Western District of Oklahoma

WASHINGTON – Attorney General Eric Holder announced today the appointment of U.S. Attorney for the District of North Dakota Timothy Q. Purdon as chair of the Native American Issues Subcommittee (NAIS) of the Attorney General’s Advisory Committee of U.S. Attorneys (AGAC). Attorney General Holder also appointed U.S. Attorney for the Western District of Oklahoma Sanford C. Coats to serve as vice chair.

"The Native American Issues Subcommittee, the oldest subcommittee of the Attorney General’s Advisory Committee, is vital to the department’s mission in Indian Country to build and sustain safe and secure communities for future generations," said Attorney General Holder. "I am confident that U.S. Attorneys Purdon and Coats have the expertise and dedication to lead this important group as we work to fulfill the department’s role in protecting and serving this country’s first Americans."

U.S. Attorney Purdon was appointed to the NAIS in 2010, and he served as vice chair throughout 2012. U.S. Attorney Purdon replaces U.S. Attorney for the District of South Dakota Brendan V. Johnson.

U.S. Attorney Coats was appointed to the NAIS in 2010, and he also served in the AGAC from 2010 through 2011. U.S. Attorney Coats continues his work with the AGAC’s Resource Allocation Working Group.

Attorney General Holder also thanked U.S. Attorney Johnson for serving as chair of the NAIS for the past three years, 2009-2012. "Brendan Johnson’s dedication and commitment to improving public safety in Indian Country will continue to positively impact tribal communities for years to come. His leadership has brought the U.S. Attorney community together to address a myriad of important issues in Indian Country, and his guidance has been an invaluable asset to this department. I look forward to my ongoing work with U.S. Attorney Johnson as a member of the AGAC."

The AGAC was created in 1973 to serve as the voice of the U.S. Attorneys and to advise the Attorney General on policy, management, and operational issues impacting the offices of the U.S. Attorneys. The NAIS is made up of 30 U.S. Attorneys from across the United States whose Districts contain Indian Country or one or more federally recognized tribes. The NAIS focuses exclusively on Indian Country issues, both criminal and civil, and is responsible for making policy recommendations to the Attorney General of the United States regarding public safety and legal issues that impact tribal communities.

Oklahoma City, Oklahoma – Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announced that WILLIAM K. ECHOLS, 28, of Enid, Oklahoma, was sentenced today by United States District Judge Stephen P. Friot to serve 36 months in prison for failure to register as a sex offender. Upon his release, Echols will be under the Supervision of United States Probation Office for ten years.

After traveling with the carnival around the United States, Echols was discovered in Enid, Oklahoma, by the United States Marshals after an anonymous tip through the website TipSoft.com. Echols was subsequently indicted by the federal grand jury in April of 2012 and charged with failing to register as a sex offender. Echols was required to register under the Sex Offender Registration and Notification Act (Adam Walsh Act) following his 2004 conviction in Trinity County Superior Court in California for Molesting a Child. In August of 2012, Echols entered a guilty plea to the charge in the indictment of failing to register as a sex offender. The defendant also has four prior convictions for failing to register as a sex offender in Nebraska, California, and Oregon.

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

The case was investigated by the United States Marshals Service and was prosecuted by Assistant U.S. Attorney Robert Don Gifford.

Oklahoma City, Oklahoma – SAFIYYAH TAHIR BATTLES, formerly a real estate agent with T&T Realty in Oklahoma City, has been sentenced to thirty months in prison for mortgage fraud and money laundering, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma

On June 21, 2012, a jury convicted Battles of using an interstate wire facility to defraud Saxon Mortgage and engaging in a monetary transaction with more than $10,000 from the proceeds of crime. The evidence at trial showed that in April of 2007, she used her sister’s mortgage brokerage company, Lending Leaders, to apply for a $500,000.00 loan from Saxon Mortgage of Fort Worth, Texas. Saxon required her to provide twelve months of bank statements to support her income and assets. The jury heard evidence that the bank statements had been altered by adding more than $100,000.00 to the ending balance on each statement, by deleting her husband’s name as an account holder, and by removing numerous overdraft fees.

At the closing on May 4, 2007, Battles signed a final loan application that stated falsely that she earned $344,677.92 per year and had $165,907.70 in her bank account. According to a tax return that she filed in March of 2009, Battles’s adjusted gross income for 2006 was $14,001.00; according to the records of First Security Bank, her actual account balance on May 4, 2007, was $852.50.

Based on the application information, a forged letter, and communications with the mortgage brokerage on the day of closing, Saxon Mortgage authorized $102,630.01 from the loan proceeds to be paid to a local builder. Battles took the $102,630.01 check at closing, deposited into her own bank account, and used it for her own purposes. The money-laundering count relates to a $15,000.00 check that Battles wrote to her mother, Trina Tahir, two days after she deposited the $102,630.01 check.

