Eastern District of Texas

WASHINGTON – A former Senior Correctional Officer at the Federal Correctional Complex (FCC) in Beaumont, Texas, was sentenced yesterday in federal court for assaulting an inmate housed at the facility.

“The Justice Department is committed to prosecuting correctional officers who use their position of authority to harm others, as opposed to upholding the duties of their job and protecting the individuals in their care,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division.

“Correctional officers work hard every day to enforce the rules and ensure order within our prisons,” said U.S. Attorney Stephen J. Cox Eastern District of Texas.  “When an officer acts like a schoolyard bully, it undermines the important work of all correctional officers and disrupts the very law and order they have sworn to protect.”

Tavoris Bottley, 35, was sentenced by U.S. District Judge Thad Heartfield to 18 months in federal prison, followed by one year of supervised release. Bottley previously pleaded guilty on Dec. 5, 2019, to one count of violating the civil rights of an inmate in his custody.

According to plea documents and information presented in court, on June 8, 2017, while on duty as a federal correctional officer at FCC Beaumont, Bottley punched A.A, an inmate, in the face and head multiple times without justification. Bottley admitted that he and his supervisor, Khristal Ford, intentionally unlocked and entered the secured cell where A.A. was being held with the intention of assaulting the inmate for being disrespectful and throwing a food tray. Bottley admitted that he then punched A.A., even though A.A. did not pose any threat at the time.

BOP Lieutenant Khristal Ford previously pleaded guilty on May 29, 2019, to aiding and abetting in the assault of A.A., and admitted to submitting written reports that omitted any reference to the assault in an effort to cover up the incident and make it appear justified. Ford was sentenced on Jan. 8, 2020, to 24 months in prison.

This case was investigated by the Department of Justice, Office of the Inspector General, and was prosecuted by Trial Attorney Katherine G. DeVar of the Department of Justice’s Civil Rights Division and Assistant U.S. Attorney Michael A. Anderson of the Eastern District of Texas.

The Justice Department’s Office of Violence Against Women (OVW) will direct more than $18 million in grant funding to Texas to support efforts to curb domestic violence throughout the state, announced U.S. Attorneys Erin Nealy Cox, Ryan K. Patrick, John F. Bash, and Stephen J. Cox.

As the state grapples with the COVID-19 pandemic, reports indicate that many cities – including Dallas, Fort Worth, Austin, Houston, and San Antonio – may be experiencing surges in domestic violence.  Because of the virus, many domestic violence victims feel they’re safest inside their homes, but that may or may not be the case.

Research shows that intimate partner homicides are troublingly common. According to the CDC, roughly 1 in 6 homicide victims are killed by an intimate partner. Tragically, Texas accounts for 10 percent of the nation’s domestic violence homicides.  Armed abusers are especially dangerous. Research shows that abusers with a gun in the home are five times more likely to kill their partners than abusers who don’t have access to a firearm.

Given these troubling statistics, in June 2019, Attorney General William P. Barr formed a Domestic Violence Working Group in order to encourage prosecution of armed domestic violence offenders.  (Federal law bars domestic violence offenders – those subject to certain protective orders or convicted of domestic violence misdemeanors or felonies – from possessing firearms.)

Districts across the nation, including all four districts in Texas, have prioritized their own initiatives designed to keep guns out of the hands of abusers. In the 18 months since the first federal domestic violence initiative kicked off in Dallas, federal prosecutors in Texas have charged dozens of armed abusers with gun crimes.

However, the federal government is just one in a host of stakeholders determined to end the scourge of domestic violence – and only a portion of domestic violence cases fall within federal jurisdiction. The OVW grants announced today will provide resources to local prosecutors, victim service providers, healthcare professionals, training organizations, and academic researchers, including several with national scope.

“Putting an end to domestic violence requires effort from everyone in a community and OVW is proud to support the work being done in Texas,” said OVW Principal Deputy Director Laura L. Rogers. “Our funding supports law enforcement, prosecutors and brings people together to work for a common cause.  These strong partnerships lead to creative solutions to prevent violence.”

“The feds are committed to prosecuting armed abusers, but we don’t have jurisdiction in every domestic violence case, and we know we’re only a piece of the puzzle when it comes to ending the scourge of domestic violence. Local prosecutors, police departments, and nonprofits do a lot of the heavy lifting,” U.S. Attorney Erin Nealy Cox, who chairs the Attorney General’s Domestic Violence Working Group, said on a press call Friday morning.

Among the $18 million in awards that will be issued to organizations and government agencies in Texas are:

• More than $11.8 million in formula funds to the state to support law enforcement, prosecutors, victim services providers, and courts in working collaboratively to respond to domestic and sexual violence.
• $1.76 million to cities and counties across Texas to improve the criminal justice response to domestic and sexual violence: $1,000,000 to the City of Austin, $400,000 to Webb County, and $355,573 to Bastrop County.
• $2.85  million to domestic violence organizations to provide legal service to victims: $600,000 to SafeHaven of Tarrant County, $600,000 to the Women’s Center of Tarrant County, $600,000 to the Houston Area Women’s Center, $650,000 to the SAFE Alliance in Austin, and $404,486 to the Bastrop County Women’s Shelter.
• $1.54 million to advocacy groups to help underserved populations, including disabled victims and minority victims of domestic violence: $588,297 to Saheli, Inc., $500,000 to Brownsville Friendship of Women, Inc., $450,000 to the SAFE Alliance in Austin.
• More than half a million to domestic violence shelters to provide transitional housing and therapy services: $515,000 to SafeHaven of Tarrant County.
• $152,345 to the Texas Association Against Sexual Assault plus $91,274 to the Texas Council on Family Violence, two statewide organizations working to address violence against women.

New projects to provide critical training and technical assistance throughout the country include:

• The $5 million new National Violence Against Women Law Enforcement Training and Technical Assistance Consortium, a project with the Institute for Intergovernmental Research, in Florida, that will deliver training on investigating and responding to domestic violence, sexual assault, and stalking.
• $675,000 to continue the work of the San Diego-based Alliance for HOPE’s Training Institute for Strangulation Prevention, which provides education on investigating and prosecuting nonfatal strangulation in domestic violence cases.
• $400,000 to the International Association of Forensic Nurses, headquartered in Maryland, to develop a national protocol to guide medical-forensic care for domestic violence victims who seek treatment for their injuries.
   

For more information on the Northern District of Texas’ Domestic Violence Initiative, please visit: https://www.justice.gov/USAO-NDTX/DV. For more information on the Justice Department’s Office on Violence Against Women, visit: https://www.justice.gov/ovw.

BEAUMONT, Texas - The Justice Department’s Office of Violence Against Women (OVW) will direct more than $18 million in grant funding to Texas to support efforts to curb domestic violence throughout the state, announced U.S. Attorneys Stephen J. Cox, Erin Nealy Cox, Ryan K. Patrick, and John F. Bash.

As the state grapples with the COVID-19 pandemic, reports indicate that many cities – including Dallas, Fort Worth, Austin, Houston, and San Antonio – may be experiencing surges in domestic violence.  Because of the virus, many domestic violence victims feel they’re safest inside their homes, but that may or may not be the case.

Research shows that intimate partner homicides are troublingly common, and often come with collateral fatalities. According to the CDC, roughly 1 in 6 homicide victims are killed by an intimate partner. Tragically, Texas accounts for 10 percent of the nation’s domestic violence homicides.  Armed abusers are especially dangerous. Research shows that abusers with a gun in the home are five times more likely to kill their partners than abusers who don’t have access to a firearm.

Given these troubling statistics, in June 2019, Attorney General William P. Barr formed a Domestic Violence Working Group in order to encourage prosecution of armed domestic violence offenders.  (Federal law bars domestic violence offenders – those subject to certain protective orders or convicted of domestic violence misdemeanors or felonies – from possessing firearms.)

District across the nation, including all four districts in Texas, have prioritized their own initiatives designed to keep guns out of the hands of abusers. In the 18 months since the first federal domestic violence initiative kicked off in Dallas, federal prosecutors in Texas have charged dozens of armed abusers with gun crimes.

However, the federal government is just one in a host of stakeholders determined to end the scourge of domestic violence – and only a portion of domestic violence cases fall within federal jurisdiction. The OVW grants announced today will provide resources to local prosecutors, victim service providers, healthcare professionals, training organizations, and academic researchers, including several with national scope.

“Having worked closely with the Office on Violence Against Women over the past few years, I know how critical OVW’s funding for law enforcement, prosecutors, and victim services is in fighting violence against women,” said U.S. Attorney Stephen J. Cox.  “We are particularly glad to see this assistance in Texas, as it will undoubtedly improve criminal justice and collaboration in responding to domestic and sexual violence—and hopefully encourage victims to come forward to take advantage of these resources.”

“Putting an end to domestic violence requires effort from everyone in a community and OVW is proud to support the work being done in Texas,” said OVW Principal Deputy Director Laura L. Rogers. “Our funding supports law enforcement, prosecutors and brings people together to work for a common cause.  These strong partnerships lead to creative solutions to prevent violence.”

“The feds are committed to prosecuting armed abusers, but we don’t have jurisdiction in every domestic violence case, and we know we’re only a piece of the puzzle when it comes to ending the scourge domestic violence. Local prosecutors, police departments, and nonprofits do a lot of the heavy lifting,” U.S. Attorney Erin Nealy Cox, who chairs the Attorney General’s Domestic Violence Working Group.

Among the $18 million in awards that will be issued to organizations and government agencies in Texas are:

• More than $11.8 million in formula funds to the state to support law enforcement, prosecutors, victim services providers, and courts in working collaboratively to respond to domestic and sexual violence.

 

• $1.76 million to cities and counties across Texas to improve the criminal justice response to domestic and sexual violence: $1,000,000 to the City of Austin, $400,000 to Webb County, and $355,573 to Bastrop County.

 

• $2.85  million to domestic violence organizations to provide legal service to victims: $600,000 to SafeHaven of Tarrant County, $600,000 to the Women’s Center of Tarrant County, $600,000 to the Houston Area Women’s Center, $650,000 to the SAFE Alliance in Austin, and $404,486 to the Bastrop County Women’s Shelter.

 

• $1.54 million to advocacy groups to help underserved populations, including disabled victims and minority victims of domestic violence: $588,297 to Saheli, Inc., $500,000 to Brownsville Friendship of Women, Inc., $450,000 to the SAFE Alliance in Austin.

 

• More than half a million to domestic violence shelters to provide transitional housing and therapy services: $515,000 to SafeHaven of Tarrant County.

 

• $152,345 to the Texas Association Against Sexual Assault plus $91,274 to the Texas Council on Family Violence, two statewide organizations working to address violence against women.

New projects to provide critical training and technical assistance throughout the country include:

• The $5 million new National Violence Against Women Law Enforcement Training and Technical Assistance Consortium, a project with the Institute for Intergovernmental Research, in Florida, that will deliver training on investigating and responding to domestic violence, sexual assault, and stalking.
• $675,000 to continue the work of the San Diego-based Alliance for HOPE’s Training Institute for Strangulation Prevention, which provides education on investigating and prosecuting nonfatal strangulation in domestic violence cases.
• $400,000 to the International Association of Forensic Nurses, headquartered in Maryland, to develop a national protocol to guide medical-forensic care for domestic violence victims who seek treatment for their injuries.

 

For more information on the Justice Department’s Office on Violence Against Women, visit: https://www.justice.gov/ovw.

TEXARKANA, Texas – Two Texas men have pleaded guilty to drug trafficking in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

Rodolfo Javier Falcon, 36, of Titus County, Texas, pleaded guilty to conspiring to distribute controlled substances before U.S. Magistrate Judge Caroline M. Craven on August 20, 2020. Falcon agreed to forfeit $5 million in drug proceeds.

Jose Armando Rosales-Bernal, 27, of Dallas County, Texas, pleaded guilty to conspiring to distribute controlled substances before U.S. Magistrate Judge Caroline M. Craven on September 1, 2020. Rosales-Bernal agreed to forfeit $4 million in drug proceeds; $234,971.00 in U.S. currency; his home in Dallas, Texas; numerous firearms; two luxury watches; a gold necklace with a rooster-shaped pendant covered in jewels; and three vehicles, including a Dodge Charger Hellcat.

According to information presented in court, Falcon, Rosales-Bernal, and others conspired to distribute more than 150 kilograms of Mexican cocaine in Dallas, East Texas, and beyond. In fact, Falcon and others—including two children—were stopped in Tennessee carrying nine kilograms of cocaine to distribute in North Carolina. The organization was also responsible for shipping drug proceeds, in the form of bulk cash, back to Mexico. For example, law enforcement intercepted one bulk cash shipment of approximately $350,000.00. Rosales-Bernal and Falcon both occupied leadership roles in the drug trafficking organization, which also distributed methamphetamine. During the investigation, law enforcement observed several members of the organization—including Rosales-Bernal—carrying firearms. Rosales-Bernal admitted that he possessed multiple firearms because he knew that the large quantity of drugs being trafficked by the organization made their activities inherently dangerous. Rosales-Bernal also described how he spent his drug proceeds on lavish lifestyle items, including a Dodge Charger Hellcat, flashy watches, a jewel encrusted rooster necklace, and numerous pairs of shoes and boots.

Under federal statutes, Falcon faces at least 10 years and up to life in federal prison at sentencing; Rosales-Bernal faces at least five years and up to 40 years in federal prison at sentencing. The statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

Operation Dirty Bird is a long-term drug trafficking and money-laundering investigation that has already led to the seizure of more than $500,000.00 in U.S. Currency, almost 40 kilograms of cocaine, more than a quarter kilogram of methamphetamine, nine firearms, and multiple vehicles.

Rosales-Bernal, Julio Villarreal, Armando Moreno Jr., Falcon, Gerardo Cabrera Ramirez, Claudia Claribel Gardea, Jose Geraldo Ornelas-Pineda, Dalia Janes Campos Rosales, Eleazar Martinez Reyes, and David Martinez were previously charged and arrested as a result of this investigation. Ornelas-Pineda and Moreno have pleaded guilty and have been sentenced. Rosales-Bernal, Villarreal, Falcon, Ramirez, Reyes, and Gardea have pleaded guilty and are awaiting sentencing. Campos Rosales and Martinez have pleaded not guilty and are awaiting trial. This case is pending in the Texarkana Division of the Eastern District of Texas.

