Western District of Pennsylvania

PITTSBURGH - A resident of Oakdale, Pennsylvania, has been sentenced in federal court to five years of probation, a $1,000 fine and ordered to pay $27,500 in restitution on his conviction of wire fraud, Acting United States Attorney Soo C. Song announced today.

United States District Judge Arthur J. Schwab imposed the sentence on Thomas Slack, 67, of Oakdale, Pennsylvania.

According to information presented to the court, Slack engaged in a scheme to fraudulently obtain money from prospective home builders seeking financing through loan programs administered through the United States Department of Agriculture ("USDA") Rural Development offices. Slack was a member and director of the Great Falls Development Group, a company which falsely purported to be an established residential real estate developer and builder. Slack falsely represented to prospective home builders and investors that he was associated with the USDA's Rural Development loan programs and that he could underwrite and pre-qualify applicants for the loan programs. Slack's false representations induced prospective home builders and investors to send money to him, believing that he was actively engaged in building homes and securing financing for the homes through the USDA, when, in fact, he was not.

Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.

Acting United States Attorney Song commended the U.S. Department of Agriculture Office of the Inspector General for the investigation leading to the successful prosecution of Slack.

Erie, Pa. - A resident of Carlton, Pennsylvania, has been sentenced in federal court to 5 years probation, 6 months home detention and ordered to make restitution in the amount of $92,928.00 on his conviction of theft of government property and social security fraud, Acting United States Attorney Soo C. Song announced today.

Senior United States District Judge Gustave Diamond imposed the sentence on David James Dean, 40, of Carlton, Pennsylvania.

According to information presented to the court, from on or about August 9, 2006 to on or about May 18, 2015, Dean knowingly stole approximately $28,097 in Social Security Survivor’s Benefits payments which he knew he was not entitled. In addition, from on or about August 9, 2006 to on or about July 8, 2015, after applying to receive SSA Child’s Insurance Benefits on behalf of a minor child, Dean knowingly and willfully converted those benefits to his own use. By doing so, Dean received payments, valuing approximately $65,175, to which he knew he was not entitled.

Assistant United States Attorney Marshall J. Piccinini prosecuted this case on behalf of the government.

Acting United States Attorney Song commended the Social Security Administration, Office of Inspector General for the investigation leading to the successful prosecution of Dean.

PITTSBURGH – An Allegheny County resident has been sentenced in federal court to imprisoned for a total term of one day, three years supervised release and restitution in the amount of $63,752.73 on his conviction of access device fraud, Acting United States Attorney Soo C. Song announced today.

United States District Judge Nora Barry Fischer imposed the sentence on Joseph E. Placzek, 25 of McKees Rocks, PA.

According to the information presented to the court, Placzek opened credit cards in the name of another person at Capital One bank, which he used to purchase cruise vacations at Carnival Cruise, as well as merchandise at Amazon.com and Home Depot, among other retailers.

Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.

The Western Pennsylvania Financial Crimes Task Force (WPFCTF), conducted the investigation that led to the successful prosecution of this defendant. The WPFCTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in Western Pennsylvania. Partnering in this effort are the United States Attorney's Office for the Western District of Pennsylvania, the United States Secret Service, the United States Postal Inspection Service, the Department of Homeland Security, the Allegheny County District Attorney's Office, the Allegheny County Police Department, the City of Pittsburgh Bureau of Police and the Pennsylvania State Police.

JOHNSTOWN, Pa. - A resident of Morrisdale, Pa., has been sentenced in federal court to six months in prison, followed by six months’ home detention with electronic monitoring, and three years’ supervised release, on his conviction of conversion of government funds, Acting United States Attorney Soo C. Song announced today.

United States District Judge Kim R. Gibson imposed the sentence on Glenn Allen English, 58, of Morrisdale, Pa.

According to information presented to the court, from Jan. 1, 2008, to Oct. 31, 2015, English did receive and convert falsely to his own use a total of $210,802.30, which represents approximately 210 separate Social Security Administration benefit payments made to him to which he was not entitled.

Assistant U.S. Attorney Stephanie L. Haines prosecuted this case on behalf of the government.

Ms. Song commended the Social Security Administration, Office of Inspector General, for the investigation leading to the successful prosecution of English.

PITTSBURGH – A resident of Indiana, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of embezzling from a federally insured bank, Acting United States Attorney Soo C. Song announced today.

The one-count indictment, returned on Dec. 13, named Madeline Isenberg, 36, of Indiana, Pennsylvania, as the sole defendant.

According to the indictment, from in or around February 2012 until in or around August 2015, Isenberg, while employed as an Assistant Manager for First Commonwealth Bank, embezzled approximately $88,000.

The law provides for a maximum total sentence of thirty years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.

The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH - A resident of Washington, Pa., has been sentenced in federal court to 84 months of imprisonment, followed by three years of supervision, on his conviction of federal heroin and fentanyl offenses, Acting United States Attorney Soo C. Song announced today.

United States District Judge Arthur J. Schwab imposed the seven-year federal sentence on 24-year-old Ronald Douglas McMillian, Jr.

According to information presented to the court, McMillian sold fentanyl-laced heroin on August 16, 2015 and a woman overdosed on it. The next day, McMillian sold more of the drug to two males who also overdosed. Quick work by civilians, medics and police kept all three alive until they were revived by Narcan, a drug that specifically counteracts the effects of heroin and its much more potent and lethal synthetic cousin fentanyl.

Prior to imposing sentence, Judge Schwab indicated that seven years in prison was sufficient, but not greater than necessary, to help deter others from similar crimes and to punish McMillian.

Assistant United States Attorney Ross E. Lenhardt and Assistant United States Attorney Katie A. King are the federal prosecutors with the Violent Crimes Section who prosecuted this case on behalf of the government.

Acting United States Attorney Song commended the Drug Enforcement Administration (DEA) for leading the investigation that has resulted in the successful prosecution of McMillian and many other Washington County drug dealers.

The DEA has joined forces with many other federal, state and local law enforcement agencies to investigate and prosecute the alarming number of recent overdoses in Washington County and the rest of the Western District of Pennsylvania. These agencies include the Canonsburg Police Department, the Monessen Police Department, the Washington County District Attorney’s Office, the Washington County Sheriff’s Office, the Washington County District Attorney Drug Task Force, the Washington County Coroner’s Office, the Allegheny County Department of Laboratories, and the Pennsylvania State Police. Federal authorities have helped to create a “Fusion Center” where heroin and fentanyl seizures from law enforcement agencies, along with overdose information, can be gathered and disseminated. This permits law enforcement to share information obtained during individual incidents to obtain investigative leads and visualize the overall picture of heroin use, sales, overdoses and deaths.

JOHNSTOWN, Pa. – A resident of Johnstown, Pa. was indicted today by a federal grand jury in Johnstown on a charge of theft of mail matter by a postal employee, Acting United States Attorney Soo C. Song announced today.

The indictment named Ashlee R. Lodolinski, 28, of Johnstown, Pa., as the sole defendant.

According to the indictment presented to the court, on June 24, 2015, while an employee of the United States Postal Service, she unlawfully removed $147 from 53 pieces of mail, which were intended to be conveyed by the United States mail.

The law provides for a maximum total sentence of 5 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Stephanie L. Haines, is prosecuting this case on behalf of the government.

The United States Postal Service, Office of Inspector General, conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

JOHNSTOWN, Pa. – An inmate at the Federal Correctional Institution in Loretto, Pa., was indicted by a federal grand jury in Johnstown on a charge of attempt to obtain contraband in prison, Acting United States Attorney Soo C. Song announced today.

The indictment named Michael Jackson, 27.

According to the indictment presented to the court, on October 12, 2016, Jackson attempted to obtain a quantity of Suboxone.

The law provides for a maximum sentence of 20 years in prison and a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.

Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.

The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, and the Federal Correctional Institution, Special Investigative Staff, conducted the investigation leading to the prosecution of Jackson.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

JOHNSTOWN, Pa. - Three residents of Rockwood, Pa., were sentenced in federal court in Pittsburgh to a charge of conspiracy, Acting United States Attorney Soo C. Song announced. George R. Beener; Kerry Beener and Kevin Beener each were sentenced to five years’ probation, the first three months of which must be served as home confinement. After completing home confinement, each was ordered to serve a term of nine months’ home detention. George R. Beener was ordered to pay a fine of $50,000, and Kerry and Kevin Beener were ordered to pay fines of $10,000 each.

United States District Judge Arthur J. Schwab imposed the sentences on George R. Beener, Kerry Beener, and Kevin Beener.

