Eastern District of Texas

TYLER, Texas – A 24-year-old Dallas woman has been sentenced to federal prison for her role in a series of violent crimes in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Chanel Collins pleaded guilty on Apr. 8, 2016 to aiding in the commission of a car-jacking and bank robbery and was sentenced to 36 months in federal prison by U.S. Appellate Court Judge Catherine Haynes on Feb. 27, 2017.

 

According to information presented in court, on Mar. 13, 2015, Collins drove LaQuaylan Patterson from Wood County, Texas, to an apartment complex in Tyler, Texas, so that he could commit an armed carjacking. Once they arrived at the complex, Patterson got out of Collins’ car, armed with a semiautomatic pistol, and told Collins to wait for his signal to her cell phone. Patterson then approach a woman, who was visiting her mother at the complex, brandished his pistol, and demanded the woman’s car keys. The woman surrendered the keys and Patterson got into her car and drove away. Patterson signaled Collins and she also departed the complex in her car. Collins and Patterson then drove the vehicles back to Wood County.

 

Later that day, Patterson used the stolen car to commit the second armed bank robbery. Collins drove her vehicle to a car wash in Big Sandy, Texas, and waited for Patterson as he robbed the 1st National Bank of Gilmer, located in Big Sandy. Patterson drove the stolen vehicle to the bank, brandished a pistol, climbed behind the teller counter, and demanded money from the tellers. The tellers stood aside as Patterson removed $29,734.00 from two cash drawers and put the money in a bag. Patterson then fled the bank with the cash and drove away in the stolen vehicle to meet Collins at the carwash. Once there, Patterson abandoned the stolen vehicle and fled with Collins in her vehicle. Collins and Patterson were indicted by a federal grand jury on June 17, 2015.

 

This case was investigated by the Federal Bureau of Investigation, Texas Department of Public Safety - Texas Rangers, Tyler Police Department, Big Sandy Police Department, and Lancaster Police Department, and prosecuted by Assistant U.S. Attorney Jim Noble.

BEAUMONT, Texas – Acting United States Attorney Brit Featherston announced today that four Southeast Texas men have been charged in a federal robbery conspiracy in the Eastern District of Texas.

 

According to complaints filed today in federal court, Micah Ledell Johnson, 37, of Humble, Texas; Darrell Paul Williams, 36, of Beaumont; Gerrick Leon Wade, 36, of Houston; and Eric Ray Johnson, 36, of Houston, are alleged to be involved in a conspiracy to commit interference with commerce by robbery in Beaumont, Corpus Christi, and the Houston metro area.

 

On Feb. 22, 2017, law enforcement officers in Beaumont attempted to stop a white Cadillac Escalade truck in the vicinity of Dowlen Road and Delaware. The vehicle would not stop and instead led officers on a vehicle pursuit until it came to a stop in the 3500 block of Delaware. The three men in the vehicle fled on foot but were captured and detained by law enforcement officers. A fourth man, whose involvement was already known to officers, was located and detained at a nearby service station. Interviews with the suspects revealed an alleged conspiracy to commit an armed robbery in violation of the Hobbs Act in Beaumont, but law enforcements officers successfully intervened and prevented them from succeeding.

 

If convicted, the defendants face penalties of up to 20 years in federal prison. 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.

 

This case is being investigated by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Beaumont Police Department, and the Houston Police Department. This case is being prosecuted by Assistant U.S. Attorney Lesley Woods.

TYLER, Texas – A 25-year-old Lancaster, Texas man has been sentenced to federal prison for violent crimes in the Eastern District of Texas, announced Acting U.S. Attorney Britt Featherston today.

 

LaQuaylan Wesley Patterson pleaded guilty on Aug. 23, 2016 to committing two armed bank robberies and a related car-jacking. Patterson was sentenced to 171 months in federal prison on Feb. 21, 2017 by U.S. District Court Judge Ron Clark.

 

According to information presented in court, on Aug. 8, 2014, Patterson robbed the Cornerstone Credit Union in Lancaster, Texas, where he brandished a pistol, climbed behind the teller counter, and demanded money from the tellers. The tellers removed $6,888.00 from cash drawers and put the money in a bag. Patterson then fled the bank, with the cash, and drove away in a stolen car. Patterson then drove the stolen vehicle to the 500 block of West Main Street, in Lancaster, where he abandoned the vehicle and fled on foot.

 

On Mar. 13, 2015, Patterson and co-defendant, Chanel Collins, drove from Wood County, Texas, to an apartment complex in Tyler, Texas, with the intent commit an armed carjacking. Once they arrived at the complex, Patterson got out of Collins’ car, armed with a semiautomatic pistol, and told Collins to wait for his signal to her cell phone. Patterson then approach a woman, who was visiting her mother at the complex, brandished his pistol, and demanded the woman’s car keys. The woman surrendered the keys and Patterson got into her car and drove away. Patterson signaled Collins and she also departed the complex in her car. Collins and Patterson then drove the vehicles back to Wood County.

 

Later that day, Patterson used the stolen car to commit the second armed bank robbery. Collins drove her vehicle to a car wash in Big Sandy, Texas, and waited for Patterson as he robbed the 1st National Bank of Gilmer, located in Big Sandy. Patterson drove the stolen vehicle to the bank, brandished a pistol, climbed behind the teller counter, and demanded money from the tellers. The tellers stood aside as Patterson removed $29,734.00 from two cash drawers and put the money in a bag. Patterson then fled the bank with the cash and drove away in the stolen vehicle to meet Collins at the carwash. Once there, Patterson abandoned the stolen vehicle and fled with Collins in her vehicle. Patterson was indicted by a federal grand jury on June 17, 2015.

 

This case was investigated by the Federal Bureau of Investigation, Texas Department of Public Safety - Texas Rangers, Tyler Police Department, Big Sandy Police Department, and Lancaster Police Department, and prosecuted by Assistant U.S. Attorney Jim Noble.

 

BEAUMONT, Texas – A 27-year-old Houston man has pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Hugo Alejandro Garcia pleaded guilty to conspiracy to possess with intent to distribute cocaine today before U.S. Magistrate Judge Keith Giblin.

 

According to information presented in court, on Oct. 27, 2016, law enforcement officers pulled over Garcia on Interstate 10 eastbound in Beaumont for a traffic violation. Garcia was extremely nervous and during questioning he provided officers with inconsistencies as to his travel plans. Garcia gave consent to search the vehicle which resulted in officers discovering four bundles wrapped in black electrical tape and concealed under the carpet in the trunk. Garcia admitted to transporting narcotics and stated he was on his way to Louisiana with the drugs. The bundles contained four kilograms of cocaine. Garcia was indicted by a federal grand jury on Nov. 2, 2016.

 

Under federal statutes, Garcia faces up to 20 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 Drug Enforcement Administration and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Christopher T. Rapp.

SHERMAN, Texas — A 29-year-old Trophy Club, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Jayce Craft pleaded guilty on July 28, 2016, to distribution of child pornography and was sentenced to 240 months in federal prison today by U.S. District Judge Amos L. Mazzant.

 

1. to information presented in court, Craft came to the attention of law enforcement when it was discovered that an individual utilizing an online file hosting service and online accounts associated with his identity had uploaded child pornography into a cloud storage account. Agents obtained a search warrant for a residence in Trophy Club that was associated with the online activity, which was executed on Sep. 15, 2015. Agents seized electronic media belonging to Craft that was found to contain a substantial amount of child pornography. In addition, it was discovered that Craft had distributed child pornography to, and received files from, other individuals through the use of electronic mail accounts. As part of his plea, Craft admitted that the files depicted children, including prepubescent children, engaged in sexually explicit activity, as well as sadistic/masochistic abuse. Craft was indicted by a federal grand jury on Oct. 14, 2015, and charged with child pornography violations.

 

This case was prosecuted 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 was investigated by Homeland Security Investigations, Flower Mound Police Department and Trophy Club Police Department and prosecuted by Assistant U.S. Attorney Marisa Miller.

BEAUMONT, Texas - A 25-year-old Jasper, Texas man has been sentenced to federal prison for federal firearms violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Floyd Michael Richardson pleaded guilty on Oct. 4, 2016, to being a felon in possession of a firearm and was sentenced to 70 months in federal prison today by U.S. District Judge Thad Heartfield.

 

According to information presented in court, on Mar. 27, 2016, law enforcement officers responded to a call from the Jasper Manor Apartments. An officer observed Richardson exiting a vehicle at the apartments with crack cocaine in plain view on the vehicle’s center console. Richardson fled the scene as officers attempted to apprehend him. A search of the vehicle revealed a loaded pistol, which had been reported stolen just a few days earlier. Further investigation revealed Richardson was a convicted felon having been previously found guilty in Jefferson County, Texas of theft in 2010 and robbery in 2010. As a convicted felon, Richardson is prohibited from owning or possessing firearms or ammunition. Richardson was indicted by a federal grand jury on Aug. 3, 2016 and charged with federal firearms violations.

 

This case was prosecuted as part of Project Safe Neighborhoods, 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 Jasper Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney John B. Ross.

BEAUMONT, Texas - A 44-year-old Houston man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

John Nealy Holt pleaded guilty on Aug. 5, 2016, to conspiracy to possess with intent to methamphetamine and was sentenced to 174 months in federal prison today by U.S. District Judge Thad Heartfield.

 

On Mar. 5, 2015, a federal grand jury returned an indictment charging 24 individuals with conspiring to possess with the intent to distribute methamphetamine, possessing firearms in furtherance of a drug trafficking crime, and using facilities of interstate commerce to facilitate the interstate distribution of illegal narcotics. The defendants were responsible for trafficking methamphetamine to customers across the United States, including in the Eastern District of Texas. Over the span of the conspiracy, this drug ring obtained over 150 kilograms of methamphetamine from numerous Mexican sources of supply that was subsequently redistributed in Houston, Texas, Port Arthur, Texas, Southwest Louisiana, and other areas across the United States. During the course of the investigation, officers recovered numerous stolen automobiles and other valuable property, which investigators allege was acquired by members of the drug trafficking ring in exchange for methamphetamine.

