Southern District of Ohio

COLUMBUS, Ohio – Jason W. Cox, 39, now of Dublin, Ohio was sentenced to 60 months in prison, three years of supervised release, and was ordered to pay $ 412,252 in restitution to the victims, one of which was an impaired adult, of his scheme to defraud them of the funds they had invested through him as their financial advisor.  Cox previously pleaded guilty on July 8, 2015 to two counts of money laundering, two counts of mail fraud, and one count of wire fraud.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation announced the sentence handed down today by U.S. District Chief Judge Edmund A. Sargus, Jr.

According to court documents, the defendant used his position as a financial advisor with a national financial services company at their Upper Arlington office to defraud an impaired adult and other victims.

The impaired adult had been introduced to Cox by her father and was told by her father that Cox would be her financial advisor and that he was a person she could trust to manage her money after her father was no longer around to do so. After the victim’s father died, Cox devised and carried out schemes to defraud the impaired adult, resulting in the loss of her residence and approximately $ 400,000 in assets over the course of 18 months. Cox left her with no assets and no income.

Cox would cause the sale of a fund in the victim’s accounts and then wire the funds to her bank or mail a check to her that would be deposited into her account. He would then convince the victim to give him cash or a check in an amount equal to or slightly less than the amount transferred. These amounts were frequent and were generally in thousands of dollars.

“She believed that she and Cox were business partners even though she was unclear what that business was,” Assistant United States Attorney Deborah A. Solove said. “Since she has little concept of the value of money or the relative amounts changing hands, she thought that the money she agave him and the money he gave her was somehow a normal thing to do.”

Cox convinced a second victim to invest some of the money the victim transferred from his 401k after being laid off. Cox asked the victim to invest $60,000 with a guaranteed 10 percent rate of return. The victim agreed to invest $10,000 after Cox sent him the agreement in writing in his employer’s business envelope. Although the victim received his principal and the interest eventually, Cox was fired when this came to light.

The defendant defrauded a third client, an elderly woman, whose adult daughters were handling her financial affairs, whom he paid back with the impaired adult’s money.

"The web of financial lies that Jason Cox created came crashing down like a house of cards and he is now a convicted felon that must pay back the stolen money," said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.  "Unfortunately, the victims in this case, including an impaired individual, have been left to pick up the pieces"

U.S. Attorney Stewart commended the investigation of this case by the IRS Criminal Investigation Division, and Assistant U.S. Attorney Deborah A. Solove, who prosecuted the case.

COLUMBUS, Ohio – An Ohio lobbyist pleaded guilty to extortion in connection with conduit contributions, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Office.

John P. Raphael, 60, of Columbus, pleaded guilty today to a one-count information charging him with interference with commerce by threats.

According to the information, Raphael was a consultant and lobbyist based in Columbus, Ohio, who was hired and paid by companies that sought to do business with municipalities and counties in Ohio. From March 2005 to February 2013, a red light camera enforcement company hired and paid Raphael to seek and obtain lucrative contracts to provide red light photo enforcement systems in the City of Columbus.

During the time the red light camera enforcement company was seeking to retain contracts in Columbus, Raphael repeatedly pressured and induced the company to make campaign contributions to the campaigns of various elected officials. He communicated to the company that it would lose its contracts and suffer an economic loss if it did not make the payments. Thus, Raphael obtained and attempted to obtain the funds by the wrongful use of fear of economic harm.

The former chief executive officer of the red light camera vendor, Karen L. Finley, previously pleaded guilty to conspiracy to commit federal programs bribery and honest services wire and mail fraud.

Interference with commerce by threats is a crime punishable by up to 20 years in prison and a fine of $250,000 or a fine of twice the pecuniary gain or loss. A sentencing hearing is yet to be scheduled.

The case was investigated by the FBI’s Cincinnati Field Office, Columbus Resident Agency, with the assistance of IRS-Criminal Investigations and the Ohio Bureau of Criminal Investigation.  The case is being prosecuted by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio.

This information only contains a charge against John Raphael and should not be construed as a reflection on the guilt or innocence of any other individual.

WASHINGTON – The Department of Justice announced that a California man and a New Jersey man pleaded guilty today in U.S. District Court in Cincinnati in connection with the prosecution of a nationwide prescription drug diversion scheme.

Fernando Galan, 50, of Simi Valley, California, pleaded guilty before U.S. District Court Judge Timothy S. Black to one count of conspiracy to distribute prescription drugs without a wholesale license.  The department also unsealed the case against David Konigsberg, 58, of East Hanover, New Jersey, who pleaded guilty on June 22 to one count of conspiracy to commit mail and wire fraud for his participation in the drug diversion scheme.

Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI) Metro Washington, D.C., Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service’s (USPIS) Cincinnati Field Office announced the two guilty pleas.

“Prescription drug diversion compromises the integrity of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer.  “This extensive investigation demonstrates that the Department of Justice will protect American consumers by prosecuting those who violate federal law by selling diverted drugs.”

“The sale of illegally diverted prescription drugs creates unacceptable public health risks,” said U.S. Attorney Stewart.  “Patients purchased what they believed were FDA-approved prescription drugs that had remained in regulated distribution channels intended to protect against misbranded, adulterated, sub-potent, improperly handled, counterfeit and stolen products.  Instead, these customers received drugs of unknown quality and origin.”

Galan and Konigsberg participated in the sale of illegally diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC).  On May 6, David Miller and MIC, along with Artur Stepanyan and Mihran Stepanyan, were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license.  Those charges are still pending.  Galan and Konigsberg are the sixth and seventh co-conspirators to plead guilty for their participation in the drug diversion scheme involving Miller and MIC.

Miller and MIC sold the prescription drugs obtained through Galan and Konigsberg – along with multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio.  Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico.  These false pedigrees covered up the illegitimate sources of the drugs – various illicit suppliers, including Konigsberg and Ricardo Jurado, a Miami supplier – and falsely stated that B&Y was an authorized distributor of the prescription drugs.

Galan

According to court documents, from July 2007 through October 2012, Galan facilitated the sale of millions of dollars of illegally diverted prescription drugs.  Galan, who owned a restaurant in Rosemead, California, acted as a middleman in the sale of diverted prescription drugs from Ricardo Jurado, a drug supplier in Miami, to Miller and MIC.  Neither Jurado nor Galan was licensed to engage in the wholesale distribution of prescription drugs.  Jurado has also been charged for his role in this conspiracy.

In connection with facilitating the sale of the diverted drugs, Galan forwarded wiring instructions from Jurado directing Miller to send payments to at least 13 different bank accounts at banks in Mexico, Nicaragua, Canada, Florida and other locations.  During the course of the conspiracy, Miller and MIC wired more than $30 million to the bank accounts specified by Galan.  From June 2009 through July 2012, Galan received between $550,000 and $1 million in commission payments on the drug sales. 

Konigsberg

According to court documents, from 2008 through February 2104, Konigsberg sold illegally diverted prescription drugs to Miller and MIC.  Doing business as Preferred Inc., Konigsberg received prescription drugs from another supplier, who obtained the drugs from illicit street sources in New York and New Jersey at substantial discounts off of the wholesale price.  Konigsberg then offered the drugs to Miller and MIC for a profit. 

At Miller’s direction, Konigsberg included false notations on the invoices he provided to Miller indicating that Konigsberg had purchased the drugs from a large wholesale distributor.  As Konigberg and Miller both knew, Konigsberg had obtained the drugs from illegal sources, not from the large distributor.

This matter is being investigated by FDA-OCI and the USPIS.  Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of the Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in these cases.

CINCINNATI – Cody Lee Jackson, 20, most recently of Norwood, Ohio, was charged by criminal complaint with coercion and enticement of a minor to engage in illegal sexual activity and production of child pornography. Jackson was arrested last week in Utah.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Norwood Police Chief William Kramer and Blue Ash Police Chief Paul Hartinger announced the charges, which were unsealed today.

According to court documents, investigators were contacted with the information that two females, including a minor, had previously been held against their will by Jackson, in Blue Ash, Ohio.  While on electronic monitoring for charges in that case, Jackson allegedly met the minor victim in the instant case, through Facebook.  Jackson arranged for a taxi to deliver the minor to his place of residence, and had sexual intercourse with her on multiple occasions.

Over time, Jackson allegedly became more controlling and would not let the victim leave his residence. He established various rules and punishments which included physical abuse.

After pleading guilty on July 31, 2015 to state charges of interference with custody, abduction and kidnapping, Jackson fled to other states including South Carolina and Texas. During that time, he allegedly threatened to kill the minor victim’s family if she did not send him sexually explicit photographs via Facebook.

Coercion and enticement of a minor to engage in illegal sexual activity carries a minimum of ten years and a maximum sentence of life in prison.  Production of child pornography is a crime punishable by a range of 15 to 30 years in prison.

Jackson is also facing charges of rape, kidnapping, unlawful sexual conduct with a minor, and interference with custody, brought by the Norwood Police Department and the Hamilton County Prosecutor’s Office.

This case is being brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorney's Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims.

U.S. Attorney Stewart commended law enforcement for the cooperative investigation, and Assistant U.S. Attorney Christy Muncy who is representing the United States in this case.

A criminal complaint merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

CINCINNATI – A federal grand jury has charged Bryan Harris, 27, of Cincinnati, with coercion and enticement in an indictment returned in Cincinnati.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Hamilton County Sheriff Jim Neal and Cincinnati Police Department Interim Chief Eliot Isaac announced the indictment returned last week.

According to court documents, Harris allegedly used the Internet and social media to coerce more than 15 minor females, ordering them to send him sexually explicit photographs and meeting with some in person to engage in sexual activity.

Coercion and enticement by means of interstate commerce is a crime punishable by up to 20 years in prison and coercion and enticement of a minor to engage in sexual activity carries a maximum life sentence, with a mandatory minimum 10-year sentence.

Any individuals who believe they may also be a victim in this case are encouraged to call the FBI victim information line at 513-979-8882, where they will be connected with a member of the FBI Cincinnati Child Exploitation Task Force.

U.S. Attorney Stewart commended the investigation of this case by the FBI Cincinnati Child Exploitation Task Force, which includes FBI, Hamilton County Sheriff’s Office and Cincinnati Police Department, and Assistant U.S. Attorney Christy Muncy, who is prosecuting the case.

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

WASHINGTON – Cincinnati-based West Chester Hospital and its parent company, UC Health, have agreed to pay $4.1 million to settle allegations that West Chester Hospital violated the False Claims Act by billing federal health care programs for costs associated with medically unnecessary spine surgeries, the Justice Department announced today.

“Hospitals have a responsibility to ensure that services provided at their facilities are medically necessary and appropriate before they bill federal health care programs for those services,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “When providers charge for medically unnecessary services, we will aggressively seek remedies under the False Claims Act.”

This settlement resolves allegations that West Chester Hospital knowingly submitted claims to Medicare and Medicaid for hospital charges related to medically unnecessary spine surgeries performed between 2009 and 2013 by Dr. Abubakar Atiq Durrani, a surgeon from Mason, Ohio, who had admitting privileges at West Chester Hospital. Durrani was arrested in July 2013 and charged with health care fraud violations relating to allegations that he performed medically unnecessary spine surgeries on patients residing in Ohio and Kentucky. Following his arraignment, Durrani allegedly fled the United States and remains a fugitive.

Medicaid is funded jointly by the states and the federal government. The state of Ohio and commonwealth of Kentucky paid for some of the Medicaid claims at issue and will receive approximately $72,000 of the settlement amount.

“Federal health care programs cover only those procedures that are medically necessary,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio. “The U.S. Attorney’s Office is committed to pursuing providers that seek payment for unnecessary medical procedures.”

“Any time greed replaces medical necessity as the primary factor in performing invasive procedures and surgeries on Medicare and Medicaid patients, our most vulnerable citizens – the elderly, disabled, and economically disadvantaged – are imperiled,” said Special Agent in Charge Lamont Pugh of the Health and Human Services Office of Inspector General (HHS-OIG). “Medical businesses and physicians who unnecessarily place patients at risk to boost profits will be held accountable for their actions.”

The civil settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the Southern District of Ohio by former patients of Durrani and is captioned United States ex rel. Scott, et al. v. Durrani, et al. As part of today’s resolution, the whistleblowers will receive approximately $800,000 from the federal share of the settlement.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $25.2 billion through False Claims Act cases, with more than $16.1 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by the U.S. Attorney’s Office of the Southern District of Ohio and the Civil Division’s Commercial Litigation Branch, with assistance provided by HHS-OIG. The claims resolved by this settlement are allegations only and there has been no determination of liability.

CINCINNATI – A federal grand jury has charged Keno Phillips, 41, of Cincinnati, Ohio, with possession with intent to distribute cocaine, possession of a firearm by a prohibited person and possession of a firearm in furtherance of a drug trafficking offense and Steve Ivery, 30, of Cincinnati, Ohio, with possession of a firearm and ammunition by a prohibited person, in indictments returned in Cincinnati.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Interim Cincinnati Police Chief Eliot Isaac, and Donald J. Soranno, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Columbus Field Division, announced the indictments returned yesterday.

The indictment charging Phillips alleges that he possessed a mixture of cocaine and a semi-automatic handgun, along with ammunition, and that he used the loaded handgun in furtherance of a drug trafficking crime. Phillips is a convicted felon, having been convicted in both state and federal courts.

The indictment charging Ivery alleges that he possessed a revolver and ammunition after being convicted of three violent felonies.  Ivery is charged as being an Armed Career Criminal.

Phillips faces a mandatory sentence of 5 years and up to life for possession of a firearm in furtherance of a drug trafficking offense, up to 10 years imprisonment for possession of a handgun and ammunition by a prohibited person.  Ivery faces a mandatory sentence of 15 years and up to life for the offense he currently faces.

“These indictments illustrate the commitment of state and federal law enforcement working together to pursue federal charges against those who illegally wield weapons and perpetuate gun violence,” U.S. Attorney Stewart said.

U.S. Attorney Stewart commended the investigation of this case by the Cincinnati Police Department and ATF, and Assistant U.S. Attorneys Christy Muncy and Timothy Oakley who are prosecuting the cases.

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

COLUMBUS, Ohio – A federal grand jury has charged Eric D. Chavis, 23, of Columbus, with conspiracy to produce and production of child pornography in an indictment returned in Columbus.

Carter M. Stewart, 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 Marlon V. Miller, Special Agent in Charge, U.S. Homeland Security Investigations, announced the indictment that was unsealed yesterday.

The indictment alleges that Chavis recruited minor victims to engage in sexually explicit conduct in his rap music videos. Chavis then posted those videos via the Internet on websites including Facebook.com, Pornhub.com, Youtube.com and Instagram.com.

