Southern District of Ohio

COLUMBUS, Ohio – A federal grand jury has charged Paul A. Groves, 36, of Canfield, Ohio, with conspiring with others to illegally buy and resell military-grade semi-automatic firearms in a superseding indictment returned here yesterday.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announced the indictment.

 

The superseding indictment alleges that Groves, who operated High Powered Armory in Youngstown, provided false information in the purchase of firearms in order to fraudulently purchase military-grade weapons and resell them to illegal purchasers, who then resold them to Mexican buyers.

 

Co-defendant Eric L. Grimes, 47, of Columbus, operated Great Machine, LLC in Hilliard.

 

While High Powered Armory was a federal firearms licensee, Great Machine was not. In January 2015, Groves submitted an application to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to license Great Machine as a secondary location for High Powered Armory.

 

According to the superseding indictment, individuals in Indiana conspired to fraudulently acquire firearms from licensees for the purpose of transferring those firearms to illegal purchasers in Mexico. Groves allegedly negotiated with members of the Indiana group for the purchases of high-powered rifles that were then sold to buyers from Mexico who paid extremely high, marked-up prices.

 

For example, on January 28, 2015, Grimes accepted more than $48,000 in cash at Great Machine at the instruction of Groves and on his behalf as payment for the anticipated purchase of rifles. Groves then transferred the weapons to members of the Indiana group at High Powered Armory a few weeks later. The Indiana individuals then drove to McAllen, Texas and re-sold them to buyers from Mexico.

 

Gun Envy, LLC on Indianola Avenue in Columbus was also used as a meeting location on at least one occasion.

Groves is charged with one count of conspiracy to defraud the United States, which is punishable by up to five years in prison, and one count of receipt or possession of an unregistered firearm, which carries a potential maximum sentence of 10 years in prison.

 

Grimes pleaded guilty in U.S. District Court Wednesday to engaging in firearms business without a license, a crime punishable by up to five years in prison.

 

U.S. Attorney Glassman commended the investigation of this case by ATF, and Assistant United States Attorneys Kevin Kelley and Jessica H. Kim, who are prosecuting the case.

 

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

 

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COLUMBUS, Ohio – A federal grand jury has charged Antwan L. Hutchinson, 25, and Michael J. Favors, 24, both of Columbus, with the murders of two potential witnesses and the beating of a third witness in an indictment returned in Columbus.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco Firearms and Explosives (ATF) and Columbus Police Chief Kim Jacobs announced the indictment returned today.

 

Hutchinson and Favors allegedly possessed and distributed cocaine, heroin, oxycodone and marijuana. It is alleged that, as part of the drug conspiracy, they used “trap houses” that were in others’ names as locations to store and sell the drugs. This included using threat of force and using the homes of drug-addicted individuals.

 

Allegedly, it was part of the conspiracy to intimidate assault, threaten and torture individuals with serious physical harm who were perceived as owing money or drugs to the members of the conspiracy. Further, the indictment alleges that Hutchinson and Favors tortured and killed individuals who were seen as potential witnesses against the members of their conspiracy.

 

It is alleged that Hutchinson and Favors intentionally killed Sidney Campbell and Marie Stamp because they were perceived as potential witnesses against the defendants. They are also allegedly responsible with the beating of Cody Campbell, who subsequently died.

 

In the 12-count indictment, both defendants are charged with conspiracy to distribute and possess with intent to distribute controlled substances, two counts of conspiracy to murder a witness, two counts of murder of a witness, two counts of murder through use of a firearm in relation to a drug trafficking crime, conspiracy to tamper with a witness and use of a firearm during a crime of violence.

 

Hutchinson is also charged with an additional count each of conspiracy to tamper with a witness, use of a firearm during a crime of violence and use of a firearm in relation to a drug trafficking crime.

 

The indictment includes death-eligible specifications under the Federal Death Penalty Act.

 

Hutchinson and Favors were arrested on March 27 and remain in custody.

 

U.S. Attorney Glassman commended the investigation of this case by ATF and the Columbus Police, as well as Assistant United States Attorneys David M. DeVillers and Jessica W. Knight who are prosecuting the case.

 

An indictment merely contains allegations, and the defendants are presumed innocent unless proven guilty in a court of law.

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DAYTON – As the result of a national FBI investigation, James Gaver, 71, of Kettering, Ohio, and Robert Phelps, 49, of Jackson Center, Ohio each pleaded guilty in U.S. District Court in separate cases to possession of child pornography involving prepubescent minors.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) Cincinnati Division, announced the pleas entered into before U.S. District Judge Walter H. Rice.

According to the Statement of Facts read at Gaver’s plea hearing on April 21, 2017, investigators discovered more than 600 images of child pornography while executing a search warrant on July 27, 2015 at Gaver’s residence. Investigators also found videos of child rape on Gaver’s computer.

Gaver was convicted in Montgomery County Common Pleas Court in 1994 of “Gross Sexual Imposition” and in 2002 of “Pandering obscenity involving a minor.”

The parties involved in his case have recommended a sentence range of 120 months to 144 months in prison. Judge Rice will consider that recommendation at his sentencing hearing scheduled August 1.

At Phelps’ plea hearing on April 13, 2017, the Statement of Facts set forth that federal agents executed a search warrant at Phelps’s home in Jackson Center and discovered more than 600 images and 100 videos of child pornography. He faces a potential maximum of 20 years in prison.

U.S. Attorney Glassman commended the investigation of this case by the FBI and Assistant United States Attorney Andrew J. Hunt, who is representing the United States in both cases, and First Assistant United States Attorney Vipal J. Patel who is representing the United States in U.S. v. Gaver.

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COLUMBUS, Ohio – Stephan D. Boggs, 64, of Columbus, was sentenced in U.S. District Court here today to 24 months in prison and ordered to pay nearly $280,000 in restitution for supplying non-conforming military parts to the Department of Defense.

 

A United States District Court jury convicted Boggs of four counts of mail fraud and 21 counts of false claims in July 2016.

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio and Brian J. Reihms, Special Agent in Charge, Defense Criminal Investigative Services (DCIS), Central Field Office, announced the sentence handed down by U.S. District Judge James L. Graham.

 

According to court documents and testimony, Boggs served as the president of Boggs & Associates, Inc., a Department of Defense (DoD) contractor who sold and supplied a variety of parts used by the military.

 

From approximately April 2010 through January 2014, the DoD issued purchase orders to Boggs & Associates for a variety of military parts and components used on various military items including aircraft, vehicles and vessels. The parts were required to meet certain military specifications. The majority of these parts are considered critical application items. A critical application item is defined as an item essential to weapon system performance or operation, or the preservation of life or safety of operating personnel, as determined by military services.

 

Boggs was convicted for supplying non-conforming parts to the DoD through purchase orders issued by the Defense Logistics Agency in Columbus for parts used around the world.

 

The Agency’s testing center found that parts from 46 different purchase orders were non-conforming. Specifically, the parts were made from unauthorized substituted material, were dimensionally defective, used unauthorized inferior fittings, not heat treated properly, not plated properly and/or did not pass specified testing requirements.

 

During trial, the evidence showed that the inspection reports and certifications signed by Boggs and submitted to the government contained false and fraudulent representations.

 

“Defense contract fraud is extremely serious business,” U.S. Attorney Glassman said. “This kind of crime not only defrauds the government, but also jeopardizes our national security and puts at risk the lives of the men and women who serve in the military. I hope that Stephan Boggs serving time in federal prison will deter others who might be tempted to cheat on defense contracts.”

 

U.S. Attorney Glassman commended the investigation of this case by DCIS, and Assistant United States Attorneys Jessica W. Knight and J. Michael Marous, who prosecuted the case.

 

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CINCINNATI – A federal grand jury has charged Deonte R. Dickey, 19, of Cincinnati with charges related to the distribution of fentanyl in an indictment returned here today. Specifically, Dickey is charged with six counts of distributing heroin and fentanyl – one count including an overdose death – and one count of distributing cocaine.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Ohio Attorney General Mike DeWine, Ohio State Highway Patrol Superintendent Col. Paul A. Pride, Hamilton County Sheriff Jim Neil, Cincinnati Police Chief Eliot K. Isaac, Norwood Police Chief William Kramer, Blue Ash Police Chief Paul Hartinger and members of the Northern Kentucky Drug Strike Force announced the indictment returned Wednesday.

 

The indictment alleges that from January 2016 through March 2017, Dickey, also known as “Lil Tay,” “Ching Ching” and “Richie,” distributed heroin, fentanyl and cocaine. Dickey allegedly supplied the heroin and fentanyl that resulted in the death of a person on December 31, 2016.

 

Each distribution charge carries a potential maximum sentence of 20 years in prison. Distribution resulting in death is punishable by 20 years up to life in prison.

 

Dickey was arrested today and his initial appearance was held in U.S. District Court at 1:30pm.

 

U.S. Attorney Glassman commended the investigation of this case by the federal, state and local law enforcement as well as Assistant United States Attorney Karl P. Kadon.

 

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

 

# # #

COLUMBUS, Ohio – A United States District Court jury convicted Shawn P. Parrish, 38, of Newark, Ohio, of receiving and possessing child pornography. Parrish had been previously convicted of an offense involving aggravated sexual abuse, sexual abuse or abusive sexual contact of a minor.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Steve Francis, Acting Special Agent in Charge, Homeland Security Investigations (HSI), Franklin County Sheriff Dallas Baldwin, Franklin County Prosecutor Ron O’Brien and other members of the Franklin County Sheriff’s Office Internet Crimes Against Children (ICAC) Task Force announced the verdict reached today, which was returned following a trial that began on April 17 before U.S. District Judge Algenon L. Marbley.

 

According to court documents and testimony, investigation of a peer-to-peer file-sharing network led investigators to Parrish’s residence when they discovered child pornography being uploaded to an IP address there. While executing a search warrant at his Newark residence on August 30, investigators found numerous images of a 12-year-old girl on Parrish’s phone.

 

Forensic evidence obtained from Parrish’s phone and the victim’s phone indicates that Parrish sent himself videos of the victim displaying her nude pubic area and that he received those videos via Facebook Messenger and thereafter created still images on his phone from the videos.

 

Parrish had previously been convicted in North Carolina in 1998 for Indecent Liberties with a Child and had been sentenced to 16-20 months in prison.

 

Receipt of child pornography in this case is punishable by a range of 15 to 40 years in prison because of Parrish’s prior conviction. Likewise, because of the prior conviction, possession of child pornography in this case includes a potential sentence of 10 to 20 years in prison.

 

U.S. Attorney Glassman commended the investigation of this case by the Franklin County ICAC Task Force, as well as Assistant United States Attorneys Heather A. Hill and Special Assistant U.S. Attorney Jennifer M. Rausch, Director of the Franklin County Special Victims Unit, who are prosecuting the case.

 

The Franklin County ICAC Task Force is a multi-agency effort dedicated to the fight against computer-facilitated crimes against children. The following agencies are members:

 

Franklin County Sheriff’s Office

Ohio ICAC

Grove City Police Department

Columbus Police Department

Grandview Heights Police Department

Westerville Police Department

Hilliard Police Department

Franklin County Prosecutor's Office

Homeland Security Investigations (HSI)

Ohio Attorney General’s Office (BCI)

The Ohio State University Police Department

Upper Arlington Police Department

Circleville Police Department

Pickaway County Sheriff’s Office

Delaware County Sheriff’s Office

 

 

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CINCINNATI – Raul Barocio, 47, of Cincinnati, was sentenced in U.S. District Court yesterday to 63 months in prison for his role as a source of supply in a cocaine trafficking ring. Barocio pleaded guilty in April 2016 to one count of conspiracy to possess with intent to distribute cocaine.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), and other members of the DEA Task Force announced the sentences handed down by United States District Court Judge Susan Dlott.

 

Seven co-defendants, all Cincinnati-area residents, have also been sentenced in the cocaine conspiracy. They include:

 

Carmella V. Smith, who was sentenced to 87 months in prison;

Daymond Williams, who was sentenced to 108 months in prison;

Derrick Thorne, who was sentenced to 60 months in prison;

Gregory Jordan, who was sentenced to 64 months in prison;

Deantre B. Pruett, who was sentenced to 62 months in prison;

Wallace Jones, who was sentenced to 60 months in prison; and

Tonya R. Ratliff, who was sentenced to time served and three years of supervised release.

 

Statements in plea agreements admitted to by the defendants show that they conspired to distribute cocaine in the Cincinnati area from about February 2013 until November 2015. Barocio admitted that his role in the conspiracy was to obtain the cocaine and provide it to Smith who then distributed it, mainly to Williams but also to others. In the conspiracy charged, once Williams obtained cocaine from Smith he then provided it to Thorne, Jordan, Pruett, Jones and Ratliff, who in turn distributed it to street-level users. Williams himself also supplied street-level users.

 

“This was a significant cocaine trafficking organization in the Cincinnati area,” U.S. Attorney Glassman said. “Even as we work to combat the opioid epidemic in southern Ohio, we must not lose sight of the dangers posed by other drugs. Cocaine remains a menace, and it’s important that we thwart its influence by dismantling sources of supply.”

 

U.S. Attorney Glassman commended the investigation by DEA task force agents, as well as Assistant United States Attorney Karl P. Kadon who represented the United States in this case.

 

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CINCINNATI – Angelia Zwick, also known as Angelia Strunk, 46, of Cincinnati, pleaded guilty in U.S. District Court today to charges related to an embezzlement scheme that defrauded her employer. Specifically, she pleaded guilty to one count of wire fraud and one count of willfully filing a false income tax return with the Internal Revenue Service (IRS).

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Frank S. Turner II, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Cincinnati Field Office, and Jason Hayden, Acting Special Agent in Charge, U.S. Secret Service, announced the plea entered into today before U.S. District Judge Susan J. Dlott.

 

According to court documents, from approximately July 2009 through May 2013, Angelia Zwick worked for Sheakley Group, Inc. and devised a scheme to defraud her employer by embezzling funds in excess of her authorized pay and compensation. Zwick wired the stolen funds from her employer’s bank account to a bank account for Amerihealth and Life Solutions, LLC, a company owned by Zwick.

 

As a result, Zwick took more than $328,000 of workers’ compensation refunds intended for her employer or its clients and diverted those refunds into bank accounts that she controlled.

