Western District of New York

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned a six count indictment charging New York State Assemblyman Joseph A. Errigo, 79, of Conesus, NY, and Lobbyist Robert Scott Gaddy, 48, of Albany, NY, with conspiracy, receiving a bribe concerning programs receiving federal funds, honest services wire fraud, and using a facility in interstate commerce to carry on and facilitate unlawful activity. Defendant Gaddy is also charged with agreeing to pay a bribe concerning programs receiving federal funds and offering and paying a bribe concerning programs receiving federal funds. The charges carry a maximum possible sentence of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney John J. Field, who is handling the case, stated that according to the indictment and a previously filed complaint, Gaddy, a lobbyist registered with the State of New York, owns and operates the lobbying firm Excelsior Advocates, LLC. At various times, Excelsior Advocates maintained lobbying contracts with the Rochester Genesee Regional Transportation Authority, and the Rochester City School District.

During an investigation into allegations of fraud and corruption involving a large re-development project in the City of Rochester, the FBI identified potential corrupt acts by Gaddy and various public officials. As a result, Special Agents began an investigation into the relationship between Gaddy and Assemblyman Errigo.

Working with an individual known to the FBI, Special Agents arranged for that individual to approach Gaddy about paying a bribe to Member A, a member other than Errigo, in order to introduce certain legislation.

On September 4, 2017, the individual met with Gaddy who and stated that he represented a wealthy client who wanted to stop the proposed development in Monroe County and was willing to pay $15,000 in order to do so. The defendant responded, “Yeah . . . yeah, no problem.” Over the next few weeks, the individual met with Gaddy to discuss and plan the bribery scheme, including the roles of Assemblyman Joseph Errigo and Member A.

On February 9, 2018, Gaddy arranged for a meeting between the individual and Errigo at Errigo’s Pittsford, NY office. During that meeting, the individual gave $1,500 cash to Errigo and $2,500 to Gaddy. On March 16, 2018, the individual gave Errigo another $2,000.

On March 27, 2018, Errigo introduced a bill consisting of the proposed legislation, which was assigned bill number A10227. The individual paid Gaddy another $2,000. On April 13, 2018, the individual paid Errigo another $2,000.

The individual paid Errigo and Gaddy a total of $10,500 to obtain the introduction of proposed legislation in the New York State Assembly, and begin the process of obtaining passage of a State law.

Errigo and Gaddy used cellular telephones and the internet to carry out their bribery activities.

Gaddy was arraigned this afternoon before U.S. Magistrate Judge Marian W. Payson and was released on conditions. Assemblyman Errigo will be arraigned on February 5, 2019, at 9:00 a.m. before Judge Payson.   

“Citizens deserve to have representatives who act in the public’s interest, not for their own personal financial gain,” stated U.S. Attorney Kennedy. “Today’s indictment represents one way to continue to remind those who seek to undertake legislative acts in exchange for the payment of bribes and in hopes of personal financial gain of what laws that exist for the public interest provide.”

“Bribery crimes are fueled by greed and power,” said Gary Loeffert, Special Agent-in-Charge of the FBI's Buffalo Office. “When a person or group can simply buy legislation from a public official, it corrupts our system of government, and the community and constituents pay the price.”

The indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

Buffalo, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Ronald Caryl, 26, of Silver Springs, NY, who was convicted of conspiracy to produce child pornography, was sentenced to serve 200 months in prison and 20 years supervised release by U.S. District Judge Lawrence J. Vilardo.

Assistant U.S. Attorneys Aaron J. Mango and Stephanie O. Lamarque, who handled the case, stated that on February 14, 2017, the defendant began communicating on MeetMe.com, a social networking service, with a 23-year-old woman in Nashville, Tennessee. During the conversation, the two began to discuss Caryl providing the woman with $300 to have sex with her. The woman wrote, “just $300 and u do what u want to me.”  The defendant replied, “do you have a young girl who could join I’ll pay more...you into young girls”?  The woman responded, “as long as they r 18 and older,” to which Caryl replied, “Ya I meant younger I’ll pay 6000.” The woman replied, “I can’t put things in her mouth she gets sick she’s disabled.” The defendant went on to say, “show me your daughter,” and then the woman allegedly sent a picture to the defendant. Caryl continued to press the woman to send naked pictures of her one-year-old daughter.

The victim’s mother was prosecuted by the United States Attorney’s Office in the Middle District of Tennessee. She has pleaded guilty and is awaiting sentencing in federal court in Tennessee.

A MeetMe.com staff member identified the possible endangerment of a minor and illegal content and notified the National Center for Missing and Exploited Children (NCMEC) who in turn notified the Federal Bureau of Investigation.

“The depravity of the conduct by both the defendant and the disabled infant’s mother is unthinkable,” stated U.S. Attorney Kennedy. “Child predators, such as the defendant, belong in cages so they cannot continue to victimize children. Parents, such as the victim’s mother, who fail to wrap their arms around their children in order to protect them in the face of such predators, deserve to have those arms handcuffed behind their back.”

The sentencing is the result of an investigation by the Federal Bureau of investigation, under the direction of Special Agent-in-Charge Gary Loeffert. Additional assistance was also provided by the Wyoming County Sheriff’s Office, under the direction of Sheriff Gregory J. Rudolph, the Cheektowaga Police Department, under the direction of Chief David J. Zack, and the Niagara County Sheriff’s Office, under the direction of Sheriff James R. Voutour.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. -- U.S. Attorney James P. Kennedy, Jr. announced today that Scott Schafer, 39, of Rochester, New York, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to possession with intent to distribute, and distribution of, methamphetamine. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine, or both.

Assistant U.S. Attorney Charles E. Moynihan, who is handling the prosecution of the case, stated that in the early morning hours of March 8, 2018, members of the Rochester Police Department arrested Schafer for possessing methamphetamine. The investigation began when officers saw a vehicle illegally parked on a side street off of Monroe Avenue. The vehicle was blocking part of the road, as well as a driveway and the bicycle lane. When law enforcement went to issue traffic tickets, they found Schafer in the bathroom of a nearby restaurant, where they learned Schafer had abruptly retreated when law enforcement approached the location.

Officers found Schafer, who was shaking and appeared nervous, with multiple bags of methamphetamine on him when he was searched. They also found more methamphetamine in the garbage can in the bathroom where the defendant had been when he was first confronted by law enforcement.  

On April 10, 2018, officers again arrested Schafer, this time at a gas station on South Clinton Avenue in Rochester. When officers approached the car to check on the welfare of the occupants, Schafer was in the front passenger seat and the driver was holding a small clear plastic baggie containing several small, white rocks.  Officers believed this substance was methamphetamine, which was confirmed by subsequent testing.

The plea is the culmination of an investigation by the Rochester Police Department, under the direction of Chief Mark Simmons, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division. 
 
Sentencing is scheduled for May 10, 2019, at 3:30 p.m. before Judge Wolford.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Charles E. Woods, 41, of Buffalo, NY, who was convicted of possession with intent to distribute 28 grams or more of crack cocaine, was sentenced to 85 months in prison by U.S. District Judge Richard J. Arcara.

Assistant U.S. Attorney Patricia Astorga, who handled the case, stated that between October 19, 2017, and January 17, 2018, the defendant distribute crack cocaine and cocaine to an individual working with the Drug Enforcement Administration. 

On January 17, 2018, law enforcement officers executed a search warrant at the Woods’ residence in Buffalo. Officers seized a quantity of cocaine, $9,860 in drug proceeds, and a digital scale.

The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.
 
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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Mark R. Maio, 34, Brittany L. Dellahoy, 28, both of East Randolph, NY, and Brandon Smith, 32, were arrested and charged by criminal complaint with conspiracy to possess with intent to distribute, and to distribute, methamphetamine and cocaine, and maintaining a drug involved premises. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.

Assistant U.S. Attorney Joel L. Violanti, who is handling the case, stated that according to the complaint, since March 2018, the Jamestown Police Department Narcotics Unit has been investigating defendants Maio and Smith for distributing methamphetamine in and around the City of Jamestown, NY. During the course of the investigation, the narcotics unit conducted controlled purchases of narcotics from defendant Maio. Maio and Smith have been arrested by Jamestown Police on multiple occasions for violations of New York State Penal Law relating to the sale and possession of methamphetamine.

On January 24, 2019, the Southern Tier Regional Drug Task Force executed a state search warrant at the Main Street residence of defendants Maio and Dellahoy. During the search, Maio and defendant Smith were present in the residence. As officers executed the search, Smith attempted to leave but was detained. Officers searched Smith and recovered quantities of crystal methamphetamine and marijuana. Maio and Dellahoy were also searched. Officers recovered crack cocaine and a large amount of cash from Maio.

During the search of the residence, officers recovered more marijuana and crystal methamphetamine, as well as a digital scale, and other drug packaging and paraphernalia.

The defendants made an initial appearance this afternoon before U.S. Magistrate Judge H. Kenneth Schroeder and are being held pending a detention hearing on February 1, 2019.

The complaint is the result of an investigation by the Jamestown Police Department, under the direction of Chief Harry Snellings; the Southern Tier Regional Drug Task Force, under the direction of Cattaraugus County Sheriff Timothy Whitcomb; and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

 

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Nicholas Coia, 31, of Greece, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to being felon in possession of a firearm. The charge carries a maximum penalty of 10 years in prison, and a $250,000 fine.

Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that the defendant admitted to possessing a shotgun and ammunition on March 28, 2018, in the area of 11 St. Pierre Drive in the Town of Greece. Coia was prohibited from legally possessing the shotgun and ammunition because of a prior felony conviction for Driving While Intoxicated.  

The plea is the result of an investigation by the Greece Police Department, under the direction of Chief Patrick D. Phelan, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.

The case was brought by the U.S. Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

Sentencing is scheduled for May 2, 2019, at 9:15 a.m. before Judge Siragusa.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Kana Chanel Hill and Aaron James Dempsey, formerly of Rochester, NY, who were convicted of wire fraud, were sentenced by U.S. District Judge Charles J. Siragusa. Hill and Dempsey were sentenced to 35 and 41 months respectively. The defendants were also ordered to pay $275,000 in restitution to their victim, Nordon, Inc. 

Assistant U.S. Attorney Kyle Rossi, who is handling the case, stated that between 2014 and 2017, Hill and Dempsey worked at Nordon, Inc., a plastic manufacturing company located in Rochester. Hill, who was employed as a payroll specialist, executed a scheme with Dempsey in which Hill manually triggered Nordon to issue inflated and fraudulent paychecks to Hill, Dempsey, and others. Hill also used the personal identifying information of former Nordon employees to cause Nordon to issue paychecks in the names of those employees, without their knowledge or consent, to bank accounts owned by Hill and Dempsey.

The fraud was discovered when a former employee received a W-2 form from the IRS containing a discrepancy in the employee’s pay. This triggered an internal audit by Nordon and subsequent investigation. 

The sentence is the result of an investigation by the Federal Bureau of Investigation, Rochester Office, under the direction of Special Agent-in-Charge Gary Loeffert.
 
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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging James Timpanaro, 54, of Buffalo, NY, with causing a pipe bomb hoax and contempt of court order. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Joel L. Violanti, who is handling the case, stated that according to the indictment, on October 27, 2018, the defendant placed a device, which appeared to be pipe bomb, outside the United States Postal Service building located at 2061 South Park Avenue in Buffalo. Timpanaro was subsequently arrested and charged by criminal complaint.

On November 2, 2018, the defendant made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder who ordered Timpanaro to complete an inpatient psychiatric and alcohol evaluation at the Buffalo VA Medical Center. Between January 26 and January 27, 2019, the defendant failed to comply with Judge Schroeder’s order to abide by all rules and directives of the inpatient treatment program, when he left the facility. Timpanaro was quickly apprehended by the U.S. Marshal Fugitive Task Force.

The indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; the U.S. Marshal Service, under the direction of Marshal Charles Salina; and the U.S. Probation Department, under the director of Chief Probation Officer Anthony SanGiacomo.

Timpanaro was arraigned this afternoon before Judge Schroder and was detained pending trial. 

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Dr. Paul Biddle, 54, of Amherst, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to identity theft and possession of unlawful hydromorphone HCL. The charges carry a maximum penalty of five years in prison.

Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that Biddle was an anesthesiologist and pain management doctor who also operated a medical marijuana practice. Between February 9, 2015 and October 16, 2017, the defendant was prescribing controlled substances for two deceased patients. Biddle knew the patients were deceased and used their names and dates of birth knowingly and without lawful authority to obtain controlled substances for himself.