If convicted, Campos Rosales and Martinez face a minimum of 15 years and as much as life in federal prison.

This case is being investigated by the Mount Pleasant office of the Texas Department of Public Safety, Criminal Investigation Division and the Dallas office of Homeland Security Investigations SRT. In addition, the following agencies have played critical roles in this investigation: the Mesquite, Texas, Police Department SWAT team; the Texas National Guard; the Texas Department of Public Safety, Highway Patrol Division and Aircraft Division; the George West, Texas, Police Department; the 23rd Judicial Drug Task Force in Dickson, Tennessee; and the Mount Pleasant, Texas, Police Department. The case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

PLANO, Texas – Two North Texas men have been charged with child exploitation crimes in the Eastern District of Texas announced U.S. Attorney Stephen J. Cox today.                   

           David Pettigrew, 48, of Denison, Texas, and Chad Michael Rider, 46, of Anna, Texas have been charged in an indictment returned by a grand jury with conspiring to sexually exploit children (also referred to as production of child pornography).  Pettigrew was additionally charged with transporting child pornography.   Both men have entered “not guilty” pleas to the charges.

           Pettigrew came to the attention of law enforcement officials through referrals sent by two electronic surveillance providers and the National Center for Missing and Exploited Children.  Those referrals identified a computer user who uploaded suspected child pornography onto their online platforms.  On August 6, 2020, Homeland Security Investigations agents executed federal search warrants at Pettigrew’s residence and the Denison Church of the Nazarene, after which, agents arrested Pettigrew.  Agents executed a search warrant at Rider’s residence on August 21, 2020.  Until recently, Pettigrew had served as pastor of the Denison Church of the Nazarene.  Rider is a resident of Anna, Texas.

           If convicted, Pettigrew and Rider face a minimum of 15 years and up to 30 years in federal prison.

           The investigation has revealed that a number of children were surreptitiously photographed in private locations or outside of the presence of their parents. Any members of the public with information about this case or possible victims are urged to contact Homeland Security Investigations at HSIDallasVictimInfo@ice.dhs.gov.  Members of the community are urged to send a detailed message (including contact information) with information about any possible private interactions with Pettigrew or Rider to the email above.

           This case is being 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 Department 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.

           This case is being investigated by Homeland Security Investigations and the Grayson County Sheriff’s Office and prosecuted by Assistant U.S. Attorneys Marisa J. Miller and Jay Combs.

           It is important to note that an indictment or arrest should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.

TEXARKANA, Texas – A 55-year-old Titus County, Texas, man and a 54-year-old federal inmate have pleaded guilty to a bribery conspiracy in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

            James Thompson pleaded guilty on August 5, 2020, to conspiring to commit bribery before U.S. Magistrate Judge Caroline M. Craven. In his plea agreement, Thompson agreed to forfeit $17,200.00 in United States currency and cash proceeds from his scheme.

            Gilbert Gomez pleaded guilty on August 31, 2020, to conspiring to commit bribery before U.S. Magistrate Judge Caroline M. Craven. In his plea agreement, Gomez agreed to forfeit $15,000.00 in United States currency and cash proceeds from his scheme.

            According to information presented in court, beginning before August 2019 and continuing through January 2020, Thompson, a federal correctional officer, and Gomez, a federal inmate, engaged in a scheme to smuggle contraband into the Federal Correctional Institution located in Texarkana, Texas. During the scheme, Thompson received cash bribe payments and prison contraband at a post office box under the alias of “Bobby Brown.”  Using his own prerogative, Thompson then smuggled the contraband into FCI Texarkana when he entered the facility to go to work.   Gomez coordinated the scheme from inside the institution, where he arraigned cash bribe payments and delivered the smuggled contraband to other inmates. Thompson and Gomez received more than $30,000.00 total for smuggling contraband into FCI Texarkana.

            Under federal statutes, Thompson and Gomez face up to 5 years in federal prison at sentencing. The statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. Sentencing hearings will be scheduled after the completion of a presentence investigations by the U.S. Probation Office.

            This case is being investigated by the Dallas Field Office of the U.S. Department of Justice, Office of the Inspector General and the Fort Worth Division of the U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

BEAUMONT, Texas – United States Attorney Stephen J. Cox and Special Inspector General for Pandemic Recovery Brian D. Miller announced today that the U.S. Attorney’s Office for the Eastern District of Texas (EDTX) has entered into a Memorandum of Understanding (MOU) with the Office of the Special Inspector General for Pandemic Recovery (SIGPR).

                “The COVID-19 pandemic has taken a devastating toll on American lives across the country, and the economic fallout is similarly widespread,” Cox said.  “Congress has provided vital financial relief to the public, and many people and companies are staying afloat thanks to those valuable resources.” Cox said. “That fraudsters have sought to steal these taxpayer funds is unfortunately a reality that we have seen firsthand in the Eastern District.  That’s why we are committed to detecting, investigating, and prosecuting those wrongdoers who exploit the pandemic for profit, and we are eager to partner with Special Inspector General Miller in this fight against fraud.”

                In response to the widespread economic harm caused by the COVID-19 pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which included over $2 trillion in emergency financial assistance designed to provide immediate help for American businesses and individuals. The purpose and mission of the MOU is to develop a cooperative effort to investigate and prosecute wrongdoing involving the making, purchase, management, and sale of loans, loan guarantees, and other investments by the Secretary of the Treasury under Division A of the CARES Act, and the management by the Secretary of any program established under Division A of the CARES Act.  This partnership will make efficient use of limited resources and help ensure coordination with regulators and law enforcement so that just results can be achieved, while at the same time taking care not to stymie legitimate businesses acting in good faith to access the important financial resources that Congress made available through the CARES Act.

                “I look forward to working with U.S. Attorney Stephen Cox and his team in the Eastern District of Texas to identify fraud, waste and abuse of the money provided under the CARES Act,” said Brian D. Miller, Special Inspector General for Pandemic Recovery. “We will bring to justice those who would steal CARES Act money, and recover money for the taxpayers. Taxpayers should expect nothing less.”

                Two Assistant U.S. Attorneys (AUSA) – one from EDTX’s Criminal Division and one from EDTX’s Civil Division – will serve as liaisons to the EDTX-SIGPR partnership. These AUSAs will be direct points of contact for case-related inquiries from SIGPR. Additionally, a criminal paralegal will be designated to assist with SIGPR-referred investigations and prosecutions. EDTX will also provide forensic audit support for civil enforcement matters.

                The MOU also calls for EDTX to create a streamlined, accelerated process for SIGPR investigations to obtain needed preliminary legal process, including grand jury subpoenas and court orders, subpoenas, and civil investigative demands.

TYLER, Texas – A couple from Gilmer, Texas has been indicted and charged with federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

          Dalton Brewer and Emilee Fenton, both 24, were indicted by a federal grand jury on August 19, 2020 and charged with conspiracy to unlawfully transfer, possess, and use a means of identification.  Fenton was also charged with theft of government money and aggravated identity theft. 

           According to the indictment, from at least November 2019 through June 2020, Brewer and Fenton conspired to possess and use the means of identification of other persons, including names, Social Security numbers, and dates of birth, in connection with the theft of government money, aggravated identity theft, wire fraud, theft of mail, and fraudulent use or possession of identifying information.  Fenton was also charged with theft of government money and aggravated identity theft for her role in obtaining two Economic Impact Payments (EIPs) using the means of identification of other persons.  

          The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  The CARES Act authorized over $2 trillion in relief programs, including approximately $560 billion for benefits to individuals.  An estimated $300 billion of that total was allocated for EIPs.

          Under the CARES Act, qualifying individuals may receive up to $1,200 in EIPs per adult, up to $2,400 for married couples filing jointly, and $500 per child under 17 years old.  Individuals with income exceeding $99,000 or joint filers whose income exceeds $198,000 do not qualify for any payment.

          “Fraudsters engaged in identity theft to steal taxpayer refunds have now turned their attention to stealing Economic Impact Payments,” said U.S. Attorney Stephen J. Cox. “We are committed to fighting fraud and criminal activity relating to the COVID-19 pandemic – this is a top priority for the Eastern District of Texas – and, along with our law enforcement partners, we will use all available tools to pursue wrongdoers who seek to exploit the crisis.”

          “It’s disheartening to see individuals and communities already facing challenges related to COVID-19 be targeted with crimes like these,” said Ketty Larco, Acting Inspector in Charge of the Fort Worth Division of the U.S. Postal Inspection Service. “Protecting the U.S. Mail and American public are priorities for Postal Inspectors however, and these arrests are a product of that commitment.  The Postal Inspection Service appreciates the efforts of all our federal and local partners who helped bring this crime spree to an end.”

“The Treasury Inspector General for Tax Administration (TIGTA), and its law enforcement partners, will aggressively pursue those who endeavor to steal Economic Impact Payments afforded to the American public under the Coronavirus Aid, Relief, and Economic Security (CARES) Act,” said J. Russell George, Treasury Inspector General for Tax Administration.  “We appreciate the efforts of the IRS Criminal Investigation Division and the U.S. Postal Inspection Service in this investigation.”

 

          “IRS Criminal Investigation continues to pursue identity thieves who view the American taxpayer as an easy target,” said Acting Assistant Special Agent in Charge Marcus Henderson of the Dallas Field Office.  “Today’s indictments highlight our commitment to protecting the very people the Economic Impact Payments were intended to benefit during this global crisis.”

 

          If convicted, Brewer and Fenton face up to 15 years in federal prison.  A grand jury indictment is not evidence of guilt.

           This case is being investigated by the United States Postal Inspection Service (USPIS), Treasury Inspector General for Tax Administration (TIGTA), and the Internal Revenue Service-Criminal Investigations (IRS-CI) and prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.

SHERMAN, Texas – A 19-year-old McKinney, Texas man has been sentenced for federal firearms violations in the Eastern District of Texas, announced U.S. Attorney Stephen. J. Cox today.                

              Christopher Lamarr Sterkes pleaded guilty on June 1, 2020, to possession of a firearm by a drug user and possession of a firearm in furtherance of a drug trafficking crime and was sentenced to a total of 144 months in federal prison today by U.S. District Judge Amos Mazzant. 

              According to information presented in court, on March 8, 2019, Sterkes met four men in a van in Anna, Texas, intending to sell them approximately 14 grams of marijuana.  The men began assaulting Sterkes in an attempt to rob him of the marijuana instead of paying for it.  Sterkes, armed with a pistol, managed to escape from the van and fired three shots into the van as it drove away.  One of the men inside the van, 16-year-old Alejandro Camacho, was struck by the gunfire and died.  Sterkes was indicted by a federal grand jury on August 14, 2019.

               This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence; deterring illegal possession of guns, ammunition, and body armor; and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

              This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Anna Police Department, and the Texas Department of Public Safety Texas Rangers.  This case was prosecuted by Assistant U.S. Attorney Maureen Smith.

TYLER, Texas – A 44-year-old Longview, Texas, man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.                

Correy James Rider was found guilty by a jury on Nov. 6, 2019, of conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine and crack cocaine.  Rider was sentenced to 360 months in federal prison today by U.S. District Judge Jeremy D. Kernodle.

According to information presented in court, in 2017, law enforcement began an investigation into drug trafficking activities in Longview, Texas.  During the investigation, police obtained an undercover recording of Rider participating in the sale of methamphetamine and a firearm at a Longview motel.  In January 2018, Rider and a co-defendant were arrested at a different motel in possession of methamphetamine, cocaine base, surveillance equipment, digital scales, and other distribution paraphernalia.  Further investigation revealed that Rider and his co-conspirators used various motels and residences throughout the city to conduct illegal drug transactions.  Rider and 11 others were indicted by a federal grand jury on June 21, 2018, and charged with violations of federal law.

The case was investigated by the Federal Bureau of Investigation – Dallas Division, Longview Police Department, Gregg County Organized Drug Enforcement (CODE) Unit and Texas Department of Public Safety and prosecuted by Assistant U.S. Attorneys Lucas Machicek and Ryan Locker.

 

TEXARKANA, Texas – A 28-year-old Dallas, Texas, man has been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

          On March 6, 2020, a federal jury found Collin Garrett Hayden guilty of obstruction of justice, and he pleaded guilty to possessing a weapon in jail before the trial began. He was sentenced to 200 months in federal prison today by U.S. District Judge Robert W. Schroeder, III.

          According to information presented in court, in 2016, law enforcement began an investigation into methamphetamine trafficking from Dallas into East Texas.  During the investigation, police intercepted Hayden and his roommate on an undercover recording offering to sell drugs to another individual. Further investigation revealed Hayden sold cocaine in the Dallas strip clubs in which he performed, and additionally sold methamphetamine to a Shreveport, Louisiana buyer. 

          When Hayden learned of his pending federal charges, he turned on his roommate and threatened to kill him. Hayden later described his plan to have the roommate killed by members of Hayden’s white supremacist prison gang.  While in custody at the Titus County jail, Hayden obtained a shank-type weapon and threatened to kill any guards who entered his cell, all in retaliation for a guard reporting Hayden for attempting to illegally obtain a cell phone by bribe.  Hayden was indicted by a federal grand jury on April 19, 2017, and charged with federal violations.

          The case was investigated by the Mount Pleasant office of the Texas Department of Public Safety, Criminal Investigation Division and prosecuted by Assistant U.S. Attorneys Jonathan R. Hornok and Donald Carter.

TYLER, Texas –  U.S. Attorney Stephen J. Cox announced that two Texas women have pleaded guilty to conspiracy charges in the Eastern District of Texas.

               Pamela Sue Hannan, 67, of Sherman, Texas, and Pamela Sue Jennings, 68, of Houston, Texas, pleaded guilty to conspiring with foreign co-conspirators to operate an unlicensed money transmitting business on August 6, 2020 before U.S. Magistrate Judge K. Nicole Mitchell. 

               According to information presented in court, over the course of several years, Hannan and Jennings received funds from romance scam victims and from victims of other fraudulent schemes on behalf of their co-conspirators, who were based outside of the United States.  In order to facilitate the scheme, Hannan and Jennings opened bank accounts in the names of businesses which purported to provide legitimate services.  In reality, Hannan and Jennings used these businesses as fronts to facilitate the money transmitting scheme.  Together, Hannan and Jennings received more than $880,000 from victims of the scheme.  Hannan and Jennings transferred the majority of the funds they received to their co-conspirators’ foreign bank accounts. 