 

In addition, Zwick filed false income tax returns with the IRS for the 2010, 2011, and 2012 income tax years, for which she owes $121,810 in additional income taxes. For the 2010 income tax year, Zwick failed to report as income the funds she embezzled from her employer and she claimed false expenses for Amerihealth. For the 2011 and 2012 income tax years, Zwick claimed false expenses for Amerihealth.

 

"The IRS enforces the nation's tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others,” said Frank S. Turner II, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “To build faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share.”

 

Wire fraud is a crime punishable by up to 20 years in prison and filing a false income tax return with the IRS carries a potential maximum sentence of three years in prison.

 

U.S. Attorney Glassman commended the investigation of this case by the IRS and U.S. Secret Service, and Assistant U.S. Attorney Timothy Mangan, who is prosecuting the case.

 

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CINCINNATI – Margaret Temponeras, 52, of Portsmouth, Ohio, pleaded guilty in U.S. District Court to conspiracy to distribute a controlled substance, which she did through a pain clinic and dispensary.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Steven W. Schierholt, Executive Director, Ohio State Board of Pharmacy, and the Ohio High Intensity Drug Trafficking Area (HIDTA) announced the plea entered into today before U.S. District Judge Timothy S. Black.

 

According to the Statement of Facts in this case, Temponeras owned and was the physician at Unique Pain Management in Wheelersburg, Ohio. Her father, John Temponeras, 82, was also a physician at the clinic.

 

From June 2005 until May 2011, Temponeras and her father saw more than 20 patients per day, who paid cash payments starting at $200 for each medical examination. Many patients received monthly prescriptions for similar combinations of medications – namely, 120-150 pills of 15mg Oxycodone, 120-150 pills of 30mg Oxycodone and 90 pills of 2mg Xanax.

 

Patients were referred to Raymond Fankell, 62, of Wheelersburg, Ohio, who owned Prime Pharmacy, to fill their prescriptions.

 

Temponeras became aware that some pharmacies in the Scioto County area had declined to accept or fill her prescriptions from Unique Pain Management so she opened the dispensary Unique Relief LLC from the same location as her clinic in order to fill her own prescriptions.

 

Temponeras and Fankell have each pleaded guilty to one count of conspiracy to distribute a controlled substance, which is a crime punishable by up to 20 years in prison. John Temponeras pleaded guilty to one count of conspiracy to distribute Oxycodone, which carries the same potential maximum sentence.

 

U.S. Attorney Glassman commended the investigation of this case by the DEA, FBI, Ohio State Board of Pharmacy, and Ohio HIDTA, as well as Assistant United States Attorneys Timothy D. Oakley and Timothy S. Mangan, who are representing the United States in this case.

 

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COLUMBUS, Ohio – Richard Jerel Doyle, 32, of Brooklyn, Ohio, was sentenced to 100 months in prison for illegally possessing a firearm when Columbus Police arrested him in March 2016. A U.S. District Court jury convicted Doyle following a two-day trial in September.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Columbus Police Chief Kimberley Jacobs announced the sentence handed down yesterday evening by Chief U.S. District Judge Edmund A. Sargus Jr.

 

A Columbus Police officer arrested Doyle on March 18, 2016 after a victim called police and said that Doyle drove up next to her while she was walking along Cleveland Avenue. The victim told officers that Doyle assaulted her with a loaded firearm and that she was able to run away from him. She called 911 and reported the incident. An officer met with the victim and asked for a description of the man. According to testimony, the victim looked up, saw Doyle in his 1994 Cadillac Deville and said, “That’s him! Oh my God.”

 

Doyle drove away and officers followed him before stopping him without incident along I-71. They searched his car and found a .380 caliber handgun and ammunition.

 

On July 27, 2016, a grand jury indicted Doyle, who had been convicted in Cuyahoga County in 2010 on charges of drug trafficking and drug possession and in 2005 on charges of sexual battery and robbery. Federal law prohibits people convicted of felonies from owning, possessing or controlling firearms. The same restrictions apply to ammunition.

 

U.S. Attorney Glassman commended the investigation by agencies on the ATF task force, as well as Assistant U.S. Attorneys Salvador A. Dominguez and Jonathan J.C. Grey who represented the United States in this case.

 

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The owner of a New Jersey feedstock collector and processor was sentenced today for his role in a scheme that generated over $7 million in fraudulent tax credits and renewable fuels credits (RIN credits) connected to the purported production of biodiesel fuel, as well as his subsequent attempts to obstruct a Grand Jury investigation into the fraud.

Malek Jalal, 52, was sentenced to 60 months in prison to be followed by three years of supervised release.  He was also sentenced to pay $1,017,087 in restitution, and a $12,500 fine.

Acting Assistant Attorney General Jeffrey H. Wood for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio, Acting Special Agent in Charge Frank S. Turner II for the Internal Revenue Service Criminal Investigation, and Acting Special Agent in Charge John Gauthier of EPA’s Criminal Enforcement Program in Ohio announced the sentence handed down today by Senior U.S. District Court Judge James L. Graham.

The RFS program is a national policy, authorized under the Energy Policy Act of 2005 and expanded under the Energy Independence and Security Act of 2007, which requires a certain volume of renewable fuel to be produced to replace or reduce the quantity of petroleum-based transportation fuel, heating oil or jet fuel.  Tax credits incentivize businesses to produce renewable fuel like biodiesel.

According to his plea, Jalal, who owned Unity Fuels of Newark, New Jersey, engaged in a scheme with other coconspirators to fraudulently claim tax credits and RIN credits multiple times on the same fuel.  Jalal did this by buying fuel from a New York-based company, blending it with other materials, and selling it back to the same New York-based company.

Jalal also admitted to obstruction of justice. According to his plea, Jalal knowingly modified and destroyed records after receiving a Grand Jury subpoena from the Southern District of Ohio. Jalal also directed an employee of Unity Fuels to fabricate false records that were provided to the Grand Jury in an attempt to hide the fraud scheme.

“Unlawful acts like those at issue in this case defraud the U.S. Government, harm American taxpayers and consumers, and undermine energy and environmental laws enacted by Congress,” said Acting Assistant Attorney General Wood. “As today’s plea demonstrates, the Department of Justice will continue to pursue and prosecute those who seek to line their own pockets through RFS fraud.”

“Environmental programs are not immune from fraud," U.S. Attorney Glassman said. "The surest way to deter this and all fraud is to catch the criminal and ensure that he is punished for the crime. That's what we're doing here.”

“At the IRS, protecting taxpayer money is a matter we take extremely seriously. An integral part of the agency’s mission involves detecting and catching those who claim fraudulent tax credits," stated Frank S. Turner II, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "The object of these schemes is to defraud the government and the taxpaying public.”

“Violations of renewable fuels laws can have serious impacts on the marketplace and hurt companies that play by the rules,” said Larry Starfield, Acting Assistant Administrator for the Office of Enforcement and Compliance Assurance at EPA.  “EPA and its law enforcement partners are committed to ensuring a level playing field for businesses that follow the rules by pursuing those who blatantly violate the law.”

Assistant Attorney General Wood and U.S. Attorney Glassman commended the cooperative investigation by law enforcement, as well as Department of Justice Trial Attorney Adam Cullman, Senior Trial Attorney Jeremy Korzenik and Assistant United States Attorney J. Michael Marous, who represented the United States in this case.

COLUMBUS, Ohio – Kristian G. Afana, also known as Leonard M. Ovono, 36, of Columbus, was sentenced in U.S. District Court to 12 months and one day in prison for running a fake passport scheme.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and the U.S. Department of State Diplomatic Security Service, announced the sentence handed down by Senior U.S. District Judge James L. Graham.

 

According to court documents, Afana would pay individuals to apply for false United States passports by using providing photographs of unknown individuals to be submitted with the passport application in the name of the applicant. Afana would drive the applicants to various post offices in Columbus in order to apply.

 

In total, Afana caused five fake passports to be issued after creating nine false applications.

 

Afana is a naturalized United States citizen from Gabon.

 

Afana pleaded guilty on August 31 to one count of conspiracy to make false statements on United States passport applications and one count of aiding and abetting in the making of a false statement on a United States passport application.

 

U.S. Attorney Glassman commended the cooperative investigation by the Diplomatic Security Service, as well as Assistant United States Attorney David J. Bosley, who is representing the United States in this case.

 

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DAYTON – Connie Apostelos, also known as Connie Coleman, 51, formerly of Springboro, Ohio, pleaded guilty in U.S. District Court today to charges related to a $70 million Ponzi scheme that defrauded nearly 500 victims. Specifically, she pleaded guilty to one count of money laundering.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Frank S. Turner II, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office; Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI); Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service; James Vanderberg, Special Agent in Charge, U.S. Department of Labor Office of Inspector General; Joe Rivers, Regional Director of the U.S. Department of Labor Employee Benefits Security Administration; and Brian Peters, Enforcement Attorney, Ohio Department of Commerce Division of Securities, announced the plea entered into today before U.S. District Judge Thomas M. Rose.

 

Apostelos and her husband, William Apostelos, were indicted in October 2015. According to court documents, beginning in 2009, and continuing for at least five years, the couple and others orchestrated a Ponzi scheme in the Dayton area in which nearly 480 investors lost more than $20 million collectively. They received $70 million in investment funds in total.

 

Connie Apostelos operated and oversaw multiple companies in the Dayton area, including Coleman Capital, Inc. and Silver Bridle Racing, LLC. These companies were operated through improper use of investor funds to William Apostelos’ companies.

 

William Apostelos also operated and oversaw multiple purported investment and asset management companies in the Dayton area, including WMA Enterprises, LLC, Midwest Green Resources, LLC and Roan Capital. He falsely reported that he held a degree in mathematics and was a registered securities broker.

 

The couple recruited investors from 37 states to invest in WMA and Midwest Green, telling the investors that their money would be used for acquiring stocks or securities, purchasing real estate or land, providing loans to business and buying gold and silver.

 

Rather than investing the money, the couple used it to pay for personal luxuries. According to court documents, the couple was spending $35,000 per month on Connie’s horse racing company and $400 per month on Victoria’s Secret lingerie.

 

When the defendants became late on interest payments to the victims, they advised that their bank account had been hacked, a bank mistakenly failed to wire payment and/or the deal the victim had invested in was temporarily on hold.

 

The government has seized two racehorses, vehicles, jewelry, artwork and cash totaling approximately $650,000 from the couple.

 

Money laundering in this case is punishable by up to 10 years in prison. Sentencing has been scheduled for August 2.

 

William Apostelos pleaded guilty to conspiracy to commit mail and wire fraud and theft or embezzlement from an employee benefit plan. As part of his plea agreement, the parties involved have recommended to the court a sentence of 180 months in prison. That sentencing recommendation will be considered by the Judge at a sentencing hearing on June 30.

 

Steven Scudder, 62, of Centerville, an attorney who served as trustee of the WMA Trust, pleaded guilty in U.S. District Court on January 19 to wire fraud, admitting that he used his position as an attorney to facilitate the fraudulent investment scheme.

 

U.S. Attorney Glassman commended the investigation of this case by law enforcement, and Assistant United States Attorney Brent G. Tabacchi and Deputy Criminal Chief Laura Clemmens, who are prosecuting the case.

 

# # #

DAYTON – Michael Stathas, 33, of Dayton, pleaded guilty in U.S. District Court to two counts of robbery.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the plea entered into today before U.S. District Judge Walter H. Rice.

 

According to the Statement of Facts in this case, Stathas robbed two banks in Montgomery County in late December. On December 23, he jumped the teller counter at a Fifth Third Bank in Kettering, Ohio before pepper spraying the teller and stealing the teller’s station money. Again on December 29, Stathas vaulted a bank counter, this time at Key Bank in Centerville, Ohio. Once on the other side of the counter, he stole cash from the teller’s station.

 

Stathas fled the second robbery in his vehicle. Soon thereafter, police in marked vehicles attempted to stop him, but rather than complying with their demands, he fled at a high rate of speed, ultimately crashing his car near Moraine, Ohio.

 

As part of the plea agreement, all parties involved in this case have recommended a sentence of 105 months in prison. U.S. District Judge Rice will consider that recommendation at a future sentencing hearing, which has yet to be scheduled.

 

U.S. Attorney Glassman commended the investigation of this case by the FBI and Assistant United States Attorney Brent G. Tabacchi, who is representing the United States in this case.

 

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COLUMBUS, Ohio – A federal grand jury has charged 17 individuals with conspiracy to possess with intent to distribute heroin and/or methamphetamine in a superseding indictment returned here.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Agency (DEA), Frank S. Turner II, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office, Ohio State Highway Patrol Colonel Paul A. Pride, Columbus Police Chief Kim Jacobs, Westerville Police Chief Joseph Morbitzer and Pickerington Police Chief Mike Taylor announced the superseding indictment returned yesterday and unsealed today.

 

The superseding indictment alleges that defendants conspired to bring the drugs from Mexico to the Southern District of Ohio from at least December 2015. One defendant, Jose Hernandez, was also charged with allegedly possessing a firearm in furtherance of a drug trafficking crime in October 2016.

 

Fourteen of the defendants are Mexican citizens and three are American citizens.

 

The individuals charged include:

• Guillermo Polanco-Contreras

• the individual known as “Chacorta”

• Hiram Hernandez-Sarabia

• Enrique Carrilo-Garcia

• Karla Aguayo-Camarena

• Hugo Carrilo

• Miguel Guardado-Hernandez

• Carlos Justo-Landa

• Erick Pablo-Reyes

• Hailey Johnson

• Crescencio Hernandez

• Jose Hernandez

• Alvaro Hernandez, aka “Alvaro Dejesus-Hernandez”

• Rene Casillas-Mojica

• Noe Zepeda-Yerena

• Ignacio Ortega-Meza

• Jose Del Real-Ortega

 

Conspiracy to possess with intent to distribute heroin or methamphetamine are each crimes punishable by up to life in prison. Using a firearm in furtherance of the illegal drug trafficking carries a potential maximum sentence of 40 years in prison.

 

Ten of the defendants have been arrested and are in custody, and the United States will be seeking the extradition of four defendants from Mexico.

 

U.S. Attorney Glassman commended the investigation of this case by federal, state and local law enforcement, as well as Deputy Criminal Chief Michael J. Hunter who is prosecuting the case.

