Eastern District of Texas

BEAUMONT, Texas – A 28-year-old federal inmate has been sentenced for receiving contraband in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Sultan Adnan Al-Bizri, of Lubbock, Texas, pleaded guilty on Mar. 11, 2015, to attempting to obtain a prohibited object by a federal inmate and was sentenced to 55 months in federal prison on June 23, 2015 by U.S. District Judge Ron Clark.

According to information presented in court, in August 2012, while monitoring inmate telephone calls and emails at the U.S. Penitentiary in the Federal Correctional Complex in Beaumont, officials discovered Al-Bizri and others arranging for the delivery of heroin into the prison during visitation.  On Aug. 6, 2012, federal agents intercepted an individual arriving at the prison visitation area with two balloons that contained heroin.  Al-Bizri was indicted by a federal grand jury on Oct. 1, 2014.

Al-Bizri was convicted of being a felon in possession of a firearm in the Northern District of Texas in 2010 and sentenced to 120 months in federal prison.  He must serve his 55 month sentence from this conviction following the conclusion of his current prison sentence.

            This case was investigated by the Drug Enforcement Administration and Bureau of Prisons, Special Investigations and prosecuted by Assistant U.S. Attorney Randall L. Fluke and Special Assistant U.S. Attorney Russell James.

TYLER, Texas – The former Chief Financial Officer of Shelby Regional Medical Center has been sentenced to federal prison in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Joe White, 68, of Cameron, Texas, pleaded guilty on Nov. 12, 2014 to making a false statement and was sentenced to 23 months in federal prison today by U.S. District Judge Michael Schneider.  White was also ordered to pay restitution in the amount of $4,483,089.09 to Medicare’s Electronic Health Record (EHR) Incentive Program.

According to information presented in court, White was the Chief Financial Officer for Shelby Regional Medical Center in Center, Texas, in addition to other hospitals owned and operated by Dr. Tariq Mahmood.  White oversaw the implementation of electronic health records for the hospital and was responsible for attesting to the meaningful use of electronic health records in order to qualify to receive incentive payments under Medicare’s EHR Incentive Program.  On Nov. 20, 2012, White knowingly made a false statement to Medicare falsely representing that the hospital was a meaningful user of electronic health records, when the hospital did not meet the meaningful use requirements.  As a result, Shelby Regional Medical Center received $785,655.00 from Medicare.  In total, hospitals owned by Mahmood were paid over $16 million under the Medicare and Medicaid EHR Incentive Programs.  White was indicted by a federal grand jury on Jan. 22, 2014.  

“The granting of EHR funds to individual and institutional providers was intended to modernize medical record storage and access.  Unfortunately, there are individuals and institutions like Mr. White and his hospital whose only intent for EHR funds was to enrich themselves,” said Mike Fields, Special Agent in Charge of the Dallas region’s HHS – Office of Inspector General.

“I agree with SAC Fields,” said U.S. Attorney Bales.  “The EHR Incentive Program was designed to enhance the delivery of excellent medical care to all Americans and especially for those citizens who live in underserved, rural areas like Shelby County.  There is no doubt that Mr. White understood that purpose and yet, he intentionally decided to steal taxpayer monies and in the process, undermine and abuse this important program.”  

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).

TYLER, Texas – A 54-year-old Tyler, Texas, woman has been sentenced for wire fraud in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

            Tammy Ogden pleaded guilty on Dec. 15, 2015, to wire fraud and was sentenced to 27 months in federal prison on June 10, 2015 by U.S. District Judge Leonard E. Davis.  Ogden was also ordered to pay restitution in the amount of $136,237.75.

                According to information presented in court, from July 2009 to November 2012, Ogden was employed by a professional cleaning and restoration company that performs water, fire, and storm damage restoration.  During this time, she devised and executed a scheme to defraud her employer by offering unauthorized discounts to customers, creating fraudulent invoices and receipts, obtaining payments, and embezzling the proceeds.

This case was investigated by the Smith County Sheriff’s Office and the U.S. Secret Service and was prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.

BEAUMONT, Texas – A 53-year-old Beaumont man has been sentenced to federal prison for wire fraud violations in the Eastern District of Texas, announced U.S. attorney John M. Bales.

            William Elzy Kelley, Jr., also known as Bo Kelley, pleaded guilty on Apr. 13, 2015, to wire fraud and was sentenced to one year and one day in federal prison today by U.S. District Judge Marcia Crone.

According to information presented in court, Kelley was president of the West Brook High School Football Booster Club from 2012 to February 2014.  During which time Kelley had access to the Booster Club’s funds, which were kept in separate checking and savings accounts.  From Sep. 2013 through Feb. 2014, Kelley withdrew funds from these accounts to pay personal expenses, including, but not limited to rent payments at Stoneleigh Apartments, college tuition, and other household bills.  Kelley carried out the scheme by withdrawing cash and depositing it into his personal bank account and by using the debit card and writing checks on the account for his personal use.  Kelley is specifically charged with using the Booster Club debit card to make a payment to Stoneleigh Apartments in the amount of $922.42 on Dec. 3, 2013.

This case was prosecuted as part of the Joint Task Force established in March 2014 between the U.S. Attorney’s Office for the Eastern District of Texas and the Jefferson County District Attorney’s Office to investigate and prosecute major crimes – more specifically, violent crime and crimes related to the abuse of public trust in Jefferson County, Texas.

If you have any information related to this or any other matter related to fraud, please call the Federal Bureau of Investigation at 409-832-8571.

This case is being investigated by the Federal Bureau of Investigation, the Beaumont Police Department, and the Jefferson County District Attorney’s Office.  This case is being prosecuted by Assistant U.S. Attorneys Joseph R. Batte and Christopher T. Tortorice.

BEAUMONT, Texas – A 37-year-old federal inmate has been sentenced for receiving contraband in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Donald James Bratton, Jr., of Little Rock, AR, pleaded guilty on Jan. 6, 2015, to attempting to obtain a prohibited object by a federal inmate and was sentenced to 37 months in federal prison today by U.S. District Judge Ron Clark.

According to information presented in court, on Oct. 1, 2012, Bratton, Jr., was visited by his father, Donald James Bratton, Sr., at the U.S. Penitentiary in the Federal Correctional Complex in Beaumont.  During the visitation, officers using surveillance equipment observed Bratton Jr. obtain an object from the waistband of his father.  Officers responded to the visitation room and separated the Brattons.  The item contained 12.25 grams of heroin.  The father and son were indicted by a federal grand jury on Oct. 1, 2013.  Bratton Sr. was sentenced to 3 years of probation on May 12, 2015. 

Bratton Jr. was convicted of being a felon in possession of a firearm in the Western District of Arkansas on Mar. 31, 2010, and sentenced to 211 months in federal prison.  He must serve his 37 month sentence from this conviction following the conclusion of his current prison sentence. 

            This case was investigated by the Drug Enforcement Administration and Bureau of Prisons, Special Investigations and prosecuted by Assistant U.S. Attorney Randall L. Fluke.

TYLER, Texas – A 45-year-old Palestine, Texas man has been sentenced to federal prison for distributing methamphetamine, announced U.S. Attorney John M. Bales today.

Edwin William Pacheco pleaded guilty on Feb. 11, 2015, to possession of methamphetamine with the intent to distribute and was sentenced to 21 months in federal prison today by U.S. District Judge Michael H. Schneider.

According to information presented in court, on Aug. 29, 2014, Pacheco delivered approximately 3.5 grams of methamphetamine to another person in Palestine, Texas.  From Aug. 29, 2014 to Oct. 24, 2014, Pacheco distributed at least 10 grams of methamphetamine in Palestine receiving about $2,500.  On Sep. 3, 2014, a search warrant was executed at Pacheco’s residence located on W. Debard Street in Palestine.  During the search, the officers recovered a .380 caliber pistol, loaded with four bullets, from above a ceiling tile in the hallway of the residence.  The officers also recovered numerous rounds of assorted ammunition from a shed on the premises.

