver a powerful warning to potential tax cheats.

“As tax filing season reaches its peak, would-be tax fraudsters are warned that our office will prosecute those who try to cheat the tax system,” said Acting U.S. Attorney Rose.  Rose noted the importance of deterring others from committing tax crimes and stated, “Our tax system is built on voluntary compliance and tax criminals who do not pay their fair share increase the tax burden on honest taxpayers.” 

“Filing a truthful, accurate tax return is a responsibility that tax preparers should take very seriously, said Thomas J. Holloman, III, Special Agent in Charge, IRS Criminal Investigation. “Let the message to unscrupulous tax return preparers be clear, that criminal activity and greed carry severe consequences. I encourage citizens to avoid being taken advantage of, by seeking out credentialed, reputable tax preparers during the current filing season, also to take the appropriate measures to safeguard their personal information, so as not to fall victim to identity theft.”    

On Wednesday, March 18, 2015, Fitzroy Lawrence, a Charlotte tax return preparer, was indicted on federal charges for preparing false tax returns by making false claims for refund from the IRS.  According to the indictment, for tax years 2008 through 2011, Lawrence aided and assisted in the preparation of hundreds of tax returns that were filed with the IRS, seeking fraudulent tax refunds totaling millions of dollars.  Many of the fraudulent tax returns included false wages and false dependent information.  Lawrence was charged with 15 counts of making false claims for refund and faces a maximum sentence of five years in prison and a $250,000 fine per count.  The charges against Lawrence are allegations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Prosecutions of Tax Evasion and Filing False Tax Returns

Over the last year, the U.S. Attorney’s Office has prosecuted and convicted a number of individuals for omitting income from their individual tax returns.  For example, Mark Tuan Le (3:14-cr-00110), an internal medicine physician, pleaded guilty to tax evasion for hiding millions of dollars in personal income from the IRS by claiming fraudulent business expenses for funds that were used to purchase and construct a $2.4 million, 8000-square foot residence on Lake Norman in Cornelius.  Plea documents indicate that Le omitted to report approximately $1.2 million of income per year for 2009 and 2010.  Le, who also pleaded guilty to healthcare fraud charges, is awaiting sentencing.

During the past year, defendants have received substantial sentences for tax charges, ranging from home confinement to several years in prison.  The following individuals were among the defendants sentenced for lying to the IRS about their taxable income:

• Denise Swanson (5:13-cr-00061), of Lenoir, N.C., owned and operated a tax preparation and bookkeeping business and failed to report more than $800,000 of income she received from embezzling client funds during years 2006 through 2011.
• Nghia Ly (3:13-cr-00235), of Waxhaw, N.C., and the fifty-percent owner of Kim Sen Jewelry, Inc., d.b.a. KS Nail Supply (KSJ) in Charlotte, concealed gross receipts and taxable income of over $800,000 from the IRS for 2007 through 2011.
• Kenneth Sumner (3:13-cr-00257), of Charlotte, and owner of Ken B. Sumner and Associates, a Charlotte-based sales company, failed to file timely tax returns for 2006 through 2008 with the IRS.  Sumner subsequently filed a delinquent 2006 federal income tax return that omitted gross receipts from Sumner’s business totaling approx. $106,808.  For tax years 2007 and 2008, Sumner failed to file timely income tax returns despite having income of approx. $318,433 and $337,090, respectively.
• Jonathan Davey (3:12-cr-00068), of Newark, Ohio, failed to report income that he received from a $21 million Ponzi scheme on his federal tax returns.  Davey was also convicted of securities fraud conspiracy, wire fraud conspiracy, and money laundering conspiracy.

Prosecutions of Fraudulent Tax Return Preparers

In 2014, the U.S. Attorney’s Office also prosecuted unscrupulous tax return preparers.  The following defendants are among those prosecuted federally for tax return preparer fraud:

• Nkhenge Shropshire (3:13-cr-00248), of Charlotte, and owner of Tax Connections, was sentenced to 33 months in prison following her guilty plea to conspiracy to defraud the IRS and making a false statement on a loan application.  For tax years 2009 through 2011, N. Shropshire aided and assisted in the preparation of more than 600 fraudulent tax returns filed with the IRS, resulting in tax losses of more than $580,000.
• Jessica Ordonez (3:14-cr-00071), a resident of Gaston County, N.C. and owner of Tax Pros, (a/k/a Ordonez Tax Services), located in Gastonia and Morganton, pleaded guilty to preparing fraudulent tax returns falsely claiming more than $200,000 in Additional Child Tax Credits.  Ordonez also pleaded guilty to filing false tax returns in her own name.  Ordonez is scheduled to be sentenced on March 25, 2015.
• Malik Shropshire (3:15-cr-00025), of Charlotte, was indicted in February 2015 on multiple charges, including conspiring with others to prepare hundreds of false tax returns with the IRS that included, among other things, false Schedule C businesses, false dependents, and false refundable education credits.

Prosecutions of Stolen Identity Refund Fraud

In addition to prosecuting tax evaders and fraudulent tax return preparers, the U.S. Attorney’s Office prosecuted individuals for stealing the identities of taxpayers and filing fraudulent tax returns.  Jacquline Juarez (3:13-cr-00157), was sentenced to 18 months in prison and ordered to pay restitution of more than $1 million for her role in a fraudulent tax refund scheme involving the use of fraudulent IRS Individual Taxpayer Identification Numbers (ITIN) to obtain false tax refunds.

Federal penalties for each count of conviction of tax crimes range from a maximum of one year in prison and a $100,000 fine for failure to file a tax return, false withholding exemptions, and delivering or disclosing false tax documents, to a maximum of 10 years in prison and a $250,000 fine for conspiracy to defraud with respect to false refund claims.  Other penalties include a mandatory term of two years in prison and a $250,000 fine for aggravated identity theft charges, three years in prison and a $250,000 fine for obstructing or impeding an investigation and filing or preparing a false tax return, and a maximum of five years in prison and a $250,000 fine for tax evasion, failure to pay taxes, conspiracy to commit a tax offense or conspiracy to defraud.

The U.S. Attorney’s Office and the IRS remind tax payers to exercise caution during tax season to protect themselves against a wide range of tax schemes ranging from identity theft to return preparer fraud.  The IRS has issued its annual “Dirty Dozen” which lists common tax scams that taxpayers may encounter, particularly during filing season.  Taxpayers are urged look out for, and to avoid, the following common schemes:

• Phone Scams
• Phishing
• Identity Theft
• Return Preparer Fraud
• Offshore Tax Avoidance
• Inflated Refund Claims
• Fake Charities
• Hiding Income with Fake Documents
• Abusive Tax Shelters
• Falsifying Income to Claim Credits
• Excessive Claims for Fuel Tax Credits
• Frivolous Tax Arguments

Education is the best way to avoid these common schemes.To learn more about the Dirty Dozen scams and for help with recognizing and avoiding abusive tax schemes, the IRS offers educational material at www.irs.gov.  Suspected tax fraud can be reported to the IRS using Form 3949-A found on the IRS.gov website.

ASHEVILLE, N.C. – On Tuesday, March 10, 2015, U.S. District Judge Martin Reidinger sentenced Joshua Warner Kamp to 33 months in prison for his role in a crystal methamphetamine trafficking ring, announced Jill Westmoreland Rose, Acting U.S. Attorney for the Western District of North Carolina. Kamp, 35, of Alexander, N.C. was also sentenced to four years of supervised release following his prison term. Kamp pleaded guilty in January 2015 to conspiracy to distribute and to possess with intent to distribute methamphetamine.

Kamp’s three codefendants were previously sentenced as follows: Mario Oliver Perez-Sanchez, 30, of Atlanta, Ga. was sentenced to 151 months in prison; Gerardo Moteil Diaz, 29, of Leicester, N.C. was sentenced to 87 months; and Debbie Ollis Webb, 58, of Leicester, N.C. was sentenced to 57 months in prison. They each pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute methamphetamine and were also ordered to five years of supervised release following their release from prison.

Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Sheriff Van Duncan of the Buncombe County Sheriff’s Office (BCSO); and Lt. John Elkins of the Buncombe County Anti-Crime Task Force (BCAT) join Acting U.S. Attorney Rose in making today’s announcement.

According to court documents and court proceedings, from in or about April 2013 through October 2013, Perez acted as an Atlanta, Ga. based methamphetamine source of supply, moving large quantities of methamphetamine between Georgia, South Carolina and North Carolina. Court records show that Diaz assisted Perez in his North Carolina narcotics trafficking. According to court records, Kamp and Webb bought the methamphetamine from Perez and Diaz, and then sold it in Buncombe County and elsewhere. Over the course of the investigation, law enforcement seized approximately 21 ounces of methamphetamine, $10,876 in U.S. currency and one firearm.

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

ATF, BCSO and BCAT investigated the case. The prosecutions were handled by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.

CHARLOTTE, N.C. – Jill Westmoreland Rose will become the Acting United States Attorney for the Western District of North Carolina (WDNC), following the departure of U.S. Attorney Anne M. Tompkins on March 9, 2015. Ms. Rose served as the First Assistant U.S. Attorney to Ms. Tompkins.

Ms. Rose has been an Assistant United States Attorney (AUSA) in the Western District since 1999. During her 16-year tenure with the U.S. Attorney’s Office, Ms. Rose has served as lead attorney for WDNC’s Organized Crime Drug Enforcement Task Forces (OCDETF) Program, Deputy Criminal Chief, Chief of the Criminal Division and First Assistant United States Attorney. Over the course of her career as a federal prosecutor, Ms. Rose has handled a variety of cases, including domestic and international drug trafficking and money laundering, violent crime, financial fraud, domestic terrorism and national security cases. Notably, Ms. Rose prosecuted the nation’s first successful federal death penalty case against MS-13 gang member Alejandro Enrique Ramirez Umana (U.S. v. Ayala et al., 3:08-cr-134) and the nation’s first successful federal death penalty case involving the Violence Against Women Act (U.S. v. Barnette, 3:97-cr-23).

While serving as WDNC’s Chief of the Criminal Division, Ms. Rose was member of the Attorney General’s Criminal Chief’s Working Group, advising the Attorney General and the Deputy Attorney General on substantive legal and law enforcement issues.

Prior to becoming an AUSA, Ms. Rose was an Assistant District Attorney for the 29th Prosecutorial District of North Carolina (1990-1999).

Ms. Rose graduated from the University of North Carolina at Chapel Hill in 1987 and Campbell University School of Law in 1990. Ms. Rose is a member of the Harry C. Martin Chapter of the American Inns of Court.

CHARLOTTE, N.C. – James William Staz has pleaded guilty to federal charges for defrauding more than $11 million from clients of the third-party payroll company he jointly operated with his father, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. James Staz, 44, of Iron Station, N.C. appeared before U.S. Magistrate Judge David S. Keesler today and pleaded guilty to wire fraud, transactional money laundering and tax evasion. James Staz’s father, William James Staz, 72, of Huntersville, N.C., pleaded guilty in January 2015 to wire fraud and tax evasion charges.

U.S. Attorney Tompkins 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 plea hearing, William and James Staz operated the third-party payroll company, “Employee Services.Net, Inc.” (ESN) and provided various services to client companies, including processing payroll, collecting and paying employment taxes, and preparing and filing employment tax forms. At its height, ESN had approximately 500 client companies nationwide. Court records show that James Staz was ESN’s vice president and later the company’s president. William Staz was a company shareholder and, through 2008, managed ESN’s day-to-day operations. According to court documents, ESN had access to the clients companies’ bank accounts and directly drafted the funds needed to cover expenses associated with the services it provided.

According to court records, from 2008 to March 2014, the two men defrauded at least 113 ESN clients of approximately $11 million dollars intended for payroll and employment tax payments and used it to support their personal lifestyles. According to the charging documents, during that time period, James Staz stole at least $3.7 million in client funds and directed the money to his personal bank account. In order to conceal his embezzlement, James Staz made false entries into ESN’s accounting system to make it appear as though the funds were used for legitimate client expenses. According to court records, James Staz used the money to pay for alcohol, strip club entertainment, jewelry, a Mercedes Benz and a luxury home. Court records also show that over the course of the scheme, William Staz drew a salary from ESN as high as $200,000, even for the time period he was serving a nine-month federal prison sentence.