 

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

COLUMBUS, Ohio – The last of 20 defendants in a gang-related racketeering and murder case received his sentence today in U.S. District Court.

 

Lance Green, 37, formerly of Columbus, was sentenced to 17 years in prison. He pleaded guilty in June before his slated trial in July to one count of racketeering conspiracy and two counts of murder in aid of racketeering.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Franklin County Prosecutor Ron O’Brien and Columbus Police Chief Kim Jacobs announced the sentences handed down by U.S. District Judge Algenon Marbley.

 

The 20 individuals, associated with the Short North Posse’s “Cut Throat Committee,” were indicted in October 2014 in a racketeering case, with charges that include 14 previously unsolved murders, attempted murders, drug trafficking, weapons offenses, extortion and robbery. Of the 20 total defendants, six were convicted at trial, 13 pleaded guilty and one has died.

 

Their sentences range from seven years in prison to multiple life terms with no chance of parole. One of the group’s “bosses,” Robert Ledbetter, was sentenced to several consecutive life sentences last week.

 

“Let this serve as a clear message that if you terrorize our streets with violence you will spend significant time in federal prison, and for the six men in this case who were convicted at trial, they’ll be spending the rest of their lives there,” U.S. Attorney Glassman said.

 

U.S. Attorney Glassman commended the two-year investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Dallas Baldwin's Office, Franklin County Prosecutor Ron O’Brien’s Office, Fairfield County Prosecutor Gregg Marx, Licking County Prosecutor Kenneth Oswalt, Muskingum County Prosecutor D. Michael Haddox, Ross County Prosecutor Matthew S. Schmidt, law enforcement leaders from those counties, and officials of the Ohio Department of Rehabilitation and Correction, as well as Assistant U.S. Attorneys David DeVillers, Kevin Kelley and Brian Martinez and Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who represented the United States in these cases.

 

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DAYTON – David A. McComb Jr., 32, of Dayton, was sentenced in U.S. District Court to 77 months in prison for possessing a firearm after having been convicted of a felony.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Dayton Police Chief Richard Biehl announced the sentence handed down today by U.S. District Judge Thomas M. Rose.

 

McComb was arrested on April 6, 2016, three days after escaping from a police station. At the time of his arrest, he was carrying a pistol. McComb had previously been convicted for felony offenses, including aggravated robbery with a deadly weapon, burglary, intimidation and abduction.

 

McComb was sentenced locally to 18 months in prison for the escape offense.

 

He pleaded guilty to the federal gun offense on November 10.

 

U.S. Attorney Glassman commended the cooperative investigation by the Dayton Police Department and ATF, as well as Assistant United States Attorneys Dominick S. Gerace and Dwight K. Keller, who are representing the United States in this case.

 

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CINCINNATI – U.S. Attorney Benjamin C. Glassman announced today the creation of a District forfeiture unit tasked with ensuring the District is as successful as possible at seizing ill-gotten gains.

 

The Department of Justice Asset Forfeiture Program encompasses the seizure and forfeiture of assets that represent the proceeds of, or were used to facilitate certain federal crimes, or that were involved in money laundering. The primary mission of the program is to employ the federal asset forfeiture laws in a manner that enhances public safety and security and promotes justice. This is accomplished by removing the proceeds of crime and other assets relied upon by criminals and their associates to perpetuate their criminal activity against our society. Asset forfeiture has the power to disrupt or dismantle criminal organizations that would continue to function if we only convicted and incarcerated specific individuals. United States Attorneys’ Offices are responsible for the prosecution of both criminal and civil actions against property used or acquired during illegal activity.

 

“Forfeiture is a set of legal tools, both civil and criminal, that we use to ensure that crime doesn’t pay,” U.S. Attorney Glassman said.

 

For example, in fiscal year 2016, the United States Attorney’s Office for the Southern District of Ohio forfeited assets valued in excess of $9 million.

 

In addition to allowing for the forfeiture of criminal proceeds, property that facilitates crime and property involved in money laundering, the law also requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. Ensuring that assets are available to compensate crime victims is a priority of the Asset Forfeiture Program.

 

Case examples in the Southern District of Ohio that involve significant forfeitures sought include:

• U.S. v. Glen Galemmo, an investment-fraud case in which the government forfeited more than $6 million, three homes and five vehicles;

• U.S. v. William Apostelos, a $70-million Ponzi-scheme case in which the government has seized and is seeking forfeiture of cash totaling $650,000, two race horses, jewelry and artwork; and

• U.S. v. Kevin Lake, a pill-mill case in which the government has seized and is seeking forfeiture of more than $29 million in proceeds from a Central Ohio medical center.

 

Assistant U.S. Attorneys Deborah Grimes and Pamela Stanek will oversee the forfeiture efforts of the District.

 

“Both Assistant U.S. Attorneys Grimes and Stanek have the expertise in this increasingly complicated body of law that – if you want to get the most out of it – requires sustained attention at multiple stages of investigations and cases,” Glassman said. “Both women have taught federal prosecutors from across the country on this topic and have served on national working groups, in addition to lending their knowledge to other federal agencies. Having them officially lead our forfeiture work will promote better restitution for victims and less profit for criminals.”

 

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DAYTON – Keon Rutledge, 35, of Dayton, was sentenced in U.S. District Court to 90 months in prison for possession with the intent to distribute more than 500 grams of cocaine.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Steve Francis, Acting Special Agent in Charge, U.S. Department of Homeland Security Investigations (HSI), Montgomery County Sheriff Phil Plummer and other members of the Sheriff’s RANGE Task Force, Clinton County Sheriff Ralph D. Fizer, Jr. and members of the Miami Valley Bulk Cash Smuggling Task Force announced the sentence handed down today by U.S. District Judge Thomas M. Rose.

 

According to the Statement of Facts in this case, on May 4, 2016, Rutledge received nearly 2,000 grams of cocaine at a business located on Salem Avenue in Dayton, and that was within 1,000 feet of a private middle school. A second search warrant was executed at Rutledge’s home on Riverview Terrace, where a bulletproof vest, an additional amount of cocaine and firearms were recovered. These items were forfeited, along with $2,300 in cash.

 

Rutledge pleaded guilty on December 7, 2016 to one count of possession with intent to distribute 500 grams or more of cocaine.

 

U.S. Attorney Glassman commended the cooperative investigation by law enforcement, as well as Assistant United States Attorney Andrew J. Hunt who is representing the United States in this case.

 

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COLUMBUS, Ohio – James R. Harrah, 51, formerly of Albany, Ohio, was sentenced in U.S. District Court to 60 months in prison for receiving child pornography.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, Westerville Police Chief Joseph Morbitzer and other members of the FBI’s Child Exploitation Task Force announced the sentence handed down today by Chief U.S. District Judge Edmund A. Sargus, Jr.

 

According to court documents, in March 2015, an FBI Task Force Officer received information from a tip submitted to the National Center for Missing and Exploited Children cyber tipline regarding images of child pornography that had been uploaded through a Gmail account.

 

Investigators linked Harrah to the activity through computer IP addresses and his phone number. Further investigation revealed additional cyber tipline reports and incident reports from Google, Inc. and Twitter related to the uploading of child pornography of young females.

 

One of Harrah’s social media profiles used the username “I Luvem Yung” and the description “Luv girls 10-15 if you in Ohio Hmu if U wanna play…let’s make a baby.”

 

Forensic examination of Harrah’s phones revealed more than 500 images and 80 videos of child pornography. When law enforcement officers submitted the recovered child pornography files to the National Center for Missing and Exploited Children, it was determined that at least 14 identified child victims were depicted.

 

Harrah was charged by a Bill of Information and pleaded guilty on July 21, 2016 to one count of receiving child pornography in interstate commerce.

 

The defendant was also sentenced to 15 years of supervised release. During that time, any cell phone or computer that he owns, uses or has access to that is connected to the Internet will be monitored and reviewed.

 

“The files recovered in this case confirm that child pornography is not a victimless crime,” U.S. Attorney Glassman said. “These were missing child victims who had been sexually abused, and Harrah’s receipt of images of that abuse warrants the sentence he received today.”

 

U.S. Attorney Glassman commended the cooperative investigation by the FBI’s Child Exploitation Task Force, as well as Assistant United States Attorney Jessica H. Kim, who is representing the United States in this case.

 

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COLUMBUS, Ohio – A United States District Court jury convicted Frederick A. McShan, 37, and David McShan, 42, both of Steubenville, Ohio, of running a Steubenville-area heroin-trafficking organization.

 

Specifically, Frederick McShan was convicted of one count of conspiracy to possess with intent to distribute more than one kilogram of heroin, 12 counts of possession with intent to distribute heroin and one count of conspiracy to commit money laundering. David McShan was also convicted of one count of conspiracy to possess with intent to distribute heroin and one count of possession with intent to distribute heroin.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Betsy Steinfeld Jividen, Acting U.S. Attorney for the Northern District of West Virginia Betsy, Karl Colder, Special Agent in Charge, DEA, Washington, D.C. field office, Jefferson County Prosecutor Jane M. Hanlin and members of the Jefferson County Drug Task Force and the Hancock-Brooke-Weirton Drug Task Force announced the verdict reached early Friday evening, which was returned following a trial that began on Monday, March 6th before Chief U.S. District Judge Edmund A. Sargus, Jr.

 

According to court documents and testimony, the McShan brothers helped lead a drug organization that was supplied out of Chicago and was responsible for street-level heroin sales in Steubenville, Ohio, including in the Market Street apartment public housing area, Weirton, W.Va., Wheeling, W.Va. and Bellaire, Ohio.

 

A yearlong investigation in this case by local, state and federal law enforcement culminated in the seizure of eight firearms, three vehicles and approximately $110,000 of narcotics proceeds.

 

Four co-defendants in this case have pleaded guilty and been sentenced. They include:

 

Donae F. Grier, 38, of Irving, Texas, sentenced to 60 months in prison;

Christopher J. Bishop, 32, of Weirton, W.Va., sentenced to 120 months in prison;

Kerris D. Moncrease, 32, of Weirton, W.Va., sentenced to 42 months in prison; and

Perrier D. Coleman, 21, of Steubenville, Ohio, sentenced to 15 months in prison.

 

Terrence J. Smith, 27, Michael K. Greathouse, 25, and Erica L. Jury, 37, all of Steubenville, Ohio have pleaded guilty and await sentencing.

 

Conspiracy to possess with intent to distribute more than one kilogram of heroin is a federal crime punishable by 10 years to up to life in prison. Both conspiracy and possession with intent to distribute heroin and conspiracy to commit money laundering are crimes punishable by up to 20 years in prison.

 

U.S. Attorney Glassman commended the cooperative efforts of law enforcement, as well as Deputy Criminal Chief Michael Hunter, and Special Assistant United States Attorney Jane M. Hanlin who are prosecuting the case.

 

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CINCINNATI –Carlos Ruiz-Rodriguez, 25, of Cincinnati, Ohio, was sentenced to 15 months for extortion against a Cincinnati-based company.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the sentence handed down yesterday by U.S. District Judge Michael R. Barrett.

 

Ruiz-Rodriguez was indicted by a federal grand jury in August 2016. He pleaded guilty on November 30, 2016 to intruding computers, stealing proprietary information from his employer, and then extorting his employer.

 

He had been employed at the company for approximately two years as a call center employee. In his role, he had access to the company’s customer service portal and personally identifiable information for certain clients. He used credentials for another employee to obtain the proprietary company information.

 

Ruiz-Rodriguez sent multiple extortion emails to the company between November 2015 and January 2016 via the internet claiming that he had hacked the company. He also provided proof of compromise of the company’s data. He stated that if the company did not pay a Bitcoin ransom, then the company schematics and client data would be released to the public.

 

Ruiz-Rodriguez, through an intermediary, then posted the company’s data on an internet “dark web” forum and received two separate ransom payments from the employer totaling approximately $15,000. Ruiz-Rodriguez was also ordered to pay restitution of $277,278.98 to the employer and $259,212.74 to the employer’s insurer.

 

U.S. Attorney Glassman commended the investigation of this case by the FBI, and Assistant United States Attorney Tim Mangan, who is prosecuting the case.

COLUMBUS – Ikechi W. Emeaghara, 27, of Columbus, pled guilty today to eight counts of armed bank robbery. Emeaghara is the armed robber dubbed as the “Buckeye Bandit” by law enforcement.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Office; Columbus Police Chief Kim Jacobs; Franklin County Sheriff Dallas Baldwin; Delaware County Sheriff Russell L. Martin; Ohio State University Police Chief Craig Stone; Worthington Police Chief Jerry L. Strait, Jr.; Upper Arlington Police Chief Tracy Hahn and Gahanna Police Chief Dennis Murphy announced the guilty pleas entered today.

 

According to court documents, Emeaghara brandished a dangerous weapon and demanded cash from bank teller’s drawers on the following occasions:

 

• October 31, 2013 at the Wesbanco Bank on South Stygler Road in Gahanna

• November 30, 2013 at the Cooper State Bank on West 5th Avenue in Columbus

• December 6, 2013 at the Wesbanco Bank on South Stygler Road in Gahanna

• July 9, 2014 at the Smart Federal Credit Union on North High Street in Columbus*

• January 12, 2015 at the Cooper State Bank on Sawmill Road in Columbus*

• April 26, 2015 at the Cooper State Bank on Sawmill Road in Columbus*

• March 17, 2016 at the First Merit Bank on East Powell Road in Powell

• October 21, 2016 at the Key Bank on Frantz Road in Columbus (original indictment)

 

* Denotes armed robbery charges that also include forcing one or more persons to accompany him within the bank.

 

Emeaghara was indicted by the federal grand jury in initial and superseding indictments in November and December 2016.

 

Armed bank robbery is a crime punishable by up to 25 years in prison. Armed robbery including forcing one or more persons to accompany the defendant without their consent is punishable by a mandatory minimum 10 year prison term, with a possible 25 year maximum.

 

U.S. Attorney Glassman commended the cooperative investigation by law enforcement and Deputy Criminal Chief Gary L. Spartis and Assistant U.S. Attorney Salvador A. Dominguez, who are prosecuting the case.

COLUMBUS, Ohio – Randall J. Frye, 58, of Columbus, pleaded guilty in U.S. District Court to conspiring to participate in a dog-fighting ring in central Ohio.