Chavis is charged with one count of conspiracy to produce child pornography, and three counts of production of child pornography, each punishable by up to 30 years in prison.

Co-defendants Lamont D. Abbington, 29, of Kissimmee, Fla., Carlton S. Jackson, 30, of Toledo, and Mareekus E. Davis, 22, of Columbus, are each also charged with one count of conspiracy to produce child pornography, for their roles in recruiting, directing or engaging in sexually explicit conduct with the minor victims in the rap videos.

U.S. Attorney Stewart commended the cooperative investigation by the Central Ohio Human Trafficking Task Force, which was formed in 2012 and is part of the Ohio Attorney General’s Ohio Organized Crime Investigations Commission, and which also includes authorities from the Attorney General's Bureau of Criminal Investigation (BCI), U.S. Homeland Security Investigations, Columbus Division of Police, Ohio State Highway Patrol, Powell Police Department, Federal Bureau of Investigation and the Delaware County Prosecutor's Office. Assistant U.S. Attorney Heather Hill and Special Assistant U.S. Attorney Brant Cook, director of the Ohio Attorney General’s Crimes Against Children Initiative, are representing the government in this case.

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

An Ohio lobbyist agreed today to plead guilty to extortion in connection with a bribery and fraud scheme involving conduit contributions to the campaigns of elected officials, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division.

John P. Raphael, 60, of Columbus, Ohio, agreed to plead guilty to a one-count information charging him with a violation of the Hobbs Act.

Raphael was a consultant and lobbyist based in Columbus.  From March 2005 to February 2013, a red light camera enforcement company engaged Raphael to seek and obtain lucrative contracts with the cities of Columbus and Cincinnati.  During that time, according to admissions made in his plea, which was filed today, Raphael conveyed to the company specific solicitations for campaign contributions on behalf of elected officials in Columbus and Cincinnati, and repeatedly pressured and induced the company to make contributions by advising the company that it would lose its contracts if it did not.

Raphael admitted that, as a result of his actions, the red light camera enforcement company made over $70,000 in campaign contributions, which were funneled through Raphael in his own name and in the names of his family members, friends and business associates. 

The former chief executive officer of the red light camera vendor, Karen L. Finley, previously pleaded guilty to conspiracy to commit federal programs bribery and honest services wire and mail fraud. 

The case is being investigated by the FBI’s Cincinnati Division, Columbus Resident Agency, with the assistance of IRS-Criminal Investigations and the Ohio Bureau of Criminal Investigation.  The case is being prosecuted by Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio and Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section.

COLUMBUS, Ohio – A former school music instructor was charged late Thursday by criminal complaint with production of child pornography.

Brian Sze, 34, of Seattle, was arrested September 29 without incident at his residence. He is also facing related state charges in Ohio.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Marlon V. Miller, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Columbus Police Chief Kim Jacobs and members of the Franklin County Internet Crimes Against Children (ICAC) Task Force announced the charges.

According to court documents, the investigation began in July 2015 after a tip was called into ICAC which indicated Sze had illicit sexual contact with a minor and subsequently recorded the encounter.

Production of child pornography is a crime punishable by a range of 15 to 30 years in prison.

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  

This case is being brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorney's Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims.

U.S. Attorney Stewart commended the members of the ICAC Task Force for the cooperative investigation, and Assistant U.S. Attorney Heather Hill who is representing the United States in this case.

A criminal complaint merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

COLUMBUS, Ohio – An Ohio lobbyist has agreed to plead guilty to extortion in connection with conduit contributions, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Office.

John P. Raphael, 60, of Columbus, has agreed to plead guilty to a one-count information charging him with interference with commerce by threats. A plea hearing will be scheduled.

According to the information, Raphael was a consultant and lobbyist based in Columbus, Ohio, who was hired and paid by companies that sought to do business with municipalities and counties in Ohio. From March 2005 to February 2013, a red light camera enforcement company hired and paid Raphael to seek and obtain lucrative contracts to provide red light photo enforcement systems in the City of Columbus.

During the time the red light camera enforcement company was seeking to retain contracts in Columbus, Raphael repeatedly pressured and induced the company to make campaign contributions to the campaigns of various elected officials. He communicated to the company that it would lose its contracts and suffer an economic loss if it did not make the payments. Thus, Raphael obtained and attempted to obtain the funds by the wrongful use of fear of economic harm.

The former chief executive officer of the red light camera vendor, Karen L. Finley, previously pleaded guilty to conspiracy to commit federal programs bribery and honest services wire and mail fraud.

Interference with commerce by threats is a crime punishable by up to 20 years in prison and a fine of $250,000 or a fine of twice the pecuniary gain or loss.

The case was investigated by the FBI’s Cincinnati Field Office, Columbus Resident Agency, with the assistance of IRS-Criminal Investigations and the Ohio Bureau of Criminal Investigation.  The case is being prosecuted by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio.

This information only contains a charge against John Raphael and should not be construed as a reflection on the guilt or innocence of any other individual.

COLUMBUS, Ohio – Alison L. Antekeier, 48, formerly of Columbus, Ohio, was sentenced in U.S. District Court today to five months in jail for criminal contempt, specifically disobedience or resistance of the court, stemming from a civil lawsuit.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Peter C. Tobin, United States Marshal for the Southern District of Ohio, announced the plea entered into today before U.S. District Judge Algenon L. Marbley.

Antekeier and treasure-hunter Thomas “Tommy” G. Thompson, 63, also formerly of Columbus, Ohio, pleaded guilty to criminal contempt in April.

According to court documents, Thompson disobeyed and resisted a lawful order of U.S. District Chief Judge Sargus, who ordered Thompson to personally appear at an August 13, 2012 hearing related to a civil case involving the defendant. Specifically, Thompson had been ordered to appear at a hearing to provide an accounting of certain funds and the location of 500 re-strike commemorative gold coins as part of a lawsuit over the treasure that Thompson found from the SS Central America shipwreck. A bench warrant for Thompson’s arrest was issued the same day.

Antekeier was also ordered to appear in U.S. District Court as a witness in the civil lawsuit. She was to appear in court to give testimony related to the civil case on November 7, 2012; a bench warrant for her arrest was issued when she failed to appear.

In March 2013, an arrest warrant based on a criminal complaint alleging criminal contempt was authorized against Thompson.

U.S. Marshals found and arrested Thompson and Antekeier on January 27, 2015 in Boca Raton, Florida. Thompson and Antekeier had been living in a Hilton hotel room under fake names and paying with cash.

As part of their plea, the couple has agreed to forfeit the more than $425,000 in cash that was seized at the time of their arrest.

Thompson is scheduled to be sentenced at 9:30am on October 29.

U.S. Attorney Stewart commended the investigation by the U.S. Marshals Service, as well as Assistant United States Attorney Doug Squires, who is representing the United States in this case.

WASHINGTON – A co-founder of Imperial Integrative Health Research and Development LLC (Imperial) was sentenced to serve 83 months in prison in federal court today for his role in a fraud scheme related to Imperial and its product, OXYwater, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carter M. Stewart of the Southern District of Ohio.

Thomas E. Jackson, 40, of Powell, Ohio, was sentenced by U.S. District Court Judge Gregory L. Frost of the Southern District of Ohio.  In addition to the prison sentence, Jackson was ordered to serve three years of supervised release and to pay approximately $8.8 million in restitution to victims of the fraud.  On March 25, Jackson was convicted of conspiracy to commit wire fraud, conspiracy to commit money laundering, eight counts of wire fraud and 12 counts of money laundering.

Jackson’s business partner, Preston J. Harrison, 43, and Harrison’s wife, Lovena Harrison, 42, both of Lewis Center, Ohio, also went to trial in March and were convicted of multiple crimes.  Preston Harrison was convicted of conspiracy to defraud the United States, filing a false income tax return, conspiracy to commit wire fraud, conspiracy to commit money laundering and 12 counts of money laundering.  Lovena Harrison was convicted of conspiracy to defraud the United States, filing a false income tax return and structuring financial transactions to evade currency reporting requirements.

The Harrisons were sentenced on Aug. 25.  Preston Harrison was also sentenced to serve 83 months in prison to be followed by three years of supervised release, and ordered to pay approximately $8.8 million to victims of the fraud and approximately $376,000 in restitution to the Internal Revenue Service (IRS).  He was also ordered to forfeit $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account.  Lovena Harrison was sentenced to serve 12 months and one day in prison to be followed by three years of supervised release, and ordered to pay approximately $376,000 in restitution to the IRS.

According to court testimony, Jackson and Preston Harrison operated Imperial, based in Westerville, Ohio, and developed OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.

The defendants engaged in a scheme to deceive Imperial’s investors about Imperial and OXYwater’s structure, composition, finances, sales and profits in order to make the company appear to be a lucrative and profitable financial investment.  Jackson and Preston Harrison produced and sent false and fraudulent documents intended to deceive investors in order to obtain additional investments in Imperial.  They then misappropriated that money for their own personal use, which included purchasing jewelry, a Cadillac Escalade, a BMW vehicle, weapons, clothing, home improvements and a swimming pool.

Between August 2010 and spring 2013, Jackson and Preston Harrison misappropriated approximately $2 million of the investors’ funds.  The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets.  As a result of the defendants’ conduct, investors lost approximately $9 million.

In 2011, Preston Harrison misappropriated approximately $1.1 million from Imperial, which he and Lovena Harrison diverted into an account in the name of a daycare business and used for personal expenses.  The Harrisons did not report the money as income on their 2011 income tax return.

“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,” said Special Agent in Charge Kathy A. Enstrom of the IRS-Criminal Investigation (CI) Cincinnati Field Office. “Today's sentencing demonstrates how federal law enforcement will band together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain.”

Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended special agents of IRS-CI and the FBI, who investigated the case, as well as Assistant U.S. Attorney Jessica Kim of the Southern District of Ohio and Trial Attorney Jason Scheff of the Tax Division, who prosecuted the case.

COLUMBUS, Ohio – Jeffrey R. Shope, 44, of Blacklick, Ohio, pleaded guilty in U.S. District Court to one count of insurance fraud.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Lieutenant Governor Mary Taylor, Director of Ohio Department of Insurance and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the plea entered into today before U.S. District Judge Gregory L. Frost.

According to court documents, Shope was a licensed chiropractor and owner of True Health Chiropractic in Westerville, Ohio. From January 2009 to December 2012, Shope made false statements to defraud federal health care benefit programs and obtained nearly $700,000 in fraudulent payments. Shope would bill for equipment and services not rendered to maximize insurance payments and would bill two separate programs for identical services provided to the same patients on the same day.

Health care fraud is a crime punishable by up to 10 years in prison and a $250,000 fine.

U.S. Attorney Stewart commended the cooperative investigation by the FBI and Ohio Department of Insurance, as well as Assistant United States Attorney Ken Affeldt, who is representing the United States in this case

WASHINGTON – The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced an $18 million settlement to resolve allegations that Fifth Third Bank (Fifth Third) engaged in a pattern or practice of discrimination against African-American and Hispanic borrowers in its indirect auto lending business.

The settlement, which is subject to court approval, includes compensation for African-American and Hispanic borrowers who were overcharged, and requires changes to the way that Fifth Third prices automobile loans.  Specifically, Fifth Third has agreed to change the way it prices its loans by limiting dealer markup to 125 basis points, or 1.25 percent, for loans of 60 months or less, and to 100 basis points, or one percent, for loans greater than 60 months.

“We commend Fifth Third for its commitment to treating all of its customers fairly without regard to race or national origin and its leadership in agreeing to impose lower caps on discretionary markups,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “This agreement shows that the indirect auto lending industry is moving toward a model of dealer compensation that fairly compensates dealers for their work related to loans, while limiting the dealer markup that leads to discriminatory pricing.”

“Consumers deserve a level playing field when they enter the marketplace, especially when financing an automobile,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio.  “This settlement prevents discrimination in setting the price for auto loans.”

“We are committed to promoting fair and equal access to credit in the auto finance marketplace,” said CFPB Director Richard Cordray.  “Fifth Third’s move to a new pricing and compensation system represents a significant step toward protecting consumers from discrimination."

The coordinated investigations by the department and the CFPB that preceded today’s settlement determined Fifth Third’s previous system of subjective and unguided pricing discretion directly resulted in the bank’s qualified African-American and Hispanic borrowers paying more than qualified non-Hispanic white borrowers.  The department and CFPB anticipate that Fifth Third’s new caps on discretionary markups will substantially reduce or eliminate these disparities.

The investigation relates to what are called “indirect” auto loans,  because, rather than taking applications directly from consumers, the bank makes most of its auto loans through car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Fifth Third.  Fifth Third’s previous business practice, like that of many other major auto lenders, allowed car dealers discretion to mark up a loan’s interest rate from the price Fifth Third initially sets based on the borrower’s objective credit-related factors.  Dealers received greater payments from Fifth Third for loans that included a higher interest rate markup.

The settlement resolves claims by the department and the CFPB that Fifth Third discriminated by charging thousands of African-American and Hispanic borrowers higher interest rates than non-Hispanic white borrowers.  The agencies claim that Fifth Third charged borrowers higher interest rates because of their race or national origin and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk.  The United States’ complaint alleges that the average African-American victim was obligated to pay over $200 more during the term of the loan because of discrimination and the average Hispanic victim was also obligated to pay over $200 more during the term of the loan because of discrimination.  The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending.  Fifth Third’s settlement with the Department of Justice, which is subject to court approval, was filed today in the U.S. District Court for the Southern District of Ohio in conjunction with the Department of Justice’s complaint.  Fifth Third resolved the CFPB’s claims by entering into a public administrative settlement.

The settlement also requires Fifth Third to improve its monitoring and compliance systems.  The settlement allows the lender to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results.  The department commends Fifth Third for working cooperatively to reach an appropriate resolution of this case.

The settlement provides for an administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Fifth Third’s discrimination.  The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available.  Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.

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

The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division.  Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA.  The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.

The Department of Justice and the Consumer Financial Protection Bureau (CFPB) today announced an $18 million settlement to resolve allegations that Fifth Third Bank (Fifth Third) engaged in a pattern or practice of discrimination against African-American and Hispanic borrowers in its indirect auto lending business.

The settlement, which is subject to court approval, includes compensation for African-American and Hispanic borrowers who were overcharged, and requires changes to the way that Fifth Third prices automobile loans.  Specifically, Fifth Third has agreed to change the way it prices its loans by limiting dealer markup to 125 basis points, or 1.25 percent, for loans of 60 months or less, and to 100 basis points, or one percent, for loans greater than 60 months.