Pacheco is a citizen of El Salvador and will face deportation upon his release from prison.

            This case was investigated by the Palestine Police Department, the Anderson County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and prosecuted by Assistant U.S. Attorney Jim Noble.

TYLER, Texas – A 22-year-old Palestine, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Abel Estrada Jr. pleaded guilty on Feb. 19, 2015, to possession of methamphetamine with the intent to distribute and was sentenced to 33 months in federal prison today by U.S. District Judge Michael H. Schneider.

According to information presented in court, on Oct. 25, 2013, in Palestine, Texas, Estrada Jr. delivered approximately 28 grams of methamphetamine to an individual in Palestine, Texas.  The court also found that from October 1, 2013 through September 24, 2014, Estrada distributed at least 40 grams of a methamphetamine and that during that time period, Estrada Jr. and received at least $10,000.00 from the delivery of methamphetamine.  

            This case was investigated by the Palestine City Police Department, the Anderson County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and prosecuted by Assistant U.S. Attorney Jim Noble.

BEAUMONT, Texas – A 47-year-old Kountze, Texas man has been sentenced to federal prison for child exploitation violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Raymond Edward Russ, Jr., pleaded guilty on Oct. 17, 2014, to coercion and enticement involving the sexual exploitation of a child and was sentenced to 120 months in federal prison on June 2, 2015 by U.S. District Judge Thad Heartfield.

According to information presented in court, on May 2, 2014, law enforcement officers became aware of a Craigslist advertisement posted by a person identified as Russ seeking a young female for sexual activity.  An undercover officer posing as a 13-year-old girl named Ashley contacted Russ and began corresponding online.  During the next 20 days, Russ and “Ashley” engaged in email conversations about “Ashley’s” sexual experiences and that she was only 13.  Russ also provided a photo of himself to Ashley.  On May 20, 2014, Russ began aggressively pursuing Ashley and attempting to entice her to meet for sexual activity.  Russ arranged to pick Ashley up from an apartment complex on Folsom in Beaumont.  Russ arrived at the apartment complex and was detained.  Russ was indicted by a federal grand jury on June 24, 2015.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 (HSI) and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Michelle Englade.

PLANO, Texas - A 35-year-old Plano, Texas man has been sentenced to 20 years in federal prison in relation to an incident involving an explosive device in the Eastern District of Texas, announced U.S. Attorney John M. Bales.

Anson Chi pleaded guilty on June 3, 2013, to possession of an unregistered firearm or explosive device and malicious use of explosive material and was sentenced to 240 months in federal prison today by U.S. District Judge Richard A. Schell.  The Court applied a terrorism enhancement and did an upward departure of the sentencing guidelines.  This enhancement classifies Chi as a domestic terrorist.

According to information presented in court, on June 18, 2012, Chi possessed a destructive device or explosive that was not registered in the National Firearms Registration and Transfer Record.  The explosive device was manufactured by Chi through the combination of chemicals to create methyl nitrate.  Methyl nitrate is a highly volatile explosive capable of inflicting significant damage to persons or property.  Chi admitted to obtaining the chemical formula for methyl nitrate and documents related to explosives from the Internet. A superseding indictment was returned by a federal grand jury on Feb. 14, 2013, charging Chi with these violations.

Chi also admitted to intentionally damaging an Atmos Energy pipeline by attaching the explosive device to the pipeline and igniting it.  Chi was ordered to pay restitution to Atmos in the amount of $28,127.77.

This case was investigated by the FBI, the FBI-Joint Terrorism Task Force, the Plano Police Department, and the ATF and prosecuted by Assistant U.S. Attorney M. Andrew Stover.

SHERMAN, Texas – A 47-year-old former resident of Frisco, Texas, was found guilty of federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Frank Edwin Pate was found guilty by a jury of two counts of wire fraud and one count of mail fraud following a five-day trial before U.S. District Judge Amos Mazzant.

According to information presented in court, Pate perpetrated a fraud scheme on seven individuals who invested money with Pate for the purpose of trading foreign currency on their behalf. The evidence established that seven investors gave Pate a total of over $2.6 million over a several year period for the purpose of currency trading.  Instead of using the money for foreign currency trading, Pate spent a large portion of the money for his own personal expenses.  Pate was indicted by a federal grand jury on Aug. 13, 2014.

Pate faces up to 20 years in federal prison on each conviction.  A sentencing date has not been set.

                This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys J. Andrew Williams and Christopher Eason.

SHERMAN — A 49-year-old man from Karachi, Pakistan, has been found guilty of being a member of a large-scale drug trafficking organization responsible for illegally importing and distributing millions of counterfeit, adulterated, and misbranded pills in the Eastern District of Texas and throughout the United States, U.S. Attorney John M. Bales announced.

On May 14, 2015, a federal jury in Sherman, Texas, convicted Muhammad Aijaz Sarfraz of conspiracy to manufacture and distribute controlled substances and international money laundering conspiracy following a four-day trial before U.S. District Judge Amos Mazzant.  Today, the Court entered a Preliminary Order of Forfeiture against Sarfraz, awarding the government a $38,967,372 money judgment based on a portion of the drug proceeds generated by the criminal enterprise.

According to information presented in court, from approximately March 2009 until Sarfraz’s arrest in April 2012, Sarfraz and his co-conspirators operated numerous illegal websites through which they distributed millions of illicit Schedule II, III, and IV controlled substances to Internet customers throughout the United States.  Those pills included such popular prescription medications as OxyContin, Percocet, Adderall, Ritalin, Hydrocodone, Xanax, Valium, Ambien, and others.   The counterfeit drugs were generally manufactured in China, Singapore, Malaysia, India, Pakistan, and Hong Kong.  The pills, which were made to look like authentic prescription medications approved for use in the U.S. when validly prescribed by a physician, often contained incorrect active pharmaceutical ingredients or the wrong quantity and dosage strength of those substances.  No physicians or medical professionals of any kind were involved at any stage of the drug distribution process.  Anyone with access to the Internet, a credit card and a physical mailing address could order drugs from this criminal organization without a prescription or limits on quantity desired.

Key members of the group operated in Pakistan, India, the United Arab Emirates, and other foreign countries.  Bulk pill shipments containing 25,000 to 50,000 or more pills at a time were shipped to ground operatives living in the U.S., who would re-ship the pills to co-conspirators operating in other parts of the country and fulfill Internet drug orders by drop-shipping individual pill bottles to Internet customers.  Evidence presented at trial established that the drug trafficking organization was capable of distributing upwards of 1 million pills or more per month on average.  This is believed to be one of the largest cases of its kind ever prosecuted in the United States in terms of pill quantities involved.

The criminal enterprise laundered money by moving drug proceeds from the United States to various foreign countries for the purpose of promoting the unlawful drug operation.  Sarfraz and other conspirators also caused money to be moved back into the U.S. through foreign banks and shell companies for the purpose of funding U.S. operations by, for example, purchasing bulk pill bottles, postage and other shipping supplies, as well as paying ground operatives.  It is estimated that the criminal enterprise may have generated as much as $100 million or more in proceeds between 2009 and 2012.

Several low-level ground operatives have been successfully prosecuted in the Eastern District of Texas and elsewhere over the past three years, but Sarfraz is the first upper-level member of the group to be apprehended and prosecuted.  Sarfraz faces up to 20 years in federal prison on each of the two drug conspiracy and money laundering conspiracy charges for which he was convicted.  A sentencing date has not yet been set.