 

In November 2016, Charles A. Granberry, 40, of Columbus pleaded guilty to the same dog-fighting charge and to illegally possessing a firearm.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Anthony Mohatt, Special Agent in Charge, Midwest Region, U.S. Department of Agriculture Office of Inspector General, Columbus Police Chief Kim Jacobs, Franklin County Prosecuting Attorney Ron O’Brien, and Capital Area Humane Society Executive Director Rachel D.K. Finney announced the plea entered today before U.S. Magistrate Judge Terrance P Kemp.

 

According to court documents, law enforcement officers found dogs at the homes of Frye and Granberry. Each house was used to train, fight and sell dogs, including at least 20 fighting dogs in the rear yard and attic of one house and at least nine dogs at Frye’s residence, some that were chained to heavy automobile axles buried in the ground.

 

Officers executed search warrants on April 5, 2016 at five Columbus houses. Agents seized evidence including more than 40 dogs along with cages, treadmills, heavy chains and collars and other items. Agents found canine blood on the floor and walls of the basement of one home indicating that the area was used as a dog fighting pit.

 

Items seized specifically at Frye’s residence also included dog fighting publications, articles authored by Frye about his well-known fighting dogs “Stein” (circa 1987) and “Miles Davis” (circa 1997) and shipping documents showing interstate and international shipment of fighting dogs.

 

Frye was charged by a Bill of Information on February 16.

 

Conspiracy is punishable by up to five years in prison and a fine of up to $250,000.

 

U.S. Attorney Glassman commended the ongoing investigation by the USDA-OIG, Columbus Police and the Humane Society, as well as Assistant U.S. Attorneys J. Michael Marous and Jessica Knight, and Franklin County Assistant Prosecutor Heather Robinson, who are representing the United States in this case.

 

COLUMBUS, Ohio – Alden Leeds, Inc., a New Jersey swimming pool and spa chemicals company, and its president, Mark Epstein, were sentenced in U.S. District Court for convictions related to customs and import violations. The case was unsealed today. Epstein was sentenced to serve eight months in prison and four months of home confinement for his role in an elaborate rebate scheme which involved false statements to U.S. Customs, followed by inflated payments for imported chemicals and then rebates paid back to Alden Leeds, Inc. The company was also sentenced, receiving three years of probation and ordered to pay restitution to Customs in the amount of $2.25 million.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, the Environmental and Natural Resources Division of the Department of Justice, Steve Francis, Acting Special Agent in Charge, U.S. Department of Homeland Security Investigations (HSI), Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and John K. Gauthier, Acting Special Agent in Charge, U.S. Environmental Protection Agency (EPA) criminal enforcement program announced the sentences handed down on February 1 by Senior U.S. District Judge James L. Graham.

 

Epstein and Alden Leeds, Inc. had an agreement with a middleman to establish two prices for the imported chlorine – an “actual price” that the company was paying and a higher “invoice price” that would be used for documentation at U.S. Customs to avoid suspicions of dumping.

 

Dumping occurs when foreign merchandise is sold in the United States for less than fair market value, which prevents fair competition between United States companies and foreign industry.

 

According to court documents, from 1998 through at least June 2012, various businesses in Columbus, Ohio served as the American representative for domestic companies seeking to import swimming pool sanitizing agents from China.

 

As the middleman, Caiwei Sheng operated the Columbus businesses and engaged in a scheme that involved using a shell corporation in Vietnam to make it appear that the chlorine was manufactured there instead of China. This was done to avoid a 286 percent anti-dumping duty or tax that was ordered by the Department of Commerce beginning in 2005. No such anti-dumping duty existed for Vietnam as it did China.

 

As part of the rebate scheme, the price of the chlorine was deliberately overstated at Customs. the time the chlorine was imported. Sheng would receive payment for the inflated, invoice price and he would then wire the lesser actual price for the chlorine to the originating companies in Vietnam and China before wiring a rebate to Alden Leeds, Inc.

 

At the request of Alden Leeds, Inc., the rebate was labeled a “consulting fee” and sent to one of the company’s sister corporations in another state.

 

“The Alden Leeds company and its president, Mark Epstein, conspired with others to make false statements to Customs about the price of the chlorine they were buying from China and Vietnam, in order to avoid potentially higher duties aimed at ensuring fair competition between United States companies and foreign industry,” U.S. Attorney Glassman said. “Now, not only do they have to pay Customs $2.5 million and fines and forfeiture of $500,000, but Epstein must serve time in federal prison and Alden Leeds will spend three years on probation. Those who import goods from overseas must tell the truth to Customs and play fair with American companies.”

 

Epstein pleaded guilty on February 1 to one count of conspiracy to make false statements and violate United States’ customs and importation laws and one count of entry of goods by means of false statement. As part of the plea agreements, Epstein is paying $500,000 in restitution and forfeiture and Alden Leeds, Inc. is paying $2.25 million in restitution. Alden Leeds, Inc. also agreed to donate 2,765 gallons of hospital grade disinfectant to the Ministry of Public Health and Population of Haiti.

 

Sheng pleaded guilty to violating Customs laws as well as USEPA laws requiring truthful statements concerning the importation of chemicals into the United States, and on August 21, 2015, was sentenced to a prison term of 12 months and one day in prison and ordered to pay restitution of $100,000.

 

U.S. Attorney Glassman commended the investigation of this case by HSI, IRS Criminal Investigation, FBI and U.S.EPA, as well as Assistant United States Attorneys J. Michael Marous and Jessica W. Knight and Department of Justice Senior Trial Attorney Christopher J. Costantini who are representing the United States in this case.

COLUMBUS, Ohio – Brian K. Skeens, 49, and Toby Lee Thacker, 56, of Wellston, Ohio were sentenced in U.S. District Court for violating the Native American Graves Protection and Repatriation Act by trafficking the human remains of Native Americans. The case is the first criminal enforcement of the Native American Graves Protection and Repatriation Act in the Southern District of Ohio.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Jackson County Sheriff Tedd E. Frazier and Rick Perkins, Chief Ranger, National Park Service at Hopewell Culture National Historical Park, announced the sentences.

 

Skeens was sentenced to 90 days in prison and Thacker to 30 days in prison for engaging in the excavation and sale of the human remains of a Native American.

 

Mark M. Beatty, 57, purchased the human remains. He was sentenced in August to serve three years of probation including three months of home confinement, pay a $3,500 fine and pay $1,000 in restitution to the Miami Tribe of Oklahoma, to be used for re-burial of the Native American remains. The remains will be transferred to the federally recognized tribes who have assisted with this case, and re-buried in Ohio at an undisclosed location and in private once all the court proceedings are completed.

According to court documents, a witness saw people digging in a rock shelter on property on Sour Run Road in Jackson County, Ohio in November 2012 and chased them off. They left behind shovels, dirt sifters, buckets and trash. Sheriff Frazier’s investigators confirmed that three Wellston men – David E. Skeens, 40, Brian K. Skeens, and Thacker – had been digging on the property and had unburied human remains and artifacts. And subsequently, Beatty illegally bought those remains.

An anthropologist confirmed that the human remains were consistent with Native Americans, specifically identifiable by cradle boarding, a cultural activity used only by Native American Indians in North America. The identity of the remains was also confirmed by an archeologist, who verified that rock shelters were used extensively for burials in Southern Ohio and specifically in Jackson County. DNA testing confirmed a direct connection between tribes living thousands of years ago to present day Native Americans.

David Skeens was sentenced on July 21, 2016 to 30 days’ incarceration followed by a year of supervised release and ordered to pay $1,000 in restitution after pleading guilty to one count of illegal trafficking of Native American remains.

U.S. Attorney Glassman commended the investigation by the Jackson County Sheriff’s Office and the Department of the Interior, and the participation from an archeologist from Wayne National Forest and researchers from Ohio University, The Ohio State University, Washington State University and the FBI, as well as Assistant United States Attorneys J. Michael Marous and Brian Martinez, who are representing the United States in this case.

DAYTON – Michael Rose, 29, of New Carlisle, Ohio, pleaded guilty in U.S. District Court to attempted extortion under the color of law.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Montgomery County Sheriff Phil Plummer announced the plea entered into today before U.S. District Judge Walter H. Rice.

 

According to the Statement of Facts in this case, Rose began working as a corrections officer at the Montgomery County Jail in spring 2016. In September of that year, Rose agreed to bring contraband – namely, a cell phone – into the jail in exchange for cash from an inmate. Likewise, in November 2016, Rose smuggled in a second cell phone and met with an associate of an inmate near a Dayton retail store to receive $1,500 as payment. Rose provided the phone knowing that the inmate intended to use it to direct drug trafficking activities from jail.

 

“Corruption by a corrections officer harms not only the jail where he or she works, but it also undermines confidence in law enforcement and our system of justice generally,” U.S. Attorney Glassman said. “That’s why it’s so important for us to investigate and prosecute instances of public corruption like this one.”

 

Rose pleaded guilty to attempted extortion under color of official right, which is a crime punishable by up to 20 years in prison.

 

U.S. Attorney Glassman commended the investigation of this case by the Montgomery County Sheriff’s Office RANGE Task Force and the FBI, as well as Assistant United States Attorney Brent Tabacchi, who is representing the United States in this case.

DAYTON – Tony Chancellor, 24, of Dayton, was sentenced in U.S. District Court to 84 months in prison for possessing a firearm after having been convicted of a felony.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Dayton Police Chief Richard Biehl, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), who are all members of the Community Initiative to Reduce Gun Violence (CIRGV), announced the sentence handed down today by U.S. District Judge Thomas M. Rose.

 

According to court documents, on November 9, 2015 during routine patrol, Dayton Police attempted to make contact with Chancellor, who was standing in the middle of the street. As they approached, Chancellor fled police and dropped a 9mm firearm he was carrying. At the time he possessed the firearm, he had previously been convicted of felony offenses, including aggravated robbery with a deadly weapon in 2010 and robbery with use of force in 2014.

 

He pleaded guilty on January 25, 2016 to a Bill of Information charging him with one count of possession of a firearm by a convicted felon.

 

U.S. Attorney Glassman commended the cooperative investigation by those involved in the Community Initiative to Reduce Gun Violence, as well as Assistant United States Attorney Andrew Hunt, who is representing the United States in this case.

CINCINNATI – A federal grand jury has charged Rodney D. Cydrus, 47, formerly of Chillicothe, with charges related to threatening United States judges and federal law enforcement officials in an indictment returned in Cincinnati. Cydrus is currently an inmate at Lebanon Correctional Institution.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), and Mark Porter, Special Agent in Charge, U.S. Secret Service, announced the indictment returned yesterday afternoon.

 

The indictment alleges that on five separate occasions, from January 17 through January 31, 2017, Cydrus mailed letters threatening to injure numerous government officials, including the President of the United States, federal judges, the FBI and the Federal Public Defender’s Office. Four of the letters were addressed to the FBI and one letter was addressed to the Federal Public Defender’s Office. In addition, two of the letters included a powdered substance as part of the threat, although the powder was determined to be non-toxic.

 

Mailing threatening communications is a crime punishable by up to 10 years in prison.

 

U.S. Attorney Glassman commended the investigation of this case by the FBI and U.S. Secret Service, and Assistant United States Attorney Timothy S. Mangan, who is prosecuting the case.

 

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

DAYTON – Leanna Heskett, 47, of Springfield, was sentenced in U.S. District Court today to serve five months in prison for more than 100 instances of stealing items from packages she handled as a mail processing clerk at the Springfield, Ohio Post Office in 2015.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio and Monica Weyler, Special Agent in Charge, U.S. Postal Service Office of Inspector General Eastern Area Field Office announced the sentence handed down today by U.S. District Judge Thomas M. Rose.

 

According to court testimony, Heskett’s job with the Postal Service was to receive and sort mail and packages and prepare them for delivery by postal carriers. In 2014, customers in Springfield reported receiving packages with items missing from inside the packages. Several postal carriers in Springfield also reported noticing open parcels among those they received for delivery. USPS-OIG investigators determined that Heskett had been opening and stealing mail. Heskett pleaded no contest on August 1, 2016 to one count of mail theft.

 

Security video documented Heskett placing packages into her pants and leaving the work area, as well as opening packages, removing the contents and resealing the packages.

 

Heskett was also sentenced to two years of supervised release, to be served following her release from prison, including seven months of home confinement.

 

U.S. Attorney Glassman commended the investigation of this case by the USPS-OIG and First Assistant United States Attorney Vipal Patel, who represented the United States in this case.

DAYTON – William M. Apostelos, 55, formerly of Springboro, Ohio, pleaded guilty in U.S. District Court today to charges related to a $70 million Ponzi scheme that defrauded nearly 500 victims. Specifically, Apostelos pleaded guilty to conspiracy to commit wire and mail fraud and conversion of funds from an employee benefit fund.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office; Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI); Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service; James Vanderberg, Special Agent in Charge, U.S. Department of Labor Office of Inspector General; Joe Rivers, Regional Director of the U.S. Department of Labor Employee Benefits Security Administration; and Brian Peters, Enforcement Attorney, Ohio Department of Commerce Division of Securities, announced the plea entered into today before U.S. District Judge Thomas M. Rose.

 

Apostelos and his wife, Connie, also known as Connie Coleman, were indicted in October 2015. According to court documents, beginning in 2009, and continuing for at least five years, the couple and others orchestrated a Ponzi scheme in the Dayton area in which nearly 480 investors lost more than $20 million collectively. Apostelos received $70 million in investment funds in total.

 

William Apostelos operated and oversaw multiple purported investment and asset management companies in the Dayton area, including WMA Enterprises, LLC, Midwest Green Resources, LLC and Roan Capital. He falsely reported that he held a degree in mathematics and was a registered securities broker.

 

Connie Apostelos also operated and oversaw multiple companies in the Dayton area, including Coleman Capital, Inc. and Silver Bridle Racing, LLC. These companies were allegedly operated through improper use of investor funds to William Apostelos’ companies.

 

The couple recruited investors from 37 states to invest in WMA and Midwest Green, telling the investors that their money would be used for acquiring stocks or securities, purchasing real estate or land, providing loans to business and buying gold and silver.