 

This case is the result of an extensive 4 ½ 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. During the course of this operation, agents have successfully arrested over 38 individuals and have seized multi-kilogram quantities of methamphetamine, kilogram quantities of drug laced hallucinogen “gummy” candies, 22 firearms, over 400 lbs. of ammunition, and recovered 17 stolen automobiles, 5 stolen motorcycles, 2 stolen trailers, and hundreds of antiques. Holt was the final defendant to be sentenced as a result of this investigation. The other defendants were sentenced to federal prison as follows:

 

1. Leslie Dianne Baron, 32, of Houston, 168 months;

2. Christopher Dean Inman, 41, of Houston, 121 months;

3. Leslie Lee Inman, 37, of Houston, 168 months;

4. Eric Lazaro Castaneda, 38, of Houston, 87 months;

5. Carlos Eduvijis Rosales, 38, of Houston, 151 months;

6. Travis Alejandro Lyon, 34, of Houston, 60 months;

7. Gilbert Gomez, 37, of Baytown, Texas, 292 months;

8. Joshua Lee Lanman, 38, of Jersey Village, Texas, 60 months;

9. Albert Cardenas, Jr., 23, of Houston, 87 months;

10. Burton Paul Dupuy, 44, of Shreveport, LA, 24 months;

11. Amado Tobar, 44, of Dallas, 137 months;

12. Joseph Louis Henning, 58, of Houston, 200 months;

13. Kenneth Sheldrick, 37, of Houston, 135 months;

14. Luis Fernando Garcia, 23, of Port Arthur, Texas, 87 months;

15. Gerardo Chavez, 38, of Nederland, Texas, 121 months;

16. Alex Trejo, 28, of Lake Elsinore, CA, 80 months;

17. Michael Broughton, 39, of Port Arthur, Texas, 63 months;

18. Shawn Key, 37, of New Caney, Texas, 188 months

19. Taber Price, 39, of Humble, Texas, 151 months;

20. Britanny Danielle Beckham, 31, of Hearne, Texas, 33 months;

21. Ricardo Cortes Lozano, 44, of Baytown, Texas, 12 months;

22. Pablo Hernandez, 39, of Houston, 87 months; and

23. Thurman Clevenger, 51, of Houston, 12 months.

     

     

    This case was investigated by the Drug Enforcement Administration Beaumont Resident Office, Internal Revenue Service – Criminal Investigations, the Port Arthur Police Department, and the Houston Police Department, and prosecuted by Assistant U.S. Attorneys Paul A. Hable and Michelle S. Englade.

SHERMAN, Texas — A 63-year-old The Colony, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

David M. Kruse pleaded guilty on Oct. 6, 2016, to possession of child pornography and was sentenced to 10 years in federal prison today by U.S. District Judge Amos L. Mazzant.

 

1. to information presented in court, in August 2015, federal agents obtained a search warrant for a computer owned by Kruse after receiving information about an individual who had accessed child pornography from a site known to host that material. On that date, agents spoke with Kruse who admitted to owning the computer, which was later found to contain more than 20,000 images and videos of child pornography, including files depicting prepubescent minors and sadistic/masochistic conduct. Kruse was indicted by a federal grand jury on Aug. 13, 2015, and charged with child pornography violations.

 

This case was prosecuted 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 was investigated by the Federal Bureau of Investigation and the Plano Police Department and prosecuted by Assistant U.S. Attorney Marisa Miller.

SHERMAN, Texas — A 40-year-old Wylie, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Jesse McQuade pleaded guilty on Sep. 13, 2016, to possession of child pornography and was sentenced to 97 months in federal prison today by U.S. District Judge Amos L. Mazzant.

 

According to information presented in court, in April 2016, an undercover officer was conducting an investigation into the sharing of child pornography files on a peer-to-peer network. The officer downloaded a number of files of child pornography, which resolved to a computer user at McQuade's home in Wylie. A federal search warrant was executed on Aug. 9, 2016, during which agents seized digital media, including a 1TB hard drive that was found to contain child pornography. McQuade admitted that he knew that the items on the hard drive were child pornography, including files depicting prepubescent minors and sadistic/masochistic conduct.

 

This case was prosecuted 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 was investigated by the Federal Bureau of Investigation, the Plano Police Department and the Wylie Police Department and prosecuted by Assistant U.S. Attorney Marisa Miller.

BEAUMONT, Texas - A 40-year-old Orange, Texas man has been sentenced to federal prison for federal violations related to the murder of a Port Acres woman in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Ozzie Nelson Ibarra pleaded guilty on Aug. 9, 2016, to conspiracy to interfere with interstate commerce by robbery and conspiracy to use and carry firearms during a crime of violence and drug trafficking crime. Ibarra was sentenced to 420 months in federal prison today by U.S. District Judge Marcia A. Crone.

 

According to information presented in court, beginning in 2001, Ibarra and others started robbing women in the parking lots of stores and businesses in Port Arthur, Texas. Ibarra admitted to committing the robberies for the purpose of supporting his crack cocaine habit. The robberies increased to almost daily between 2009 and 2011. During the investigation of these crimes, it was discovered that Ibarra and his co-defendants were responsible for the May 2010 death of a Port Acres, Texas woman who was shot while driving on West Port Arthur Road. Once law enforcement officers became aware of Ibarra’s involvement, they were able to obtain video surveillance from area businesses that verified Ibarra’s presence in the area at the time of the shooting. Ibarra was indicted by a federal grand jury on May 4, 2016.

 

“The murder of Allison Neil Clark in 2010 was long held as an unsolved cold case, but it was never forgotten by detectives with the Port Arthur Police Department or Allison’s family,” said Acting U.S. Attorney Brit Featherston. “This tenacious team, joined by federal prosecutor Lesley Woods and Port Arthur Police detectives Alton Baise and Paul Arvizo, focused their time and skills to piece this case together. Today, justice was finally served for the family of Allison, and for the investigators, and the citizens of Port Arthur who were egregiously harmed by these individuals. Ozzie Ibarra will harm no one else in the future!”

 

This case was investigated by the Port Arthur Police Department, Drug Enforcement Administration and Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Lesley Woods.

BEAUMONT, Texas - A 34-year-old Beaumont, Texas man has been sentenced to federal prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Billy Ray Joseph, Jr., pleaded guilty on Oct. 13, 2016, to conspiracy to distribute and possession with intent to distribute heroin and was sentenced to 135 months in federal prison today by U.S. District Judge Marcia A. Crone.

 

According to information presented in court, on Mar. 28, 2016, acting on leads from investigators in Houston, agents and investigators conducted surveillance of an address in Beaumont, Texas on McLean Street where they observed Joseph exit the residence with a Styrofoam cup in his hand and get in a vehicle. Joseph was then detained by officers after committing multiple traffic violations. Investigators searched the residence, which was Joseph’s home at the time, and recovered a firearm, crack cocaine, and plastic wrapping for a kilogram of narcotics that contained heroin residue. Detectives also found drug paraphernalia and ecstasy. Joseph was indicted by a federal grand jury on Apr. 6, 2016.

 

This case was investigated by the Drug Enforcement Administration, the Beaumont Police Department, and Jefferson County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Lesley Woods.

BEAUMONT, Texas - A 44-year-old Beaumont, Texas man has been sentenced to federal prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Michael Jon Gelagotis pleaded guilty on Aug. 17, 2016, 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 Sep. 24, 2015, law enforcement officers executed a search warrant at Gelagotis’s residence after he had violated the terms of his state probation for impersonating a public servant. Inside the residence, the officers found 34 firearms, including high-caliber rifles, semi-automatic pistols, and a shotgun. The officers also found more than 30,000 rounds of assorted ammunition and more than 40 large capacity 223 caliber magazines, and a ballistic vest. As a convicted felon, Gelagotis is prohibited from owning or possessing firearms or ammunition. Gelagotis was previously convicted of risk of injury in New Haven, Connecticut, in 1993, and grand larceny, in Newport, Vermont, in 1997. Gelagotis was indicted by a federal grand jury on May 4, 2016 and charged with federal firearms violations.

 

This case was prosecuted as part of Project Safe Neighborhoods, 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 and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney John B. Ross.

BEAUMONT, Texas - A 43-year-old Beaumont, Texas man has been sentenced to federal prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Deshawn Paul Hall, also known as Deshawn Paul Davis, was convicted at trial on Aug. 31, 2016, of being a felon in possession of a firearm, possession with intent to distribute, and distribution of crack cocaine and was sentenced to 155 months in federal prison today by U.S. District Judge Marcia A. Crone.

 

According to information presented in court, Hall was found to be distributing crack cocaine out of a home on Magnolia Street in Beaumont, Texas for over a year. During the investigation it was also revealed that Hall was a convicted felon having been previously convicted in Jefferson County, Texas of sexual assault in 1993; failure to comply with sex offender registry in 2007; and possession of a controlled substance in 2012. When detectives and officers with the police department executed a search warrant at the residence where Hall was living illegally, investigators discovered that Hall was also living with a juvenile female. Hall was also in possession of three firearms and crack cocaine on that same occasion. Hall was indicted by a federal grand jury on Sep. 5, 2015.

 

This case was prosecuted as part of Project Safe Neighborhoods, 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 and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Lesley Woods.

 

BEAUMONT, Texas - A 28-year-old Silsbee, Texas man has been sentenced to federal prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Seth Deandre Turner pleaded guilty on Aug. 9, 2016, to conspiracy to possess with intent to distribute crack cocaine and was sentenced to 250 months in federal prison today by U.S. District Judge Marcia A. Crone.

 

According to information presented in court, on July 21, 2010, law enforcement officers searched a residence in Beaumont where Turner resided during which officers recovered a handgun, a rifle and 7.93 grams of crack cocaine. Also recovered during the search was drug paraphernalia commonly used for “cooking” or manufacturing cocaine powder into crack cocaine and $1,050 in cash from controlled substance sales. On Feb. 17, 2015, Turner was apprehended as the suspect of a burglary and found in possession of over 20 grams of crack cocaine and another $2,013 in his pocket from illegal crack cocaine sales. Turner was indicted on May 4, 2016, along with co-defendants responsible for dealing crack cocaine from a Beaumont residence on Avenue A for over 10 years.

 

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Lesley Woods.

TYLER, Texas – The former CEO of a Nebraska pharmaceutical benefits manager has pleaded guilty to engaging in illegal kickbacks in the Eastern District of Texas, announced Acting United States Attorney Brit Featherston today.

 

Douglas M. Pick, 57, of Omaha, Nebraska, pleaded guilty to making unlawful kickback payments today before United States Magistrate Judge John D. Love. At sentencing, Pick faces up to three years in federal prison. A sentencing date has not been set.

 

According to information presented in court, Pick was the founder and long-time President and CEO of Pharmaceutical Technologies, Inc. (PTI). The company, which operates as a pharmacy benefits manager (PBM), provides for the administration and delivery of pharmacy products and services. PTI uses a network of pharmacies to service employee welfare benefit plans and health care benefit programs across the United States. During Pick’s tenure, PTI contracted with certain individuals, known as “Producers,” who had close business relationships with benefit plans. These benefit plans require administrative services in connection with the delivery of pharmacy products and services to their members. Agreements between PTI and certain Producers were used to facilitate the payment of illegal kickbacks. These Producers unlawfully used their positions to steer the benefit plans to PTI in exchange for kickback payments. The payments by Pick and PTI were based on the volume of business the Producers steered to PTI. Such agreements and the related payments violate the Employee Retirement Income Security Act of 1974 (ERISA). Pick, as PTI’s President and CEO, was primarily responsible for the negotiations with Producers.

 

Between 2001 and 2013, Pick, acting on PTI’s behalf, entered into agreements with several Producers who unlawfully used their positions to refer benefit plan business to PTI in exchange for illegal kickback payments. These Producers collectively received illegal payments in excess of $3.5 million.