According to information presented to the court, between March 2010 and February 2016, George R. Beener, Kerry Beener and Kevin Beener engaged in a conspiracy to impair, impede, and obstruct the functions of the Internal Revenue Service in the computation, assessment, and collection of income tax.

Assistant United States Attorney John J. Valkovci, Jr., prosecuted this case on behalf of the government.

Acting United States Attorney Soo C. Song commended the Internal Revenue Service/Criminal Investigation for the investigation leading to the successful prosecution of the Beeners.

PITTSBURGH - A resident of Allegheny County, Pennsylvania, has been sentenced in federal court to time served on his conviction of bank fraud, Acting United States Attorney Soo C. Song announced today.

United States District Judge Donetta W. Ambrose imposed the sentence on Alvin R. Simmons, 56.

According to the information presented to the court, Simmons used fraudulent personal checks to buy postage stamps at Post Offices in western Pennsylvania, and committed bank fraud upon Citizens and First Niagara banks.

Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.

Acting United States Attorney Soo C. Song commended the U.S. Postal Inspection Service for the investigation leading to the successful prosecution of Alvin R. Simmons.

PITTSBURGH – A local restaurateur has been indicted by a federal grand jury in Pittsburgh on charges of harboring and transporting illegal aliens, Acting United States Attorney Soo C. Song announced today.

The two-count indictment, returned on Dec. 6, and unsealed today, named Xing Zheng Lin, aka Steve Lin, age 44, of McKees Rocks, Pa., as the sole defendant.

According to the indictment presented to the Court, from in and around 2009, until on or about Jan. 10, 2014, Lin harbored and transported illegal aliens who were employed at Saga Restaurant in Monroeville, Robinson, and Bethel Park, all of which were owned by Lin.

The law provides for a maximum total sentence at each count of not more than 10 years in prison for each alien, a fine of $250,000 for each alien or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.

Homeland Security Investigations and the Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH – A Bulgarian man has been indicted by a federal grand jury in Pittsburgh in connection with a sophisticated malware package known as GozNym, designed to steal banking credentials and other confidential personal information from infected computers, Acting United States Attorney Soo C. Song announced today.

The six-count indictment, returned on Oct. 4, 2016, and unsealed today, named Krasimir Nikolov, age 44, of Varna, Bulgaria, as the sole defendant. Count One charges Nikolov with criminal conspiracy; Count Two charges unauthorized access of a computer to obtain financial information; and Counts Three through Six charge bank fraud. The indictment alleges that Nikolov acquired victims’ stolen banking credentials through GozNym malware infections of victims’ computers to gain unauthorized access to victims’ online bank accounts from which electronic funds transfers were issued or attempted to be issued.

According to Acting U.S. Attorney Song, GozNym malware has been used to target private businesses and their respective financial institutions in the United States since late 2015. Victims receive phishing emails containing a hyperlink or an attachment designed to look like a legitimate business invoice. By clicking on the hyperlink or attachment, the victim’s computer becomes infected with GozNym malware. The malware steals the victim’s online banking login credentials which the criminals then use to access the victim’s bank account and issue unauthorized wire transfers.

Last week Acting U.S. Attorney Song and other members of the Justice Department announced a multi-national operation to dismantle a complex and sophisticated criminal network known as Avalanche which hosted more than two dozen of the world’s most pernicious types of malware, to include GozNym, and several money laundering campaigns. The prosecution of Krasimir Nikolov stems from the criminal investigation into the Avalanche network and the malware campaigns it hosted.

Among the numerous GozNym attacks that occurred throughout the United States, the indictment names the following:

• Nord-Lock, Inc., a bolt-manufacturing company headquartered in Carnegie, Pa., was the victim of an attempted unauthorized wire transfer of $387,500 from its online account at PNC Bank to an account in Sofia, Bulgaria.
• Protech Asphalt Maintenance, Inc., an asphalt and paving business located in New Castle, Pa., was the victim of several attempted unauthorized wire transfers totaling more than $243,000 from its online account at First National Bank.
• Foresight Sports, Inc., a company that provided technology-based golf products and was located in San Diego, California, was the victim of attempted unauthorized wire transfers totaling more than $118,000 from its online account at American Express Foreign Exchange Service Payments.
• California Furniture Collection, Inc., (DBA Artifacts International) a furniture business located in Chula Vista, California, was the victim of several attempted unauthorized wire transfers totaling more than $737,000 from its online account at CommerceWest Bank.
   

Acting U.S. Attorney Song praised the diligence and quick action of the victims and their respective banks in discovering the fraudulent wire transfers and recalling the funds before they were lost.

Nikolov was arrested at his residence in Varna, Bulgaria, on September 8, 2016. He was extradited to the United States over the past weekend, and made his initial appearance in federal court in Western Pennsylvania today at 3:30 p.m.

The law provides for a maximum total sentence of up to 100 years in prison and a fine of $3,500,000. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.

Assistant United States Attorney Charles Eberle of the Western District of Pennsylvania and Senior Trial Attorney Richard D. Green of the Justice Department’s Computer Crimes and Intellectual Property Section are prosecuting this case on behalf of the government.

The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case. The FBI was assisted by Bulgaria’s General Directorate for Combating Organized Crime. In addition to the Justice Department’s Computer Crimes and Intellectual Property Section’s involvement in the investigation, the Department’s Office of International Affairs provided significant assistance with the extradition process.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH - A resident of New Kensington, Pa, has been sentenced in federal court for the third time, Acting United States Attorney Soo C. Song announced today.

According to information presented to the court, Daniel Johnson and several accomplices smashed the front window of the Jolar gun dealership in New Kensington on Dec. 14, 2009. and stole three AR-15 type assault rifles and 11 pistols. Agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives led the investigation which resulted in the charges.

In 2011, Senior United States District Court Judge Alan Bloch originally sentenced Johnson to 24 months in federal prison and three years of supervision by the United States Probation Office.

Johnson later violated that period of supervision and was sentenced in 2014 by Judge Bloch to an additional ninemonths of imprisonment and 27 months of supervision.

While in a halfway house after serving the 2014 sentence, Johnson was arrested for selling heroin. At a hearing held on Dec. 8, 2016, Judge Bloch determined that the defendant’s heroin sale was a serious violation his supervision and sentenced the defendant to another 24 months of imprisonment, followed by 19 months of supervision.

Assistant United States Attorney Ross E. Lenhardt of the Violent Crime Section of the Office of the United States Attorney prosecuted this case on behalf of the government.

Acting United States Attorney Song commended the Pennsylvania Office of the Attorney General Task Force for the investigation leading to the third successful prosecution of Johnson. This task force is comprised of local police officers who work together to investigate drug crimes.

PITTSBURGH – Eighteen individuals have been charged in 13 indictments for their role in a large-scale health care fraud and prescription pill distribution scheme, Acting United States Attorney Soo C. Song announced today. The separate, but related, indictments, returned Tuesday and unsealed today, charge the defendants with drug distribution, health care fraud and conspiracy to commit health care fraud. The indictments allege that the defendants obtained prescription painkillers paid for by government-funded health care programs and then sold their pills for cash. The buyers then redistributed the pills to addicts.

The grand jury returned an 11-count superseding indictment charging the following six defendants:

Mark Coleman, 37, of Pittsburgh, Pa.; Jeremiah Davidson, 60, of Pittsburgh, Pa.; Kavon Dawkins, 23, of Clinton Twp., Michigan; Tevina Harris, 22, of Pittsburgh, Pa.; Nicole Miller, 29, of formerly Pittsburgh, Pa. and currently incarcerated; and
William Richardson, formerly Pittsburgh, Pa., 15212 and currently incarcerated.

According to the superseding indictment, Coleman, Davidson, Dawkins, Harris, Miller and Richardson conspired to distribute oxycodone and oxymorphone from August 2014 to June 2016. Harris and Richardson are charged with possession with intent to distribute oxymorphone on August 6, 2014 and August 14, 2014; and with possession with intent to distribute oxycodone on August 12, 2014. Davidson is charged with conspiracy to defraud UPMC Health Plan by selling prescription medications he obtained for himself. Richardson is charged with conspiracy to defraud health care benefit programs from March 2016 to May 2016 by obtaining, through false pretenses, prescription medication prescribed for others and paid for by their health care plans. The indictment also charges Richardson with defrauding UPMC Health Plan, Envision Rx Plus, and Gateway Health by receiving prescription medications for himself and selling them, and for paying individuals for prescription medications issued in their names and selling their medications. Richardson is also charged with possession with intent to distribute oxycodone and oxymorphone on August 15, 2014. The indictment further alleges that on August 15, 2014, Richardson was in possession of six firearms in furtherance of a drug trafficking crime. Finally, the indictment alleges Richardson, a convicted felon who has 11 prior convictions for crimes punishable by more than a year in prison, illegally possessed five firearms on August 15, 2014. Federal law prohibits an individual who has been convicted of a felony from possessing a firearm.