 

Rather than investing the money, the couple used it to pay for personal luxuries. According to court documents, William Apostelos was spending $35,000 per month on his wife’s horse racing company and $400 per month on Victoria’s Secret lingerie.

 

When the defendants became late on interest payments to the victims, they advised that their bank account had been hacked, a bank mistakenly failed to wire payment and/or the deal the victim had invested in was temporarily on hold.

 

The government has seized two race horses, vehicles, jewelry, artwork and cash totaling approximately $650,000 from the couple.

 

“William Apostelos took advantage of nearly 500 people, defrauding them of honestly earned money, in order to fuel his own lavish lifestyle,” U.S. Attorney Glassman said. “We will hold schemers like Apostelos accountable for their actions.”

 

“The investigation of William Apostelos uncovered a multi-million dollar Ponzi scheme laced with a web of financial lies that left approximately 500 investors in financial peril,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime. Combining the financial investigative expertise of the IRS with the skills and resources of our law enforcement partners and the U.S. Attorney’s Office makes a formidable team for combating major, greed-driven crimes.”

 

“William Apostelos engaged in an extensive fraud scheme that impacted hundreds of victims, including American workers who lost approximately $1.9 million in ERISA covered pension assets. We will continue to work with our law enforcement partners to safeguard employee benefit plan assets," stated James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the United States Department of Labor, Office of Inspector General.

 

William Apostelos pleaded guilty to conspiracy to commit mail and wire fraud and theft or embezzlement from an employee benefit plan. As part of his plea agreement, the parties involved have recommended to the court a sentence of 180 months in prison. That sentencing recommendation will be considered by the Judge at a future sentencing hearing, which has yet to be scheduled.

 

Steven Scudder, 62, of Centerville, an attorney who served as trustee of the WMA Trust, pleaded guilty in U.S. District Court on January 19 to wire fraud, admitting that he used his position as an attorney to facilitate the fraudulent investment scheme.

 

U.S. Attorney Glassman commended the investigation of this case by law enforcement, and Assistant United States Attorney Brent G. Tabacchi and Deputy Criminal Chief Laura Clemmens, who are prosecuting the case.

COLUMBUS, Ohio – A United States District Court jury convicted Joshua D. Chapman-Sexton, 31, of Buckeye Lake, Ohio, of all counts, which include receipt and possession of child pornography. Chapman-Sexton had been previously convicted of similar federal charges in 2010 and had been released from prison after serving his sentence. He was on supervised release when he committed the new offenses.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Westerville Police Chief Joe Morbitzer, Buckeye Lake Police Chief Jimmy Hanzey and members of the FBI’s Child Exploitation Task Force announced the verdict reached yesterday evening, which was returned following a trial that began on February 6 before U.S. District Judge Algenon L. Marbley.

 

According to court documents and testimony, a thumb drive in Chapman-Sexton’s Playstation contained more than 700 images of children engaged in sexual activity.

 

Despite the defendant’s claim that he had been set up and the child pornography was planted on the device when it was stolen on February 28, 2016, forensic evidence revealed that the child pornography had been downloaded continuously from July 2014 until February 27, 2016.

 

Chapman-Sexton was indicted by a federal grand jury of two counts of receipt of child pornography and one count of possession of child pornography on July 21, 2016.

 

Receipt of child pornography in this case is punishable by a range of 15 to 40 in prison per count because of Chapman-Sexton’s prior conviction. Likewise, because of the prior conviction, possession of child pornography in this case includes a potential maximum sentence of 20 years in prison.

 

This case was prosecuted by Assistant United States Attorneys Heather A. Hill and Jessica W. Knight. It was investigated by FBI’s Child Exploitation Task Force.

COLUMBUS, Ohio – A federal grand jury has charged Lerenzo M. White, aka “Justice” and “Justin,” 30, of Columbus, with five counts of human trafficking in an indictment returned in Columbus.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Ohio Attorney General Mike DeWine and members of the Central Ohio Human Trafficking Task Force, including Steve Francis, Acting Special Agent in Charge, Homeland Security Investigations (HSI), Franklin County Prosecutor Ron O’Brien, Columbus Police Chief Kim Jacobs and Franklin County Sheriff Dallas Baldwin announced the indictment returned January 26, which was unsealed today at White’s initial appearance. White was arrested yesterday by Task Force agents.

 

The indictment alleges that White, through force, fraud or coercion, trafficked at least five females for the purpose of commercial sex acts. According to the indictment, White allegedly recruited and harbored women from at least July 2013 through May 2016. It is alleged that he used violence and the threat of drug withdrawal, namely heroin, to force young women to prostitute themselves at various hotels and residences throughout Ohio for his financial benefit.

 

Sex trafficking by force, fraud or coercion is punishable by a range of 15 years up to life in prison.

 

U.S. Attorney Glassman commended the investigation of this case by the Ohio Attorney General’s Ohio Organized Crime Investigations Commission Human Trafficking Task Force, which includes authorities from the U.S. Homeland Security Investigations, Columbus Division of Police, Ohio State Highway Patrol, the Franklin County Sheriff’s Office, the Franklin County Prosecutor’s Office and the Delaware County Prosecutor's Office, as well as Assistant U.S. Attorney Heather A. Hill and Special Assistant U.S. Attorney Jennifer M. Rausch, Director of the Franklin County Special Victims Unit, who are prosecuting the case.

 

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

 

Anyone with information regarding this case is encouraged to contact the ICE HSI Tip Line at 866-DHS-2-ICE (866-347-2423).

COLUMBUS, Ohio – The U.S. Probation Office for the Southern District of Ohio and the Ohio Department of Public Safety, Bureau of Motor Vehicles have created a supervision ID card for inmates leaving federal prison. The ID serves as a legitimate form of identification to obtain a state of Ohio ID or driver’s license.

 

The Department of Justice urged districts nationwide to enhance the identification process as part of BOP reforms announced in November 2016, recognizing that possession of government-issued identification documents is critical to successful reentry. Without such documentation, men and women leaving correctional facilities face significant challenges securing employment and housing, registering for school, opening bank accounts and accessing other benefits, such as health care, that are critical to successful integration.

 

The initiative in the Southern District of Ohio, which launched last month, allows recently released eligible offenders to obtain an Ohio ID card, learner’s permit, driver’s license or commercial driver’s license. Eligible offenders include those who have been released from the U.S. Bureau of Prisons system, are citizens or legal residents of the United States and who reside in Ohio.

 

The Probation Office will provide the offender with a U.S. Offender Release Card, which contains the individual’s photograph, legal name, date of birth, social security number and an expiration date. That Card can then be exchanged for the official state ID at the BMV.

 

“I commend Chief U.S. Probation Officer John Dierna and his team for bringing to fruition a practical and tangible solution for inmates leaving our federal facilities and returning to the Southern District of Ohio,” U.S. Attorney Glassman said. “Obtaining an ID seems simple enough, but for many of the men and women leaving federal prison, it can pose an enormous barrier to gaining employment and moving forward with productive and law-abiding lives. Removing this kind of barrier promotes public safety by improving the likelihood of successful reentry.”

DAYTON – Richard C. Webber, 54, of Huber Heights, Ohio, was sentenced in U.S. District Court today to serve 24 months in prison and 10 years of supervised release for possession of child pornography.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division and Montgomery County Sheriff Phil Plummer announced the sentence handed down today by U.S. District Judge Walter H. Rice.

 

Webber was charged on March 25, 2016 in a bill of information and pleaded guilty on May 9, 2016. According to court documents, Webber used “Peer-to-Peer” software and file-sharing programs and applications to obtain, download, view, possess with intent to distribute, share and transfer child pornography.

 

Webber possessed videos depicting child pornography on a shared file folder on his home desktop computer and various storage devices in his home in Huber Heights. Upon executing a search warrant, investigators discovered more than 1,200 pictures and 170 video files of child pornography, including those depicting prepubescent minors.

 

Webber’s sentence includes a requirement that he register as a sex offender anywhere that he lives, works or attends school. He was also ordered to pay restitution and forfeit various computers and computer media.

 

This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.

 

U.S. Attorney Glassman commended the investigation of this case by the FBI and Montgomery County Sheriff’s Office, as well as Assistant United States Attorney Andrew J. Hunt and First Assistant United States Attorney Vipal Patel, who represented the United States in this case.

CINCINNATI – U.S. Attorney Benjamin C. Glassman announced a final order of forfeiture has been filed in U.S. v. Christopher Whitfield, Tonia Whitfield and Steven Griffin, ordering the forfeiture of the more than $1 million in cash, among other things, that had been seized during the execution of search warrants in this case.

 

The Cincinnati Police Department will net approximately $450,000 from equitable sharing.

 

Also included in forfeiture in this case are: seven firearms, three properties in Cincinnati, five vehicles including two luxury vehicles and a motorcycle, multiple pieces of jewelry, Gucci and Rolex watches, two ballistic vests, a number of “mink” fur coats and vests, 13 designer handbags and Beats headphones and ear buds.

 

“This is a great illustration of the value of criminal forfeiture,” U.S. Attorney Glassman said. “Instead of enriching drug dealers, these proceeds will now be put to use combatting addiction and the other ravages of drug trafficking.”

 

“One of the government's most powerful weapons is the ability to seize through asset forfeiture the assets associated with narcotics-related crimes,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs. Without these ill-gotten gains, the traffickers could not finance their organizations.”

 

Christopher Whitfield, 42, of Cincinnati, Ohio was sentenced on November 3, 2016 to 120 months in prison after pleading guilty to one count of conspiracy to commit money laundering.

 

Tonia Whitfield, 41, of Cincinnati, Ohio was sentenced on December 14, 2015 to 12 months and one day in prison on three counts of money laundering.

 

Steven Griffin, 41, of Cincinnati, Ohio was sentenced on January 13, 2016 to 87 months in prison on one count each of possession with intent to distribute heroin and a felon in possession of a firearm.

 

A federal grand jury indicted the defendants in a 23-count indictment returned in April 2015. The indictment outlined that the group conspired to facilitate an illegal drug business, primarily cocaine and heroin.

 

As part of the conspiracy, the defendants operated “stash” houses to process, cut, package and store the drugs as well as firearms and money. In order to conceal the money generated from the drug sales, defendants would launder the profits by purchasing real and personal property and place assets in the names of other individuals.

 

This case was investigated by IRS-Criminal Investigation, FBI and the Cincinnati Police Department and was prosecuted by Assistant U.S. Attorneys Karl Kadon and Jessica W. Knight.

Today the government unsealed a plea agreement with the owner and operator of Columbus Southern Medical Center, which provided unlawful prescriptions of controlled substances to addicts throughout the Midwest and who engaged in a series of schemes to evade more than $3.5 million in taxes, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio.

 

Kevin B. Lake, 50, of New Albany, Ohio, pleaded guilty to drug, tax and fraud charges and agreed to the forfeiture of what remains from the $29 million in seized funds earned from the clinic’s illegal activities, after restitution is paid from the funds.

 

According to court documents, Lake owned and managed Columbus Southern Medical Center through one or more corporate or trust entities which he used to insulate himself from the illegal drug trafficking being conducted at the clinic.

 

In the filed plea document, he admitted that between 2006 and 2013, he knew doctors and staff at the 2912 South High Street clinic prescribed controlled substances to patients without a legitimate medical purpose. During that time, hundreds of patients showed up daily – 85 percent of whom were returning patients – to receive prescriptions of oxycodone, hydrocodone and Xanax. The percentage of patients who were prescribed these controlled substances rose each year, jumping from nearly 60 percent in 2004 to nearly 92 percent in 2009 and 2010.

 

Lake agreed to plead guilty to maintaining the clinic as a drug premises. He also admitted that he exclusively controlled all of the proceeds generated by the illegal activity being conducted by the doctors, physician assistants and staff at the clinic, which was more than $38 million in payments for patient visits. He admitted to engaging in more than $20 million in money laundering transactions with these illegal drug proceeds.

 

The doctor also agreed to plead guilty to tax evasion on his personal income tax returns and admitted to filing fraudulent tax returns for his corporations and trusts. He paid himself more than $90,000 in 2010 through 2013 from the clinic entities, which he did not report as income, but instead disguised as phony rental payments ostensibly for use of his personal residence for corporate retreats. He also took inflated charitable contribution deductions on his individual income tax returns. In addition, Lake admitted causing the filing of corporate tax returns that falsely claimed inflated depreciation deductions for nearly $7.4 million in so-called “equipment” purchases by his corporations from his trust for tax years 2005 through 2011. He also admitted to falsely reporting these purchases as capital gains on his trust tax returns rather than as ordinary income, thereby securing a much lower tax rate. Lake’s tax crimes caused a tax loss of more than $3.5 million.

 

After the DEA first appeared at the clinic in June 2010, Lake took several steps to separate himself from the drug premises; he stopped paying himself a salary, and instead filed a fraudulent claim for disability payments from his two disability insurers. The insurance companies ultimately denied his claims, and only paid out $18,000. Lake also sold the clinic’s remaining stock to employees through an Employee Stock Ownership Plan (ESOP) for the inflated price of $14 million.

 

After the ESOP sale and the denial of his fraudulent disability claim, Lake fraudulently filed for and collected unemployment benefits, stealing more than $20,000 in government funds.

 

Finally, the doctor admitted to defrauding the Bureau of Workers’ Compensation by having employees upcode office visits in order to bill for higher level medical services in addition to those provided by physician assistants as if they were provided by physicians, causing a loss of more than $260,000.

 

As part of the plea agreement, and due to Lake’s cooperation in the government’s investigation, the parties involved recommended to the court that Lake receive a sentence of 60 months in prison. Judge Watson will consider the recommended sentence at a sentencing hearing that has yet to be scheduled.

 

“At the same time Dr. Lake was running his medical center as an illegal drug premises, he took every opportunity to cheat the U.S. Treasury out of millions of dollars in taxes,” said Acting Deputy Assistant Attorney General Goldberg. “As the income tax filing season begins, Lake’s guilty plea is a stark reminder of what awaits those filing false returns -- no matter their profession, income level or the complexity of their scheme.”

 

“For seven years, Kevin Lake operated Columbus Southern Medical Center as a pill mill,” said U.S. Attorney Glassman. “He got rich by feeding the addictions of hundreds and hundreds of people. Thanks to the thorough investigation of federal, state, and local law enforcement agencies, however, Lake has agreed to plead guilty to drug, tax, and fraud charges, forfeit his ill-gotten gains, and serve time in federal prison for his misdeeds.”