               Hannan and Jennings were indicted by a federal grand jury on October 16, 2019.   

               At sentencing, Hannan and Jennings each face a maximum of 5 years in federal prison.  The statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

               In October 2017, President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law.  The EAPPA’s purpose is to increase the federal government’s focus on preventing elder abuse and exploitation.  Subsequently, the Department of Justice launched the Elder Justice Initiative (EJI).  Through the EJI, the Department has participated in hundreds of criminal and civil enforcement actions involving misconduct that targeted vulnerable seniors.  This past March, the Department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide sweep.  The Department has likewise conducted hundreds of trainings and outreach sessions across the country.  The EJI website contains useful information, including educational resources about prevalent financial scams so you can guard against them.

               Last week, the Eastern District of Texas announced plans to develop a new initiative, in partnership with law enforcement, to increase enforcement efforts to combat transnational elder fraud schemes and their extensive networks of associates and money mules who launder the stolen funds.

               If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed 7 days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.                                                                                                                       

               This case is being investigated by the U.S. Department of Homeland Security-Homeland Security Investigations with assistance from the U.S. Postal Inspection Service, the Sherman Police Department, and the Appleton (Wisconsin) Police Department.  It is being prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.

SHERMAN, Texas – A 48-year-old Denison, Texas man has been arrested for child pornography violations in the Eastern District of Texas announced U.S. Attorney Stephen J. Cox today.  
                 
          David Pettigrew was arrested on August 6, 2020, for transporting child pornography.    

          According to court documents, Pettigrew came to the attention of law enforcement officials through referrals sent by two electronic surveillance providers and the National Center for Missing and Exploited Children.  Those referrals identified a computer user who uploaded suspected child pornography onto their online platforms.  On August 6, 2020, Homeland Security Investigations agents executed federal search warrants at Pettigrew’s residence and the Denison Church of the Nazarene, after which, agents arrested Pettigrew.

          If convicted, Pettigrew faces a minimum of 5 years and up to 20 years in federal prison.

          Any members of the public with information about this case or possible victims are urged to contact the U.S. Attorney’s Office at 1-800-804-3547 or their local law enforcement.

          This case is being 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 Department 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 Project Safe Childhood. 

          This case is being investigated by Homeland Security Investigations and the Grayson County Sheriff’s Office and prosecuted by Assistant U.S. Attorneys Marisa J. Miller and Jay Combs.

          It is important to note that a complaint, arrest, or indictment should not be considered as evidence of guilt and that all persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.

TEXARKANA, Texas – A 32-year-old Texarkana, Texas, man has pleaded guilty to distribution of child pornography in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

               Troy Dewayne Daniels pleaded guilty on August 6, 2020, to distributing child pornography before U.S. Magistrate Judge Caroline M. Craven. In his plea agreement, Daniels agreed to pay restitution to his victims, to register as a sex offender, and to be sentenced to a life term of supervised release following his imprisonment.

               According to information presented in court, in October 2019, Daniels used social media apps to communicate with an undercover law enforcement officer. During the conversation, Daniels described his progress in grooming a female child for sexual exploitation, including stating that he was “hoping” to go “[a]ll the way” with her. During the conversation, Daniel admitted to the undercover officer that he had been looking at pictures and videos of younger girls “for a while.” Daniels then sent the undercover officer an image of child pornography claiming that the prepubescent female child depicted looked like the child he had been grooming. Daniels did so in exchange for non-pornographic images of the undercover officer’s (fictional) daughter. Several days later, Daniels reached out to the undercover officer and asked if he could “play” with the officer’s (fictional) daughter on Snapchat. In November 2019, law enforcement officers executed a search warrant at Daniels’s home. Inside, officers found electronic devices containing more than 600 images of child pornography. The images found depicted prepubescent minors, sadistic or masochistic abuse or other depictions of violence, and depictions of the sexual exploitation of infants and toddlers.

               Under federal statutes, Daniels faces a minimum of 5 years and up to 20 years in federal prison at sentencing. The statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

               The U.S. Attorney’s Office for the Eastern District of Texas is committed to the protection of our children. Advances in technology over the past two decades have brought about new obstacles for parents, educators, and law enforcement. No longer are children safe in their own homes. No longer can teachers and parents let their guard down when our children are in the classroom, library, or even in their own home. The statistics are alarming. One in five children per year receives an unwanted sexual solicitation online. One in 33 children per year receives an aggressive sexual solicitation. And perhaps most disturbing, at any given time, 50,000 predators are on the Internet actively seeking out children. This office is committed to aggressively implementing programs and targeting those who would harm children in order to provide a safer environment for all children. More information and resources for parents and educators are available at https://www.justice.gov/usao-edtx/project-safe-childhood.

               This case is being investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

TYLER, Texas – U.S. Attorney Stephen J. Cox announced today that six individuals have been arrested pursuant to a federal indictment alleging money laundering violations.

            “The threat posed by transnational organized crime is continuing to increase,” said U.S. Attorney Stephen J. Cox.  “Of particular concern to us is the financial exploitation of older Americans by foreign-based crime rings.  These villains are located thousands of miles away, but they can target seniors here at home through believable scams designed to rob them of hard-earned savings.  Our district will be relentless in the fight against not only these transnational criminal organizations, but also their extensive networks of associates and money mules laundering the stolen funds.  We also plan to develop a new initiative with our law enforcement partners to ramp up our enforcement efforts on this front.”

            A federal grand jury returned the two-count indictment on June 18, 2020, charging a money laundering conspiracy and operation of an unlicensed money transmitting business.  The individuals charged include:

            Jeremy Christopher Jones, 45, of Kansas City, Kansas;

            John Arthur Fuss, 69, of Wartrace, Tennessee;

            Perry Lewis Crenshaw, Jr., 26, of Pensacola, Florida;

            Mary Elizabeth Booth, a/k/a Mary Beaman, 39, of Hammond, Louisiana;

            Ronnie Duane Booth, 37, of Hammond, Louisiana; and

            Tracey Lynn Brookshier, 51, of Tyler, Texas.

            All six defendants were arrested in other districts and then later made court appearances in the Eastern District of Texas.  Jones was arrested in the District of Kansas on June 29, 2020, and arraigned on July 29, 2020.  Fuss was arrested on July 1, 2020, in the Eastern District of Tennessee and arraigned on July 23, 2020.  Crenshaw was arrested in the Northern District of Florida on June 30, 2020, and arraigned on July 21, 2020.  Beaman, Booth, and Brookshire were all arrested on July 6, 2020, in the Eastern District of Louisiana and arraigned on July 22, 2020.

            According to the indictment, the defendants engaged in a money laundering conspiracy from July 2012 to September 2019.  As part of the operation, co-conspirators allegedly employed by call centers fraudulently induced victims, some of whom were located in the Eastern District of Texas, to transfer funds to the defendants and other co-conspirators.  These callers allegedly made unsolicited calls to individuals in the United States and employed various schemes that directly targeted or predominantly affected elder victims. 

            The indictment alleges that the schemes included impersonation of Social Security Administration and IRS/Department of Treasury officials.  Callers allegedly claimed that the victim’s Social Security number had been suspended because of suspicious activity and could be reactivated by payment of some amount.  Other callers allegedly claimed that victims owed back taxes and were required to satisfy the fictional debt to avoid threatened legal action.  Some callers allegedly posed as employees of mortgage companies.  Victims, who included borrowers with mortgages backed by the U.S. Department of Housing and Urban Development Federal Housing Administration, were promised lower rates through fictitious loan modifications and, in some instances, threatened with foreclosure if they did not agree to pay for the loan modification.

            The indictment further alleges that victims wired funds through money services businesses to locations in the Eastern District of Texas and elsewhere.  The indictment charges that the defendants’ money laundering conspiracy involved more than 4,000 victim wire transfers that totaled over $3.2 million.  The defendants and co-conspirators receiving these illicit proceeds are alleged to have retained a percentage of the victim funds for their services. 

            The indictment also charges that the defendants created fictitious companies and then deposited victim funds into bank accounts opened in the names of these fictitious companies.  The defendants are alleged to have made cash withdrawals of the fraudulently-obtained money and transferred some of the proceeds to other accounts, some of which were located outside of the United States.

            Jvones, Beaman, Booth, and Brookshier were separately charged with operation of an unlicensed money transmitting business in the State of Texas.

            “I’m very proud of my IRS service and I take these impersonation scams very personally.  I am disgusted by attempts to impersonate IRS employees and steal money from the taxpaying public,” stated Brian Payne, Special Agent in Charge of the Tampa Field Office of IRS Criminal Investigation. “Our office will continue to use the full force of the financial skills of our agents to identify and investigate these impactful crimes with our law enforcement partners in order to improve confidence in the taxpayers’ contacts with the IRS and its public servants.”

            “Over the last several years, American taxpayers have been subjected to unprecedented attempts to fraudulently obtain money by individuals impersonating IRS employees,” said J. Russell George, the Treasury Inspector General for Tax Administration.  “TIGTA and our law enforcement partners will do everything within our power to ensure that those involved in the impersonation of IRS employees are prosecuted to the fullest extent of the law.”

            “Creating a scheme that enriches the defendants while defrauding distressed and vulnerable HUD insured borrowers jeopardizes the many legitimate processes in place to protect a person’s mortgage,” said HUD Office of Inspector General, Special Agent in Charge, Nick Nelson.  “I want to thank the tireless efforts of our law enforcement partners and the U. S. Attorney’s Office, whose collaboration made these charges possible.  The HUD Office of Inspector General will continue to aggressively prosecute these type of cases.”

            “As reflected by the indictment, the United States Secret Service in Indianapolis -- along with our federal, state and local partners across America -- remains dedicated to the pursuit and apprehension of those fraudsters who seek to cheat their way to riches by preying upon some of our most vulnerable citizens,” said Eric Reed, Special Agent in Charge of the Indianapolis Field Office.  “I commend the excellent work of all the prosecutors and agents who have worked on this matter, and I am especially appreciative of the successful teamwork demonstrated by the many different law enforcement agencies who contributed to this investigation.  The Secret Service will continue to prioritize cases that have economic impact to the community and those that involve such ruthless schemes.”

If convicted, the defendants face up to 20 years in federal prison on the money laundering conspiracy charge and up to 5 years on the charge of operating an unlicensed money transmitting business.  Any proceeds are also subject to forfeiture.

            In October 2017, President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law.  The EAPPA’s purpose is to increase the federal government’s focus on preventing elder abuse and exploitation.  Subsequently, the Department of Justice launched the Elder Justice Initiative (EJI).  Through the EJI, the Department has participated in hundreds of criminal and civil enforcement actions involving misconduct that targeted vulnerable seniors.  This past March, the Department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide sweep.  The Department has likewise conducted hundreds of trainings and outreach sessions across the country.  The EJI website contains useful information, including educational resources about prevalent financial scams so you can guard against them.

            If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).  This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps.  Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis.  Reporting is the first step.  Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses.  The hotline is staffed 7 days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.

            This case is being investigated by the Internal Revenue Service – Criminal Investigations, the Treasury Inspector General for Tax Administration, the U.S. Department of Housing and Urban Development Office of Inspector General, and the United States Secret Service.  The case is being prosecuted by Assistant U.S. Attorney Frank Coan.

            An indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

TEXARKANA, Texas – A 49-year-old Cass County, Texas, man has been indicted for federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

Bryan Lee Simmons was indicted by a federal grand jury on March 18, 2020, and charged with conspiring to distribute methamphetamine and using a firearm during and in relation to drug trafficking. After his initial appearance before U.S. Magistrate Judge Roy S. Payne, he was ordered detained pending trial.

According to the indictment, from at least July 2019 and continuing to about August 2019, Simmons agreed with others to distribute methamphetamine. Specifically, on August 29, 2019, he possessed methamphetamine that he intended to distribute. During and in relation to those crimes, he possessed a pistol.

If convicted, Simmons faces a minimum of 5 years and as much as life in federal prison.

This case is being investigated by the Texas Department of Public Safety, Texas Rangers Division with assistance from the Cass County, Texas, District Attorney’s Office and the Cass County, Texas, Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

A grand jury indictment is not evidence of guilt. A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

BEAUMONT, Texas - Today, U.S. Attorney Stephen J. Cox joined fellow U.S. Attorneys in Texas—Ryan K. Patrick in the Southern District, Erin Nealy Cox in the Northern District and John F. Bash  in the Western District—and Attorney General Ken Paxton to inform the public about several fraudulent schemes involving masks, personal protection equipment (PPE), and other COVID-19 related equipment. They urge everyone to exercise increased due diligence and caution when dealing with new suppliers or vendors, especially when using a third-party broker.  

As demand for PPE increases, scammers may advertise equipment they do not actually have in attempts to make a quick profit. These PPE products may be counterfeit and mislabeled, and some may not exist at all. Some fraudsters reach out directly to consumers and government entities through email or social media to push their products. Red flags that a seller may be engaging in a scam include:  

• Unusual payment terms 
• Last-minute price changes 
• Last-minute excuses for delay in shipment 
• Unexplained source of a large quantity of material 
• Evidence of re-packaging or mislabeling 

“Fraudsters that engage in the trafficking of counterfeit or non-existent PPE prey upon their fellow citizens at a time when they are at their most vulnerable, and, in so doing, deny front line medical professionals needed protective equipment,” said U.S. Attorney Stephen J. Cox.  “One of my highest priorities is identifying these scammers, shutting down their operations, and bringing them to justice.  The public deserves nothing less.”
 
There are ongoing federal and state prohibitions on charging exorbitant prices for PPE during this time of national emergency. Texans who believe they have encountered scams or price gouging should call the Office of the Attorney General’s toll-free complaint line at (800) 621-0508 or file a complaint online. For additional information on disaster scams, please visit our disaster scams website.  
More information on unapproved or counterfeit PPE can be found at cdc.gov/niosh. You can also find information on the U.S. Food and Drug Administration website and the Environmental Protection Agency website. If you have information about PPE-related fraud, or about hoarding or price gouging of critical supplies, you can report it without leaving your home to the National Center for Disaster Fraud by calling the National Hotline at (866) 720-5721 or by submitting the NCDF Web Complaint Form. 
#####

BEAUMONT, Texas – A 31-year-old Vidor, Texas man has been sentenced for federal violations in the Eastern District of Texas announced U.S. Attorney Stephen J. Cox today.                