A five-count indictment charges Angela Vernon, 65, of Pittsburgh, Pa., with defrauding UPMC Health Plan and conspiracy to possess with intent to distribute and distribution of oxycodone.

A four-count indictment charges Antoinette Adair, 48, of Pittsburgh, Pa., with defrauding Envision Insurance Company and conspiracy to distribute oxycodone and oxymorphone.

A four-count indictment charges James Roberson, 61, of Pittsburgh, Pa., with defrauding UPMC Health Plan and conspiracy to possess with intent to distribute and distribution of oxycodone and oxymorphone.

A three-count indictment charges Jacqueline Bauer, 33, of Gibsonia, Pa., with defrauding UPMC Health Plan and conspiracy to distribute oxycodone and oxymorphone.

A three-count indictment charges Mildred Rainey, 60, of Pittsburgh, Pa., with conspiracy to defraud health care insurance companies and possession with intent to distribute oxycodone.

A three-count indictment charges Marion Randolph, 62, of Pittsburgh, Pa., with defrauding Aetna, Inc. and possession with intent to distribute oxycodone.

A two-count indictment charges Teresa Bernardi, 54, of Pittsburgh, Pa., with conspiracy to defraud health care insurance companies and possession with intent to distribute oxycodone.

A two-count indictment charges Donna Swigart, 53, of Ford City, Pa., with defrauding Gateway Health and conspiracy to possess with intent to distribute oxycodone.

A two-count indictment charges Jeannette Smith, 53, of Ford City, with defrauding Gateway Health and conspiracy to possess with intent to distribute oxycodone.

A two-count indictment charges John Zurich, 40, of North Versailles, Pa., with conspiracy to possess with intent to distribute oxycodone and possession of a firearm by an unlawful user of controlled substances.

A one-count indictment charges Jennifer Troy, 40, of Gibsonia, Pa., with conspiracy to possess with intent to distribute oxycodone and oxymorphone.

A one-count indictment charges Chani Watkins, 25, of Coraopolis, Pa., with conspiracy with intent to distribute oxycodone and oxymorphone.

Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the United States.

The Federal Bureau of Investigation and the Drug Enforcement Administration conducted the investigation that led to the prosecution of these defendants.

PITTSBURGH - A resident of Allegheny County, Pennsylvania, has been convicted by a jury of four men and eight women in Pittsburgh, Pennsylvania, of production, attempted production, and possession of material depicting the sexual exploitation of a minor, Acting United States Attorney Soo C. Song announced today.

The seven-count Superseding Indictment named George Orbin, 61, as the sole defendant.

According to the Superseding Indictment, on or about December 10, 2011, April 8, 2013, June 10, 2013, and June 11, 2013, Orbin employed, used, persuaded, induced, enticed, and coerced minors to engage in sexually explicit conduct for the purpose of producing a visual depiction of the sexual exploitation of the minors. The Superseding Indictment further alleges that on or about August 11, 2012, and June 3, 2013, Orbin attempted to employ, use, persuade, induce, entice, and coerce minors to engage in sexually explicit conduct for the purpose of producing a visual depiction of the sexual exploitation of the minors. Also, on or about September 10, 2013, Orbin knowingly possessed videos and images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.

The law provides for a maximum total sentence of 190 years in prison, a fine of $1,750,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Jessica Lieber Smolar and Heidi Grogan prosecuted this case on behalf of the government.

The Federal Bureau of Investigation and the Allegheny County District Attorney’s Office conducted the investigation leading to the conviction in this case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

PITTSBURGH - A former resident of Beaver, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of escape from federal custody, Acting United States Attorney Soo C. Song announced today.

The one-count indictment named Jaemere Scott, age 21, currently detained in the Allegheny County Jail, as the sole defendant.

According to the indictment presented to the Court, the defendant was serving part of his federal sentence for theft of firearms from a Federally Licensed Firearms Dealer at the Renewal Center, which is a half-way house. The defendant left the Renewal Center on Aug. 15, 2016, and failed to return.

The law provides for a maximum total sentence of up to five years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.

Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.

The United States Marshal Service conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH - A Chinese national has been sentenced in federal court to 3 years’ probation on his conviction of conspiracy, manufacturing of fraudulent passports, and mail and wire fraud in relation to a scheme involving the fraudulent taking of college entrance exams, Acting United States Attorney Soo C. Song announced today.

Chief United States District Judge Joy Flowers Conti imposed the sentence on Han Tong.

According to information presented to the court, Han Tong acted as a facilitator for Chinese nationals to have the SAT and TOEFL examinations taken on their behalf by himself and others. Using counterfeit passports that contained identifying information of the Chinese nationals and the impostors’ photographs, Tong and his associates earned scores on college entrance examinations which were then used to earn admission to universities within the United States. Those who had the tests taken for them were also able to obtain F-1 Visas to enter the United States as students on the basis of that fraudulent admission.

“Conspiracy and fraud schemes like the one perpetrated by Mr. Tong for monetary gain undermine the integrity of the educational system in this country. The defendant’s actions also pose a very real threat to national security,” said Marlon V. Miller, special agent in charge of HSI in Pennsylvania.

Prior to imposing sentence, Judge Conti stated that her sentence reflected the seriousness of the offense in that it allowed people who otherwise would not have been eligible to enter the U.S. to enter and also brought unfairness to the American education system. Tong has been turned over to Immigration authorities for processing.

Assistant United States Attorney James T. Kitchen prosecuted this case on behalf of the government.

Acting U.S. Attorney Song commended the Department of Homeland Security, Homeland Security Investigations and the Department of State for the investigation leading to the successful prosecution of Tong.

WASHINGTON – The Justice Department today announced a multinational operation involving arrests and searches in four countries to dismantle a complex and sophisticated network of computer servers known as “Avalanche.” The Avalanche network allegedly hosted more than two dozen of the world’s most pernicious types of malicious software and several money laundering campaigns.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Soo C. Song of the Western District of Pennsylvania and Special Agent in Charge Robert Johnson of the FBI’s Pittsburgh Division made the announcement.

“For years, sophisticated cyber criminals have used our own technology against us—but as their networks have grown more complex and widespread, criminals increasingly rely on an international infrastructure as well,” said Assistant Attorney General Caldwell. “Avalanche is just one example of a criminal infrastructure dedicated to facilitating privacy invasions and financial crimes on a global scale. And now a multinational law enforcement coalition has turned the tables on the criminals, by targeting not just individual actors, but the entire Avalanche infrastructure. Successful operations like this one can disrupt an entire criminal ecosystem in one strike.”

“The takedown of Avalanche was unprecedented in its scope, scale, reach and cooperation among 40 countries,” said Acting U.S. Attorney Song. “This is the first time that we have aimed to and achieved the destruction of a criminal cyber infrastructure while disrupting all of the malware systems that relied upon it to do harm.”

“Cyber criminals operate without regard for national borders, and they pose a serious and growing threat to all of us,” said Special Agent in Charge Johnson. “This investigation highlights, once again, that the only way to effectively combat cyber crime is with a coordinated international law enforcement approach. Together with our law enforcement partners across the globe, the FBI is as comfortable chasing criminals in cyberspace as we are on the streets of our communtites here at home.”

The Avalanche network offered cybercriminals a secure infrastructure, designed to thwart detection by law enforcement and cyber security experts, over which the criminals conducted malware campaigns as well as money laundering schemes known as “money mule” schemes. Online banking passwords and other sensitive information stolen from victims’ malware-infected computers was redirected through the intricate network of Avalanche servers and ultimately to backend servers controlled by the cybercriminals. Access to the Avalanche network was offered to the cybercriminals through postings on exclusive, underground online criminal forums.

The operation also involved an unprecedented effort to seize, block and sinkhole – meaning, redirect traffic from infected victim computers to servers controlled by law enforcement instead of the servers controlled by cybercriminals – more than 800,000 malicious domains associated with the Avalanche network. Such domains are needed to funnel information, such as sensitive banking credentials, from the victims’ malware-infected computers, through the layers of Avalanche servers and ultimately back to the cybercriminals. This was accomplished, in part, through a temporary restraining order obtained by the United States in the Western District of Pennsylvania.

The types of malware and money mule schemes operating over the Avalanche network varied. Ransomware such as Nymain, for example, encrypted victims’ computer files until the victim paid a ransom (typically in a form of electronic currency) to the cybercriminal. Other malware, such as GozNym, was designed to steal victims’ sensitive banking credentials and use those credentials to intiate fraudulent wire transfers. The money mule schemes operating over Avalanche involved highly organized networks of “mules” who purchased goods with stolen funds, enabling cybercriminals to launder the money they acquired through the malware attacks or other illegal means.