 

One such Producer was Tom Slack of Tyler, Texas. From 1998-2011, Slack served as the CEO of Tyler-based HealthFirst and its subsidiaries, including HealthFirst RX Solutions (HFRX). HealthFirst, a subsidiary of East Texas Medical Center, provides administrative services to employee benefit plans in East Texas. The plans include health care benefits, such as pharmacy products. HFRX, a private label PBM located in Tyler, provides pharmacy benefit services to HealthFirst’s client plans. In early 2004, Pick and Slack executed a contract in which PTI agreed to administer the pharmacy benefits of HealthFirst’s client plans through HFRX. The agreement specified that HealthFirst would pay PTI an administrative fee for every claim made for the filling of prescriptions. During April and May of 2004, Slack expressed to Pick that he wanted to personally receive money on the pharmacy business from HealthFirst in exchange for directing more business to PTI and automatic renewal of the PTI-HealthFirst agreement each year. Pick agreed that PTI would pay Slack in exchange for this commitment. To do so, Pick and Slack agreed that Slack would approve an increase of the PTI administrative fee imposed on HealthFirst’s clients for each prescription filled. PTI would then pay the increase to a shell company that Slack had established. Slack, who was fired by HealthFirst in July 2011 and later passed away in 2012, received more than $1.5 million in illegal payments/kickbacks from Pick and PTI.

 

Gary Gustafson, a Producer from Eden Prairie, Minnesota, received close to $750,000 in illegal payments/kickbacks from Pick and PTI. He pleaded guilty to federal health care fraud charges in the District of Minnesota in May 2016 and is awaiting sentencing.

 

To resolve the matter, PTI entered into a non-prosecution agreement with the United States and agreed to pay over $8.5 million. As part of the agreement, PTI agreed to cooperate with the government in the investigation and prosecution of individuals involved in the illegal kickback arrangements and to maintain internal controls, including compliance with ERISA, the Anti-Kickback Statute, and all other applicable statutes.

 

The case was investigated by the U.S. Department of Health and Human Services, the U.S. Department of Labor - Employee Benefits Security Administration, and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant U.S. Attorneys Nathaniel Kummerfeld and Frank Coan and Special Assistant U.S. Attorney Kenneth McGurk prosecuted the case.

BEAUMONT, Texas – A 54-year-old Houston man has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Alvin Lee Turner pleaded guilty to conspiracy to commit wire fraud today before U.S. Magistrate Judge Keith Giblin.

 

According to information presented in court, on Sep. 30, 2016, federal and local agents arrested three individuals in the Houston area involved in a nationwide six-year scheme which defrauded the relatives of federal inmates by falsely representing that they could obtain reductions in their relatives’ sentences in exchange for the payment of cash and wire transfers of funds. The payments were falsely represented to be for the payment for a network of confidential informants who would make undercover drug transactions under the direction of the courts and prosecutors which would allow the incarcerated inmates to ask the court for reductions of sentences for providing substantial assistance to the government under the Federal Rules of Criminal Procedure. In reality the indictment alleges the money was spent for the personal benefit of the defendants and there was never any network of informants or undercover transactions. Federal inmates do not have to pay for substantial assistance motions for reductions of sentences which normally only require information to be provided by such inmates against co-defendants as well as trial testimony. Separate indictments in the scheme were handed down by federal grand juries in the Eastern District of Texas, Beaumont Division, and the Southern District of Florida, Miami Division. The Texas indictment alleged a wire fraud and conspiracy to commit wire fraud involving six individuals: Alvin James Warrick, 41, Colitha Patrice Bush, 36, Ronald B. Shepherd, 33, and Alvin Turner, 54, all of Houston, Texas; and Larry Lee Stephenson, 48, of Port Arthur, Texas. Additionally, Alvin James Warrick, Colitha Patrice Bush, Ronald B. Shepherd were also the subject of the indictment from the Southern District of Florida also alleging a wire fraud and conspiracy to commit wire fraud. The indictments allege different victims in and around each district. The scheme resulted in losses to inmate families of over $4 million. Turner was arrested in October and Stephenson surrendered in October. One defendant remains at large and is being sought by authorities. Warrick is detained pending trial in Miami. Bush, Shepherd, Turner, and Stephenson are released on conditions.

 

Under federal statutes, the defendants face up to 20 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 Federal Bureau of Investigation; Department of Justice, Office of Inspector General, in Miami and New York region; U.S. Marshals Service; Houston Police Department- Major Offenders Division; United States Attorney’s Offices in the Eastern District of Texas, Southern District of Florida, and Eastern District of New York. The case is being prosecuted by Assistant U.S. Attorney Robert L. Rawls.

PLANO, Texas – Trinity Pharmacy in Carrollton, Texas, and one of its owners, Jonathan Paul Lipe, have agreed to pay the United States $400,000 to settle alleged violations of the Controlled Substances Act in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston.

 

The Controlled Substances Act (CSA) is the primary federal law regulating the distribution and availability of controlled substances. Strict compliance with the CSA is required in order to prevent, among other things, the unlawful movement of controlled substances into communities.

 

Prior to filing a lawsuit, the United States alleged that it had civil penalty claims against both Trinity Pharmacy and Lipe under the CSA for, among other things, failing to maintain required records, failing to secure controlled substances, and failing to file loss reports. According to the settlement agreement, the United States alleged that the CSA violations facilitated and enabled criminal conduct by Trinity Pharmacy’s prior pharmacist-in-charge, John Christopher Esparza. Esparza misappropriated Trinity Pharmacy’s controlled substances, including 3.1 kilograms of oxycodone powder, and has since pleaded guilty to Conspiracy to Distribute and Possess with Intent to Distribute a Controlled Substance in violation of the CSA.

 

Trinity Pharmacy and Lipe agreed to pay $400,000 to resolve the civil allegations and have denied any allegations of wrongdoing.

As the United States Attorney’s Office announced regarding the recent National Prescription Drug Take Back Day, America is presently experiencing an epidemic of addiction, overdose, and death due to abuse of prescription drugs, particularly opioid painkillers. In 2015, approximately 6.4 million Americans aged 12 and over misused prescription drugs, according to the 2015 National Survey on Drug Use and Health—more than those that abused cocaine, heroin, hallucinogens, and methamphetamine combined. Drug overdoses are now the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms.

 

“Today’s settlement puts on notice every entity and person with obligations under the CSA—including pharmacies and their owners—that the United States will not tolerate carelessness with controlled substances,” said Acting U.S. Attorney Featherston. “Prescription drug abuse is a deadly problem of epidemic proportions in our communities; people are dying every single day because of it. If you mishandle controlled substances or shirk your obligations under the CSA, expect a visit from us.”

 

This case was investigated by the Drug Enforcement Administration Dallas Division, the Texas Department of Public Safety, the Texas Board of Pharmacy, the McKinney Police Department, and the U.S. Attorney’s Office for the Eastern District of Texas. The settlement was negotiated by Assistant U.S. Attorney Joshua Russ. The claims resolved by the settlement are allegations only, and there has been no determination of liability.

SHERMAN, Texas – A Dallas physician has been sentenced to federal prison for conspiracy to sell illegal prescriptions in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Habiboola Niamatali, 75, of Dallas, was found guilty by a jury in July 2016 of conspiracy to distribute Hydrocodone, Alprazolam, and Promethazine with Codeine outside the usual course of professional practice and without a legitimate medical purpose. Niamatali was sentenced to 78 months in federal prison today by U.S. District Judge Marcia Crone. Niamatali was also ordered to pay a $50,000 fine.

 

According to information presented in court, Niamatali used his medical clinics in Garland and Lancaster to sell illegal prescriptions for cash. The defendant attempted to cover up his scheme by ordering his staff to falsify medical records. Niamatali was indicted by a federal grand jury on July 10, 2013.

 

Before the trial, the staff members who falsified the records, Esmeralda Lozada and Lisa Tumlinson, pleaded guilty to conspiracy and were sentenced respectively to 16 months and 10 months in prison. Additionally, the physician’s wife, Shirley Niamatali, admitted that she knew about the conspiracy, pleaded guilty to misprision of a felony, was sentenced to 3 years of probation, and fined $20,000.

 

“’Do no Harm,’ the Hippocratic Oath adhered to by all but a few physicians, remains as sacred today as it was centuries ago,” said Acting U.S. Attorney Brit Featherston. “Dr. Niamatali chose to violate the oath, and his duty as a physician, by choosing to harm others by prescribing unwarranted drugs.”

 

The case was investigated by the U.S. Drug Enforcement Administration – Dallas Tactical Diversion Squad, DeSoto Police Department, and Ellis County Sheriff’s Office.

BEAUMONT, Texas – A 23-year-old Beaumont, Texas man has been sentenced to federal prison for making a terroristic threat in the Eastern District of Texas announced Acting U.S. Attorney Brit Featherston today.

 

Lance Giovanni Fontenot pleaded guilty on Sep. 15, 2016, to maliciously conveying false information about explosive material and was sentenced to 21 months in federal prison today by U.S. District Judge Marcia A. Crone.

 

According to information presented in court, on June 15, 2016, Fontenot placed a telephone call to the ExxonMobil refinery located at 1795 Burt Street in Beaumont, Texas and claimed that explosive devices were set to detonate at packages placed around the exterior of the facility at a specific time that day. In the call, Fontenot stated that a specific employee working at the plant had worked with a family member to place the explosives around the property, and Fontenot told the employee of the plant who answered the call that the employee responsible had ties to a terrorist organization identified by Fontenot as "ISIS."

 

Law enforcement agencies immediately responded to the scene, and once the threat was identified as false, began to focus on identifying the caller who made the threat. Within hours, investigators identified Fontenot, who had recently been in a romantic relationship with the employee that the defendant claimed was responsible for placing the explosives around the plant. Investigators then placed a call to the number used to phone in the threat, and Fontenot answered and identified himself at that number. Later that same day, Fontenot admitted to knowingly lying about the threat of explosives and was aware that his actions would disrupt the operations of a plan with an interstate pipeline that would result in a significant financial loss to the company. Fontenot stated the purpose for the threat was to retaliate at the named employee for discontinuing their romantic relationship. Fontenot also admitted to lying about the employee having any known connection with a terrorist organization.

 

Fontenot was also ordered to pay restitution to ExxonMobil in the amount of $372,691.79, which was the cost to the refinery for shutting down the pipeline.

 

This case was investigated by the Joint Terrorism Task Force including agents with the Federal Bureau of Investigation, the Beaumont Police Department, Homeland Security Investigations, Bureau of Alcohol Tobacco and Firearms, the Jefferson County Sheriff’s Office, the U.S. Coast Guard Investigative Services, and the Port Arthur Police Department. This case was prosecuted by Assistant U.S. Attorney Lesley Woods.

BEAUMONT, Texas – A 47-year-old former Orange County Sheriff’s Detective has been sentenced to federal prison for violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Chad Wayne Hogan, of Orange, Texas, pleaded guilty on Sep. 6, 2016, to money laundering and was sentenced to one year and one day in federal prison today by U.S. District Judge Marcia A. Crone.

 

According to information presented in court, from March 2009 to August 2015, Hogan, while employed as a detective with the Orange County Sheriff’s Office, deposited approximately 4,302 checks into a bank account at MCT Credit Union titled “Starcomm Wireless,” all of which represented proceeds from unlawful activity. Starcomm Wireless was a business once owned and operated by Hogan, but closed prior to 2009. Hogan, however, kept the Starcomm Wireless bank account open and active after the business ceased operation.