After the death of one of the patients, Biddle wrote 10 prescriptions using the deceased patient’s name and date of birth between November 21, 2016 and October 16, 2017. All of these prescriptions were filled by a pharmacy in Tampa, FL, and shipped directly to the defendant’s home or office. After the death of the second patient, the defendant wrote 23 prescriptions using that deceased patient’s name and date of birth between February 9, 2015 and August 7, 2017. All of these prescriptions were also filled by a pharmacy in Tampa, FL, and shipped directly to the defendant’s home or office. Biddle was obtaining these prescriptions and using them himself.

The plea is the result of an investigation by Special Agents of the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; the Federal Bureau of Investigation, Western New York Healthcare Fraud Task Force, under the direction of Special Agent-in-Charge Gary Loeffert; the New York State Department of Financial Services, under the direction of Maria T. Vullo, Superintendent of Financial Services; Department of Health and Human Services, Office of Inspector General, Office of Investigations, under the direction of Special Agent-in-Charge Scott Lampert; and the Amherst Police Department, under the direction of Chief John Askey.

Sentencing is scheduled for May 9, 2019, at 11:00 a.m. before Judge Wolford. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Phillip Taylor, 28, of Rochester, NY, who was convicted of possession with intent to distribute cocaine and possession of a firearm and ammunition by a convicted felon, was sentenced to 188 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.  

Assistant U.S. Attorney Charles Moynihan, who is handling the case, stated that Taylor, a two-time convicted felon, was arrested following a police investigation which took Rochester Police officers to 173 Anderson Avenue to investigate a report of a person dropping a handgun in the parking lot of the business located there. When officers arrived, they saw a person, later identified as Taylor, get into the driver’s seat of a blue Ford Escape and drive off after officers went to speak with him about the reported handgun. The defendant drove his car in the direction of one of the responding officers, coming within inches before driving away. Taylor also struck a brick structure with his vehicle as he exited the parking lot and continued traveling westbound on Anderson Avenue as officers pursued him. Officers followed Taylor in police cars onto College Avenue where the defendant struck a tree. Undeterred, Taylor continued to flee on foot with officers in pursuit. During the chase, officers could see the defendant holding the right side of his pants while making several attempts to remove something from his pants pocket. Taylor was taken into custody in the area of 100 College Avenue. Officers searched the defendant and recovered a loaded .380 caliber semiautomatic handgun in his pocket, $704 in cash, and 12 vials containing cocaine.

The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief Mark Simmons, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge John B. Devito, New York Field Division.

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Gary Drago, 58, of Amherst, NY, pleaded guilty to witness tampering and failure to file an income tax return before U.S. District Judge Lawrence J. Vilardo. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Joel L. Violanti, who is handling the case, stated that on May 19, 2017, the Federal Bureau of Investigation received information from an individual (Victim) regarding threats, theft, and extortionate acts that the defendant made against the Victim and the Victim’s business, a medical practice. The Victim also advised the FBI that he had a meeting with the Amherst Police Department regarding these crimes the very next day. The FBI advised the Victim to meet with the Amherst Police Department. The Victim was going to meet with the Amherst Police and the FBI to tell them about how Drago previously extorted money from the Victim’s business by using threats of physical harm and threats to ruin the Victim’s reputation.

However, an employee of the Victim overheard the conversation with the FBI, and notified the defendant. Drago then arrived at the Victim’s place of business, and told the Victim’s patients that the Victim was done seeing patients that day. Drago then then physically took the Victim from his place of business and placed the Victim in his car.  Once in the car, the defendant threatened the Victim with a pistol, and slapped the Victim, telling the Victim that he heard the Victim was talking with law enforcement. Drago continued to ask the Victim who he spoke to from law enforcement, and what the Victim told them. The Victim told the defendant that he spoke to the FBI and was going to meet with the Amherst Police the next day. While continuing to threaten the Victim, the defendant told the Victim to call the FBI and tell them that everything was okay, which the Victim did. Drago then let the Victim go home.

Later that same night, the defendant repeatedly called the Victim and left messages on his voice mail threatening the Victim, and reminding the Victim not to cooperate with the FBI, or go to the meeting with the Amherst Police the next day.

Between 2013 and May 20, 2017, the defendant worked at medical business located in Williamsville, NY. During that time, Drago entered into a contract for employment with the Victim/owner and was paid a salary through the payroll. However, the defendant eventually started taking additional money from the business in the form of cash, without providing any employment service in return. When confronted by the Victim about the money, Drago would threaten force or physical harm. Specifically, the defendant took a total of $129,792 without rendering employment services. When confronted by the Victim, Drago would berate and threaten physical harm or damage to the Victim’s reputation. As a result, the Victim was fearful, and was prevented from stopping the defendant from taking the unearned money.

In addition, during the course of his employment with the Victim, Drago received recordable income. Some of this income was derived from the defendant’s threats to the Victim, and was paid by the Victim to the defendant as extortion money. The defendant received this income through payroll check payments from the victim’s business, as well as cash payments from the Victim. However, Drago failed to file federal income tax returns. For the tax years 2013 through 2016, the defendant received $294,043 in income, resulting in a loss to the Internal Revenue service of $19,007.

The plea is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent-in-Charge Gary Loeffert; the Internal Revenue Service, Criminal Investigation Division, under the direction of Acting Special Agent-in-Charge Jonathan D. Larsen, New York Field Office; the Lancaster Police Department, under the direction of Chief Gerald Gill; the Amherst Police Department, under the direction of Chief John Askey; the New York State Police, under the direction of Major Edward Kennedy; the Erie County Sheriff’s Office, under the direction of Timothy Howard; and the Erie County District Attorney’s Office, under the direction of John Flynn. 

Sentencing is scheduled for June 29, 2019, before Judge Vilardo.    

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Anthony Schmidt, 20, of Tonawanda, NY, was arrested and charged by criminal complaint with possession with the intent to distribute marijuana, attempted possession with intent to distribute cocaine, and possession of a firearm in furtherance of narcotics trafficking. The charges carry a maximum penalty of 20 years in prison, and a $1,000,000 fine.

Assistant U.S. Attorney Jeremiah E. Lenihan, who is handling the case, stated that according to the complaint, on November 16, 2018, Tonawanda police officers responded to a domestic disturbance at 652 Woodstock Avenue in Tonawanda. While on scene, officers received information that a male suspect, later identified as the defendant, had a gun. As officers began speaking with Schmidt, he took off running, leading officers on a chase. He was taken into custody as he attempted to jump a neighboring fence. The defendant resisted arrested. Officers recovered a loaded 9mm handgun in his front waist area.

Officers also recovered a backpack Schmidt was wearing which contained quantities of marijuana and suspected cocaine, and paraphernalia used for the processing and packaging of narcotics. 

The defendant appeared before U.S. Magistrate Judge Michael J. Roemer today for a detention hearing and was released on electronic monitoring.

The complaint is the culmination of an investigation led by the Tonawanda Police Department, under the direction of Chief Jerome Uschold, III, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty. 

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Kevin Morgan, 42, of Pittsford, NY, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to commit bank fraud, which carries a maximum penalty of five years in prison and a fine of $250,000.

Assistant U.S. Attorneys John D. Fabian and Douglas A.C. Penrose, who are handling the case, stated that between March 2011 and June 2017, the defendant, along with co-defendants Todd Morgan, Frank Giacobbe, Patrick Ogiony, and others, conspired to defraud financial institutions, including UBS Securities LLC, Arbor Commercial Mortgage LLC, and Berkadia Commercial Mortgage, LLC.

Kevin Morgan was employed as a Vice President at Morgan Management, LLC, a real estate management company that managed more than 100 multi-family properties.  Todd Morgan also was employed by Morgan Management as a Project Manager. Kevin and Todd Morgan worked with Frank Giacobbe, who owned and operated Aurora Capital Advisors, LLC, a mortgage brokerage company, and Patrick Ogiony, an Aurora employee, to secure financing for properties managed by Morgan Management or certain principals of Morgan Management.  

Kevin Morgan and his co-defendants provided false information to financial institutions and government sponsored enterprises that overstated incomes of properties managed by Morgan Management or certain principals of Morgan Management. This resulted in the financial institutions issuing loans for larger amounts than the financial institutions would have authorized had they been provided with truthful information.

The defendants misled the financial institutions regarding the occupancy of properties. For example, Kevin Morgan: conspired to provide false rent rolls to lenders and appraisers on a variety of dates, overstating either the number of renters in a property and/or the rent paid by occupants; conspired to provide false and inflated income statements for the properties; and worked with others to deceive inspectors into believing that unoccupied apartments were, in fact, occupied.

In one such instance, Kevin Morgan and his co-defendants provided false information to Berkadia Commercial Mortgage, LLC, in connection with Rochester Village Apartments at Park Place, a multi-family residential community owned by certain Morgan Management principals. The false information included inflated income derived from storage unit rentals, inflated reports of rental income, and reporting apartment units as occupied before certificates of occupancy were obtained for those units.

In addition, Kevin Morgan and his co-defendants made misrepresentations to conceal from the lending financial institutions that Morgan Management used a portion of the loan proceeds for purposes other than that disclosed in the loan application. Loan funding was used to maintain or improve other properties managed by Morgan Management, and to satisfy debts associated with other properties managed by Morgan Management. For example, the defendants included a fictitious $2.5 million debt in a loan application purportedly owed to a Morgan Management controlled entity and created a fabricated payoff letter for that debt to increase the amount of the loan in connection with a property known as Autumn Ridge.

“History has shown us the havoc that can be wrought when fraud takes place in the mortgage industry,” noted U.S. Attorney Kennedy. “This investigation, and today’s plea, protect that industry from fraud and those who invest in securities which are backed by mortgages.”

“From day one, our investigation has focused on protecting the residential and commercial financing industry,” said Gary Loeffert, Special Agent-in-Charge of the FBI’s Buffalo Division. “With Kevin Morgan's plea today, we have advanced our efforts to safeguard the tens of thousands of investors who own mortgage-backed securities.”

Robert Manchak, Acting Special Agent in Charge for the Northeast Region of the Federal Housing Finance Agency, Office of Inspector General, said, “The financing of multifamily loans is a significant segment of Fannie Mae’s and Freddie Mac’s portfolio.  As our commitment to this case demonstrates, FHFA-OIG will work with our partners in law enforcement to investigate and hold accountable those who subject the entities regulated by FHFA to fraud, waste, or abuse.”

Charges are pending against defendants Frank Giacobbe, Patrick Ogiony, and Todd Morgan. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

Today’s plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the Federal Housing Finance Agency, Office of Inspector General, under the direction of Acting Special Agent-in-Charge Robert Manchak, Northeast Region.

Sentencing will be scheduled at a later date before Judge Wolford.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Scott Trapp, 50, of Clarence, NY, pleaded guilty before U.S. District Judge Lawrence J. Vilardo to conspiracy to commit health care fraud. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Assistant U.S. Attorney Maura K. O’Donnell, who is handling the case, stated that the defendant began working as a pharmaceutical sales representative for various pharmaceutical companies in 1996. In 2014, Trapp began marketing “compounded medications,” such as pain patches, pain creams, and scar creams. “Compounded medications” are medications created when a licensed pharmacist, a licensed physician, or a person working under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.

The compounded medications marketed by the defendant, and his associates, were not tailored to the needs of individual patients. Instead, the medications were tailored to contain ingredients that carried high reimbursement rates from health insurers. Formulations of the medications were modified at times to permit reimbursement from health insurance companies and/or to maximize reimbursement rates. For example, a one month supply of one of the compounded pain creams marketed by Trapp carried a reimbursement rate of $22,000.

Unlike typical pharmaceutical sales representatives who market prescription drugs to physicians, the defendant, and his associates, identified patients whose health insurance covered the medications, and convinced the patients to agree to receive the medications. 

In furtherance of the conspiracy, Trapp asked a friend, who was a physician, to sign blank, 12 month prescriptions for compounded medications, in the names of the defendant and his wife. Trapp then duplicated the prescriptions and substituted names of different patients for his own name, allowing for additional prescriptions for compounded medications to be filled without the physician knowledge.

Trapp also recruited, supervised, and compensated others to market the compounded pharmaceuticals. One of those individuals then recruited others to be part of the marketing scheme. The defendant received commission payments of approximately 20% of the reimbursement rate of each prescription he personally marketed which was approved and filled. Trapp also received commission payments of approximately 5% of each prescription marketed and filled by those he supervised, and by the individuals working for those people he supervised.

In total, between 2014 and December 2016, the health care benefit programs provided by Blue Cross Blue Shield (BCBS), the Verizon Medical Expense Plan for New York and New England Associates, National Grid USA, and Sunovion Pharma, paid approximately $5,821,331, for compounded prescriptions fraudulently filled, resulting in losses of: $7,352 to BCBS; $3,601,179 to the Verizon Medical Expense Plan for New York and New England Associates; $1,992,354 to National Grid USA; and $220,445 to Sunovion Pharma.