The Avalanche network, which has been operating since at least 2010, was estimated to serve clients operating as many as 500,000 infected computers worldwide on a daily basis. The monetary losses associated with malware attacks conducted over the Avalanche network are estimated to be in the hundreds of millions of dollars worldwide, although exact calculations are difficult due to the high number of malware families present on the network.

Several victims of Avalanche-based malware attacks are located in the Western District of Pennsylvania. A local governmental office was the victim of a Nymain malware attack in which computer files were encrypted until the victims paid a Bitcoin ransom in exchange for decrypting the files. Two companies, based in New Castle and Carnegie, Pennsylvania, and their respective banks were victims of GozNym malware attacks. In both attacks, employees received phishing emails containing attachments designed to look like legitimate business invoices. After clicking on the links, GozNym malware was installed on the victims’ computers. The malware stole the employees’ banking credentials which were used to initiate unauthorized wire transfers from the victims’ online bank accounts.

The U.S. Attorney’s Office of the Western District of Pennsylvania, the FBI and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) conducted the operation in close cooperation with the Public Prosecutor’s Office Verden; the Luneburg Police of Germany; Europol; and Eurojust, located in The Hague, Netherlands; and investigators and prosecutors from more than 40 jurisdictions, including India, Singapore, Taiwan and Ukraine.

Other agencies and organizations partnering in this effort include the Department of Homeland Security’s U.S.-Computer Emergency Readiness Team (US-CERT), the Shadowserver Foundation, Fraunhofer Institute for Communication, Registry of Last Resort, ICANN and domain registries from around the world. The Criminal Division’s Office of International Affairs also provided significant assistance.

Assistant U.S. Attorney Charles Eberle of the Western District of Pennsylvania and CCIPS Senior Trial Attorney Richard D. Green are prosecuting the case. Assistant U.S. Attorney Michael A. Comber of the Western District of Pennsylvania and CCIPS Senior Trial Attorney Green are handling the civil action to disrupt the malware operating over the Avalanche network.

Individuals who believe that they may have been victims of malware operating over the Avalanche network may use the following webpage created by US-CERT for assistance in removing the malware: www.us-cert.gov/avalanche.

Anyone claiming an interest in any of the property seized or actions enjoined pursuant to the court orders described in this release is advised to visit the following website for notice of the full contents of the orders: https://www.justice.gov/opa/documents-and-resources-december-5-2016-announcement-takedown-international-cybercriminal.

The Justice Department today announced a multinational operation involving arrests and searches in four countries to dismantle a complex and sophisticated network of computer servers known as “Avalanche.”  The Avalanche network allegedly hosted more than two dozen of the world’s most pernicious types of malicious software and several money laundering campaigns. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Soo C. Song of the Western District of Pennsylvania and Assistant Director Scott S. Smith of the FBI’s Cyber Division made the announcement.

“For years, sophisticated cyber criminals have used our own technology against us—but as their networks have grown more complex and widespread, criminals increasingly rely on an international infrastructure as well,” said Assistant Attorney General Caldwell.  “Avalanche is just one example of a criminal infrastructure dedicated to facilitating privacy invasions and financial crimes on a global scale.  And now a multinational law enforcement coalition has turned the tables on the criminals, by targeting not just individual actors, but the entire Avalanche infrastructure.  Successful operations like this one can disrupt an entire criminal ecosystem in one strike.” 

“The takedown of Avalanche was unprecedented in its scope, scale, reach and cooperation among 40 countries,” said Acting U.S. Attorney Song.  “This is the first time that we have aimed to and achieved the destruction of a criminal cyber infrastructure while disrupting all of the malware systems that relied upon it to do harm.”

“We are committed to halting cybercriminal activity against the United States,” said Assistant Director Smith.  “Cybercriminals can victimize millions of users in a moment from anywhere in the world.  This takedown highlights the importance of collaborating with our international law enforcement partners against this evolution of organized crime in the virtual.”

The Avalanche network offered cybercriminals a secure infrastructure, designed to thwart detection by law enforcement and cyber security experts, over which the criminals conducted malware campaigns as well as money laundering schemes known as “money mule” schemes.  Online banking passwords and other sensitive information stolen from victims’ malware-infected computers was redirected through the intricate network of Avalanche servers and ultimately to backend servers controlled by the cybercriminals.  Access to the Avalanche network was offered to the cybercriminals through postings on exclusive, underground online criminal forums. 

The operation also involved an unprecedented effort to seize, block and sinkhole – meaning, redirect traffic from infected victim computers to servers controlled by law enforcement instead of the servers controlled by cybercriminals – more than 800,000 malicious domains associated with the Avalanche network.  Such domains are needed to funnel information, such as sensitive banking credentials, from the victims’ malware-infected computers, through the layers of Avalanche servers and ultimately back to the cybercriminals.  This was accomplished, in part, through a temporary restraining order obtained by the United States in the Western District of Pennsylvania.      

The types of malware and money mule schemes operating over the Avalanche network varied.  Ransomware such as Nymain, for example, encrypted victims’ computer files until the victim paid a ransom (typically in a form of electronic currency) to the cybercriminal.  Other malware, such as GozNym, was designed to steal victims’ sensitive banking credentials and use those credentials to initiate fraudulent wire transfers.  The money mule schemes operating over Avalanche involved highly organized networks of “mules” who purchased goods with stolen funds, enabling cybercriminals to launder the money they acquired through the malware attacks or other illegal means. 

The Avalanche network, which has been operating since at least 2010, was estimated to serve clients operating as many as 500,000 infected computers worldwide on a daily basis.  The monetary losses associated with malware attacks conducted over the Avalanche network are estimated to be in the hundreds of millions of dollars worldwide, although exact calculations are difficult due to the high number of malware families present on the network.

Several victims of Avalanche-based malware attacks are located in the Western District of Pennsylvania.  A local governmental office was the victim of a Nymain malware attack in which computer files were encrypted until the victims paid a Bitcoin ransom in exchange for decrypting the files.  Two companies, based in New Castle and Carnegie, Pennsylvania, and their respective banks were victims of GozNym malware attacks.  In both attacks, employees received phishing emails containing attachments designed to look like legitimate business invoices.  After clicking on the links, GozNym malware was installed on the victims’ computers.  The malware stole the employees’ banking credentials which were used to initiate unauthorized wire transfers from the victims’ online bank accounts.  

The U.S. Attorney’s Office of the Western District of Pennsylvania, the FBI and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) conducted the operation in close cooperation with the Public Prosecutor’s Office Verden; the Luneburg Police of Germany; Europol; and Eurojust, located in The Hague, Netherlands; and investigators and prosecutors from more than 40 jurisdictions, including India, Singapore, Taiwan and Ukraine.     

Other agencies and organizations partnering in this effort include the Department of Homeland Security’s U.S.-Computer Emergency Readiness Team (US-CERT), the Shadowserver Foundation, Fraunhofer Institute for Communication, Registry of Last Resort, ICANN and domain registries from around the world.  The Criminal Division’s Office of International Affairs also provided significant assistance.  

Assistant U.S. Attorney Charles Eberle of the Western District of Pennsylvania and CCIPS Senior Trial Attorney Richard D. Green are prosecuting the case.  Assistant U.S. Attorney Michael A. Comber of the Western District of Pennsylvania and CCIPS Senior Trial Attorney Green are handling the civil action to disrupt the malware operating over the Avalanche network.  

Individuals who believe that they may have been victims of malware operating over the Avalanche network may use the following webpage created by US-CERT for assistance in removing the malware: www.us-cert.gov/avalanche. 

Anyone claiming an interest in any of the property seized or actions enjoined pursuant to the court orders described in this release is advised to visit the following website for notice of the full contents of the orders: https://www.justice.gov/opa/documents-and-resources-december-5-2016-announcement-takedown-international-cybercriminal.

PITTSBURGH – A resident of Allison Park, Pa., pleaded guilty in federal court to a charge of bank fraud, United States Attorney David J. Hickton announced today.

Bortolo DalDosso, a/k/a Bart DalDosso, 53, of Allison Park, Pa., pleaded guilty to one count of bank fraud before United States District Judge Arthur J. Schwab.

In connection with the guilty plea, the court was advised that from April 2012, to December 2014, DalDosso used his position as the Manager of the Credit and Collections Department to embezzle $92,455.27 from Black Box Network Services’ corporate accounts at Bank of New York Mellon by having customer refunds credited to his or his wife’s credit card accounts or by depositing customer refund checks into his personal bank account after forging the endorsement signatures.