This case was investigated by the Drug Enforcement Administration and Internal Revenue Service-Criminal Investigations Division, and was prosecuted by Assistant U.S. Attorneys Stevan Buys and Will Tatum.

BEAUMONT, Texas – A 66-year-old Hamond, Indiana, resident, who had lived in Vidor, Texas, has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Raymond Gajewski pleaded guilty on Dec. 4, 2014, to possession of child pornography and was sentenced to 87 months in federal prison today by U.S. District Judge Ron Clark.

According to information presented in court, in April 2012, law enforcement officers were notified by a citizen of a computer which belonged to Gajewski which contained images of child pornography.  Gajewski had left the computer in Vidor after relocating to Indiana.  Gajewski admitted to possessing the images on the computer and to abandoning it in Vidor.  A forensic analysis of the computer revealed approximately 300 images, including two videos, of child pornography.  Gajewski was indicted by a federal grand jury on Aug. 6, 2014. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 (HSI) and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.

PLANO, Texas – A 68-year-old Prosper, Texas woman has been sentenced to federal prison in connection with her role in a conspiracy to embezzle millions from the Plano Independent School District, announced U.S. Attorney John M. Bales today.

                Carol Ann LaRue pleaded guilty on June 24, 2014, to conspiracy to commit federal program fraud and was sentenced to 30 months in federal prison today by U.S. District Richard Schell.  LaRue was also ordered to pay restitution in the amount of $1,252,556 to Plano ISD.

                According to information presented in court, LaRue owned and operated Fire Systems Specialists (FSS) and Digital Security Solutions (DSS), companies supposedly in the business of maintaining fire safety systems and security systems.  Between May 2011 and December 2013, LaRue conspired with Plano Independent School District employee, Kris Wilson Gentz, to defraud Plano ISD by submitting fraudulent invoices for services that were not rendered and products that were not provided.   When payment was made to FSS and DSS, LaRue and Gentz would split the profits between themselves.  As a result of the fraudulent scheme, LaRue is responsible for losses to Plano ISD of $1.2 million and Gentz was responsible for losses of $2.6 million.  Gentz pleaded guilty to the same charges and was sentenced to 51 months in federal prison on Apr. 16, 2015.

This case was investigated by the Federal Bureau of Investigation and the Department of Education and prosecuted by Assistant U.S. Attorney Christopher A. Eason.

BEAUMONT, Texas — A 57-year-old Beaumont, Texas man has been indicted on child exploitation charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Gary Allen George was indicted by a federal grand jury on May 6, 2015 and charged with receiving child pornography, distributing child pornography and possession of child pornography.

According to the indictment, an investigation revealed that from Aug. 6, 2014 to Sep. 18, 2014, George is alleged to have received, distributed and possessed files containing images or videos of child pornography on his computer.  At least one of the images involved a minor under the age of 12-years-old engaging in sexually explicit conduct.

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

This case is being 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 is being investigated by Homeland Security Investigations (HSI) and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.

It is important to note that an 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.

BEAUMONT, Texas — A 35-year-old Baltimore, MD man has been indicted on child exploitation charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Ian Christian Anderson was indicted by a federal grand jury on May 7, 2015 and charged with two counts of enticement of a minor and two counts of traveling with intent to engage in illicit sexual conduct.

According to the indictment, on Feb. 15, 2015 and Mar. 16, 2015, Anderson is alleged to have traveled from Maryland to Lumberton, Texas to engage in sexual conduct with a person he knew to be under the age of 18.

Nelson faces a minimum of 10 years in federal prison if convicted of any of the charges.

This case is being 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 is being investigated by the Federal Bureau of Investigation the Lumberton Police Department, and the Hardin County Sheriff’s Office.  This case is being prosecuted by Assistant U.S. Attorneys Joseph R. Batte and Christopher T. Tortorice.          

It is important to note that an 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.

 

BEAUMONT, Texas – A 58-year-old Lafayette, LA, man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

                Christopher Omigie, a Nigerian native and naturalized U.S. citizen, pleaded guilty on Oct. 28, 2014 to conspiracy to distribute cocaine was sentenced to 168 months in federal prison today by U.S. District Judge Marcia A. Crone.

                According to information presented in court, Omigie presented himself to drug traffickers as a witch doctor and was paid hundreds of thousands of dollars to provide supernatural protection from law enforcement.  Omigie was consulted by drug traffickers in the Cesar Barrera and David Bazan drug trafficking organizations on a daily basis and before, during and after each drug transaction.  The supernatural protections rendered involved card readings, massages (by Omigie) with magic ointments, cutting of the skin with razor blades and the topical application of magic powder, the use of magic amulets, magic belts, magic coconuts and magic rocks (that those being treated were required to talk to).  Drug traffickers were required by Omigie to go without bathing and intercourse for a period of time following magic treatments so as not to diminish the potency of those ministrations.  Magic “law stay away” candles were also burned in order to protect drug traffickers from law enforcement detection.  Omigie would regularly return to Africa, at drug traffickers’ expense, to re-new his supernatural powers.  Omigie was indicted by a federal grand jury on Sep. 5, 2013.

                Cesar Barrera and David Bazan have since both pleaded guilty to schemes involving the trafficking of more than 1,000 kilograms of cocaine each.

This case was investigated by the U.S. Drug Enforcement Administration and the Internal Revenue Service Criminal Investigation and prosecuted by Assistant U.S. Attorney John Craft.

BEAUMONT, Texas – A 28-year-old Jasper, Texas man has been sentenced to federal prison for drug violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

        Shane Dwayne Hadnot pleaded guilty on Dec. 10, 2014, to possession with intent to distribute cocaine and was sentenced to 87 months in federal prison today by U.S. District Judge Marcia Crone. 

        According to information presented in court, on Nov. 7, 2013, Alfred Wright, of Jasper, Texas, was reported missing by his family after his truck broke down in rural Sabine County, Texas.  Articles of Wright’s clothing were found on private land, approximately a mile from where Wright was last seen.  After searchers initially failed to locate Wright, his body was found on Nov. 25, 2013 in brush near where his clothing had been found.  An investigation into the cause of Wright’s disappearance and death revealed his involvement with Shane Hadnot.  Phone records, witness statements, and drug evidence located during the search of Shane Hadnot’s car, indicated that Hadnot was selling cocaine to Alfred Wright.

        During the two-day period before Wright’s death, Hadnot and Wright exchanged 20 text messages.  The indictment alleges that on Nov. 7, 2013, Wright sent a text message to Hadnot at 12:36 pm requesting to purchase cocaine and other illegal narcotics from Hadnot.  Wright went missing approximately five hours later.  An autopsy was performed on Wright’s body and toxicology testing revealed that Wright’s blood contained cocaine, methamphetamine and Xanax.  The final autopsy report, and other experts in the fields of pathology, toxicology, and anthropology concluded that Wright’s cause of death was an accident due to combined drug intoxication.  Hadnot was indicted by a federal grand jury on Aug. 6, 2014 and charged with drug trafficking violations.              

        This case was investigated by the Texas Rangers, the Federal Bureau of Investigation, and the U.S. Drug Enforcement Administration.  This case was prosecuted by Assistant U.S. Attorneys Brit Featherston and John B. Ross.

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PLANO, TX – Kris Wilson Gentz, 59, has been sentenced to federal prison for his role in a conspiracy to embezzle over $2.5 million from the Plano Independent School District, announced U.S. Attorney John M. Bales.

            Gentz was sentenced to 51 months in prison yesterday during a court appearance before U.S. District Judge Thad Heartfield.  Gentz had pleaded guilty to Conspiracy to Commit Federal Program Theft on April 1, 2014.  In addition to his prison sentence, Gentz was also ordered to pay restitution of over $2.5 million dollars.