          Taylor Graham Cozart pleaded guilty on Feb. 10, 2020, to being a felon in possession of a firearm and was sentenced to 100 months in federal prison today by U.S. District Judge Marcia A. Crone.

          According to information presented in court, on July 30, 2019, law enforcement officers responded to a motorcycle accident on Interstate Highway 10 in Orange County, Texas.  They determined that Cozart was the driver of the motorcycle, which was stolen, and after he was transported to a nearby hospital and the scene was cleared, officers located a backpack affixed to the motorcycle.  The backpack contained a pistol, ammunition, $3,000 cash, methamphetamine, Xanax and Hydrocodone pills.  Law enforcement also learned that Cozart was a convicted felon with three prior felony drug convictions.  As a convicted felon, Cozart is prohibited from owning or possessing firearms or ammunition. 

          This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence, deterring illegal possession of guns, ammunition and body armor, and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state and local law enforcement agencies.

          This case was investigated by the Texas Department of Public Safety, the Orange County Sheriff’s Office and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Michelle S. Englade.

U.S. Attorney for the Northern District of Texas Erin Nealy Cox – in partnership with U.S. Attorneys Ryan K. Patrick (Southern District of Texas), John F. Bash (Western District of Texas), and Stephen J. Cox (Eastern District of Texas) as well as Texas Attorney General Ken Paxton – today informed the public about several fraudulent schemes involving masks, personal protection equipment (PPE), and other COVID-19 related gear. They urged everyone to exercise increased due diligence and caution when dealing with new suppliers or vendors, especially when using a third-party broker.  

As demand for PPE increases, scammers may advertise equipment they do not actually have in attempts to make a quick profit. These PPE products may be counterfeit and mislabeled, and some may not exist at all. Some fraudsters reach out directly to consumers and government entities through email or social media to push their products.

Red flags that a seller may be engaging in a scam include:  

• Unusual payment terms 
• Last-minute price changes 
• Last-minute excuses for delay in shipment 
• Unexplained source of a large quantity of material 
• Evidence of re-packaging or mislabeling 

There are ongoing federal and state prohibitions on charging exorbitant prices for PPE during this time of national emergency. 

Texans who believe they have encountered scams or price gouging can call the Office of the Attorney General’s toll-free complaint line at (800) 621-0508 or file a complaint online. For additional information on disaster scams, please visit their disaster scams website.

More information on unapproved or counterfeit PPE can be found at cdc.gov/niosh. If you have information about PPE-related fraud, or about hoarding or price gouging of critical supplies, you can report it without leaving your home to the National Center for Disaster Fraud by calling the National Hotline at (866) 720-5721 or by submitting the NCDF Web Complaint Form. 

BEAUMONT, Texas – The Americans with Disabilities Act (ADA) was signed into law on July 26, 1990, and remains the nation’s preeminent civil rights law for providing access and equal opportunities for people with disabilities.  The U.S. Attorney’s Office for the Eastern District of Texas is proud to play a critical role in enforcing the ADA in order to protect people with disabilities from discrimination. Today, on the 30th anniversary of President George H.W. Bush signing the ADA into law, U.S. Attorney Stephen J. Cox reiterates the Eastern District of Texas’ continued commitment to investigate and litigate significant ADA cases.

             “Thirty years ago, President George H.W. Bush invoked our founding fathers when celebrating the passage of the ADA.  He stated the ADA ‘brings us closer to that day when no Americans will ever again be deprived of their basic guarantee of life, liberty, and the pursuit of happiness,’” said U.S. Attorney Stephen J. Cox.  “Unfortunately, the ADA’s promise has not been fully realized. Individuals with disabilities continue to face unlawful barriers, which prevent them from fully participating in all society has to offer.  The U.S. Attorney’s Office for the Eastern District of Texas will continue to work to remove these barriers and ensure all individuals are afforded equal opportunity, freedom from discrimination, and the ability to fully participate in society.”   

             The Civil Rights Enforcement Coordinator for the Eastern District of Texas is Assistant U.S. Attorney Aimee M. Cooper. Currently, her work involves negotiating settlements to require commercial facilities and private entities to remove architectural barriers that prohibit persons with mobility disabilities from gaining access; assisting state and local governments in revising policies and procedures to provide effective communication and appropriate auxiliary aids and services for persons who are deaf, hard of hearing, or deaf-blind; and ensuring that employers are providing reasonable accommodations for employees and job applicants with disabilities. 

             The promise of the ADA is its wide-ranging efforts to eliminate disability discrimination across the range of services, programs, and activities that most Americans take for granted, but for too long were largely inaccessible to individuals with disabilities.  Whether in employment; areas of civic life; or in the day-to-day activities and access to goods and services that we all enjoy—the ADA requires that we take those steps necessary to ensure access for all.   

             Over the past 30 years, our country has undertaken the hard work of changing attitudes about disability, tearing down barriers to equality, and dismantling the systems that have historically excluded people with disabilities.  Today, we commemorate the many ways that the ADA has transformed our society—by replacing exclusion with access, segregation with integration, and limitations with self-determination.  The ADA has advanced the promise of the American dream, ensuring that people with disabilities can write their own stories.  And as a society, we are better and stronger because of the contributions that people with disabilities make.

             For more information about the 30th Anniversary of the ADA, please visit www.ada.gov

             To file a complaint with the Department, please visit the Civil Rights Division’s portal at https://civilrights.justice.gov/report/  

             For more information about the ADA, call the Department’s toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TTY).

BEAUMONT, Texas – A federal inmate has been sentenced for murdering his cellmate in a Federal Bureau of Prisons facility in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today. 

               Carroll Ellis Hayes, 40, of Mobile, AL, pleaded guilty on Jan. 27, 2020 to 2nd degree murder and was sentenced to 360 months in federal prison today by U.S. District Judge Marcia A. Crone today.  

               According to information presented in court, Hayes was serving a sentence for federal firearms violations and was in the Special Housing Unit (SHU) at the Federal Correctional Complex’s Medium Facility in Beaumont, Texas.  On Feb. 9, 2018, another prisoner moved into the same cell as Hayes, and within an hour, a correctional officer discovered the new cellmate motionless on the floor—he had been beaten and strangled.  Correctional officers attempted CPR before the cellmate was taken to a local hospital, where he was pronounced dead.

               This case was investigated by the Bureau of Prisons and prosecuted by Assistant U.S. Attorney Michael Anderson.

PLANO, Texas – A 48-year-old Saginaw, Texas man has been sentenced to federal prison for  attempted child coercion and enticement in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox and FBI Special Agent in Charge Matthew J. DeSarno today.

               Adam Rene Rodriguez was found guilty by a jury on Oct. 18, 2019, of attempted coercion and enticement of a minor and was sentenced to 210 months in federal prison today by U.S. District Judge Sean D. Jordan. 

               According to information presented at trial, on May 3, 2019, Rodriguez was arrested by members of the FBI Dallas Field Office and the Plano Police Department when he traveled to Plano to engage in sex acts with an individual he believed to be a 14-year old child. 

               During the 4-day trial, jurors heard that an undercover agent entered a sexually-oriented messaging group that was run by Rodriguez.  Between April 10, 2019 and May 3, 2019, Rodriguez engaged in continuing messages with the undercover persona, even after being  repeatedly advised of the persona's age.  In the messages, Rodriguez (as username "Texasarod") continued to ask for photos of the child, sent the child sexually explicit material, and offered to "train" the child to engage in various sex acts.  Evidence presented to the jury also included messages in which Rodriguez instructed the child on how to conceal her online activities and avoid detection by her parents.  The exchanges continued until May 3, 2019.  On that day, Rodriguez drove to a pre-arranged meeting place with condoms in order to engage in illegal sex acts with the child.  Rodriguez testified on his own behalf, contending that he believed that he was communicating with an adult who was role playing or fantasizing about pretending to be a child.

               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 U.S. Attorneys’ Offices and the 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.justice.gov/psc.              

               This case was investigated by the Federal Bureau of Investigation’s Dallas Field Office and the Plano Police Department and prosecuted by Assistant U.S. Attorneys Marisa Miller and Lesley Brooks.

BEAUMONT, Texas – A 35-year-old St. Petersburg, Florida woman has been sentenced to federal prison for drug trafficking crimes in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

               Erica Ann Lang pleaded guilty on Feb. 10, 2020, to conspiracy to distribute and possess methamphetamine and was sentenced to 37 months in federal prison today by U.S. District Judge Marcia A. Crone.  Ryan Andrew Davis, 35, of Clearwater, Florida pleaded guilty to the same charge on Jan. 16, 2020, and was sentenced to 162 months in federal prison on July 9, 2020.              

               According to information presented in court, on Oct. 24, 2019, Lang and Davis were stopped for a traffic violation on Interstate Highway 10 East in Beaumont, Texas.  A certified narcotics detection dog alerted on the car and a search was performed revealing approximately one kilogram of methamphetamine hidden in the trunk of the vehicle.

               This case was investigated by the Jefferson County Sheriff’s Office and the U.S. Drug Enforcement Administration and prosecuted by Assistant U.S. Attorney John B. Ross.

               BEAUMONT, Texas –A 26-year-old federal inmate has been sentenced for escaping from a Bureau of Prisons facility in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today. 

               Leo Martinez of Miami, Florida, pleaded guilty on March 11, 2020, to escaping from federal custody and was sentenced to an additional 18 months in federal prison by U.S. District Judge Marcia Crone today.  

               According to information presented in court, on Oct. 11, 2019, the Jefferson County Sheriff’s Office received an anonymous tip alerting them that inmates at the Bureau of Prisons Camp Facility in west Jefferson County were planning to escape from the facility in order to retrieve contraband that had been left for them in a field off Hillebrandt Road.  Law enforcement officers surrounded the area in concealed locations and within several hours observed four inmates approaching on foot.  All four inmates were apprehended after attempting to flee.  After they were captured, a search of the inmates revealed several cellular telephones and a bottle of whisky.  All four were indicted by a federal grand jury on Nov. 6, 2019.

               Martinez was serving a federal prison sentence for a drug trafficking conviction out of the Western District of Oklahoma.  Martinez’s new prison sentence will begin once he has served the remainder of his original prison sentence.

               This case was investigated by the Jefferson County Sheriff’s Office and the U.S. Marshals Service and prosecuted by Assistant U.S. Attorney Joseph R. Batte.

TYLER, Texas – A 38-year-old Carthage, Texas, man has been sentenced to federal prison for  firearms violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.                

               On Jan. 22, 2020, a jury found Timothy Earl Brown guilty of being a felon in possession of a firearm  and ammunition  following a two-day jury trial before U.S. District Judge Jeremy D. Kernodle.  Brown was sentenced to 60 months in federal prison today by Judge Kernodle.

               According to information presented in court, on Oct. 14, 2016, law enforcement responded to a report of a prowler at a rural residence in Panola County.  There, officers observed Brown in the wooded area near the home, carrying a rifle.  Brown was later discovered to be also armed with a revolver.  Brown was convicted in Panola County in 2000 for theft, in 2000 for escape, and in 2011, for sexual assault.  As a felon, Brown is prohibited by federal law from owning or possessing firearms or ammunition.  Brown was also previously convicted in the Eastern District of Texas for being a felon in possession of a firearm in 2004.

               This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence; deterring illegal possession of guns, ammunition, and body armor; and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

               This case was investigated by the Panola County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorneys Jim Noble and Alan Jackson.

WASHINGTON – Today, President Donald J. Trump and Attorney General William P. Barr announced significant cases related to Joint Task Force Vulcan (JTFV), an initiative launched in August 2019 aimed at disrupting, dismantling, and ultimately, destroying MS-13.

President Trump and Attorney General Barr announced a number of significant cases associated with JTFV, including the first time an MS-13 member has been charged with terrorism related offenses, a coordinated multi-district takedown of the leadership of the Hollywood clique of MS-13, and the Attorney General’s decision to seek the death penalty against an MS-13 defendant.

“In 2017, the President directed the Department of Justice to go to war against MS-13, and we did just that,” said Attorney General Barr. “In coordination with our partners at the Department of Homeland Security, the Justice Department’s law enforcement components have successfully investigated, charged, and arrested command and control elements of MS-13 responsible for murder. Joint Task Force Vulcan’s operations have significantly degraded MS-13’s capabilities. While there is still work to be done, the Department of Justice remains committed to protecting Americans threatened by MS-13, and we will not rest until we have successfully defeated this transnational criminal organization.”

“Today’s announcements are the result of tremendous teamwork and coordination between prosecutors and law enforcement officers across the United States and Central America,” stated JTFV Director John Durham. “MS-13 is a violent transnational criminal organization, whose criminal activities respect no boundaries. The only way to defeat MS-13 is by targeting the organization as a whole, focusing on the leadership structure, and deploying a whole-of-government approach against a common enemy.”

“The Eastern District of Texas is proud to support Joint Task Force Vulcan, and we are happy to lend one of our finest prosecutors to the effort,” said U.S. Attorney Stephen J. Cox.  “Our district is fully committed to the President’s goal of disrupting and dismantling MS-13.”

In an indictment unsealed yesterday, Melgar Diaz was charged in the Eastern District of Virginia with conspiring to provide material support to terrorists; conspiring to kill or maim persons overseas; conspiring to commit acts of terrorism transcending national boundaries; conspiring to finance terrorism; and conspiring to engage in narco-terrorism, in addition to racketeering conspiracy and drug trafficking. This is the first time that an MS-13 member has been charged with terrorism related offenses.

Alexi Saenz was indicted in 2017 in the Eastern District of New York. It is alleged that between 2016 and 2017 he committed seven murders: the Jan. 28, 2016, murder of Michael Johnson; the April 29, 2016, murder of Oscar Acosta; the Sept. 13, 2016, murders of Kayla Cuevas and Nisa Mickens; the Oct. 10, 2016, murder of Javier Castillo; the Oct. 13, 2016, murder of Dewann Stacks; and the Jan. 30, 2017, murder of Esteban Alvarado-Bonilla. Two of the victims were Brentwood high school students killed with a machete and baseball bat. The Attorney General has filed a Notice of Intent to Seek the Death Penalty for Saenz.

In a 24 count indictment unsealed yesterday, the Eastern District of New York, charged eight MS-13 members, including leaders of the East Coast Hollywood Program, with Racketeer Influenced and Corrupt Organization (RICO) and Violent Crimes in Aid of Racketeering (VICAR) charges related to six murders, two attempted murders, kidnapping, narcotics and related firearms offenses.