Today’s plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, under the direction of Michael C. Mikulka, Special Agent-in-Charge, New York Region; the U.S. Food and Drug Administration, Office of Criminal Investigations, under the direction of Jeffrey Ebersole, Special Agent-in-Charge New York Field Office; the New York State Financial Services Department, under the direction of Superintendent Maria T. Vullo; and the Defense Criminal Investigative Service, under the direction of Special Agent-in-Charge Leigh-Alistar Barzey.

Sentencing is scheduled for May 1, 2019, at 9:00 a.m. before Judge Vilardo.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Jason Williams, 44, of Kenmore, NY, who was convicted of RICO conspiracy, was sentenced to serve 48 months in prison by U.S. District Judge Elizabeth A. Wolford.

Assistant U.S. Attorneys Joseph M. Tripi and Brendan T. Cullinane, who handled the case, stated that the defendant, a/k/a Toop, was a member of the North Tonawanda Chapter and the West Side of Buffalo Chapter of the Kingsmen Motorcycle Club (KMC) between 2009 and 2016. Williams served in various capacities, including as the Vice President of the North Tonawanda Chapter.

KMC members and associates used marijuana, cocaine, methamphetamine, and other controlled substances at the North Tonawanda and West Side of Buffalo KMC Chapter Clubhouses. At times, Williams obtained and supplied quantities of marijuana and cocaine to KMC members, and used and distributed cocaine and marijuana. The defendant used telephones and Facebook messaging to arrange drug transactions. KMC members also possessed, maintained, and sold firearms.

Williams is one of 20 KMC members and associates charged and convicted in this case. Williams is the fifth defendant to be sentenced.  

The sentencing is the culmination of an investigation led by the Federal Bureau of Investigation’s Safe Streets Task Force, under the direction of Special Agent-in-Charge Gary Loeffert. Assisting in the investigation: the FBI Knoxville, TN, and Jacksonville, FL Field Offices; Immigration and Customs Enforcement, Homeland Security Investigations; the Erie County Sheriff’s Office; the Buffalo Police Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the New York State Police; the Olean Police Department; the Lancaster Police Department; the Amherst Police Department; the City of North Tonawanda Police Department; the Niagara Frontier Transportation Authority Police; the Cattaraugus County Sheriff’s Department; and the Hamburg Police Department.    

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.--U.S. Attorney James P. Kennedy, Jr. announced today that five defendants were charged by criminal complaint with conspiracy to possess with intent to distribute, and distribution of, oxycodone, hydrocodone, amphetamine, and buprenorphine, all Schedule II controlled substances, and carisoprodol, alprazolam, phentermine, tramadol, and zolpidem tartrate, all Schedule IV controlled substances. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.  

Named in the complaint are:

• Dr. James T. Keefe, 38, of Florida; • Benjamin Rivera, 40, of Buffalo, NY; • Laura Ricotta, 27, of Williamsville, NY; • Takeya Rainey, 43, of Buffalo, NY; • Phousavath Luangrath, 29, of Buffalo, NY.

Assistant U.S. Attorneys Timothy C. Lynch and Joshua Violanti, who are handling the case, stated that according to the complaint, Dr. Keefe is a New York State licensed physician who was previously employed as a contracted physician at the Erie County Medical Center (ECMC), Mercy Hospital of Buffalo, and the Monsignor Carr Institute. In February 2018, the Drug Enforcement Administration began investigating the drug diversion and fraudulent prescription activities of Keefe. On March 6, 2018, after previously being questioned by DEA investigators regarding the issuance of fraudulent prescriptions, Dr. Keefe voluntarily surrendered his DEA Registration, preventing him from continuing to issue any prescriptions for controlled substances.

During the investigation, Dr. Keefe admitted to law enforcement officers to being active user of cocaine, Adderall, and prescription opiates, and to writing false prescriptions to some “friends,” and sharing the prescriptions.

While employed at ECMC, and even after he was terminated, Dr. Keefe issued controlled substance prescriptions to four coworkers, all medical professionals, including co-defendant Phousavath Luangrath, a nurse at ECMC. Luangrath is Dr. Keefe’s ex-girlfriend. Records show that Dr. Keefe issued Luangrath 10 prescriptions of Adderall, a Schedule II controlled substance, between February 2, 2017, and December 21, 2017, totaling 420 dosage units. Of the 10 prescriptions, three were issued after Dr. Keefe was terminated from ECMC.

Records also show that between April 20, 2015, and February  20,  2018,   Dr. Keefe issued defendant Ricotta 15 prescriptions for Schedule II controlled substances, including dextroamphetarnine, oxycodone-acetaminophen, hydrocodone-acetaminophen, and carisoprodol, a Schedule IV controlled substance, totaling 535 dosage units. The prescriptions were issued in her name or the names of her relatives. In addition, Dr. Keefe wrote seven prescriptions for Ricotta’s boyfriend, Benjamin Rivera, for Schedule II controlled substances, including dextroamphetamine, oxycodone-acetaminophen, hydrocodone-acetaminophen, and carisoprodol, a Schedule IV controlled substance, from December 17, 2017, through February 17, 2018, totaling 290 dosage units.
 
Defendant Takeya Rainey was issued 14 prescriptions by Dr. Keefe for dextroamphetamine and oxycodone, both Schedule II controlled substances, as carisoprodol and alprazolam, both Schedule IV controlled substances, from between September 18, 2017, and February 15, 2018, totaling 1,380 dosage units.

According to the complaint, Dr. Keefe issued 178 fraudulent prescriptions, totaling 9,718 dosage units.

“For the second time this week, a medical professional with an addiction problem has found himself on the wrong side of the law,” stated U.S. Attorney Kennedy. “Where, as here, a physician ignores his Hippocratic Oath to ‘do no harm,’ but instead sells out his medical license for personal or financial gain, my Office will do all that we can to see that strong consequences follow.”    

DEA Special Agent-in-Charge Ray Donovan stated, “This sentence sends a message that there is no place in medicine for doctors to prescribe medications for no medical purpose. Opioid addiction is the leading cause of overdoses nationwide and law enforcement is doubling down on rogue doctors as well as drug trafficking organizations to stop the opioid flow on our streets.”

Dr. Keefe made an initial appearance this afternoon before U.S. Magistrate Judge Michael J. Roemer and was released on conditions. Defendants Rivera, Ricotta, Rainey, and Luangrath made an initial appearance on December 19, 2018. Defendants Rainey, Ricotta, and Luangrath were released, defendant Rivera was detained.  

The complaint is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan.

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CONTACT:  Barbara Burns

PHONE:         (716) 843-5817

FAX #:            (716) 551-3051

BUFFALO, N.Y.--U.S. Attorney James P. Kennedy, Jr. announced today that following an eight week trial, a federal jury has convicted Herman E. Aguirre, a/k/a 007, a/k/a Lucky, a/k/a Primo, a/k/a Freddy, of Brea, California, and Troy R. Gillon, of Lockport, NY, of narcotics conspiracy. Defendant Aguirre was also convicted of operating a continuing criminal enterprise and money laundering conspiracy. The charges carry a maximum penalty of life in prison.

Assistant U.S. Attorneys Meghan A. Tokash and Michael P. Felicetta, who handled the prosecution of the case, stated that Aguirre was the leader, and Gillon a member, of a transnational drug trafficking organization that utilized contacts and a source of supply whose territory included Mexico, Arizona, California, and elsewhere. The source of supply was the Sinaloa Cartel, led by Joaquín “El Chapo” Guzmán and Ismael “El Mayo” Zambada. 

The local organization trafficked thousands of kilograms of illegal narcotics, including heroin, fentanyl, and cocaine throughout the United States, including Lockport, Niagara Falls, and Buffalo, via the mail, individual vehicles outfitted with “trap” compartments, and on pallets loaded on tractor trailers. Members of the organization created fictitious “front” companies to launder drug proceeds including Triton Foods, Inc., Kamora Investment Enterprises, Inc. and Fresh Choice Produce, all of which were incorporated in the State of California. Another fictitious company, Corral Seafoods, LLC, registered in the State of New York, was allegedly located in Cheektowaga, NY, but proved to be completely fake.

Using these companies, the defendants disguised kilogram quantities of heroin, fentanyl, and cocaine on pallets described on inventory and other documents as containing “Sea Cucumbers.” Evidence presented by the Government at trial showed that sea cucumbers are commonly found in Southeast Asia and Europe but rarely, if ever, in Western New York State. The pallets bearing the illegal narcotics were secreted in containers sealed with foam or spray insulation to avoid detection by law enforcement.

Members of the organization also utilized numerous bank accounts at local Bank of America branches to deposit illegal drug proceeds. Local members of the drug trafficking organization deposited over $19,000,000 of illegal drug proceeds into these fake seafood accounts, while California conspirators created false invoices to make it look like Western New Yorkers were buying sea cucumbers at astounding rates and quantities. The Western New York Asset Protection Manager of Wegman’s Food Markets, Inc. testified at the trial that none of its 13 Western New York stores have ever carried sea cucumbers because there is no demand for the product in Buffalo and the surrounding areas.

During the course of the investigation, law enforcement officers seized over $5,000,000 worth of illegal narcotics, including:

•           52.5 kilograms of cocaine;

•           17.5 kilograms of heroin; and

•           8.5 kilograms of fentanyl

Using standard dosage amounts, the seized drugs potentially represented over 1,500,000 “hits” of cocaine, and 2,700,000 “hits” of heroin and considering that two milligrams of fentanyl can be a lethal dose, enough fentanyl potentially to kill over four million people. Further evidence presented by the Government at trial revealed that after a December 2014 meeting in Buffalo, defendant Aguirre shipped 10 kilograms of fentanyl to Buffalo and defendant Gillon took possession of the 10 kilograms. Gillon sold two kilograms of the fentanyl before residents of the Lockport area started overdosing on the drug shortly after New Year’s Day, 2015. A DEA representative testified that Gillon told police that he returned the remaining eight kilograms to a co-conspirator in early March 2015 because, “People are dying off this (expletive).” The co-conspirator moved the remaining fentanyl, along with two kilograms of cocaine, and 22 kilograms of heroin, to a house on Folger Street in the City of Buffalo.  On March 23, 2015, Buffalo Police seized 32 kilograms of drugs from the Folger Street location—including Gillon’s eight kilograms of fentanyl.

The investigation further determined that between June 2013 and September 2015, members of the organization additionally distributed over 5,000 pounds of cocaine, heroin, fentanyl and marijuana in the Western New York area. Approximately $20,000,000 was sent from Western New York banks to California in a two year period of time.

“This transnational drug organization and these defendants were responsible for introducing the scourge of lethal fentanyl into our community, resulting in the loss of lives,” stated U.S. Attorney Kennedy. “However, as a result of this verdict and previous convictions of multiple co-defendants, the organization and the pipeline have been effectively shut down.”    

“Throughout this trial, it clearly demonstrates to the public that traffickers are reaping millions of dollars off overdoses, addiction and death,” stated DEA Special Agent in Charge Ray Donovan. “DEA’s seizures and enforcement efforts in Buffalo denied the Sinaloa Cartel revenue of $2.5 million but more importantly, put 17 members in jail and took nearly three million doses of heroin, fentanyl and cocaine off the streets.  I commend our law enforcement partners and the prosecutors at the U.S. Attorney’s Office Western District of New York for their diligent efforts in this investigation.”  

“IRS Criminal Investigation uses financial investigative expertise to pursue those individuals who engage in illegal activities as seen in the significant drug organization on trial in this case,” said James D. Robnett, IRS Special Agent-in-Charge of the New York Field Office. “Money laundering constitutes a serious threat to our communities and to the integrity of our financial system; today’s verdict is an example of how merging the unique skills of each agency makes a formidable team as we prosecute the offenders.” 

Aguirre and Gillon were indicted along with 15 others including:

•           Jose Ruben Gil, a/k/a Unc, a/k/a Ruben Gil Campos, a/k/a Mayor of Mexico, was convicted and is awaiting sentencing;

•           Sonia Hernandez, was convicted and is awaiting sentencing;  

•           Margaret Banuelos, a/k/a Lisa, was convicted and is awaiting sentencing;

•           Darryl J. Williams, a/k/a D, was convicted and is awaiting sentencing;

•           Trent Adair Hamilton, was convicted and is awaiting sentencing;

•           Michael Paul Mitchell, was convicted and is awaiting sentencing;

•           Demetrius Yarborough, a/k/a Tu, was convicted and is awaiting sentencing;

•           Rashawn Crule, a/k/a Black, a/k/a Shawn, was convicted and is awaiting sentencing;

•           Maulana Lucas, a/k/a Big Daddy, a/k/a Shabazz, was convicted and is awaiting sentencing;

•           Shirley Grigsby, was convicted and is awaiting sentencing;

•           Ralik Hamilton; was convicted and is awaiting sentencing;

•           Dion Cheatham, was convicted and is awaiting sentencing; and

•           Joseph Thompson, a/k/a Jo-Jo, a/k/a Skools, a/k/a Skoolboy, convicted and sentenced.