            According to information presented in court, Plano ISD employed Gentz as a Manager and Security and Fire Systems Security Support Specialist from approximately August 2001 through December 2013.  Gentz was responsible for ensuring that Plano ISD schools were equipped with fire and security alarms that were properly maintained.  Gentz and two other  individuals set up two companies called Fire System Specialists (FSS) and Digital Security Solutions (DSS) that were allegedly in the business of maintaining fire safety systems and security systems.

Between 2004 and December 2013, Gentz and his co-conspirators generated fraudulent FSS and DSS invoices and submitted them to Plano ISD for payment.  Gentz, in his Plano ISD management role, corruptly approved these invoices and the services and products referenced on the invoices were never provided or delivered.  When payment was made to FSS and DSS, Gentz and his co-conspirators would split the profits between themselves.  Over the course of the scheme, Gentz and his co-conspirators obtained over $2,500,000 from Plano ISD.  In pleading guilty, Gentz acknowledged that he had abused the position of trust that Plano ISD had given him.

            This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorneys Chris Eason and Andy Williams.

 

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TYLER, Texas – A 63-year-old Dallas County, Texas, physician, has been sentenced to federal prison for health care fraud and identity theft violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales.

           Tariq Mahmood, 63, of Cedar Hill, Texas, was found guilty by a jury 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.  He was sentenced to 135 months in federal prison and ordered to pay restitution in the amount of $599,128.02 to Medicare, Medicaid, and Blue Cross Blue Shield of Texas.

           According to information presented in court, Mahmood, a general practitioner, owned and operated several hospitals in the state of Texas, including Cozby Germany Hospital in Grand Saline, Renaissance Terrell Hospital in Terrell, Central Texas Hospital in Cameron, Community General Hospital in Dilley, and Lake Whitney Medical Center in Whitney.  From January 2010 to April 2013, Mahmood and others carried out a scheme to defraud Medicare and Medicaid through the submission of false and fraudulent claims.  Mahmood and others added, changed, and incorrectly sequenced diagnostic codes in a way that did not reflect the actual diagnoses and conditions of the patients and often did so without reviewing the medical records.  They submitted false and fraudulent claims to Medicare and Medicaid based on the added, changed, and incorrectly sequenced diagnostic codes.  Mahmood and others also unlawfully used Medicare beneficiaries’ names and Medicare numbers in order to commit health care fraud.  Mahmood was indicted by a federal grand jury on April 11, 2013.

           “Americans enjoy the best health care in the world and the cost for this care is expensive,” said John M. Bales, U.S. Attorney.  “What we do not need is providers like Tariq Mahmood who masquerade as physicians who pretend to care about American health care but actually are determined to loot the Medicare Trust Fund.  He is now being held to account, and I congratulate the prosecution team for a job very well done.”

           “Today, Dr. Mahmood found out what health care providers who defraud Medicare are finding out all over America, you will be held accountable for your greed,” said Mike Fields, Special Agent in Charge, Department of Health and Human Services - OIG.  “HHS-OIG agents will continue to work closely with our State and Federal law enforcement partners to protect the Medicare Trust Fund.”

            The 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).  This case was prosecuted by Assistant U.S. Attorneys Nathaniel C. Kummerfeld and Frank Coan and Special Assistant U.S. Attorney Ken McGurk.

           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).

BEAUMONT, Texas — Three former Beaumont Independent School District employees have been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

            Daryl Glenn Johnson, 44, of Beaumont, pleaded guilty on Dec. 4, 2014, to conspiracy and was sentenced to 33 months in federal prison today by U.S. District Judge Ron Clark.   Erin Gipson Johnson, 38, of Beaumont, and Kailyn DeShondra Pete, 25, of Beaumont, each pleaded guilty on Dec. 4, 2014 to fraud upon programs receiving federal funds.  They were both sentenced to 5 years probation today by Judge Clark.

            Daryl Johnson was ordered to pay $284,039.42 in restitution.  He is jointly and severally liable with Erin Johnson for $193,998.37, and jointly and severally liable with Kailyn Pete for $90,041.05.

            According to information presented in court, from July 2009 through June, 2012, Daryl Johnson, who was employed as the warehouse supervisor for the school district, first his wife, Erin Johnson, and then a friend, Kailyn Pete, placed on the BISD payroll as temporary employees.  However, neither Erin Johnson nor Kailyn Pete ever actually worked as a BISD warehouse employee.  Daryl Johnson had the autonomy to hire temporary warehouse employees on his own, and the authority to determine how many hours they would be paid, and could do so unilaterally and without the authorization or direct knowledge of anyone else. Daryl Johnson used this authority to fraudulently verify that both Erin Johnson and Kailyn Pete worked the hours indicated on their respective timesheets, which included extensive amounts of overtime when he knew that they in fact had not worked any of the hours.  From July 2009 through May 2011, Erin Johnson was paid $193,998.37.  During the timeframe of June 2010 through May 2012, Kailyn Pete was paid $90,041.05.

            This case was investigated by the joint Task Force with the Jefferson County District Attorney’s Office, the Beaumont Police Department, and the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Joe Batte and Christopher T. Tortorice.

BEAUMONT, Texas - U.S. Attorney John M. Bales announced today that 18 individuals have been arrested on federal violations in the Eastern District of Texas.

               On Apr. 7-8, 2015, a combined task force of federal, state and local law enforcement arrested 18 illegal aliens working under false identities at various refineries, industrial plants and shipyards in Jefferson, Galveston and Liberty counties.

               A federal grand jury returned 18 indictments on Apr. 2, 2015, charging each individual with either illegal reentry after deportation, identity theft, and or making false claims of United States citizenship in order to obtain jobs at numerous refineries, industrial plants and shipyards over the past six years. The defendants, who are in the United States illegally, were all allegedly working under assumed names obtained through the possession of fraudulently obtained legitimate social security numbers and matching birth certificates, primarily issued in Puerto Rico. With such primary identifying information the defendants obtained State issued identification cards from Louisiana, Arkansas, Texas, and other states. The use of such documents allowed the illegal aliens to pass the E-verify systems used by their employers to ascertain U.S. citizenship or alien lawful work permits. The documents allowed some individuals to obtain Transportation Worker Identification Credentials allowing access to ports and other sensitive work sites. HSI knew the actual identities of several of the aliens because they had been previously deported.  One alien was previously deported after a felony drug conviction.  Fifteen other aliens were identified after being arrested under their assumed names.

               If convicted of the charges, defendants face up to 20 years in federal prison and deportation.

               These cases are being investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Enforcement and Removal Operations (ERO) offices in Beaumont, Houston, and Galveston, as well as the U.S. Marshals Service, Social Security Administration Office of Inspector General, Coast Guard Investigative Service, Beaumont Police Department, and Port Arthur Police Department.  These cases are being prosecuted by Assistant U.S. Attorney Robert L. Rawls.

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

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BEAUMONT, Texas – A 44-year-old Orange, Texas man has been sentenced to federal prison for child exploitation violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Joseph Lloyd White pleaded guilty on Dec. 4, 2014, to attempted sexual enticement of a child and was sentenced to 120 months in federal prison today by U.S. District Judge Ron Clark.

According to information presented in court, on May 28, 2014, law enforcement officers were alerted by a parent of possible child exploitation after discovering sexually explicit photos on their 9-year-old child’s cellular phone.  A forensic analysis of the phone and investigation revealed White had met the child using an online messenger site, and even after learning the child was a minor, had continued to send sexually explicit photos of himself to the child and persuaded the child to send photos containing nudity to him.  A detective, pretending to be the child, began communicating with White and verified White knew the child was only nine years old.  On June 6, 2014, White traveled to an apartment complex in Beaumont where he was arrested.  White admitted that he had come to the apartment complex for the purpose of having sex with the 9-year-old child.  White was indicted by a federal grand jury on Aug. 6, 2014. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 (HSI) and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.