In a 21-count indictment unsealed yesterday in the District of Nevada, 13 MS-13 members, including leaders of the “Hollywood Locos” clique and “Los Angeles Program,” were charged with various offenses including Continuing Criminal Enterprise (CCE), narcotics distribution and weapons charges.

In August 2019, Attorney General Barr created JTFV to carry out the recommendations of the MS-13 subcommittee formed under the Attorney General’s Transnational Organized Crime Task Force, which was the result of President Trump’s February 2017 Executive Order directing the Departments of Justice, State, and Homeland Security, and the Office of the Director of National Intelligence to coordinate a whole-of-government approach to dismantle transnational criminal organizations, such as MS-13, and restore safety for the American people. The principal purpose of JTFV is to coordinate and lead the efforts of the Justice Department and U.S. law enforcement agencies against MS-13 in order to dismantle the group.

The JTFV has successfully implemented the whole-of-government approach to law enforcement relating to MS-13; increased coordination and collaboration with foreign law enforcement partners, including El Salvador, Mexico, Honduras and Guatemala; designated priority MS-13 programs, cliques and leaders, who have the most impact on the U.S., for targeted prosecutions; and coordinated significant MS-13 indictments in United States Attorney’s Offices across the country, such as the Eastern District of New York, the Eastern District of Virginia, and the District of Nevada.

Federal prosecutors from the Department of Justice’s National Security Division and the Criminal Division, as well as 10 United States Attorney’s Offices have been assigned to serve JTFV in full-time capacities: the Eastern District of New York; the Eastern District of Virginia; the District of Nevada; the Southern District of California; the District of Massachusetts; the Northern District of Ohio; the District of New Jersey; the Eastern District of Texas; the District of Utah; and the District of Columbia. In addition, all Department of Justice law enforcement agencies are involved in the effort – the Federal Bureau of Investigation; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; and the Bureau of Prisons. The Department of Homeland Security’s Homeland Security Investigations has also played a critical role in JTFV.

Attorney General Barr would also like to thank Attorney General Raul Melara of El Salvador for the assistance of his office, as well as investigators from El Salvador’s Policia Nacional Civil, Centro Antipandilla Transnacional unit for their assistance.

BEAUMONT, Texas - U.S. Attorney Stephen J. Cox announced today that eight individuals have been arrested in the Eastern District of Texas pursuant to a federal indictment which alleges drug and money laundering violations.

 

               A federal grand jury returned the 24-count indictment on June 3, 2020, charging the following individuals with drug trafficking and money laundering crimes:

               Jake Ellis Daughtry, 34, of Nederland, Texas;

               Joseph Ellis Daughtry, 64, of Nederland;

               Kip William Daughtry, 46, of Vidor, Texas;

               Sandra Miller Daughtry, 72, of Nederland;

               Jordan Lee King, 31, of Nederland;

               Tanner John Jorgensen, 28, of Nederland;

               Austin Wayne Dial, 28, of Nederland; and

               Jesse Lee Hackett, 37, of The Woodlands, Texas.              

 

               The defendants were arrested by a joint law enforcement task force today and will make initial appearances in federal court this afternoon, July 15, 2020, and tomorrow, July 16, 2020.  A ninth defendant is already in custody.

               According to court documents, the defendants are charged with conspiracy to possess with intent to distribute, and distribution of, a controlled substance analogue resulting in death; conspiracy to possess with intent to distribute, and distribution of, a date rape drug over the internet to an unauthorized purchaser; maintaining a drug-involved premises; possession with intent to distribute, and distribution of, a controlled substance analogue; and money laundering.

               The defendants are alleged to be the head of a Chemical Trafficking Organization (“CTO”) cell operating on a national scale.  Investigation of the organization began in 2018 when DEA West Palm Beach, Florida intercepted mail parcels of a chemical identified as 1,4 butanediol, commonly referred to as “BDO.”  BDO is a chemical manufactured only for industrial or laboratory use as a floor stripper or vehicle wheel cleaner and is not intended for human consumption.  Investigators determined that when BDO is ingested, it immediately metabolizes into GHB (a known date-rape drug) with the same effects, causing potential overdoses, addiction, and death.

               DEA traced the seized parcels to their origination point, Right Price Chemicals, a business located on Twin City Highway in Nederland, Texas, and owned by Jake Daughtry, Joe Daughtry and Sandra Daughtry.    Also located at Right Price Chemicals is a seasonal fireworks business called “Jake’s Fireworks.”  Agents determined that since 2016, Right Price Chemicals has distributed approximately 7,000 gallons of BDO over thousands of orders, and that those sales generated $4.5 million.

               Agents additionally determined that Jake’s Fireworks operated as a front for Right Price Chemicals, allowing individuals to purchase BDO on a walk-in basis.  Customers could also obtain BDO from Jake’s Fireworks through internet orders, and have the chemical shipped to their home.  Right Price Chemicals also distributed bulk quantities BDO to mid-level dealers, who, in turn, sold or distributed the chemical to users.  Investigators determined that at least two deaths—one in Virginia and one in Florida—were directly caused by BDO sold by Right Price Chemicals.  Right Price Chemicals distributed BDO in 48 states across the country.

               Investigators have also determined that the proceeds from the distribution and sale of BDO, which total over $1 million, have been laundered through several bank and retirement accounts throughout Southeast Texas.  Those accounts have now been seized.

               If convicted of the criminal charges, the defendants face a minimum term of 20 years, and up to life, in federal prison.

               In addition to pursuing criminal charges, on July 13, 2020, the Eastern District sought and obtained a temporary restraining order against Jake’s Fireworks and any other businesses housed within the Twin City Highway location in Nederland.  This civil injunctive relief immediately shuts down operations of the business and any further distribution of BDO and other chemicals.  Jake Daughtry, Joe Daughtry, Sandra Daughtry, and Kip Daughtry also face civil penalties under the Controlled Substance Act.

               “I am proud of our team’s investigation and interdiction of this dangerous chemical trafficking organization,” said U.S. Attorney Steve Cox.  “The joint efforts of our Criminal and Civil Divisions led to the arrest of suspected drug traffickers, the seizure of bank accounts, and the shutdown of a suspected drug front, making the Eastern District of Texas a safer place for all.”

               “The DEA Miami and Houston Field Divisions combined forces to target and neutralize a Chemical Trafficking Organization that was responsible for the nationwide distribution of a chemical product, that when consumed, is immediately metabolized into GHB.  This chemical, often used by sexual predators as a date-rape drug, can cause overdose, addiction and death,” stated DEA Special Agent in Charge Steven S. Whipple.  “This investigation highlights DEA’s commitment to the protection of our communities by working alongside our state, federal and local law enforcement partners to identify the most significant threats to the public safety.”

               This is an Organized Crime Drug Enforcement Task Force (OCDETF) case and is being investigated by the Drug Enforcement Administration West Palm Beach, Florida, and Beaumont; United States Postal Service; Internal Revenue Service-Criminal Investigation;  Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Jefferson County Sheriff's Office.  Essential support and coordination was provided by numerous components of DEA headquarters and the Department of Justice’s multi-agency Special Operations Division (SOD), including assigned attorneys from the Narcotic and Dangerous Drug Section (NDDS).  This case is being prosecuted by Assistant U.S. Attorneys Michelle S. Englade and Robert Wells.

               An indictment is not evidence of guilt.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

BEAUMONT, Texas – A 59-year-old Kemah, Texas man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

           Jimmy James Mamoth, Jr., pleaded guilty to attempted bank robbery before U.S. District Judge Thad Heartfield on July 13, 2020.  

           According to information presented in court, on Sep. 27, 2019, a witness observed Mamoth approach the entrance to the Texas First Bank in Hull, Texas, wearing a dark hooded jacket, gloves, a Halloween-style mask on his face, and carrying a duffle bag.  The witness honked his vehicle’s horn to draw attention to Mamoth, who subsequently fled into the nearby woods.  Law enforcement was able to locate and arrest Mamoth, and from him recovered an Airsoft-style replica gun meant to resemble a Beretta 9mm pistol.  Mamoth was indicted by a federal grand jury on Oct. 9, 2019.

           As part of his plea agreement, Mamoth admitted his participation in a string of other robberies and attempted robberies, specifically, the robbery of the Arbor 8 movie theater in Austin, Texas, on March 17, 2019; an attempted robbery of the Benchmark Bank in West Lake Hills, Texas, on June 4, 2019; the robbery of the Broadway Bank in Wimberley, Texas, on June 19, 2019; and the robbery of the First National Bank of Hughes Springs in Kilgore, Texas, on June 28, 2019.  Mamoth further agreed to pay restitution for the above crimes.

           This case is being investigated by the Federal Bureau of Investigation, the Liberty County Sheriff’s Office, the Austin Police Department, the West Lake Hills Police Department, the Hays County Sheriff’s Office, and the Gregg County Sheriff’s Office and is prosecuted by Assistant U.S. Attorneys Christopher Rapp and Rachel Grove.

SHERMAN, Texas – A 40-year-old Honey Grove, Texas woman has been sentenced to federal prison for tax fraud in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.                

          Kristi Michelle Finney, also known as Kristi Michelle Fry, pleaded guilty on Aug. 29, 2019 to five counts of tax fraud.  On July 2, 2020, U.S. District Judge Amos Mazzant sentenced Finney to 33 months in federal prison.  Finney was also ordered to pay restitution of $359,733 to the Internal Revenue Service.

          According to information presented in court, from 2013 to 2018, Finney offered tax services from her home, where she would complete and file tax returns for others at a fee of around $200.  An IRS investigation linked 147 suspicious tax returns to Finney, many of which contained false employment, income, and expense information.  Specifically, Finney would claim large financial losses for businesses that never existed, resulting in a larger tax refund for her clients than they would otherwise be entitled to.  Finney would then divert portions of the fraudulent tax refund to herself by placing the refunds on prepaid debit cards.  Finney concealed her involvement by falsely claiming that the fraudulent returns were personally prepared by her clients, rather than her.  The IRS was ultimately able to identify Finney as the filer of these returns through internet protocol addresses and email addresses associated with the electronic returns, as well as through witness interviews.

          This case was investigated by the Internal Revenue Service, Criminal Investigation, and prosecuted by Assistant U.S. Attorney Wes Wynne.

Opinion Editorial by Stephen J. Cox, United States Attorney 

Published in the Texas Lawyer

July 8, 2020

https://www.law.com/texaslawyer/2020/07/07/combating-cares-act-fraud-ensuring-economic-relief-for-americans-through-law-enforcement-efforts/

 

Millions of Americans and small businesses are suffering the economic effects caused by the COVID-19 pandemic.  In response, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.  This historic legislation, which included over $2 trillion in emergency financial assistance, was designed to provide immediate help for small businesses, healthcare providers, and individuals. 

The CARES Act includes the Paycheck Protection Program (“PPP”), which provides nearly $650 billion in loans to small businesses, as well as Economic Impact Payments (“EIPs”) to provide relief to individual taxpayers and families.  The CARES Act also included other programs to help small and medium-sized businesses, and assistance to hospitals and other healthcare providers on the front lines of the coronavirus response. 

This federal response to the current crisis is vital to the economy, but like many good federal programs, there is risk of fraud.  For example, the PPP requires borrowers to make certain certifications regarding their eligibility and the use of the funds, but some borrowers make misrepresentations in bad faith.  When fraudsters unlawfully take money to which they are not entitled, they deplete the program and divert funds from those who need it most.  The Department of Justice (“DOJ”) is committed to pursuing wrongdoing related to COVID-19, including these fraudulent schemes.  The U.S. Attorney’s Office for the Eastern District of Texas (“EDTX”) shares this priority and will deploy all criminal and civil enforcement tools available to combat such misconduct.

In the few short months since passage of the CARES Act, we have initiated multiple criminal actions and investigations.  We are pursuing individuals who used stolen identities to obtain EIPs.  We also have partnered with the DOJ’s Criminal Division to charge several individuals who, as alleged, knowingly provided false information to obtain millions of dollars in PPP loans.  In one case, rather than using PPP funds for purposes authorized by the CARES Act, the funds were allegedly used to purchase luxury vehicles and to fund personal investment accounts.  In addition to criminal efforts, we are looking to the False Claims Act (“FCA”), a powerful civil statute that allows the United States to recoup money that has been lost due to fraud.  The FCA allows the government to obtain treble damages and civil penalties from those who defraud federal programs, such as the CARES Act.

We will be vigorous in our enforcement efforts.  Even so, we recognize that some businesses have voiced concerns about increasingly complicated program rules and regulations creating traps not only for the unwary, but for the many companies that sought assistance in good faith.  For example, some have predicted False Claims Act litigation based on inadvertent foot faults or regulatory defects—a risk that could increase with additional disclosures of funding recipients, investigative reporting, and public criticism.  Rest assured that we will be careful not to discourage legitimate businesses from accessing the important financial resources that Congress made available through the CARES Act.  We will not punish companies that accessed stimulus funds in good faith compliance with the rules.  Nor, will we seek out applicants who made technical mistakes in processing paperwork or honestly misunderstood regulatory or certification requirements.  Our focus is on fraud.

So, what can the public do?  Simply put, if you see something, say something.  Report borrowers who knowingly provided false information in loan applications, individuals who unlawfully obtained EIPs, and those who knowingly misused CARES Act funds.  We are working with banks and other financial institutions to help identify potential fraudsters.  But we also need the public’s assistance.  If you know of, or suspect, fraud related to the CARES Act, please contact the National Disaster Fraud Hotline at (866) 720-5721.

The EDTX and our law enforcement partners are ready to take on those who attempt to illegally profit from the coronavirus pandemic.  And we need your help to wage this fight.

 

Stephen J. Cox is the 39th U.S. attorney for the Eastern District of Texas (EDTX). As the chief federal law enforcement officer in EDTX, Cox supervises the prosecution of all federal crimes and the litigation of all civil matters in which the United States has an interest. As U.S. attorney, Cox leads a staff of over 120 prosecutors, civil litigators, and support personnel located in Beaumont, Plano, Tyler, Sherman, Lufkin, and Texarkana.

TYLER, Texas – A 33-year-old Shreveport, Louisiana woman has pleaded guilty to embezzling over $500,000 from an East Texas non-profit organization in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

            Jessica Rottab pleaded guilty today to a one-count criminal information charging her with federal program theft before U.S. Magistrate Judge John D. Love.