Today, United States District Judge Timothy D. DeGiusti sentenced Battles to thirty months in prison and ordered her to pay restitution of $326,902.34. She will be required to serve two years on supervised release after her prison term, including 104 hours of community service. The court also imposed a forfeiture judgment in the amount of $102,630.01. The sentence was based on the counts of conviction, as well as fraud that Battles perpetrated in connection with five other residential mortgages.

This sentence is the result of an investigation conducted by the IRS Criminal Investigation and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Scott E. Williams and Chris M. Stephens.

Oklahoma City, Oklahoma – Today, THEODORE MICHAEL ZACHRITZ, of Nichols Hills, Oklahoma, pled guilty to willfully failing to pay over to the Internal Revenue Service federal taxes that he withheld from his employees’ wages, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

For many years, Zachritz and his wife owned and operated Lifestyle Pools, LLC in Oklahoma City. As owner of the company, Zachritz deducted and withheld federal income taxes, Social Security taxes, and Medicare taxes (commonly called “payroll taxes”) from wages of Lifestyle Pools employees. Under federal law, an employer must deduct and withhold payroll taxes from employees’ wages, and then pay over those withheld taxes to the IRS at the end of each quarter.

On January 22, 2013, the United States charged Zachritz with willfully failing to collect and pay over to the IRS the federal income taxes, Social Security taxes, and Medicare taxes withheld from wages of Lifestyle Pools employees for the third quarter of 2006 through the end of 2009. At today’s plea hearing, Zachritz admitted that he deducted and withheld more than $290,000 in payroll taxes from his employees’ wages during that period. He also admitted that he knew he was required by law to turn over to the IRS the withheld federal payroll taxes each quarter, but he did not do so. Zachritz admitted that he still has not paid over to the IRS any of the payroll taxes that he withheld from 2006 to 2009.

At sentencing, Zachritz faces a potential penalty of up to five years in prison, a fine up to $250,000, and restitution to the IRS. In a plea agreement, Zachritz agreed to pay restitution to the IRS in the amount of his criminal conduct. The court will determine the specific amount of restitution due to the IRS at sentencing, which will take place in approximately ninety days.

This case is the result of an investigation conducted by the IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Chris M. Stephens.

Oklahoma City, Oklahoma – JORDAN ABE CHAVIRA, 22, of Oklahoma City, was sentenced by United States District Judge Stephen P. Friot to serve 46 months in prison for unlawful possession of firearms as a prior convicted felon, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. The firearms were purchased at a local gun show.

"It is a priority of this office to work with law enforcement to keep firearms out of the hands of felons," said U.S. Attorney Coats. "The defendant, a convicted felon, was able to purchase two semiautomatic firearms and ammunition at a local gun show without the necessity of a background check. Fortunately, alert Oklahoma City Police Officers were able to arrest and unarm the defendant before a violent crime was committed. Anyone who is legally prohibited from possessing firearms or ammunition, including convicted felons, better think twice before doing so. Law enforcement is committed to protecting law-abiding citizens from gun violence, and at the core of that effort is the apprehension and prosecution of felons who possess guns."

"The successful prosecution of Chavira by U.S. Attorney Coats highlights the cooperation between the Oklahoma City Police Department and ATF during the last 13 months to proactively keep firearms out of the hands of criminals who use gun show venues to purchase firearms," said OCPD Chief Bill Citty.

"This investigation is an example of ATF's partnership with the Oklahoma City Police Department to address violent crime associated with violent gangs and convicted felons in the Oklahoma City area as they attempt to illegally acquire firearms as tools of their trade," said Robert R. Champion, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives.

According to Judge Friot’s findings at sentencing, attached below, Chavira is a convicted felon and former member of the Southside Locos, a gang with a long history of violent criminal activity in Oklahoma City. On March 18, 2012, gang enforcement officers from the Oklahoma City Police Department were participating in a surveillance of a gun show in Oklahoma City. At the gun show, officers overheard Chavira approach a vendor and say, “no paperwork right,” referring to an ATF form used for a background check in order to purchase a firearm. After the dealer stated that paperwork was required because he was a federal firearms licensee, Chavira walked away and did not purchase any items from that dealer.

At the gun show, Officers observed Chavira purchase an Intratec 9 mm semiautomatic machine pistol with a high capacity magazine walk from one private vendor, a Glock Model 22, 40 caliber semiautomatic handgun from a different private vendor, and ammunition from a yet another private vendor. Each of these purchases was made by Chavira with cash and without any receipts or other paperwork completed.