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BEAUMONT, Texas – A 34-year-old Port Arthur, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Damien Oasis Winn pleaded guilty on Dec. 4, 2014, to possession of child pornography and was sentenced to 86 months in federal prison today by U.S. District Judge Ron Clark.

According to information presented in court, in December 2013, law enforcement officers conducting Internet undercover operations were made aware of a computer offering files containing child pornography for distribution.  Further investigation revealed the computer belonged to Winn.  On June 19, 2014, a federal search warrant was executed at Winn’s residence and numerous computers and digital storage devices were seized.  A forensic analysis of Winn’s computer revealed over 600 images, including 31 videos, of child pornography.  Winn was indicted by a federal grand jury on Sep. 3, 2014. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 (HSI) and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.

LUFKIN, Texas – A 43-year-old Chicago man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.                

Frederick Mitchell pleaded guilty on Dec. 19, 2014 to conspiracy to possess with intent to distribute cocaine and use of an interstate facility in aid of racketeering and was sentenced to 84 months in federal prison on Apr. 8, 2015 by U.S. District Judge Ron Clark.

According to information presented in court, on July 6, 2014, Mitchell and a co-defendant, Henry Korvette Bams, were stopped for a traffic violation by the Texas Department of Public Safety on US Highway 259 in Nacogdoches County, Texas.  The officer conducted a search of the vehicle and seized approximately $253,341 in cash and a small quantity of marijuana.  Both men were eventually released on bail on July 9, 2014.  On July 22, 2014, Bams and Mitchell were stopped again for a traffic violation by Arkansas State Police in Hot Springs County, Arkansas, on Interstate Highway 30.  The officer received consent to search the vehicle and discovered approximately ten kilograms of suspected cocaine located inside a hidden compartment within the vehicle.  Two bank deposit slips were also discovered within the vehicle.  On Aug. 1, 2014, agents with the Internal Revenue Service and the Drug Enforcement Administration executed a seizure warrant on the bank account and seized approximately $135,015.14 in suspected drug proceeds.  Bams is awaiting trial on pending charges.

This case was investigated by the Internal Revenue Service-Criminal Investigation, the U.S. Drug Enforcement Administration, the Federal Bureau of Investigation, and the Texas Department of Public Safety, and prosecuted by Assistant U.S. Attorney Baylor Wortham.

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BEAUMONT, Texas – A 64-year-old Silsbee, Texas, man has been sentenced for federal income tax violations, announced U.S. Attorney John M. Bales today.

 Billy Dan Peavy pleaded guilty on Oct. 28, 2014 to two counts of filing false income tax returns and one count of aiding and abetting in the preparation and filing of a false corporation income tax return.  Peavy was sentenced on Apr. 7, 2015 to 12 months and one day in federal prison by U.S. District Judge Thad Heartfield. 

 According to information presented in court, Peavy filed false 2007 and 2008 Form 1040 Individual Income Tax Returns.  These returns were false because he knew that he didn’t report all of the income from Beech Creek Disposal, Inc. (also known as NBC Disposal, Inc) and Caneyhead Construction, Inc. on these returns.  Peavy also pleaded guilty to one count of aiding in the preparation of a false Form 1120 Corporation Income Tax Return for 2008 for Beech Creek Disposal, Inc.  The return was false because the gross receipts did not include all of the income from Beech Creek Disposal, Inc (also known as NBC Disposal, Inc.).
 
As a part of the plea agreement with the government, Peavy agreed to pay $351,766 in restitution, representing the amount of taxes to which the IRS was entitled.  He also agreed to pay civil penalties and interest which will amount to more than $100,000.  Peavy was also ordered to pay a fine of $5,000.  Peavy was ordered to surrender on May 26, 2015 to begin serving his prison sentence. 
 
In an effort to show extraordinary acceptance of responsibility, Peavy paid in full all of the restitution owed prior to the sentencing date. He also submitted numerous letters of support to the Court for his service in the community and elsewhere.
 
This case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Randall Fluke.

BEAUMONT, Texas – U.S. Attorney John M. Bales announced today the indictment of 24 individuals who operated a major drug distribution ring and 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 trafficking ring is alleged to have obtained over 150 kilograms of methamphetamine from numerous Mexican sources of supply for redistribution in Houston, Port Arthur, Texas, Southwest Louisiana, and other areas of the United States.  During 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.

On Mar. 5, 2015, a federal grand jury returned a four-count sealed indictment charging 24 individuals with conspiring to possess with 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.  On Mar. 31, 2015, state and federal investigators began executing arrest warrants and at this time have successfully apprehended 21 defendants including:

1. John Nealy Holt, 44, Houston, Texas
2. Leslie Dianne Baron, 32, Houston, Texas
3. Christopher Dean Inman, 41, Houston, Texas
4. Eric Lazaro Castaneda, 38, Houston, Texas
5. Carlos Eduvijis Rosales, 38, Houston, Texas
6. Travis Alejandro Lyon, 34, Houston, Texas
7. Gilbert Gomez, 37, Baytown, Texas
8. Joshua Lee Lanman, 38, Jersey Village, Texas
9. Albert Cardenas, Jr., 23, Houston, Texas
10. Burton Paul Dupuy, 44, Shreveport, Louisiana
11. Amado Tobar, 44, Dallas, Texas
12. Joseph Louis Henning, 58, Houston, Texas
13. Luis Fernando Garcia, 23, Port Arthur, Texas
14. Gerardo Chavez, 38, Nederland, Texas
15. Michael Broughton, 39, Port Arthur, Texas
16. Shawn Key, 37, New Caney, Texas
17. Taber Price, 39, Humble, Texas
18. Britanny Danielle Beckham, 31, Hearne, Texas
19. Ricardo Cortes Lozano, 44, Baytown, Texas
20. Pablo Hernandez, 39, Houston, Texas
21. Thurman Clevenger, 51, Houston, Texas

The identities of the remaining at-large defendants shall remain under seal until they are apprehended by authorities.

Count One of the March 2015 indictment alleges that from 2011 to March 2015, John Nealy Holt, Leslie Dianne Baron, Christopher Dean Inman, Eric Lazaro Castaneda, Carlos Eduvijis Rosales, Travis Alejandro Lyon, Gilbert Gomez, Joshua Lee Lanman, Albert Cardenas, Jr., Amado Tobar, Joseph Louis Henning, Luis Fernando Garcia, Gerardo Chavez, Michael Broughton, Shawn Dewayne Key, Taber Shawn Price, Britanny Danielle Beckham, Ricardo Cortes Lozano, Pablo Hernandez, and Thurman Lee Clevenger, all conspired to distribute methamphetamine in the Eastern District of Texas and elsewhere.

Counts Two and Three allege that on Sep. 10, 2014, John Nealy Holt, Leslie Dianne Baron, and Joshua Lee Lanman possessed numerous firearms during and in furtherance of the methamphetamine trafficking conspiracy.

Count Four alleges that on Aug. 21, 2014, John Nealy Holt and Burton Paul Dupuy used the mail and other facilities of interstate commerce to facilitate the distribution of methamphetamine.

The defendants all face a maximum sentence ranging from 20 years to life in federal prison if convicted of the methamphetamine conspiracy charge.

            This case is the result of an extensive two and a half 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.