“We commend Fifth Third for its commitment to treating all of its customers fairly without regard to race or national origin and its leadership in agreeing to impose lower caps on discretionary markups,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “This agreement shows that the indirect auto lending industry is moving toward a model of dealer compensation that fairly compensates dealers for their work related to loans, while limiting the dealer markup that leads to discriminatory pricing.”

“Consumers deserve a level playing field when they enter the marketplace, especially when financing an automobile,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio.  “This settlement prevents discrimination in setting the price for auto loans.”

“We are committed to promoting fair and equal access to credit in the auto finance marketplace,” said CFPB Director Richard Cordray.  “Fifth Third’s move to a new pricing and compensation system represents a significant step toward protecting consumers from discrimination."

The coordinated investigations by the department and the CFPB that preceded today’s settlement determined Fifth Third’s previous system of subjective and unguided pricing discretion directly resulted in the bank’s qualified African-American and Hispanic borrowers paying more than qualified non-Hispanic white borrowers.  The department and CFPB anticipate that Fifth Third’s new caps on discretionary markups will substantially reduce or eliminate these disparities.

The investigation relates to what are called “indirect” auto loans,  because, rather than taking applications directly from consumers, the bank makes most of its auto loans through car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Fifth Third.  Fifth Third’s previous business practice, like that of many other major auto lenders, allowed car dealers discretion to mark up a loan’s interest rate from the price Fifth Third initially sets based on the borrower’s objective credit-related factors.  Dealers received greater payments from Fifth Third for loans that included a higher interest rate markup.

The settlement resolves claims by the department and the CFPB that Fifth Third discriminated by charging thousands of African-American and Hispanic borrowers higher interest rates than non-Hispanic white borrowers.  The agencies claim that Fifth Third charged borrowers higher interest rates because of their race or national origin and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk.  The United States’ complaint alleges that the average African-American victim was obligated to pay over $200 more during the term of the loan because of discrimination and the average Hispanic victim was also obligated to pay over $200 more during the term of the loan because of discrimination.  The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending.  Fifth Third’s settlement with the Department of Justice, which is subject to court approval, was filed today in the U.S. District Court for the Southern District of Ohio in conjunction with the Department of Justice’s complaint.  Fifth Third resolved the CFPB’s claims by entering into a public administrative settlement.

The settlement also requires Fifth Third to improve its monitoring and compliance systems.  The settlement allows the lender to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results.  The department commends Fifth Third for working cooperatively to reach an appropriate resolution of this case.

The settlement provides for an administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Fifth Third’s discrimination.  The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available.  Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.

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

The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division.  Since 2010, the Civil Rights Division has provided approximately $1.3 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA.  The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.

WASHINGTON, DC—Today, U.S. Attorney General Loretta Lynch announced Office of Community Oriented Policing Services (COPS Office) funding awards to12 cities and counties in Ohio, aimed at creating, and in some cases protecting, 58 law enforcement positions. Over $107 million will be awarded nationally, through the COPS Hiring Program (CHP), including $7.3 million in Ohio.

In the Southern District of Ohio, nearly $1.9 million is being awarded to the City of Cincinnati for 15 law enforcement positions.

The list of this year’s grantees includes:  Austintown Township, Barberton, Boardman, Canton, Cincinnati, Cleveland, Cuyahoga Metropolitan Housing Authority Police, East Cleveland, Mansfield, Massillon, Milton Township and the Village of Northfield.

“The COPS Office is pleased to assist local law enforcement agencies throughout the country in addressing their most critical public safety issues,” said Ronald L. Davis, Director of the COPS Office. “These grants are not simply about putting more officers on the street, they are about expanding the capacity of law enforcement agencies to engage in community policing.”

CHP provides grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers. The program provides salaries and benefits for officer and deputy hires for three years.

Priority consideration was given this year to agencies that selected any of the Building Trust focus areas or School Based Policing through School Resource Officers.  All applicants were encouraged to refer to the report of the President's Task Force on 21st Century Policing for suggested actions to incorporate into their proposed community policing strategy.

The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has invested over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 127,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.

For the entire list of grantees and additional information about the 2015 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.

COLUMBUS, OHIO – Andrew J. Parish, 40, of Chillicothe, Ohio was sentenced to 18 months in prison, three years of supervised release, and was ordered to pay $341,336.46 in restitution to the Internal Revenue Service (IRS) for failing to account for and pay over employment taxes to the IRS. Parish previously pleaded guilty to the aforementioned charge on May 5, 2015.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office announced the sentence handed down today by Senior U.S. District Judge James L. Graham.

According to court documents, between January 2009 and March 2009, Parish defrauded the IRS by failing to account for and pay over employment taxes.  Parish was the owner and operator of Axiom Consulting Group, LLC (“Axiom”) and was responsible for collecting, truthfully accounting for, and paying over the employment taxes to the IRS from the employees of Axiom.  Parish retained the services of an accounting firm that employed Certified Professional Accountants.  One of the accounting firm’s responsibilities was to process the payroll for Axiom based on figures provided to them by Parish.  The accounting firm was also retained to prepare Forms 941, Employer’s Quarterly Federal Tax Returns.

Parish did not follow the established payroll procedures and instead paid a majority of Axiom’s payroll by issuing the payroll checks himself to the Axiom employees.  These payroll checks did contain withholding amounts for the required employment taxes owed.  However, the amount of employment taxes that Parish withheld from his employees were never remitted to the IRS.  In addition, Parish never provided the true amount of the wages paid to the employees to the accounting firm, causing the preparation of an inaccurate Form 941 for the period January 1, 2009 through March 31, 2009.  In addition, it was Parish’s responsibility to transmit the Forms 941 to IRS, but he failed to do so.

The total tax loss to the IRS as a result of the non-payment of employment taxes was $341,336.46.

"IRS Criminal Investigation realizes the detrimental consequences of employment tax evasion.  It results in the loss of tax revenue to the United States government and the loss of future social security or Medicare benefits for the employees," stated Kathy A. Enstrom, Special Agent in Charges, IRS Criminal Investigation, Cincinnati Field Office.

This case was prosecuted by Assistant United States Attorney Jessica H. Kim and was investigated by special agents of IRS-Criminal Investigation.

WASHINGTON – Kayaba Industry Co. Ltd., dba KYB Corporation (KYB) has agreed to plead guilty and to pay a $62 million criminal fine for its role in a conspiracy to fix the price of shock absorbers installed in cars and motorcycles sold to U.S. consumers.

According to charges filed today, KYB conspired from the mid-1990s until 2012 to fix the prices of shock absorbers sold to Fuji Heavy Industries Ltd. (manufacturer of Subaru vehicles), Honda Motor Co. Ltd., Kawasaki Heavy Industries Ltd., Nissan Motor Company Ltd., Suzuki Motor Corporation and Toyota Motor Company, including their subsidiaries in the United States.

“KYB turned the competitive process on its head by agreeing with its competitors to fix the prices of shock absorbers installed in cars and motorcycles sold in the U.S.,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “Working with the FBI and our other law enforcement partners, the Antitrust Division will continue to protect American car buyers and hold automotive part suppliers accountable for their illegal conduct.”

“Any collusive agreement among competitors to restrict price competition undercuts our free enterprise system and violates the law,” said U.S. Attorney Carter M. Stewart of the Southern District of Ohio.  “We will continue to work to prosecute these fraudulent arrangements in order to protect consumers’ right to free and open competition, particularly in the auto parts industry.”

“Fixing prices and rigging bids is against the law and ultimately harms consumers by artificially inflating prices and creating a corrupt marketplace,” said Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division.  “The FBI and our partners will continue to investigate anticompetitive practices and promote fair competition.”

According to the information filed in the U.S. District Court of the Southern District of Ohio, KYB, based in Tokyo, and its two co-conspirators agreed to allocate the supply of shock absorbers sold and determine the price submitted to the targeted vehicle manufacturers.  To keep prices up, KYB and its co-conspirators also agreed to coordinate on price adjustments requested by the vehicle manufacturers and strived to keep their conduct secret.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  KYB has agreed to cooperate with the department’s ongoing investigation and the plea agreement is subject to court approval.  Including KYB, 37 companies and 55 executives have been charged in the division’s ongoing investigation and have agreed to pay a total of more than $2.6 billion in criminal fines.  KYB is being prosecuted by the Antitrust Division’s Chicago Office and the FBI’s Cincinnati Field Office, with assistance from the U.S. Attorney’s Office of the Southern District of Ohio.  Anyone with information on market allocation, price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cincinnati Field Office at 513-421-4310.

COLUMBUS, Ohio – Benjamin N. Chason, 61, of Climax, Ga. pleaded guilty and was sentenced in U.S. District Court for three charges related to violating the Lacey Act. Chason was ordered to pay $1.6 million in fines and restitution, the largest sum of money ordered of an individual to pay for a wildlife crime in the United States.

Of the $1.6 million, $600,000 is to be paid into the Ohio Department of Natural Resources Wildlife Habitat Fund $200,000 to the Federal  Endangered Species and Wildlife Diversity Fund, $400,000 to Columbus and Franklin County Metro Parks and $100,000 to the Ohio DNR Division of Wildlife Turn in a Poacher (TIP) program.

Carter Stewart, U.S. Attorney for the Southern District of Ohio, Gregory Jackson, Special Agent in Charge, United States Fish and Wildlife Service Office of Law Enforcement, Chief Scott Zody, Ohio Department of Natural Resources Division of Wildlife, Franklin County Prosecutor Ron O’Brien, the Florida Fish and Wildlife Conservation Commission and Georgia Department of Natural Resources announced the sentence, which was unsealed yesterday.

According to court documents, Chason and co-conspirator Donald W. Wainwright, Sr., trafficked in live white-tailed deer.  Wainwright Sr. owned hunting preserves in Logan County, Ohio, and Live Oak, Florida; both preserves were named Valley View Whitetails.  Donald Wainwright, Jr. was part-time resident and part-time operator of the site in Ohio. Chason was part-owner of Valley View Whitetails in Ohio and also owned an extensive high-fenced property containing white-tailed deer in Climax, Ga.

Wainwright Sr. illegally shipped deer to Florida from Ohio and attempted to ship deer to Georgia from Ohio. The deer herds involved with these shipments were not certified to be free from chronic wasting disease, tuberculosis and brucellosis. Federal law requires interstate shipments of deer to be certified to be disease-free; because the deer in the present case were not certified as disease-free, deer herds (both captive and wild) in Florida were potentially exposed to these diseases.   Tuberculosis and brucellosis can also be transmitted from deer to cows and humans.

The attempted shipment to Georgia was intercepted on I-71 South, about 50 miles from the Ohio River, when Ohio Division of Wildlife officers noticed deer noses and antlers inside a cargo trailer and pulled over a truck driven by Wainwright Sr.’s employees.

Wainwright Sr. and Chason placed federal identification tags from a certified deer that had previously died into the ear of an uncertified deer they were selling. They then sold breeding services and semen from the deer to breeders around the United States.

The defendants also sold illegal white-tailed deer hunts at Valley View Whitetails of Ohio. They induced clients from around the country to hunt at Valley View Whitetails of Ohio – charging customers from $1,000 to $50,000 to kill deer inside his high fence preserve when Wainwright did not have a hunting preserve license. The customers then took the bucks back to their home states, including: Florida, Michigan, Alabama and Virginia.

“Illegal sale and transport of white-tailed deer are serious crimes and I appreciate the teamwork and cooperation between all of the agencies involved to help obtain these convictions,” ODNR Division of Wildlife Chief Scott Zody said.

"We are pleased to see the positive results in this investigation. The U.S. Fish and Wildlife Service, Office of Law Enforcement considers the potential spread of disease caused by the illegal commercialization of fish and wildlife resources a high priority, and we will continue to work closely with our State partners to assist them in these important investigations," said Edward Grace, U.S. Fish and Wildlife Service Deputy Assistant Director for Law Enforcement.

Chason pleaded guilty on May 1, 2014. Besides being ordered to pay restitution, Chason was sentenced to three years of probation and four months of home confinement. Chason also agreed to publish a statement in North American Whitetail Magazine and perform 150 hours community service in an Ohio or Georgia State Park.

Wainwright Sr. pleaded guilty on February 27, 2015, to 12 charges related to violating the Lacey Act, one count of conspiracy and one count of wire fraud.  He was sentenced to 21 months in prison, a $125,000 fine 200 hours of community service to be served in a parks system and ordered to publish an article in The Deer Breeders Gazette.

Wainwright Jr. pleaded guilty on February 17, 2015, to eight charges related to offering illegal hunts in violation the Lacey Act and was sentenced to four months of house arrest and three years of probation.

Under the Lacey Act, it is unlawful to import, export, transport, sell or purchase wildlife, fish or plants that were taken, possessed, transported or sold in violation of a state, federal or foreign law. When it was passed in 1900, the Lacey Act became the first federal law protecting wildlife.

U.S. Attorney Stewart commended the cooperative investigation by law enforcement, as well as Special Assistant United States Attorney Heather Robinson with the Franklin County Prosecutor’s Office and Assistant United States Attorneys J. Michael Marous and Peter Glenn-Applegate, who represented the United States in this case.

CINCINNATI – David Allen Coe, 76, of Cincinnati, Ohio, pleaded guilty to one count of impeding and obstructing the due administration of the Internal Revenue laws.  Coe faces a maximum of three years in prison and a fine of up to $250,000.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office announced the guilty plea entered today before U.S. District Judge Timothy S. Black.

According to court documents, David Allen Coe was a national recording artist in the country music industry. Coe performed at least 100 concerts yearly throughout the United States where he earned income, including during the 2008 through 2013 calendar years.  During this same time period, Coe either failed to file his individual income tax returns with the IRS or when Coe did file his individual income tax returns with the IRS, he failed to pay the taxes due and owing.  In addition, during this same time period, Coe also owed money to the IRS for prior years of taxes due and owing.  Instead of paying his taxes in full, Coe spent the money earned from performing concerts on other debts and gambling.

As part of his entertainer contract, when a concert was booked, Coe required that the total concert fee be deposited upfront.  The deposit was either paid by wire or by check made payable to the booking manager's account.  The booking manager took his fee out of the deposit and then wired the remaining amount directly to Coe or to Coe’s road manager's business account.

In approximately May 2009, Coe stopped receiving these payments by wire into his personal bank account after receiving correspondence from the IRS as to his current outstanding tax liabilities.  This action prevented the IRS from levying his bank account to pay his income taxes.  The remaining balance of the concert fee was to be paid in cash only, by 3:00p.m.on the day of the concert, with no $50 dollar bills allowed as Coe believed they were bad luck and would not gamble with them.  Coe’s road manager picked up the cash, which he used to pay himself and the other band members, and then provided the remaining cash to Coe either in person or through MoneyGram or Western Union.  Additionally, Coe would sometimes receive cash bonuses from playing concerts.  Coe’s arrangement to be paid primarily in cash was also in an effort to impede the ability of the IRS to collect on the taxes owed.