            According to information presented in court, from about June 24, 2017 through September of 2018, Rottab, who was residing in Flint, Texas at the time, worked as the Interim Executive Director of the East Texas Center for Independent Living (ETCIL) in Tyler, Texas.  ETCIL is a non-profit corporation with a mission of helping people with disabilities achieve greater independence, self-sufficiency, and full participation in their communities.  

            ETCIL receives benefits in excess of $10,000.00 from the U.S. Department of Health and Human Services every year.  From Sep. 9, 2017 through July 23, 2018 ETCIL maintained an operating checking account at Southside Bank in Tyler, Texas.  During this time, Rottab made 369 unauthorized cash withdrawals for her personal financial benefit, totaling $118,224.24. From June 24, 2017 and continuing until Sep. 11, 2018 by various additional means, such as using ETCIL’s corporate credit card for unauthorized expenditures for her personal financial benefit, Rottab embezzled a total of $526,690.83 from ETCIL.

            “This case exemplifies the great results we can achieve when we bring together our federal and state and investigative resources,” said U.S. Attorney Stephen J. Cox. “The U.S. Attorney’s Office in the Eastern District of Texas will continue to aggressively prosecute those who abuse their position of trust to steal from those who receive public assistance.” 

            Acting Assistant Special Agent in Charge of the Dallas Field Office, Gerardo Gomez, commended the cooperative efforts of our law enforcement partners in the successful resolution of this investigation.  "The IRS enforces the nation's tax laws, but also takes particular interest in financial schemes that victimize our most vulnerable citizens and taxpayers.  In those instances be assured IRS-CI will pursue any and all legal avenues in pursuit of justice.” 

            Under federal statutes, Rottab faces up to 10 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.   Rottab has agreed to pay restitution of $526,690.83 to ETCIL and their disabled clients.  

            This case was investigated by the Texas Department of Public Safety Criminal Investigations Division, Tyler Office, the Internal Revenue Service-Criminal Investigation, Tyler Office and prosecuted by Assistant U.S. Attorney Jim Noble.

           

SHERMAN, Texas – Bibi Tasleyma Sattar, D.O., and her practice, Oakmont Wellness Center, PA, (collectively, “Dr. Sattar”) have agreed to pay $210,000 to resolve False Claims Act allegations involving accepting payments for patient referrals in violation of the Anti-Kickback Statute, as well as claims otherwise improperly billed to federal healthcare programs for laboratory testing, announced Eastern District of Texas U.S. Attorney Stephen J. Cox today.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Anti-Kickback Statute intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlement announced today resolves allegations that Dr. Sattar conspired with others to receive remuneration disguised as “process and handling fees” in exchange for referring laboratory tests to True Health Diagnostics, LLC (“True Health”) from June 2015 to November 2017.  Specifically, Dr. Sattar referred her Medicare patients to Onsite Draw Station, Inc. (“ODS”), a company owned and/or operated by Dr. Sattar’s parents, Sultan Sattar and Bibi Zabeda Sattar, to perform blood draws when Dr. Sattar ordered True Health tests for her patients.  When Dr. Sattar ordered diagnostic testing from True Health, and ODS performed the blood draws, True Health paid a $25 “process and handling fee” per each patient that Dr. Sattar referred to True Health.  True Health then submitted the claims to the Medicare program for payment.  Dr. Sattar’s decision to order these laboratory tests was based in part on True Health’s payment of “process and handling fees” to ODS, in violation of the Anti-Kickback Statute.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

In connection with this scheme, Sultan Sattar, 64, and Bibi Zabeda Sattar, 61, of Fort Worth, Texas, and Jeffrey Paul Cornwell, a/k/a "Boomer," 43, of McKinney, Texas, were indicted by a federal grand jury on December 11, 2019.  If convicted, the Sattars and Cornwell each face up to 5 years in federal prison.

               “A pillar of our medical system is trust between a patient and a physician,” said U.S. Attorney Stephen J. Cox. “The Eastern District of Texas is committed to protecting that trust and ensuring that those whose medical judgment is corrupted by illegal financial agreements are held accountable.”

The civil settlement was the result of an investigation by the Commercial Litigation Branch of the Justice Department’s Civil Division, OIG-HHS, DCIS, and the U.S. Attorney’s Office for the Eastern District of Texas.  The case is being handled by Assistant U.S. Attorneys James Gillingham and Adrian Garcia. 

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

MARSHALL, Texas – A 36-year-old Daingerfield, Texas man has been sentenced to federal prison for drug trafficking crimes in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

              Michael Leon Wood pleaded guilty on May 5, 2020, to possession with intent to distribute methamphetamine and was sentenced to 108 months in federal prison today by U.S. District Judge Rodney Gilstrap.  Wood also agreed to forfeiture of $3,625, which he received from selling methamphetamine.

              According to information presented in court, on March 1, 2018, Wood delivered an ounce of methamphetamine to another person in exchange for $600.  On Jan. 15, 2019, law enforcement officers executed a search warrant at Wood’s residence in Morris County and recovered approximately 50 grams of methamphetamine, $1,150 in cash, a rifle, a pistol, and a shotgun.  Wood admitted to being responsible for distributing approximately 96 grams of methamphetamine. 

              Wood was indicted by a federal grand jury on Oct. 16, 2019 and charged with drug trafficking violations.   

               This case was investigated by the Texas Department of Public Safety, Franklin County Sheriff’s Office, and the Morris County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Jim Noble.

######

SHERMAN, Texas – A 50-year-old Plano, Texas man has been indicted and charged with federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

            James Mwanza was indicted by a federal grand jury on June 18, 2020 and charged with wire fraud, theft of government money, and aggravated identity theft.  Mwanza went before U.S. Magistrate Judge Christine A. Nowak today for an initial appearance.

            According to information presented in court, from at least January 2020 through April 2020, Mwanza, claiming to be a tax preparer, allegedly prepared and filed fraudulent income tax returns with the IRS.  To do so, he unlawfully obtained the personal identification information of other individuals, including names, birth dates, and Social Security numbers.  Mwanza used Electronic Filing Numbers assigned to other tax preparation firms who were not affiliated with him, to file the returns and claim false tax refunds.  The filing of the false returns also triggered payment of Economic Impact Payments (EIPs) provided for under the CARES Act.

            The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  The CARES Act authorized over $2 trillion in relief programs, including approximately $560 billion for benefits to individuals.  An estimated $300 billion of that total was allocated for Economic Impact Payments (EIPs).

            Under the CARES Act, qualifying individuals may receive up to $1,200 in EIPs per adult, up to $2,400 for married couples filing jointly, and $500 per child under 17 years old.  Individuals with income exceeding $99,000 or joint filers whose income exceeds $198,000 do not qualify for any payment. 

            “Fraudsters engaged in identity theft to steal taxpayer refunds have now turned their attention to stealing Economic Impact Payments,” said U.S. Attorney Stephen J. Cox. “The Eastern District of Texas is working with our law enforcement partners to utilize all available tools to ensure that government payments get to the taxpayers who need this economic relief.”

            “The Treasury Inspector General for Tax Administration remains committed to investigating and pursuing attempts to corruptly interfere with Federal tax administration, including tax preparer misconduct involving the theft of tax refunds and Economic Impact Payments,” said J. Russell George, the Treasury Inspector General for Tax Administration.  “We appreciate the hard work of our law enforcement partners in this investigation.”

            “IRS Criminal Investigation has seen a variety of Economic Impact Payment scams and other financial schemes looking to take advantage of unsuspecting taxpayers,” said IRS Criminal Investigation Special Agent in Charge Tamera Cantu of the Dallas Field Office.  “IRS Criminal Investigation is dedicated to working with our law enforcement partners and the U.S. Attorney’s Office to combat fraud schemes that harm innocent taxpayers.”   

            If convicted, Mwanza faces up to 20 years in federal prison.  A grand jury indictment is not evidence of guilt.

            This case is being investigated by the Treasury Inspector General for Tax Administration (TIGTA) and the Internal Revenue Service-Criminal Investigations and prosecuted by Assistant U.S. Attorney Frank Coan.

TEXARKANA, Texas – A 31-year-old Bowie County, Texas, man has been convicted of federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

               Justin Rashad Young was found guilty of drug trafficking today, following a four-day jury trial before U.S. District Judge Robert W. Schroeder, III.

               According to information presented in court, on June 28, 2017, Young and his fellow drug trafficker, Joshea Cardwell, a.k.a. “Too Tall,” were found in the Magnuson Hotel near North State Line Avenue in Texarkana, Texas, with more than 400 grams of methamphetamine, 1.6 kilograms of marijuana, drug distribution materials, and a Taurus 9 mm pistol. When officers arrived on the scene, Young slammed the hotel room door on one of the responding officers. Before that day, Young had been shot at the drug house he had been operating on Waterman Street in Texarkana. On another occasion, Young was found in possession of marijuana after he left a drug house. At trial, a cooperating witness described how Cardwell and Young had been working together for months to sell marijuana from California and methamphetamine. Young and Cardwell were indicted by a federal grand jury on Nov. 14, 2018, and again on July 24, 2019.

               On June 4, 2020, Cardwell pleaded guilty to conspiring with Young to possess and distribute marijuana and methamphetamine and to possessing a firearm in furtherance of drug trafficking.

               Under federal statutes, Young and Cardwell face up to 40 years in federal prison at sentencing. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

               This case was investigated by the Special Operations Division of the Texarkana Texas Police Department, the Texarkana office of the Texas Department of Public Safety, Criminal Investigation Division, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorneys Jonathan R. Hornok and Lucas R. Machicek.

BEAUMONT, Texas — A 43-year-old physician practicing in Beaumont has been indicted on federal health care fraud violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

                Grigoriy T. Rodonaia, of Port Neches, Texas, was indicted on March 18, 2020 and charged with 35 counts of health care fraud and other related violations.  Rodonaia appeared before U.S. Magistrate Judge Keith Giblin today for an initial appearance.

                According to the indictment, beginning in January 2015, Rodonaia is alleged to have participated in a health care fraud scheme by issuing prescriptions for specially compounded scar creams using the names, dates of birth, and Health Insurance Claim Numbers of TRICARE beneficiaries and caused the prescriptions to be forwarded directly to Memorial Compounding Pharmacy in Houston, Texas without the specific knowledge of the beneficiary and without having examined or consulted with the beneficiary. The prescriptions were billed to the military health care program, TRICARE, by the pharmacy at the approximate cost of $9,000 - $13,000 per prescription and the prescriptions authorized multiple refills. Over 600 prescriptions in the names of approximately 140 beneficiaries were issued by Rodonaia in this manner outside the usual course of professional practice and without medical necessity.  Before the scheme could be detected, TRICARE paid approximately $6.7 million in TRICARE funds to Memorial Compounding Pharmacy. The indictment also alleges Rodonaia created patient files and records of the TRICARE beneficiaries as though he had examined or consulted with those patients and submitted those false records to the Defense Health Agency as part of an audit of the prescription scheme.

                The indictment also alleges the defendant violated the Anti-kickback statute by requiring Medicare and Medicaid beneficiaries seeking opioid treatment to pay cash for an office visit in excess of the amount which would have been reimbursed by the Medicare and Medicaid programs. The indictment further alleges that Rodonaia dispensed a Schedule IV controlled substance, Adipex-P or Phentermine, a weight control drug, outside the course of standard medical practice.

                If convicted, Rodonaia faces up to 10 years in prison for each count of health care fraud and a mandatory 2 years in prison for each count of aggravated identity theft.  A grand jury indictment is not evidence of guilt.

                This case is being investigated by the Defense Criminal Investigative Service, the Drug Enforcement Administration, Health and Human Services – Office of Inspector General, and the Texas Medicaid Fraud Control Unit. Assistant U.S. Attorney Robert L. Rawls is prosecuting this case.

                BEAUMONT, Texas –A 46-year-old federal inmate has been sentenced for escaping from a Bureau of Prisons facility in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today. 

                Robert Lloyd Young of Bruceville, Texas, pleaded guilty on Jan. 9, 2020, to escaping from federal custody and was sentenced to 18 months in federal prison by U.S. District Judge Thad Heartfield on June 23, 2020.  

                According to information presented in court, on Oct. 11, 2019, the Jefferson County Sheriff’s Office received an anonymous tip alerting them that inmates at the Bureau of Prisons Camp Facility in west Jefferson County were planning to escape from the facility in order to retrieve contraband that had been left for them in a field off Hillebrandt Road.  Law enforcement officers surrounded the area in concealed locations and within several hours observed four inmates approaching on foot.  All four inmates were apprehended after attempting to flee and detained.  A search of the inmates revealed several cellular telephones and a bottle of whisky.  All four were indicted by a federal grand jury on Nov. 6, 2019.

                “These prison escapes have plagued Jefferson County for a long time.  They are unacceptable, and we are committed to working with BOP to better secure the prison,” said U.S. Attorney Stephen J. Cox.  “In the meantime, federal prison inmates are on notice that if they escape from prison, they will be caught and prosecuted and will spend additional time in a higher security prison.”

                Young was serving a federal prison sentence for a drug trafficking conviction out of the Western District of Texas.  Young’s new prison sentence will begin once he has served the remainder of his original prison sentence.

                This case was investigated by the Jefferson County Sheriff’s Office and the U.S. Marshals Service and prosecuted by Executive Assistant U.S. Attorney Brit Featherston.

A Texas man was charged in an indictment unsealed today with wire fraud, false statements to a financial institution and money laundering for his alleged participation in a scheme to file fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Stephen J. Cox of the Eastern District of Texas, Special Agent in Charge Donald Abram of SBA Office of Inspector General (OIG) Central Region, Inspector General J. Russell George of the Treasury Inspector General for Tax Administration’s Cybercrime Investigations Division, Acting Deputy Inspector General Richard Parker of the Federal Housing Finance Agency, Assistant Special Agent in Charge Kevin Caramucci of the IRS Criminal Investigation (CI) Dallas Field Office, and Inspector General Jay N. Lerner of Federal Deposit Insurance Corporation (FDIC) made the announcement.

Fahad Shah, 44, of Murphy, Texas, was charged in an indictment filed in the Eastern District of Texas with three counts of wire fraud, one count of false statements to a bank, and four counts of money laundering.  Shah was arrested this morning and appeared today before U.S. Magistrate Judge Christine A. Nowak of the Eastern District of Texas. 