 

The checks were written on bank accounts held by Beverly Place apartments, Cedarwood apartments, and Villa Main apartments, all in the Port Arthur/Groves, Texas area and ranged in amount from $2 to $277, totaling $187,706. Employees of the apartment complexes would meet with Hogan, give him the checks, which he would deposit in his account. Hogan would then give approximately 2/3 of the money back to the employees, keeping the remaining 1/3 for himself. The checks Hogan received from the employees were payable to tenants of the complexes and were written under the Housing and Urban Development’s (HUD’s) utility assistance program. The HUD utility assistance program provides qualifying persons a monthly check to help offset their utility costs. However, many of the tenants at Beverly Place, Cedarwood, and Villa Main were not aware they were receiving these benefits. On-site managers at the complexes engaged in a scheme to fraudulently sign tenants up for HUD benefits without the tenants’ knowledge, and then take then use the money provided by HUD for themselves. Hogan was aware that the checks he was depositing represented the proceeds of some form of unlawful activity, and did so to disguise the nature of the funds. Hogan was also ordered to pay restitution in the amount of $187,706, as this was his portion of the scheme.

 

This case was investigated by the U.S. Housing and Urban Development – Office of Inspector General and Homeland Security Investigations. This case was prosecuted by Assistant U.S. Attorney Christopher T. Tortorice.

BEAUMONT, Texas – A 44-year-old Houston woman has been sentenced for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston.

 

Nhung Tuyet Nguyen, also known as Sandy Nguyen, pleaded guilty on July 26, 2016, to theft of government property and was sentenced to 22months in federal prison today by U.S. District Judge Marcia A. Crone.

 

According to information presented in court, from October 2007 to December 2015, Nguyen was employed by the Beverly Place Apartments in Groves, Texas as an assistant Manager. As part of her job responsibilities, Nguyen assisted potential tenants in applying for U.S. housing and Urban Development (HUD) benefits for rental assistance and utility assistance. The rental and utility assistance programs are designed to help low-income individuals offset housing rental and utility costs with funds provided by HUD. In June 2007, Nguyen began applying for HUD rental assistance and utility assistance benefits without the tenants’ knowledge or consent. As a result, HUD provided funds to Beverly Place Apartments to cover tenants’ monthly rental fees. Nguyen required tenants, who were unaware HUD had already paid their monthly rent, to pay full market price for their apartments in cash or money orders. Nguyen would then take the cash or money orders and use them for her personal benefit. Nguyen enrolled at least five tenants in HUD rental and utility assistance programs without their knowledge. As a result, Nguyen caused a total loss to HUD of $393,583.00 and was ordered to pay that amount in restitution to the agency.

 

This case was investigated by the U.S. Housing and Urban Development – Office of Inspector General and Homeland Security Investigations. This case is being prosecuted by Assistant U.S. Attorney Christopher T. Tortorice.

TYLER, Texas – A 39-year-old Palestine, Texas man has been sentenced to federal prison for federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Jefferson Kincade pleaded guilty on Aug. 23, 2016 to fraudulent or false statements in a tax return, theft or conversion of money, and aggravated identity theft. Kincade was sentenced to 102 months in federal prison on Jan. 26, 2017, by U.S. District Judge Ron Clark. Kincade also agreed to a cash forfeiture of $110,919.54

 

According to information presented in court, Kincade prepared tax returns for individuals at a tax preparation business, EZ Tax, in Palestine, and devised a scheme to prepare false tax returns, steal clients' refunds, and use the clients' and other individuals' identities to accomplish the theft. Kincade's made false statements and representations in the tax returns that he submitted in order to increase the amount of tax refunds to which the taxpayer would be entitled. Kincade was able to intercept the government tax refunds for his own benefit by printing the refund checks, not giving them to his clients, and then cashing them with the assistance of two individuals who were not associated with EZ Tax.

 

“The U.S. Attorney’s Office is committed to vigorous enforcement of the internal revenue laws and especially those involving tax preparers such as the defendant in this case who included false statements in returns that he prepared, and then intercepted the inflated refunds,” said Acting U.S. Attorney Brit Featherston. “These actions caused significant problems for the actual taxpayers, many of whom found that they owed money back to the IRS because of the refund overpayments. IRS-Criminal Investigation worked diligently to investigate the actions of the defendant, determine the extent of his complex fraud activity, and bring him to justice.”

 

"The sentence handed down yesterday highlights the seriousness of the defendant's conduct" said Alfredo Vazquez, Assistant Special Agent in Charge of the Dallas Field Office of IRS, Criminal Investigation. "We will remain vigilant in identifying and investigating those who seek to defraud the American Taxpayers by filing false tax returns. Mr. Kincade defrauded his clients and the IRS for his own personal benefit; and yesterday he was held accountable for his criminal actions."

 

This case was investigated by the Internal Revenue Service Criminal Investigations and was prosecuted by Assistant U.S. Attorney Tom Gibson.

BEAUMONT, Texas – Acting U.S. Attorney Brit Featherston announced today that three Beaumont men have been convicted by a jury following a three-day trial and lengthy investigation into drug trafficking in the Eastern District of Texas.

 

Kristopher George Ardoin, 30; Kody Dwayne Ardoin, 22; and Zerrick Edward Walker, 32; were found guilty of conspiracy to possess with intent to distribute 280 grams or more of crack cocaine. The verdict was reached by a jury late on Jan. 25, 2017 following a trial before U.S. District Judge Marcia Crone. Kristopher Ardoin was also found guilty of a firearms conspiracy.

 

According to information presented in court, for over a decade the Ardoin family and others openly distributed crack cocaine from their home at 1107 Avenue A in Beaumont. In the last ten years, the Beaumont Police Department has received over 2,000 calls for service to the neighborhood block controlled by the Ardoin organization, including approximately 139 calls to the crack house itself. An estimated 280 grams of crack cocaine is believed to have been distributed from the location during this time. A federal grand jury returned a four-count indictment on May 4, 2016 charging 13 individuals with federal drug and firearms violations. The other ten defendants have already pleaded guilty to their crimes.

 

"This is a great example of federal, state and local law enforcement coming together to make the community a safer place to live,” said Acting U.S Attorney Featherston. “I appreciate the hard work of the investigators and prosecutors who worked day and night to put this case together."

Under federal statutes, the defendants each face a minimum of 10 years and up to life 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 U.S. Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Beaumont Police Department. The U.S. Marshals Service also assisted in today’s law enforcement activities. This case was prosecuted by Assistant U.S. Attorneys Lesley A. Woods and Robert L. Rawls.

TYLER, Texas – A 46-year-old Tyler, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston.

 

Chad Hollowell pleaded guilty on Sep. 24, 2015, to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 151 months in federal prison today by U.S. Fifth Circuit Court of Appeals Judge Catharina Haynes. Hollowell was also ordered to forfeit approximately $10,000 cash and multiple firearms.

 

According to information presented in court, in 2014, Hollowell and others trafficked more than 500 grams of methamphetamine through the Eastern District of Texas. Hollowell was indicted by a federal grand jury on Mar. 18, 2015 and charged with drug trafficking crimes.

 

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Canton Police Department and was prosecuted by Assistant U.S. Attorney Frank Coan.

TYLER, Texas – A 32-year-old Laneville, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Joshua Lyle Harned pleaded guilty on Mar. 15, 2016, to possession with intent to distribute methamphetamine and possession of a firearm in furtherance of drug trafficking crimes. Harned was sentenced to 147 months in federal prison today by U.S. Fifth Circuit Court of Appeals Judge Catharina Haynes.

 

According to information presented in court, on Oct. 16, 2014, law enforcement officers went to Harned’s residence in Rusk County t the request of Texas Child Protective Services and found him in possession of a pistol. Harned admitted to being in possession of methamphetamine. A search of the residence revealed 214 grams of methamphetamine, drug paraphernalia and multiple additional firearms. Harned had $2,657 in cash on him at the time. Harned admitted to making at least $20,000 from the delivery of methamphetamine between January 2014 and May 2015. Harned was arrested by the U.S. Marshals Service on July 20, 2015 in Bear Creek, AL. At the time of his arrest, Harned was in possession of methamphetamine and firearms. Harned was indicted by a federal grand jury on Aug. 19, 2015 and charged with drug trafficking crimes.

 

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Rusk County Sheriff’s Office and the U.S. Marshals Service and prosecuted by Assistant U.S. Attorney Jim Noble.

TYLER, Texas — A 35-year-old Trinidad, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Mikael Johnson pleaded guilty on Oct. 11, 2016, to distributing child pornography and was sentenced to 140 months in federal prison by U.S. District Judge Ron Clark on Jan. 24, 2017.

 

According to information presented in court, on Dec. 14, 2015, Johnson knowingly sent another person child pornography by using the Internet, digital services that he owned and a social media application. Following an investigation, federal agents obtained and executed a search warrant at Johnson’s residence on Jan. 7, 2016. More than 600 images and videos containing child pornography were located and seized during the search. Johnson was arrested on that day and a federal grand jury returned an indictment on Jan. 20, 2016 charging him with federal child exploitation violations.

 

This case was prosecuted 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 was investigated by Homeland Security Investigations and prosecuted by Assistant U.S. Attorney Marisa Miller and U.S. Department of Justice Criminal Division Trial Attorney Amy Larson.

TYLER, Texas – A 33-year-old Dallas man has been sentenced to federal prison for burglarizing a bank in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Calvin Lee Browning pleaded guilty on Aug. 23, 2016, to bank burglary and was sentenced to 42 months in federal prison by U.S. Fifth Circuit Court of Appeals Judge Catharina Haynes. Browning was also ordered to pay restitution in the amount of $58,376.75.

 

According to information presented in court, on Feb. 9, 2016, Browning and three others broke into the Jacksonville branch of Austin Bank early in the morning before the bank had opened for business. Three of the individuals were dropped off at the bank while the other waited nearby with a getaway car. After disabling the bank’s surveillance cameras and security system, the defendants stole more than $30,000 from the bank’s automated teller machine cash drawers. They then left the bank, returned to the getaway car and left the area. A local patrol unit attempted a traffic stop and a high speed chase ensued. During the chase, all four men bailed out of the vehicle and attempted to flee on foot. One individual was apprehended at the scene and the others were arrested later

 

This case was investigated by the Federal Bureau of Investigation and the Jacksonville Police Department and prosecuted by Assistant U.S. Attorney Frank Coan.

BEAUMONT, Texas – A 48-year-old Port Arthur, Texas man has pleaded guilty to federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Larry Lee Stephenson pleaded guilty to conspiracy to commit wire fraud today before U.S. Magistrate Judge Zack Hawthorn.

 

According to information presented in court, on Sep. 30, 2016, federal and local agents arrested three individuals in the Houston area involved in a nationwide six-year scheme which defrauded the relatives of federal inmates by falsely representing that they could obtain reductions in their relatives’ sentences in exchange for the payment of cash and wire transfers of funds. The payments were falsely represented to be for the payment for a network of confidential informants who would make undercover drug transactions under the direction of the courts and prosecutors which would allow the incarcerated inmates to ask the court for reductions of sentences for providing substantial assistance to the government under the Federal Rules of Criminal Procedure. In reality the indictment alleges the money was spent for the personal benefit of the defendants and there was never any network of informants or undercover transactions. Federal inmates do not have to pay for substantial assistance motions for reductions of sentences which normally only require information to be provided by such inmates against co-defendants as well as trial testimony. Separate indictments in the scheme were handed down by federal grand juries in the Eastern District of Texas, Beaumont Division, and the Southern District of Florida, Miami Division. The Texas indictment alleged a wire fraud and conspiracy to commit wire fraud involving six individuals: Alvin James Warrick, 41, Colitha Patrice Bush, 36, Ronald B. Shepherd, 33, and Alvin Turner, 54, all of Houston, Texas; and Larry Lee Stephenson, 48, of Port Arthur, Texas. Additionally, Alvin James Warrick, Colitha Patrice Bush, Ronald B. Shepherd were also the subject of the indictment from the Southern District of Florida also alleging a wire fraud and conspiracy to commit wire fraud. The indictments allege different victims in and around each district. The scheme resulted in losses to inmate families of over four million dollars. Turner was arrested in October and Stephenson surrendered in October. One defendant remains at large and is being sought by authorities. Warrick is detained pending trial in Miami. Bush, Shepherd, Turner, and Stephenson are released on conditions.