Despite earning income from his concerts, Coe willfully failed to pay the income taxes due and owing when he filed his 2009, 2011 and 2013 individual income tax returns.  As a result, Coe now owes the IRS $388,190.94 for the 2009 income tax year, $35,640.10 for the 2011 income tax year and $42,733.82 for the 2013 income tax year, which includes the income taxes owed plus interest and penalties.

Coe also owes restitution to the IRS for the taxes due and owing as a result of his 2008 and 2010 tax returns, which said amount will be determined at the time of sentencing.

"All taxpayers, regardless of their profession, must comply with their federal tax obligations," said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.  “As is evident from Mr. Coe’s guilty plea, schemes to evade the payment of taxes are a violation of the Federal Tax laws and postpones the eventual need to comply at an even higher cost, including federal criminal prosecution and having to pay back taxes with interest and steep penalties."

This case was prosecuted by Assistant United States Attorney Jessica W. Knight and was investigated by special agents of IRS-Criminal Investigation.

COLUMBUS, Ohio – A federal grand jury has charged Mark W. Wolfe, 50, of Sunbury, Ohio, with distribution, receipt and possession of child pornography.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the indictment returned yesterday.

According to court documents, undercover investigators observed files containing child pornography being shared through an IP address belonging to Wolfe. During a search warrant executed on July 31 at Wolfe’s residence, investigators discovered a laptop containing approximately 486 videos and 203 images of child pornography. The files were located in several folders on the computer under the user name “Mark.”  Some of the videos showed children as young as eight-to-10 months old being sexually abused.

Further forensic analysis of the computer revealed Skype chat messages between Wolfe and several other individuals. In these conversations, Wolfe allegedly distributed child pornography files and claimed to have previously engaged in sex acts with minors and stated that his favorite age is five to ten years old.

The three-count indictment charges Wolfe with one count of distribution and one count of receipt of child pornography, each crimes punishable by at least five years up to a potential maximum of 20 years in prison, and one count of possession of child pornography, which carries a potential maximum sentence of 10 years imprisonment.

This case is being 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/.

Stewart commended the investigation by the FBI Columbus Child Exploitation Task Force, which includes officers from the Westerville Police Department, Reynoldsburg Police Department, Powell Police Department and Belmont County Sheriff’s Office, as well as Assistant U.S. Attorney Heather A. Hill, who is prosecuting the case.

Charges contained in an indictment are merely allegations. All defendants are presumed innocent until and unless proven guilty in court.

CINCINNATI – A federal grand jury has charged nine individuals in an indictment related to the trafficking of real, Puerto Rican identities in the Cincinnati area. Defendants were arrested in Cincinnati and in Puerto Rico today.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service (USPIS), Marlon Miller, Special Agent in Charge, Homeland Security Investigations (HSI), and Elias Papoulias, Resident Agent in Charge, Social Security Administration Office of Inspector General announced the indictment and arrests.

The indictment alleges that the defendants are linked in a vast document trafficking organization, wherein defendants obtained birth certificates and Social Security cards in the names of real individuals from Puerto Rico, shipped those document sets to Southern Ohio and then sold the document sets in the Cincinnati area. The defendants allegedly sold the document sets for $900-$1200 each.

The defendants include:

• Cipriano Diaz, 38, of Cincinnati
• Ramon E. Fuentes Morillo, 49, of Puerto Rico
• Oris Mercedes Baez Ramirez, 49, of Hamilton
• Jorge Roblero, 34, of Cincinnati
• Kathya Roblero, 50, of Cincinnati
• Chilango Zuniga, 40, of Hamilton
• Esmeralda Hernandez Cervantes, 36, of Cincinnati
• Susana Angiolina Urena, 44, of Hamilton
• Fernano Evelio Velasquez-Morales, 31, of Cincinnati

Each of the defendants was charged with conspiracy to commit wire and mail fraud, a crime punishable by up to 20 years in prison. The indictment also includes 29 counts of aggravated identity theft, a crime punishable by a mandatory two years imprisonment for each count, and two counts of money laundering, which each carry a maximum sentence of 20 years in prison.

U.S. Attorney Stewart commended the investigation of this case by law enforcement, and Assistant U.S. Attorney Jessica W. Knight and Cincinnati Branch Chief Emily N. Glatfelter, who are prosecuting the case.

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

COLUMBUS, Ohio – A federal grand jury has charged Rita Green, 55, of Gahanna, Ohio, with illegally receiving Department of Veterans Affairs Dependency and Indemnity Compensation benefits in an indictment returned in Columbus, Ohio.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Gavin McClaren, Resident Agent in Charge, Department of Veterans Affairs Office of Inspector General (VA-OIG), and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the indictment returned yesterday.

The indictment alleges that Green kept $89,646.22 of Department of Veterans Affairs Dependency and Indemnity Compensation benefits to which she knew she was not entitled. Green’s mother was a recipient of the benefits, which are paid to surviving spouses of veterans who died in the line of duty or died from a disease or injury incurred or aggravated while on active duty. Those benefits were paid monthly to a bank account in the mother’s name.

It is alleged that after Green’s mother died in 2009, Green continued to withdraw the benefits from the bank account of her mother and use the money via a debit card in her mother’s name.

Theft of public money is a crime punishable by up to 10 years in prison and a $250,000 fine.

U.S. Attorney Stewart commended the investigation of this case by the VA-OIG and the FBI, and Assistant U.S. Attorney Peter Glenn-Applegate, 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 – Richard Spriggs, Sr., 47, of Columbus, pleaded guilty in U.S. District Court to conspiracy to possess with intent to distribute marijuana, conspiracy to commit money laundering and unlawful possession of a firearm.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Agency (DEA), Kathy A. Enstrom. Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office and Columbus Police Chief Kim Jacobs, announced the plea entered into yesterday before U.S. Magistrate Judge Terence P. Kemp.

According to court documents, Spriggs and others in an organization were responsible for distributing multiple kilograms of marijuana by use of Ohio residences, business fronts, commercial freight, semi tractor-trailers and vehicles. Spriggs and others transported marijuana to various places in Columbus, Ohio from suppliers in Houston, Texas. The drug shipments were disguised as hair care products, beauty supplies and whole grain rice.

Spriggs used the drug proceeds to purchase at least two residences by paying cash. He used pre-paid debit cards which he funded in another person’s name as his personal credit card, buying air travel, rental vehicles and cellular telephone bills.

Spriggs pleaded guilty to one count of possession with intent to distribute marijuana, one count of money laundering and one count of unlawful possession of a firearm by a convicted felon.

The marijuana charge carries a potential maximum sentence of 40 years imprisonment, and conspiracy to commit money laundering and unlawful possession of a firearm each carry a potential maximum sentence of 10 years in prison.

Spriggs has agreed to forfeit approximately $86,000 in cash, firearms and ammunition.

“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,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.

U.S. Attorney Stewart commended the cooperative investigation by law enforcement, as well as Assistant United States Attorney Kenneth F. Affeldt, who is representing the United States in this case.

WASHINGTON – Dean Daniels, 52, Richard Smith, 57, Brenda Daniels, 45 and William Bradley, 58, all of Florida, pleaded guilty and were sentenced today in U.S. district court for charges related to a scheme involving the false production of biodiesel.

Dean Daniels was sentenced to 63 months incarceration, Bradley was sentenced to 51 months incarceration, Smith was sentenced to 41 months incarceration and Brenda Daniels was sentenced to 366 days incarceration.

Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney Carter M. Stewart for the Southern District of Ohio, Acting Special Agent in Charge Troy N. Stemen for the Internal Revenue Service Criminal Investigation (IRS) and Acting Special Agent in Charge Jeffrey Martinez of  the Environmental Protection Agency’s (EPA) Criminal Enforcement Program in Ohio and Regional Special Agent in Charge Max D. Smith of the Department of Transportation’s Office of Inspector General announced the sentences handed down today by Senior U.S. District Court Judge James L. Graham.

According to court documents, the defendants profited by unjustly generating and selling biodiesel credits (RINs) and unjustly claiming biodiesel tax credits for the production and blending of fuel that was not actually biodiesel.

“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent and to move our energy economy into the 21st century,” said Assistant Attorney General Cruden.  “The fraud perpetrated by the defendants threatens these important public policies.  The Justice Department will vigorously prosecute those seeking to line their pockets using scams like this one.”

The defendants were all employees and officers of New Energy Fuels LLC, a business in Waller, Texas, that claimed to process animal fats and vegetable oils into biodiesel.  The defendants subsequently relocated, operating a similar scheme at Chieftain Biofuels LLC in Logan, Ohio.

The defendants would purchase low-grade feedstock and perform minimal processing to produce a low-grade fuel.  The fuel was not biodiesel, however, the defendants would represent to the EPA that they had produced biodiesel.  They would generate fraudulent biodiesel RINs and sell them to various third parties.  Biodiesel RINs cannot be generated unless the biodiesel produced meets industry standards.  In total, the defendants sold over $15 million worth of fraudulent biodiesel RINs.

The defendants also made false claims to the IRS in order to obtain the biodiesel tax credit that they were not eligible to receive.  Throughout 2009, 2010 and 2011, refundable tax credits were available for renewable fuel producers.  If companies complied with IRS regulations, they could earn one dollar per gallon of biodiesel.  It was illegal to claim this tax credit unless the biodiesel was produced, blended and sold in compliance with rules and regulations.  Among other requirements, the biodiesel had to meet industry standards, which the defendant’s fuel did not.  In total, the defendants claimed over $7 million in false biodiesel tax credits.

In addition, New Energy Fuels’ production process generated substantial hazardous by-products.  Defendant Dean Daniels arranged for an employee of New Energy Fuels to transport the wastes off-site at night.  That employee, Lonnie Perkins, previously pleaded no-contest in Texas to several charges related to the dumping of hazardous waste in and around the city of Houston.

“The Renewable Fuel Standard helps reduce the climate impact of transportation fuel sold in this country,” said Acting Special Agent in Charge Martinez.  “The criminal activity by these defendants has real consequences.  The defendants manipulated and utilized federal governmental programs to line their pockets by fraud.  These guilty pleas demonstrate EPA’s commitment, working closely with our partners at the Department of Justice, to pursue these criminal cases vigorously.  Companies and their managers need to understand there are serious consequences to skirting the rules and undermining the integrity of an EPA program.”

“Today’s sentencings mark the successful end of an investigation that uncovered a complicated fraudulent scheme that generated millions of dollars through false biodiesel tax credits,” said Acting Special Agent in Charge Stemen.  “We want everyone to take advantage of the deductions and credits to which they are entitled by law; however, no one is entitled to defraud the government."

“The Office of Inspector General is committed to investigating and seeking prosecution of those who choose to endanger the public by illegally transporting, distributing, or disposing of hazardous materials,” said Regional Special Agent in Charge Smith.  “Today’s sentencing should send a clear warning that these fraudulent actions and illegal hazmat violations will not be tolerated.”

Each of the defendants pleaded guilty to conspiracy to commit wire fraud and to defraud the United States.  Dean Daniels also pleaded guilty to offering a hazardous material for transport without providing or affixing proper placards.

Assistant Attorney General Cruden and U.S. Attorney Stewart commended the cooperative investigation by law enforcement, including the Houston Police Department, as well as Department of Justice Trial Attorney Adam Cullman and Assistant U.S. Attorney J. Michael Marous, who represented the United States in this case.

WASHINGTON – Two Ohio residents were arrested today after being indicted on Aug. 25, by a federal grand jury sitting in Dayton, Ohio, for conspiracy and tax-related crimes, announced Acting Deputy Assistant Attorney General Bruce M. Salad of the Justice Department’s Tax Division.

According to the 23-count indictment, Fesum Ogbazion, of Beavercreek, Ohio, and Kyle Wade, formerly of West Chester, Ohio, were indicted on one count of impeding the administration of the Internal Revenue Code, one count of conspiracy to commit wire fraud and five counts of wire fraud.  Ogbazion is also charged with six counts of money laundering, one count of evasion of payment of employment taxes, eight counts of failure to collect and pay over employment taxes and one count of bank fraud.

According to the allegations in the indictment, Ogbazion owned and controlled ITS Financial LLC, which was the national franchisor of Instant Tax Service (ITS), a tax preparation business Ogbazion founded that claimed to have more than 1,100 franchise locations throughout the United States in 2009.  Wade was the vice president of financing for ITS and owned multiple ITS franchises.

From about January 2004 through November 2012, Ogbazion and Wade executed a scheme to obstruct the Internal Revenue Service (IRS), wherein numerous ITS franchises filed false federal income tax returns without valid Forms W-2 and without the permission of their taxpayer clients.  The false returns included false and inflated sole proprietorship Schedule C income in an attempt to increase the Earned Income Tax Credit.  Over the course of several years, Ogbazion also instructed an ITS employee to electronically file large volumes of unsigned tax returns on the first day of the “tax filing season,” then falsely backdated customer filing authorizations.  In an attempt to obstruct IRS civil compliance audits, ITS maintained and filed false documents with the IRS, including fabricated Forms W-2 created by ITS employees using tax preparation software, and forged client signatures on various false IRS forms.

From about December 2009 through November 2012, Ogbazion and Wade also conspired to generate loan and tax return preparation fees for ITS and its franchises by luring low-income and unsophisticated taxpayers into ITS franchises through a nationwide advertising campaign that offered customers tax refund anticipation loans.  Despite the fact that ITS did not have an independent lender that could fund the promised loans, ITS collected loan application and tax preparation fees from its customers.  For the 2011 tax filing season, Ogbazion and Wade represented to ITS staff, franchises and customers that refund anticipation loans were obtained through an independent lender, even though Ogbazion owned the purported lender, which had limited lending capabilities.  Ogbazion knew that the overwhelming majority of loan applications would be denied.  In total, the indictment alleges that ITS generated more than $12.5 million in fees in 2010, and more than $3.1 million in fees in 2011 from this loan scheme.

The indictment also alleges that Ogbazion was responsible for ITS’ and TaxMate LLC’s federal employment payroll taxes.  He failed to pay over approximately $1.26 million in payroll taxes due from these businesses during four tax quarters in 2009 and 2010.  Ogbazion also evaded the IRS’ attempts to collect ITS and TaxMate federal payroll taxes by directing business revenue to nominee accounts, placing assets in the names of nominee entities and making false statements to an IRS revenue officer during the course of collection activity, among other acts of concealment.