Chavira and his friend left the gun show in a vehicle which was subsequently stopped by OCPD officers. In the vehicle, officers found a 9 mm semiautomatic handgun capable of handling a large capacity 32-round magazine, a .40 caliber Glock Model 22 semiautomatic handgun, three high capacity magazines, one box of 9 mm bullets with 40 rounds, and .22 caliber bullets.

Chavira was indicted on June 5, 2012. On August 10, 2012, he pled guilty to the indictment without a plea agreement.

Judge Friot ordered that Chavira serve 46 months in federal prison, followed by three years of supervised release. As a convicted felon, Chavira is prohibited from possessing firearms or ammunition in the future.

This case was the result of an investigation conducted by the Oklahoma City Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorney Lee Borden.

Reference is made to court documents for further information.

Ordered to Repay Over $398,000 in Restitution to College

Oklahoma City, Oklahoma – Today, BRANDI J. HENSON, 49, of Yukon, Oklahoma, was sentenced to 27 months in federal prison in connection with a scheme to embezzle nearly $400,000 from Oklahoma City Community College, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

Henson worked as the bursar at Oklahoma City Community College (“OCCC”) from 2003 through 2011. As bursar, she had access to the college’s PayPal account. PayPal allows users to maintain financial accounts for the purpose of transferring money over the Internet. In her duties as bursar, Henson used OCCC’s PayPal account to process refunds to students’ credit cards.

Henson was charged on July 10, 2012, with wire fraud relating to a scheme to embezzle money from OCCC. On August 16, 2012, Henson pled guilty to one count of wire fraud. At the plea hearing, she admitted that she improperly used the college’s PayPal account to post refunds/credits to her personal credit cards. Henson also admitted that the embezzlement scheme lasted from 2004 to 2011. According to the Information filed against her, Henson paid off more than $398,000 in personal credit card bills with OCCC refunds that she posted to her personal accounts.

At today’s sentencing, United States District Judge David L. Russell sentenced Henson to 27 months in federal prison, followed by three years of supervised release. In addition, Judge Russell ordered Henson to pay restitution to OCCC in the amount of $398,315.12. Henson must report to federal prison on February 18, 2013.

The case is the result of an investigation conducted by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Chris M. Stephens.

Oklahoma City, Oklahoma – Yesterday, KATHARINE ANNE DAUGHERTY, 57, of Bethany, Oklahoma, was sentenced to serve 37 months in prison in connection with a scheme to take money by false pretenses from the United States Department of Labor, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

Daugherty worked for many years as an Adult Protective Services Specialist with the Oklahoma Department of Human Services ("DHS"). At DHS, Daugherty oversaw the financial accounts of persons placed under the guardianship of DHS Adult Protective Services. In 2009, an Oklahoma state judge appointed DHS as the guardian for "L.J.A.," an elderly man in a Bethany nursing facility. Daugherty was added as a trustee and signatory to L.J.A.’s bank account in May 2009. L.J.A. received monthly disability compensation benefits from the Office of Workers’ Compensation Programs within the United States Department of Labor. L.J.A. died in March 2010, and his entitlement to federal benefits ended upon his death.

On September 11, 2012, Daugherty was charged in a one-count Information with wire fraud. The Information alleged that from March 2010 to May 2011, Daugherty defrauded the Department of Labor through false documents that induced the agency after L.J.A.’s death to continue paying monthly benefits to L.J.A.’s bank accounts that Daugherty controlled. According to the Information, Daugherty caused the Department of Labor to issue more than $27,000 in fraudulent benefits after L.J.A.’s death.

On September 27, 2012, Daugherty pled guilty to the wire fraud count. Daugherty admitted that after L.J.A.’s death, she closed out his case at DHS, but did not notify the Department of Labor of his death. She admitted that in July 2010, months after L.J.A.’s death, she used DHS letterhead to write a letter asking the Department of Labor to mail L.J.A.’s benefits to her at the DHS office. She also admitted that she submitted to the Department of Labor a forged state-court order that appeared to continue DHS guardianship well after L.J.A.’s death. She admitted that in December 2010, she set up and controlled a bank account in L.J.A.’s name to deposit the federal benefits issued in his name. Finally, at the plea hearing, she admitted to using for her personal benefit money that came into L.J.A.’s accounts after his death.

At yesterday’s sentencing, United States District Judge Joe Heaton sentenced Daugherty to 37 months in federal prison, followed by three years of supervised release. Daugherty was ordered to pay restitution to the United States Department of Labor in the amount of $5,451.99. She was also ordered to pay $1,985 in restitution for theft from an unrelated victim under DHS guardianship. Daugherty must report to federal prison on February 4, 2013.

This case is the result of an investigation conducted by the United States Department of Labor – Office of Inspector General and the Oklahoma Department of Human Services – Office of Inspector General. The case was prosecuted by Assistant United States Attorney Chris M. Stephens.