This investigation was conducted by the U.S. Drug Enforcement Administration Beaumont Resident Office, the Port Arthur Police Department, and the Houston Police Department, with assistance from the Fort Worth, Texas and Shreveport, Louisiana DEA Resident Offices, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Internal Revenue Service-Criminal Investigation, U.S. Immigration and Customs Enforcement/Homeland Security Investigations, U.S. Customs and Border Patrol, U.S. Marshals Service, Texas Department of Public Safety, the Harris, Montgomery, Waller, and Jefferson County (Texas) Sheriff’s Offices, Montgomery County Pct. 4 and Pct. 1 Constable’s Office, and the police departments of Baytown, Humble, Oak Ridge North, Port Neches, and Groves, Texas.  This case is being prosecuted by Assistant U.S. Attorney Baylor Wortham.

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

TYLER, Texas – U.S. Attorney John M. Bales announced today that 27 individuals have been indicted following a lengthy investigation into a drug trafficking organization dealing methamphetamine in the Eastern District of Texas.

                On Mar. 14, 2015, a federal grand jury returned a sealed indictment charging 27 individuals with conspiracy to possess with intent to distribute methamphetamine.

A combined task force of federal, state and local law enforcement began executing federal arrest warrants and search warrants this week as a result of the investigation.  According to the indictment, beginning in July 2014, the defendants conspired to distribute at least 1.5 kilograms of methamphetamine in the Jacksonville, Texas and Cherokee County area.  During the investigation, agents conducted about 40 controlled buys of over $65,000 worth of methamphetamine.  The drug trafficking organization uses a network of drug couriers, distributors and multiple sources of supply bringing methamphetamine to Cherokee County, Angelina County, Marshall, Texas and into Louisiana.  The indictment also charges two of those defendants with being criminal aliens unlawfully present in the United States after having been deported and four with firearms violations.

If convicted, the defendants each face a minimum of 10 years and up to life in federal prison.

This investigation is being led by the Federal Bureau of Investigation, the Jacksonville Police Department, and the Cherokee County Sheriff’s Office with assistance from multiple federal, state, and local agencies.  Assistant U.S. Attorney Richard Moore is prosecuting the case.

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

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ATTACHMENT

U.S. Attorney Charges 27 in East Texas Drug Trafficking Organization:

Subjects Arrested April 1, 2015

1. Jose Luis Servin-Escalera, 32, of Jacksonville, Texas
2. Felipe Gonzales, 31, of Jacksonville, Texas
3. Juan Armando Servin, 28, of Jacksonville, Texas
4. Javier Secara Servin, 39, of Jacksonville, Texas
5. Jose Alfredo Servin, 31, of Jacksonville, Texas
6. Flavio Fernando Balderas, 46, of Jacksonville, Texas
7. Gerardo Servin Escalera, 29, of Jacksonville, Texas
8. Jose Juan Garcia, 32, of Jacksonville, Texas
9. Johnny Ray Johnston, 49, of Jacksonville, Texas
10. Austin Tamas Gipson, 20, of Rusk, Texas
11. Milton Cynell McFarland, 44, of Jacksonville, Texas
12. James Carlos Simms, 33, of Jacksonville, Texas
13. Toyn Bernard McCuin, 29, of Jacksonville, Texas
14. Vandorus Tranode Horn, 35, of Jacksonville, Texas
15. Raul Hernandez, Jr., 25, of Jacksonville, Texas
16. Jessica Lee Wolf, 32, most recently of Bullard, Texas
17. Penny Ann King, 41, of Lufkin, Texas

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

 

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TYLER, Texas – A Tyler resident, along with his Houston co-conspirator, have been sentenced to federal prison, announced U.S. Attorney John M. Bales today.  

Juan Gutierrez-Mojica, 44, of Tyler, was sentenced to 180 months for conspiracy to possess with the intent to distribute methamphetamine and cocaine, and money laundering during an appearance before United States District Judge Michael H. Schneider.  His co-conspirator, Norberto Pineda, 41, of Houston, was sentenced to 70 months for conspiracy to possess with the intent to distribute cocaine and money laundering.

Gutierrez-Mojica and Pineda were indicted along with 16 co-defendants on April 23, 2014.  According to information presented in court, the conspiracy involved the transportation of multiple kilograms of cocaine from Houston to individuals in Longview and Tyler.  Gutierrez-Mojica also acquired methamphetamine and cocaine from suppliers in Dallas and Houston, which he then distributed.  In addition to their illicit drug conspiracy activities, the pair utilized a bank account to deposit proceeds from the sale of drugs.  Gutierrez-Mojica entered a guilty plea on October 14, 2014.  Pineda pleaded guilty on November 4, 2014.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations.  This case was prosecuted by Assistant U.S. Attorney Mary Ann Cozby.

SHERMAN, Texas – A 35-year-old Allen, Texas man has been sentenced to federal prison for mail fraud violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Marcus Brian Curry pleaded guilty on July 29, 2014 to mail fraud and was sentenced to 151 months in federal prison today by U.S. District Judge Amos L. Mazzant.  A hearing to determine restitution will be held in approximately 90 days.  A date for the hearing has not been set.

According to information presented in court, from June 2006 to February 2014, Curry, the owner and operator of South Coast Group, L.P., a real estate company located in Allen, Texas, devised a scheme to defraud certain homeowners and buyers.  To facilitate the scheme, Curry solicited distressed homeowners who were facing possible foreclosure through mail advertisements and his website, www .soldthismonth.com, and convinced them they could protect their credit by transferring the title to their homes to him with the promise he would assume responsibility for making the mortgage payments.  Curry then solicited buyers with below average credit through his website, www .allcreditisokay.com, and would then sell the property to a new buyer representing that Curry was the true owner of the property, omitting that there was still an original lien holder, and in most cases, not paying the mortgage payments to the original lien holder as promised.  In order to conceal the existing lien from the buyer, Curry financed the mortgage himself, set up “land trusts” pertaining to each transaction, designated himself as the “trustee,”  and had the new buyer send payments to a private mail box under his control with the understanding that Curry, as trustee, would then make the mortgage payments.

After approximately six to ten months the buyer learned that the mortgage payments were delinquent pursuant to (1) either a delinquent notice from the true lending institution that held the note on the property or (2) from the original homeowner after the original owner had been contacted by the true lending institution.  In turn, the lending institution often made a demand for payment-in-full for the remaining balance of the mortgage – despite the buyer’s submission of monthly payments to Curry.  When the buyer was unable to make the full payment to the lending institution, the lending institution initiated the foreclosure process and the buyer was often evicted.

As part of the fraud scheme, more than 50 homeowners and buyers relied on Curry’s false material representations.  As a result of his fraudulent actions, Curry personally gained $1,574,900, and caused a loss to homeowners, buyers and lending institutions of approximately $2,362,350.

This case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney Christopher A. Eason.

      

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TYLER, Texas – A 38-year-old Tyler, Texas, man has been sentenced for wire fraud in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

            Mohammad Moosa Yahya pleaded guilty on Nov. 19, 2014, to wire fraud and was sentenced to 24 months in federal prison today by U.S. District Judge Leonard E. Davis.  Yahya was also ordered to pay restitution in the amount of $455,000.

            According to information presented in Court, Yahya served as president of EMN Global Trading Corporation, a Texas corporation based in Tyler.  In April 2001, EMN Global Trading began doing business as a used car dealership in Tyler operating under the name Tyler Automax.  Beginning in May 2011, Yahya devised a scheme to defraud investors by representing that their funds would be used for operation of the dealership, specifically for the purchase of vehicles that would be resold.  Yahya told the prospective investors that they would be paid profits from the vehicle sales.  Yahya failed to sue the investors’ money to purchase vehicles and instead misappropriated the funds for his personal use.  Yahya was indicted by a federal grand jury on Sep. 13, 2012.  In October 2013, Yahya was arrested in Saudi Arabia by Saudi law enforcement officials and returned to U.S. custody in March 2014.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation and was prosecuted by Assistant U.S. Attorney Frank Coan.