James Staz has been detained since his arrest in October 2014. William Staz has been released on bond pending sentencing. They each face a maximum of 20 years in prison and a $250,000 fine for the wire fraud charge and five years in prison and a $100,000 fine for the tax evasion charge. James Staz also faces a maximum of 20 years in prison and a $500,000 fine or twice the amount of the criminally derived proceeds, whichever is greater, for the money laundering charge. As part of the plea agreement, both defendants have agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date for the defendants has not been set yet.

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

CHARLOTTE, N.C. – On Monday, March 2, 2015, Chief U.S. District Judge Frank D. Whitney sentenced Hector Manuel Castaneda Gastelo, 31, of Mexico, to serve 240 months in prison on drug trafficking charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Gastelo pleaded guilty in May 2014 to conspiracy to distribute and to possess with intent to distribute heroin.

U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department, and Chief Rob Merchant of the Pineville Police Department.

According to filed court documents and today’s sentencing hearing, beginning in 2012 through September 2013, Gastelo was a Charlotte drug cell leader responsible for arranging bulk shipments of heroin from Mexico using a transportation network and couriers based out of Los Angeles. Court documents show that Gastelo also managed a group of lower-level conspirators who packaged and sold the heroin in Charlotte. According to court documents, Gastelo also facilitated the return of drug proceeds to Mexico. Filed documents indicate that Gastelo and his conspirators trafficked to the Charlotte area between 10 and 30 kilograms of heroin with a street value of more than $1 million dollars. Over the course of the investigation, law enforcement seized approximately $170,000 in cash, and almost 40 kilograms of heroin.

This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF) that has resulted in the indictment of 14 defendants on heroin trafficking and money laundering 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 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.

Other conspirators charged to date day in connection with this investigation are:

• Benjamin Villanueva Estrada – Pleaded guilty in 2014 to conspiracy to distribute and to possess with intent to distribute heroin and was sentenced in September 2014 to 78 months in prison and 2 years of supervised release.
• Carlos Lopez-Hernandez – Pleaded guilty to one count of misprision of a felony and re-entry by an illegal alien and was sentenced in January 2015 to 36 months in prison followed by one year of supervised release.
• Marcelino Rivera Vorquez – pleaded guilty in March 2014 to conspiracy to distribute and to possess with intent to distribute heroin and is pending sentencing.
• Fernando Hernandez – operated a heroin transportation group in Los Angeles and pleaded guilty in April 2014 to conspiracy to distribute and to possess with intent to distribute heroin and is pending sentencing.
• Yolanda Gonzalez – operated a heroin transportation group in Los Angeles and was convicted by jury in July 2014 of conspiracy to distribute and to possess with intent to distribute heroin and money laundering conspiracy and is pending sentencing.
• Lorenzo Gonzalez – Pleaded guilty in February 2015 to conspiracy to distribute and to possess with intent to distribute heroin and money laundering conspiracy and is pending sentencing.
• Steven Gonzalez - Pleaded guilty in January 2015 to conspiracy to distribute and to possess with intent to distribute heroin and money laundering conspiracy and is pending sentencing.
• Rigoberto Gonzalez– Pleaded guilty in February 2015 to conspiracy to distribute and to possess with intent to distribute heroin and money laundering conspiracy and is pending sentencing.
• Mahoud Barnabe Salame –Pleaded guilty in February 2015 to distribute and to possess with intent to distribute heroin and is pending sentencing.
• Jose Ivan Hernandez – Charged with conspiracy to distribute and to possess with intent to distribute at heroin and money laundering conspiracy and is currently awaiting trial.
• Jesus Viera – Has agreed to plead guilty to conspiracy to distribute and to possess with intent to distribute heroin.
• Gloria Isabell Ruiz-Pena Pleaded guilty to possession with intent to distribute heroin and is pending sentencing.
• Alberto Gasca - Arranged the transportation of heroin from Los Angeles and has pleaded guilty to conspiracy to distribute heroin. He is currently pending sentencing.
• Erik Estrada-Lopez- Has agreed to plead guilty to possession with intent to distribute heroin. A plea hearing date has not been set yet.

Gastelo has been in federal custody since April 2013. 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 DEA in Charlotte, CMPD, and PPD. The prosecution is being handled by Assistant U.S. Attorney Elizabeth Greene of the U.S. Attorney’s Office in Charlotte.

Law enforcement arrested 13 during early-morning round up; Law enforcement still looking for two defendants

CHARLOTTE, N.C. – Anne M. Tompkins, United States Attorney for the Western District of North Carolina (WDNC), announced today that she will stepping down as U.S. Attorney, effective midnight March 9, 2015. Upon Ms. Tompkins’ departure, Jill W. Rose will be Acting U.S. Attorney, until a permanent replacement is nominated and confirmed by the United States Senate.

“As United States Attorney for the Western District of North Carolina, Anne Tompkins has pursued the cause of justice with passion, with integrity, and with results,” said Attorney General Eric Holder. “In her outstanding work on matters involving health care and financial fraud, she helped safeguard the well-being of the American people and bring wrongdoers to justice. Through her service on the Attorney General’s Advisory Committee, she proved herself to be an indispensable advisor on a range of vital issues. And with her efforts to protect civil rights and combat human trafficking, she stood up for innumerable men, women, and children who are too frequently overlooked and too often underserved. Over the course of her extraordinary career, Anne has never lost sight of the most vulnerable in her own community, and has spearheaded trailblazing projects to engage young people in the work of building a more just society, from anti-bullying efforts to leadership development. Through her work at all levels, she has served as an inspiring example to public servants throughout the country – including me. And while I will miss her distinguished leadership and wise counsel, I look forward to all that she will achieve in the next stage of her already remarkable career.”

“It has been a great honor to serve the people of the Western District and I am grateful to President Obama for the opportunity,” said U.S. Attorney Tompkins. “For nearly five years, I’ve had the pleasure and the privilege of working with some of the brightest and most committed public servants. I have the utmost respect for their tireless dedication to the pursuit of justice. I am proud of our accomplishments and I am confident that the lawyers and staff of the Office will continue to work hard to protect the people of this district and deliver justice. ”

Ms. Tompkins was appointed by President Obama and confirmed by the U.S. Senate in April 2010. During her tenure, Ms. Tompkins’ office has prosecuted numerous financial fraud cases involving multi-million dollar investment schemes, securities fraud cases, and mortgage fraud conspiracies. Under Ms. Tompkins’ leadership, WDNC formed the District’s White Collar/Securities and Financial Fraud Group, which comprises federal and state law enforcement agencies and regulatory entities. This task force works in cooperation to identify potential fraud and move quickly to stop offenders and help victims of fraud.

U.S. Attorney Tompkins has also focused on combating health care fraud schemes and reducing the potential for health care fraud in the future. During her tenure, the Office created WDNC’s Health Care Fraud Task Force, a multi-agency team dedicated to identifying and prosecuting those who defraud public and private insurers, jeopardize the integrity of the health care system and waste taxpayer dollars. The Office has brought both criminal and civil fraud cases against individuals and corporations engaged in health care fraud against Medicare and Medicaid, and has recovered millions in restitution for the government-funded programs.

Ms. Tompkins has also focused on the protection of our vulnerable populations from exploitation and violence. In the past five years, the Office has prosecuted successfully numerous child predators and has secured restitution for known victims of child pornography. Also, under Ms. Tompkins’ leadership, the Office created the Charlotte Metropolitan Human Trafficking Task Force, which comprises law enforcement agencies, federal and state prosecutors and community organizations. The goal of the task force is two-fold: to identify cases for prosecution and to provide short and long-term support and assistance to victims of human trafficking. Working with the Task Force, WDNC has also organized annual training events aimed at raising awareness on the issue of human trafficking.

Protecting the integrity of government and public institutions from corruption has been another area of focus for Ms. Tompkins. Under Ms. Tompkins’ leadership, the Office has prosecuted a number of public corruption cases involving police officers and city employees, including the recent prosecution of Charlotte’s former mayor.

Under Ms. Tompkins’ leadership, WDNC was also selected to be a part of Attorney General Holder’s Residential Mortgage Backed Securities (RMBS) Working Group, tasked with investigating those responsible for misconduct contributing to the financial crisis through the pooling and sale of RMBS.

WDNC also continues to focus on community and local impact cases, conducting targeted enforcement actions in high-crime neighborhoods, particularly in response to violent gang activity, crime data, and community needs.

“During my tenure as U.S. Attorney, I have had the opportunity to work closely with our federal, state and local law enforcement partners on prosecutions and crime prevention and outreach initiatives. I extend my gratitude for each agency’s support, which will extend beyond my tenure, and I am thankful for the extraordinary service of the countless agents, officers and deputies who work hard to protect our communities and bring perpetrators to justice.”

In addition to her supervision of the Office, in her role as U.S. Attorney, Ms. Tompkins has engaged in extensive community outreach efforts and crime prevention initiatives. A hallmark of Ms. Tompkins’ tenure has been her focus on youth engagement and crime prevention. Ms. Tompkins’ Office has partnered with Charlotte-Mecklenburg Schools (CMS), law enforcement and community groups to host a series of summits, titled “Engage,” that discuss various youth-related topics including anti-bullying, teen dating violence, leadership development, conflict resolution and race relations. Ms. Tompkins has also regularly participated in community-led events and has spoken on the issues of bullying, the importance of tolerance and positive conflict resolution.

“My position as U.S. Attorney has given me the opportunity to reach out to young people and empower them to effectuate change in their schools and their environments. Through the Engage Summits and our collaboration with CMS and a host of community organizations, we have delivered a powerful message, encouraging our youth to stand up, speak out and become catalysts for change by becoming leaders and positive role models to their peers. Our work would not be possible without the assistance of our community partners and the support of our citizen community. I am thankful for their ongoing collaboration and for partnering with the Office in support of our outreach efforts.”

During her tenure, Ms. Tompkins’ Office has organized events focusing on outreach, awareness, and training, in the areas human trafficking, gang prevention, focused deterrence, the Bank Secrecy Act, Project Safe Neighborhoods, domestic violence and prescription drugs. In addition, Ms. Tompkins has engaged in extensive outreach to the LGBT, Arab-Muslim and Sikh communities, and has met with leaders of numerous faith-based organizations.

In addition to serving as U.S. Attorney for WDNC, Ms. Tompkins served for over two years as an advisor to United States Attorney General Eric Holder by sitting on the Attorney General Advisory Committee (“AGAC”), advising the Attorney General on emerging policy management, and operational issues affecting the Department of Justice. “Serving on the AGAC has been a privilege and an opportunity to provide input on important issues to Department of Justice leadership, and to serve as a representative and an advocate for the U.S. Attorney community,” said Ms. Tompkins. Ms. Tompkins also served as co-chair of the AGAC’s Subcommittee on Civil Rights, and as a member of the Health Care Fraud, White Collar Crime, and Office Management and Budget Subcommittees.

Ms. Tompkins navigated the Office through significant challenges in her tenure, including hiring freezes, budgetary cuts and an unprecedented government shut-down. Despite the challenges, Ms. Tompkins’ Office has continued to handle high-volume cases while increasing the Office’s workforce with the addition of prosecutors and support staff.

The United States Attorney’s Office for the Western District of North Carolina includes 32 counties, half of the Great Smoky Mountains National Park and the Blue Ridge Parkway. The Pisgah and Nantahala National Forests cover over one million acres of our district. The largest Native American Community in the eastern half of the United States, the Eastern Band of Cherokee Indians, is in WDNC.