Charges are pending against defendants Martha Aguirre and Juan Alfaro. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

The trial verdict is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Ray Donovan, New York Field Division; Homeland Security Investigations, under the direction of Special-Agent-in Charge Kevin Kelly; the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett; the Niagara County Drug Task Force, under the direction of Sheriff James Voutour; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; the Lockport Police Department, under the direction of Acting Chief Steven Preisch; the Montebello, California Police Department, the Nebraska State Patrol, and the DEA, Los Angeles.

Defendant Aguirre is scheduled to be sentenced on June 12, 2019, Gillon on June 14, 2019, both before U.S. District Judge Lawrence J. Vilardo, who presided over the trial of the case. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Tariq Butt, 42, of Buffalo, NY, who was convicted of theft of government funds, was sentenced to serve 12 months in prison by U.S. District Judge Lawrence J. Vilardo. The defendant was also ordered to pay restitution totaling $305,000 to the Department of Health and Human Services.
Assistant U.S. Attorney Maura K. O’Donnell, who handled the case, stated that in February 2015, the defendant and his wife, Halima Mohammed, opened Twinkle Stars Day Care Center, and in July 2015, the couple opened Candyland Daycare, both located in the City of Buffalo. 

Between January 2016 and September 2016, the defendant submitted hundreds of false and fraudulent claims to Erie County seeking reimbursement for daycare services supposedly provided by Twinkle Stars and Candyland to children eligible for Child Care and Development Block Grant funds from the U.S. Department of Health and Human Services. The defendant knew that the children listed on the claims did not actually attend Twinkle Stars on the dates and times claimed, making the daycare ineligible for reimbursement. In total, between January 2016 and September 2016, Erie County paid Twinkle Stars and Candyland approximately $305,000 for daycare services, which were never rendered. 

Halima Mohamed was previously convicted and sentenced to five months in prison and three years supervised release, to include five months home detention.

Today’s plea is the result of an investigation by the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent-in-Charge Scott Lampert, and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Ramon Crespo, 32, of Rochester, NY, who was convicted of robbery and possession and brandishing a firearm in furtherance of a crime of violence, was sentenced to serve 96 months in prison by U.S. District Judge David G. Larimer.

Assistant U.S. Attorney Cassie Kocher, who handled the case, stated that on March 15, 2018, the defendant robbed the Dunkin’ Donuts located at 277 East Ridge Road in Rochester. During the robbery, Crespo waved a firearm at store employees and stole approximately $200 in cash. After investigators with the Rochester Police Department conducted their investigation, the defendant was arrested on March 22, 2018, following a traffic stop. Upon searching the vehicle, officers located a loaded .40 caliber Glock model 27 semi-automatic handgun.

The case was brought by the U.S. Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

The sentencing is the result of an investigation by the Rochester Police Department, under the direction of Chief Mark Simmons, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. -- U.S. Attorney James P. Kennedy, Jr. announced today that Karl Kleber, 64, of Lisbon, Portugal, who was convicted of smuggling goods into the United States, in connection with the importation into the United States of Chinese-manufactured, 75 round capacity, AK-47 rifle drum magazines, was sentenced to time served by U.S. District Judge Charles J. Siragusa. The defendant will also forfeit $345,600. 

Assistant U.S. Attorney Charles E. Moynihan, who handled the case, stated that the defendant worked with co-defendant Gary Hyde to import into the United States over 5,000 Chinese-manufactured, 75 round capacity AK-47 rifle drum magazines from between in or about March of 2008 until October of 2008. Further, Kleber and Hyde negotiated a deal with a Chinese firearms manufacturer to make the magazines, while representing that they were manufactured in Bulgaria. Between January and March of 2008, the defendant offered them for sale to American Tactical Imports, Inc. in Rochester, while knowing that the magazines could not be imported into the United States because they were manufactured in China. The magazines were then sold to American Tactical Imports, Inc.

Gary Hyde was previously convicted and sentenced.

The sentencing is the culmination of an investigation on the part of Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy Jr. announced today that Michael Krepp, 58, of Rochester, NY, who was convicted of possession of child pornography, was sentenced to serve 135 months in prison and 15 years supervised release by U.S. District Judge Charles J. Sirgusa.

Assistant U.S. Attorney John J. Field, who handled the case, stated that between September 9, 2017, and January 22, 2018, an FBI Special Agent, working undercover, discovered multiple files containing videos and images of child pornography. Some of the videos and images depicted prepubescent children in sexual situations. Investigators determined that the IP address connected to the files resolved to one utilized by the defendant. Digital media recovered from Krepp in February 2018 contained child pornography.

The defendant was previously convicted of Rape 3rd in State Court and is a registered sex offender.
 
Today’s sentencing is the result of an investigation by the Federal Bureau of Investigation, Buffalo Division, under the direction of Special Agent-in-Charge Gary Loeffert.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Torin Finver, 54, of Hamburg, NY, was arrested and charged by criminal complaint with importation of a controlled substance. The charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.

Assistant U.S. Attorney Patricia Astorga, who is handling the case, stated that according to the complaint, on Wednesday, November 21, 2018, U.S. Customs and Border Protection Officers intercepted a padded mailer addressed to the defendant’s Hamburg residence. A CBP K-9 alerted officers to the package. The parcel was from Germany and a check of law enforcement databases revealed that the sender information was fictitious.  The parcel contained three grams of a white powdery substance, which field tested positive for cocaine.

On December 10, 2018, during review of incoming mail in Rochester, NY, Postal Inspectors located a parcel, again addressed to Finver’s Hamburg residence. A K-9 sniff of the parcel resulted in a positive alert. On December 12, 2018, a search warrant was executed on the parcel. The parcel contained three small envelopes with a brown rock-like substance, which field tested positive for heroin.

On December 12 and December 15, 2018, two more similar parcels addressed to the defendant were located, one in Rochester, and one in Hamburg. A search warrant was executed on one of the parcels, which was found to contain suspected cocaine. The second parcel is in the custody of law enforcement.

On December 17, 2018, a controlled delivery was conducted at Finver’s residence. Law enforcement officers replaced the cocaine that was seized from the first parcel and replaced with sham. An officer knocked on the door and the defendant answered. Finver took the parcel into the residence. Officers then executed a federal search warrant of Finver’s residence. The defendant was subsequently taken into custody.

The defendant made an initial appearance before U.S Magistrate Judge Michael J. Roemer and was released on conditions.

The criminal complaint is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Joseph W. Cronin.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

# # # #

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Kenneth Cassidy, 52, of Brooklyn, NY, who was convicted of conspiracy to commit wire fraud and willful failure to file an income tax return, was sentenced to serve 60 months in prison by Senior U.S. District Judge William M. Skretny. The defendant was also ordered to pay restitution totaling $2,649,169.17.

Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that between June 12, 2012, and December 20, 2016, the defendant opened approximately 173 fraudulent Lowe's Accounts Receivable (LAR) accounts throughout the United States using counterfeit checks. Once an account was opened, Cassidy made fraudulent purchases of goods at Lowe’s until the funds were depleted or Lowe’s closed the account. Of the 173 accounts, four were opened at stores in the Western District of New York and purchases were made at stores throughout the Buffalo and Rochester areas. In total, the defendant and others used the fraudulent accounts to make approximately $2,652,391.17 in purchases from Lowe’s.

Additionally, for the tax years 2012 to 2015, Cassidy received gross income in excess of $10,000 from criminal activity, but willfully failed to file federal income tax returns for those years.   

“The substantial fraud perpetrated by defendant was tantamount to him stealing over $2.5 million,” stated U.S. Attorney Kennedy. “Today’s sentence should serve as a reminder to any thief that if you steal lots of money then you should expect to spend lots of time in jail.”

“IRS Criminal Investigation is committed to aggressively pursuing those taxpayers who willfully fail to file their tax returns and report income,” said IRS-Criminal Investigation Special Agent-in-Charge James D. Robnett, “and no exception is granted for income derived from illegal activity.”

Today’s sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of James Robnett, Special Agent-in- Charge, New York Field Office; the New York State Police, Special Investigations Unit, under the direction of Major Gregory S. Thomas; the U.S. Marshals Service, under the direction of Marshal Charles Salina; and Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that William Cooke, 22, of Rochester, NY, pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to possession with intent to distribute fentanyl and possession of a firearm in furtherance of a drug trafficking crime. The charges carry a mandatory minimum penalty of five years in prison, a maximum of life, and a fine of $1,000,000.

Assistant U.S. Attorney Charles Moynihan, who is handling the case, stated that Cooke was arrested after Rochester police officers stopped a car, in which Cooke was riding, in the area of Scrantom Street and Conkey Avenue. As officers stopped the car, the defendant jumped from the rear passenger seat and fled, causing officers to chase after him.  During the chase, officers could see a black object in Cooke’s hand as he pulled his hand half way from his jacket pocket. Officers only lost sight of Cooke for a brief period of time during the chase as he rounded the corner of a house on Clifford Avenue. 

After apprehending the defendant, officers found a loaded defaced semiautomatic pistol on the ground in the area where officers momentarily lost sight of Cooke. Officers arrested Cooke and placed him in a room at the Clinton Section police offices. While the defendant was in the room, officers could see him through the use of a video camera surveillance system climb onto a table in the room. Officers quickly confronted Cooke, who was already sitting back down when they entered the room. However, officers could see blue bags protruding from the ceiling and electrical junction above the table where Cooke was standing moments before. Officers removed a total of 27 baggies of suspected heroin. Subsequent testing determined the substance was fentanyl and acetyl-fentanyl.

The case was brought by the U.S. Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

The plea is the result of an investigation by the Rochester Police Department, under the direction of Chief Mark Simmons, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.

Sentencing is scheduled for March 11, 2019, at 2:00 p.m. before Judge Geraci.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. -- U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned a second superseding indictment charging six additional defendants with conspiracy to possess with intent to distribute, and to distribute, five kilograms or more of cocaine. Daniel Sterling, a/k/a Pancho, a/k/a Jose, Martin Lopez, Ivan Rene Rios Bustillos, Adrian Grier, Shamar Davi, a/k/a Fatboy, and Gabrielle McGrady.  The charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.

Previously indicted were Eduardo Enrique Valdez, Edgar Pavia, Adrian Goudelock, a/k/a AD, a/k/a Ace, a/k/a Ace Boogs, Eric Young, Lance Parker, and Jai Hunter.

Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the second superseding indictment and previously filed indictment and complaints, an investigation began following the seizure of approximately 10 kilograms of cocaine and $259,960 in U.S. currency. On October 3, 2017, defendants Valdez, Pavia, and Goudelock met in Cleveland, OH, prior to the shipment of a bulk quantity of cocaine from El Paso, Texas, to Buffalo, NY. On October 19, 2017, Homeland Security Investigations Special Agents conducted a controlled delivery of 10 sham bricks of cocaine in Pembroke, NY, which resulted in the federal arrest of defendant Valdez.

In July 2018, investigators intercepted wire and electronic communications between defendants Pavia and Goudelock through court-authorized wiretaps. Intercepted calls and messages revealed that a bulk shipment of cocaine was to be imminently delivered to Goudelock in the Buffalo area. Goudelock was also expected to provide bulk drug proceeds. In a conversation on July 25, 2018, Pavia informed Goudelock that he would be receiving 17 kilograms of cocaine.

That same day, law enforcement officers seized approximately 17 kilograms of cocaine from defendant Lance Parker during the execution of a search warrant. Law enforcement officers also searched a tractor trailer, driven by defendant Young, located on Slade Avenue in West Seneca, NY and recovered 52 shrink-wrapped and taped bundles of currency, predominantly in $10,000 bundles. In total, $519,580 in U.S. currency was seized from a bag. Officers also located a hidden compartment in the rear wall of the sleeper area of the tractor cab and recovered three plastic wrapped packages of bulk US currency totaling over $145,000. 

In September 2018, investigators intercepted another series of wire and electronic communications between defendants Pavia and Goudelock discussing the shipment of another 20 kilograms of cocaine, which led to their arrests.

On December 5 and 6, 2018, investigators intercepted a series of wire and electronic communications between defendants Sterling and Lopez discussing plans for an exchange of bulk quantity cocaine in Louisville, KY.  Lopez was observed operating a truck pulling a horse trailer, Rios-Bustillos was observed operating a pick-up truck with Mexican license plates, and Sterling was observed operating another pickup truck. After law enforcement observed Sterling and Lopez meet, the defendants were arrested. Simultaneously, Rios-Bustillos, who was parked nearby in his own truck not far from the meeting spot, left the scene on foot. Ultimately, Rios-Bustillos obtained a ride from two individuals, to whom he admitted that he had just delivered cocaine and that law enforcement was looking for him. After those individuals contacted the police, Rios-Bustillos was taken into custody. 