 

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TYLER, Texas – A 43-year-old Whitehouse, Texas man has been sentenced to federal prison for a firearms violation in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Robert Dean Jackson pleaded guilty on Nov. 4, 2014, to being a misdemeanant family violence in possession of a firearm and was sentenced to 40 months in federal prison today by U.S. District Judge Leonard Davis.

According to information presented in court, on June 19, 2014, state and federal agents executed an arrest warrant for Jackson at his residence in Whitehouse, Texas.  Jackson was located on the premises and taken into custody.  Jackson’s common-law wife was also present and gave agents consent to search the residence.  A search of the home revealed paraphernalia associated with the use of methamphetamine, three firearms and approximately 30 rounds of ammunition.  Further investigation revealed Jackson had been previously convicted of assault family violence on Jan. 23, 2009 in Smith County, Texas.  As such, Jackson is prohibited by federal law from owning or possessing firearms or ammunition.

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 Texas Department of Public Safety Criminal Investigation Division, the U.S. Postal Inspector’s Office and the Smith County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Jim Noble.

 

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SHERMAN, Texas – A 63-year-old Red Oak, Texas man has been sentenced for his role in a mortgage fraud scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Stephen King pleaded guilty on Mar. 16, 2015, to conspiracy to commit wire fraud in connection with his role in a Collin County Mortgage fraud scheme and was sentenced today by U.S. District Judge Marcia Crone to 33 months in federal prison.  King was also ordered to pay restitution in the amount of $685,704.73. 

According to information presented in court, in 2008, King, a real estate agent, conspired with Euneisha Hearns, Yvonne Gumaer and Kathy Moore to devise a scheme to defraud and obtain money and property by means of false pretenses for the purpose of executing a wire fraud scheme.  King, who was assisting buyers in purchasing residences located in Dallas and Lancaster, Texas, referred the buyers to Hearns to obtain mortgage loans to purchase the property.  King knew the buyers did not have sufficient funds to make down payments for the loans and he knew that Hearns would make materially false statements on the loan applications in order to obtain the loans.  Hearns prepared and submitted materially false applications requesting loans and reflecting that the buyers had funds in bank accounts for the down payments.  Hearns and King knew that these statements were false and the buyers did not have that amount of money in bank accounts or sufficient savings to make down payments.  King knew the buyers’ down payments would be made from the proceeds of the loans. This scheme resulted in losses to mortgage lenders, including The Federal National Mortgage Association (Fannie Mae) and The Federal Home Loan Mortgage Corporation (Freddie Mac).

Hearns, 34, of Desoto, Texas, was indicted along with King by a federal grand jury on Apr. 11, 2013, for violations related to the mortgage fraud scheme.  The indictment for Hearns was superceded in April 2014, for violations of conspiracy to commit money laundering and conspiracy to commit bank fraud.  A trial date has not been set for Hearns.  A federal indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, Hearns faces up to 40 years in prison for the conspiracy to commit money laundering and up to 20 years in prison for the conspiracy to commit bank fraud.

Others who have been sentenced in connection with the mortgage fraud scheme include:

Yvonne Gumaer, 68, of Galveston, Texas, who was sentenced to 33 months in federal prison and ordered to pay restitution in the amount of $791,782.89; and Kathy Moore, 50, of Broken Arrow, Oklahoma, who was sentenced to 24 months in federal prison and ordered to pay restitution in the amount of $774,377.63.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case was investigated by HUD-Office of Inspector General, IRS Criminal Investigation and Federal Housing Finance Agency-Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Andy Williams and Chris Eason.

 

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BEAUMONT, Texas –An east Texas man and woman have been charged with federal income tax violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Derek Cornelius Briscoe, also known as Terrance Briscoe, also known as Derek Anderson, 36, of Jasper, Texas, and Angela Dunaway, also known as Angela Coudrain, 45, an inmate in Jefferson County Jail in Beaumont, Texas, appeared before U.S. Magistrate Judge Zack Hawthorn today.

Briscoe and Dunaway were indicted on Mar. 5, 2015, and charged with one count of conspiracy to commit wire fraud.  Briscoe was also charged with eight additional counts of preparing false tax returns.

According to information presented in court, Briscoe held himself out as a tax preparer sometimes doing business as “Thaferrets Tax Service” from his residence in Jasper, Texas.  Briscoe maintained contacts with the female inmates at the Jefferson County Jail in Beaumont, Texas.  Briscoe offered those inmates a fee in exchange for personally identifying information of other inmates that could be used to facilitate the filing of false tax returns.  Dunaway was one of those inmates who supplied Briscoe with the personally identifiable information of other inmates to file false tax returns.  The information was transmitted to Briscoe by means of recorded collect phone calls placed from the Jefferson County Jail. Briscoe also utilized JPay services to transmit money to conspirators and inmates.  JPay is an entity organized for the purpose of facilitating communication and financial transactions between inmates and non-inmates.  As part of the scheme, the false tax returns contained false wage, income and employment information, false education credits, false Making Work Pay Credit forms and false or nonexistent home addresses for taxpayers.  Brisco and Dunaway aided in the preparation and electronic filing of over 500 false federal income tax returns for the tax years 2009, 2010 and 2011 and requested fraudulent refunds in excess of $1 million.    

If convicted, both Briscoe and Dunaway face up to 20 years in federal prison for the count of conspiracy to commit wire fraud.  Briscoe faces an additional three years in federal prison for each of the eight counts for preparing false tax returns.  Briscoe also faces the forfeiture of his personal residence in Jasper, Texas.

This case is being investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Lesley Anne Bartow.

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

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TYLER, Texas – A 65-year-old Athens, Texas, man has been sentenced for federal income tax violations, announced U.S. Attorney John M. Bales today.

            Joseph A. Masso pleaded guilty on Dec. 12, 2014 to making and subscribing to a false tax return for the calendar year 2011 and was sentenced to 15 months in federal prison today by U.S. District Judge Leonard E. Davis.  Masso was also ordered to pay restitution of more than $900,000 to the Internal Revenue Service.

            According to information presented in Court, Masso formed a Texas limited liability company known as Lone Star Western & Casual LLC in December 2007.  Lone Store operated retail clothing stores in Athens, Corsicana, and Waxahachie, Texas.   For tax years 2009-2011, Masso falsely understated the gross receipts for these businesses on his IRS Form 1040 Schedule C by more than    $5 million.  As a result, he falsely understated his tax liability for the three tax years by approximately $950,000.

            Masso has already agreed to pay a civil fraud penalty of more than $450,000.  Also, Masso agreed in a related civil action to forfeit $800,000 to the United States.  The funds were originally seized during the execution of federal seizure warrants.

This case was investigated by the Internal Revenue Service-Criminal Investigation and was prosecuted by Assistant U.S. Attorney Frank Coan.

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BEAUMONT, Texas – A 46-year-old Lumberton, Texas man pleaded guilty to federal charges in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Jerry Lynn Roberts pleaded guilty to making a false statement to a federal agent today before U.S. Magistrate Judge Zachary J. Hawthorn.

According to information presented in court, on Mar. 6, 2013, federal agents executed a search warrant at Roberts’ residence in Lumberton, Texas, to search for evidence of child pornography that was mailed to a P.O. Box in Silsbee, Texas, under the name “Jerry Roberts.”  Agents were able to determine that Jerry Roberts, who was employed by the Hardin County Sheriff’s Office as a detective, lived in Lumberton, Texas.  Investigators were further able to determine that the child pornography was ordered using a credit card under Roberts’ control, using his e-mail address, and using his cell phone number.  While at his residence, Roberts agreed to be interviewed by a U.S. Postal Inspector.  Roberts told the federal agent that he did not order the videos of suspected child pornography, did not charge their purchase to his credit card and was unfamiliar with the website from which they were ordered.  Although investigators did not locate child pornography at the residence, further investigation confirmed that Roberts did order and charge the suspected videos to his credit card, and, as such, his statements were false and were material to the investigation.  Roberts was indicted by a federal grand jury on Mar. 5, 2015.