Judge Schwab scheduled sentencing for April 5, 2017 at 12:30 p.m. The law provides for a total sentence of 30 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.

The U.S. Postal Inspection Service and Homeland Security Investigations conducted the investigation that led to the prosecution of DalDosso.

WASHINGTON – Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Soo C. Song of the Western District of Pennsylvania and Special Agent in Charge of the Federal Bureau of Investigation’s Pittsburgh Division Robert Johnson issued the following statement today:

“November 30 began the start of a multi-national operation to dismantle a complex, criminal network of worldwide computer servers known as Avalanche. This network hosted more than two dozen of the world’s most pernicious types of malware and several money laundering campaigns.

“The operation is being conducted by the United States Attorney’s Office for the Western District of Pennsylvania, the FBI – Pittsburgh Division, and the Computer Crime and Intellectual Property Section of the United States Department of Justice, in close cooperation with the Public Prosecutor’s Office Verden and the Luneburg Police of Germany, Europol and Eurojust, located in The Hague, Netherlands, and investigators and prosecutors from more than 40 countries.

“The operation involves an unprecedented and ongoing effort to seize, block and sinkhole more than 800,000 malicious domains associated with the Avalanche network.

“The operation involves arrests and searches in five countries. More than 50 Avalanche servers worldwide were taken offline.

“The Avalanche network, which has been operating since at least 2010, is estimated to involve hundreds of thousands of infected computers worldwide. The monetary losses associated with malware attacks conducted over the Avalanche network are estimated to be in the hundreds of millions of dollars worldwide, although exact calculations are difficult due to the high number of malware families present on the network.

“Additional information on the dismantling of Avalanche and several Western Pennsylvania victims of Avalanche-based malware attacks will be provided early next week.”

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Soo C. Song of the Western District of Pennsylvania and Special Agent in Charge of the Federal Bureau of Investigation’s Pittsburgh Division Robert Johnson issued the following statement today:

“November 30 began the start of a multi-national operation to dismantle a complex, criminal network of worldwide computer servers known as Avalanche. This network hosted more than two dozen of the world’s most pernicious types of malware and several money laundering campaigns. 

“The operation is being conducted by the United States Attorney’s Office for the Western District of Pennsylvania, the FBI – Pittsburgh Division, and the Computer Crime and Intellectual Property Section of the United States Department of Justice, in close cooperation with the Public Prosecutor’s Office Verden and the Luneburg Police of Germany, Europol and Eurojust, located in The Hague, Netherlands, and investigators and prosecutors from more than 40 countries. 

“The operation involves an unprecedented and ongoing effort to seize, block and sinkhole more than 800,000 malicious domains associated with the Avalanche network. 

“The operation involves arrests and searches in five countries.  More than 50 Avalanche servers worldwide were taken offline. 

“The Avalanche network, which has been operating since at least 2010, is estimated to involve hundreds of thousands of infected computers worldwide.  The monetary losses associated with malware attacks conducted over the Avalanche network are estimated to be in the hundreds of millions of dollars worldwide, although exact calculations are difficult due to the high number of malware families present on the network.

“Additional information on the dismantling of Avalanche and several Western Pennsylvania victims of Avalanche-based malware attacks will be provided early next week.”

JOHNSTOWN, Pa. - A resident of Altoona, Pa., has been sentenced in federal court to 96 months in prison, and four years’ supervised release on his conviction of conspiracy to distribute and possess with the intent to distribute a quantity of heroin, Acting United States Attorney Soo C. Song announced today.

United States District Judge Kim R. Gibson imposed the sentence on Darrin Canaan, 37, of Altoona, Pa.

According to information presented to the court, from Jan. 22, 2015, to April 17, 2015, Canaan conspired to distribute and possess with the intent to distribute a quantity of heroin.

Assistant United States Attorney Stephanie L. Haines prosecuted this case on behalf of the government.

Ms. Song commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation, the Pennsylvania Attorney General's Office, the Cambria County Drug Task Force, the Altoona Police Department, and the Cambria County District Attorney's Office, for the investigation leading to the successful prosecution of Canaan.

PITTSBURGH - United States Attorney David J. Hickton announced today that a criminal Information has been filed in federal court in Pittsburgh charging Ryan Kyle with a hate crime based on the victim’s race. This is the first federal hate crime filed in Western Pennsylvania since the enactment of the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act of 2009.

The one-count Information named Ryan Kyle, 22, formerly of Baldwin Borough, Pennsylvania, and presently incarcerated.

According to the Information filed with the court, on or about May 30, 2015, in the Western District of Pennsylvania, Ryan Kyle did willfully cause bodily injury to K.L. because of the actual and perceived race and color of K. L.

Evidence previously introduced in state court established that Kyle, who is white, assaulted Kevin Lockett, a then-53-year-old African-American man, at the Wood Street T Station in downtown Pittsburgh on May 30, 2015. The assault was captured on Port Authority video and occurred following a Kenny Chesney concert at Heinz Field.

U.S. Attorney Hickton stated, “The anticipated plea in this case ensures that Ryan Kyle is held fully accountable for a federal hate crime that carries a significant sentence, highlights the racial motivation for the offense, and demonstrates the federal government’s commitment to prosecuting racially-motivated crimes.”

United States Attorney General Loretta Lynch certified the filing of the charge in the public interest and necessary to secure substantial justice. By law, federal prosecutors must obtain a written certification by the Attorney General or his designee before a hate crime prosecution may be undertaken.

The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Cindy K. Chung is prosecuting this case on behalf of the government.

The Federal Bureau of Investigation and the Port Authority Police Department conducted the investigation leading to the filing of charges in this case.

A criminal Information is an accusation.

A defendant is presumed innocent unless and until proven guilty. The filing of an Information generally indicates that the defendant intends to enter a guilty plea.

ERIE, Pa. - A resident of Erie, Pennsylvania, pleaded guilty in federal court to a charge of bank robbery, United States Attorney David J. Hickton announced today.

Eric S. Chadwick, 31, pleaded guilty to one count before United States District Judge David S. Cercone.

In connection with the guilty plea, the court was advised that on February 19, 2015, Chadwick and a co-defendant were involved in the robbery of $1,565 from the First National Bank, located at 3310 West 26th Street, Erie, Pennsylvania.

Judge Cercone scheduled sentencing for March 13, 2017. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Pending sentencing, the court continued Chadwick on bond.

Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.

The Federal Bureau of Investigation and the Millcreek Township Police Department conducted the investigation that led to the prosecution of Chadwick.

PITTSBURGH -A Butler County resident has been indicted by a federal grand jury in Pittsburgh on charges of sexual misconduct and ordered detained, United States Attorney David J. Hickton announced today.

The four-count indictment, returned on November 9 and unsealed yesterday, named James Mark Leroy, 54, of Renfrew, PA. According to the indictment presented to the court, Leroy, on two separate occasions, traveled out of state and transported minors with the intent to engage in illicit sexual conduct.

Following a detention hearing, Magistrate Judge Lisa Pupo Lenihan ordered that Leroy remain in the custody of the United States Marshals pending trial. According to evidence presented to the court, Leroy sexually exploited four minor children between 2009 and 2016 at his home and on interstate trips. Testimony presented by Detective John Hertzog of Butler County also detailed direct and indirect efforts by Leroy to obstruct the investigation.

Anyone with information that may help identify additional victims of James Mark Leroy is asked to contact the Federal Bureau of Investigation – Pittsburgh Division at 412-432-4000.

The law provides for a maximum total sentence of not less than 10 years and up to life in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorneys Soo C. Song and Heidi M. Grogan are prosecuting this case on behalf of the government.

The Federal Bureau of Investigation, Penn Township Police, and Butler County conducted the investigation leading to the indictment in this case.

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

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH – A Westmoreland County resident pleaded guilty in federal court jury in Pittsburgh on a charge of fraudulent official seals, United States Attorney David J. Hickton announced today.

Christopher Diiorio, 53, of Greensburg, PA, pleaded guilty to one count before United States District Judge Nora Barry Fischer.

In connection with the guilty plea, Christopher Diiorio conspired with others to produce false United States Secret Service identification cards. He also misrepresented that he was an agent of the United States Secret Service, possessed, and displayed an imitation United States Secret Service badge to a hotel manager in order to obtain the government rate for a hotel stay. Finally, he misrepresented that he was an agent of the United States Secret Service and displayed the false United States Secret Service identification card during an encounter with a local police officer.

Judge Fischer scheduled the sentencing for March 9, 2017. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.

The United States Secret Service conducted the investigation that led to the prosecution of Christopher Diiorio.