 

“Today’s guilty plea exemplifies DEA’s determination to combat the troubling prescription drug and opiate abuse problem currently plaguing this country,” said Drug Enforcement Administration (DEA) Special Agent in Charge Timothy J. Plancon. “Kevin Lake abused his position of trust and jeopardized the lives of many individuals, by conspiring with others to illegally prescribe controlled substances that ended up being consumed throughout Ohio and the surrounding states. This investigation uncovered the elaborate lengths that Lake undertook to conceal his illegal profits, and the seizure of $29 million from Lake is indicative of the scope of his illegal activity. Lake’s guilty plea should serve as a warning to all medical professionals that if you prescribe medicine for personal gain, you will be prosecuted to the fullest extent of the law. This investigation was a success thanks to the outstanding investigative work by all of our federal, state, and local law enforcement partners.”

 

“Dr. Lake’s conduct detailed in this case is egregious and had such a negative impact on our community,” said Acting Special Agent in Charge Troy N. Stemen of Internal Revenue Service Criminal Investigation (IRS-CI), Cincinnati Field Office. “This is an important victory for the citizens of Central Ohio. Dr. Lake not only fueled the prescription drug problem in Central Ohio, but he supported addiction in several parts of the country. As a result of this joint investigative effort, the government has seized a significant portion of the illegal proceeds through asset forfeiture, and Dr. Lake is faced with having to pay back taxes with interest and steep penalties.”

 

“The Office of Inspector General congratulates the U.S. Attorney’s Office and all of the investigators on this important case,” said Special Agent in Charge James Vanderberg of the U.S. Department of Labor, Office of Inspector General’s Chicago Region. “The OIG will continue to work with our law enforcement partners to investigate unemployment insurance fraud and employee retirement plan fraud schemes.”

 

“There is no doubt that today’s opiate epidemic is due in large part to the overprescribing of prescription pain medication across this state,” said Ohio Attorney General Mike DeWine. “This defendant preyed on those battling addiction in an effort to make millions from their suffering. An incredible amount of hard work went into investigating and prosecuting this case. Because of this team effort, this pill mill operation has been shut down.”

 

“We place trust in our healthcare professionals to provide quality treatment that improves the health of injured workers,” said Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Sarah Morrison. “We’re pleased to do our part to address the problem of prescription drug abuse in Ohio, as well as put an end to Dr. Lake’s fraudulent billing scheme.”

 

“It is through the hard work of the investigators and the cooperation of agencies at the federal, state, and local level that led to the successful investigation and prosecution of this pill mill,” said Columbus Police Deputy Chief Michael Woods.

 

Three co-defendants have pleaded guilty as part of this case. Dr. Terry Dragash was sentenced in October 2014 to one year in prison for conspiracy to distribute drugs as a result of his conduct in prescribing at the clinic. Dr. David Rath pleaded guilty to a similar conspiracy charge. And in December 2015, Karen Climer – another employee of Lake’s – pleaded guilty to conspiracy and was sentenced to six months in prison after the government revealed she was cooperating in the investigation into Lake.

 

Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Glassman commended the investigation of this case by the DEA Tactical Diversion Squad – including the Ohio Attorney General’s Bureau of Criminal Investigation (BCI) and Columbus Division of Police – IRS Criminal Investigation, Ohio Bureau of Workers’ Compensation, Department of Labor OIG and Employee Benefits Security Administration, Central Ohio Drug Enforcement Task Force, Franklin County Sheriff’s Office, Ohio State Board of Pharmacy and the State Medical Board of Ohio, as well as Assistant U.S. Attorney Kenneth F. Affeldt and Department of Justice Tax Division Trial Attorneys Richard M. Rolwing and Carl F. Brooker, who are representing the United States in this case.

 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

 

COLUMBUS, Ohio – Today the government unsealed a plea agreement with the owner and operator of Columbus Southern Medical Center, which provided unlawful prescriptions of controlled substances to addicts throughout the Midwest and who engaged in a series of schemes to evade more than $3.5 million in taxes.

 

Kevin B. Lake, 50, of New Albany, Ohio, pleaded guilty to drug, tax and fraud charges and agreed to the forfeiture of what remains from the $29 million in seized funds earned from the clinic’s illegal activities, after restitution is paid from the funds.

 

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Department of Justice’s Tax Division; Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Agency (DEA); Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation; James Vanderberg, Special Agent in Charge, U.S. Department of Labor Office of the Inspector General; Joe Rivers, Regional Director of the U.S. Department of Labor Employee Benefits Security Administration; Ohio Attorney General Mike DeWine; Ohio Bureau of Workers’ Compensation Administrator/CEO Sarah Morrison and Columbus Police Chief Kim Jacobs announced the plea that is scheduled to be entered into today at 2pm before U.S. District Judge Michael H. Watson.

 

According to court documents, Lake owned and managed Columbus Southern Medical Center through one or more corporate or trust entities which he used to insulate himself from the illegal drug trafficking being conducted at the clinic.

 

In the filed plea document, he admitted that between 2006 and 2013, he knew doctors and staff at the 2912 South High Street clinic prescribed controlled substances to patients without a legitimate medical purpose. During that time, hundreds of patients showed up daily – 85 percent of whom were returning patients – to receive prescriptions of oxycodone, hydrocodone and Xanax. The percentage of patients who were prescribed these controlled substances rose each year, jumping from nearly 60 percent in 2004 to nearly 92 percent in 2009 and 2010.

 

Lake agreed to plead guilty to maintaining the clinic as a drug premises. He also admitted that he exclusively controlled all of the proceeds generated by the illegal activity being conducted by the doctors, physician assistants and staff at the clinic, which was more than $38 million in payments for patient visits. He admitted to engaging in more than $20 million in money laundering transactions with these illegal drug proceeds.

 

The doctor also agreed to plead guilty to tax evasion on his personal income tax returns and admitted to filing fraudulent tax returns for his corporations and trusts. He paid himself more than $90,000 in 2010 through 2013 from the clinic entities, which he did not report as income, but instead disguised as phony rental payments ostensibly for use of his personal residence for corporate retreats. He also took inflated charitable contribution deductions on his individual income tax returns. In addition, Lake admitted causing the filing of corporate tax returns that falsely claimed inflated depreciation deductions for nearly $7.4 million in so-called “equipment” purchases by his corporations from his trust for tax years 2005 through 2011. He also admitted to falsely reporting these purchases as capital gains on his trust tax returns rather than as ordinary income, thereby securing a much lower tax rate. Lake’s tax crimes caused a tax loss of more than $3.5 million.

 

After the DEA first appeared at the clinic in June 2010, Lake took several steps to separate himself from the drug premises; he stopped paying himself a salary, and instead filed a fraudulent claim for disability payments from his two disability insurers. The insurance companies ultimately denied his claims, and only paid out $18,000. Lake also sold the clinic’s remaining stock to employees through an Employee Stock Ownership Plan (ESOP) for the inflated price of $14 million.

 

After the ESOP sale, and the denial of his fraudulent disability claim, Lake fraudulently filed for and collected unemployment benefits, stealing more than $20,000 in government funds.

 

Finally, the doctor admitted to defrauding the Bureau of Workers’ Compensation by having employees upcode office visits in order to bill for higher level medical services in addition to those provided by physician assistants as if they were provided by physicians, causing a loss of more than $260,000.

 

As part of the plea agreement, and due to Lake’s cooperation in the government’s investigation, the parties involved recommended to the court that Lake receive a sentence of 60 months in prison. Judge Watson will consider the recommended sentence at a sentencing hearing that has yet to be scheduled.

 

“At the same time Dr. Lake was running his medical center as an illegal drug premises, he took every opportunity to cheat the U.S. Treasury out of millions of dollars in taxes," said Acting Deputy Assistant Attorney General Goldberg. "As the income tax filing season begins, Lake’s guilty plea is a stark reminder of what awaits those filing false returns -- no matter their profession, income level or the complexity of their scheme.”

 

"For seven years, Kevin Lake operated Columbus Southern Medical Center as a pill mill," said U.S. Attorney Glassman. "He got rich by feeding the addictions of hundreds and hundreds of people. Thanks to the thorough investigation of federal, state, and local law enforcement agencies, however, Lake has agreed to plead guilty to drug, tax, and fraud charges, forfeit his ill-gotten gains, and serve time in federal prison for his misdeeds."

 

“Today’s guilty plea exemplifies DEA’s determination to combat the troubling prescription drug and opiate abuse problem currently plaguing this country.” Special Agent in Charge Timothy J. Plancon said. “Kevin Lake abused his position of trust and jeopardized the lives of many individuals, by conspiring with others to illegally prescribe controlled substances that ended up being consumed throughout Ohio and the surrounding states. This investigation uncovered the elaborate lengths that Lake undertook to conceal his illegal profits, and the seizure of $29 million from Lake is indicative of the scope of his illegal activity. Lake’s guilty plea should serve as a warning to all medical professionals that if you prescribe medicine for personal gain, you will be prosecuted to the fullest extent of the law. This investigation was a success thanks to the outstanding investigative work by all of our federal, state, and local law enforcement partners.”

 

“Dr. Lake’s conduct detailed in this case is egregious and had such a negative impact on our community,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "This is an important victory for the citizens of Central Ohio. Dr. Lake not only fueled the prescription drug problem in Central Ohio, but he supported addiction in several parts of the country. As a result of this joint investigative effort, the government has seized a significant portion of the illegal proceeds through asset forfeiture, and Dr. Lake is faced with having to pay back taxes with interest and steep penalties.”

 

“The Office of Inspector General congratulates the U.S. Attorney’s Office and all of the investigators on this important case. The OIG will continue to work with our law enforcement partners to investigate unemployment insurance fraud and employee retirement plan fraud schemes, “stated James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.

 

“There is no doubt that today’s opiate epidemic is due in large part to the overprescribing of prescription pain medication across this state. This defendant preyed on those battling addiction in an effort to make millions from their suffering,” said Ohio Attorney General Mike DeWine. “An incredible amount of hard work went into investigating and prosecuting this case. Because of this team effort, this pill mill operation has been shut down.”

“We place trust in our healthcare professionals to provide quality treatment that improves the health of injured workers,” said BWC Administrator/CEO Sarah Morrison. “We’re pleased to do our part to address the problem of prescription drug abuse in Ohio, as well as put an end to Dr. Lake’s fraudulent billing scheme.”

“It is through the hard work of the investigators and the cooperation of agencies at the federal, state, and local level that led to the successful investigation and prosecution of this pill mill,” Columbus Police Deputy Chief Michael Woods said.

 

Three co-defendants have pleaded guilty as part of this case. Dr. Terry Dragash was sentenced in October 2014 to one year in prison for conspiracy to distribute drugs as a result of his conduct in prescribing at the clinic. Dr. David Rath pleaded guilty to a similar conspiracy charge. And in December 2015, Karen Climer – another employee of Lake’s – pleaded guilty to conspiracy and was sentenced to six months in prison after the government revealed she was cooperating in the investigation into Lake.

 

Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Glassman commended the investigation of this case by the DEA Tactical Diversion Squad – including the Ohio Attorney General’s Bureau of Criminal Investigation (BCI) and Columbus Division of Police – IRS Criminal Investigation, Ohio Bureau of Workers’ Compensation, Department of Labor OIG and Employee Benefits Security Administration, Central Ohio Drug Enforcement Task Force, Franklin County Sheriff’s Office, Ohio State Board of Pharmacy and the State Medical Board of Ohio, as well as Assistant United States Attorney Kenneth F. Affeldt and Department of Justice Tax Division Trial Attorneys Richard M. Rolwing and Carl F. Brooker, who are representing the United States in this case.

CINCINNATI – Holt Parker, 59, of Cincinnati, was sentenced in U.S. District Court to 48 months in prison, 15 years of supervised release, and ordered to pay a $40,000 fine for possession of child pornography, admitting that he attempted to destroy a thumb drive containing nearly 1,000 video files, the majority of which depicted child pornography that he had downloaded from the Internet.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division announced the sentence handed down yesterday afternoon by U.S. District Judge Timothy S. Black.

 

According to court documents, FBI agents executed a search warrant at his home in the Clifton neighborhood on March 15, 2016. Agents seized a laptop computer and a damaged thumb drive. Parker told agents that when he realized law enforcement officers were searching his house, he attempted to destroy the thumb drive because he had recently downloaded hundreds of images and videos of child pornography. Forensic analysis confirmed that the drive contained video files and images, including an image of an infant.

 

Parker pleaded guilty to one count of possession of child pornography in October.

 

“Child pornography is not a victimless crime,” U.S. Attorney Glassman said. “These are real children being abused and possessing such explicit material will have real consequences in the court of law.”

 

U.S. Attorney Glassman commended the cooperative investigation by the FBI, as well as Assistant United States Attorney Kyle Healey, who is representing the United States in this case.

CINCINNATI – Terry Johnson, 43, of Hamilton Ohio, was sentenced in U.S. District Court to 24 months in prison for health care fraud and money laundering in a scheme to defraud Medicare and Medicaid.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office, Lamont Pugh, Special Agent in Charge, Health and Human Services Office of Inspector General (HHS-OIG), and Ohio Attorney General Mike DeWine announced the plea sentence handed down today by U.S. District Judge Michael R. Barrett.

 

According to court documents, Johnson is the owner and operator of Community Angels Ambulance Service, LLC, which provided medical transportation to dialysis patients from at least 2007 through 2012. He also operated the ambulance company Starlite Transportation.

For approximately seven years, Johnson fraudulently billed Medicare and Medicaid for ambulance and ambulette transports. Approximately $1.1 million was fraudulently billed to Medicare for Community Angels. The loss to Medicaid from both companies totaled more than $354,000.

In addition, Johnson was ordered to file amended personal and corporate (Community Angels Ambulance) income tax returns with the IRS for the 2008-2011 income tax years.

U.S. Attorney Glassman commended the cooperative investigation by the IRS, HHS-OIG and the Ohio Attorney General’s Medicaid Fraud Control Unit, as well as Assistant United States Attorney Timothy Mangan, who is representing the United States in this case.