During a search of Lopez’s horse trailer, officers recovered 20 kilograms of cocaine in a hidden compartment, as well as over $600,000 from a duffle bag in Sterling’s truck, and more than $100,000 from Sterling’s residence.

The second superseding indictment is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert; the New York State Police, under the direction of Major Edward Kennedy; the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard; and Customs and Border Protection, Air and Marine Unit, under the direction of Brian Manaher, Director, Marine Operations. Additional assistance was provided by the New York National Guard.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Ramon Perdomo, 38, of Greece, NY, pleaded guilty to possession with intent to distribute 28 grams or more of crack cocaine, and being a felon in possession of a firearm and ammunition, before Chief U.S. District Judge Frank P. Geraci, Jr. The charges carry a minimum penalty of five years in prison, a maximum of 40 years, and a $5,000,000 fine.

Assistant U.S. Attorney Katelyn Hartford, who is handling the case, stated that law enforcement officers executed a search warrant at the defendant’s residence at 164 Sheraton Drive in the Town of Greece on April 20, 2018. During the search, officers found approximately 80 grams of crack cocaine, 42 grams of powder cocaine, and $238,237 United States currency, which consisted of proceeds from the defendant’s cocaine drug sales. Officers also found a 9mm semi-automatic pistol and bullets in a closet located off the kitchen, as well as evidence of drug dealing and packaging throughout the house. At the time of his arrest, Perdomo was on probation for a prior felony conviction.

The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Ray Donovan, Special Agent-in-Charge; the Monroe County Sheriff’s Office and the Monroe County Heroin Task Force, under the direction of Sheriff Todd Baxter; the Rochester Police Department, under the direction of Chief Mark Simmons; the Gates Police Department, under the direction of Chief James VanBrederode;  and the Monroe County DA’s Office, under the direction of District Attorney Sandra Doorley.

Sentencing is scheduled for March 11, 2019, at 12:00 p.m. noon before Chief Judge Geraci.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. -- U.S. Attorney James P. Kennedy, Jr. announced today that Jeffrey Richards, 28, of Niagara Falls, NY, was arrested and charged by criminal complaint with possession with intent to distribute 100 grams or more of heroin; possession of firearms in furtherance of drug trafficking; maintaining a drug-involved premises; and making and possessing an unlawful destructive device. The charges carry a mandatory minimum penalty of five years in prison, a maximum of life, and fine of up to $5,000,000.

Assistant U.S. Attorneys Timothy C. Lynch and Brendan T. Cullinane, who are handling the case, stated that according to the complaint, an investigation by the FBI’s Joint Terrorism Task Force revealed that defendant was a significant narcotics trafficker who also manufactured improvised explosive devices. Through the investigation, agents learned that Richards obtains heroin and other narcotics from suppliers which he redistributed in the Niagara Falls area.  

On December 14, 2018, law enforcement officers executed a search warrant at the defendant’s residence on Packard Court in Niagara Falls. Officers recovered amounts of suspected heroin, marijuana, and cocaine, approximately 10 firearms, various rounds of ammunition, drug trafficking paraphernalia, and an improvised explosive device. Officers also recovered various items used in the manufacturing of explosive devices.

The defendant made an initial appearance before U.S. Magistrate Judge Michael J. Roemer and is detained.

The criminal complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division, the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto, and the Niagara County Sheriff's Department, under the direction of Sheriff James Voutour.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Presiliano Garcia, 33, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to misprision of a felony. The charges carries a maximum penalty of three years in prison and a $250,000 fine.

Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated between 2012 and March, 2016, the defendant, a personal banker at Bank of America, opened approximately 36 bank accounts that were utilized by co-defendants Jose Manuel Lua-Guizar, Gerardo Ballardo, Enrique Munoz, Max Riestra, Bryant Hudson, and others, to structure deposits to funnel money from places around the United States, including Buffalo, to accounts based in California. A total of $8,359,223, composed of approximately 1,092 cash-in deposits, mostly structured between $8,000 and $9,990 and made in 15 different states, were funneled into these accounts opened by Garcia.

Approximately 205 suspect customers were identified by Bank of America as potentially linked to the defendant. Many of the suspect customers had similar naming conventions or even the same name with slight variations in spelling, last name orientation, date of birth, social security number, or domicile. Garcia knew that a structuring felony was being committed by these individuals but did not file any suspicious activity reports relating to these transactions or notify federal law enforcement of the structuring activity in order to conceal the activities of the co-defendants.

Garcia is one of seven defendants allegedly involved in an illegal narcotics operation stretching from Sinaloa, Mexico to Western New York. Law enforcement officers began investigating a sophisticated drug trafficking organization with ties to a Mexican drug cartel operating out of Los Angeles, California area in 2014. The organization shipped drug packages to various states including New York, New Jersey, Illinois, and Colorado.

To date, five of the seven defendants have been convicted in this case. Defendants Max Riestra and Gerardo Ballardo are scheduled to go to trial on January 22, 2019. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

Today’s plea is the culmination of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Raymond P. Donovan, New York Field Division; Homeland Security Investigations, under the direction of Special Agent in Charge Kevin Kelly; and the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent- in-Charge, New York Field Office. Additional assistance was provided by ICE-HSI in Los Angeles, California and Bank of America.

Sentencing is scheduled for April 3, 2019, before Judge Wolford.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that five defendants pleaded guilty before U.S. District Judge Elizabeth A. Wolford in connection with a cocaine and heroin trafficking ring on the West Side of Buffalo. Entering guilty pleas:

• Defendants Gonzalo Velazquez Cabrera and Orlando Lanzo-Manso both pleaded guilty to discharge of a firearm in furtherance of drug trafficking. Cabrera also pleaded guilty to conspiracy to possess with intent to distribute 500 grams or more of cocaine. The charges carry a mandatory minimum penalty of 10 years in prison, a maximum of life, and a $250,000 fine.
• Raul Ortiz and Josue Diaz Rodriguez pleaded guilty to possession with intent to distribute heroin, which carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
• Eunhe Choi pleaded guilty to possession of marijuana, which carries a maximum penalty of one year in prison and a $100,000 fine.       

Assistant U.S. Attorney Seth T. Molisani, who is handling the case, stated that between March 2015 and December 2015, defendant Gonzalo Velazquez Cabrera was the leader and conspired with Orlando Lanzo-Manso, Raul Ortiz, and Josue Diaz Rodriguez, to sell cocaine in Buffalo, mainly on the west side. Velazquez Cabrera purchased and distributed approximately 125 grams of cocaine every week, beginning in the summer of 2015 and continuing until December of 2015. The defendant obtained, stored, and distributed cocaine at his residence on West Delavan Avenue in Buffalo. The defendant supplied co-defendants Lanzo-Manso, Diaz Rodriguez, and Raul Ortiz with cocaine so they could conduct street-level narcotics sales. The defendant also personally engaged in the daily sale of varying quantities of cocaine both at his residence and on the streets.

In August of 2015, Velazquez Cabrera became embroiled in a feud with a rival drug dealer who also operated on the west side of Buffalo. Following verbal arguments that centered on the defendant’s encroachment into the drug dealing territory of his rival, Velazquez Cabrera escalated the conflict to violence. On August 27, 2015, the defendant, accompanied in his vehicle by co-defendant Lanzo-Manso, pulled up alongside a vehicle occupied by the rival drug dealer at which time Lanzo-Manso fired the gun at the rival drug dealer. The rival drug dealer fired back. Velazquez Cabrera and the rival drug dealer sped off in their vehicles. In a text message exchange that followed between the defendant and the rival drug dealer, Velazquez Cabrera declared the rival drug dealer was a dead man. 

Defendant Choi was the girlfriend of Velazquez Cabrera and resided with him on West Delavan Avenue in Buffalo. Choi knew that Velazquez Cabrera was engaged in trafficking narcotics. She also possessed marijuana.

Today’s plea is the culmination of an investigation by the Federal Bureau of Investigation, Safe Streets Task Force, under the direction of Special Agent-in-Charge Gary Loeffert.

Josue Diaz Rodriguez is scheduled to be sentenced on March 29, 2019; Eunhe Choi on April 4, 2019, Orlando Lanzo-Manso and Raul Ortiz on April 5, 2019, and sentencing for Gonzalo Velazquez Cabrera will be scheduled at a later date.

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The United States has filed a complaint in the Western District of New York against YRC Freight Inc., (YRC); Roadway Express Inc. (Roadway); and Yellow Transportation Inc. (Yellow), alleging that these companies systematically overcharged the government for freight carrier services and made false statements to the government that hid their misconduct, the Justice Department announced today.

The United States filed this lawsuit in U.S. District Court in Buffalo, New York.  The United States alleges that, for more than seven years, the defendants defrauded the Department of Defense by millions of dollars for shipments that were actually lighter, and thus cheaper, than the weights for which the defendants charged the government.  The United States further alleges that the defendants knowingly made or used false statements concealing their overcharging practices to the Department of Defense. 

“Those who do business with the government must do so fairly and honestly,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “Knowingly overcharging the government is an affront to American taxpayers, and the Department of Justice will seek to ensure that those who engage in such misconduct are held accountable.”

Specifically, the United States’ lawsuit alleges that the defendants reweighed thousands of shipments and suppressed the results whenever they indicated that a shipment was actually lighter than its original estimated weight.  Thus, instead of charging the Department of Defense for shipments based on the correct weight, the defendants knowingly billed the government (and their other customers) based on weights that they knew to be inflated.  The defendants also allegedly made false statements to induce the Department of Defense to use them as freight carriers and further knowingly made or used false statements to improperly avoid their obligations to correct inflated invoices and return overpayments. 

“When a federal agency, such as the Department of Defense, enters into a service contract with a private corporation or company, the expectation is that the agreement will be administered in good faith,” stated U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “In this case, YRC did not legally fulfill its agreed upon obligations to the Defense Department, choosing instead to line its pockets with tax payer’s dollars. Such actions are fraudulent and illegal. This case should serve as a warning to any organization that enters into a contract with the federal government—if you try to rip us off, be prepared to pay a heavy price.”        

“This complaint is the result of a successful investigation to identify those who seek to profit by defrauding the Defense Department," stated Leigh-Alistair Barzey, Special Agent-in-Charge, Defense Criminal Investigative Service (DCIS), Northeast Field Office.  "DCIS will continue to investigate procurement fraud allegations, along with its law enforcement partners, in order to protect U.S. military members and the American tax payer."

The original lawsuit in this case was filed by James Hannum under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the United States for false claims and share in any recovery.  The act permits the government to intervene in such lawsuits, as it has done here.  Those who violate the act are subject to treble damages and civil penalties.  

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of New York, the Defense Criminal Investigative Service, and the United States Army Criminal Investigation Division Command.

The case is captioned United States ex rel. Hannum v. YRC Freight, Inc.; Roadway Express, Inc.; and Yellow Transportation, Inc., Civil Action No. 08-0811(A) (W.D.N.Y.). 

The claims asserted in the United States’ complaint are allegations only and there has been no determination of liability.  

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. –  The United States has filed a complaint in the Western District of New York against YRC Freight Inc., (YRC); Roadway Express Inc. (Roadway); and Yellow Transportation Inc. (Yellow), alleging that these companies systematically overcharged the government for freight carrier services and made false statements to the government that hid their misconduct, the Justice Department announced today.

The United States filed this lawsuit in U.S. District Court in Buffalo, New York.  The United States alleges that, for more than seven years, the defendants defrauded the Department of Defense by millions of dollars for shipments that were actually lighter, and thus cheaper, than the weights for which the defendants charged the government.  The United States further alleges that the defendants knowingly made or used false statements concealing their overcharging practices to the Department of Defense. 

“When a federal agency, such as the Department of Defense, enters into a service contract with a private corporation or company, the expectation is that the agreement will be administered in good faith,” stated U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “In this case, YRC did not legally fulfill it’s agreed upon obligations to the Defense Department, choosing instead to line its pockets with taxpayer’s dollars. Such actions are fraudulent and illegal. This case should serve as a warning to any organization that enters into a contract with the federal government—if you try to rip us off, be prepared to pay a heavy price.”        

“Those who do business with the government must do so fairly and honestly,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “Knowingly overcharging the government is an affront to American taxpayers, and the Department of Justice will seek to ensure that those who engage in such misconduct are held accountable.”