Law enforcement arrested 13 during early-morning round up; Law enforcement still looking for two defendants

CHARLOTTE, N.C. – A federal criminal indictment was unsealed today in U.S. District Court, charging 15 defendants with drug trafficking conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. FBI agents and officers with the Charlotte-Mecklenburg Police Department conducted an early morning round-up, arresting 13 of the 15 named in the federal indictment.

U.S. Attorney Tompkins 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 Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).

The 15 defendants named in a federal indictment unsealed today are:

• Noel Rondell Alexander, a/k/a “Floyd,” 25 of Charlotte. (in custody)
• Akanni Butler, a/k/a “KB,” 29, of Charlotte. (in custody)
• Anthony Carter, a/k/a “Sanchez,” 26, of Charlotte. (in custody)
• Akeem Ford, a/k/a “Nike,” 21, of Charlotte. (in custody)
• Kenate Funderburk, a/k/a “Tay,” 35, of Charlotte. (in custody)
• Shemia Glenn, a/k/a “Pooh,” 22, of Charlotte. (not arrested yet)
• Isaac Hampton, a/k/a “Ike,” 26, of Charlotte. (in custody)
• William Kee, III, 20, of Charlotte. (in custody)
• Anthony C. Lindsay, a/k/a “Chez,” 26, of Charlotte. (in custody)
• Keith Rivera, 23, of Charlotte. (in custody)
• Rodney Smith, a/k/a “Man,” 22, of Charlotte. (in custody)
• Jonathan Stewart, a/k/a “J Rock,” 29, of Charlotte. (in custody)
• Antonio Sullivan, a/k/a “Pooh,” 36, of Charlotte. (not arrested yet) • Vincent Thompson, 32, of Charlotte. (in custody)
• Jamel Watson, a/k/a “Man,”18, of Charlotte. (in custody)

(See chart below for a breakdown of federal charges and potential penalties for each defendant).

In addition to the 15 federal defendants charged today, six more defendants face state drug and related charges:

• Demontrez Mobley, 21, of Charlotte. (in custody)
• Kadarian Cortez Ford, 18, of Charlotte (in custody)
• Larry Yeargin, 36, of Charlotte. (in custody)
• Elijah Parker, 20, formerly of Charlotte (previously in state custody)
• Scott Mayfield, 26, of Charlotte. (not arrested yet)
• Ty’Darrien Cortez Ford, 20, of Charlotte. (not arrested yet)

The federal defendants will have their initial appearances today in federal court.

Today’s arrests and indictments are the result of an eight month investigation conducted by federal and local law enforcement agencies dedicated to making our streets and communities safer. The agencies involved in the initiative include the U.S. Attorney’s Office for the Western District of North Carolina, the FBI, CMPD’s Gang Unit, Vice & Narcotics Unit, and Metro Division, and the Mecklenburg County District Attorney’s Office, with assistance from the North Carolina Division of Community Corrections. The goal of the investigation is to target and reduce violent crime in Mecklenburg County, with special emphasis placed on a street corner in Beatties Ford Road area, formerly controlled by the conspirators.

“Today’s arrests are the result of a coordinated effort of law enforcement partners, working together to target a hot spot for criminal activity. We will continue to work side-by-side side to identify and prosecute those who are responsible for spreading drugs in our streets and wreaking havoc in our neighborhoods,” said U.S. Attorney Tompkins. Tompkins also commended all the agents and officers who participated in this morning’s round up and thanked them for their commitment to serving and protecting our communities.

“The FBI working alongside our law enforcement partners is committed to keeping North Carolina families safe by targeting those offenders whose criminal activities threaten the safety and stability of our communities,” said FBI’s Special Agent in Charge Strong.

“The Charlotte-Mecklenburg Police Department and our partner agencies will continue to be diligent in letting criminals know that these neighborhoods are not a safe haven for their illegal activity,” said Chief Monroe, CMPD. The charges contained in these indictments are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The investigation is being handled by the FBI’s Safe Streets Task Force, of which CMPD is a partner member. The prosecution is being handled by Assistant U.S. Attorney Dana Washington of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – The United States Attorney’s Offices for the Eastern, Middle, and Western Districts of North Carolina, along with the Department of Justice – Environmental Crimes Section, filed criminal charges today against three subsidiaries of Duke Energy Corporation: Duke Energy Business Services LLC, Duke Energy Carolinas LLC, and Duke Energy Progress, Inc. for multiple violations of the Clean Water Act.

The three U.S. Attorney’s Offices filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: Dan River Steam Station (Rockingham County); Cape Fear Steam Electric Plant (Chatham County); Asheville Steam Electric Generating Plant (Buncombe County); H.F. Lee Steam Electric Plant (Wayne County); and Riverbend Steam Station (Gaston County). The alleged violations include unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee, and Riverbend facilities.

The U.S. Attorney’s Offices for Middle and Western Districts also filed papers asking their courts to transfer the cases to be heard in the Eastern District of North Carolina.

The defendants face a maximum penalty on each charged count of five years probation; a fine in an amount of the greater of not less than $2,500 nor more than $25,000 per day of violation; $200,000.00; or twice the gross gain or loss; restitution; and a special assessment of $125.00.

Persons directly and proximately harmed as a result of the conduct charged in this matter may have rights under the Crime Victims’ Rights Act. See 18 U.S.C. § 3771. If you believe that you are a crime victim in this matter, please contact the United States Attorney’s Office for the Eastern District of North Carolina at USANCE.CrimeVictimsRightsAct@usdoj.gov no later than March 6, 2015.

A criminal information is not a finding of guilt. A corporation charged by criminal information is presumed innocent unless and until proven guilty in a court of law.

The U.S. Attorney’s Offices will have no further comment on this matter until after court proceedings.

U.S. v. Duke Energy

Two Others Also Sentenced in Separate Cases

ASHEVILLE, N.C. – On Thursday, February 12, 2015, U.S. District Judge Martin Reidinger sentenced Kieron Mann, 45, of Hendersonville, N.C. to 40 years in prison on production of child pornography charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Mann was ordered to serve a lifetime of supervised release, to continue to register as a sex offender, and to pay $50,000 as restitution to his victims.

Ryan L. Spradlin, Acting Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Charles McDonald of the Henderson County Sheriff’s Office join U.S. Attorney Tompkins in making today’s announcement.

“After receiving a lead from our Cyber Crimes Center about the suspected distribution of child pornography by this defendant, who is a registered sex offender, HSI special agents in Hendersonville were able to determine he was in fact producing child pornography with a very young child and was sexually abusing two other children,” said ICE/HIS Acting Special Agent in Charge Spradlin. “Thanks to the hard work of HSI and the Henderson County Sheriff’s Office, not to mention an aggressive prosecution by the U.S. Attorney’s Office, this monstrous child predator will never again have an opportunity to abuse another innocent victim.”

“The safety and security of the children in our communities is paramount. Through the efforts of agents from the Department of Homeland Security and deputies of the Henderson County Sheriff’s office, families affected by this vile predator can rest more comfortably knowing their children will never be harmed by Mr. Mann again,” said Sheriff McDonald.

In May 2014, Mann pleaded guilty to one count of production of child pornography. According to court documents and statements made in court, law enforcement executed search warrants at Mann’s residence, and seized his computers and cellular phones. A forensic examination of the seized items revealed that they contained images and videos of child pornography, which Mann had produced. Mann is a registered sex offender, which stems from his 1996 federal conviction for receiving child pornography. At today’s hearing, Mann’s sentence was enhanced because of his criminal history. Mann has been in federal custody March 2014. The case was prosecuted by HSI and Henderson County.

Judge Reidinger also sentenced today Tabatha Dianne Black, 35, of Bakersville N.C., to 210 months in prison and a lifetime of supervised release. According to court records, from May to June 2012, in Yancey County, Black did entice and coerce a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of it which she then distributed. Black pleaded guilty in June 2014 to one count of production of child pornography and has been in federal custody since April 2014. The case was prosecuted by HSI, the State Bureau of Investigation, and the Yancey County Sheriff’s Office.

Judge Reidinger sentenced a third defendant today on child pornography charges. Jonathan Michael Whisnant, 42 of Easley, S.C. was sentenced to 78 months in prison and to a lifetime of supervised release. According to court records, in January 2014 in Polk County, Whisnant received and possessed images depicting child pornography. Whisnant pleaded guilty in June 2014 to one count of possession of child pornography and one count of receipt of child pornography. He has been in federal custody since April 2014. The case was prosecuted by HSI.

U.S. Attorney Tompkins thanked all the law enforcement agencies that investigated these cases for their outstanding work and said, “My Office and our law enforcement partners will not allow child predators to victimize innocent children. We will find and prosecute those who prey upon the most vulnerable members of our communities.”

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

This case 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

Investment Banker Received Kickbacks in Cash And Gold For Stolen Inside Information

CHARLOTTE, N.C. – A former Wells Fargo investment banker and three of his conspirators were sentenced today on insider trading conspiracy and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Today’s sentencings stem from the Charlotte-based FBI investigation, “Operation Insider Out,” which began in early 2012 and identified targets involved in insider trading activities in the Charlotte area.

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

John W. Femenia, 33, of Greenwich, Conn., was sentenced to five years in prison and two years of supervised release. Shawn C. Hegedus, 34, of Centereach, N.Y. was sentenced to ten years in prison and two years of supervised release. Matthew J. Musante, 34, of Miami, Fla., was sentenced to 42 months in prison followed by two years of supervised release. They each pleaded guilty to insider trading and money laundering conspiracy charges. Danielle C. Laurenti, 34, of Massapequa Park, N.Y. was sentenced to 19 months (time served) in prison followed by two years of supervised release. Laurenti pleaded guilty to one count of insider trading conspiracy.

Four other codefendants who previously pleaded guilty to insider trading conspiracy have already been sentenced:

• Roger A. Williams, 53, of Georgetown, S.C., was sentenced to 24 months in prison and one year of supervised release.
• Kenneth M. Raby, 52, of Greer, S.C., was sentenced to 18 months in prison and one year of supervised release.
• Aaron M. Wens, 34, of Encinitas, Calif., was sentenced to six months in prison and one year of supervised release.
• Frank M. Burgess, Jr., 44, of Charlotte, was sentenced to six months in prison and one year of supervised release.
• James A. Hayes, 40, also of Charlotte, was sentenced to one year of probation.

According to filed court documents and today’s sentencing hearings, from March 2010 through December 2012, the conspirators conducted illegal insider trading activities based on stolen material non-public information, including information on Wells Fargo and its clients’ upcoming corporate mergers and acquisitions. Stealing material non-public inside information allows a trader to cheat and earn substantial profits by trading before such news becomes public, thereby earning substantial profits by trading again once the news becomes public and impacts the price of a stock.

Femenia, an investment banker who lived in Charlotte and later in New York, stole from his employer, Wells Fargo, and its clients, material nonpublic information about upcoming mergers and acquisitions, and passed the inside information to his conspirators who then used it to conduct illegal trades. These conspirators then passed the confidential inside information to other conspirators who also then traded on that information, court records indicate. The criminal conspiracy netted over $11 million in proceeds as a result of the illegal insider trading activities, court records show.

According to court records, Femenia was paid kickbacks for the stolen information in several forms. Court records indicate that Hegedus, who was a stockbroker and Femenia’s high-school friend, used the proceeds of the insider trading to buy 55 gold bars. Femenia then sold four of the gold bars for $70,877. Femenia also received kickbacks in cash, including via ATM cash deposits made to account in the name of Femenia’s girlfriend. Court records indicate that Hegedus and his wife, Laurenti, laundered proceeds of the insider trading through a casino in Las Vegas. Court records also show that Femenia and Hegedus engaged in mortgage fraud through the fraudulent purchase of a luxury home in Waxhaw, N.C.

In announcing today’s sentencings, U.S. District Judge Robert J. Conrad Jr. stated that the sentences imposed were intended to deter other insider traders and to recognize the seriousness of the offense.

Femenia and Musante have been released on bond and will be ordered to self-report to the Federal Bureau of Prisons (BOP) to begin serving their sentences. Hegedus, who previously fled to Cuba, has been detained since his return to the United States over the summer of 2013 and will be transferred to BOP’s custody upon designation of a federal facility.