 

Under federal statutes, the defendants face up to 20 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 Federal Bureau of Investigation; Department of Justice, Office of Inspector General, in Miami and New York region; U.S. Marshals Service; Houston Police Department- Major Offenders Division; United States Attorney’s Offices in the Eastern District of Texas, Southern District of Florida, and Eastern District of New York. The case is being prosecuted by Assistant U.S. Attorney Robert L. Rawls.

SHERMAN, Texas – The United States has filed a complaint intervening in an alleged kickback scheme in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

The United States filed a complaint today in partial intervention against East Texas Medical Center Regional Healthcare System, Inc., East Texas Medical Center Regional Health Services, Inc. (together, “ETMC”), Paramedics Plus, LLC, Emergency Medical Services Authority (“EMSA”), and EMSA’s President, Herbert Stephen Williamson (“Williamson”) alleging, among other things, violations of the False Claims Act and the Anti-Kickback Statute. A copy of the United States’ complaint can be found attached.

 

ETMC, one of East Texas’ largest health care systems, provides ambulance services outside of Texas through its for-profit subsidiary, Paramedics Plus. The United States’ complaint alleges that ETMC and Paramedics Plus entered into an illegal kickback scheme to obtain and retain a lucrative public ambulance services contract awarded by Williamson and EMSA, a public trust entity established under Oklahoma law. The United States alleges the defendants created a slush fund controlled by ETMC and Paramedics Plus that was used to pay over $20 million in kickbacks. The United States alleges the kickbacks and bribes ranged from cash payments (including at least $50,000 for Williamson’s personal benefit), political contributions, marketing expenses, and direct payments to EMSA’s contractors.

 

The lawsuit, United States ex rel. Dean v. Paramedics Plus, LLC, et al., 4:14-CV-203, was originally filed in 2014 in the U.S. District Court for the Eastern District of Texas by relator Stephen Dean. Dean was employed by Paramedics Plus as Chief Operating Officer overseeing the EMSA contract. Dean filed the action under the qui tam provisions of the False Claims Act, which permit private parties known as “relators” to sue on behalf of the United States and to receive a share of any recovery. Dean’s lawsuit includes allegations against additional defendants, including other municipal entities doing business with Paramedics Plus in California, Florida, and Indiana. The False Claims Act permits the Government to intervene in such a lawsuit, as it has done in a portion of Dean’s case.

 

“The law prohibits paying kickbacks, such as those alleged in this lawsuit, in order to gain access to Medicare and Medicaid funds,” said Acting U.S. Attorney Featherston. “Kickback schemes are anti-competitive, undermine the integrity of our nation’s health care programs, and wrongly prioritize profits over patient care.”

 

These matters were investigated by the U.S. Attorney’s Office for the Eastern District of Texas, the U.S. Department of Justice Civil Division’s Commercial Litigation Branch, the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and the states of California, Florida, Indiana, and Oklahoma.

 

Tips and complaints about potential fraud, waste, abuse, and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477) or to the United States Attorney’s Office for the Eastern District of Texas, at (972) 509-1201.

 

The claims asserted against the defendants are allegations only, and there has been no determination of liability.

 

 

####

False Act Claims Lawsuit complaint

BEAUMONT, Texas — A 40-year-old Daisetta, Texas man has been sentenced to federal prison for child exploitation violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Steven Wayne Robinson pleaded guilty on Sep. 1, 2016, to two counts of production of child pornography and was sentenced to a total of 420 months in federal prison today by U.S. District Judge Marcia Crone.

 

According to information presented in court, Robinson persuaded, induced, and coerced three children to engage in sexually explicit conduct for the purpose of producing videos or visual depictions of that conduct. Homeland Security Investigations conducted an online undercover operation targeting Robinson and other child predators, and Robinson sent ten videos to the undercover operation that depicted himself engaging in sexual acts with children known to him. One victim was less than one-year-old, a second victim was six years of age, and a third victim was only eight years old. Robinson forced each of them to engage in sexual acts with him. Further investigation by the office of Homeland Security revealed that Robinson at one point offered to give another suspected child predator access to one of the children in exchange for money to be paid to Robinson. Homeland Security working with the Liberty County Sheriff's Office took Robinson into custody before Robinson could act on those intentions. Robinson was indicted by a federal grand jury on Nov. 4, 2015.

 

“For the victims of child abuse, we pray for their healing,” said Acting U.S. Attorney Brit Featherston. “These cases are heart wrenching for all involved, the child advocates, the families, the investigators, the prosecutors and the courts; I applaud their resilience and fortitude in bringing Steven Robinson to justice. For Robinson, he deserves all the punishment ordered, and for those out there that choose to do these despicable acts, law enforcement will be knocking at your door and justice will be swift.”

 

This case was prosecuted 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 was investigated by the Homeland Security Investigations and the Liberty County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Lesley A. Woods.

BEAUMONT, Texas – A 42-year-old federal prison chaplain has pleaded guilty to bribery in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Eric S. Patrick, of Nederland, Texas, pleaded guilty to an Information charging him with bribery of a public official today before U.S. Magistrate Judge Zack Hawthorn.

According to information presented in court, in July 2015, investigators at the U.S. Penitentiary in Beaumont, Texas seized two gallon bags of tobacco and rolling papers from inmates at the prison. An investigation revealed that Patrick, while employed by the U.S. Bureau of Prisons as a chaplain at the prison, was smuggling tobacco and cigarettes into the prison for inmates. To facilitate the scheme, Patrick set up several scam post office boxes and charged inmates $1,500 in each instance.

 

Under federal statutes, Patrick faces up to 15 years in federal prison at sentencing. The maximum statutory sentence prescribed by Congress and 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 Department of Justice – Office of the Inspector General, the U.S. Postal Inspection Service, and the Drug Enforcement Administration. This case was prosecuted by Assistant U.S. Attorney John Craft.

PLANO, Texas – A 64-year-old Grand Prairie, Texas man has been sentenced to federal prison for his role in a conspiracy to commit bank fraud and perjury in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Melvin Ray Layman pleaded guilty on July 20, 2016, to conspiracy to commit bank fraud and conspiracy t commit perjury and was sentenced to 51 months in federal prison on Jan. 11, 2017 by U.S. District Judge Marcia A. Crone. Layman was also ordered to pay restitution in the amount of $111,744.

 

According to information presented in court, from July 2014 to September 2015, Layman conspired with Daylon Esaw to execute a scheme to defraud financial institutions by forging distressed borrowers’ signatures on quitclaim deeds purported to grant ownership of the properties from the true owners to Esaw. Layman and Esaw then filed civil law suits in Dallas County District Courts against the financial institutions that asserted a fraudulent ownership interest in the properties. Layman and Esaw then sought to force the financial institutions to either pay them a settlement to clear up the titles or allow Layman and Esaw to short sell the properties. Layman and Esaw intended to split the proceeds from their scheme when they were successful. Additionally, from November 2011 to June 2013, Layman conspired with Rebecca Quinn and others to make a false statement to the Grand Jury of the United States District Court in the Eastern District of Texas in regards to a mortgage fraud investigation. Quinn had been subpoenaed to testify in the Grand Jury about the use of her notary on certain mortgage documents. Layman met with Quinn prior to her testimony, so that they could strategize on how she would lie to the Grand Jury about the use of her notary. On June 12, 2013, Quinn appeared before the Grand Jury and while under oath made false statements about the use of her notary on certain mortgage documents.

 

“The U.S. Attorney’s Office is committed to prosecuting and holding responsible those who are engaged in fraud, including the type of mortgage fraud that led to this prosecution,” said Acting United States Attorney Brit Featherston. “The defendants in this case engaged in activities that caused losses to multiple mortgage lenders as well as the Department of Housing and Urban Development, along with fraudulent documents filed in the Dallas County deed records and district court records. Compounding this activity was the defendant’s conspiracy with others to make false statements before a United States grand jury, related to a separate mortgage fraud scheme. Thanks to the diligent work by Special Agents with the Office of Inspector General of the Federal Housing Finance Agency, the Federal Bureau of Investigation, and the Office of the Inspector General for the Department of Housing and Urban Development, this activity was investigated and successfully prosecuted.”

 

FHFA-OIG Special Agent in Charge Tim Mowery said, “The act of victimizing distressed home owners who are at risk of losing their homes is a despicable act. When individuals exploit the foreclosure process for their personal gain, FHFA-OIG will pursue those perpetrators to the fullest extent of the law.”

 

FBI Special Agent in Charge Thomas M. Class Sr. said, “The FBI is committed to holding those accountable who undermine the financial security of our citizens and institutions through fraud schemes. Hijacking the foreclosure system impacts homeowners when they are most vulnerable and will not be tolerated.”

 

"It is always disturbing when individuals choose to engage in actions to defraud the government,” said Phyllis Robinson, Special Agent in Charge, HUD Office of the Inspector General. “Our office will continue to partner with federal prosecutors and the law enforcement community to aggressively pursue those that seek to undermine federal housing programs,” she concluded.

This case was investigated by the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG), Federal Bureau of Investigation (FBI), and U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG).

SHERMAN, Texas – A 44-year-old McKinney, Texas woman has been sentenced to federal prison for income tax violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Sandra Ayanna Morgan pleaded guilty on July 11, 2016 to filing a false income tax return and was sentenced to 18 months in federal prison today by U.S. District Judge Marcia A. Crone. Morgan was also ordered to pay restitution in the amount of $152,471.

 

According to information presented in court, Morgan was in the business of preparing federal income tax returns and admitted to preparing and presenting to the Internal Revenue Service, a United States Individual Income Tax Return Form 1040, of another individual for calendar year 2010. The return falsely represented that the taxpayer was entitle to claim deductions for losses from a business on Schedule C and losses for rental property on Schedule E. In addition, Morgan knowingly and willfully prepared false and fraudulent tax returns for a number of individuals for tax years 2009, 2010, 2011, and 2012. Those tax returns claimed fraudulent tax deductions for the taxpayers for things such as Education Credits, American Opportunity Credits, Charitable Contributions, Unreimbursed Employee Expenses, Medical and Dental Expenses, Loses for Rental Property, and Losses from a Business. The taxpayers did not represent to Morgan that they were entitled to the tax credits or deductions, and Morgan knew the representations in the tax returns were false and material.

 

The total tax loss, to the Internal Revenue Service, that resulted from these false tax returns was $152,741.

 

This case was investigated by the Internal Revenue Service Criminal Investigations and was prosecuted by Assistant U.S. Attorney Andy Williams.