COLUMBUS, Ohio – Six of 19 defendants to be sentenced in a gang-related racketeering and murder case received their sentences this week in U.S. District Court.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration (DEA), Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Franklin County Prosecutor Ron O’Brien and Columbus Police Chief Kim Jacobs announced the sentences handed down by U.S. District Judge Algenon Marbley.

 

Johnathan Holt, 24, of Columbus, was sentenced to life in prison with no chance of parole, plus an additional 25 years. He was convicted on all counts by a United States District Court jury following trial in December 2016.

 

Holt was the final of 20 individuals who were indicted in October 2014 in a racketeering case, with charges that include murders, attempted murders, drug trafficking, weapons offenses, extortion and robbery. Of the 20 total defendants, five others were convicted at trial, 13 pleaded guilty and one has died.

 

Holt’s specific charges include murder in aid of racketeering and murder through the use of a firearm during and in relation to a drug trafficking crime.

 

“Johnathan Holt earned every minute of the life sentence that he received today,” U.S. Attorney Glassman said. “For anyone starting down the road that Holt and his co-defendants traveled, I hope these sentences will make them think twice and take another path.”

 

The five other defendants sentenced this week all pleaded guilty to racketeering and/or murder charges. They include:

• Ismael Bowers – sentenced to 14 years.

• Tommy Coates – sentenced to 7 years.

• Joseph Hill – sentenced to 18 years.

• Freddie Johnson – sentenced to 10 years.

• Chris Warton – sentenced to 18 years.

 

Robert Wilson and Troy Patterson are scheduled to be sentenced tomorrow. Wilson pleaded guilty to racketeering conspiracy, and Patterson pleaded guilty to murder in aid of racketeering.

 

U.S. Attorney Glassman commended the two-year investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Zach Scott’s Office, Franklin County Prosecutor Ron O’Brien’s Office, Fairfield County Prosecutor Gregg Marx, Licking County Prosecutor Kenneth Oswalt, Muskingum County Prosecutor D. Michael Haddox, Ross County Prosecutor Matthew S. Schmidt, law enforcement leaders from those counties, and officials of the Ohio Department of Rehabilitation and Correction, as well as Assistant U.S. Attorneys David DeVillers, Kevin Kelley and Brian Martinez and Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who are representing the United States in this and the related cases.

WHEELING, W. Va. – Donna S. Brown, 65, of Clarington, Ohio, was sentenced by Senior Judge Frederick P. Stamp in U.S. District Court for the Northern District of West Virginia today to 121 months in prison for defrauding investors of more than 800 investment accounts totaling more than $31 million. Brown, who owned Budget Finance Company in New Martinsville, W. Va., was sentenced for charges of wire fraud, mail fraud and money laundering, to which she had entered pleas of guilty on October 24, 2016.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Raymond P. Duda, Assistant Special Agent in Charge, Federal Bureau of Investigation (FBI), Pittsburgh Field Division; Thomas J. Holloman, Interim Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office; Tommy Coke, Inspector in Charge, U.S. Postal Inspection Service; West Virginia Attorney General Patrick Morrisey, West Virginia State Auditor and Securities Commissioner Lisa Hopkins; Commissioner Andrea Seidt of the Ohio Division of Securities; Acting Commissioner Dawn Holstein of the West Virginia Division of Financial Institutions; and Wetzel County Prosecutor Tim Haught announced the sentence handed down today.

 

According to court documents, Brown owned and operated Budget Finance company which was both a licensed consumer loan company and an unlicensed investment company. Between 2005 and 2015, she lured potential investors into investing funds with Budget Finance by promising annual returns of between eight and 12 percent.

 

Brown mailed checks to investors who requested periodic payments and sent them fraudulent quarterly investment statements reflecting their account balances and interest paid. She also mailed investors IRS 1099 forms, but never sent those forms to the IRS.

 

Brown abruptly closed the doors of Budget Finance without warning in November 2015.

 

The actual losses in this case currently are estimated to be somewhere between $9.5 million and $25 million, and the crimes resulted in substantial financial hardship to many of the investor/victims.

 

U.S. Attorney Glassman commended the investigation of this case by the agencies and Assistant United States Attorney Daniel A. Brown and Deputy Criminal Chief Brenda Shoemaker, who are representing the United States in this case.

DAYTON – Taylor Karas, 25, of Dayton, pleaded guilty today in U.S. District Court for her role in the kidnapping of an elderly man.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the plea entered into today before Senior U.S. District Judge Water H. Rice.

 

According to the Statement of Facts in this case, on October 6, 2016, Karas and co-defendants James Marriott and Andrew Azzalina kidnapped an adult male victim and transported him across state lines. Karas lured the victim to a motel by calling him and asking him to borrow money. The victim agreed to her request and they arranged to meet.

 

When the elderly man arrived, Marriott threatened him with a gun while he and Azzalina demanded any items of value and bank and credit card information. Acting under Marriott’s direction, the three located the victim’s car keys, moved him from the motel to his Ford Explorer, and forced him to accompany them to various places in western Ohio and eastern Indiana where they attempted to use his bank cards to withdrawal cash and buy items.

 

They took him to a bank in Englewood and when the victim could not remember his PIN code, they drove him to a Dollar General and eventually to a Dick’s Sporting Goods in Richmond, Indiana to purchase items for the defendants.

 

Believing that the victim had requested help from the sales clerk during the purchase of clothing and other items at Dick’s Sporting Goods, the trio abandoned the elderly man at the store and fled back to Ohio in his vehicle.

 

Marriott, Karas and Azzalina were indicted in October 2016 on charges of aiding and abetting in kidnapping and taking a stolen vehicle across state lines. Marriott and Azzalina were also charged with brandishing a firearm during a crime of violence. Marriott faces additional charges for possessing a firearm as a convicted felon and while a fugitive from justice for sentencing on guilty pleas to aggravated possession of drugs and having weapons under disability.

 

Karas pleaded guilty to one count of aiding and abetting kidnapping, which is punishable by a maximum potential sentence of up to life in prison. Marriott and Azzalina are scheduled for trial on March 6.

 

U.S. Attorney Glassman commended the investigation of this case by the FBI as well as Assistant United States Attorney Brent G. Tabacchi, who is prosecuting this case.

DAYTON – Steven Scudder, 62, of Centerville, pleaded guilty in U.S. District Court to wire fraud, admitting that he used his position as an attorney to facilitate a fraudulent investment scheme operated by someone else.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph Rivers, Regional Director of the U.S. Department of Labor Employee Benefits Security Administration and James Vanderberg, Special Agent in Charge of the U.S. Department of Labor Office of the Inspector General, announced the plea entered yesterday afternoon before U.S. District Judge Thomas M. Rose.

 

Court documents state that between July 2013 and July 2014, Scudder served as trustee of the WMA Trust, a land trust that purported to secure investments that individuals had made with William Apostelos. Scudder ultimately resigned from this position during mid-summer 2014. Scudder said Apostelos instructed him to continue to falsely hold himself out as the trustee of the WMA Trust until September 2014. Based on Scudder’s false representations, an investment group of approximately 10 people in another state invested more than $1 million with Apostelos. Apostelos allegedly used the funds to pay earlier investors rather than investing the money as promised.

 

Wire fraud is punishable by up to 20 years in prison, a maximum fine of $250,000 or twice the gain or gross loss from the crime, whichever is greater. Judge Rose will schedule a date for sentencing following a pre-sentence investigation by the court.

 

U.S. Attorney Glassman commended the investigation of this case by the IRS, FBI and two Department of Labor agencies, as well as Assistant United States Attorney Brent G. Tabacchi and Deputy Criminal Chief Laura Clemmens, who are representing the United States in this case.

COLUMBUS, Ohio – A United States District Court jury convicted Thomas A. Sweeney, 48, of Columbus of all counts, which include production of child pornography, attempted coercion/enticement of a minor, receipt of child pornography and commission of a sex offense while registered as a sex offender.

 

Vipal Patel, First Assistant United States Attorney for the Southern District of Ohio, Steve Francis, Acting Special Agent in Charge, U.S. Department of Homeland Security Investigations (HSI), Franklin County Sheriff Dallas Baldwin and other members of the Franklin County Internet Crimes Against Children (ICAC) Task Force announced the verdict reached today, which was returned following a trial that began on January 17 before U.S. District Judge Michael H. Watson.

 

According to court documents and testimony, Sweeney enticed a 14-year-old female to take sexually explicit pictures and send them to Sweeney’s phone. He also used his phone to attempt to coerce the minor victim into engaging in sexual activity.

 

Sweeney had been convicted in 2004 in Franklin County Common Pleas Court for two counts of rape involving a minor. He was sentenced to two consecutive terms of five years in prison for that conviction.

 

Sweeney was charged by a criminal complaint in this case on February 11, 2016 and was indicted by a federal grand jury on March 31, 2016 and in a superseding indictment on January 12, 2017.

 

Production of child pornography is punishable by a range of 25 to 50 years in this case. Coercion of a minor carries a potential life sentence and receipt of child pornography is punishable by a range of 15 to 40 years in prison in this case. Committing these crimes while registered as a sex offender includes a 10-year sentencing enhancement to be served consecutive to any other term of imprisonment.

 

This case was prosecuted by United States Attorney Benjamin C. Glassman and Assistant United States Attorney Heather A. Hill. It was investigated by Franklin County ICAC Task Force members.

 

The Franklin County ICAC Task Force is a multi-agency effort dedicated to the fight against computer facilitated crimes against children. The following agencies are members:

Franklin County Sheriff’s Office

Ohio ICAC

Grove City Police Department

Columbus Police Department

Grandview Heights Police Department

Westerville Police Department

Hilliard Police Department

Franklin County Prosecutor's Office

Homeland Security Investigations (HSI)

Ohio Attorney General’s Office (BCI)

The Ohio State University Police Department

Upper Arlington Police Department

Circleville Police Department

Pickaway County Sheriff’s Office

Delaware County Sheriff’s Office

 

 

COLUMBUS, Ohio – Nicholas T. Billman, 20, of Flushing, Ohio, was sentenced in U.S. District Court to 264 months in prison for brandishing a machine gun while he robbed a general store in Freeport, Ohio on October 22, 2015.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Harrison County Sheriff Ronald J. Myers announced the sentence handed down yesterday by Senior U.S. District Judge James L. Graham.

 

Billman pleaded guilty in September to one count of robbery of a business that is engaged in interstate commerce and one count of carrying and brandishing a machine gun during a crime of violence.

 

Testimony during the plea hearing confirmed that Billman entered the Hilltop General Store brandishing an AK-47 type rifle. Billman wore a handgun holstered on his right hip and a sheathed knife on his left hip. He robbed the store of cash and cigarettes then fled. A witness followed Billman but stopped after Billman fired three shots toward him.

 

Acting on information received from the public and other witnesses, investigators obtained a warrant and searched Billman’s residence two days later. They found an AK-47 similar to the one used in the robbery as well as other firearms and evidence indicating that Billman had committed the crimes. Forensic tests determined that the weapon was fully automatic. Sheriff’s deputies arrested Billman on state charges, then contacted ATF to pursue federal charges. A federal grand jury indicted Billman in February 2016. He has been in custody since sheriff’s deputies arrested him.

 

U.S. Attorney Glassman commended Assistant U.S. Attorney Timothy Prichard, who is representing the United States in this case.

Company Agrees to $800 Million Global Resolution with authorities in the United States, the United Kingdom and Brazil 

Rolls-Royce plc, the United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors, has agreed to pay the U.S. nearly $170 million as part of an $800 million global resolution to investigations by the department, U.K. and Brazilian authorities into a long-running scheme to bribe government officials in exchange for government contracts.  

U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio, Chief Andrew Weissmann of the Fraud Section of the Justice Department’s Criminal Division, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office and Inspector in Charge Regina Faulkerson of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.

“Bribery of government officials undermines the integrity of a free and fair market,” said U.S. Attorney Glassman.  “This multinational resolution imposes significant criminal penalties on Rolls-Royce for its multinational corruption.”

“For more than a decade, Rolls-Royce repeatedly resorted to bribes to secure contracts and get a competitive edge in countries throughout the world,” said Chief Weissmann.  “The global nature of this crime requires a global response, and this case is yet another example of the strong relationship between the United States and U.K. Serious Fraud Office and Brazilian Ministério Público Federal, and the collective efforts to ensure that ethical companies can compete on an even playing field anywhere in the world.”

“Rolls-Royce knowingly acted outside the law by conspiring to bribe foreign officials to gain an unfair advantage,” said Assistant Director Richardson.  “No company is above the law.  This resolution will stand as a warning to big and small companies all across the world that the FBI will not tolerate the foreign corruption that threatens our fair and competitive markets.”

“This successful parallel investigation is a tremendous example of the central importance of working cooperatively alongside our international partners to achieve a fair and meaningful resolution,” said Assistant Director in Charge Abbate.  “This outcome is a reflection of the immense reach and capabilities of the FBI’s Washington Field Office international corruption squad and the global impact of the anti-corruption program.”

According to admissions made in court papers unsealed today, Rolls-Royce admitted that between 2000 and 2013, the company conspired to violate the Foreign Corrupt Practices Act (FCPA) by paying more than $35 million in bribes through third parties to foreign officials in various countries in exchange for those officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and affiliated entities (collectively, Rolls-Royce): 

• In Thailand, Rolls-Royce admitted to using intermediaries to pay approximately $11 million in bribes to officials at Thai state-owned and state-controlled oil and gas companies that awarded approximately seven contracts to Rolls-Royce during the same time period.
• In Brazil, Rolls-Royce used intermediaries to pay approximately $9.3 million in bribes to bribe foreign officials at a state-owned petroleum corporation that awarded multiple contracts to Rolls-Royce during the same time period. 
• In Kazakhstan, between approximately 2009 and 2012, Rolls-Royce paid commissions of approximately $5.4 million to multiple advisors, knowing that at least a portion of the commission payments would be used to bribe foreign officials with influence over a joint venture owned and controlled by the Kazakh and Chinese governments that was developing a gas pipeline between the countries.  In 2012, the company also hired a local Kazakh distributor, knowing it was beneficially owned by a high-ranking Kazakh government official with decision-making authority over Rolls-Royce’s ability to continue operating in the Kazakh market.  During this time, the state-owned joint venture awarded multiple contracts to Rolls-Royce.
• In Azerbaijan, between approximately 2000 and 2009, Rolls-Royce used intermediaries to pay approximately $7.8 million in bribes to foreign officials at the state-owned and state-controlled oil company, which awarded multiple contracts to Rolls-Royce during the same time period. 
• In Angola, between approximately 2008 and 2012, Rolls-Royce used an intermediary to pay approximately $2.4 million in bribes to officials at a state-owned and state-controlled oil company, which awarded three contracts to Rolls-Royce during this time period. 
• In Iraq, from approximately 2006 to 2009, Rolls-Royce supplied turbines to a state-owned and state-controlled oil company.  Certain Iraqi foreign officials expressed concerns about the turbines and subsequently threatened to blacklist Rolls-Royce from doing future business in Iraq.  In response, Rolls-Royce’s intermediary paid bribes to Iraqi officials to persuade them to accept the turbines and not blacklist the company. 