U.S. Attorney Tompkins commended the FBI for their investigation of the case, and thanked the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and Wells Fargo for their invaluable assistance.

The prosecution for the government was handled by Assistant United States Attorneys Kurt W. Meyers and Kelli H. Ferry of the Charlotte office.

President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.stopfraud.gov.

CHARLOTTE, N.C. – Fred Carrasco, Jr., 37, of Mexico was sentenced today to 185 months in prison on drug trafficking and firearms offenses, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. also ordered Carrasco to serve five years under court supervision upon completion of his prison term.

U.S. Attorney Tompkins 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 Rodney D. Monroe, of the Charlotte-Mecklenburg Police Department (CMPD).

According to court documents and court proceedings:

According to court documents and court proceedings, Carrasco is a former member of the Texas Mexican Mafia and an affiliate of the Sureños 13 and MS-13 gangs in Charlotte. Court records indicate that from 2005 to 2009, Carrasco was responsible for supplying more than 1,000 kilograms of marijuana and 500 grams of cocaine to Charlotte and elsewhere, which had been smuggled into the United States from Mexico. According to court records, Carrasco fled to Mexico in 2009 and returned in 2013 to face the federal drug trafficking charges filed in the Western District. He pleaded guilty in January 2014 to one count of conspiracy to distribute and to possess with intent to distribute marijuana and cocaine and one count of possession of a firearm in furtherance of a drug trafficking crime

Carrasco has been in federal custody since July 2013 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.

This FBI and CMPD investigated the case. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

CHARLOTTE, N.C. – Today, U.S. District Judge Robert J. Conrad, Jr. sentenced two defendants to lengthy prison sentences for operating separate multi-million dollar investment fraud schemes. Stephen E. Maiden, 41, of Vienna, Va., was sentenced to 84 months in prison, followed by one year of supervised release for carrying out an $8.9 million Ponzi scheme, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Maiden, who pleaded guilty to securities fraud in May 2013, was also ordered to pay $7,755,752 as restitution.

In a separate case, Judge Conrad sentenced James Alexander Shepherd, 59, of Vass, N.C to 84 months in prison and three years of supervised release for defrauding more than 100 investors of in excess of $6 million. Judge Conrad delayed issuing a final order of restitution to permit the parties to file additional court briefs. The United States is seeking a restitution order of approximately $8 million for victims of the scheme. Shepherd pleaded guilty to one count of securities fraud in June 2013.

United States v. Stephen Maiden

According to filed court documents and today’s sentencing hearing, Maiden, formerly of Charlotte, carried out the scheme through his Charlotte-based hedge fund, Maiden Capital Opportunity Fund (“Maiden Capital”), which he formed in 2006. According to court records, Maiden represented to his victims that the fund was doing well and was profitable. By at least February 2009, however, he had lost the majority of the fund’s assets in failed investments. Beginning in at least February 2009, Maiden began transmitting bogus account statements to his investor victims and to Maiden Capital’s fund administrator, falsely reporting favorable returns. To keep the scheme going, Maiden used money from new investors to satisfy withdrawal requests made by other fund investors, falsely characterizing the transactions as payments from Maiden Capital’s successful operations. As a result of his unlawful conduct, Maiden caused a total loss of at least $8.9 million to approximately 39 victims.

United States v. James Alexander Shepard

According to filed court documents and court proceedings, from 2006 to 2013, Shepherd defrauded investors in Union County and elsewhere of approximately $6 million. Court documents indicate that Shepherd carried out the fraud by promising his victims returns on their investments in funds Shepherd owned and controlled, including “The Shepherd Major Play Option Fund, L.P.” (the “Major Play Fund”) and the “Shepherd’s Model Hedge Fund” (the “Hedge Fund”). In addition, Shepherd had some individual investors that invested their money independent of any particular investment vehicle. In about 2006, and without his investors’ knowledge, Shepherd began misappropriating investor money from the Major Play Fund, and used it, among other things, to pay investors of his hedge fund, to trade in his personal accounts, and to fund the operations of his newsletter he distributed nationwide, court filings show. According to court records, Shepherd also used the money to fund his personal lifestyle, including to build a $2 million home and to make mortgage payments on that residence.

According to court records, to conceal his fraudulent conduct, Shepherd sent to investors certified financial statements for the Major Play fund, accompanied by an Independent Auditor’s Report. This assured investors that an independent audit on the fund had been conducted in compliance with the rules of the U.S. Commodities Futures Trading Commission (“CFTC”). The false financial statements also misrepresented to investor victims the financial condition of the fund. For example, in December 2012, Shepherd’s a fraudulent statement stated that the fund had a $6,041,850 cash balance, when in reality the fund had less than $100,000 at the time.

Shepherd used forged bank documents and names of fictitious bank employees, among other things, to trick an accountant into providing the Independent Auditor’s Report. According to court records, Shepherd’s scheme was uncovered when in March 2013 the accountant insisted on verifying the cash balance of fund’s bank account electronically, through the audit confirmation website www.confirmation.com, which is now the commonly used method of verification by accountants. Shepherd delayed and then refused to give the accountant authority to utilize the website to verify the cash balance of the Major Play Fund, court records show. In March 2013, the accountant notified the National Futures Association (NFA) that his audit opinion could no longer be relied upon.

In making today’s announcement, U.S. Attorney Anne Tompkins said “Prosecuting fraudsters who prey on innocent investors is a top priority of my Office. Each of these two defendants chose a path of deceit and lies to fulfill their greedy self-interest. As a result, both now have lengthy jail sentences to reflect on the inestimable damage they caused to their victims. My Office will continue to aggressively investigate and prosecute those who seek to victimize innocent investors.”

“These prison sentences are a stark reminder to con artists; no matter how elaborate or complex the scheme, you will be caught and held accountable. Unfortunately, victims lose billions of dollars annually to fraudsters. Investors should be cautious and question promises of large payoffs,” said John Strong, Special Agent in Charge of the FBI in North Carolina.

Both Maiden and Shepherd have been released on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

The FBI handled both investigations. U.S. Attorney Tompkins also thanked CFTC and NFA for their invaluable assistance in Shepherd’s case.

Assistant U.S. Attorneys Kurt Meyers and Mark T. Odulio, of the U.S. Attorney’s Office in Charlotte prosecuted Shepherd, and AUSA Odulio prosecuted Maiden.

CHARLOTTE, N.C. – Today, U.S. District Judge Max O. Cogburn, Jr. sentenced John Reid Perkins, 45, of Charlotte, to serve 64 months in prison followed by three years of supervised release on securities fraud conspiracy charges and for violating the terms of his supervised release stemming from a previous federal conviction, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Perkins, who pleaded guilty in September 2013 to one count of securities fraud conspiracy, was also ordered to pay $805,150 as restitution.

Perkins’ conspirator, Terry Wayne Gandy, 51, or Myrtle Beach, S.C. was sentenced in December 2014 to 57 months in prison and three years of supervised release for his role in the conspiracy and was ordered to pay $3,076,411.34 in restitution to his victims.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) and B.W. Colier, Acting Director of the North Carolina State Bureau of Investigation (SBI) join U.S. Attorney Tompkins in making today’s announcement.

According to filed court documents and court proceedings, from 2006 to 2008 Perkins conspired with Gandy and others and tricked victims into investing in a fraudulent real estate investment scheme. Court records show that Perkins owned and operated “Master Home Solutions” (“MHS”), a company that purportedly purchased, remodeled, renovated and resold foreclosed homes. Based on court records, Perkins induced victims by falsely representing their money would be invested in real estate projects through MHS, when, in fact, very little of that money was ever invested. Instead of investing the investors’ money as promised, Perkins, Gandy and others used the funds to pay themselves and to support their lifestyles, including to pay bills, buy cars, and make large cash withdrawals.

According to court documents and court proceedings, the conspirators also used some of the victim’s money to pay purported “profits” to other investors, falsely characterizing them as “gains on investments.” Perkins and his conspirators also used new victims’ money to make payments to old victim-investors, commonly known as “Ponzi” payments. Court records indicate that Perkins and his conspirators further lied to victims, falsely telling them their money was tied up in investments with specific “maturity periods.” In some instances, the defendants advised victims that additional investment funds were needed in order to secure the return of the victims’ original investment, court records indicate.

In handing down the 64 month sentence, Judge Cogburn stressed the significant damage caused to victims by Perkins’ greed and noted that the lengthy sentence was needed to protect the public from futures crimes of the defendant.

In 2007, Perkins was convicted on federal conspiracy, identification document fraud, wire fraud and aggravated identity theft charges and served 33 months in prison. Perkins began a five-year period of supervised release in November 2010. Judge Cogburn revoked Perkins’ supervised release because Perkins violated several of his conditions by, among other things, engaging in unauthorized travel and defrauding a victim of approximately $125,000 in a sham tugboat sale. Perkins was remanded into federal custody following the sentencing hearing. 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 FBI, IRS and SBI. Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte prosecuted the case.

STATESVILLE, N.C. – On Wednesday, February 4, 2015, U.S. District Judge Richard L. Voorhees sentenced four defendants involved in a consumer and mortgage fraud conspiracy which resulted in multi-million dollar losses for consumers and federal agencies, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

Today’s sentences are the result of an investigation into a fraudulent mortgage and consumer fraud scheme committed by executives and employees of Phoenix Housing Group (“PHG”) and related lenders. The scheme caused multi-million dollar losses for consumers and federal agencies, including home buyers, the lenders that financed the home sales, and the U.S. Department of Housing and Urban Development (“HUD”) and U.S. Department of Agriculture (“USDA”), which guaranteed the loans.

Joseph (“Joey”) Klakulak, 36, of Charlotte, was sentenced to 30 months in prison, two years of supervised release and was ordered to pay $5,635,384.81 as restitution. Dennis Parris Wayne, 57, of Pinehurst, N.C. was sentenced to 24 months in prison, two years of supervised release and was ordered to pay $24,087,187.34 as restitution. Isaac “Ike” Vinson, IV, 47, of Murrells Inlet, S.C. was sentenced to 24 months in prison, two years of supervised release and was ordered to pay $6,625,841.24 as restitution. And, Andrew B. McKeown, 40, of Asheboro, N.C. was sentenced to a two year probationary term, with the first six months to be served in home confinement. McKeown was also ordered to pay $4,333,076.87 as restitution.

According to filed documents and statements made in court today, Parris was a former PHG Senior Vice President. Vinson was a former loan officer and manager for W.R. Starkey Mortgage (“WRSM”), McKeown was a former Sales Manager, and Klakulak was a Charlotte-based former loan officer for numerous lenders, including WRSM.

Court records indicate that from approximately 2004 to 2010, Parris, Vinson, McKeown, Klakulak, and related conspirators Roger Bailey, Marina McCuen and Fabian Sparrow originated hundreds of fraudulent HUD/FHA-insured and USDA-insured mortgage loans totaling more than $150 million and resulting in net losses of over $21 million to the United States and more than $3.3 million to consumers.

According to court records, the defendants convinced customers to purchase manufactured homes which they could not afford by misrepresenting the financing terms of the loans. Court records show that the conspirators secured loans for the unqualified consumers by providing lenders with documents that contained fraudulent customer information, such as false income, assets, and credit. According to court records, in some instances defendants also obtained inflated appraisals, misrepresented the source of down payment funds, and coerced consumers to sign closing documents. At times, the defendants also collected down payment money for which borrowers received no credit.

In handing down the defendants’ sentencings, Judge Voorhees noted the exceptional losses families “suffered as a result of unrealistic and ill-motivated procedures foisted on them.”

Klakulak pleaded guilty in August 2013 to conspiracy to make false statements to a federal agency and submit false statements to HUD. Parris and Vinson pleaded guilty in April 2014 and November 2014, respectively, to conspiracy to make false statements to a federal agency, submit false statements to HUD and destroy records in a federal investigation. McKeown pleaded guilty in January 2014 to concealing the conspiracy to defraud the government and consumers.