If convicted of impeding the administration of the Internal Revenue Code, the defendants face a statutory maximum sentence of three years in prison and a fine of up to $250,000.  If convicted of conspiracy to commit wire fraud and wire fraud, the defendants face a statutory maximum sentence of 30 years in prison and a fine of up to $1 million for each count.  If Ogbazion is convicted of money laundering, he faces a statutory maximum sentence of 20 years in prison and a fine of up to $500,000.  If convicted of tax evasion and failure to pay over employment taxes,  Ogbazion faces a statutory maximum sentence of five years in prison and up to a $250,000 fine for each count.  Finally, Ogbazion faces a statutory maximum sentence of 30 years in prison and up to a $1 million fine if he is convicted of bank fraud.

The Tax Division commended the special agents of IRS – Criminal Investigation, who investigated the case, and Senior Litigation Counsel Corey Smith and Trial Attorney Mark S.  McDonald of the Tax Division and Assistant U.S. Attorney Jessica Knight of the Southern District of Ohio, who are prosecuting the case.

An indictment merely alleges that crimes have been committed.  The defendants are presumed innocent until proven guilty beyond a reasonable doubt.

A former deputy treasurer of Ohio has been extradited from Pakistan to the United States to serve a 15-year prison sentence for his role in a bribery and money laundering scheme involving the Ohio Treasurer’s Office.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division, Attorney General Mike DeWine of Ohio and U.S. Marshal Peter C. Tobin of the Southern District of Ohio made the announcement.

Amer Ahmad, 40, of Chicago, pleaded guilty in December 2013 to federal program bribery and conspiracy to commit federal program bribery, honest services wire fraud and money laundering.  Following his guilty plea, Ahmad fled the United States and was arrested by Pakistani authorities while attempting to illegally enter that country.  He has remained in custody and the U.S. government requested his extradition.  On Dec. 1, 2014, Ahmad was sentenced in abstentia by U.S. District Judge Michael H. Watson of the Southern District of Ohio to 15 years in prison and ordered to forfeit $3.2 million in illicit proceeds.  

A remand hearing has been scheduled for 10:00 a.m. on Friday, August 28, before U.S. District Judge Watson.

According to admissions in connection with his guilty plea, from January 2009 through January 2011, Ahmad used his position as deputy treasurer to direct official state of Ohio business to securities broker Douglas E. Hampton in return for bribes.  Ahmad and Chicago businessman Joseph Chiavaroli concealed the payments they received from Hampton by passing them through the accounts of their landscaping business.  Hampton also funneled more than $123,000 to Mohammed Noure Alo, an attorney and lobbyist who was Ahmad’s close personal friend and business associate.  Over the course of the scheme, Hampton paid in excess of $500,000 in bribes and received, in exchange, approximately $3.2 million in commissions for 360 securities trades on behalf of the Ohio Treasurer’s Office. 

In November 2014, Hampton and Alo were sentenced to 45 months and 48 months in prison, respectively, for their roles in the scheme.  Chiavaroli was sentenced in December 2014 to 18 months in prison.  

The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation.  The U.S. Marshals Service joined the investigation after Ahmad fled the United States.  The Criminal Division’s Office of International Affairs provided significant assistance in this matter.  The case is being prosecuted by Trial Attorneys Eric L. Gibson and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio.

WASHINGTON – A former Deputy Treasurer of Ohio has been extradited from Pakistan to the United States to serve a 15-year prison sentence for his role in a bribery and money laundering scheme involving the Ohio Treasurer’s Office.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division, Attorney General Mike DeWine of Ohio and U.S. Marshal Peter C. Tobin of the Southern District of Ohio made the announcement.

Amer Ahmad, 40, of Chicago, pleaded guilty in December 2013 to federal program bribery and conspiracy to commit federal program bribery, honest services wire fraud, and money laundering.  Following his guilty plea, Ahmad fled the United States and was arrested by Pakistan authorities while attempting to illegally enter that country.  He has remained in custody and the U.S. government requested his extradition.  On Dec. 1, 2014, Ahmad was sentenced in abstentia by U.S. District Judge Michael H. Watson of the Southern District of Ohio to 15 years in prison and ordered to forfeit $3.2 million in illicit proceeds.

“Today’s extradition demonstrates the never-ceasing efforts by investigators at home and abroad to bring to justice those who abuse positions of power to defraud,” said First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio.

“Amer Ahmad abused the public’s trust and ran halfway across the globe to hide,” stated FBI Cincinnati Special Agent in Charge Angela L. Byers. “Tenacious FBI Special Agents and investigators continued to pursue Ahmad until he could be returned to face justice. Now he will have plenty of time to reflect on his corrupt actions while serving out his lengthy prison sentence.”

“Deputy U.S. Marshals and FBI Special Agents worked hand in hand to track fugitive Ahmad and return him to justice,” said Pete Tobin, U.S. Marshal, Southern District of Ohio. “If you violate the trust of the American public and the laws of the land, we will pursue you wherever you may be found.”

According to admissions in connection with his guilty plea, from January 2009 through January 2011, Ahmad used his position as Deputy Treasurer to direct official state of Ohio business to securities broker Douglas E. Hampton in return for bribes.  Ahmad and Chicago businessman Joseph Chiavaroli concealed the payments received from Hampton by passing them through the accounts of their landscaping business.  Hampton also funneled more than $123,000 to Mohammed Noure Alo, an attorney and lobbyist who was Ahmad’s close personal friend and business associate. Over the course of the scheme, Hampton paid in excess of $500,000 in bribes and received, in exchange, approximately $3.2 million in commissions for 360 securities trades on behalf of the Ohio Treasurer’s Office.

Hampton and Alo were sentenced in November 2014 to 45 months in prison and 48 months in prison, respectively, for their roles in the scheme. Chiavaroli was sentenced in December 2014 to 18 months in prison. 

A remand hearing is being scheduled to be held at 10am on Friday in front of U.S. District Court Judge Michael H. Watson.

The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation.  The U.S. Marshals Service joined the investigation after Ahmad fled the United States.  The Criminal Division’s Office of International Affairs provided significant assistance in this matter.  The case is being prosecuted by Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio  and Trial Attorneys Eric L. Gibson and Menaka Kalaskar of the Criminal Division’s Public Integrity Section.

DAYTON, Ohio – An investigation by federal, state and local law enforcement in Butler County has led to the issuance of 14 arrest warrants on people charged in a conspiracy to defraud the United States, wire fraud, illegal use of Food Stamp benefits, theft of public money, money laundering and possession with intent to distribute a controlled substance (including near schools and playgrounds).

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Harold Torrens, Agent in Charge, Ohio State Highway Patrol, Ohio Investigative Unit, Anthony Mohatt, Special Agent in Charge, United States Department of Agriculture (USDA) Office of Inspector General, Mark Porter, Special Agent in Charge, United States Secret Service, Butler County Sheriff Richard Jones, Hamilton County Sheriff Jim Neil, Fairfield Police Chief Mike Dickey, Cincinnati Police Chief Jeffrey Blackwell and Warren County Sheriff Larry Sims and other members of the Southern District of Ohio Task Force announced the arrests that took place today.

This morning federal, state and local law enforcement officials executed 19 search warrants, 14 arrest warrants and four seizure warrants against the owners, operators and employees of Butcher Shop Food Distributors, LLC of 300 Commercial Drive, Fairfield, OH and US Beef of Cincinnati, LLC of 3210 Profit Drive, Fairfield, OH.

Locations searched included business premises, residences and vehicles. Today’s raid culminated an 18-month undercover investigation into the suspected criminal practices of both of these retail meat home delivery services that operate in an approximate 50-mile radius of Fairfield. Their door-to-door retail sales of beef, poultry, pork and sea food products have impacted residential customers in Butler, Hamilton, Warren, Montgomery and Greene Counties.

Court documents allege that since 2011, individuals associated with Butcher Food Shop Distributors LLC and U.S. Beef Cincinnati LLC in Fairfield, Ohio actively engaged in illegal/fraudulent SNAP EBT (Food Stamp) transactions in exchange for cash. It is alleged that the owners, managers and other employees of the door-to-door meat retailers repeatedly, continually and illegally acquired and redeemed SNAP benefits in exchange for ineligible items, including money, Oxycodone, heroin and marijuana.

USDA records show that between December 2011 and May 2015, approximately 8,145 suspected fraudulent SNAP EBT transactions were completed via voucher for U.S. Beef employees for a total amount of approximately $1.1 million. The total estimated fraud for the Butcher Shop is approximately $382,000 and the total estimated number of SNAP EBT transactions for that shop is 7,912.

Initial court appearances for the arrestees are scheduled for 1:30 PM on August 27, 2015 before U.S. Magistrate Judge Michael J. Newman. They include:

• Steven E. Mueller, 61, of Fairfield
• Joseph Raymond Gray, 34, of Fairfield
• Jeffrey C. Knab, 58, of Cincinnati
• Andrie Lamarr Scott, 22, of Cincinnati
• Francis E. Racicot, IV, 32, of Cincinnati
• Rici Lynn Hopkins, 25, of Cincinnati
• Christopher Doane, 29, of Cincinnati
• Scott Andrew Traum, 45, of Cincinnati
• Joey Lightcap-Traum, 43, of Cincinnati
• Dalton Andrew Traum, 19, of Cincinnati
• Keith Blankenship, 35, of Loveland
• Gregory M. Brown, 35, of Cincinnati
• Jordan A. Kaiser, 22, of Fairfield
• William N. King, 22, of Fairfield

The Southern District of Ohio Task Force is an electronic and financial crimes task force made up of approximately 60 federal, state, and local law enforcement agencies in Ohio.  This task force, along with an additional 80 electronic and financial networks across the United States, has been established to prevent, detect and investigate various forms of criminal activity that have large community impact.    

U.S. Attorney Stewart commended the cooperative investigation by the local, state and federal law enforcement, as well as Assistant U.S. Attorney Dwight Keller, who is prosecuting the case.

Charges contained in a complaint are allegations. All defendants should be presumed innocent until and unless proven guilty in court.

WASHINGTON – A husband and wife residing in Lewis Center, Ohio, were sentenced to prison in U.S. District Court today for their roles in a fraud scheme related to the company Imperial Integrative Health Research and Development LLC (Imperial) and its product, OXYwater, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Carter M. Stewart of the Southern District of Ohio.

Preston J. Harrison, 43, and Lovena Harrison, 42, were sentenced by U.S. District Judge Gregory L. Frost of the Southern District of Ohio.  Preston Harrison was sentenced to serve 83 months in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the Internal Revenue Service (IRS) and $8,840,706 to victims of the fraud, and to forfeit $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account.  Lovena Harrison, Preston Harrison’s wife, was sentenced to serve one year and one day in prison and three years of supervised release, and ordered to pay $375,985.15 in restitution to the IRS.

“The sentences imposed today reflect the department’s commitment to investigating and vigorously prosecuting individuals who defraud investors, misappropriate funds to finance lavish lifestyles and file false tax returns to conceal their ill-gotten gains,” said Acting Assistant Attorney General Ciraolo.  “Like the Harrisons, those who engage in such conduct will pay a heavy price.”

The couple went to trial in March and were convicted of multiple crimes.  Preston Harrison’s business partner, Thomas E. Jackson, 40, of Powell, Ohio, was also convicted at trial for his role in the scheme and is scheduled to be sentenced on Oct. 1.  Preston Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, conspiracy to commit wire fraud, conspiracy to commit money laundering and 12 counts of money laundering.  Lovena Harrison was convicted of conspiracy to defraud the United States and filing a false income tax return, and structuring financial transactions to evade currency reporting requirements.  Jackson was convicted of conspiracy to commit wire fraud, conspiracy to commit money laundering, eight counts of wire fraud and 12 counts of money laundering.

“Preston Harrison and his co-conspirators made OXYwater appear to be a lucrative and profitable financial investment, touting investments and endorsements from athletes, a musician and others,” said U.S. Attorney Stewart.  “After they convinced folks to invest, they misappropriated that money to fuel their own lavish lifestyle, buying items like jewelry, luxury vehicles, weapons and swimming pools.”

“Today’s sentencings mark the successful end of an investigation that uncovered an investment fraud scheme laced with a web of financial lies that generated millions of dollars through false promises and deceit,” said Acting Special Agent in Charge Troy N. Stemen of the IRS-Criminal Investigation (CI) Cincinnati Field Office.  “Investment fraud schemes are often described as a house of cards.  The underlying structure can fall apart at any time and expose the individuals responsible.”

“The Harrisons and their business partner took advantage of unsuspecting investors to line their own pockets,” said Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division.  “Hopefully they will now understand that their irresponsible actions have real consequences.”

According to court testimony, Jackson and Preston Harrison operated Imperial, based in Westerville, Ohio, and developed OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.

The defendants engaged in a scheme to deceive the investors in Imperial about Imperial and OXYwater’s structure, composition, finances, sales and profits in order to make the company appear to be a lucrative and profitable financial investment.  Jackson and Preston Harrison produced and sent false and fraudulent documents intended to deceive investors in order to obtain additional investments in Imperial.  They then misappropriated that money for their own personal use, including the purchase of jewelry, a Cadillac Escalade, a BMW vehicle, weapons, clothing, home improvements and a swimming pool.

Between August 2010 and spring 2013, Jackson and Preston Harrison misappropriated approximately $2 million of the investors’ funds.  The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets.  As a result of the defendants’ conduct, investors lost approximately $9 million.

In 2011, Preston Harrison misappropriated approximately $1.1 million from Imperial, which he and Lovena Harrison diverted into an account in the name of a daycare business and used for personal expenses.  The Harrisons did not report the money as income on their 2011 income tax return.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended special agents of IRS-CI and FBI, who investigated the case, as well as Assistant United States Attorney Jessica Kim of the Southern District of Ohio and Trial Attorney Jason Scheff of the Tax Division, who prosecuted the case.

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

COLUMBUS, Ohio – Robert Jarrod Johnson, 33, most recently of Columbus, Ohio, was sentenced in U.S. District Court to 50 months in prison and five years of supervised release for failure to comply with the Sex Offender Registration and Notification Act.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Peter Tobin, U.S. Marshal, Southern District of Ohio, announced the sentence handed down yesterday by Senior U.S. District Judge Peter C. Economus.

According to court documents, Johnson was convicted of Second Degree Rape of a female juvenile in North Carolina in 2001.  For at least the next 30 years, he was ordered to register as a sex offender in any state in which he lived or worked.  Johnson moved to Columbus, Ohio and obtained employment and an Ohio state ID card, but never registered as a sex offender in Ohio.  He was indicted in December 2014 on a federal Sex Offender Registration and Notification Act violation and pleaded guilty to that offense in February 2015.