Rolls-Royce entered into a deferred prosecution agreement (DPA) in connection with a criminal information, filed on Dec. 20, 2016, in the Southern District of Ohio and unsealed today, charging the company with conspiring to violate the anti-bribery provisions of the FCPA.  Pursuant to the DPA, Rolls-Royce agreed to pay a criminal penalty of $195,496,880, subject to a credit discussed below.  The company has also agreed to continue to cooperate fully with the department’s ongoing investigation, including its investigation of individuals.

In related proceedings, Rolls-Royce also settled with the United Kingdom’s Serious Fraud Office (SFO) and the  Brazilian Ministério Público Federal (MPF).  As part of its resolution with the SFO, Rolls-Royce entered into a DPA and admitted to paying additional bribes or failing to prevent bribery payments in connection with Rolls-Royce’s business operations in China, India, Indonesia, Malaysia, Nigeria, Russia and Thailand between in or around 1989 and in or around 2013, and Rolls-Royce agreed to pay a total fine of £497,252,645 ($604,808,392).  As part of its leniency agreement with the MPF, Rolls-Royce also agreed to pay a penalty of approximately $25,579,170 for the company’s role in a conspiracy to bribe foreign officials in Brazil between 2005 and 2008.  Because the conduct underlying the MPF resolution overlaps with the conduct underlying part of the department’s resolution, the department credited the $25,579,170 that Rolls-Royce agreed to pay in Brazil against the total fine in the United States.  Therefore, the total amount to be paid to the United States is $169,917,710, and the total amount of penalties that Rolls-Royce has agreed to pay is more than $800 million.    

A number of factors contributed to the department’s criminal resolution with the company, including that Rolls-Royce did not disclose the criminal conduct to the department until after the media began reporting allegations of corruption and after the SFO had initiated an inquiry into the allegations and that the conduct was extensive and spanned 12 countries.  However, the company did cooperate with the department’s investigation.  Rolls-Royce has also taken significant remedial measures, including terminating business relationships with multiple employees and third-party intermediaries who were implicated in the corrupt scheme; enhancing compliance procedures to review and approve intermediaries; and implementing new and enhanced internal controls to address and mitigate corruption and compliance risks.  Thus, the criminal penalty reflects a 25-percent reduction from the bottom of the U.S. Sentencing Guidelines fine range.  In addition, the department considered the parallel resolutions reached by the SFO and MPF in determining the resolution.

The U.S. Postal Inspection Service and the FBI’s International Corruption Squad in Washington, D.C., investigated the case.  Trial Attorneys Ephraim Wernick, Kevin Gingras and Dennis Kihm of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Michael J. Marous and Jessica Kim of the Southern District of Ohio are prosecuting the case.  

The Criminal Division’s Office of International Affairs provided significant assistance in this matter.  The SFO and the MPF provided significant cooperation and assistance in this matter, as did law enforcement colleagues in Austria, Germany, the Netherlands, Singapore and Turkey.     

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.  

Rolls-Royce DPA

Rolls-Royce Information

WASHINGTON – Rolls-Royce plc, the United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors, has agreed to pay the U.S. nearly $170 million as part of an $800 million global resolution to investigations by the department, U.K. and Brazilian authorities into a long-running scheme to bribe government officials in exchange for government contracts.

 

U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio, Chief Andrew Weissmann of the Fraud Section of the Justice Department’s Criminal Division, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office and Inspector in Charge Regina Faulkerson of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.

 

“Bribery of government officials undermines the integrity of a free and fair market,” said U.S. Attorney Glassman. “This multinational resolution imposes significant criminal penalties on Rolls-Royce for its multinational corruption.”

 

“For more than a decade, Rolls-Royce repeatedly resorted to bribes to secure contracts and get a competitive edge in countries throughout the world,” said Chief Weissmann. “The global nature of this crime requires a global response, and this case is yet another example of the strong relationship between the United States and U.K. Serious Fraud Office and Brazilian Ministério Público Federal, and the collective efforts to ensure that ethical companies can compete on an even playing field anywhere in the world.”

 

“Rolls-Royce knowingly acted outside the law by conspiring to bribe foreign officials to gain an unfair advantage,” said Assistant Director Richardson. “No company is above the law. This resolution will stand as a warning to big and small companies all across the world that the FBI will not tolerate the foreign corruption that threatens our fair and competitive markets.”

 

“This successful parallel investigation is a tremendous example of the central importance of working cooperatively alongside our international partners to achieve a fair and meaningful resolution,” said Assistant Director in Charge Abbate. “This outcome is a reflection of the immense reach and capabilities of the FBI’s Washington Field Office international corruption squad and the global impact of the anti-corruption program.”

 

According to admissions made in court papers unsealed today, Rolls-Royce admitted that between 2000 and 2013, the company conspired to violate the Foreign Corrupt Practices Act (FCPA) by paying more than $35 million in bribes through third parties to foreign officials in various countries in exchange for those officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI and affiliated entites (collectively, Rolls-Royce):

 

• • In Thailand, Rolls-Royce admitted to using intermediaries to pay approximately $11 million in bribes to officials at Thai state-owned and state-controlled oil and gas companies that awarded approximately seven contracts to Rolls-Royce during the same time period.

 

• • In Brazil, Rolls-Royce used intermediaries to pay approximately $9.3 million in bribes to bribe foreign officials at a state-owned petroleum corporation that awarded multiple contracts to Rolls-Royce during the same time period.

     

  • In Kazakhstan, between approximately 2009 and 2012, Rolls-Royce paid commissions of approximately $5.4 million to multiple advisors, knowing that at least a portion of the commission payments would be used to bribe foreign officials with influence over a joint venture owned and controlled by the Kazakh and Chinese governments that was developing a gas pipeline between the countries. In 2012, the company also hired a local Kazakh distributor, knowing it was beneficially owned by a high-ranking Kazakh government official with decision-making authority over Rolls-Royce’s ability to continue operating in the Kazakh market. During this time, the state-owned joint venture awarded multiple contracts to Rolls-Royce.

     

  • In Azerbaijan, between approximately 2000 and 2009, Rolls-Royce used intermediaries to pay approximately $7.8 million in bribes to foreign officials at the state-owned and state-controlled oil company, which awarded multiple contracts to Rolls-Royce during the same time period.

     

  • In Angola, between approximately 2008 and 2012, Rolls-Royce used an intermediary to pay approximately $2.4 million in bribes to officials at a state-owned and state-controlled oil company, which awarded three contracts to Rolls-Royce during this time period.

     

  • In Iraq, from approximately 2006 to 2009, Rolls-Royce supplied turbines to a state-owned and state-controlled oil company. Certain Iraqi foreign officials expressed concerns about the turbines and subsequently threatened to blacklist Rolls-Royce from doing future business in Iraq. In response, Rolls-Royce’s intermediary paid bribes to Iraqi officials to persuade them to accept the turbines and not blacklist the company.

 

Rolls-Royce entered into a deferred prosecution agreement (DPA) in connection with a criminal information, filed on Dec. 20, 2016, in the Southern District of Ohio and unsealed today, charging the company with conspiring to violate the anti-bribery provisions of the FCPA. Pursuant to the DPA, Rolls-Royce agreed to pay a criminal penalty of $195,496,880, subject to a credit discussed below. The company has also agreed to continue to cooperate fully with the department’s ongoing investigation, including its investigation of individuals.

 

1. related proceedings, Rolls-Royce also settled with the United Kingdom’s Serious Fraud Office (SFO) and the Brazilian Ministério Público Federal (MPF). As part of its resolution with the SFO, Rolls-Royce entered into a DPA and admitted to paying additional bribes or failing to prevent bribery payments in connection with Rolls-Royce’s business operations in China, India, Indonesia, Malaysia, Nigeria, Russia and Thailand between in or around 1989 and in or around 2013, and Rolls-Royce agreed to pay a total fine of £497,252,645 ($604,808,392). As part of its leniency agreement with the MPF, Rolls-Royce also agreed to pay a penalty of approximately $25,579,170 for the company’s role in a conspiracy to bribe foreign officials in Brazil between 2005 and 2008. Because the conduct underlying the MPF resolution overlaps with the conduct underlying part of the department’s resolution, the department credited the $25,579,170 that Rolls-Royce agreed to pay in Brazil against the total fine in the United States. Therefore, the total amount to be paid to the United States is $169,917,710, and the total amount of penalties that Rolls-Royce has agreed to pay is more than $800 million.

 

A number of factors contributed to the department’s criminal resolution with the company, including that Rolls-Royce did not disclose the criminal conduct to the department until after the media began reporting allegations of corruption and after the SFO had initiated an inquiry into the allegations and that the conduct was extensive and spanned 12 countries. However, the company did cooperate with the department’s investigation. Rolls-Royce has also taken significant remedial measures, including terminating business relationships with multiple employees and third-party intermediaries who were implicated in the corrupt scheme; enhancing compliance procedures to review and approve intermediaries; and implementing new and enhanced internal controls to address and mitigate corruption and compliance risks. Thus, the criminal penalty reflects a 25-percent reduction from the bottom of the U.S. Sentencing Guidelines fine range. In addition, the department considered the parallel resolutions reached by the SFO and MPF in determining the resolution.

 

Assistant United States Attorneys Michael J. Marous and Jessica Kim of the Southern District of Ohio and Trial Attorneys Ephraim Wernick, Kevin Gingras and Dennis Kihm of the Criminal Division’s Fraud Section are prosecuting the case. The U.S. Postal Inspection Service and the FBI’s International Corruption Squad in Washington, D.C., investigated the case.

 

1. Criminal Division’s Office of International Affairs provided significant assistance in this matter. The SFO and the MPF provided significant cooperation and assistance in this matter, as did law enforcement colleagues in Austria, Germany, the Netherlands, Singapore and Turkey.

 

The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

COLUMBUS, Ohio – Robert E. Porter, 53, of Westerville, Ohio pleaded guilty to filing a false income tax return with the Internal Revenue Service (IRS). Porter faces a maximum of three years in prison and a fine of up to $250,000.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Cincinnati Field Office, James Vanderberg, Special Agent in Charge, the United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, Brad Geary, Special Agent in Charge, United States Department of Housing and Urban Development, Office of Inspector General, and Marlon Miller, Special Agent in Charge, Homeland Security Investigations announced the guilty plea entered before U.S. District Judge Michael. H. Watson.

 

According to court documents, between 2009 and 2013 Porter was the Vice President of Porter Drywall and was also the Vice President of Black Star Drywall, Inc. Porter Drywall contracted to provide drywall installation and drywall supplies to residential and commercial contractors in Central Ohio. As well as being Vice President, Porter was a jobsite supervisor and estimator for Porter Drywall’s private and corporate clients.

 

Porter diverted numerous customer payments to his personal bank account. Acting on behalf of Porter Drywall, Porter provided estimates for certain projects and assigned Porter Drywall’s employees and/or subcontractors to complete the work. On “diverted income” projects, all expenses, including labor and materials, were incurred by Porter Drywall and all revenue/payments generated were deposited into Porter’s personal bank account.

 

“Income tax fraud is not a victimless crime,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Individuals who corruptly violate the law to further their business interests and intentionally evade paying their fair share of taxes undermine public confidence in our tax system and unfairly disadvantage businesses that play by the rules.”

 

Porter has also agreed to ensure that Porter Drywall subscribes to proper governmental forms and otherwise complies with all tax and immigration laws with respect to its employees.

 

U.S. Attorney Glassman commended the investigation of this case by the IRS, U.S. Department of Labor, U.S. Department of Housing and Urban Development, and Homeland Security Investigations, and Assistant U.S. Attorney Daniel A. Brown, who is prosecuting the case.

DAYTON – Antonio J. Spiva, 25, of Dayton, pleaded guilty to conspiracy to possess with intent to distribute heroin and fentanyl that resulted in the death of at least two individuals. A co-defendant, Charles M. McBeath, 33, of Dayton, had pleaded guilty to the same last week.

 

Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Montgomery County Sheriff Phil Plummer, Dayton Police Chief Richard Biehl and other members of the Heroin Eradication Apprehension Team (HEAT) announced the plea that was entered into yesterday before U.S. District Judge Thomas M. Rose.

 

Both men were originally indicted by a federal grand jury in December 2015 and have remained in custody since. According to court documents, through late May 2015, McBeath and Spiva distributed heroin, fentanyl and crack cocaine while maintaining operations at residences located on E. Fifth Street, S. Torrence Street and S. Horton Street, all in Dayton. Their distribution of fentanyl resulted in the overdose death of two individuals and the non-fatal overdose of at least three others.

 

As part of Spiva’s plea agreement, all parties involved are recommending a sentence of 12 to 18 years in prison to the court. Likewise, the plea agreement for McBeath includes a recommended sentence of 10 to 18 years in prison. Those recommendations will be considered by a U.S. District Judge at sentencing hearings in April.

 

The HEAT initiative was announced in May 2015 and includes the U.S. Attorney’s Office, DEA, Dayton Police Department, Montgomery County Sheriff’s Office, Montgomery County Coroner’s Office, and the Miami Valley Regional Crime Laboratory. The intent of the task force is to prosecute heroin and fentanyl suppliers who contribute to both fatal and non-fatal overdoses in Montgomery County.

 

U.S. Attorney Glassman commended the investigation of this case by HEAT, and Assistant U.S. Attorneys Sheila G. Lafferty and Dominick S. Gerace, who are prosecuting the case.