In August 2014, Marina McCuen, 51, of Asheville, N.C., and Roger Bailey, 42, of Hickory, were sentenced to 50 months and 30 months in prison, respectively. McCuen was a WRSM loan officer and Bailey was a sales manager of PHG’s sales center in Granite Falls. In addition to their prison terms, all defendants are barred from participating in mortgage lending.

The last conspirator charged in connection with this case, Fabian Sparrow, 36, of Burlington, N.C. has pleaded guilty to conspiracy to make false statements to a federal agency and submit false statements to HUD and is currently awaiting sentencing. Sparrow was a sales manager at PHG’s sales center in Burlington. In January 2011, PHG ceased business operations as part of a settlement with the Consumer Protection Division of the North Carolina Attorney General’s office.

Following the sentencing hearings, the defendants were ordered to self-report to 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 Tompkins thanked the multiple agencies involved in the investigation:

Office of the Inspector General, Office of Investigation of the Department of Housing and Urban Development (HUD-OIG); Office of the Inspector General, Office of Investigation of the U.S. Department of Agriculture (USDA-OIG); Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service (USPIS); North Carolina Attorney General’s Office; and North Carolina Commissioner of Banks (NCCOB). U.S. Attorney Tompkins also thanked the United States Marshals Service for their substantial assistance in financial analysis and the Department of State for their assistance in the apprehension of Sparrow when he fled the United States for Doha, Qatar.

The prosecution for the case was handled by Assistant United States Attorneys Michael Savage and Benjamin Bain-Creed, of the U.S. Attorney’s Office in Charlotte.

A total of 57 defendants have been prosecuted federally in connection with Operation “Dixie Crystal”

STATESVILLE, N.C. – On Monday February 2, 2015, U.S. District Judge Richard L. Voorhees handed down prison sentences to three men for their involvement in a methamphetamine trafficking ring, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

Kenneth Herman Bennett, 53, of West Jefferson, N.C. was sentenced to 188 months in prison, followed by five years of supervised release. Bennett pleaded guilty in December 2013 to one count of conspiracy to distribute and to possess with intent to distribute methamphetamine. According to court documents and today’s sentencing hearing, Bennett was the one of the conspiracy’s leaders and a supplier of crystal methamphetamine smuggled in to the United States from Mexico.

Judge Voorhees also sentenced Troy William Yount, Jr., 49, of Hudson, N.C. to 51 months in prison, followed by five years of supervised release, and Isaac Andrew Waters, 38, of Charlotte, to 33 months in prison and two years of supervised release. Yount and Waters each pleaded guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine in November 2013 and April 2014, respectively.

The prosecutions stem from Operation “Dixie Crystal,” a joint drug task force operation which began in 2012, targeting significant methamphetamine traffickers in Ashe, Allegheny, Caldwell, Watauga, Wilkes Counties, and Johnson County in Tennessee. To date, at total of 57 defendants have been prosecuted federally in connection with this investigation.

According to filed court documents and court proceedings, beginning in 2003 and continuing through 2011, the drug trafficking conspiracy was responsible for the sale of more than 200 pounds of methamphetamine, with a street value of more than $4,000,000. Over the course of the investigation, law enforcement seized approximately 30 firearms, five vehicles, 20 pounds of methamphetamine, and $150,000 in U.S. currency.

The following 30 defendants each pleaded guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine and were sentenced as follows:

1. Larry Mitchell Snyder of Trade, Tenn., was sentenced in July 2014 to 120 months in prison and five years of supervised release.
2. Earl Butler Potter of Todd, N.C., was sentenced in October 2014 to 37 months in prison and two years of supervised release.
3. Stephanie Lynn Shatley of Lansing, N.C., was sentenced in October 2014 to 60 months in prison and three years of supervised release.
4. Jared William Pardue of Zionville, N.C., was sentenced in October 2014 to 41 months in prison and three years of supervised release.
5. Tawana M. Sparks of Hudson, N.C., was sentenced in October 2014 to 24 months in prison and two years of supervised release.
6. Ricky Allen Latham of Creston, N.C., was sentenced in October 2014 to 46 months in prison and two years of supervised release.
7. Baxter Smith James of Boone, N.C., was sentenced in October 2014 to time served and eight years of supervised release.
8. Courtney Wayne Patterson of Todd, N.C., was sentenced in August 2014 to 110 months in prison followed by five years of supervised release.
9. Deborah Phillips Lewis of Todd, N.C., was sentenced in October 2014 to 33 months in prison followed by three years of supervised release.
10. James Foy Parsons of West Jefferson, N.C., was sentenced in August 2014 to 33 months in prison and two years of supervised release.
11. Tina Ann Wheeler (a/k/a Tina Ann Miller) of Crumpler, N.C., was sentenced in July 2014 to 108 months in prison, followed by five years of supervised release.
12. Mauricio “Mario” Baltazar of Lake City, Ga., was sentenced in June 2014 to 169 months in prison and five years of supervised release.
13. Jose Francisco Jimenez Pina of Mexico, was sentenced in April 2014 to 180 months in prison and five years of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime and aiding and abetting.
14. Jason Michael Benfield of Laurel Springs, N.C., was sentenced in June 2014 to 121 months in prison and five years of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to carrying of a firearm in furtherance of a drug trafficking crime.
15. Ernest Monroe Parlier, Jr. of Crumpler, N.C., was sentenced in April 2014 to 84 months in prison followed by five years of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime.
16. Jeremy Keith Nunnenkamp, of North Wilkesboro, N.C., was sentenced in July 2014 to 120 months in prison followed by five years of supervised release.
17. Jeffrey Dale Watson of Fleetwood, N.C., was sentenced in June 2014 to 15 months in prison followed by five years of supervised release.
18. James Thomas Hawkins of Laurel Springs, N.C., was sentenced in August 2014 to 70 months in prison and five years of supervised release.
19. Chad Morgan Yates of Chattahoochee Hills, Ga., was sentenced in July 2014 to 97 months in prison followed by five years of supervised release.
20. Christy Lee Latham of Warrensville, N.C., was sentenced in June 2014 to 84 months in prison followed by five years of supervised release.
21. Melanie Virginia Osley of Chattahoochie Hills, Tenn., was sentenced in April 2014 to 108 months in prison and five years of supervised release.
22. Luis Enrique Garcia, of Mexico, was sentenced in December 2013 to 188 months in prison and five years of supervised release.
23. Jose Francisco Jimenez Pina, of Mexico, was sentenced in April 2014 to 180 months in prison and five year of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to unlawful use and carry of a firearm in furtherance of a drug trafficking crime.
24. Jose Humberto Jimenez Pina, of Mexico, was sentenced in April 2014 to 50 months in prison, followed by four years of supervised release. In addition to the drug conspiracy charge, he also pleaded guilty to unlawful use and carry of a firearm in furtherance of a drug trafficking crime.
25. Bobby Giles Shore, of Lansing, N.C. was sentenced in April 2014 to 24 months in prison and five years of supervised release.
26. Danny Eller of West Jefferson, N.C., was sentenced in April 2014 to 21 months in prison followed by five years of supervised release.
27. Cristie Aldridge Dollar of Foscoe, N.C., was sentenced in December 2013 to 121 months in prison followed by five years of supervised release.
28. Pamela Ann Corum, of Zionville, N.C. was sentenced in March 2014 to 63 months in prison followed by five years of supervised release.
29. Tammy Wynette Woody, of West Jefferson, N.C., was sentenced in June 2014 to 30 months in prison followed by five years of supervised release.
30. Javier Sanchez Chavez of Mexico, was sentenced in March 2014 to 21 months in prison and one year of supervised release. He pleaded guilty to withholding information on a crime.

Seventeen additional defendants have pleaded guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine and are currently awaiting sentencing.

31. John Dale Darden, of Jefferson, N.C..
32. Larry Curtis Hooks of Lenoir, N.C.
33. William Clyde Townsend of Mountain, Tenn.
34. Victor Javier Hernandez (address unknown).
35. Terri Elaine Clark of Lenoir, N.C.
36. Michael Wayne Jenkins of Bloomer, N.C.
37. Bradley Eugene Goble of Lenoir, N.C.
38. Karl Albert Blanton of Lenoir, N.C.
39. Christopher Everett Triplett of Hudson, N.C.
40. Anthony Dwayne Byers of Jefferson, N.C.
41. Toni Leigh Wilson of Stanley, N.C.
42. Jesse Lawrence Burkett of Fleetwood, N.C.
43. John Paul Caudill of Laurel Springs, N.C.
44. Shannon Marie Williams Greene of Hickory, N.C.
45. Stephen Roger Dean (address unknown).
46. Lisa Dawn Wentworth of Lenoir, N.C.
47. Yee Thor of Newton, N.C.

The following three defendants have agreed to plead guilty to conspiracy to distribute and to possess with intent to distribute methamphetamine and are expected to appear in federal court to formally accept their pleas once their hearings have been scheduled:

48. Anthony Lee Day of Crumpler, N.C.
49. Donald Ray Newton of Byron, Ga.
50. Marixa Dawn Hart of Jefferson, N.C.

Three more defendants have been charged with conspiracy to distribute and to possess with intent to distribute methamphetamine:

51. Roger Dale Franklin of Lenoir, N.C. (via federal criminal indictment).
52. Brian Ledford of Newton, N.C. (via federal criminal complaint).
53. Heather Renee Miller of Hickory, N.C. (via federal criminal complaint).

Another defendant, Martin Martinez Saldana, 43, of West Jefferson, N.C. was convicted by a jury in March 2014 of conspiracy to distribute and to possess with intent to distribute methamphetamine and of receipt and possession of a firearm that was not registered to him. He is currently awaiting sentencing.

In making today’s announcement, U.S. Attorney Tompkins recognized the following federal, state and local agencies which partnered in Operation Dixie Crystal, and thanked them for their continued cooperation and support:

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Drug Enforcement Administration (DEA); U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); North Carolina State Bureau of Investigation (NC SBI); Ashe County Sheriff’s Office; Allegheny County Sheriff’s Office; Boone Police Department; Caldwell County Sheriff’s Office; Watauga County Sheriff’s Office; Wilkes County Sheriff’s Office; Johnson County Sheriff’s Office in Tennessee; Lenoir Police Department; Hickory Police Department; and Catawba County Sheriff’s Office.

The prosecutions are being handled by Assistant U.S. Attorney Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte.