During the course of the case, investigators discovered that between May 2013 and October 2013, Johnson allegedly committed multiple sex offenses against a girl between the ages of 12 and 13 in Columbus, Ohio, during the period in which he was not registering as a sex offender. Judge Economus ruled that it was appropriate to increase Johnson’s sentence based on that conduct.

In April 2015, Johnson was indicted in Franklin County on counts of Rape, Gross Sexual Imposition, and Unlawful Sexual Conduct with a Minor. That case remains pending.  An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

U.S. Attorney Stewart commended the investigation by Senior Inspector Nicole Ralston, as well as Assistant United States Attorney Brian Martinez, who represented the United States in this case.

COLUMBUS, Ohio – Mark W. Wolfe, 50, of Sunbury, Ohio, surrendered this morning to the U.S. Marshal Service in Columbus, Ohio, after being charged by criminal complaint for receipt and distribution of child pornography.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) announced the arrest.

According to the complaint, undercover investigators observed files containing child pornography being shared through an IP address belonging to Wolfe. During a search warrant executed on July 31 at Wolfe’s residence, investigators discovered a laptop containing approximately 486 videos and 203 images of child pornography. The files were located in several folders on the desktop of the computer under the user name “Mark.”  Some of the videos showed children as young as eight-to-10 months old being sexually exploited.

Further forensic analysis of the computer revealed Skype chat messages between Wolfe and several other individuals. In these conversations, Wolfe allegedly claimed to have previously engaged in sex acts with minors and stated that his favorite age is five to ten years old.

Wolfe is scheduled for an initial appearance at 1:30pm today in front of Magistrate Judge Norah McCann King.

This case is being 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/.

Stewart commended the investigation by the FBI Columbus Child Exploitation Task Force, which includes officers from the Westerville Police Department, Reynoldsburg Police Department and the Powell Police Department, as well as Assistant U.S. Attorney Heather A. Hill, who is prosecuting the case.

Charges contained in a criminal complaint are merely allegations. All defendants are presumed innocent until and unless proven guilty in court.

COLUMBUS, Ohio – Mark M. Beatty, 56, of Wellston, Ohio, pleaded guilty in U.S. District Court to violating the Native American Graves Protection and Repatriation Act by purchasing 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.

Carter M. Stewart, 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 Frazier and Rick Perkins, Chief Ranger, National Park Service at Hopewell Culture National Historical Park, announced the plea entered into today before U.S. Magistrate Judge Elizabeth Preston Deavers.

According to court documents, individuals were observed digging in a rock shelter in Salt Creek Valley in Jackson County, Ohio. When they were approached, they ran off into the woods and left behind shovels, dirt sifters, buckets and trash. Investigators confirmed that at least two individuals were digging on the property and had unburied human remains. Beatty admitted to purchasing 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 rockshelters were used extensively for burials in Southern Ohio and specifically in Jackson County.

DNA testing concluded a direct connection to present day Native American Indians living in the United States today.

“We are going to continue to investigate crimes against the Native American Graves Protection and Repatriation Act,” Jackson County Sheriff Tedd Frazier said.

The parties involved in the case have agreed to a proposed sentence of three years of probation including three months home confinement, a $3,500 fine and restitution in the amount of $1,000 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.

Beatty has also agreed to publish an advertisement in a circulation warning others not to engage in illegal excavation of Native American bones and artifacts. As part of his plea, he has agreed to perform 100 hours of community service for a program that protects or promotes the interests of Native Americans.

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

COLUMBUS, Ohio – Donald W. Wainwright Sr., 49, of Live Oak, Fla., was sentenced in U.S. District Court to 21 months in prison and a $125,000 fine for 12 charges related to violating the Lacey Act, one count of conspiracy and one count of wire fraud. His son, Donald W. Wainwright, Jr., 29, of Live Oak, Fla., was sentenced to four months of house arrest and three years of probation for eight charges related to violating the Lacey Act.

Carter Stewart, U.S. Attorney for the Southern District of Ohio, Gregory Jackson, Special Agent in Charge, United States Fish and Wildlife Service Office of Law Enforcement, Chief Scott Zody, Ohio Department of Natural Resources Division of Wildlife, Franklin County Prosecutor Ron O’Brien, the Florida Fish and Wildlife Conservation Commission and Georgia Department of Natural Resources announced the sentences handed down by U.S. District Chief Judge Edmund A. Sargus, Jr.

According to court documents, the co-conspirators trafficked in live white-tailed deer.  Wainwright Sr. owned hunting preserves in Logan County, Ohio, and Live Oak, Florida; both preserves were named Valley View Whitetails.  Wainwright Jr. was part-time resident and part-time operator of the site in Ohio.

Wainwright Sr. illegally shipped deer to Florida from Ohio and attempted to ship deer to Georgia from Ohio. The deer herds involved with these shipments were not certified to be free from chronic wasting disease, tuberculosis and brucellosis. Federal Law requires interstate shipment of deer to be certified to be disease free.  As a result, deer herds in Florida were potentially exposed to these diseases.  His attempted shipment to Georgia was intercepted on I-71 South, about 50 miles from the Ohio River, when Ohio Wildlife officers noticed deer noses and antlers inside a cargo trailer and pulled over a truck driven by Wainwright Sr.’s employees.

“Trophy-sized white-tailed deer can sell for hundreds of thousands of dollars apiece if the animals come from herds that have been certified by government agricultural officials to be free from disease,” U.S. Attorney Stewart said. “Farmers are intensely interested in the disease status of white-tailed deer herds because their diseases can be transmitted to cattle and humans with potentially fatal results.”

Wainwright Sr. placed federal identification tags from a certified deer that had previously died into the ear of uncertified deer they were selling. He then sold breeding services and semen from the deer to breeders around the United States.

The defendants also sold illegal white-tailed deer hunts at Valley View Whitetails of Ohio. They induced clients from around the country to hunt at Valley View Whitetails of Ohio – charging customers from $1,000 to $50,000 to kill deer inside his high fence preserve when Wainwright did not have a hunting preserve license. The customers then took the bucks back to their home states, including: Florida, Michigan, Alabama and Virginia.

"Chronic wasting disease can decimate wild deer and elk populations and we take egregious violations like this very seriously," said U.S. Fish and Wildlife Service Special Agent in Charge Gregory Jackson. "We would like to thank our law enforcement counterparts in Ohio, Florida and Georgia for sharing their expertise and resources to fully investigate this case.”

Wainwright Sr. pleaded guilty on February 27, 2015, to 12 charges related to violating the Lacey Act, one count of conspiracy and one count of wire fraud.  He was also sentenced to 200 hours of community service to be served in a parks system and ordered to publish an article in The Deer Breeders Gazette.

Wainwright Jr. pleaded guilty on February 17, 2015, to eight charges related to violating the Lacey Act.

Under the Lacey Act, it is unlawful to import, export, transport, sell or purchase wildlife, fish or plants that were taken, possessed, transported or sold in violation of a state, federal or foreign law. When it was passed in 1900, the Lacey Act became the first federal law protecting wildlife.

U.S. Attorney Stewart commended the cooperative investigation by law enforcement, as well as Special Assistant United States Attorney Heather Robinson with the Franklin County Prosecutor’s Office and Assistant United States Attorneys Peter Glenn-Applegate and J. Michael Marous, who are representing the United States in this case.

COLUMBUS, Ohio – Jeremiah R. Malfroid, 34, of Hilliard, Ohio, was sentenced in U.S. District Court to 216 months in prison for production of child pornography.

Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, Marlon V. Miller, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), and members of the Franklin County Internet Crimes Against Children Task Force announced the sentence handed down today by U.S. District Judge Gregory L. Frost.

According to court documents, investigators with the Franklin County Internet Crimes Against Children (ICAC) task force connected files containing child pornography to the defendant’s computer. While executing a search warrant and forensic examination of Malfroid’s computer, investigators discovered 281 files of child pornography, 77 of which depicted children who have been identified by the National Center for Missing and Exploited Children (NCMEC).

Numerous additional images on Malfroid’s computer depicted Malfroid sexually abusing a female child. It was confirmed that Malfroid had access to the juvenile female between approximately 2007 and 2013, when the child was three to nine years old.

Malfroid was charged by criminal complaint in October 2014 and absconded during the investigation. He turned himself in to local authorities in California in December 2014, after being profiled on the U.S. Immigration and Customs Enforcement (ICE) Operation Predator smartphone app. A user-generated Facebook post indicating Malfroid’s fugitive status had been created the same month and shared nearly 200,000 times.

Malfroid pleaded guilty to production of child pornography on April 2, 2015.

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

Upper Arlington Police Department

Grove City Police Department

Columbus Police Department

Grandview Heights Police Department

Whitehall Police Department

Hilliard Police Department

Westerville Police Department

Homeland Security Investigations

U.S. Secret Service

Ohio ICAC

Franklin County Prosecutor's Office

This case was brought as part of Project Safe Childhood, a nationwide initiative by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorney's Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children as well as to identify and rescue victims.

U.S. Attorney Stewart commended the cooperative investigation by HSI and the Franklin County ICAC Task Force, as well as Assistant United States Attorneys Heather A. Hill and Jessica H. Kim, who represented the United States in this case.

COLUMBUS, OHIO -- Marietta Industrial Enterprises, Inc. (MIE) pleaded guilty today in U.S. District Court in Columbus to charges related to an oil spill on the Ohio River caused by MIE on October 2, 2013.

Carter Stewart, U.S. Attorney for the Southern District of Ohio, Jason D. Wimer, Special Agent in Charge, United States Coast Guard Investigative Service (CGIS), Ohio Attorney General Mike DeWine, and Justin A. Oesterreich, Acting Special Agent in Charge of the U.S. Environmental Protection Agency (U.S. EPA) announced the guilty plea today by MIE in front of U.S. District Chief Judge Edmund A. Sargus, Jr.

According to court documents, MIE owned and operated a barge which was located on the Ohio River, near the MIE facility in Marietta, Ohio.  On October 1, 2013, an MIE employee pumped out the ballast tanks of the barge which contained a significant amount of oil, without first checking the tanks.  By 11:00 a.m. on the day of the spill, an oil sheen could be seen on the Ohio River approximately 75 feet downstream of the barge.

In the first count of the information, MIE is charged with violating the Oil Pollution Act for negligently causing an oil spill on the Ohio River.  Also related to the oil spill, in the second count, MIE is charged with violating the Refuse Act, which prohibits the discharge of oil or oily wastewater from a barge into navigable waters of the United States.

A plea agreement, which has been submitted for the Court’s approval, provides that MIE will be fined $35,000, implement a compliance program, and be placed on probation for one year.  In addition, the plea agreement provides that $7,500 of the fine will be paid to the individual who reported the spill to the Coast Guard, and that MIE will make a community service payment of $1,000 to an organization to be named at the time of sentencing.

This case was jointly investigated by the Coast Guard and the U.S. EPA Criminal Investigation Division, all members of the Central Ohio Environmental Crimes Task Force, and is being prosecuted by Senior Trial Attorney Christopher J. Costantini, Special Assistant U.S. Attorney Brad Beeson and Assistant U.S. Attorney J. Michael Marous.

COLUMBUS – Jason W. Cox, 39, now of Dublin, Ohio pleaded guilty to two counts of money laundering, two counts of mail fraud, and one count of wire fraud relative to a scheme to defraud his clients, one of which was an impaired adult, of the funds they had invested through him as their financial advisor.

Carter M. Stewart, United States Attorney for the Southern District of Ohio and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation announced the plea entered into today before U.S. District Chief Judge Edmund A. Sargus, Jr.

According to court documents, the defendant used his position as a financial advisor with a national financial services company at their Upper Arlington office to defraud an impaired adult and other victims.

The impaired adult had been introduced to Cox by her father and was told by her father that Cox would be her financial advisor and that he was a person she could trust to manage her money after her father was no longer around to do so. After the victim’s father died, Cox devised and carried out schemes to defraud the impaired adult, resulting in the loss of her residence and approximately $ 400,000 in assets over the course of 18 months.

Cox would cause the sale of a fund in the victim’s accounts and then wire the funds to her bank or mail a check to her that would be deposited into her account. He would then convince the victim to give him cash or a check in an amount equal to or slightly less than the amount transferred. These amounts were frequent and were generally in thousands of dollars.

“She believed that she and Cox were business partners even though she was unclear what that business was,” Assistant United States Attorney Deborah A. Solove said. “Since she has little concept of the value of money or the relative amounts changing hands, she thought that the money she agave him and the money he gave her was somehow a normal thing to do.”

Cox convinced a second victim to invest some of the money the victim transferred from his 401k after being laid off. Cox asked the victim to invest $60,000 with a guaranteed 10 percent rate of return. The victim agreed to invest $10,000 after Cox sent him the agreement in writing in his employer’s business envelope. Although the victim received his principal and the interest eventually, Cox was fired when this came to light.

The defendant defrauded a third client, an elderly woman, whose adult daughters were handling her financial affairs, whom he paid back with the impaired adult’s money.

Cox was arrested on December 11, 2014 and indicted on January 8, 2015.

“Jason Cox took advantage of an impaired individual for his own financial gain, which is reprehensible,” said Kathy A. Enstrom, 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.”

Money laundering carries a maximum sentence of 10 years in prison and a $250,000 fine. Mail fraud and wire fraud are crimes punishable by up to 20 years in prison and a $250,000 fine.

U.S. Attorney Stewart commended the investigation of this case by the IRS Criminal Investigation Division, and Assistant U.S. Attorney Deborah A. Solove, who is prosecuting the case.

More than $30,000 in drug proceeds and 10 firearms seized and forfeited in charges stemming from heroin connection between Chicago and Steubenville, Ohio

STEUBENVILLE, Ohio – Local, state and federal law enforcement agencies were recognized today for their efforts in the eventual conviction of 16 individuals and the seizure and forfeiture of more than $30,000 and 10 firearms.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, commended the two-year investigation by law enforcement in Steubenville and Jefferson County, Ohio; Weirton, W. Va. and Chicago, Ill. 

The investigation, dubbed “Chicago Boys” due to significant ties between the drug traffickers in the Steubenville area and suppliers and traffickers from the Greater Chicago area, led to the conviction of 16 individuals on federal and state charges related to narcotics trafficking and evidence tampering, as well as the seizure and forfeiture of more than $30,000 and 10 firearms.  Leaders of the drug organization ultimately admitted responsibility for distributing as much as 30 kilograms of heroin in the Steubenville area during an approximate two year period.

“Heroin is impacting the lives of Americans in every state, in every region, and from every background and walk of life,” U.S. Attorney Stewart said. “The Steubenville area is no exception to this, which is why cooperative law enforcement efforts such as this one are so needed. The coordination represented by this effort illustrates a serious law enforcement commitment to loosening the grip that heroin has on our communities.”