“This complaint is the result of a successful investigation to identify those who seek to profit by defrauding the Defense Department," stated Leigh-Alistair Barzey, Special Agent-in-Charge, Defense Criminal Investigative Service (DCIS), Northeast Field Office.  "DCIS will continue to investigate procurement fraud allegations, along with its law enforcement partners, in order to protect U.S. military members and the American tax payer."

Specifically, the United States’ lawsuit alleges that the defendants reweighed thousands of shipments and suppressed the results whenever they indicated that a shipment was actually lighter than its original estimated weight.  Thus, instead of charging the Department of Defense for shipments based on the correct weight, the defendants knowingly billed the government (and their other customers) based on weights that they knew to be inflated.  The defendants also allegedly made false statements to induce the Department of Defense to use them as freight carriers and further knowingly made or used false statements to improperly avoid their obligations to correct inflated invoices and return overpayments. 

The original lawsuit in this case was filed by James Hannum under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the United States for false claims and share in any recovery.  The act permits the government to intervene in such lawsuits, as it has done here.  Those who violate the act are subject to treble damages and civil penalties. 

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of New York, the Defense Criminal Investigative Service, and the United States Army Criminal Investigation Division Command.

The case is captioned United States ex rel. Hannum v. YRC Freight, Inc.; Roadway Express, Inc.; and Yellow Transportation, Inc., Civil Action No. 08-0811(A) (W.D.N.Y.). 

The claims asserted in the United States’ complaint are allegations only and there has been no determination of liability.  
  
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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Quincey Frye, 27, of Rochester, NY, who was convicted following a jury trial of being a felon in possession of a shotgun and ammunition, was sentenced to 40 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.

Assistant U.S. Attorney Charles E. Moynihan, who handled the prosecution of the case, stated that on March 26, 2016, members from the New York State Department of Corrections and Community Supervision apprehended Frye at 270 Weyl Street in Rochester, after he absconded from parole supervision in early February. While looking for the defendant inside the residence, officers found a shotgun with an ammunition carrying case attached. The ammunition carrier contained four live shotgun shells. Officers found Frye hiding in the attic and arrested him. Evidence presented during the trial showed that after officers took Frye to booking at the Monroe County Jail, he placed a telephone call to his girlfriend.  During that telephone call, which was recorded, the defendant accused his girlfriend of telling law enforcement officers about the shotgun and then said he wanted it returned. 

At the time, Frye was under the supervision of the New York State Department of Corrections and Community Supervision following a 2012 conviction and serving a prison sentence for Attempted Burglary in the Second Degree.

The prosecution was brought by the United States Attorney’s Office as part of its Project Safe Neighborhoods (PSN) initiative. PSN is the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.   

Today’s sentencing is the result of an investigation by New York State Department of Corrections and Community Supervision, under the direction of Acting Commissioner Anthony J. Annucci; the Rochester Police Department, under the direction of Chief Mark Simmons; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.—U.S. Attorney James P. Kennedy, Jr. announced today that former New York State Senator Marc Panepinto, 53, of Buffalo, NY, who was convicted of promise of employment, compensation, or other benefit for political activity, was sentenced to serve two months in prison and one year supervised release by U.S. Magistrate Judge Michael J. Roemer.

Assistant U.S. Attorney Paul E. Bonanno, who handled the case, stated that the defendant served as the New York State Senator for the 60th Senate District between January 1, 2015, and December 31, 2016. In that position, Panepinto employed a young woman as a staff member in his district office.

On January 7, 2016, the defendant and the staff member traveled together to New York City to attend a fundraiser for Panepinto. Following the event, the staff member took possession of the donations from the fundraiser. Later that evening, the defendant suggested that he and the staff member go to her hotel room to count the donations together.

While in the staff member’s hotel room, Panepinto made a series of unwanted, verbal, and physical sexual advances which were rebuffed by the staff member. The defendant eventually complied with the staff member’s request that he leave, although he did return to the staffer member’s hotel room during the early morning hours in an unsuccessful attempt to get back into her hotel room. The following morning, Panepinto and the staff member returned to Buffalo together. However, the two did not discuss the events that took place the night before.

Upset by what occurred in her hotel room, the staff member subsequently resigned from her position in Panepinto’s district office. Following her resignation, the New York State Senate conducted an investigation into what had occurred, and, as a result of the investigation, referred the matter to the New York State Joint Commission on Public Ethics (JCOPE) for further investigation.

The defendant was concerned that the JCOPE investigation would jeopardize his 2016 campaign for re-election. As a result, Panepinto directed a senior staff member to meet with the staff member and offer her money and/or new employment if she refused to participate in the JCOPE investigation. It was suggested that the new employment would be political in nature and funded in whole or in part by an Act of Congress. The meeting took place on March 7, 2016, at which time the staff member did not accept or refuse the offer. On March 9, 2016, the senior staff member contacted the staff member to arrange a follow-up meeting but the staff member did not agree to a follow-up meeting. Subsequently, on March 15, 2016, Panepinto announced that he would not be seeking re-election to the New York State Senate.

“The defendant essentially sought to purchase this young woman’s silence,” stated U.S. Attorney Kennedy. “In so doing, he placed his own interests above those of his staff and his constituents; he sought to use his position to benefit himself above all others. His abuse of power cost him his office and bought him a federal criminal conviction.”  

“Panepinto's admitted criminal misconduct -- behavior that he engaged in while he served in public office -- is not acceptable,” said FBI Special Agent-in-Charge Gary Loeffert. “Today's sentencing highlights the importance of rooting out acts of public corruption in our community.”

Today’s sentencing is the result of an investigation by the Buffalo Division of the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the New York State Joint Commission on Public Ethics, under the direction of Executive Director Seth H. Agata.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.—U.S. Attorney James P. Kennedy, Jr. announced today that Feng Chen, 23, of Ontario, Canada, was arrested and charged by criminal complaint with assaulting a federal officer by means of a dangerous weapon, evading a checkpoint operated by a Federal law enforcement agency in a motor vehicle in excess of the legal speed limit, and with eluding inspection by immigration officials. The charges carry a maximum penalty of 25 years in prison and a $250,000 fine.

Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that on December 10, 2018, at approximately 2:30 p.m., the defendant was attempting to enter the United States at the Lewiston Bridge Port of Entry. Chen turned over his passport when it was requested by a Customs and Border Protection officer. However, when the officer asked the defendant for his citizenship and destination, he did not answer the questions, and then sped through the inspection checkpoint.

The officer called out “port runner” over the radio, and a CBP officer began pursuing Chen’s vehicle, in a marked unit, with emergency lights and sirens activated. During the course of the chase, the defendant was weaving in and out of traffic at an unsafe speed. The pursuit continued on to Grand Island, where a New York State Police unit, with activated emergency lights, entered the roadway in front of Chen’s vehicle in an attempt to stop it. Rather than stop, the defendant struck the rear of the New York State Police vehicle at a high rate of speed, and the came to a stop.

Following the collision, Chen failed to comply with a CBP officer’s commands. As the officer attempted to remove the defendant from his vehicle, Chen struck and punched the CBP officer with his fist, near the officer’s left eye, resulting in an abrasion on the side of officer’s face. The defendant was then transported to Mt. Saint Mary’s Hospital in Lewiston, NY.

Based on immigration record checks, the defendant has no valid immigration status in the United States and is present illegally in the United States in violation of the Immigration and Nationality Act. 

“Border security is essential to our very existence as a Nation,” stated U.S. Attorney Kennedy. “We, together with our state and local partners, remain vigilant and committed to protecting our citizens and upholding the rule of law not only within our country but also at its borders.”

“Our officers and state partners did an excellent job ensuring this port runner was apprehended. If you attempt to enter the U.S without inspection we will pursue and apprehend you,” said CBP Buffalo Field Office Director ose Brophy. “Border security is paramount to our country's safety and it starts with ensuring everyone is properly inspected at the border. I’d like to thank the New York State Police for assisting our officers in the apprehension of the subject.”

The defendant made an initial appearance before U.S. Magistrate Judge Michael J. Roemer and is being held pending a detention hearing scheduled for December 18, 2018, at 12:00 p.m.

The complaint is the result of investigation by Homeland Security investigations, under the direction of Special Agent-in-Charge Kevin Kelly; U.S. Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy; and the New York State Police, under the direction of Major Edward Kennedy.

The fact that a defendant has been charged with a crime is merely an accusation, and the defendants are presumed innocent until and unless proven guilty.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.—U.S. Attorney James P. Kennedy, Jr. announced today that Raymel Weeden, 25, of Buffalo, NY, who was convicted of discharge of a firearm causing death, was sentenced to serve 20 years in prison by Senior U.S. District Judge William M. Skretny. The sentence will be served consecutive to a 10 year state sentence the defendant is currently serving for Robbery in the First Degree. 

Assistant U.S. Attorneys Michael P. Felicetta and Joseph M. Tripi, who handled the case, stated that on February 9, 2012, the defendant, a Bailey Boys Gang associate, along with Bailey Boys Gang member Rayshod Washington, attempted to rob Fred Rozier of drugs and money. During the course of the attempted robbery, when Fred Rozier resisted the robbery attempt, Weeden shot and killed Rozier.

The Bailey Boys Gang is a violent criminal gang which operates in an area of the City of Buffalo bounded by Winspear Avenue, the Kensington Expressway, Eggert Road and Main Street.
Rayshod Washington was previously convicted and sentenced to serve 144 months in prison.

Today’s sentencing is the result of an ongoing investigation on the part of the U.S. Attorney’s Office in close cooperation with the Erie County District Attorney’s Office, under the direction of District Attorney John Flynn; the Buffalo Police Department, under direction of Police Commissioner Byron Lockwood; the Federal Bureau of Investigation’s Safe Streets Task Force, under the Direction of Special Agent-in-Charge Gary Loeffert; the Erie County Sheriff’s Office, under the direction of Sheriff Timothy B. Howard; the Drug Enforcement Administration, under the direction of Special Agent-in-Charge Raymond P. Donovan, New York Field Division; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Ashan Benedict, New York Field Division.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

Buffalo, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Anthony Dloniak, 40, of Dunkirk, NY, who was convicted of possession with intent to distribute U-47700, was sentenced to serve 78 months in prison by U.S. District Judge Elizabeth A. Wolford.

Assistant U.S. Attorney Brendan T. Cullinane, who handled the case, stated that beginning in May of 2017, law enforcement officers began recovering packages addressed to the defendant from China and the Netherlands, all of which contained either U-47700 or MDMA, both of which are Schedule I controlled substances. On September 7, 2017, officers executed a search warrant at the Dloniak’s residence and recovered controlled substances and items used in the distribution of controlled substances, including: a quantity of U-47700; scales; a vacuum sealing system; packaging materials; a ledger; a book entitled “How to Manufacture Methamphetamine;” and, $12,650 in U.S. currency.

The sentencing is the culmination of an investigation on the part of Immigrations and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office, under the direction of Special Agent-in-Charge Jeffrey Ebersole.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Armando Ernesto Abarca, 22, of Modesto, California, who was convicted of conspiracy to possess with intent to distribute, and to distribute, five kilograms or more of cocaine, was sentenced to 168 months in prison by U.S. District Judge Elizabeth A. Wolford.   

Assistant U.S. Attorney Michael J. Adler, who handled the case, stated that between September 2014 and September 2016, the defendant conspired with others to possess and distribute cocaine. Specifically, Abarca utilized a storage unit in Amherst, NY to store 43 kilograms of cocaine. The defendant also distributed approximately 50 kilograms of cocaine in Columbus, OH, during the course of the conspiracy.

Charges remain pending against co-defendant Raul Everado Ledesma Abarca. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

The sentencing is the result of an investigation on the part of the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division; Immigration and Custom Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly; and the Internal Revenue Service, Criminal Investigations Division, under the direction of James D. Robnett, Special Agent-in-Charge, New York Field Office. Additional assistance was provided by ICE-HSI in Los Angeles, California.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Stevie Alejandro, 32, of Buffalo, NY, who was convicted of conspiracy to possess with intent to distribute, and distribution of, 500 grams or more of cocaine, was sentenced to serve 60 months in prison by U.S. District Judge Richard J. Arcara.

Assistant U.S. Attorney Meghan A. Tokash, who handled the case, stated that the defendant operated the Barberians Barber Shop at 1132 East Lovejoy Street, which is located directly across from Buffalo Public School #43, the Lovejoy Discovery School. Between May 2017 and October 18, 2017, the defendant utilized the barber shop to facilitate a drug distribution network. Alejandro conspired with co-defendants Aaron Hill, Cleophus Dentmond, a/k/a Face, Gilbert Guzman, and others, to distribute cocaine in the Lovejoy District. 

During the course of the investigation, Alejandro and his associates made numerous cocaine sales to an undercover police officer. Aaron Hill, Cleophus Dentmond, and Gilbert Guzman were previously convicted and sentenced.