United States v. Jose Humberto Pina; Case Number 5:12-cr-48-RLV.
United States v. Saldana et al; Case Number 5:12-cr-49-RLV.
United States v. Shore; Case Number 5:12-cr-50-RLV.
United States v. Eller; Case Number 5:12-cr-51-RLV.
United States v. Corum; Case Number 5:12-cr-52-RLV.
United States v. Dollar; Case Number 5:12-cr-53-RLV.
United States v. Garcia et al; Case Number 5:12-cr-54-RLV.
United States v. Chavez; Case Number 5:13-cr-12-RLV.
United States v. Osley; Case Number 5:13-cr-15-RLV.
United States v. Parlier; Case Number 5:13-cr-18-RLV.
United States v. Latham; Case Number 5:13-cr-19-RLV.
United States v. Benfield; Case Number 5:13-cr-26-RLV; Complaint Number 3:13-mj-83.
United States v. Hawkins; Case Number 5:13-cr-27-RLV.
United States v. Yates; Case Number 5:13-cr-28-RLV.
United States v. Woody; Case Number 5:13-cr-36-RLV; Complaint Number 3:13-mj-132.
United States v. Nunnenkamp; Case Number 5:13-cr-39-RLV; Complaint Number 3:13-mj-132.
United States v. Watson; Case Number 5:13-cr-40-RLV; Complaint Number 3:13-mj-132.
United States v. Bennett; Case Number 5:13-cr-41-RLV; Complaint Number 3:13-mj-132.
United States v. Baltazar; Case Number 5:13-cr-42-RLV; Complaint Number 3:13-mj-137.
United States vs. Hartley; Case Number 5:13-cr-46-RLV.
United States vs. Lewis; Case Number 5:13-cr-47-RLV.
United States vs. Parsons; Case Number 5:13-cr-48-RLV.
United States vs. Yount; Case Number 5:13-cr-49-RLV.
United States vs. Snyder et al; Case Number 5:13-cr-50-RLV.
United States vs. Patterson; Case Number 5:13-cr-51-RLV.
United States vs. Wheeler; Case Number 5:13-cr-52-RLV.
United States vs. Darden, 5:14-cr-23-RLV.
United States vs. Hooks, 5:14-cr-30-RLV.
United States vs. Townsend, 5:14-cr-36-RLV.
United States vs. Hernandez, 5:14-cr-40-RLV.
United States vs. Clark, 5:14-cr-41-RLV.
United States vs. Jenkins, 5:14-cr-43-RLV.
United States vs. Goble, 5:14-44-RLV.
United States vs. Blanton, 5:14-cr-45-RLV.
United States vs. Triplett, 5:14-cr-50-RLV.
United States vs. Byers, 5:14-cr-51-RLV.
United States vs. Wilson, 5:14-cr-52-RLV.
United States vs. Burkett, 5:14-cr-63-RLV.
United States vs. Caudill, 5:14-cr-68-RLV.
United States vs. Greene, 5:14-cr-71-RLV.
United States vs. Dean, 5:14-cr-76-RLV.
United States vs. Wentworth, 5:14-cr-86-RLV.
United States vs. Thor, 5:15-cr-1-RLV.
United States vs. Day, 5:15-cr-5-RLV.
United States vs. Newton, 5:15-cr-10-RLV.
United States vs. Hart, 5:15-cr-7-RLV.
United States vs. Franklin, 3:14-cr-81-RLV; Complaint Number 3:14-mj-248.
United States vs. Ledford, 3:15-mj-30-DSC.
United States vs. Miller, 3:15-mj-30-DSC.

Defendants among 91 Charged in Operation Wax House

CHARLOTTE, N.C. – Matthew Newland, 41, of Iowa, was sentenced on Tuesday, January 27, 2015, by Senior U.S. District Judge Graham C. Mullen to serve 13 months in prison followed by one year of supervised release on federal racketeering charges, announced the U.S. Attorney’s Office for the Western District of North Carolina. Four other defendants were sentenced earlier this month.

The U.S. Attorney’s Office is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

These convictions are the latest in Operation Wax House, an investigation which began in 2007. Of the 91 individuals charged, eighty-nine defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives.

According to court records and Tuesday’s sentencing hearing, Newland operated as a promoter in the conspiracy and received more than $400,000 in kickbacks for his role. Newland also served as a seller in one transaction, letting approximately $240,000 in kickbacks be paid out of the loan proceeds to his co-conspirators. Newland pled guilty to RICO conspiracy to commit bank fraud in June 2013.

The other five defendants sentenced this month are:

• On January 27, 2015, Lorie Dooley, 50, of Charlotte, N.C., was sentenced to 46 months in prison, followed by three years of supervised release. Dooley was also a promoter in the enterprise’s mortgage fraud operations and received approximately $25,000 in kickbacks for her role. In addition to the mortgage fraud, Dooley engaged in a bank bribery scheme, in which she received $63,000 from a co-conspirator and paid a bank employee $55,000 to provide a bogus letter of credit. Also, when Dooley learned that the bank employee had pleaded guilty, Dooley obstructed justice, attempting to threaten and intimidate that employee. Dooley pleaded guilty to RICO conspiracy to commit bank fraud, wire fraud, and money laundering conspiracy in January 2014. She has been in custody since her arrest on these charges in May 2013.

• On January 20, 2015, Travis Bumpers, 38, of Charlotte, was sentenced to 66 months in prison and three years of supervised release. Bumpers was a promoter in both the enterprise’s mortgage fraud and investment fraud operations. Bumpers engaged in multiple mortgage fraud transactions, arranging for a straw buyer, providing down payment money, and receiving more than $800,000 in kickback money through a sham corporation. Bumpers also engaged in extensive investment fraud, defrauding approximately 70 victims out of more than $4.6 million. Bumpers pleaded guilty to RICO conspiracy to commit securities fraud, bank fraud, wire fraud and money laundering conspiracy in March 2013. He has been in custody since his arrest on these charges in November 2012.

• On January 8, 2015, Ralph Johnson, 37, of Charlotte, was sentenced to 27 months in prison and two years of supervised release. Johnson was a promoter in the enterprise’s mortgage fraud operations, helping arrange multiple fraudulent transactions and provide straw buyers in exchange for approximately $360,000 in kickbacks. Johnson pleaded guilty to RICO conspiracy to commit bank fraud, wire fraud, and money laundering conspiracy in June 2013. He has been in custody since his arrest on these charges in April 2013.

• Also on January 8, 2015, Benjamin Clarke, 41, of Atlanta, Ga. was sentenced to an eight month split sentence, followed by two years of supervised release. Clarke served the enterprise as a buyer for two properties purchased as part of its mortgage fraud operations and received approximately $200,000 in kickbacks. Clarke pleaded guilty to bank fraud in June 2013. Of the 26 six defendants charged in this indictment, 18 await sentencing, including three of the scheme’s leaders. The fourth leader, Ramin Amini, 46, last known address Tehran, Iran, is one of two international fugitives. Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Operation Wax House prosecution is being handled for the government by Assistant United States Attorney Maria K. Vento.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’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 the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The names and case numbers of the all the defendants charged to date in Operation Wax House are listed below, organized by their alleged role in the scheme.

ASHEVILLE, N.C. – A Clay County man was sentenced on Thursday, January 22, 2015, to serve 192 months in a federal prison for producing, possessing and distributing child pornography, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, U.S. District Judge Martin Reidinger also ordered James Thomas Lifsey, 59, of Warne, N.C. to serve under court supervision the rest of his life upon release from prison and to register as a sex offender. Lifsey was also ordered to pay $ 46,057 as restitution to the victims.

Ryan L. Spradlin, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Georgia and the Carolinas joins U.S. Attorney Tompkins in making today’s announcement.

In July 2013, a federal criminal indictment charged Lifsey with one count of production, one count of distribution and one count of possession of child pornography. Lifsey pleaded guilty to the charges in December 2013. According to court filings and proceedings, during the investigation detectives discovered Lifsey had an extensive collection of child pornography, as well as a computer hard drive, an email account, and online photo sharing accounts. Lifsey admitted to distributing child pornography internationally that he produced himself.

Lifsey has been in federal custody since July 2013 and will be transferred into custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.

The investigation into Lifsey was handled by HSI with assistance from the Clay County Sheriff’s Office and the Cherokee County Sheriff’s Office.

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

CHARLOTTE, N.C. – Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, announced that the United States Supreme Court affirmed yesterday the conviction of Larry Whitfield, a Charlotte man involved in the 2008 attempted robbery of a credit union in Gastonia, N.C. On November 23, 2009, following a six-day trial, a federal jury convicted Whitfield of attempted robbery of the credit union, conspiracy to possess, carry and use firearms during the attempted credit union robbery, possessing, carrying and using firearms during the attempted credit union robbery and forcing a victim to accompany him while avoiding and attempting to avoid arrest for these offenses, resulting in the death of the victim.

According to court records, Whitfield forced a victim, who died of a heart attack, to accompany him to another room inside her home while he was fleeing from police after the failed bank robbery. In a unanimous opinion, the U.S. Supreme Court found that Whitfield’s actions violated 18 U.S.C. Section 2113(e) (“forced accompaniment statute”), which provides for a sentence ranging from ten years up to life in prison for anyone who “forces any person to accompany him” in the course of committing or fleeing a bank robbery.

According to court records and evidence presented at Whitfield’s trial:

On September 26, 2008, Whitfield and his co-defendant, Quanterrious McCoy, armed with a loaded .357 revolver and an assault rifle, attempted to rob the Fort Financial Credit Union in Gastonia. Court records show that the two robbers fled the scene, switched get-away cars, and were heading toward Charlotte when spotted by law enforcement officers. Officers were in pursuit when the defendants’ vehicle hit another car and became disabled on the shoulder of an I-85 exit ramp.

After crashing, the robbers grabbed their firearms and fled toward a residential neighborhood in the Belmont area, where they got rid of their guns and split up. Whitfield entered the home of a victim and threatened her with a knife as she was coming into the house. The victim fled, and so did Whitfield. Whitfield then entered the house of a second victim, a 79-year-old woman who was home alone. Whitfield forced the victim to move to another room inside her home while Whitfield called a friend for help escaping police. The victim suffered and died from a heart attack during the forced accompaniment.

On November 20, 2012, Judge Conrad re-sentenced Whitfield, after correcting an error in the original sentence, to 264 months in prison for the forced accompaniment conviction, to run concurrently with 240 months in prison for the attempted robbery and conspiracy to carry firearms conviction, and to run consecutively with 60 months of consecutive imprisonment for the carrying firearms conviction, for a total sentence of 27 years in prison.

The United States Supreme Court accepted the case for certiorari review last year to decide whether the forced accompaniment offense required proof of more than minimum movement on the part of the victim. According to the Supreme Court’s website, “the Court receives approximately 10,000 petitions for a writ of certiorari each year. . . . [and] grants and hears oral argument in about 75-80 cases.”

In the Supreme Court’s 9-0 opinion written by Justice Antonin Scalia, the Court noted that the forced accompaniment language of the statue has remained unchanged since Congress passed the statute after a series of bank robberies committed by John Dillenger in the 1930s. The Court rejected Whitfield’s argument that the statute should be read to require a forced movement over more substantial distances than in Whitfield’s case, holding that “a bank robber ‘forces [a] person to accompany him, (for purposes of § 2113(e)), when he forces that person to go somewhere with him, even if the movement occurs entirely within a single building or over a short distance. Defined in this manner, Whitfield forced [the victim] to ‘accompany him.’”

Whitfield’s conspirator, Quanterrious McCoy, pleaded guilty in May 2009 to attempted bank robbery and use and carry of a firearm in relation to a crime of violence. He was sentenced in February 2010 to 84 months in prison.

The FBI investigated the case. The federal prosecution was handled by Assistant U.S. Attorney Thomas A. O’Malley and former Assistant U.S. Attorney Adam C. Morris handled the federal prosecution. Assistant U.S. Attorneys Amy Ray and William Miller handled the appellate portion of the case.

The Charlotte Metropolitan Human Trafficking Task Force Highlights Its Ongoing Efforts To Fight Human Trafficking And Provide Victim Assistance

CHARLOTTE, N.C. – Federal, state and local law enforcement agencies and representatives of community organizations gathered today in recognition of “National Slavery and Human Trafficking Prevention Month.” During an early morning press conference, Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, emphasized the importance of raising public awareness on this issue and highlighted the continued efforts of the Charlotte Metropolitan Human Trafficking Task Force (CMHTTF) in fighting this modern-day form of slavery.

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. In today’s remarks, U.S. Attorney Tompkins noted that a coalition of law enforcement agencies working side by side with community groups, equally committed to fighting this epidemic, is a powerful combination of resources in the fight against human trafficking. Ms. Tompkins praised the work of the task force’s community partners for their commitment to helping rescued victims and providing them with much-needed assistance, such as food, shelter, medical attention and mental health services.

“Human Trafficking Prevention Month is a painful reminder that there are men, women and children within our communities trapped in a life of bonded labor, violence and forced prostitution for little or no pay. The Charlotte Metropolitan Human Trafficking Task Force is a strong coalition of law enforcement agencies and community organizations working together to fight this form of modern-day slavery, assist victims and prosecute the criminals who commit these acts,” said U.S. Attorney Tompkins.

“Homeland Security Investigations is committed to working with our partners both inside and outside of law enforcement to break the victims of human trafficking free from their bondage,” said Joe Gallion, Deputy Special Agent in Charge of ICE Homeland Security Investigations in Charlotte. “By working together across the enforcement and advocacy spectrum, we will ensure that the criminals are put behind bars and their victims have help in taking their first steps on the journey to healing.”