“Whenever drug traffickers travel to the Ohio Valley from places like Chicago to sell heroin, significant federal resources will be allocated to disrupt and dismantle their operation,” said U.S. Attorney Ihlenfeld.  “The convictions and sentences announced today are proof that great results can be achieved by combining intelligence and resources from law enforcement agencies that span multiple jurisdictions.  My office in Northern West Virginia will continue to work with Mr. Stewart’s office in Southern Ohio to investigate and prosecute these cases, and in the end the communities that we serve will be safer places to live and raise a family.”

Stewart and Ihlenfeld, joined by officials from the Federal Bureau of Investigation (FBI), United States Marshal Peter Tobin, Cincinnati Field Division, representatives of the Ohio State Highway Patrol, Jefferson County Prosecutor Jane M. Hanlin, Jefferson County Sheriff Fred Abdalla, Steubenville Police Chief Bill McCafferty, Wintersville Police Chief  Edward Laman and Toronto Police Chief Randy Henry praised the investigative and prosecutorial efforts of the coalition of agencies, and recognized the Jefferson County Prosecutor’s Office, the Jefferson County Drug Task Force, the Hancock-Brooke-Weirton Drug Task Force, and agents in the Cambridge FBI Office, recognizing their collaboration, professionalism and effectiveness in the investigation.

Convicted of federal charges for conspiracy to possess with intent to distribute heroin were:

Kinlawyed Hendrix, aka “Lo”, 27, Steubenville, Ohio
Calvin D. Bryant Jr., aka “Gunz”, 26, Canton, Ohio
Robert L. Simmons Jr., aka “Chase”, 19, Steubenville, Ohio
Jessie O. Birden, aka “J-Money”, 21, Steubenville, Ohio
Berryon F. Moore, III, aka “Pumpkin”, 25, Steubenville, Ohio
Joseph L. Dennis, 30, aka “JD” Toronto, Ohio
Sean Loveless, 29 aka “Puff” Steubenville, Ohio
Steven James, 36, Chicago, Ill.
Kyle M. Irvin, 30, Chicago, Ill.
Charles H. Thompson, 28, Chicago, Ill.

Convicted of state charges related to drug trafficking and tampering with evidence were:

Lavinia Hearon, 29, Chicago, Ill.                
Jacari Benson, 30, Weirton, W. Va.                          
Frederick L. McGowan, 39, Madison WI  
Robert Jackson, 32, Steubenville, Ohio                                                 
Harry E. Stackhouse, 25, Steubenville, Ohio           
Rashann D. Mukes, 28, Steubenville, Ohio              

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. Possession of a firearm in furtherance of a drug trafficking crime carries a maximum federal sentence of 40 years in prison.

U.S. Attorneys Stewart and Ihlenfeld also commended the cooperative efforts of the Ohio State Highway Patrol in the investigation and the U.S. Marshals Service in Ohio and Illinois who participated in the arrests in the case, as well as Assistant United States Attorney Michael Hunter and Special Assistant United States Attorney Jane Hanlin who prosecuted the federal cases.

DAYTON – A United States District Court jury convicted Demian Pina, 34, of Dayton, Ohio of distribution and possession of child pornography.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela Byers, Special Agent in Charge, Federal Bureau of Investigations (FBI), Troy Police Chief Charles Phelps, Dayton Police Chief Richard Biehl, and members of the Internet Crimes Against Children (ICAC) task force, announced verdict reached today, which was returned following a trial that began on May 18 before U.S. District Judge Thomas M. Rose.

In November 2010, an undercover investigator working for the Cuyahoga County, Ohio ICAC was investigating individuals sharing child pornography using peer-to-peer networks.  The investigator downloaded 12 image and video files containing child pornography from a person using a particular IP address.  Records from the Internet Service Provider determined that the IP addressed received service at Demian Pina’s residence.  A search warrant was executed at Mr. Pina’s residence in February 2011, in which various electronic media were seized.  Subsequent examination of this computer media identified that two of the desktop computers contained images of child pornography. 

In November 2012, another undercover investigator working for the Cuyahoga County ICAC downloaded five image files containing child pornography from a person using a different IP address on the same peer-to-peer network.  This IP address also received service at Mr. Pina’s residence.  On three dates in March 2013, an undercover officer working for the Troy Police Department downloaded via the peer-to-peer network seven image files containing child pornography from the IP address receiving service at Mr. Pina’s residence.  A search warrant was executed at Mr. Pina’s residence in June 2013 in which various electronic media were seized.  Subsequent examination of this computer media identified that a desktop computer, laptop, and an external hard drive contained images and videos of child pornography. 

Mr. Pina was identified as the individual distributing child pornography on the peer-to-peer network.  He was indicted in February 2014 on five counts of distribution of child pornography and two counts of possession of child pornography.  On June 25, 2015, following a four day jury trial, Mr. Pina was found guilty of all seven counts.

Pina faces between 5 and up to 20 years in prison on the distribution counts and up to 10 years imprisonment on the possession counts. He has been in custody since his arrest on February 26, 2014 and is scheduled for sentencing on October 16, 2015.

U.S. Attorney Stewart commended the cooperative investigation of this case by the FBI, Troy and Dayton Police Departments, and ICAC task force members. Assistant United States Attorneys Christy L. Muncy and Alex Sistla are representing the government in this case.

WASHINGTON – Education Affiliates (EA), a for-profit education company based in White Marsh, Maryland, has agreed to pay $13 million to the United States to resolve allegations that it violated the False Claims Act by submitting false claims to the Department of Education for federal student aid for students enrolled in its programs.  EA operates 50 campuses in the United States under various trade names, including All State Career, Fortis Institute, Fortis College, Tri-State Business Institute Inc., Technical Career Institute Inc., Capps College Inc., Driveco CDL Learning Center, Denver School of Nursing and Saint Paul’s School of Nursing, which provide post-secondary education training programs in several professions in the states of Alabama, Florida, Maryland, Ohio and Texas. 

“Today’s settlement is an excellent example of cooperation among multiple offices of the federal government to achieve a result that protects federal student aid funding and the interests of individual students,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Schools have an obligation to live up to their commitment to the government and their students when they accept federal student aid funds.”

The government alleged that employees at EA’s All State Career campus in Baltimore altered admissions test results so as to admit unqualified students, created false or fraudulent high school diplomas and falsified students’ federal aid applications, and that multiple EA schools referred prospective students to “diploma mills” to obtain invalid online high school diplomas.  These allegations also led to criminal convictions of two All State Careers admission representatives, Barry Sugarman and Jesse Moore, and a test proctor, Jacqueline Caldwell. 

“Students who apply for federal financial aid to attend trade and professional schools are required to show that they have the necessary skills to complete the educational program and work in the field,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.  “This settlement resolves the government's allegations that Education Affiliates defrauded the government by changing students' test scores and enrolling students with invalid diploma mill high school ‘diplomas’ ordered online.”

“The various cases that were settled here include numerous allegations of predatory conduct that victimized students and bilked taxpayers,” said Under Secretary Ted Mitchell of the U.S. Department of Education.  “In particular, the settlement provides for repayment of $1.9 million in liabilities ordered by Secretary of Education Arne Duncan that resulted from EA awarding federal financial aid to students at its Fortis-Miami campus based on invalid high school credentials issued by a diploma mill.  Secretary Duncan made clear that such abusive behavior would not be tolerated, and we will continue to work with the Justice Department and other federal agencies to ensure that postsecondary institutions face consequences when they violate the law.”

The settlement agreement also resolves allegations related to EA schools in Birmingham, Alabama, Houston and Cincinnati, including violations of the ban on incentive compensation for enrollment personnel, misrepresentations of graduation and job placement rates, alteration of attendance records and enrollment of unqualified students. 

“Using fake high school diplomas is a particularly insidious abuse of the federal student aid system,” said Inspector General Kathleen Tighe of the U.S. Department of Education’s Office of Inspector General (OIG).  “Students received only a worthless piece of paper.”  Tighe commended the efforts of OIG staff and Department of Justice attorneys, whose outstanding investigative work led to this significant settlement.

The settlement resolves five lawsuits filed under the whistleblower provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in the recovery.  As part of this resolution, the five whistleblowers will receive payments totaling approximately $1.8 million.    

The settlements were the result of a coordinated effort by the U.S. Attorneys’ Offices of the District of Maryland, the Southern District of Texas, the Northern District of Alabama, Southern District of Ohio and the Middle District of Tennessee, as well as the Civil Division’s Commercial Litigation Branch, and the Department of Education and its OIG.     

The cases are captioned United States ex rel. Roman v. All State Career, Inc. and Education Affiliates, Inc.,Civil Case No. JKB-10-1730 (D.Md.); United States ex rel. Thomas v. Education Affiliates, Inc., Civil Case No. JKB-14-332 (D.Md.); United States ex rel. Andrews v. Education Affiliates, Inc., et al., Civil Case No. H-13-2366 (S.D. Tex.); United States ex rel. Atkins, et al. v. Fortis Institute and Education Affiliates, LLC, Civil Case No. CV-14-1107-S (N.D. Ala.); and United States ex rel. McArthur, Gruff & Associates LLC v. Education Affiliates, Inc., Civil Case No. 1:14-CV-977 (S.D. Oh.).  The False Claims Act claims resolved by the settlement are allegations only, and there has been no determination of liability. 

COLUMBUS, Ohio – Twenty people indicted in December 2013 have been sentenced in U.S. District Court as of today for participating in a drug trafficking organization in Central Ohio.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Franklin County Sheriff Zach Scott and Columbus Police Chief Kim Jacobs announced the sentences.

The sentences are a result of a year-long investigation into the organization by local, state and federal law enforcement.

The organization was responsible for distributing cocaine, oxycodone, crack cocaine and marijuana in the central Ohio area. Some members of the organization, including some convicted felons, possessed firearms in furtherance of the drug trafficking activities. The group supplied drug distributors with firearms to protect the distributors, the drug supply and proceeds from potential robberies. Firearms were placed in strategic places in various locations to intimidate potential robbers.

According to court documents, members of the group would torture and threaten individuals with serious physical harm who were perceived as owing money or drugs to members of – or individuals who were seen as potential witnesses against – the drug conspiracy.

Some of the defendants would launder their drug trafficking proceeds by exchanging tens of thousands of dollars for casino chips at Hollywood Casino in Columbus.

Jermonte M. Fletcher was also indicted on drug, firearm and money laundering charges in connection with the group. He was fatally injured during a shootout with law enforcement agents in Columbus on January 27, 2015. Fletcher had been facing a statutory mandatory minimum of 115 years in prison.

U.S. Attorney Stewart acknowledged the cooperative investigation by the FBI, Columbus Police, Franklin County Sheriff, DEA, ATF, the Ohio Casino Control Commission, and Franklin County Prosecutor Ron O’Brien’s Office, as well as Assistant U.S. Attorneys David DeVillers and Kevin Kelley, and Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who prosecuted the case.

CINCINNATI – John R. Bullar, 53, of Cincinnati, Ohio, was sentenced to 100 months in prison,  three years of supervised release, was ordered to forfeit $535,408.68, and was ordered to pay approximately $6.2 million in restitution to the victims for committing wire fraud and money laundering relative to a fraudulent investment scheme that he ran for 10 years. Bullar previously pleaded guilty to the aforementioned charges on September 23, 2014.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, Ohio Attorney General Mike DeWine, Commissioner Andrea Seidt, Ohio Department of Commerce, Division of Securities and Joseph T. Deters, Hamilton County Prosecuting Attorney announced the sentence handed down today by U.S. District Judge Michael R. Barrett.

According to court documents, between 2003 and September 2013 Bullar devised a scheme to defraud investors by soliciting millions of dollars under false pretenses, failing to invest investors' funds as promised, and misappropriating and converting investors' funds for his own benefit without the knowledge or authorization of the investors.

Bullar was the sole owner and operator of Executive Management Advisors, LLC ("EMA"), which had its principal place of business in Cincinnati, Ohio. Bullar also was the sole owner and operator of Priapus Group, LLC. Since at least 1998, Bullar offered investment opportunities to investors through his company, EMA. Bullar marketed himself as someone experienced in the financial services industry and who was successful in investing in commodity futures.

In an effort to persuade individuals to invest with him, Bullar frequently made numerous false representations. For example, Bullar told potential clients that he never had a losing quarter. Bullar also offered potential investors a false sense of security by telling potential investors that he, himself, was the biggest investor in EMA. Bullar told the investors that he would manage their funds even though it was below his minimum level of investment.

The majority of Bullar’s investors were friends, family members and fellow church members. Bullar told his clients that he had invested their money in precious metals, gold, silver, bonds, and foreign currency and that he made money based on the volatility of the market, regardless of whether the market was up or down. Bullar told clients that he preferred to keep the number of his investor’s small, so that he could "fly under the radar." Bullar also told clients that he had a computerized algorithm system that monitored the market for patterns and alerted him to potential losses. Bullar told investors that although he had been offered millions of dollars for the system he would not sell it, because he could make more money using the system rather than selling it. These representations were false, however, because in reality, Bullar had invested only a small amount of the money that he received from clients, using the vast majority of the money to pay other investors and his own personal expenses.

To induce current clients to keep investing, Bullar provided investors with quarterly statements purporting to show their account balances. These statements often showed substantial gains over a short period of time.

Although Bullar collected over $8.7 million from investors between mid-2006 and September 2013, only $580,500.00 was sent to brokers for trading. The remaining $8.1 million was never invested at all. The small fraction of investor money that Bullar actually sent to brokers for trading failed to generate profits and the money was either lost via trading or later withdrawn by Bullar.

In addition, investors actually paid taxes on the fictitious earnings. Bullar caused Forms 1099 to be issued to investors for tax purposes, which reported the fictitious gains. Investors relied on these documents to file their tax returns and investors paid taxes on the fictitious gains reported to them.

Bullar furthered his scheme by creating an appearance of legitimacy. Bullar created an investment blog for his clients (www.emafutures.com), which he updated regularly, sharing various articles and reports about the market. Bullar outfitted his home office, which investors frequented, with a television and three computer monitors to give investors the impression that he was constantly monitoring the market. Bullar’s expansive 5 bedroom/5 bathroom home also gave investors the impression that he was a successful trading advisor. In addition, Bullar also purchased an adjoining lot with investor money and used investor money to remodel the cabin on the lot, install a swimming pool and outdoor kitchen, and pay for professional landscaping on the lot. Bullar also entertained groups of investors at his home, treating investors to lavish dinners and paying for some investors to vacation with him.

In addition, Bullar used investor money to pay for the mortgage on his home, vacations, country club dues, boats, jet skis, sports tickets, and vehicles, among other things.