The indictment alleges that Shah submitted fraudulent applications for over $3 million in PPP loans to two different SBA-approved lenders filed under the name of WBF Weddings by Farah Inc. In these applications, Shah claimed to have over 120 employees earning wages when, in fact, no employees worked for his business at the time, the indictment alleges.  The indictment also alleges that Shah submitted fraudulent documentation in support of his applications.  Shah ultimately received over $1.5 million in PPP loan funds and used the funds primarily for personal purposes, including purchasing a Tesla, personal investments, and home mortgage payments, the indictment alleges. 

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.  The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses. 

A federal criminal indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the SBA OIG’s Houston Division, Treasury Inspector General for Tax Administration Southern Field Division, Federal Housing Finance Agency OIG Dallas Field Office, IRS-CI Dallas Field Office, and FDIC OIG Dallas Regional Office. 

Trial Attorneys Della Sentilles and Louis Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Frank Coan and Robert Wells for the Eastern District of Texas are prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

SHERMAN, Texas –  A 44-year-old Murphy, Texas man was charged in an indictment unsealed today with wire fraud, false statements to a financial institution and money laundering for his alleged participation in a scheme to file fraudulent loan applications seeking more than $3 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

          Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Stephen J. Cox of the Eastern District of Texas, Special Agent in Charge Donald Abram of SBA Office of Inspector General (OIG) Central Region, Inspector General J. Russell George of the Treasury Inspector General for Tax Administration’s Cybercrime Investigations Division, Acting Deputy Inspector General Richard Parker of the Federal Housing Finance Agency, Assistant Special Agent in Charge Kevin Caramucci of the IRS Criminal Investigation (CI) Dallas Field Office, and Inspector General Jay N. Lerner of Federal Deposit Insurance Corporation (FDIC) made the announcement.

          Fahad Shah was charged in an indictment filed in the Eastern District of Texas with three counts of wire fraud, one count of false statements to a bank, and four counts of money laundering.  Shah was arrested this morning and appeared today before U.S. Magistrate Judge Christine A. Nowak of the Eastern District of Texas. 

          The indictment alleges that Shah submitted fraudulent applications for over $3 million in PPP loans to two different SBA-approved lenders filed under the name of WBF Weddings by Farah Inc. In these applications, Shah claimed to have over 120 employees earning wages when, in fact, no employees worked for his business at the time, the indictment alleges.  The indictment also alleges that Shah submitted fraudulent documentation in support of his applications.  Shah ultimately received over $1.5 million in PPP loan funds and used the funds primarily for personal purposes, including purchasing a Tesla, personal investments, and home mortgage payments, the indictment alleges. 

          “This is the third time our District has charged an individual for perpetrating a fraud on the Paycheck Protection Program,” said U.S. Attorney Stephen J. Cox.  “The Paycheck Protection Program is a vital tool for American small businesses and their employees who are struggling with the economic fallout from this pandemic.  The Eastern District of Texas is committed to pursuing fraudsters who exploit this program to the detriment of others.”

          The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

          The PPP allows qualifying small-businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.  The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses. 

          A federal criminal indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

          This case was investigated by the SBA OIG’s Houston Division, Treasury Inspector General for Tax Administration Southern Field Division, Federal Housing Finance Agency OIG Dallas Field Office, IRS-CI Dallas Field Office, and FDIC OIG Dallas Regional Office. 

          Trial Attorneys Della Sentilles and Louis Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Frank Coan and Robert Wells for the Eastern District of Texas are prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

BEAUMONT – U.S. Attorney Stephen J. Cox announced the hiring of Nicholas Ganjei as the First Assistant U.S. Attorney for the Eastern District of Texas. 

First Assistant U.S. Attorney (FAUSA) Nicholas Ganjei arrived in Texas this week where he will assume the role as second in command in the Eastern District of Texas, which includes 43 counties stretching from the Oklahoma border to the Gulf of Mexico. The district includes six fully staffed offices in Beaumont, Plano, Tyler, Sherman, Texarkana, and Lufkin with 120 employees, including 55 prosecutors. 

                Nick Ganjei has served as an Assistant United States Attorney for twelve years, most recently prosecuting fraud, public corruption, and other white-collar matters.  Prior to that, Mr. Ganjei prosecuted organized crime, narcotics, and human trafficking cases, as well as border offenses.  He comes to the office from the District of New Mexico, where he served in both the Albuquerque main office and the Las Cruces border office.  Mr. Ganjei also worked at the Department of Justice in Washington as Nominations and Policy Counsel in the Office of Legal Policy, where he maintained a portfolio related to nominations and criminal justice matters.  Prior to joining the Department of Justice, Mr. Ganjei clerked for the Honorable Richard Allen Griffin of the Sixth Circuit Court of Appeals and Ralph R. Erickson of the Eighth Circuit Court of Appeals (previously of the United States District Court for the District of North Dakota).  Mr. Ganjei has also taught on the subjects of civil, criminal, and constitutional law, at both the collegiate and law school level.  Mr. Ganjei is a graduate of the University of California, Berkeley School of Law.

                “Nick is a great addition to the Eastern District of Texas and will do a wonderful job working with our team, our law enforcement partners, and our judges,” said U.S. Attorney Stephen J. Cox.  “He comes to Beaumont with all the qualities that we admire – he is hard-working and smart, he has sound judgment, and he is a servant leader who excels in personal diplomacy.”  Cox also commended Assistant U.S. Attorney Heather Rattan for her valued service as First Assistant U.S. Attorney.  “Heather is a terrific litigator whose passion for the work of the District is invaluable.”  AUSA Rattan will continue to serve the Eastern District of Texas as a seasoned and highly competent federal prosecutor.

                “Over the past decade, Nick has established a reputation as a dedicated and talented prosecutor in the District of New Mexico,” said District of New Mexico U.S. Attorney John C. Anderson.  “While we will miss his many contributions to our office, I am confident that Nick’s leadership skill and litigation experience will be put to good use in the service of the Eastern District of Texas.”

                                                                                                                                                                     

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MARSHALL, Texas – A 41-year-old Hughes Springs, Texas man has been sentenced to federal prison for drug trafficking crimes in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

               Oscar Dean Davis pleaded guilty on Feb. 4, 2020, to conspiracy to distribute and distribution of methamphetamine and was sentenced to 264 months in federal prison today by U.S. District Judge Rodney Gilstrap.              

               According to information presented in court, Davis was the leader of an illegal drug distribution network responsible for obtaining multiple-kilogram quantities of methamphetamine from a Mexican-based supplier and selling them throughout East Texas.  Davis admitted to acquiring large numbers of firearms, including pistols, rifles, and high-caliber weapons, and transporting them to the U.S.-Mexico border as a medium of exchange for methamphetamine.  Finally, Davis admitted to directing others to use money services businesses to wire transfer proceeds from methamphetamine sales to his supplier in Mexico.

               Seventeen other individuals have previously pleaded guilty to their involvement in the drug and firearms trafficking organization. Stephanie Bennett Mata, 35, of Daingerfield, Gary O'Neal Gibson, 62, of Henderson, Felix Antonio Jaime, 37, of Mt. Pleasant, Charlie Jake Porter, 34, of Marietta, Tony King, 41, of Daingerfield, and Gerald Wayne Furlow, 55, of Hughes Springs, each pleaded guilty to possessing or conspiring to possess with the intent to distribute methamphetamine.  Raymond Danny Moore, 43, of Avinger, Jennifer Michelle Kirkham, 39, of Jena, Louisiana,  Donna Gail Sertuche, 53, of Hughes Springs, Jamie Nicole Browning, 40, of Gilmer, Joshua Nickie Soto, 35, of Leesville, Johnny Duayne Tucker, 52, of Hughes Springs, and James Drakeford Scholl, 41, of Naples, pleaded guilty to either unlawfully obtaining firearms from licensed dealers or transporting firearms to the U.S.-Mexico border in furtherance of the drug trafficking conspiracy.  Christina Felipe, 37 of Hughes Springs, Nohemi Aniceto, 39, of San Diego, California, Randall Dean Harper, Jr., 42, of Daingerfield, and Angelica Arreola, 28, of El Paso, have pleaded guilty to conduct including transferring or transporting money from the U.S. to Mexico.

               This case is the result of a two-year joint investigation by the Organized Crime Drug Enforcement Task Force (OCDETF).  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

               Davis was indicted by a federal grand jury on Oct. 10, 2018 and charged with drug trafficking violations.   

               This case was investigated by the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Lucas Machicek.

BEAUMONT, Texas – A 52-year-old Groves, Texas man has been sentenced to 78 years in federal prison for violations related to an arson and insurance fraud scheme in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.               

          Patrick Wayne Bronnon was found guilty on Oct. 21, 2019 of 40 charges including conspiracy to commit mail fraud and use of a fire in commission of a felony.  Bronnon was sentenced to 940 months in federal prison today by U.S. District Judge Marcia A. Crone. 

Breakdown:        16 counts of mail fraud and conspiracy to commit mail fraud—100 months on each count to run concurrently.

                          First count of Use of a Fire in commission of mail fraud (Arson)—120 months consecutive to the 100 months above.

                          Second count of Use of a Fire in commission of mail fraud—240 months consecutive to the 220 months above  

                          Third count of Use of a Fire in commission of mail fraud—240 more months consecutive to the 460 months above

                          For a total of 940 months.

          “This sentence is deserved not only because of the tremendous loss to insurance companies, but also in light of the danger Bronnon imposed on our first responders every time he set a fire,” said U.S. Attorney Stephen J. Cox.  “That he put his own greed ahead of the lives of others has cost him his freedom for a long time.”

          According to information presented in court, beginning in 2011, Bronnon, and others, began executing a scheme to defraud various insurance companies through fraudulent claims on homes and vehicles.  The scheme involved identifying a low value property and purchasing it through a co-defendant straw purchaser.  Within a few weeks of a down payment being made, Bronnon or an associate would intentionally damage the home, typically by fire or water, in order to collect insurance proceeds.  In total, nine fraudulent fire claims, three fraudulent water damage claims, and two fraudulent theft claims were filed with various insurance companies on nine different addresses, totaling approximately $1.7 million in fraudulent payments. The properties were located in Port Arthur, Port Neches, Beaumont, and Sugarland, Texas.

This case was investigated by the U.S. Postal Inspection Service, National Insurance Crime Bureau and prosecuted by Assistant U.S. Attorney Joseph R. Batte. 

BEAUMONT, Texas – Two Buna, Texas brothers have been sentenced to federal prison for drug trafficking crimes in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

                James Joseph Fabela, 41, and Benjamin Jason Fabela, 36, each pleaded guilty on Nov. 15, 2019, to conspiracy to distribute and to possess with intent to distribute methamphetamine and were each sentenced to 135 months in federal prison today by U.S. District Judge Marcia A. Crone today.  Ownership of their residence in Buna, Texas was also forfeited.                

                According to information presented in court, from as early as July 2016, the defendants have been involved in a drug trafficking enterprise trafficking methamphetamine in the Buna, Texas area.  James Fabela and Benjamin Fabela have supervised, managed and controlled the drug trafficking organization with personal knowledge of the distribution of methamphetamine.  In total, the organization sold more than 700 grams of methamphetamine in the Southeast Texas area.  The defendants were indicted by a federal grand jury on Sep. 5, 2018.

                This case is the result of an extensive joint investigation by the Organized Crime Drug Enforcement Task Force (OCDETF).  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.  Six other defendants have been convicted and sentenced for their roles in the conspiracies.                

                This case was investigated by the U.S. Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Texas Department of Public Safety, the Jefferson County Sheriff’s Office and the Jasper County Sheriff’s Office.  This case was prosecuted by Assistant U.S. Attorney Christopher Rapp.

BEAUMONT, Texas – A Beaumont businessman, his wife, and son have been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.                

          Larry Earnest Tillery, 70, Judy Kay Tillery, 63, and Brian Tillery, 47, all of Beaumont, pleaded guilty on June 25, 2019 to federal charges and were sentenced today by U.S. District Judge Thad Heartfield.

          Larry Tillery pleaded guilty to engaging in monetary transactions in property derived from specified unlawful activity and tax evasion.  Today he was sentenced to 33 months in federal prison.  Tillery was ordered to pay restitution in the amount of $1,000,040.00 and to forfeit approximately $2 million in cash, jewelry, and sports memorabilia that were proceeds of his illegal gambling enterprise.  A money judgment of $32,758,541.00 was also ordered by the court.  

          Judy Tillery pleaded guilty to structuring of financial transactions to evade reporting requirements and was sentenced to serve two years federal probation.  Judy Tillery shares the forfeiture judgment with her husband.

          Brian Tillery pleaded guilty to engaging in monetary transactions in property derived from specified unlawful activity and was sentenced to two years of federal probation.  Brian Tillery was ordered to forfeit approximately $245,477.00 and a residence on Christina Court in Beaumont with an appraised value of approximately $600,000.00 that was determined to be proceeds of the illegal gambling enterprise.  Additionally, a money judgment of $700,000.00, which represents the proceeds of the illegal gambling enterprise.

          According to information presented in court, Larry Tillery was engaged in the business of accepting illegal wagers on sporting events from 1985 until April - 2017.  Tillery owned and operated Daylight Motors, a used car dealership, and Lamar Capital, a holding company for Daylight Motors, and used these two companies as a front to launder illicit proceeds from his illegal gambling enterprise.   

          Larry Tillery used a website to receive and track wagers from his betting clients, allowing his bettors to place wagers on sporting events, including professional and collegiate basketball, baseball, and football games.  Judy assisted her husband in laundering cash proceeds of his illegal gambling activities by depositing cash into her personal bank account at Beaumont Community Credit Union in Beaumont, Texas, and then writing checks to bank accounts controlled by her husband.  Judy Tillery structured these cash deposits in amounts under $10,000 in an attempt to evade federal currency transaction reporting requirements.

          Brian Tillery, Larry Tillery’s son, aided the bookmaking enterprise by collecting money from sports bettors; making payments to bettors on Larry’s behalf; checking the online wagers on a regular basis to make Larry aware of what bets were placed on which games; accepting illegal gambling funds from Larry and making wire transfers to pay illegal gambling debts for Larry; and mailing packages of currency in excess of $10,000 – derived from illegal gambling activities – via the United States Postal Service at the request of Larry. 