“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.

“Moore & Van Allen launched its Human Trafficking Pro Bono Project in late 2013, to offer victims of human trafficking free legal representation in a variety of areas including victim-witness advocacy, criminal record expunction, and civil protective orders. The Project also focuses on facilitating community collaboration and awareness. The firm looks forward to the continued momentum of this important work,” said Sarah Byrne, Moore & Van Allen Conflicts Counsel and Charlotte Metropolitan Human Trafficking Task Force Member. “Gathering members of the bar and the bench, together with law enforcement and service providers like we have today is important because of the intersections between trafficking and domestic violence, trafficking and child abuse, trafficking and the juvenile justice system, and trafficking and runaway children. Only by recognizing these often hidden victims and connecting them to necessary services can we, as a community, offer justice and healing to survivors of this horrific crime,” Byrne added.

U.S. Attorney Tompkins thanked all the law enforcement agencies and community groups for their invaluable assistance and praised their work and ongoing collaboration. The press conference was followed by a half-day training workshop organized by the task force. The training was open to service providers, law enforcement, members of the judiciary and attorneys, and focused on the realities of human trafficking, victim identification and best practices support services.

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.

 

 

 

 

Defendant Spent Stolen Funds on Luxury Vehicles and Jewelry

CHARLOTTE, N.C. – Ronnie Lorenzo Robinson, 37, of Charlotte, was sentenced today to 30 months in prison for his role in a $3.4 million Medicaid fraud scheme involving sham mental and behavioral health services, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Frank D. Whitney also ordered Robinson to serve three years under court supervision and to pay $3,153,074 in restitution to Medicaid.

U.S. Attorney Tompkins 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 Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID).

According to filed court documents and today’s sentencing hearing, from in 2007 to 2011, Robinson engaged in a scheme to defraud Medicaid of at least $3.4 million in fraudulent reimbursement claims submitted to Medicaid. Court records show that Robinson owned and operated Peaceful Alternative Resources, Inc. (PAR), a purported non-profit Medicaid-approved company providing mental health and mentoring services with offices in Charlotte, Mooresville and Greensboro, N.C. Robinson and PAR defrauded Medicaid by submitting false reimbursements to the government program for bogus mental health services. Contrary to the submitted claims, the claimed services were either provided by unlicensed, non-Medicaid approved individuals, or were never provided at all.

According to filed documents, Robinson submitted the fraudulent reimbursement claims using the Medicaid provider numbers of at least three licensed clinicians who had performed some work for PAR. Court records indicate that these clinicians never provided the claimed services and were not aware that Robinson was submitting the false claims using their provider numbers. Court documents also indicate that Robinson obtained Medicaid beneficiary information from other organizations and used that information to submit claims for the made-up services. According to court documents, that Robinson submitted claims to Medicaid totaling approximately $3.4 million and received approximately $3.1 million in payments. Robinson pleaded guilty in January 2014 to two counts of health care fraud.

Over the course of the investigation, law enforcement seized a 2004 Land Rover Range Rover HSE, a 2007 Chevrolet Suburban, a 2007 Mercedes S550 and a 1 5/8 carat oval ladies diamond ring, purchased with money fraudulently obtained from Medicaid. Agents also seized a classic 1972 Chevrolet Chevelle-Malibu, a 2006 Chrysler 300 and approximately $660,000 in funds in connection with the fraud.

Robinson will report to the Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility. All federal sentences are served without the possibility of parole.

Two social workers, formerly employed by the Mecklenburg County Department of Social Services (DSS), who provided Robinson the Medicaid beneficiary information of DSS clients, have already pleaded guilty to health care fraud charges. Ieshia Hicks Watkins pleaded guilty in October 2014 to one count of health care fraud conspiracy and one count of receiving illegal kickbacks. Ryce Edward Hatchett pleaded guilty on Tuesday, January 6, 2015, to one count of receiving illegal kickbacks. Both defendants await sentencing.

The investigation into Robinson was handled by the FBI and MID. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.

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.

STATESVILLE, N.C. – On Monday, January 5, 2014, U.S. District Judge Richard L. Voorhees sentenced Forest Skidmore, Jr., 48, of Statesville, N.C. to 120 months in prison on child pornography charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. In addition to the prison term, Skidmore was ordered to register as a sex offender and to serve the rest of his life under court supervision after his release from prison.

U.S. Attorney Tompkins 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 Thomas A. Anderson of the Statesville Police Department.

Skidmore pleaded guilty in July 2014 to one count of possession of child pornography. According to filed documents and statements made in court, from on or about March 2012 to on or about May 2012, law enforcement became aware of Skidmore’s collection of child pornography, which he was downloading from and sharing over the Internet. Court records indicate that law enforcement executed a search warrant at Skidmore’s home and seized his computer. A forensic examination of Skidmore’s computer revealed that he possessed 166 images and 61 videos of children being sexually abused, including images of child pornography victims under the age of five. Court records show that the child pornography in Skidmore’s possession included at least 23 different children already identified by law enforcement as victims of child pornography.

Skidmore has been in custody since entering his guilty plea and will 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 FBI and the Statesville Police Department. Assistant U.S. Attorneys Cortney S. Randall and David A. Thorneloe prosecuted the case.

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

CHARLOTTE, N.C. - U.S. Attorney Anne M. Tompkins announced today that the Western District of North Carolina (WDNC) collected $22,164,212.92 in criminal and civil actions in Fiscal Year (FY) 2014. Of this amount, WDNC collected $9,677,978.82 in criminal actions and $12,486,234.10 in civil actions.*

Attorney General Eric Holder announced last month that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.

“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”

“The men and women of the U.S. Attorney’s Office for the Western District of North Carolina are dedicated public servants tasked with an important mission: to enforce the laws of our nation and to ensure that criminals do not profit from their illegal activities. I am proud of their hard work and their commitment to recovering taxpayer dollars, securing restitution for victims of federal crimes and protecting the public from fraud, waste and abuse,” said U.S. Attorney Tompkins.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing criminal and civil actions and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. Criminal actions comprise criminal fines, special assessments and restitution. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. For example, in FY 2014, in US v. Martin, WDNC collected assets and cash from Gary D. Martin totaling $4,656,140.31, to be applied toward restitution for the victims of the scheme. WDNC prosecuted Martin for his involvement in the $32.5 million Queen Shoals Ponzi scheme. Martin was sentenced in March 2013 to 10 years in prison and was ordered to pay $31,707,038 as restitution. While restitution is paid to the victim, 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 FY 2014, 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. In WDNC, in US vs. Mark Le, the office collected $2.1 million of its $6.2 million civil settlement with Dr. Le, on civil fraud allegations arising from the submission of fraudulent reimbursement claims to Medicare and Medicaid for medically unnecessary diagnostic tests and procedures.

Additionally, the Western District of North Carolina worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $850,830,833.59 in cases pursued jointly with these offices. Of this amount, $850,786,750 was collected in civil actions and $44,083.59 was collected in criminal actions. In FY 2014, in US v. Bank of America Corp., et al. (Mortgage Services Global Settlement), WDNC shared in on $850 million collected from Bank of America as part of the multi-district settlement with the nation’s five largest mortgage servicers – Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, and Ally. As part of the 2012 settlement, the servicers agreed to pay a $25 billion to resolve allegations of abuse and fraud in mortgage loan servicing and foreclosures.

In addition to the criminal and civil actions, the U.S. Attorney’s office in Western District of North Carolina, working with partner agencies and divisions, collected $4,415,201 in asset forfeiture actions in FY 2014. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

* In measuring collections recovered in FY 2014, the figures necessarily include some cases that were resolved in previous years but the proceeds were collected in FY 2014. Similarly, the FY 2014 figures do not include some cases resolved in the 2014 fiscal year, for which collections will begin in FY 2015.

ASHEVILLE, N.C. – The last of 18 members of a methamphetamine trafficking organization was sentenced on Wednesday, December 17, 2014, to 46 months on drug charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Angela Leigh Wike, of Bryson City was also ordered to serve three years under court supervision.

U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office and Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division.

In May of 2013, 18 members of the drug ring were arrested as the result of a joint law enforcement investigation conducted by DEA, ATF, North Carolina State Bureau of Investigation, Macon County Sheriff’s Office, Jackson County Sheriff’s Office, Swain County Sheriff’s Office, Franklin Police Department, and Cherokee Indian Police Department.

According to filed court documents and court proceedings, from May 2012 to April 2013, the drug ring operated primarily in Jackson, Haywood, Macon, Swain and Buncombe counties in Western North Carolina. Wake was the last defendant to be sentenced in this case. Those already sentenced are:

• Cipriano Ramos Altamirano – 135 months in prison and five years of supervised release.
• Claude Gregory Coggins – 70 months in prison and three years of supervised release.
• Anne Harvey Cresswell – 60 months in prison and three years of supervised release.
• Joseph Daniel Denmark – 60 months in prison and four years of supervised release.
• Patricia Leigh Dreml – 57 months in prison and two years of supervised release.
• Daniel Furman Gibson - 151 months in prison and four years of supervised release.
• Gerardo Beltran Llanas – 97 months in prison and three years of supervised release.
• Forest Shane Lynn – 30 months in prison and three years of supervised release. Joshua Bryan Parker – 60 months in prison and four years of supervised release.
• Eddie Dwayne Potts – 27 months in prison and three years of supervised release.
• Gerardo Rodriquez-Aragon – 46 months in prison and two years of supervised release.
• Javier Serna-Trejo – 37 months in prison and two years of supervised release.
• Chad Keith Shuler – 100 months in prison and four years of supervised release.
• Paul Michael Swofford – 30 months in prison and three years of supervised release.
• Ronald Edward Swofford – 46 months in prison and three years of supervised release.
• James Homer Taylor – 30 months in prison and three years of supervised release.
• Heather Marie West – 54 months in prison and three years of supervised release.

Wike 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 DEA and ATF, assisted by the North Carolina State Bureau of Investigation, Macon County Sheriff’s Office, Jackson County Sheriff’s Office, Swain County Sheriff’s Office, Franklin Police Department, and Cherokee Indian Police Department. The prosecution is being handled for the government by Assistant U.S. Attorney Thomas Kent of the U.S. Attorney’s Office in Asheville.

The Defendant Provided Medicaid Clients’ Identities to a Conspirator in Exchange for Cash

CHARLOTTE, N.C. – Ryce Edward Hatchett, Jr., 43, of Charlotte, and a Senior Social Worker with the Mecklenburg County Department of Social Services (DSS), was charged today by a criminal bill of information with one count of receiving illegal kickbacks, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A plea agreement has also been filed and Hatchett is expected to appear in federal court in the coming weeks to formally accept the guilty plea.

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

According to filed court documents, from November 2009 to October 2010, and while working at DSS, Hatchett participated in an illegal kickback scheme with Ronnie Lorenzo Robinson, owner and operator of “Peaceful Alternative Resources, Inc.” (PAR), a non-profit mental health and mentoring services provider with offices in Charlotte and surrounding areas. Court records indicate that Hatchett solicited and received illegal kickbacks from Robinson and PAR, in exchange for the referrals of individuals enrolled with the Medicaid program, some of whom were DSS clients. Court records show that Robinson used the beneficiaries’ information to file fraudulent reimbursement claims with Medicaid for services that were either not approved by Medicaid or were never provided. According to court records, Hatchett received at least $12,000 in illegal kickbacks from Robinson, in exchange for providing the information of the Medicaid recipients.

Hatchett will be ordered by the U.S. District Court to appear on a summons for his initial appearance, which will be scheduled by the Court. At sentencing, he faces a maximum term of five years in prison and a $250,000 fine for receiving the illegal kickbacks. In his plea agreement, Hatchett has agreed to pay full restitution to Medicaid for any losses resulting from his criminal conduct. The final restitution amount will be determined by the court at Hatchett’s sentencing hearing, which has not been scheduled yet.