“Today's sentencing demonstrates how federal law enforcement, along with our State and Local law enforcement partners, band together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain. IRS Criminal investigators will continue to use their financial expertise to identify and trace laundered funds in these types of investor fraud schemes,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.

U.S. Attorney Stewart commended the investigation by the IRS-Criminal Investigation and Ohio Bureau of Criminal Investigation, the coordination of the Hamilton County Prosecutor’s Office, as well as Assistant United States Attorney Emily N. Glatfelter, who represented the United States in this case. U.S. Attorney Stewart also thanked the U.S. Commodity Futures Trading Commission, which has filed civil charges in a separate action.

WASHINGTON – A Corona, California, man pleaded guilty today in U.S. District Court in Cincinnati to one count of conspiracy to commit mail and wire fraud for his participation in a large-scale, nationwide prescription drug diversion scheme.

Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent In Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI) Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS) Cincinnati Field Office announced the guilty plea, entered today by U.S. District Judge Timothy S. Black.

According to court documents, from May 2010 through December 2012, Vin Nguyen, 45, and others conspired to distribute illegally-diverted prescription drugs while concealing the true, illicit sources of the drugs.  Nguyen purchased prescription drugs, including HIV medications, anti-psychotic medications and other brand name drugs, from various unlicensed and illegal sources in California and Florida.  Working with co-conspirators, Nguyen then sold the drugs to other drug diverters without the statutorily required pedigree documents stating the origin of the drugs.  Nguyen and his co-conspirators sold more than $6.5 million worth of diverted drugs. 

“Illegal prescription drug diversion threatens the security of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer.  “The Department of Justice will continue to protect American consumers by prosecuting those who engage in prescription drug diversion.” 

From December 2011 through December 2012, Nguyen and others sold diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC).  On May 6, David Miller and MIC were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license.  Those charges remain pending. 

Nguyen and his co-conspirators used the company name “Modern Medical” when selling drugs to Miller and MIC.  Modern Medical is a real California company that had no involvement in the drug sales.  Nguyen and his co-conspirators simply hijacked the name to conceal their involvement and the true, illicit drug sources.

Miller and MIC, in turn, sold the prescription drugs obtained from Nguyen – and multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio.  Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico.  These false pedigrees covered up the illegitimate sources of the drugs – various illicit, unlicensed suppliers, including Nguyen – and falsely stated that B&Y Wholesale was an authorized distributor of the prescription drugs.

On Feb. 19, Yusef Yassin Gomez, the owner of B&Y Wholesale in Puerto Rico, pleaded guilty to one count of conspiracy to distribute prescription drugs without a wholesale license for his role in the conspiracy.

This matter is being investigated by FDA-OCI and the USPIS.  Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of the Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.

WASHINGTON – A former chief executive officer of a red light camera vendor pleaded guilty today to participating in an eight-year bribery and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Office.

Karen L. Finley, 55, of Cave Creek, Arizona, pleaded guilty before U.S. Magistrate Judge Terence P. Kemp of the Southern District of Ohio to a one-count information charging her with conspiracy to commit federal programs bribery and honest services wire and mail fraud.  Finley’s sentencing hearing will be scheduled at a later date.

From December 2005 to February 2013, Finley served as CEO of a red light camera enforcement company.  As part of her plea agreement, Finley admitted that, between 2005 and 2013, she participated in a scheme in which the company made campaign contributions to elected public officials in the cities of Columbus and Cincinnati through a consultant retained by the company.  According to admissions made in connection with her plea, Finley and others, including another executive of the company, agreed to provide the conduit campaign contributions with the understanding that the elected public officials would assist the company in obtaining or retaining municipal contracts, including a photo red light enforcement contract with the City of Columbus.  Finley also admitted she and her co-conspirators concealed the true nature and source of the payments by the consultant’s submission and the company’s payment of false invoices for “consulting services,” which funds the consultant then provided to the campaigns of the elected public officials.

The case was investigated by the FBI’s Cincinnati Field Office, Columbus Resident Agency, with the assistance of IRS-Criminal Investigations and the Ohio Bureau of Criminal Investigation.  The case is being prosecuted by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio.

CINCINNATI – A federal grand jury has charged Margaret Temponeras, 50, of Portsmouth, Ohio, John Temponeras, 80, of Portsmouth, Ohio and Raymond Fankell, 60, of Wheelersburg, Ohio, with illegally running a pain clinic and distributing pain killers not for a legitimate purpose and outside the scope of medical practice in an indictment returned in Cincinnati.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, 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 indictment returned today.

The indictment alleges that Margaret Temponeras and John Temponeras were physicians specializing in family practice and OBGYN respectively, who changed their medical focus to pain management and began operating Unique Pain Management LLC in Wheelersburg, Ohio. Margaret Temponeras also opened Unique Relief LLC in Wheelersburg, Ohio. Raymond Fankell owned and operated Prime Pharmacy Group Inc., doing business as Medi-Mart Pharmacy in Portsmouth, Ohio.

It is alleged that all three defendants dispensed diazepam, hydrocodone and oxycodone not for a legitimate purpose and outside the scope of medical practice. Margaret and John Temponeras allegedly “examined” more than 20 customers per day, and provided large amounts of prescription medications to customers that they knew or had a reasonable cause to believe were drug addicts or diverting/selling the medication.

The five-count indictment states that in furtherance of the conspiracy, the father and daughter would charge customers cash amounts that started at approximately $200 per office visit; they would not accept insurance payments. They allegedly referred patients to Fankell to have Fankell fill prescriptions. The court document also indicates that at least eight individuals were found dead after consuming medications prescribed by and dispensed from the defendants.

The three were charged with two counts of illegally distributing medication, which each carry a maximum penalty of 20 years in prison and a million dollar fine; these charges also carry an enhanced penalty of 20 years to life in prison if death resulted. John Temponeras and Raymond Fankell were charged with one count and Margaret Temponeras with two counts of maintaining a place for the purpose of distributing controlled substance, a crime punishable by up to 20 years in prison and a fine of up to $500,000.

U.S. Attorney Stewart commended the investigation of this case by the DEA, FBI, Ohio State Board of Pharmacy, and Ohio HIDTA.

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

CINCINNATI – Joshua Walker, 24, of Cincinnati, was sentenced in U.S. District Court to 96 months in prison for possessing with intent to distribute a measurable amount of heroin and possession of a firearm in furtherance of a drug trafficking offense.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Donald J. Soranno, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Columbus Field Division, and Cincinnati Police Chief Jeffrey Blackwell announced the sentence handed down today by U.S. District Judge Susan J. Dlott.

According to court documents, on or about March 23, 2014, undercover officers observed Walker engage in several traffic violations. Officers continued to follow the defendant, and after he parked his car, they approached his vehicle. When Walker saw the officers walking toward him, he turned around, got back into his car, locked his vehicle and refused to open his door.

Officers eventually removed Walker from the vehicle and observed a pistol on the driver’s seat, along with a bag containing approximately 5.88 grams of heroin. The defendant had nearly $2,000 on his person and a digital scale was discovered in his glove compartment.

Walker pleaded guilty on March 24, 2015 to one count of possession with intent to distribute a measurable amount of heroin and one count of possession of a firearm in furtherance of drug trafficking.

U.S. Attorney Stewart commended the cooperative investigation by ATF and the Cincinnati Police Department, as well as Cincinnati Branch Chief Anthony Springer, represented the United States in this case. 

COLUMBUS, Ohio – William J. McBride, Jr., 49, of Columbus, was sentenced in U.S. District Court to 216 months in prison for armed bank robberies in Ohio, West Virginia, Kentucky and Indiana.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, William J. Ihlenfeld, II, United States Attorney for the Northern District of West Virginia, John E. Kuhn, Jr., Acting United States Attorney for the Western District of Kentucky, Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Joshua Minkler, United States Attorney for the Southern District of Indiana, announced the sentence handed down today by Senior U.S. District Court Judge James L. Graham.

According to court documents, between June 21, 2014 and August 23, 2014, McBride robbed six different federally insured banks in five different federal jurisdictions while armed with a dangerous weapon.

McBride, at gunpoint, demanded and received more than $21,000 in cash total from the banks. The defendant did not wear any disguise during the robberies, and witnesses in each location described him similarly.

On August 23, 2014, a witness reported McBride’s license plate number upon seeing the defendant flee in his vehicle after robbing the Wesbanco Bank in St. Clairsville, Ohio. Law enforcement officials discovered the vehicle was registered to McBride and subsequently arrested him later the same day in a hotel in Columbus, Ohio.

McBride pleaded guilty to six counts of armed robbery on February 2, 2015. He was also sentenced to five years supervised release.

U.S. Attorney Stewart commended the cooperative investigation by the FBI and other law enforcement agencies in each jurisdiction, as well as Assistant United States Attorney Salvador A. Dominguez, who represented the United States in this case. 

COLUMBUS, Ohio – Kevin Whitely, 33, of Columbus, Ohio, was sentenced in U.S. District Court to 84 months in prison for distributing marijuana and money laundering.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Kathy Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, and Columbus Police Chief Kim Jacobs announced the sentence handed down today by Senior U.S. District Judge George C. Smith.

According to court documents, in April 2010, DEA, IRS and Columbus Division of Police initiated an investigation into a marijuana trafficking organization.  The investigation revealed that from December 2009 through September 2013 Whitely was involved with a large scale narcotics organization responsible for importing and distributing multiple kilograms of marijuana throughout central Ohio.  Through surveillance, cooperating defendants, shipping documents and narcotic seizures, it was determined that this organization utilized various Ohio residences, business fronts, commercial freight, semi tractor-trailers and vehicles to store and transport narcotics and currency.

Specifically, Whitely and others received approximately 2,400 kilograms of marijuana that was transported from suppliers in Houston, Texas, to various fraudulent businesses in Columbus, Ohio. In order to conceal the identity of the marijuana, the marijuana shipments were disguised as hair care products, beauty supplies and whole grain rice in tightly wrapped packaging.  During the course of the drug operation, the organization generated a significant amount of illegal proceeds from the sale of marijuana.

On September 11, 2013, DEA, IRS and Columbus Division of Police executed a search warrant at a warehouse located on North Hamilton Road in Columbus, Ohio, and a residence utilized by Whitely located on Ilene Road in Columbus, Ohio.

Upon entering the warehouse, agents observed Whitely and three other individuals removing numerous packages concealed inside approximately 12-15 pool tables.  The packages contained approximately 500 kilograms of marijuana.  It was determined that the marijuana originated in Texas and was delivered by commercial freight to the North Hamilton Road warehouse.  Whitely and the co-conspirators intended to repackage the marijuana for the purpose of selling it to other drug traffickers in the Columbus area.  In addition to the marijuana seized at the warehouse, law enforcement also seized $65,255 in U.S. currency from Whitley’s Ilene Road residence.

During the course of the drug conspiracy, Whitely earned substantial income from the sale of narcotics.  Whitely used his drug proceeds to purchase assets and fund bank accounts through the use of nominees.  Specifically, in March 2012 Whitley used a nominee to purchase a 2012 Infinitity G37 for approximately $44,000.  Initially, Whitley paid the nominee $5,000 in cash to purchase the vehicle, and then paid the nominee $500 in cash per month until the vehicle was paid off.

Whitely also used a credit card obtained in a nominee name as his personal credit card.  Whitely paid the nominee with cash earned from his drug sales for the charges he made on this credit card.  In addition, Whitely deposited cash directly into the nominee’s bank account to reimburse the nominee for expenditures made by Whitley.  Some of the transactions made by Whitely with this credit card included renting vehicles used to facilitate his drug trafficking activities.

Whitley pleaded guilty on October 28, 2014 to conspiracy to possess with the intent to distribute more than 1,000 kilograms of marijuana and money laundering.

He was ordered to forfeit $65,255 in cash that was seized during the execution of a search warrant on Ilene Road, Columbus, Ohio on September 11, 2013.

“All financial transactions leave a trail and we have the unique expertise to follow those leads,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.  “Not only is a criminal going to jail for his crimes, but the government has seized a significant portion of the illegal proceeds through asset forfeiture.”

U.S. Attorney Stewart commended the cooperative investigation by the DEA, IRS-Criminal Investigation and the Columbus Division of Police, as well as Assistant United States Attorney Kenneth F. Affeldt, who is representing the United States in this case.

COLUMBUS, Ohio – Andre M. Brown, aka ‘Paco’, 33, of Columbus, Ohio was arrested this morning by FBI agents in Charlotte, North Carolina. Brown had been a fugitive since October 2014 when he was charged with nine counts in a superseding indictment that related to his role in the Short North Posse. With the arrest of Brown, there are no longer any indicted Short North Posse members at large.

Seventeen individuals were originally indicted in the racketeering case in July 2014. All of the defendants were accused of being an organized criminal enterprise known as the Short North Posse.

Brown was one of three more people indicted in October 2014 in connection with a series of violent crimes including 13 previously unsolved murders as well as other attempted murders, drug trafficking, weapons trafficking, extortion and robbery. The addition to the indictment included an additional 23 felonies, including one murder and nine attempted murders.

Carter M. Stewart, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Joseph P. Reagan, Special Agent in Charge, Drug Enforcement Administration (DEA), Donald J. Soranno, 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 arrest.

The superseding indictment which names Brown alleges that beginning in 2005, members of the enterprise originally referred to themselves solely as the Short North Posse. Later some members began subsets of the Short North Posse referring to themselves as the Cut Throat Committee and later the Homicide Squad. Still within the Short North Posse, Cut Throat Committee and Homicide Squad specialized in murders and robberies of rival gang members, other drug dealers, and targets thought to have large sums of cash or firearms. The Short North Posse also identified themselves nationally with the Crips street gang.

The superseding indictment was a result of a two-year long investigation by federal, state and local law enforcement agencies, including the FBI, DEA, ATF, Columbus Police, Franklin County Sheriff Zach Scott’s Office, and 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 joined U.S. Attorney Stewart in announcing the original charges.

Brown was charged in the superseding indictment with one count of racketeering conspiracy and three counts of use and discharge of a firearm during and in relation to a crime of violence, each crimes punishable by up to life in prison; one count of attempted possession with intent to distribute cocaine, a crime punishable by up to 20 years in prison; and three counts of possession with intent to distribute and one count of attempted possession with intent to distribute a detectable amount of marijuana, each crimes punishable by up to five years in prison.

Stewart commended Assistant United States Attorneys David DeVillers and Kevin Kelley and Special Assistant United States Attorney Brian Martinez, as well as Special Assistant U.S. Attorney Jimmy Lowe with Franklin County Prosecutor O’Brien’s Office, who are prosecuting the case.

Charges contained in an indictment are allegations. All defendants should be presumed innocent until and unless proven guilty in court.