PITTSBURGH - A resident of Bal Harbour, Florida, has been indicted by a federal grand jury in Pittsburgh on charges of bank fraud, United States Attorney David J. Hickton announced today.

The three-count indictment named Edmund M. Abramson, 81, is the sole defendant.

According to the indictment, Abramson lied about his assets and falsified financial statements in order to obtain loans from First Commonwealth Bank.

The law provides for a maximum total sentence of 70 years in prison, a fine of $1,500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.

The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH – David J. Hickton, United States Attorney for the Western District of Pennsylvania, has announced his resignation effective midnight on November 28. U.S. Attorney Hickton has served as the U.S. Attorney for the Western District of Pennsylvania since August 12, 2010.

“The opportunity to serve as a United States Attorney in this administration has been the professional privilege of a lifetime and the highlight of my career,” said U.S. Attorney Hickton.

During his tenure as U.S. Attorney, Mr. Hickton’s signature achievements include:

Addressing the Cyber Threat

• Brought first of its kind indictment against five members of the Chinese military for economic espionage against Pittsburgh-based companies and organizations.
• Created a dedicated section in the U.S. Attorney’s Office to focus on cybercrime and national security.
• Prosecuted ground-breaking cases such as Darkode, the largest English-speaking cybercrime forum, and Evgeniy Bogachev, creator of GameOver Zeus and Cryptolocker malware, among others.

Combatting the National Heroin and Opioid crisis

• Co-Chaired the National Heroin Task Force.
• Formed U.S. Attorney’s Working Group on Drug Overdoses and Addiction which includes key federal, state and local law enforcement along with public health and public safety staff.
• Brought community impact prosecutions against large-scale heroin traffickers and worked to reduce stigma, minimize the criminalization of addiction and improve access to treatment.

Enhancing Community Police Trust

• Assembled a Community Police Working Group in 2011 to build trust for and from law enforcement and the citizens they serve.
• Established a civil rights section in U.S. Attorney’s Office.
• Pittsburgh selected as one of six pilot cities for the National Initiative for Building Community Trust and Justice by Attorney General Loretta Lynch.

Significant Civil Recoveries and Achievements

• EDMC - Achieved a historic settlement of $95.5 million, the largest ever False Claims Act (FCA) recovery of Department of Education funds.
• PENNSYLVANIA DEPARTMENT OF CORRECTIONS – Secured fundamental changes throughout the prison system to humanely address the issues of unconstitutional confinement conditions for those suffering from serious mental illness and for victims of institutional sexual assault.
• GAMEOVER ZEUS BOTNET– Utilized civil injunctions in conjunction with criminal prosecution to dismantle a global network of infected victim computers used by cyber criminals to steal millions of dollars from businesses and consumers.

As of November 29, Soo C. Song will assume leadership of the office as Acting U.S. Attorney. Ms. Song is currently the First Assistant U.S. Attorney and has served in the Department of Justice since 1995. She is a graduate of Yale University and the George Washington Law School.

WASHINGTON – Attorney General Loretta E. Lynch released the following statement on the planned departure of U.S. Attorney David Hickton of the Western District of Pennsylvania:

“For the last six years, U.S. Attorney David Hickton has served the people of the Western District of Pennsylvania – and all the American people – with fidelity, integrity and distinction. Under David’s outstanding leadership, his office has been at the forefront of some of the Justice Department’s most consequential achievements of the last few years. These include the indictment of five Chinese military hackers for committing cyber espionage, the dismantling of the Darkode hacking forum and the first human trafficking cases to be brought in the Western District of Pennsylvania. In addition, David has been a tireless advocate of stronger community-police relations and he has been a crucial partner in the fight against the devastating heroin and prescription opioid epidemic. There is no doubt that the United States is a stronger and safer place because of David’s many contributions. I thank him for his distinguished service, and I wish him the very best in his future endeavors.”

ERIE, Pa. - A former resident of Erie, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of violating federal firearm laws, United States Attorney David J. Hickton announced today.

The two-count indictment named Ezra Eugene Davis, 32, as the sole defendant.

According to the indictment presented to the court, on October 21, 2016, Davis possessed seven firearms while released on bond awaiting trial on local gun and drug charges. Davis was also charged with the knowing possession of stolen firearms and with possession of firearms while a current user of controlled substances.

The law provides for a maximum total sentence of 15 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.

This case was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.

The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Millcreek Township Police Department conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

ERIE, Pa. - Two residents of Erie, Pennsylvania, have been indicted by a federal grand jury in Erie on charges of conspiracy to defraud the government, theft of government property, aggravated identity theft and false claims against the United States, United States Attorney David J. Hickton announced today.

The twenty-nine-count indictment named Chamere Henderson, 35 and Chamell Henderson, 35, as defendants.

According to the indictment presented to the court, between February 2012 and March 2013, Chamere Henderson filed three fraudulent tax returns by stealing the identities of individuals. The refunds from the tax returns were wired into a bank account to which her sister, Chamell Henderson, had access. Chamell Henderson then removed the refunds from the account in cash. The indictment also alleges that Chamere Henderson filed numerous other false federal tax returns for taxpayers who were unaware that Chamere Henderson had included false information on their returns.

The law provides for a maximum total sentence of 96 years in prison, a fine of $7,250,000, or both for Chamere Henderson and a maximum total sentence of 20 years in prison, a fine of $500,000, or both for Chamell Henderson. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.

Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.

The Internal Revenue Service, Criminal Investigation, conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH – United States Attorney David J. Hickton released the following statement today:

“Cam McLay has been an outstanding Police Chief for the City of Pittsburgh. He has implemented many needed reforms in keeping with the principles of 21st Century policing. While we will miss him and wish him well, the Pittsburgh Bureau of Police is in a much improved position today because of his good work.”

PITTSBURGH – United States Attorney David J. Hickton released the following statement today:

“The Bricelyn Street fire and deaths of three brave Pittsburgh Firefighters is a scar from which this community has never recovered. We still mourn and honor the memory of Thomas Brooks, Patricia Conroy and Marc Kolenda tragically killed while fighting the fire that resulted after being intentionally set. The investigation of the fire by the Bureau of Alcohol, Tobacco and Firearms, City of Pittsburgh Arson Squad and the Allegheny County Fire Marshal established that the fire was intentionally set making their deaths all the more devastating.

“Federal and local investigators and prosecutors have worked cooperatively since the inception of the investigation after the fire occurred in 1995. Even though jurisdiction existed in both state and federal court, it was agreed between the Allegheny County District Attorney’s office and the United States Attorney’s Office that the case would originally be brought in state court and a joint prosecution team from both offices would prosecute the case.

“After a trial before then Common Pleas Court Judge David Cercone, Gregory Brown, Jr. was convicted of the fatal arson and his mother, Darlene Buckner, was found guilty of insurance fraud. Brown was sentenced to life in prison and Buckner was sentenced to three years’ probation

“Years later, Brown challenged his conviction and Common Pleas Court Judge Joseph Williams ordered a new trial at which he would preside. The District Attorney's Office challenged Judge Williams’ decision alleging partiality and asked him to recuse himself. He declined the request to recuse himself and that decision was affirmed by the Pennsylvania Superior Court.

“Substantial questions have been raised which undermine confidence in a retrial in state court.

“After a thorough review of the evidence and in consultation with the Allegheny County District Attorney, and after application of the Principles of Federal Prosecution, we have decided that the interests of justice are best served by a trial of this matter in federal court. Accordingly, a sealed indictment was presented to and returned by a federal grand jury on November 1, and we have unsealed it today.

“There is federal jurisdiction, there is a substantial federal interest in protection against arson, there is a substantial community interest in securing justice for firefighters killed by arson and there is no federal statute of limitations given the arson caused the death of the victims.

“Our paramount interest throughout has been the cause of justice; for the victims and their families, for the defendants and for the community. We believe justice can best be ensured through this course.”

PITTSBURGH - A resident of McKeesport, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on charges of violating federal firearms laws, United States Attorney David J. Hickton announced today.

The nine-count indictment, returned on Nov. 2 and unsealed today, named Joseph E. Flack, age 23, of McKeesport, PA.

According to the indictment, between October 28, 2014, and January 4, 2015, Flack made false statements in connection with the acquisition of 16 firearms from licensed dealers in the Western District of Pennsylvania.

The law provides for a maximum total sentence of not more than 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Stephen S. Gilson is prosecuting this case on behalf of the government.

The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation leading to the indictment in this case. This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH – A resident of Allegheny County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of malicious destruction of property by fire resulting in death, United States Attorney David J. Hickton announced today.

The one-count indictment, returned on Nov. 1 and unsealed today, named Gregory Brown, Jr., 39, currently incarcerated, as the sole defendant.