TYLER, Texas – A Smith County couple has pleaded guilty to charges of health care fraud in the Eastern District of Texas announced Acting United States Attorney Brit Featherston today.

 

Gerard Dengler, 61, and Suzanne Dengler, 52, of Tyler, Texas, pleaded guilty to conspiring to commit health care fraud today before U.S. Magistrate Judge K. Nicole Mitchell.

 

According to information presented in Court, the Denglers owned and operated Elite Lab Services, a clinical diagnostic laboratory based in Tyler. As a Medicare provider, the company would bill Medicare for laboratory services provided to nursing homes located throughout east Texas, including the mileage associated with providing those services. Beginning in April 2014, Gerard and Suzanne Dengler conspired to fraudulently increase route mileage that Elite Lab used to calculate the travel allowances billed to Medicare. From April through October 2014, the company then sought reimbursement from Medicare for mileage that included the falsely inflated amounts.

 

Under federal statutes, the Denglers each face up to 10 years in federal prison at sentencing and have already agreed to pay restitution in excess of $160,000, which represents the loss to Medicare. 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.

 

The criminal investigation arose from a civil qui tam action filed by former Elite Lab employee Karen Malcolm. In her complaint, Malcolm alleged, among other things, that Elite Lab and the Denglers submitted false claims to Medicare from approximately 2010 through 2014. The United States intervened in the action for purposes of settlement. The Denglers and Elite Lab agreed to pay the United States $3.75 million to settle the lawsuit. As a result of the settlement, Elite Lab will be excluded from participating in Medicare for eight years; Gerard Dengler will be excluded for 10 years; and Suzanne Dengler will be excluded for eight years. The settlement also resolved a separate civil lawsuit in which the United States sought to forfeit funds and property obtained by the Denglers and Elite Lab through their fraudulent conduct.

 

This matter was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services – Office of the Inspector General, the Texas Office of the Attorney General – Medicaid Fraud Control Unit, and the United States Attorney’s Office for the Eastern District of Texas. The criminal case was prosecuted by Assistant U.S. Attorneys Frank Coan and Nathaniel Kummerfeld and Special Assistant U.S. Attorney Ken McGurk. The civil settlement was negotiated by Assistant U.S. Attorney Josh Russ. The civil forfeiture action was prosecuted by Assistant U.S. Attorney Bob Wells.

 

This case was investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), and the Federal Bureau of Investigation (FBI). This case is being prosecuted by Special Assistant U.S. Attorney Kenneth C. McGurk and Assistant U.S. Attorney Nathaniel C. Kummerfeld.

 

Any individuals with knowledge of these or other health care fraud violations are encouraged to contact the Department of Health and Human Services’ fraud hotline at 1-800-HHS-TIPS (447-8477).

SHERMAN, Texas – A jury has found a 49-year-old Lavon, Texas man guilty of federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

David Allen Anderton was found guilty by a jury on multiple counts of harboring illegal aliens, conspiracy, and visa fraud on Dec. 15, 2016, following a seven-day trial before U.S. District Judge Amos Mazzant.

According to information presented in court, Anderton, through his commercial landscaping company, A&A Landscape and Irrigation, abused the Department of State’s work visa system bringing Mexican workers into the U.S. underpaying them and housing them in dangerous conditions.  Anderton was indicted by a federal grand jury on Mar. 9, 2016. 

"Today's conviction affirms that David Anderton failed to pay prevailing wages and overtime to his H2B workers, and pocketed the money that rightfully belonged to his employees. The U.S. Department of Labor's Office of Inspector General will continue to work with our law enforcement partners to investigate crimes that abuse Department of Labor programs and have a detrimental effect on workers," said Steven Grell, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Dallas Regional Office.

                Under federal statutes, Anderton faces up to 10 years in federal prison at sentencing and will forfeit nearly $2 million in property used in the commission of his crimes.  The maximum statutory sentence prescribed by Congress and 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 U.S. Department of State, Diplomatic Security Service, U.S. Department of Labor Office of Inspector General, Internal Revenue Service Criminal Investigations, and Homeland Security Investigations. This case was prosecuted by Assistant U.S. Attorneys Andy Williams and Tom Gibson.

BEAUMONT, Texas – A jury has found a 43-year-old Beaumont, Texas man guilty of federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

Donald Roy Kelly was found guilty by a jury of providing a prison inmate with a prohibited object and bribery of a public official following a three-day trial before U.S. District Judge Marcia Crone.  The jury reached its verdict around 6:30 pm on Dec. 14, 2016.

               According to information presented in court, Kelly was an evening shift supervisory corrections officer at the LaSalle Unit (downtown Jefferson County jail) in late 2014 and early 2015.  Juan Saenz-Tamez, then leader of the Gulf Cartel was brought to the LaSalle Unit pending his trial for federal drug trafficking offenses in October 2014.  Once at the LaSalle Unit and in the custody of Kelly, Saenz-Tamez was approached by Kelly and corruptly offered a cell phone to the inmate in exchange for money.  Kelly engaged other individuals to assist him in the scheme.  A cell phone was purchased by another individual and given to Kelly who provided it to Saenz-Tamez.  Additionally, fast food was brought into the LaSalle Unit at Kelly’s direction for Saenz-Tamez.  Saenz-Tamez had individuals attempt money transfers to Kelly in payment for his corrupt acts.  Ultimately the cell phone was seized from Saenz-Tamez on Jan. 3, 2015.  Kelly was indicted by a federal grand jury in April 2016.

                Under federal statutes, Kelly faces up to 15 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress and 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 Federal Bureau of Investigation, the United States Marshals Service, and the Drug Enforcement Administration.  This case was prosecuted by Assistant U.S. Attorneys John Craft and Christopher T. Tortorice.

TYLER, Texas –  Elite Lab Services, LLC, along with its husband-and-wife owners Gerard and Suzanne Dengler, will pay the United States $3.75 million after billing Medicare for tens of thousands of miles that were never driven by Elite Lab’s personnel, announced Acting United States Attorney Brit Featherston.

“The United States Attorney’s Office for the Eastern District of Texas continues to combat white-collar fraud at every turn,” said Acting U.S. Attorney Featherston.  “Medicare is designed to ensure that this country’s elderly have access to vital health care services.  Unfortunately, some providers fraudulently raid these limited public funds for purely personal gain—misconduct that our office will tirelessly prosecute.” 

In July 2014, former Elite Lab employee Karen Malcolm filed a lawsuit under the qui tam provisions of the False Claims Act.  Ms. Malcolm filed her suit in the Eastern District of Texas in an action captioned United States ex rel. Malcolm v. Elite Lab Services, LLC, et al., Case Number 6:14-cv-662.   In her action, Ms. Malcolm alleged, among other things, that the defendants inflated mileage claims submitted to Medicare from approximately 2010 through 2014.  Ms. Malcolm approached the Denglers in the spring of 2014 to voice her concerns about the billing practices.  Ms. Malcolm claimed the fraudulent billing was not corrected, and she then resigned her employment with Elite Lab. 

The United States intervened in the action for purposes of settlement.  The Denglers and Elite Lab agreed to pay the United States $3.75 million to settle the False Claims Act lawsuit.  As part of the settlement announced today, the Denglers and Elite Lab admit they submitted false claims to Medicare—claims that contained inflated mileage calculations beyond those actually driven by Elite Lab employees.  The settlement also resolves a separate lawsuit in which the United States sought to forfeit funds and property obtained by the Denglers and Elite Lab through their fraudulent conduct.

The False Claims Act permits a private citizen (called a “relator”) with knowledge of fraud against the Government to bring a lawsuit on behalf of the United States and to share in the recovery.  Under the settlement announced today, Ms. Malcolm will receive a 21% share of the United States’ recovery, a total of $787,500.00. 

“The allegations in this case are representative of profiteering at the expense of Medicare,” said HHS OIG SAC CJ Porter. “The Medicare program was fraudulently billed for excessive mileage driven to collect lab specimens.   These abuses are a threat to the viability of Medicare and together with our law enforcement partners, we will doggedly pursue all manner of fraud against Medicare.” As a result of this settlement, Elite Lab Services, LLC will be excluded from participating in Medicare for eight years, Gerard Dengler will be excluded for 10 years, and Suzanne Dengler will be excluded for eight years, according to SAC Porter. 

This matter was investigated by the Federal Bureau of Investigation (FBI), the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), and the United States Attorney’s Office for the Eastern District of Texas.  The civil settlement was negotiated by Assistant U.S. Attorney Joshua Russ.  The civil forfeiture action was prosecuted by Assistant U.S. Attorney Bob Wells.

SHERMAN, Texas - A 24-year-old Denison, Texas man has been sentenced to federal prison for federal violations related to the murder of a man in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Jordan Tyrel Ballard pleaded guilty on Jan. 27, 2016, to being a felon in possession of a firearm and four counts of being a felon in possession of ammunition.  Ballard was sentenced to a total of 30 years in federal prison by U.S. District Judge Amos L. Mazzant on Dec. 7, 2016.

 

According to information presented in court, on Apr. 21, 2015, family members of Ballard’s pregnant girlfriend received information that Ballard was threatening her at her residence in Denison.  Two of the girlfriend’s male cousins, Justyn Simmons and Victor Simmons, traveled from their home in Celina to Denison to check on her welfare.  After arriving to West Monterey Street in Denison, the Simmons brothers were confronted by Ballard at gunpoint. Despite the fact that neither man was armed and they put their hands up and repeatedly indicated they were just there to talk, Ballard shot Justyn Simmons in the chest. Ballard continued to shoot at Victor as he fled on foot and Justyn was pronounced dead at the scene. An investigation revealed Ballard was a convicted felon having been previously found guilty of aggravated assault with a deadly weapon in 2012 in Grayson County, Texas. Convicted felons are prohibited by federal law from owning or possessing firearms or ammunition.  Ballard was indicted by a federal grand jury on May 14, 2015. 

 

During the sentencing hearing, Judge Mazzant ruled that Ballard did not act in self-defense, and further found that Ballard committed first degree murder.  Based on his history of violence and lack of remorse, Ballard was sentenced to a total of 30 years in federal prison for federal firearms violations.  He has also been indicted by a Grayson County Grand Jury for murder.  That case is pending.

 

This case was prosecuted as part of Project Safe Neighborhoods, 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 Denison Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorneys Lesley D. Brooks and Maureen Smith.                               

TYLER, Texas – A 49-year-old Irving resident has been sentenced to fifty-seven months in prison, announced Acting U.S. Attorney Brit Featherston today.

          Gary Wayne Blanton (Blanton) pleaded guilty on April 26, 2016 to a charge of being a felon in possession of ammunition.  He was sentenced today to 57 months imprisonment during an appearance before U.S. Circuit Judge Catharina Haynes.

          According to the evidence presented at the plea hearing, on November 12, 2015, at approximately 3:00 a.m., a Gun Barrel City police officer observed Blanton driving a vehicle with no tail lights.

          After police stopped the vehicle and identified Blanton, the officer determined that Blanton had an outstanding arrest warrant.  When the officer asked Blanton to get out of the car, Blanton sped away, evading detention.  The officer pursued Blanton in his patrol car at speeds exceeding 100 m.p.h.  After a few minutes, Blanton pulled over and surrendered to the police.  An inventory of Blanton’s vehicle led to the discovery of a stolen 9mm caliber semiautomatic pistol, a loaded Glock magazine, a bullet, and a digital scale in the trunk.