          Larry Tillery knew that despite the fact he was violating Texas state and federal law,  federal tax law nonetheless required him to register as a bookmaker with the Internal Revenue Service and to file monthly excise tax returns to report total wagers he accepted during the month.  Larry also knew that he was required to pay gross wagering excise taxes of 2% on wagers he accepted each month, but he failed to report or pay taxes to the IRS based on the wagers he accepted each month.  From September through November of 2016, Larry Tillery accepted at least 450 wagers totaling $5,060,150. These wagers are subject to the 2% federal gross wagering excise tax, and Larry evaded gross excise wagering taxes of $29,717 in September 2016, $34,423 in October 2016 and $37,063 in November 2016 for a three month total of $101,203.  

          Between 2011 and 2016, Larry Tillery accepted at least $52 million in illegal wagers on sporting events.  Larry did not report these wagers to the IRS or pay gross excise taxes. The gross wagering taxes that resulted from wagers Larry Tillery accepted between 2011 and 2016 total $1,040,000.

          The investigation traced a total of 125 financial transactions in excess of $10,000 derived from illegal gambling that utilized the United States banking system.  These financial transactions total $32,383,841 and occurred between 2010 and 2016.

          “These sentences imposed today on the Tillery family demonstrate the Department’s commitment to hold criminal enterprises accountable,” said U.S. Attorney Stephen J. Cox.  “Illegal gambling activity and tax evasion will not be tolerated in the Eastern District of Texas.”

          “Today’s sentencing and forfeiture order are the culmination of a six-year multi-agency criminal investigation into one of the largest illegal sports gambling and money laundering operations in U.S. history,” said Mark Dawson, special agent in charge of Homeland Security Investigation (HSI) Houston. “Working together with our federal partners, we have successfully disrupted the Tillery family criminal enterprise and sent a message that we are united in our efforts to investigate and prosecute financial crimes.”

          “Most individuals file truthful and accurate tax returns voluntarily and pay their fair share of taxes," said Gerardo Gomez, Acting Assistant Special Agent in Charge, IRS Criminal Investigation.  "IRS Special Agents will continue to investigate individuals like Mr. Tillery, who gain illicit profits and evade their taxes at the expense of law-abiding taxpayers.”

               This case was investigated by Homeland Security Investigations and the Internal Revenue Service, Criminal Investigation, and is being prosecuted by Assistant U.S. Attorney Joseph R. Batte.

TEXARKANA, Texas – A 31-year-old Starr County, Texas, man has been sentenced to federal prison for drug trafficking, and a 27-year-old Titus County, Texas, man has pleaded guilty to drug trafficking in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

               Armando Moreno Jr. pleaded guilty on Feb. 27, 2020, to conspiring to distribute controlled substances and was sentenced to 108 months in in federal prison by U.S. District Judge Robert W. Schroeder III on June 10, 2020. He was also ordered to forfeit $350,000.00 in drug proceeds.

               According to information presented in court, Moreno was stopped for a traffic violation on Oct. 29, 2019, in George West, Texas, in Live Oak County. A search of the vehicle revealed  almost $350,000.00 in U.S. currency hidden in a secret compartment built into the vehicle. Moreno, traveling with his wife and two children, admitted to conspiring with his co-defendant, Jose Armando Rosales-Bernal and others to distribute cocaine. Moreno described how he had trafficked at least 15 kilograms of cocaine from Mexico to his co-conspirators in Dallas, and that the money hidden in his car was drug proceeds destined for Mexico.

               Gerardo Cabrera Ramirez pleaded guilty to conspiring to distribute controlled substances before U.S. Magistrate Judge Caroline M. Craven on June 11, 2020. Ramirez agreed to forfeit $7,500.00 in drug proceeds.

               According to information presented in court, Ramirez conspired with Rodolfo Javier Falcon, Eleazar Martinez Reyes, and others to distribute cocaine and methamphetamine. Ramirez admitted that he is personally responsible for distributing more than 500 grams of methamphetamine, which he had obtained from Falcon and Reyes. Specifically, on Sep. 11, 2018, and on Jan. 1, 2019, Ramirez led police on a foot chase and a dangerous vehicle pursuit when officers attempted to stop him while trafficking methamphetamine. Ramirez also admitted that his flight from police in a vehicle recklessly created a substantial risk of death or serious bodily injury to others.

               Under federal statutes, Ramirez faces a minimum of 10 years and up to life in federal prison at sentencing. The statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

               Operation Dirty Bird is a long-term drug trafficking and money-laundering investigation that has already led to the seizure of more than $500,000.00 in U.S. Currency, almost 40 kilograms of cocaine, more than a quarter kilogram of methamphetamine, nine firearms, and multiple vehicles.

               Rosales-Bernal, Julio Villarreal, Falcon, Claudia Claribel Gardea, Jose Geraldo Ornelas-Pineda, Dalia Janes Campos Rosales, and Reyes were previously charged and arrested as a result of this investigation. Ornelas-Pineda has pleaded guilty and has been sentenced. Gardea has pleaded guilty and is awaiting sentencing. Rosales-Bernal, Villarreal, Falcon, Campos Rosales, and Reyes have pleaded not guilty and are awaiting trial. This case is pending in the Texarkana Division of the Eastern District of Texas.

               If convicted, Rosales-Bernal, Villarreal, Falcon, Campos Rosales, and Reyes, face a minimum of 10 or 15 years and as much as life in federal prison.

               This case is being investigated by the Mount Pleasant office of the Texas Department of Public Safety, Criminal Investigation Division. In addition, the following agencies have played critical roles in this investigation: the Dallas office of Homeland Security Investigations; the Mesquite, Texas, Police Department SWAT team; the Texas National Guard; the Texas Department of Public Safety, Highway Patrol Division and Aircraft Division; the George West, Texas, Police Department; the 23rd Judicial Drug Task Force in Dickson, Tennessee; and the Mount Pleasant, Texas, Police Department. The case is being prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

TEXARKANA, Texas – A 48-year-old New Boston, Texas, man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.                

            Armando Moya was found guilty on Oct. 18, 2019, of conspiracy to possess with intent to distribute and distribution of heroin, fentanyl, and cocaine.  Moya was sentenced to 320 months in federal prison today by U.S. District Judge Robert W. Schroeder III.  Moya was also ordered to submit to forfeiture of $4 million and an additional $198,184.00 which had been seized during this law enforcement operation.

            According to information presented in court, on June 7, 2018, law enforcement officers from the Drug Enforcement Administration and supporting law enforcement agencies executed a search warrant at Moya’s home. During the search, law enforcement officers located $198,184.00 in rubber-banded bundles of cash hidden in boxes in Moya’s closet with a pistol. Moya then confessed to being part of an international drug-trafficking ring: smuggling large quantities of drugs from Mexico to cities across the United States and returning with large quantities of United States currency. Moya described how he received drugs from his brother, Jose Roberto Moya. He also explained that the bulk currency hidden in his house was drug proceeds from New York that was destined for Mexico. In addition to his brother, Armando Moya identified multiple people involved in their drug-trafficking conspiracy, including their boss in Mexico named Don Roberto. The defendant’s brother, Jose Roberto Moya, was arrested earlier on his way to Armando Moya’s New Boston residence with eight kilograms of heroin and one kilogram of fentanyl. Testimony and extensive digital evidence at trial established that Armando Moya was responsible for delivering as much as 150 kilograms of heroin, fentanyl, and cocaine from November 2017 through June 2018 to Illinois, New York, Ohio, Tennessee, and Pennsylvania. Special Agents from the DEA also testified at trial regarding the deadly role that heroin and fentanyl are currently playing in the nation-wide opioid epidemic.

            Armando Moya was indicted by a federal grand jury on June 21, 2018 and charged with federal drug trafficking crimes.

            The case was investigated by the Drug Enforcement Administration’s Tyler, Corpus Christi, and Chicago offices and prosecuted by Assistant U.S. Attorneys Jonathan R. Hornok and D. Ryan Locker.

SHERMAN, Texas – A 57-year-old former bank president has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox today.

               Anita Gail Moody, of Cooper, Texas, pleaded guilty to conspiracy to commit bank fraud and arson today before U.S. Magistrate Judge Christine A. Nowak.

               According to information presented in court, Moody was President of Enloe State Bank in Cooper, Texas.  On May 11, 2019, the bank had a fire that was determined to be arson.  The fire was contained to the bank’s boardroom, but the entire bank suffered smoke damage.  Several files had been stacked on the boardroom table, all of which were burned in the fire. Coincidentally, the bank was scheduled for a review by the Texas Department of Banking the next day.  Further investigation into the fire and the bank revealed that Moody had been creating false nominee loans in the names of several people, including some actual bank customers.  Moody eventually admitted to setting the fire in the boardroom to cover up the criminal activity concerning the false loans.  She also admitted to using the fraudulently obtained money to fund her boyfriend’s business, other businesses of friends, and her own lifestyle.  The fraudulent activity, which began in 2012, resulted in a loss to the bank of approximately $11 million. 

               Moody has agreed to a sentence of 84 months in federal prison and will pay restitution in the amount of $11,136,241.82  A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.

               This case was investigated by the FDIC-OIG and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecuted by Assistant U.S. Attorneys Maureen Smith and Wes Wynne.

LITTLE ROCK, Arkansas – A 36-year-old Arkansas Department of Corrections inmate has been indicted for federal violations in the Eastern District of Arkansas, announced Eastern District of Texas U.S. Attorney Stephen J. Cox today.

               Jeffrey S. Williams was indicted by a federal grand jury in Little Rock, AR, on June 4, 2020 and charged with mailing threatening communications.

               According to the indictment, in March 2018, Williams is alleged to have mailed a letter to the federal courthouse in Memphis, TN, in which he threatened a U.S. District Judge.  Then in May 2018, February 2019, and March 2020, Williams is alleged to have mailed letters to the federal courthouse in Little Rock in which he threatened two U.S. District Judges and an Assistant U.S. Attorney.  Each threatening letter was mailed in violation of the laws of the United States.

               Williams is currently an inmate in the Arkansas Department of Corrections as a result of a robbery and theft conviction in the Pulaski County Circuit Court.

               If convicted, Williams faces up to 40 years in federal prison.

               This case is being investigated by the Little Rock office of the U.S. Postal Inspection Service and prosecuted by Eastern District of Texas Assistant U.S. Attorney Jonathan R. Hornok.

A grand jury indictment is not evidence of guilt.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

SHERMAN, Texas – A 50-year-old Whitewright, Texas woman has been sentenced to federal prison for violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox and FBI Dallas Special Agent in Charge Matthew J. DeSarno today.

            Beverly Diane Cross pleaded guilty on Dec. 4, 2019, to wire fraud and was sentenced to 102 months in federal prison today by U.S. District Judge Amos L. Mazzant III.  She was also ordered to pay restitution in the amount of $620,408.14. 

            According to information presented in court, from 2015 through June 2019, Cross worked at MicroFab as its accountant.  Cross abused her position of trust as the company’s accountant to embezzle funds from MicroFab.  Cross falsified payroll data and other company documents to pay herself unearned salary amounts and undue expense reimbursements over a four-year period.  During the last two years of her fraud scheme, the average monthly amount of money she embezzled from the company totaled around four times her monthly salary.  In one instance, Cross bought a car from another MicroFab employee for her son, but stole the precise amount of money from MicroFab to purchase the car.  Cross’s fraudulent actions resulted in a loss of approximately $620,000 to MicroFab and caused a considerable negative impact to the company and its employees, many of which suffered salary reductions, and two of which lost their jobs. 

            “The defendant methodically planned and executed a scheme to steal from her employer with total disregard for the company or her co-workers,” said U.S. Attorney Stephen J. Cox.  “However, she failed to account for the tenacity and perseverance of not only our federal agents, but the very employers who trusted her.” 

            “The defendant’s decision to steal from her employer caused salary reductions, job loss, and erased the earnings the company worked to accumulate for over 35 years,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “Financial crime is not a victimless crime. The FBI and our law enforcement partners will pursue anyone who uses their position of trust for personal gain.”

            This case was investigated by the Federal Bureau of Investigation’s Frisco Resident Agency of the Dallas Field Office and prosecuted by Special Assistant U.S. Attorney Todd M. Blessing and Assistant United States Attorney Christopher A. Eason.

SHERMAN, Texas – A 42-year-old Navarre, Florida man has been sentenced to federal prison for violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox and FBI Dallas Special Agent in Charge Matthew J. DeSarno today.

            Ivan T. Navarro-Jusino pleaded guilty on Dec. 18, 2019, to three counts of wire fraud and was sentenced to 120 months in federal prison today by U.S. District Judge Amos L. Mazzant III.  The defendant was also ordered to pay restitution in the amount of $482,000. 

            According to information presented in court, from August 2012 through May 2018, Navarro-Jusino lied to an individual in the Eastern District of Texas, telling him that Navarro-Jusino had a high-performing investment fund and could invest the victim’s money in that fund.  Navarro-Jusino also represented to the victim that there were a limited number of investors, leading the victim to believe that the fund was both exclusive and profitable.  The victim eventually gave the defendant over $500,000, his life savings, believing that the defendant would invest this money.  Instead, the defendant spent the funds on personal expenses such as tickets to a professional football game, a trip to Puerto Rico, and personal items such as a vehicle, jewelry, electronics, a car stereo, and furniture.  Additionally, Navarro-Jusino spent approximately $43,000 of the victim’s funds to repay loans that relatives had made and to purchase a local business, which ultimately failed.  Following receipt of the funds Navarro-Jusino lied about the status of the money in several emails that he sent to the victim telling him his money had grown to over $800,000 while in the investment fund—which was entirely false.  The victim of Navarro-Jusino's scheme lost $482,000.

            “The U.S. Attorney's Office and the FBI are focused on rooting out fraud and financial crime targeting individuals such this victim, who trusted the defendant with his life's savings," said U.S. Attorney Stephen J. Cox. "We will prosecute these crimes vigorously and to the full extent of federal law."

            “The FBI will continue to investigate businesses or individuals that use deceptive schemes to steal money from investors,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “We urge the public to use caution when researching investment opportunities and to contact us immediately if they become a victim of financial fraud.”

            This case was investigated by the Federal Bureau of Investigation’s Frisco Resident Agency of the Dallas Field Office and prosecuted by the U.S. Attorney’s Office in Plano.