Today’s sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Raymond P. Donovan, Special Agent-in-Charge, New York Field Division; the Buffalo Police Department, under the direction of Commissioner Byron Lockwood; the Cheektowaga Police Department, under the direction of Chief David Zak; and the Erie County Sheriff’s Office, under the direction of Sheriff Timothy Howard.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Emmanuel Collins, a/k/a Scooter, 40, and Quintella Wilson, 36, both of Buffalo, NY, pleaded guilty to conspiracy to defraud the government with respect to claims (Collins) and aiding and abetting fraudulent returns, statements, or other documents (Wilson) before Chief U.S. District Judge Frank P. Geraci, Jr.  Collins’s charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Wilson’s charge carries a maximum penalty of one year and a $100,000 fine.

Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that between 2012 and 2015, Collins organized various individuals in Buffalo to file fraudulent tax returns with the Internal Revenue Service, claiming false income and tax withholdings on false W-2 forms. Wilson assisted Collins in part by driving the tax filers to tax return preparers to file the fraudulent forms. Investigators identified 16 fraudulent filings in the conspiracy that claimed $124,787 in false refunds. Collins generally took a cut of each tax refund that was fraudulently obtained. Three of the tax filers have also been convicted for their roles.

The plea is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent in Charge, New York Field Office.

Sentencing is scheduled for March 21, 2019, before Judge Geraci.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Gregory Kwiatkowski, 54, of Buffalo, NY, who was convicted of deprivation of rights under color of law, was sentenced to serve four months in prison by Senior U.S. District Judge William M. Skretny. The defendant was also sentenced to one year supervised release to include four months home detention.

Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that the conviction stems from a series on incidents which occurred while defendant Kwiatkowski was working the overnight shift as a Lieutenant with the City of Buffalo Police Department (BPD) on May 30-31, 2009. That night, Lt. Kwiatkowski arrived at 52 Treehaven Road in Buffalo to respond to a vehicle that had been stopped by the Cheektowaga Police Department (CPD) and that was believed to be involved in an ongoing series of BB gun shootings, including one which occurred earlier that night. Lt. Kwiatkowski was the first BPD officer to arrive at the scene. Other CPD officers were present at the scene when Lt. Kwiatkowski arrived and had already removed the vehicle’s four occupants, who were all between 16 and 18 years old. At the time of Lt. Kwiatkowski’s arrival, all of the occupants were compliant and completely under the control of the CPD officers. 

Upon arriving at the scene, Lt. Kwiatkowski used unlawful and unreasonable force on each of the four occupants. Specifically, Lt. Kwiatkowski admitted to forcibly pushing each of the suspects heads and upper torsos into the vehicle around which they were being detained. As set forth in his plea agreement with the government, Lt. Kwiatkowski agreed that his use of force against the four suspects was unreasonable and excessive and that his use of such use of force deprived the suspects of their Constitutional rights to be free from unreasonable seizure and to due process of law, by one acting under color of law.

Following the defendant’s use of force on the four occupants, the defendant recovered a BB gun from the vehicle in which the suspects had been riding and handed the BB gun to one of the other two BPD Officers, Raymond Krug and Joseph Wendel, who had arrived on scene shortly after the defendant. Krug and Wendel, who were accused of shooting one of the individuals with the BB gun while that individual was handcuffed next to another arrested individual in the back seat of the police car, were acquitted following a trial.  

Today’s sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Gary Loeffert, Special Agent-In-Charge, and the Buffalo Police Department, under the direction of Commissioner Byron Lockwood.               

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that Jeb Tyler, 45, of Rochester, NY, who was convicted of conspiracy to commit wire fraud and filing a false tax return for the year 2012, was sentenced to serve 14 months in prison by U.S. District Court Judge David G. Larimer. The defendant was also ordered to pay $2,759,633 in restitution. 

Assistant U.S. Attorney Richard A. Resnick, who handled the prosecution, stated that in 2001, the defendant, together with Craig Jerabeck and Jason Guck started 5LINX Enterprise, Inc. (5LINX), a multi-level marketing company headquartered in Rochester, which offered utility and telecommunications services, health insurance, nutritional supplements, and business services. 5LINX used independent representatives to sell products and services, and to recruit additional representatives. Jerabeck was President and Chief Executive Officer, Guck was Vice President and Secretary, and the defendant was Vice President.

In June 2006 and July 2006, the defendant, Jerabeck, and Guck sold 5LINX stock for $5,500,000 to three investment companies, Trillium Lakefront Partners III, L.P.; Trillium Lakefront Partners III, NY L.P.; and Shalam Investment Co., L.L.C. (collectively known as "the Investors"). Between May 2010 and April 2016, 5LINX sold and distributed products for a Florida vendor. The defendant, along with Jerabeck and Guck, and without the knowledge of the Investors, Board of Directors, or other stockholders, conspired and agreed to cause the Florida vendor to pay them personally or companies they owned approximately $2,310,510, which their Stockholders Agreements prohibited them from receiving. 5LINX, its investors, as owners between 2006 and January 2014, and as creditors thereafter, and stockholders were entitled to and should have received such funds instead of defendant, Guck, and Tyler.

The Judge at sentencing also referenced that the defendant, Jerabeck and Guck engaged in additional fraudulent conduct by representing themselves as “fictitious representatives” of 5Linx, resulting in them receiving approximately $12,000,000 in fraudulent proceeds.

In addition, the defendant provided material false information on his personal tax returns, Forms 1040, for the years 2011 through 2013, and 2015. Specifically, Tyler failed to report income he received from 5LINX, and took deductions to which he was not entitled, that is, commissions that were not paid.  The false returns resulted in a tax loss of approximately $449,123.

The Judge ordered the forfeiture of the defendant’s interest in real property at 4385 County Road 16 in Canandaigua, NY.

Craig Jerabeck and Jason Guck were previously convicted. Jerabeck was sentenced to 14 months in prison, Guck is awaiting sentencing.
 
Today’s sentencing is the culmination of an investigation by Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Gary Loeffert, and the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent in Charge, New York Field Office.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y.- U.S. Attorney James P. Kennedy, Jr. announced today that eight defendants were arrested and charged by criminal complaint with conspiracy to distribute five kilograms or more of cocaine, and one kilogram or more of heroin. The charge carries a minimum penalty of 10 years in prison, a maximum of life, and a $10,000,000 fine.

Named in the complaint are:

• Edwin Deleon, 27;  • Eugenio Torres, 44; • Clarita Mendez, 31; • Sergio Smith, 30; • Manuel Lewis, 29; • Bryan Deleon, 23; • Juan Ortega-Baez, 18; and
• Angel Fernando, 28, all of Rochester, NY.

Defendants Edwin Deleon, Eugenio Torres, Clarita Mendez, are also charged with possession with intent to distribute cocaine, which carries a maximum penalty of 20 years in prison and a $1,000,000 fine.

Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that according to the complaint, the defendants were responsible for trafficking heroin and cocaine in and around the City of Rochester. The arrests are the result of a lengthy investigation that involved various sensitive investigative techniques.

During the execution of search warrants this morning, investigators recovered multiple firearms, quantities of suspected fentanyl, heroin, and cocaine, as well as more than $20,000 in cash.

The defendants made initial appearances today before U.S. Magistrate Judge Marian W. Payson and are being detained. 

The criminal complaint is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division; the Rochester Police Department, under the direction of Chief Mark Simmons; U.S. Border Patrol, the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert; and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Robert Gonzalez, 42, of Rochester, NY, was charged by criminal complaint with production and possession of child pornography. The charges carry a mandatory minimum penalty of 15 years in prison and a maximum of 30 years.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that according to the complaint, on December 3, 2018, the Rochester Police Department received a 911 call from a mother regarding her missing 14-year-old daughter who had not been seen since December 1, 2018. The mother, who attempted to call her daughter’s cell phone several times without success, told police that her daughter left the house that day around 1:00 p.m. without her permission. The mother also told officers that she recently discovered that her daughter was in an inappropriate sexual relationship with her neighbor, Robert Gonzalez. The mother stated that she caught the defendant kissing her daughter in front of her house, and that her daughter confessed to her that she has been dating Gonzalez and that they had sex numerous times.

In addition, the mother stated that there were messages from her daughter’s Facebook account between her and the defendant indicating that they were in a sexual relationship. Messages included: “I love you,” “Come over,” and Gonzalez asking if they were going to make love to which the daughter responded, “yeah 100.” The mother also stated that a friend advised her that the defendant took her daughter to New York City. A Facebook photograph of the daughter and a New York City skyline in the background was posted to the daughter's account on December 2, 2018. A friend of Robert Gonzalez also told officers that Robert Gonzalez told him that he took the daughter to New York City but would not state exactly where in New York City.

An emergency trace was put on the defendant's cell phone which showed that he was in fact in New York City. An Amber Alert was issued and the FBI and NYPD assisted with the investigation and ultimately apprehended Robert Gonzalez. The defendant was apprehended on December 6, 2018, at the Red Carpet Inn in Brooklyn, NY.

At the time of his arrest, officers seized Gonzalez’s cell phone. A search of the recovered numerous videos, taken between November 12, 2018, and November 19, 2018, of the defendant engaging in sexual activity with the daughter.

The defendant made an initial appearance this afternoon before U.S. Magistrate Judge Marian W. Payson.

The criminal complaint is the result of an investigation by the Rochester Police Department, under the direction of Chief Mark Simmons, the Federal Bureau of Investigation, under the direction Special Agent-in-Charge Gary Loeffert, and the New York Police Department, under the direction of Chief Terence Monahan.

The fact that a defendant has been charged with a crime is merely an accusation, and the defendants are presumed innocent until and unless proven guilty.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Kevin Allen, 38, aka Killer Kev, of Buffalo, NY, who was convicted following a seven-week jury trial of multiple RICO, drug and gun charges, was sentenced to serve 300 months in prison by U.S. District Judge Richard J. Arcara. The sentence will be served consecutive to a 25 year to life sentence imposed by New York State following the defendant’s conviction on a murder charge.
 
Allen was convicted along with co-defendant Thamud Eldridge of Racketeering Influenced Corrupt Organization (RICO), RICO conspiracy, narcotics conspiracy, possession of firearms in furtherance of drug trafficking, and the trial included evidence of the defendant’s role in conspiring to target drug dealers for gun-point robberies, and included evidence the Allen conspired to kidnap and rob a Buffalo-area drug dealer of kilograms of cocaine. 

Assistant U.S. Attorneys Joseph M. Tripi and Meghan A. Tokash, who handled the prosecution of the case, stated Allen and Eldridge were members and associates of a criminal organization which operated on the East Side of Buffalo from 2003 until 2005. The organization was found by the jury to be a violent group of gang members who specialized in targeting and then robbing drug dealers in and around the City of Buffalo, intending to steal their illegal drugs, money, and jewelry. Allen, Eldridge, and their associates were also accused in the Indictment of invading victim’s homes, threatening residents at gun point for money and other items of value, and kidnapping drug dealers.
 
One victim who testified for the Government at trial, told the jury that Allen and Eldridge came to his home seeking money and drugs, then forcibly kidnapped him--forcing him into their vehicle with a gun into his neck. They drove the victim to another location in Buffalo where the victim stored his drugs. The dealer said his life was spared only because he was able to give them two kilograms of cocaine.

Another Government witness testified that he was robbed of money at gunpoint in the driveway of his family home.
 
Other victims of a home invasion masterminded by Eldridge testified that their arms and legs were bound with duct tape while they were held at gunpoint--execution style. One victim was handicapped and duct taped to his wheelchair. While Eldridge's associates tried to break into the upper apartment which belonged to a known drug dealer, he casually smoked a cigar. That cigar was collected by crime scene detectives and later tested for DNA which confirmed Eldridge's presence at the crime scene.
 
Victims testified about the terror they experienced--one told the Court she dialed 9-1-1 underneath a couch so Eldridge and his gang members would not detect her attempts at contacting law enforcement. Eldridge and associates escaped before police arrived--only to be caught be his DNA left at the crime scene.

Additionally, the members of the enterprise and their associates distributed quantities of cocaine, crack cocaine, heroin and marijuana, and planned conspired, attempted and committed robberies and murders against other rival drug dealers in order to enhance their street credibility on the East Side of Buffalo.

“The reign of terror engaged in by these defendants has come to a familiar ending, with federal convictions and sentences that will result in those charged spending all or most of the rest of their lives in jail,” noted U.S. Attorney Kennedy. “Fittingly, yet somewhat ironically, the most valuable item taken by each of these robbers was their own lifetime worth of freedom.”
 
Thamud Eldridge was previously sentenced to serve 50 years in prison. 
 