According to the indictment, Brown set fire to a residential rental home located in Pittsburgh on February 14, 1995, which fire resulted in the deaths of firefighters Thomas Brooks, Patricia Conroy and Marc Kolenda.

The law provides for a maximum total sentence of life in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Shaun E. Sweeney is prosecuting this case on behalf of the government.

The Bureau of Alcohol, Tobacco, Firearms and Explosives, Pittsburgh Bureau of Police, Allegheny County Fire Marshal and the Allegheny County District Attorney’s Office conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH – Henry T. Little-Proctor aka Bundles, of McKeesport, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh with violations of the federal narcotics and firearms laws, United States Attorney David J. Hickton announced today.

The five-count Superseding Indictment charged Little-Proctor, 26, with conspiracy to distribute and possession with intent to distribute heroin and fentanyl, from October 2015 to July 20, 2016, resulting in the death of a person. The Superseding Indictment further alleges that on July 13, 2016, Little-Proctor possessed with intent to distribute and distributed fentanyl resulting in the death of a person. On July 18, 2016, he also possessed with intent to distribute and distributed heroin. Further, on July 20, 2016, Little-Proctor possessed with intent to distribute heroin. Finally, the Superseding Indictment alleges that from May 14, 2016, to July 20, 2016, Little-Proctor possessed .233 Rem caliber Full Metal Jacket ammunition and .22 caliber ammunition, after having been convicted of multiple crimes punishable by more than one year in prison. Those cases include two prior convictions for heroin dealing.

The law provides for a maximum potential sentence of not less than 20 years and up to life in prison, a fine of $8,000,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.

Assistant United States Attorney Ross E. Lenhardt, of the Violent Crime Section of the U.S. Attorney’s Office, is prosecuting this case on behalf of the government.

Special Agents and Task Force Officers from the Drug Enforcement Administration and law enforcement officers from the Duquesne Police Department, Homestead Police Department, and Allegheny County Sheriff’s Office conducted the investigation leading to the Superseding Indictment in this case. The investigation was funded by the federal Organized Crime Drug Enforcement Task Force program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal, state, and local agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.

A Superseding Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH - A former resident of Lawrence County, Pennsylvania pleaded guilty in federal court to a charge of possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.

Sean J. Barner, 38, formerly of New Bedford, Pennsylvania pleaded guilty to one count before United States District Judge Mark R. Hornak.

In connection with the guilty plea, the court was advised that on March 28, 2015, Barner unlawfully possessed computer graphics files containing photographs and videos depicting minors engaged in sexually explicit conduct.

Judge Hornak scheduled sentencing for Feb. 22, 2017, at 9:30am. The law provides for a total sentence of 20 years in prison, a fine of $250,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.

The Pennsylvania State Police conducted the investigation that led to the prosecution of Barner.

PITTSBURGH - A resident of Baden, Pennsylvania, has been sentenced in federal court to 37 months imprisonment followed by 3 years of supervised release on his conviction of mail fraud and filing false income tax returns, United States Attorney David J. Hickton announced today.

United States District Judge Arthur J. Schwab imposed the sentence on Keith Kristek, age 57, of Baden, Pennsylvania.

According to information presented to the court, from approximately January, 2007 through February, 2015, Kristek, who was the de facto Tax Collector for Baden Borough, devised and executed a scheme to steal in excess of $1,060,000 in tax payments from Baden Borough and the Ambridge Area School District. Additionally, Kristek failed to report his receipt of the stolen funds and filed false income tax returns with the IRS for the tax years of 2011 through 2014.

Assistant United States Attorney Lee J. Karl prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Internal Revenue Service, and the Beaver County District Attorney’s Office for the investigation leading to the successful prosecution of Kristek.

PITTSBURGH - United States Attorney David J. Hickton announced today that Assistant United States Attorney Shanicka L. Kennedy has been appointed to serve as the District Election Officer (DEO) for the Western District of Pennsylvania. In that capacity AUSA Kennedy is responsible for overseeing the District’s handling of complaints of voting rights abuses and election fraud in consultation with Justice Department Headquarters in Washington, D.C.

United States Attorney Hickton said, “Every citizen must be able to vote without interference or discrimination. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”

The Department of Justice has an important role in deterring misconduct and discrimination at the polls and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible violations while the polls are open on Election Day.

Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.

In order to respond to complaints of voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney David Hickton stated that AUSA/DEO Shanicka Kennedywill be on duty in Western Pennsylvania while the polls are open. She can be reached by the public at the following telephone number: (412) 894-7516.

In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election misconduct on Election Day. The local FBI field office can be reached by the public at (412) 432-4000.

Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to voting.section@usdoj.gov or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.

United States Attorney Hickton said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about interference with the vitally important right to vote make that information available immediately to the U.S. Attorney’s Office, the FBI, or the Civil Rights Division.”

PITTSBURGH - A resident of East Pittsburgh, Pa., has been sentenced in federal court to 52 months’ imprisonment on his convictions of conspiracy to distribute 500 grams or more of cocaine and being a felon in possession of a firearm, United States Attorney David J. Hickton announced today.

United States District Judge Mark R. Hornak imposed the sentence on Tracey Yancey, 53, of East Pittsburgh, Pa.

According to information presented to the court, in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Tracey Yancey was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier. During the investigation, Yancey also obtained a firearm, which he was prohibited from possessing as a convicted felon.

Prior to imposing sentence, Judge Hornak stated that the sentence was sufficient but not greater than necessary to achieve the goals of sentencing.

Assistant United States Attorney Tonya Sulia Goodman prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Tracey Yancey.

PITTSBURGH - A resident of Wilkinsburg, Pa., has been sentenced in federal court to 96 months’ imprisonment on his conviction of conspiracy to distribute 500 grams or more of cocaine, United States Attorney David J. Hickton announced today.

United States District Judge Mark R. Hornak imposed the sentence on Aaron Reed, 35.

According to information presented to the court, in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Aaron Reed was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier.

Prior to imposing sentence, Judge Hornak stated that the sentence was sufficient but not greater than necessary to achieve the goals of sentencing.

Assistant United States Attorney Tonya Sulia Goodman prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Aaron Reed.

PITTSBURGH – After conviction at trial, a former resident of Allegheny County has been sentenced to 151 months imprisonment, followed by 10 years supervised release, on his convictions of Distribution and Possession of Material Depicting the Sexual Exploitation of a Minor, United States Attorney David J. Hickton announced today.

United States District Judge Donetta W. Ambrose imposed the sentence on Christopher Welshans, 39, of Atlasburg, Pennsylvania.

According to information presented to the Court at trial, on or about Feb. 11, 2014, Welshans distributed videos and images containing material depicting the sexual exploitation of minors. In addition, on or about March 21, 2014, Welshans knowingly possessed videos and images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.

Assistant U.S. Attorneys Jessica Lieber Smolar and Shanicka L. Kennedy prosecuted this case on behalf of the government.

U.S. Attorney Hickton commended the Pennsylvania Office of the Attorney General and Federal Bureau of Investigation for conducting the investigation leading to the successful prosecution of Welshans.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

JOHNSTOWN, Pa. - A resident of Johnstown, Pa., pleaded guilty in federal court to charges of violating federal narcotics and firearms laws, United States Attorney David J. Hickton announced today.

Tony U. Atwood, 44, of Johnstown, Pa., pleaded guilty to four counts before United States District Judge Kim R. Gibson.

In connection with the guilty plea, on June 4, 2014, Atwood distributed less than 100 grams of heroin, and he possessed less than 100 grams of heroin with the intent to distribute it on June 4, 2014, and again on January 20, 2016. In addition, also on June 4, 2014, Atwood, who had been convicted in 1995 in Cambria County, Pennsylvania, of Drug Act/Possession with the intent to deliver a controlled substance, unlawfully possessed a Titan semi-automatic pistol. Federal law prohibits persons who have been convicted of a crime punishable by imprisonment for more than one year from possessing ammunition or firearms. Drug Act/Possession with the intent to deliver a controlled substance is such a crime.

Judge Gibson scheduled sentencing for March 2, 2017, at 10 a.m. The law provides for a maximum total sentence of 70 years in prison, a fine of $3,250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.

Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.

The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation that led to the prosecution of Atwood.

According to Mr. Hickton, Atwood is being prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.

PITTSBURGH – An individual found by the Allegheny County Police Department, with assistance from the Homeland Security Investigations and Immigration and Customs Enforcement, has been indicted by a federal grand jury in Pittsburgh on charges of Illegal Re-Entry into the United States after Deportation, United States Attorney David J. Hickton announced today.