Robinson pleaded guilty in January 2014 to two counts of health care fraud in connection with a separate case and is currently awaiting sentencing.

The investigation into Hatchett was handled by the FBI with assistance from the North Carolina Medicaid Investigations Division. The prosecution was handled by Assistant U.S. Attorney Kelli Ferry of the U.S. Attorney’s Office in Charlotte.

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

ASHEVILLE, N.C. – Today, U.S. District Judge Martin Reidinger sentenced Brian Wayne Moore to 262 months in prison on federal production of child pornography charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Moore was also ordered to register as a sex offender and to serve the rest of his life under court supervision after he is released from prison. Judge Reidinger also ordered Moore to have no contact with victims of child pornography.

U.S. Attorney Tompkins is joined in making today’s announcement by Brock D. Nicholson, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Sheriff Gary Banks of the Yancey County Sheriff’s Office.

In August 2013, Moore, 28, of Burnsville, N.C., pleaded guilty to one count of production of child pornography and one count of possessing child pornography. According to filed documents and statements made in court, in May 2012, law enforcement became aware of Moore’s production of child pornography after it was reported by a family member. Law enforcement later searched a cellular phone and computer equipment pursuant to a search warrant. Court records indicate that after producing the child pornography, Moore distributed it to another person he met on the Internet who he believed to be a sixteen year old.

Moore has been in federal custody since February 2013. He 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 jointly by HSI and the Yancey County Sheriff’s Office.

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, U.S. District Judge Max O. Cogburn, Jr. sentenced Terry Wayne Gandy, 51, of Myrtle Beach, S.C. to serve 57 months in prison followed by three years of supervised release for stealing more than $2 million from investors, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Cogburn also ordered Gandy to pay $3,076,411.34 as restitution to his victim investors.

John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) and and B.W. Colier, Acting Director of the North Carolina State Bureau of Investigation (SBI) join U.S. Attorney Tompkins in making today’s announcement.

According to filed court documents and today’s sentencing hearing, from 2000 to 2009 Gandy and his conspirators engaged in an investment fraud scheme that defrauded his victim investors of more than $2 million. According to court documents, Gandy was the owner and operator of TakeSix Trading Fund (TakeSix), which Gandy falsely held out to be a bona fide investment firm, when in fact TakeSix was never registered in North Carolina or elsewhere. Gandy used TakeSix to induce his victims to invest through the company, claiming, among other things, that their money would be invested in various project such as real estate and oil and gas wells. Contrary to Gandy’s claims, very little, if any, of the victim’s money was actually invested.

According to court documents and court proceedings, Gandy mainly targeted his former co-workers at Philipp Morris and solicited funds from them, promising rates of return anywhere between 20% to 30% annually. Instead of investing the victims’ money as promised, Gandy used it to fund his own personal lifestyle, including payment for luxury hotel accommodations on multiple trips to Las Vegas, cash withdrawals at Las Vegas casinos, purchase of luxury cars, and to pay purported “profits” to other investors who asked for their money, commonly known as “Ponzi” payments. Court records indicate that to further support his fraudulent scheme, Gandy provided his victim-investors false account statements depicting bogus and over-inflated account balances. In all, Gandy and his conspirators defrauded more than thirty victims of over $2 million. Co-conspirator John Reid Perkins earlier pleaded guilty to securities fraud conspiracy for his role in the scheme on September 6, 2013. Perkins is currently awaiting a sentencing date.

In handing down the 57 month sentence, Judge Cogburn emphasized that the “sentence is necessary to deter others who may be thinking of engaging in such unlawful conduct.”

Following the sentencing hearing, Gandy was permitted to remain on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

The investigation was handled by FBI, IRS and SBI. Assistant United States Attorney Mark T. Odulio of the U.S. Attorney’s Office in Charlotte prosecuted the case.

All Defendants Have Previous Convictions And Were Prohibited From Possessing Firearms

CHARLOTTE, N.C. – Four Charlotte men with previous criminal convictions have been indicted on federal gun charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. A federal grand jury returned the criminal indictments on Tuesday, December 16, 2014, against Carlton Calvin Wilson, 28, Dominic Xavier McDonald, 28, Brendan Cornelius Penn, 25, and Tory Lorenzo Vaszquez, 25, all of Charlotte, charging them with multiple counts of possession of a firearm by a convicted felon.

Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department join U.S. Attorney Tompkins in making today’s announcement.

According to the four criminal indictments and other filed court documents, the defendants unlawfully possessed firearms despite having previous criminal convictions, which prohibit them from possessing weapons. Wilson’s six-count indictment alleges that, from September through November 2014, Wilson illegally possessed 11 firearms, including four pistols, five revolvers and two shotguns. Penn’s indictment alleges that in October 2014, Penn illegally possessed three firearms, and has been charged with three counts of possession of firearm by a convicted felon in connection with that conduct. A third indictment charges McDonald with four counts of possession of a firearm by a convicted felon. According to allegations contained in the indictment, in October 2014, McDonald possessed six firearms, including two pistols, one revolver and two rifles. A fourth indictment charges Vasquez with one count of possession of a firearm by a convicted felon for possessing two pistols in October 2014.

All four defendants are currently in federal custody. They face a maximum of 10 years in prison and a $250,000 fine for each count.

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

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

CHARLOTTE, N.C. – On Tuesday, December 16, 2014, a grand jury sitting in Charlotte returned a federal indictment against Michael Francis Egan, III, 32, formerly of Charlotte, charging him with securities fraud and wire fraud in connection with a fraudulent investment scheme, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Tompkins 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 criminal indictment, from August 2007 to February 2012, Egan engaged in a fraudulent investment scheme by inducing his victims to enter into various fictitious business and investment contracts. The indictment alleges that Egan promised that he would invest the victims’ money in various projects, such as Halloween themed attractions, holiday themed attractions, land development and investment deals, and television shows, among others, when, in reality, Egan did not invest victims’ money as promised. According to allegations contained in the indictment, Egan further induced his victims to invest with him by lying about his financial background and personal assets. For example, the indictment alleges that Egan forged brokerage account statements to reflect fraudulent balances when, in reality, those accounts had no money or a fraction of the purported amount.

According to allegations contained in the indictment, Egan also lied to his investors about his professional connections and his investments. For example, as alleged in the indictment, 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. According to the indictment, 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, restaurants medical bills and pet care, among others.

Egan will be ordered by the U.S. District Court to appear on a summons for his initial appearance, which will be scheduled by the Court. If convicted, Egan faces a maximum of 20 years in prison and a $5 million fine for the securities fraud count and a 20 year prison term and a $250,000 fine for the wire fraud count.

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

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

Conspiracy Involved Over 700 Kilograms of Cocaine Worth Over $21 Million

CHARLOTTE, NC B Pedro Oscar Dieguez, a/k/a “The Cuban,” was sentenced today by Chief U.S. District Judge Frank D. Whitney to serve 400 months in prison and five years of supervised release on cocaine trafficking and related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Judge Whitney also ordered the defendant to pay a $20,000 fine and the forfeiture of Dieguez’s Mercedes vehicle, three firearms and $1,890 in cash.

U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office; Sheriff Eddie Cathey of the Union County Sheriff’s Office (UCSO) and Chief Rodney D. Monroe of the Charlotte-Mecklenburg Police Department (CMPD).

According to filed court documents, trial evidence presented, and today’s sentencing hearing:

In January 2014 following a four-day trial, Dieguez, 49, of Indian Trail, N.C. was convicted by a federal jury of conspiracy to distribute and to possess with intent to distribute cocaine and money laundering conspiracy. From about 2004 through 2013, Dieguez and his co-conspirators trafficked more than 700 kilograms of cocaine with an estimated street value of more than $21,000,000. Dieguez obtained his drug supplies from Mexican cartels and other sources of supply with connections to cartels and transported it to the Charlotte area using trucks. Dieguez and his conspirators ultimately redistributed the cocaine as crack cocaine. Dieguez engaged in a conspiracy to launder the drug proceeds through bank accounts and by purchasing expensive exotic horses. Dieguez kept the horses on his 16-acre ranch located in Indian Trail, which he also used to offload the drug shipments. While executing a search warrant at Dieguez’s ranch, law enforcement seized multiple firearms, including a .45 caliber High-Point handgun and a .22 Ruger handgun.

Dieguez, a Cuban national, has been in federal custody since April 24, 2013, after it was discovered that he had been planning to flee to Cuba. 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.

Two of Dieguez’s conspirators, Maximiliano Aguilar-Rodriguez and Juan Diego Aguilar-Preciado were previously sentenced to 70 months and 46 months in prison, respectively, and to three years of supervised release.

The case was investigated by the DEA in Charlotte, UCSO, and CMPD. The prosecution was handled by Assistant U.S. Attorney Steven R. Kaufman.

ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger today sentenced Jackie Lee Rattler, 55, of Cherokee, N.C. 108 months in prison on drug trafficking conspiracy charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Rattler was also ordered to serve three years under court supervision upon completion of his prison term.

U.S. Attorney Tompkins is joined in making today’s announcement by John S. Comer, Acting Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the North Carolina; Charles Addington, Deputy Associate Director of the Bureau of Indian Affairs, Division of Drug Enforcement; Chief Ben Reed of the Cherokee Indian Police Department; Sheriff Curtis Cochran of the Swain County Sheriff’s Office; Sheriff Mickey Anderson of the Graham County Sheriff’s Office; and Sheriff Jimmy Ashe of the Jackson County Sheriff’s Office.

According to filed court documents and today’s proceedings, Rattler and his co-defendants were involved in the trafficking of narcotics, including Oxycodone, cocaine, marijuana and Alprazolam in Swain and Jackson Counties. At today’s sentencing hearing, Rattler was found to be accountable for trafficking 477.20 grams Oxycodone, 3.05 kilograms of marijuana and 56.2 grams of cocaine. During the investigation, law enforcement also seized 42 firearms, including two Ruger M77 II rifles and a Smith & Wesson 66 Revolver. In September 2013, Rattler pleaded guilty to six counts of possession with intent to distribute a controlled substance and one count of being a controlled substance user in possession of firearms.

Rattler’s co-defendants have already been sentenced: Mark Allen Winstead was sentenced to 38 months; Timothy Leroy Rattler was sentenced to 18 months; Jacob Hunter Rattler was sentenced to 15 months; Taryn Krista Elizabeth Toineeta Rattler was sentenced to 70 months in prison and Evan Thomas Norris, Jr. was sentenced to 19 months in prison.

Jackie Rattler has been in federal custody since June 2013. 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 Tompkins thanked all the law enforcement agencies involved in these investigations for their continued cooperation and assistance. The prosecution was handled by Assistant U.S. Attorney John Pritchard, of the U.S. Attorney’s Office in Asheville.

ASHEVILLE, N.C. – Anthony Lamont Hill, 31, of Fletcher, NC, appeared before U.S. Magistrate Judge Dennis L. Howell on Tuesday, December 16, 2014 and pleaded guilty to armed robbery and gun charges in connection with a 2013 armed robbery of a Dollar General store in Woodfin, N.C., announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney Tompkins is joined in making today’s announcement by Wayne L. Dixie, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, and Chief Brett Holloman of the Woodfin Police Department.

At today’s plea hearing, Hill admitted to committing the armed robbery of the Dollar General Store located at 458 Weaverville Road on August 2, 2013. Court records show that Hill by actual and threatened force took money from the store while it was occupied by only two employees. Hill pleaded guilty to one count of Hobbs Act robbery and one count of possessing and brandishing a firearm during and in relation to a crime of violence.

Hill remains in federal custody. He faces a maximum prison sentence of 20 years and a $250,000 fine for the armed robbery charge and a minimum of seven years and a maximum of life imprisonment for the gun charge. A sentencing date for Hill has not been set yet.

The investigation was handled by ATF and the Woodfin Police Department. The prosecution for the government was handled by Assistant U.S. Attorney John D. Pritchard of the U.S. Attorney’s Office in Asheville.