Today’s sentencing is the culmination of an investigation on the part of the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Gary Loeffert; the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special-Agent-in-Charge Ashan Benedict; the New York State Police, under the direction of Major Edward Kennedy, and the Buffalo Police Department, under the direction of Commissioner Byron Lockwood.   

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CONTACT:  Barbara Burns

PHONE:         (716) 843-5817

FAX #:            (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced that Jason Haynes, of Florida, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to commit wire fraud and filing a false tax return in connection with a scheme to defraud the Xerox Corporation of more than $20,000,000. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that the defendant, along with Kyle Haynes, David Haynes and Bryan Day, owns Haynes Brother Furniture in Daytona Beach, Florida, where defendant resides. Co-conspirator Robert Fisher’s company, RBM Imaging, was an authorized reseller of Xerox office equipment.

Xerox, which has a location in Webster, NY, sells and leases office equipment, including printers. Xerox sells or leases the office equipment directly to end-user customers or to authorized resellers, like Fisher, who then resell or lease the office equipment to end-user customers, like the defendants. The office equipment requires toner and other products to operate. End-user customers order the toner for their printers from Xerox. Rather than pay Xerox upfront for the toner, the end-user customers pay Xerox based on the number of prints made with the toner. However, at all times, the toner belongs to Xerox until consumed by the end-user customers. At no time may the end-user customers sell the toner.

The Haynes’ set up a sham company, HDH Graphics, to obtain approximately 63 Xerox printers from Fisher. Although HDH Graphics made few, if any, prints with the printers, the defendants fraudulently represented to Xerox that HDH Graphics was making prints using much more toner than the industry average, which deceived Xerox into shipping approximately $25,000,000 worth of toner to HDH Graphics. The Haynes’ then sold the fraudulently obtained toner for approximately $11,000,000 to an individual in Miami, Florida. The Haynes’ and Fisher shared the profits from the fraudulent sale of the Xerox toner.

In executing the scheme, the Haynes’ repeatedly misrepresented to Xerox that they were making millions of prints with the toner, even though they never took most of the printers out of their boxes. The Haynes’ provided Xerox with false usage profiles from the printers and false print samples that made it appear that the defendants were making the millions of prints and using much more toner than the industry average for each print.    

Jason Haynes also filed false personal income tax returns with the Internal Revenue Service for the years 2008 through 2013. His personal tax returns failed to report net income HDH Graphics earned from the fraudulent sale of the Xerox toner. Because HDH Graphics was a partnership, all of its net income flowed through to the Haynes’ personal tax returns. Therefore, the underreporting of the net income on HDH Graphics tax returns resulted in the underreporting of the income on the defendant’s personal tax returns.

The Haynes’ underreported the net income earned by HDH Graphics by falsely claiming that they had personally paid and incurred travel and shipping expenses on behalf of HDH Graphics. They then had HDH Graphics reimburse them for the falsely claimed expenses and falsely reported such expenses as deductions on HDH Graphics tax returns.  The falsely reported deductions on HDH Graphics tax returns were approximately $265,154, resulting in approximately $265,154 less in net income being reported on the corporate returns. As a result, approximately $66,288.50 should have flowed through as income to the defendant’s personal tax returns.

The defendant also agreed to forfeiture of assets that were previously seized by the government. 

Kyle Haynes, David Haynes, and Bryan Day were previously convicted and are awaiting sentencing. Charges remain pending against Robert Fisher. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigation, Buffalo Office, under the direction of Special Agent-in-Charge Kevin Kelly, and the Internal Revenue Service, Criminal Investigation Division, under the direction of James Robnett, Special Agent-in-Charge, New York Field Office.  

Sentencing is scheduled for March 13, 2019, at 2:00 p.m. before Judge Wolford.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Donald Hennings, 32, of Buffalo, NY, pleaded guilty before U.S. District Judge Richard J. Arcara to possession with intent to distribute, and distribution of, butyryl fentanyl and furanyl fentanyl. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine.

Assistant U.S. Attorney Laura A. Higgins, who is handling the case, stated that on three separate occasions in September and October 2016, the Hamburg Police Department conducted three separate controlled purchases of butyryl fentanyl from the defendant. In addition, in October and November 2016, Hamburg Police conducted six controlled purchases of furanyl fentanyl from Hennings.

On December 7, 2016, a search warrant was executed at the defendant’s residence on Southside Parkway in Buffalo. Officers recovered quantities of furanyl fentanyl and crack cocaine, multiple grinders, a digital scale, and blue envelopes and rubber bands commonly used to package controlled substances. Hennings was arrested inside a 2012 Chevy Traverse vehicle, which he used during several of the controlled purchases. In the door panel on the driver’s side, where the defendant was sitting, officers found an additional quantity of furanyl fentanyl.

The plea is the result of an investigation by the Hamburg Police Department, under the direction of Chief Gregory Wickett, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.

Sentencing is scheduled for March, 25, 2019, at 12:30 p.m. before Judge Arcara.

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned an indictment charging Rhonda Henderson, 47, of Cheektowaga, NY, with mail fraud and making false statements. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Joseph M. Tripi, who is handling the case, stated that according to the indictment, between September 2013 and January 3, 2014, the defendant devised a scheme to defraud Victim A of a 1999 Honda Accord, which belonged to the victim’s deceased mother. Henderson worked as a social services manager for a local social services agency. The defendant met Victim A, who suffered from a variety of mental health issues and only completed formal education through seventh grade, through her employment at the agency where Victim A received services.

As part of the scheme, Henderson reminded Victim A of the things that Henderson did for Victim A and Victim A's mother prior to her death, and advised Victim A that Victim A should do the defendant a favor as a result. Henderson asked Victim A to allow her son, D.H., to drive the 1999 Honda Accord for a temporary period of time because Henderson was having financial trouble and could not get her son a car. Victim A gave the defendant and her son physical possession of the vehicle.

Henderson deceived Victim A into signing Department of Motor Vehicle (DMV) documents that would allow the defendant to obtain a duplicate title for the 1999 Honda Accord. Henderson took Victim A to the DMV branch on Sheridan Drive in Amherst, NY, at which time Victim A filled out and signed an application for a duplicate title. The application was then processed by L.Y., an associate of Henderson. A duplicate title was issued in the name of Victim A's deceased mother, but with Henderson's home address in Cheektowaga listed on the title. Victim A did not fill out the address portion of the form and did not know that it included Henderson’s address.

Subsequently, the defendant forged Victim’s A’s signature on the duplicate title, listing Victim A as the “seller,” and listing herself as the “buyer.” Henderson then registered the 1999 Honda Accord in her name. The defendant’s actions resulted in the DMV mailing the defendant title to the vehicle and defrauding Victim A of the 1999 Honda Accord.

The indictment further alleges that in June 2014, the defendant made several false statements to the FBI when she was questioned pertaining to her actions related to the 1999 Honda Accord.  

The indictment is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, and the New York State Department of Motor Vehicles, Division of Field Investigation, under the direction of Owen McShane, Director of Investigations. 

The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty. 

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Marcus Lynch, 32, of Rochester, NY, pleaded guilty to possession of a firearm by a convicted felon, before U.S. District Judge Charles Siragusa. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Assistant U.S. Attorney Cassie Kocher, who is handling the case, stated that the defendant went to the Firing Pin Shooting Range in the Town of Bergen to target shoot a rifle. Lynch was previously convicted in January 2008 of Robbery in the Third Degree; in August 2007 of Burglary in the Second Degree and Grand Larceny in the Fourth Degree; and in May 2007 of Burglary in the Second Degree. As a result, the defendant is legally prohibited from possessing a firearm.

The plea is the result of an investigation by New York State Department of Corrections and Community Supervision, under the direction of Acting Commissioner Anthony J. Annucci, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.

Sentencing is scheduled for March 12, 2019, at 9:15 a.m. before Judge Siragusa.

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CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Craig Jerabeck, 57, of Rochester, NY, who was convicted of conspiracy to commit wire fraud and filing a false tax return, was sentenced to serve 14 months in prison by U.S. District Judge David G. Larimer. The defendant was also ordered to pay $2,310,510 in restitution to victims and $118,628.00 to the Internal Revenue Service. 

Assistant U.S. Attorney Richard A. Resnick, who is handling the prosecution of the case, stated that in 2001, the defendant, along with co-defendants Jeb Tyler and Jason Guck, started 5LINX Enterprise, Inc. (5LINX), a multi-level marketing company headquartered in Rochester. The company offered utility and telecommunications services, health insurance, nutritional supplements, and business services. 5LINX utilized independent representatives to sell products and services, and to recruit additional representatives. Jerabeck was President and Chief Executive Officer, Guck was Vice President and Secretary, and Tyler was also a Vice President. In June 2006 and July 2006, Jerabeck, Tyler and Guck sold 5LINX stock for $5,500,000 to three investment companies, Trillium Lakefront Partners III, L.P.; Trillium Lakefront Partners III, NY L.P.; and Shalam Investment Co., L.L.C. (collectively known as "the Investors").

Between May 2010 and April 2016, 5LINX sold and distributed products for a Florida vendor. As part of his plea agreement, Jarabeck admitted that he, together with Guck and Tyler, personally, and by companies they owned, received approximately $2,310,510 from a Florida vendor, without the knowledge of the 5LINX’s Investors, Board of Directors, or other stockholders. Jerabeck further admitted that he, Guck, and Tyler were each prohibited from receiving such money by their Stockholders Agreements. 5LINX, its investors, as owners between 2006 and January 2014, and as creditors thereafter, and stockholders, were entitled to and should have received the funds instead of Jerabeck, Guck, and Tyler.

In addition, Jerabeck provided false information on his personal tax returns for the years 2011 through 2013, and 2015. The defendant failed to report income he received from 5LINX, and took deductions to which he was not entitled, that is, commissions that were not paid.  The false returns resulted in a tax loss to the Internal Revenue Service of approximately $118,628.

Judge Larimer also ordered the forfeiture of the defendant’s interest in real property at 90 East Lake Road, in Middlesex, NY.

Jeb Tyler and Jason Guck were previously convicted and are scheduled to be sentenced on December 12, 2018, and December 19, 2018, respectively.

Today’s sentencing is the culmination of an investigation by Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Gary Loeffert, and the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent in Charge, New York Field Office.

 

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. —U. S. Attorney James P. Kennedy, Jr. announced today that the United States Court of Appeals for the Second Circuit has affirmed the conviction and sentence of Emanuel L. Lutchman.

On April 11, 2016, the defendant pleaded guilty before Chief U.S. District Judge Frank P. Geraci, Jr. to conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL). On January 26, 2017, Judge Geraci sentenced Lutchman to 20 years in prison and 50 years supervised released.   

According to court documents, Lutchman posted on social media expressions of support for ISIL, including images, videos and documents relating to ISIL and violent jihad. Lutchman also downloaded and watched terrorism-related videos, including videos relating to ISIL and the now-deceased terrorist Anwar al-Awlaki. The defendant also maintained a digital collection of documents relating to terrorism and terrorist groups.

On December 25, 2015, Lutchman initiated online contact with Abu Issa Al-Amriki, an ISIL member and external attack planner in Syria, who told the defendant to plan an attack on New Year’s Eve and kill a number of kuffar (non-believers and infidels), in order to pledge his allegiance to ISIL. Al-Amriki was subsequently killed in an airstrike in Syra in 2016.

Lutchman also communicated with other individuals who, unbeknownst to the defendant, were cooperating with the FBI. In these communications, Lutchman discussed details of the New Year’s Eve attack, including potential targets. One identified target was the Merchant’s Grill, a bar/restaurant in Rochester. On December 29, 2015, Lutchman went to a store in Rochester to purchase weapons and supplies for the attack, including two black ski masks, two knives, a machete, zip-ties, duct tape, ammonia and latex gloves. The defendant told that individual that “the operation is a go,” and noted that many victims would have to be killed. On December 30, 2015, Lutchman made a video pledging allegiance to ISIL. In reference to the planned New Year’s Eve attack, the defendant stated, “the blood that you spill of the Muslim overseas we gonna spill the blood of the kuffar,” and asked Allah to “make this a victory.” Immediately thereafter, law enforcement agents arrested Lutchman.

In their decision, the Circuit Judges noted: “Lutchman’s behavior at the end of the sentencing proceeding validated the district court’s conclusion. Lutchman had maintained a pretense of remorse that was dropped after the sentence was announced. Lutchman then laughed, reaffirmed his allegiance to ISIL’s leader, and stated that more individuals like him would “rise up.” We see no error in the imposition of the statutory maximum sentence.”

The investigation was conducted by the FBI’s Rochester Joint Terrorism Task Force. On appeal, the government was represented by Assistant U.S. Attorneys Tiffany H. Lee and Brett A. Harvey.

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