          Officers also recovered loose methamphetamine from the front passenger seat of Blanton’s car.  An additional small baggie of methamphetamine was discovered on the side of the road where Blanton was initially stopped.  When Blanton was being booked into jail, officers discovered two 9 mm. cartridges in Blanton’s right front pants’ pocket.              

          At the time of his arrest, Blanton had previous convictions for the following felony offenses: Theft of a Firearm, Burglary of a Vehicle – Habitual, Unauthorized Use of a Motor Vehicle, and two convictions for Unlawful Possession of a Controlled Substance - Amphetamine.

          This case was investigated by the Gun Barrel City Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Tyler Office, and prosecuted by Assistant U.S. Attorney Jim Noble.

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PLANO, Texas – A 61-year-old Quinlan, Texas man, who had originally received a probated sentence for negligently releasing an extremely hazardous substance into the air, has been sentenced to three months in prison to be followed by three months of home confinement, announced Acting U.S. Attorney Brit Featherston today.

          U.S. Magistrate Judge Kimberly C. Priest-Johnson imposed the sentence November 15, 2016 on William “Bill” Lafon Musgrove, 61, after finding that Musgrove had violated the conditions of his probation by returning to the metal recovery business without the proper equipment or a permit.  Musgrove originally pleaded guilty on August 7, 2013 to the offense of Negligent Release of an Extremely Hazardous Substance.  On June 21, 2013, the United States Attorney’s Office for the Eastern District of Texas filed an information charging Musgrove with the offense. Musgrove admitted that in June of 2011, as the vice president and operations manager of Industrial Precious Metals Recovery Incorporated (IPMR), in Royse City, Texas, he allowed their metal recovery process to release Nitrogen Oxides, or “NOx” into the ambient air at ground level, through an open doorway, instead of utilizing the company’s air scrubber which was broken at the time.  Musgrove admitted that he should have known that releasing NOx in that manner would place people in imminent danger of death or serious bodily injury.  Fortunately, no actual injuries occurred. 

             Federal environmental regulations characterize Nitrogen Oxides as an “extremely hazardous substance.”  At the time, the IPMR facility in Royse City was adjacent to other commercial facilities with employees that were present during the NOx emissions.  The facility has since closed.            

          This case was investigated by the United States Environmental Protection Agency, Criminal Investigations Division, Region VI, Dallas, Texas, and the Texas Commission on Environmental Quality (TCEQ) Environmental Crimes Unit and prosecuted by Assistant U.S. Attorney Jim Noble.

SHERMAN, Texas — A 30-year-old Missouri man has been sentenced to federal prison for child exploitation in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

Nathan Oliva pleaded guilty on January 28, 2016, to sex trafficking of children and was sentenced to 365 months in federal prison today by U.S. District Judge Amos Mazzant. 

According to information presented in court, an unidentified person called in a tip to the Denton Police Department that a child was being trafficked by Oliva and was at a hotel in Denton, Texas.  Denton Police officers located a classified ad on Backpage.com that offered the child for sexual activity.  Officers went to the hotel, where they located the victim and the defendant.  The victim, who had injuries sustained from an assault by Oliva, told the officers that she was in fear for her life because Oliva had injured her and had threatened her with greater harm.  Moreover, Oliva had taken control of her cell phone, driver’s license, and social security card.  Oliva had also threated to harm the parents of the victim.  As part of his plea, Oliva admitted to posting ads on Backpage.com that offered the victim, who was younger than 18-years-old, for commercial sex.  Oliva was indicted by a federal grand jury on August 13, 2015.

This case was prosecuted 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 was investigated by the Homeland Security Investigations and the Denton Police Department and prosecuted by Assistant U.S. Marisa J. Miller.

TYLER, Texas – A 56 year-old Longview man pled guilty in federal court to being a Felon in Possession of a Firearm announced Acting U.S. Attorney, Brit Featherston, today.

According to the evidence presented at his plea hearing, Gerald Dwayne Templeton (Templeton) was found to be in possession of weapons and cocaine at a residence in Longview, Texas when the Gregg County Organized Drug Enforcement (CODE) Unit executed a search warrant there on March 1, 2016. Templeton and his co-defendant, Teresa Ann Bean, (Bean) were both located within the residence at the time of the search. During the search of the residence, officers recovered several pieces of cocaine, used rubber gloves and a box of unused rubber gloves, significant since Templeton was wearing rubber gloves when he was arrested.  Officers also found several empty plastic bags, staples, razor blades and cocaine residue, all indicative of drug trafficking.  Altogether, agents recovered approximately 35 grams of cocaine.

In addition to the drugs, officers also recovered two shotguns, one of which had been “sawed off,” and multiple rounds of ammunition of various calibers.

At sentencing, Templeton is facing a maximum punishment of 10 years imprisonment and a $250,000.00 fine.   Charges against Bean are still pending.

            This case was investigated by the Gregg County Organized Drug Enforcement (CODE) Unit and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Tyler Field Office, and prosecuted by Assistant U.S. Attorney Jim Noble.

TYLER, Texas - The United States has obtained a civil judgment for $1,223,414.50 against Tariq Mahmood, who owned and operated multiple rural hospitals across Texas, announced Acting U.S. Attorney Brit Featherston.

In July 2014, a jury found Tariq Mahmood, of Cedar Hill, Texas, guilty of conspiracy to commit health care fraud, seven counts of health care fraud, and seven counts of aggravated identity theft following a four-day trial before U.S. District Judge Michael Schneider.  A federal grand jury indicted Mahmood on April 11, 2013. 

Following his conviction, the United States brought a False Claims Act action against Mahmood in the Eastern District of Texas captioned United States of America v. Tariq Mahmood, Case Number 6:15-cv-948.  The Government alleged in its Motion for Summary Judgment that Mahmood was estopped from denying liability under the False Claims Act as a result of his criminal health care fraud and conspiracy convictions.

In the Court’s Final Judgment dated Oct. 28, 2016, U.S. Magistrate Judge K. Nicole Mitchell ordered Mahmood to pay the United States $1,223,414.50.  The amount owed to the United States includes $288,414.50 in damages plus an additional $935,000.00 in civil penalties arising from the submission of 85 false claims.  The Court awarded the United States the highest applicable civil penalty for each false claim Mahmood caused to be submitted to Medicare and Medicaid.

“The Department of Justice and the United States Attorney’s Office for the Eastern District of Texas aggressively prosecute health care fraud, both criminally and civilly,” said Acting U.S. Attorney Featherston.  “When our national programs are defrauded, the public wants its money back.  Our office is committed to recovering those public funds.”

The criminal case was investigated by the Texas Office of the Attorney General – Medicaid Fraud Control Unit (OAG-MFCU), the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation (FBI), and the U.S. Postal Inspection Service (USPIS).  The civil action was prosecuted by Assistant U.S. Attorneys Joshua Russ and James Gillingham.

BEAUMONT, Texas – Acting United States Attorney Brit Featherston announced today that Assistant United States Attorneys (AUSAs) have been appointed to lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections.  AUSA Michelle Englade has been appointed to serve as the District Election Officer (DEO) for the Eastern District of Texas, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.

            Acting United States Attorney Featherston said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud.  The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”           

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

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

The franchise is the cornerstone of American democracy.  We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice.  In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, Acting United States Attorney Featherston said that in addition to AUSA/DEO Englade, AUSAs Allen Hurst and M. Andrew Stover will be on duty in the Eastern District of Texas while the polls are open. AUSA Englade can be reached by the public in Beaumont at 409-839-2538, AUSA Hurst can be reached in Tyler, Texas, at 903-590-1400, and AUSA Stover can be reached in Plano, Texas, at 972-509-1201.  

In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The FBI can be reached by the public in the Eastern District of Texas at the following telephone numbers:

Beaumont – 409-832-8571

Frisco – 214-705-7000

Lufkin – 936-637-3834

Sherman – 903-892-8754

Texarkana – 870-773-3382

Tyler – 903-592-4301

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

            Acting United States Attorney Featherston said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate.  It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”

BEAUMONT, Texas – A 19-year-old Beaumont, Texas man has been sentenced for federal wildlife violations in the Eastern District of Texas announced Acting U.S. Attorney Brit Featherston.

                 

Trey Joseph Frederick pleaded guilty on May 23, 2016 to a violation of the Migratory Bird Treaty Act and was sentenced to five years of federal probation today by U.S. Magistrate Judge Zack Hawthorn.  As part of his probation, Frederick is prohibited from owning or possessing firearms, ammunition or any other dangerous weapon.  He is also prohibited from hunting or fishing anywhere in the United States.

 

According to information presented in court, on Jan. 11, 2016, a Texas Game Warden received two calls reporting two whooping cranes had been shot on Blair Road in Jefferson County.  Further investigation revealed the defendant had been seen in the area with a hunting rifle and had claimed to be hunting geese.  Federal agents contacted Frederick at his home on LaBelle Road where he admitted to killing the cranes.  Whooping cranes are migratory birds and are protected under the Migratory Bird Treaty Act making it unlawful to capture, kill, or attempt to capture or kill in the United States.

 

Acting U.S. Attorney Featherston quoted President Theodore Roosevelt saying, “’The nation behaves well if it treats the natural resources as assets which it must turn over to the next generation increased; and not impaired value.’”  Featherston added, “Protecting our environment and wildlife is vital to making sure that future generations have the opportunity to enjoy the true beauty and excitement of nature.” 

 

“The loss of these cranes is not simply a loss for the species. It is a loss for the community, for taxpayers and for future generations deprived of an opportunity to see these magnificent birds thriving in the wild," said Southwest Region Special Agent in Charge Nicholas E. Chavez of the U.S. Fish and Wildlife Service. "Moreover, the killing of these two whooping cranes is not an isolated incident. Over the past five years, more than 20 whooping cranes have been shot and killed in the U.S.  By bringing criminals who perpetrate crimes against wildlife to justice, we hope to prevent future tragedies like this from occurring.”

 

“Justice was served here in no small part due to the strong partnership between Texas Parks and Wildlife Department game wardens and the United States Fish and Wildlife Services special agents, whose thorough and collaborative investigation of the heinous crime illustrates their commitment to protecting our shared natural resources, particularly endangered species like the whooping cranes,” said Colonel Craig Hunter, TPWD Director of Law Enforcement.  “The fact that this act of senseless cruelty was universally condemned by the local community, who along with landowners played a vital role in this case being solved quickly, sends a strong message to future game law criminals; your actions will not be tolerated, nor will they go unpunished.  We also appreciate the assistance from the United States Attorney’s Office and Assistant United States Attorney Joe Batte for making this case a priority.”

 

Frederick has been ordered to pay restitution to the International Crane Foundation in the amount of $12,907.50 and restitution to the Texas Parks and Wildlife Foundation in the amount of $12,907.50 for a total restitution judgment of $25,815.00.  Frederick must also perform 200 hours of community service.

 

This case was investigated by special agents with the U.S. Fish and Wildlife Services, Office of Law Enforcement and Game Wardens with the Texas Parks and Wildlife Department and prosecuted by Assistant U.S. Attorney Joseph R. Batte.