The one-count indictment named Jaime Mosqueda, a/k/a Jorge Collazo, 40, a native of Colombia.

According to the indictment, Mosqueda, an alien, who was removed from the United States by U.S. Immigration and Customs Enforcement on Dec. 19, 2011, by law enforcement authorities in Alexandria, LA, was found in Allegheny County on September 3, 2015.

The law provides for a maximum total sentence of up to twenty (20) years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

The Homeland Security Investigations, Immigration and Customs Enforcement, and Allegheny County Police Department conducted the investigation leading to the indictment in this case.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

PITTSBURGH - After deliberating an hour, a federal jury of four men and eight women found siblings James and Janna Nassida guilty of two counts of Bank Fraud and Conspiracy to Commit Bank and Wire Fraud, United States Attorney David J. Hickton announced today.

James Nassida, age 48, of Pittsburgh, Pennsylvania, and Janna Nassida, age 45, of West Mifflin, Pennsylvania, were tried before Senior United States District Judge Donetta Ambrose in Pittsburgh, Pennsylvania.

According to Assistant United States Attorneys Cindy Chung and Brendan T. Conway, who prosecuted the case, the evidence presented at trial established that James Nassida owned and operated a mortgage broker business called Century III Home Equity (Century III), which assisted borrowers in obtaining loans collateralized by real estate. Janna Nassida was a manager at Century III and also a loan officer. At the time of the events at issue, which was between 2008 and 2008, Century III was one of the largest mortgage broker businesses in the Western District of Pennsylvania, and during the course of that timeframe brokered hundreds of millions of dollars worth of loans using more than a dozen different lenders. Many of those loans, however, involved one or more aspects of fraud.

Some of the aspect of the fraud included the following:

• Appraisals that fraudulently inflated the true value of the properties;
• Settlement statements that falsely reflected that the borrowers made substantial payments associated with the purchases of real estate;
• Settlement statements that failed to disclose secondary financing;
• Settlement statements that failed to include cash payments charged by Century III and paid by the borrowers;
• Settlement statements and closing documents that were backdated to reflect that the settlements had occurred on a date prior to the actual settlement date; and
• Various loan documents, including loan approval forms, good faith estimates, and underwriting transmittal forms, that failed to disclose secondary financing and falsely represented the combined loan to value ratio.

The fraud also involved misrepresentations to some of the borrowers to induce them to enter into the transactions, including concealing the fees Century III received from lenders for the borrowers’ transactions and the impact of those fees on the borrowers’ interest rates; and concealing the nature of the mortgage products, including that some of the mortgage products could negatively amortize. Lastly, the fraud also involved James Nassida’s receipt of kickbacks from the settlement company that he failed to disclosed to the borrowers and lenders, as required.

The evidence at trial established that James and Janna Nassida submitted multiple fraudulent documents associated with loans in which they served as a loan officer, but also that the loan officers working under their direction regularly submitted false information to lenders and borrowers. In addition, the evidence established that James Nassida caused the submission of fake documents to the lender in connection with his purchase of a $300,000 vacation home near Seven Springs, including the following: (1) a settlement statement that overstated the sales price; (2) a loan application that falsely stated his income and assets; and (3) fake statements from an investment company that falsely verified that he had more than $600,000 in investment when he really had about $15,000. In the loan application, James Nassida reported that he earned approximately $980,000 in 2006, but he did not even file his tax returns in 2006, and his reported taxable income in 2004 and 2005 was not even close to that figure.

Judge Ambrose scheduled sentencing for March 29, 2017 for both defendants. The law provides for a total sentence of sixty years in prison, a fine of $2,000,000, or both for each defendants. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant.

The Mortgage Fraud Task Force in conjunction with the Allegheny County District Attorney’s Office, conducted the investigation that led to the prosecution of James and Janna Nassida. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Allegheny County District Attorney’s Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.

Erie, PA -After deliberating for little more than an hour, a federal jury has found Bola Peters guilty of one count of conspiracy to commit wire fraud, United States Attorney David J. Hickton announced today.

Peters, 44, of Queens, New York, was tried before United States District Judge David S. Cercone in Pittsburgh, Pennsylvania.

According to Assistant United States Attorney Christian A. Trabold, who prosecuted the case, the evidence presented at trial established that Peters maintained multiple bank accounts which were used as repositories for fraudulently obtained federal tax refunds. After the fraudulently obtained refunds were deposited into accounts under her control, Peters would remove the funds, keep a portion for herself and remit the remainder of the refunds back to her co-conspirators. Evidence presented at trial showed that Peters was in possession of numerous false identification documents. These documents matched the stolen identities listed on the fraudulent federal tax returns that generated the tax refunds deposited into the accounts Peters controlled. Other stolen identity documents found in Peters’ house matched the names on bank accounts Peters opened using stolen identities. Peters was also in possession of handwritten ledgers and lists containing hundreds of stolen identities which were used during the course of the conspiracy to file false federal tax returns.

Judge Cercone scheduled sentencing for March 3, 2017 at 11:30 a.m. The law provides for a total sentence of 20 years in prison, a maximum fine of $250,000 or twice the amount of loss to the victims, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Pending sentencing, the court revoked Peters’ bond.

The Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation conducted the investigation that led to the prosecution of Peters.

JOHNSTOWN, Pa. - A resident of Everett, Pa., has been sentenced in federal court to three years’ probation and ordered to pay a fine in the amount of $250 on his conviction of unlawful possession of firearms by a convicted felon, United States Attorney David J. Hickton announced today.

United States District Judge Kim R. Gibson imposed the sentence on Gene F. Bussard, 42, of Everett, Pa.

According to information presented to the court, on Nov. 7, 2013, Bussard, who had been convicted in 2003 in Allegany County, Md., of theft, unlawfully possessed 19 firearms and ammunition. Federal law prohibits persons who have been convicted of a crime punishable by imprisonment for more than one year from possessing ammunition or firearms. Theft is such a crime.

Assistant United States Attorney John J. Valkovci, Jr. prosecuted this case on behalf of the government.

Mr. Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pennsylvania State Police for the investigation leading to the successful prosecution of Bussard.

According to Mr. Hickton, Bussard was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.

PITTSBURGH – The President and owner of North American Power Group Ltd. (NAPG) pleaded guilty in federal court to a charge of filing a False Claim against the United States, United States Attorney David J. Hickton announced today.

Michael J. Ruffatto, 70, of Englewood, Colorado, pleaded guilty to one felony count before United States Chief District Court Judge Joy Flowers Conti.

In connection with the guilty plea, the court was advised that on Dec. 8, 2009, the Department of Energy’s National Energy Technology Laboratory, located in Pittsburgh, Pennsylvania, awarded a multi-million dollar cooperative agreement to NAPG, a corporation headquartered in Denver, Colorado, that is owned and controlled by Ruffatto, an attorney and graduate of Stanford University.

The purpose of the agreement was to study the carbon sequestration potential of an 880-acre site in Campbell County, Wyoming. The agreement required NAPG to conduct field studies and to drill wells necessary for the study.

Instead of performing the work required under the cooperative agreement, Ruffatto fraudulently transferred millions of dollars of award monies into his personal bank account and used the award monies to fund an extravagant lifestyle. Ruffatto secretly filtered millions of dollars of award monies through Ruffatto’s wholly owned subsidiary, North American Land and Livestock, LLC, while falsely representing to the Department of Energy that the subsidiary was doing work on the project.

“Protecting federal taxpayer funds dedicated to energy-related development projects is an important responsibility,” stated U.S. Attorney Hickton. “Recovery Act funds were awarded to spur job creation, not to provide personal enrichment.”

Chief Judge Conti scheduled sentencing for Feb. 3, 2017. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Pending sentence, the court released Ruffatto on bond.

Assistant United States Attorney Mary McKeen Houghton is prosecuting this case on behalf of the government.

The United States Department of Energy, Office of Inspector General, conducted the investigation leading to the conviction in this case.

PITTSBURGH - A resident of Allegheny County, Pennsylvania, has plead guilty in federal court to a charge of bank fraud, United States Attorney David J. Hickton announced today.

Alvin R. Simmons, 56, of Pittsburgh, PA, pleaded guilty to one count before United States District Judge Donetta W. Ambrose.

In connection with the guilty plea, Simmons used fraudulent personal checks to buy postage stamps at Post Offices in western Pennsylvania, and committed bank fraud upon Citizens and First Niagara banks.

The law provides for a total sentence of 30 years in prison, a fine of $1,000,000, or both at each count. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.

Assistant United States Attorney Gregory C. Melucci is prosecuting this case on behalf of the government.

The U.S. Postal Inspection Service conducted the investigation that led to the prosecution of Alvin R. Simmons.