Oklahoma City, Oklahoma – DALE HOWARD BRUNO, 59, from Altus, Oklahoma, was sentenced by United States District Judge David L. Russell to serve 24 months in federal for illegal possession of a functional Claymore mine, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

According to Court records and proceedings, Bruno was an Army instructor at Fort Sill, Oklahoma, and stole a Claymore mine while working at Fort Sill. Following a tip that Bruno had a Claymore mine, law enforcement discovered Bruno to be in possession of a fully functional Claymore mine on October 28, 2011. A Claymore mine is a military weapon containing approximately1.5 pounds of C4 plastic explosive and embedded approximately 700 steel ball bearings. It is engineered as a directional antipersonnel weapon to inflict death or serious bodily injury over a large area.

Bruno pled guilty on September 24, 2012, to unlawful possession of the Claymore mine. At sentencing, Judge Russell ordered that Bruno serve 24 months in prison followed by two years of supervised release.

This case was the result of an investigation conducted by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Ed Kumiega.

Oklahoma City, Oklahoma – Former Oklahoma Senate President Pro Tem MICHAEL STEVEN MORGAN, 57, of Stillwater, Oklahoma, was sentenced today by United States District Judge Robin J. Cauthron to serve five years’ probation for bribery, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

"While this was not the sentence for which we advocated, the determination of sentencing in federal court is within the discretion of the Judge,” said U.S. Attorney Coats. “This is one of the most significant public corruption cases in this district in decades. Both the U.S. Attorney’s Office and the FBI remain committed as ever to the pursuit of public corruption cases and holding accountable any public officials who abuse their positions for personal gain. I commend the Assistant United States Attorneys and FBI Special Agents for their extraordinary work in this long and complex investigation and prosecution."

The government alleged three different schemes. On March 5, 2012, the federal jury found Morgan guilty of bribery on one scheme, acquitted him on one scheme, and could not reach a unanimous verdict on a third scheme. According to evidence at trial on the scheme in which he was convicted, Morgan, an attorney, accepted payments from a business that owned assisted-living centers, disguised as legal fees, in exchange for favorable treatment in the legislature. Evidence at trial showed that Morgan took twelve $1,000 bribe payments in 2006 and 2007, disguised as legal fees, from Silver Oak Senior Living Center. Evidence showed that Silver Oak had been at odds with the Oklahoma Department of Health, which was attempting to impose regulations on assisted-living facilities. In exchange for the bribe payments, evidence showed that Morgan authored Senate Bill 738, which became law at the end of the 2007 session and helped Silver Oak by lifting some of its regulatory burdens.

In addition to serving five years of probation, Morgan was ordered to forfeit $12,000.

This case was the result of an investigation conducted by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorneys Scott E. Williams and Vicki Zemp Behenna.

Reference is made to court filings for further information.

Oklahoma City, Oklahoma – CAROLYN DAWSON, of Oklahoma City, has pled guilty to using interstate wire communications to defraud her former employer, American Plant Products, and to evading federal payroll taxes, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.

Until November of 2011, Dawson worked as the bookkeeper for American Plant Products, an Oklahoma City wholesaler of greenhouse and garden supplies. Her duties included maintaining payroll, preparing payroll tax returns, and paying withheld taxes to the IRS. According to a criminal information filed on December 18, 2012, Dawson defrauded the business by using interstate wire communications to pay personal credit card expenses from a business bank account, without the knowledge of the business or its owners. The information also alleges that she treated these payments as business-related expenses to disguise her embezzlement. These payments took place from January of 2007 until November 25, 2011, when Dawson was terminated.

In a separate count, the information alleges that Dawson willfully evaded federal payroll taxes by failing to file a 2010 payroll tax return for the company, failing to make payroll withholding payments to the IRS, and altering the books and records of American Plant Products to conceal her failure to make withholding payments.

Today, Dawson pled guilty to both counts. In a plea agreement, she agreed to pay $1,194,656.15 in restitution to American Plant Products. She has also agreed to pay restitution to the Internal Revenue Service, including restitution for her failure to pay personal income taxes on the embezzled money. The plea agreement provides that the loss to the IRS is more than $200,000 and less than $1,000,000.

Dawson’s punishment for wire fraud could be as much as twenty years in prison, three years of supervised release, and a fine of $250,000. Her punishment for tax evasion could be as much as five years in prison, three years of supervised release, and an additional $250,000 fine. Sentencing will take place in approximately ninety days.

These charges are the result of an investigation conducted by the Federal Bureau of Investigation and the Criminal Investigations Division of the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorney Scott E. Williams.

Reference is made to court filings for further information.