BEAUMONT, Texas — A 56-year-old former Jefferson County, Texas school teacher has been sentenced to federal prison for child exploitation violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

 

Gary Alan George pleaded guilty on April 5, 2016, to receiving child pornography and was sentenced to 60 months in federal prison today by U.S. District Judge Thad Heartfield. 

 

According to information presented in court, during an undercover operation led by Homeland Security, George, a former middle school teacher from 1999 to 2014 with the Beaumont Independent School District, distributed images containing child pornography to an investigator.  A search warrant was executed at George’s residence resulting in the seizure of electronic devices.  Forensic analysis of the electronic devices revealed thousands of images containing child erotica and child pornography.  George was indicted by a federal grand jury on May 6, 2015.

 

This case was prosecuted 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 was investigated by the Homeland Security Investigations and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Lesley A. Woods.

BEAUMONT, Texas –Acting United States Attorney Brit Featherston and Drug Enforcement Administration Special Agent in Charge Joe Arabit announced today that DEA will reprise one of its most popular community programs this weekend:  National Prescription Drug Take Back Day.  On Saturday October 22 between 10 a.m. and 2 p.m. the public can dispose of their unused, unwanted prescription medications at one of 4,700 collection sites nationwide, operated by 3,800 local law enforcement agencies and other community partners.  The service is free of charge, no questions asked.

 

America is presently experiencing an epidemic of addiction, overdose and death due to abuse of prescription drugs, particularly opioid painkillers. 6.4 million Americans age 12 and over—2.4 percent of the population—abuse prescription drugs, according to the 2015 National Survey on Drug Use and Health released last month, more than abuse cocaine, heroin, hallucinogens, and methamphetamine combined.  Drug overdoses are now the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms.  The majority of prescription drug abusers report that they obtain their drugs from friends and family, including from the home medicine cabinet.

 

Last April, during its 11th Take Back Day, the DEA and over 4,200 of its national, tribal, and community law enforcement partners collected 893,498 pounds (about 447 tons) of unwanted prescription drugs at almost 5,400 collection sites.  Since the program began six years ago, about 6.4 million pounds (about 3,200 tons) of drugs have been collected. That’s more than a quarter pound of pills for each of the 25 million children aged 12 to 17 in America, pills that won’t result in abuse or overdose.

 

The DEA Beaumont office, along with the Cleveland, Jasper, Lamar University, Liberty, Lumberton, Orange, Port Arthur, Silsbee and Sour Lake Police Departments, will set up collection sites at the following locations: 

 

Cleveland PD- 226 Peach Street, Cleveland, Texas 77327

Jasper PD- 555 S Main Street. Jasper, Texas 75951

Lamar University PD- 211 Red Bird Lane, Beaumont, Texas 77710

Liberty PD- 1906 Lakeland Drive, Liberty, Texas 77575

Lumberton PD-120 East Chance Rd #A, Lumberton, Texas 77657

Orange PD- 201 8th Street, Orange, Texas 77630

Port Arthur PD- 645 4th Street, Port Arthur, Texas 77641

Silsbee PD- 1104 North 5th Street, Silsbee, Texas 77656

Sour Lake PD- 625 Highway 105 West, Sour Lake, Texas 77659
Beaumont Rogers Park- 1455 Dowlen Rd, Beaumont, Texas 77706

 

Collection sites across the nation can be found by going to www.dea.gov. This site is continuously updated with new take-back locations.

WASHINGTON – The Department of Justice, U.S. Attorney’s Office for the Eastern District of Texas and the Environmental Protection Agency (EPA) announced today that four Texas companies pleaded guilty and agreed to pay a total of $3.5 million dollars for criminal violations of the Clean Air Act at two oil and chemical processing facilities in Texas.

The Information filed in federal court in the Eastern District of Texas charges KTX Limited and KTX Properties Inc., with negligently releasing hazardous air pollutants after a tank explosion at their chemical and petroleum processing facility located in Port Arthur, Texas on March 31, 2011. The explosion killed one worker at the plant and severely injured two others. 

According to the factual basis of the plea agreement, KTX Limited and KTX Properties Inc, authorized two contract workers to perform welding or “hot work” on piping connected to a tank at their Port Arthur, Texas, facility.  Prior to beginning the welding, the defendants falsified the “hot work” permit issued to the workers and failed to properly drain, isolate and decontaminate the tank and connecting equipment as required by Occupational Safety and Health Act (OSHA) regulations.  As a result, the welding work ignited vapors causing the tank to explode and release hazardous air pollutants to the environment.  Because the defendants had failed to properly inspect and maintain the tank pursuant to generally accepted industry standards, the exploding tank collapsed spilling burning product which severely injured two workers.  A third worker was killed when the rails and ladder from the collapsing tank fell on his head. 

“The dishonest [and outright] failure to adhere to workplace standards and practices can lead to death and injury to American workers who deserve better, as this case tragically shows,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “The Justice Department is committed to enforcing environmental and workplace safety laws that protect workers from this kind of egregious behavior and to help ensure it doesn’t happen again.”

The information also charges Crosby LP and Ramsey Properties LP with failing to monitor leaks of ground-level ozone (smog) producing air pollutants at their chemical processing facility in Crosby, Texas, from 2008 until 2012.  Pursuant to the factual basis, the defendants also admitted that they falsified records and reports for these Title V permit requirements to EPA and the Texas Commission of Environmental Quality certifying the facility was complying with the permit requirements.

“Safety inspections involving toxic or hazardous materials are mandatory and vital to the safety of the worker and the surrounding communities,” said Acting U.S. Attorney Brit Featherston for the Eastern District of Texas.  Non-performance is unacceptable and will not be tolerated, and offenders will be prosecuted.”

The plea agreement requires the companies to pay a total of $3.3 million in criminal fines.  In addition, the companies will make a $200,000 community service payment to the Southern Environmental Enforcement Network (SEEN).  The payment will be used by SEEN for hazardous air release prevention and emergency response training to state and local environmental and law enforcement agencies. 

“When handled or stored improperly, chemicals can result in severe injuries or even death, so protecting communities from the harmful effects of hazardous chemicals is a priority for EPA,” said Special Agent in Charge Christopher R. Brooks of EPA’s criminal enforcement program for Texas.  “This case emphasizes the importance of having – and following – a plan to manage risks associated with storing hazardous chemicals, which help companies avoid accidents and enable local emergency responders to be better prepared.”   

“Employee safety is of paramount importance as there is no excuse for workers not returning to their families at the end of the day,” said Regional Administrator Kelly Knighton for OSHA Region 6.  “Resulting from an initial OSHA fatality investigation, I commend the Federal and State partners for holding accountable, to the fullest extent of the law, those employers that take shortcuts and endanger the safety and health of their workers.”

Assistant U.S. Attorney Joseph R. Batte of the Eastern District of Texas and Trial Attorneys Richard Powers and David Kehoe of the Department of Justice, Environmental Crimes Section, prosecuted the case.  The case was investigated by EPA’s Criminal Investigation Division and assisted by the Texas Commission on Environmental Quality, the Texas Parks and Wildlife Department, and the Occupational Safety and Health Administration.

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SHERMAN, Texas – A jury has found four North Texas men guilty of federal money laundering violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today. 

Miguel Rivas Estrada, 29, of Michoacán, Mexico; Felipa Torres, 49, of Dallas; Justa Centeno, 52, of Dallas; and Jose Angel Olvera, 40, of Dallas, were found guilty by a jury of conspiracy to commit money laundering. The verdict was reached on Sep. 19, 2016 following a week-long trial before U.S. District Judge Amos Mazzant.

               According to information presented in court, Felipa Torres owned and operated Cumbia Recordz, Justa Centeno owned and operated Variedades Esperanza and Jose Olvera owned and operated Super Mercado 5 Estrellas.  All three of these businesses operated as money services business (MSBs) located in the Northwest Highway area and were authorized agents of several International Money Remitter Companies, such as Barri Financial Group, Continental Exchange Solutions, GroupEx Financial Corporation, InterCambio Express Corporation, Intermex Wire Transfers, LLC, Sigue Corporation, Unidos Financial Corporation, and Viamericas Corporation.  The three MSBs utilized these remitter services to facilitate the transmission of proceeds obtained from the distribution of methamphetamines via wire transfers to Michoacán, Mexico. 

Between June of 2013 and October of 2015, these MSBs laundered over $16 million in illicit proceeds from the North Texas area to Michoacán, Mexico. These MSBs charged a wire transaction fee to help launder the illicit proceeds.  It was part of the laundering scheme that the MSBs structured the wires in amounts less than $1,000 coupled with the usage of fictitious sender information in order to avoid bank secrecy act reporting requirements and to conceal the true origin and ownership of the illicit proceeds.

The head of the multi kilo methamphetamine transnational distribution ring was Miguel Angel Rivas Estrada who was also found guilty of conspiracy to distribute methamphetamine. 

                Under federal statutes, the defendants each face up to 20 years in federal prison at sentencing.  The maximum statutory sentence prescribed by Congress and 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 is the result of an ongoing Organized Crime Drug Enforcement Task Force (OCDETF) joint investigation.  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. 

This case was investigated by Homeland Security Investigations, Internal Revenue Service - Criminal Investigations, Lancaster Police Department, Dallas Police Department, Dallas County Sherriff’s Office, Fate Department of Public Safety, Irving Police Department, Rockwall County Sherriff’s Office, Balch Springs Police Department, Rowlett Police Department, Enforcement and Removal Operations, and the Texas Attorney General’s Office.  This case was prosecuted by Assistant U.S. Attorneys Heather Rattan and Leslie Brooks.

ABILENE, Texas — William David Harden, 65, formerly of Tye, Texas, was sentenced this morning by U.S. District Judge Reed C. O’Connor to 135 months in federal prison, following his guilty plea in May 2016 to one count of enticement of a minor, announced U.S. Attorney John Parker of the Northern District of Texas.

Harden has been in custody since his arrest on a federal indictment in August 2015.

According to documents filed in the case, from approximately May to July 2015, Harden engaged in a cell phone texting relationship with a female minor, under age 17, in which he knowingly persuaded, induced, and enticed her to engage in sexual activity with him.  Specifically, in early July 2015, Harden knowingly persuaded, induced, and enticed, and attempted to persuade, induce and entice this minor female to engage in sexual activity with him, suggesting to the minor female that by doing so, she could repay him for arranging to get a motel room where she could meet up with a friend.

At today’s sentencing hearing, Judge O’Connor also ordered that Harden forfeit his 2008 pickup truck that he used to transport this minor female and another minor to that motel.

This year marks the 10th anniversary of the Project Safe Childhood (PSC) initiative.  PSC is a department initiative launched in May 2006 to combat the proliferation of technology-facilitated sexual exploitation crimes against children.  Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, tribal and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  Since FY 2011, the Department of Justice has filed 20,260 PSC cases against 19,111 defendants.  These cases include prosecutions of child sex trafficking; sexual abuse of a minor or ward; child pornography offenses; obscene visual representation of the sexual abuse of children; selling or buying of children; and many more statutes.  To learn more about PSC’s work, please visit: https://www.justice.gov/psc.

The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Abilene Police Department, and the Taylor County Sheriff’s Office.  Assistant U.S. Attorney Steven M. Sucsy, of the U.S. Attorney’s Office in Lubbock, Texas, was in charge of the prosecution.

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