Roberts faces up to eight years in federal prison at sentencing.  A sentencing date has not been set.

This case is being investigated by the U.S. Postal Inspection Service and prosecuted by Assistant U.S. Attorneys Paul A. Hable and Christopher T. Tortorice.

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PLANO, Texas – A 31-year-old McKinney, Texas woman has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Judith Williams pleaded guilty on Apr. 22, 2014, to conspiracy to produce child pornography and production of child pornography and was sentenced to 405 months in federal prison today by U.S. District Judge Marcia Crone.

According to information presented in court, in December 2012, Williams videotaped herself performing oral sex on an infant she was babysitting.  Williams then emailed the videos to her boyfriend, Charles Smolens.  Afterwards, Smolens provided Williams with a thumb drive that contained hundreds of images of child pornography, some of which he produced himself.  Williams and Smolens were indicted by a federal grand jury on Mar. 13, 2013.  Smolens was sentenced to 365 months in federal prison on Jan. 9, 2015. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 McKinney Police Department and prosecuted by Assistant U.S. Attorneys Tracey M. Batson and Mandy Griffith.

 

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PLANO, Texas – Six defendants have been sentenced for their roles in a mortgage fraud conspiracy in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.  Sentencing hearings were held before U.S. District Judge Marcia Crone.

Debra Rush-Santens, 42, of Plano, pleaded guilty on Oct.4, 2012, and was sentenced to 60 months in federal prison on Mar. 12, 2015, and ordered to pay restitution in the amount of 6,215,087.47.

Casey Irons, 42, of Rockwall, Texas, pleaded guilty on Dec 18, 2012, and was sentenced to 87 months in federal prison on Mar. 12, 2015, and ordered to pay restitution in the amount of $5,907,697.05.

Chris Limbrick, 47, of Houston, pleaded guilty on Nov 8, 2012, and was sentenced to 47 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $4,521,764.15.

Gregory  Preston, 43, of Cedar Hill, Texas, pleaded guilty on Dec 18, 2012, and was sentenced to 42 months in federal prison on Mar. 16, 2015, and ordered to pay restitution in the amount of $3,085,085.52.

Eric Patterson, 36, of Dallas, pleaded guilty on Nov 8, 2012, and was sentenced to 25 months in federal prison on Mar. 12, 2015, and ordered to pay restitution in the amount of $1,233,784.91.

Michael Allen, 47, of Houston, pleaded guilty on July 7, 2014 and was sentenced to 41 months in federal prison and ordered to pay restitution in the amount of $507,862.61.

Santens, Irons, Limbrick, and Preston all pleaded guilty to conspiracy to commit money laundering.  Patterson and Allen pleaded guilty to conspiracy to commit wire fraud.

According to information presented in court, from July 2006 to March 2008, in the Eastern District of Texas and elsewhere, Santens conspired with Irons, Limbrick, Preston, Patterson, and Allen to engage in monetary transactions in criminally-derived property of a value greater than $10,000, which property was derived from wire fraud, that is a scheme to induce lending institutions to fund mortgage loans for residential properties for which the property values had been fraudulently inflated for buyers who had been fraudulently qualified for loans.

Santens owned, operated, and controlled Silver Key Financial ("SKF"), LDS Lakehill Developers Group, L.P. ("LDS"), and North Texas Developers Group ("NTDG") from her residence in Plano, Texas, and at her office in Frisco, Texas, both in the Eastern District of Texas.  In furtherance of the conspiracy, Santens caused HUD-1 forms to be submitted to lending institutions that falsely stated that the buyers had provided the down payment for the purchase of the property when Santens was the source of the down payment.  Santens knew at the time of submission to the lending institutions that the source of the down payment was material to the lender in determining whether to fund the requested mortgage loan.  Santens also knew that co-conspirators would provide documents containing false information to the lending institutions; that lending institutions would rely on the false material representations made in the loan documents in determining whether to fund the mortgage loans; that the lending institutions would provide the loan funds through the use of interstate wire transfers; and Santens intended for these actions to occur.

Santens, as a recipient of the criminally-derived loan funds from the title companies’ subsequent disbursements, distributed the proceeds through wire transfers in amounts greater than $10,000 to co-conspirators as kickbacks for their roles in the conspiracy.

Irons' role in the offense was to identify properties that could be fraudulently flipped by Santens, through one of her companies, at a fraudulently inflated price to a straw buyer.  Irons coordinated these fraudulent deals with the title company employees, the appraisers, Santens, and other co-conspirators.  Irons knowingly caused false gift letters and false verifications of employment forms to be submitted to lenders to induce the lenders to fund the mortgage loans.

Limbrick was a loan officer for Outlook Mortgage who assisted individuals with completing Loan Applications in order to qualify the individuals for mortgage loans from lending institutions.

Patterson and Preston's role in the offense was to recruit buyers to purchase properties in a fraudulent flipping scheme where Santens, through one of her companies, would sell properties at a fraudulently inflated price.

Allen was a loan processor for Mortgage Icons who assisted individuals with completing Loan Applications in order to qualify the individuals for mortgage loans from lending institutions.

This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case was investigated by Federal Bureau of Investigation and IRS Criminal Investigation.  The case was prosecuted by Assistant U.S. Attorneys Andy Williams and Chris Eason.

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BEAUMONT, Texas – A 61-year-old Newton, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

John Dale Clark pleaded guilty on Oct. 28, 2014, to the sexual exploitation of a child and was sentenced to 180 months in federal prison today by U.S. District Judge Thad Heartfield.

According to information presented in court, on July 30, 2013, law enforcement officers were alerted to possible child exploitation taking place in Newton County.  Federal search warrants were executed for Clark’s digital camera, memory card, an external thumb drive, and a thumb drive.  A forensic examination of the items revealed images of child pornography, which Clark had produced.  Clark was indicted by a federal grand jury on Sep. 4, 2013.

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

            This case is being investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Newton County Sheriff’s Office and the Orange County Sheriff’s Office and prosecuted by Assistant U.S. Attorney Randall L. Fluke.

TYLER, Texas – A 42-year-old Kilgore, Texas man has been sentenced to federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Terry Drennen pleaded guilty on Dec. 2, 2014 to possession of child pornography and was sentenced to 180 months in federal prison today by U.S. District Judge Leonard Davis.

According to information presented in court, Drennen, a registered sex offender having been previously convicted of indecency with a child, was found to be in possession of material depicting the sexual exploitation of a child.  Drennen was indicted by a federal grand jury on June 19, 2014 and charged with child pornography violations.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 U.S. Secret Service, the Rusk County Sheriff’s Office and the Orlando, Florida Police Department and prosecuted by Assistant U.S. Attorney Nathaniel C. Kummerfeld.

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TYLER, Texas - A 39-year-old Longview, Texas man has been sentenced to federal prison for being a felon in possession of a firearm in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

John Blake London pleaded guilty on Dec. 2, 2014, to being a felon in possession of a firearm and was sentenced to 42 months in federal prison today by U.S. District Judge Leonard Davis.

According to information presented in court, on July 9, 2014, London was driving a car in Longview when he was detained by a police officer because he had parked in a roadway and was impeding traffic.  During the course of the detention, the officer discovered that London had an active warrant so the officer placed him under arrest.  The officer then learned that the only passenger in the car had no valid driver’s license, so the officer called for a tow truck and performed an inventory of the car.  During the course of the inventory, the officer discovered a sawed-off shotgun.  The officer checked London’s criminal history and found that he had been previously convicted of forgery in Gregg County in 2012 and possession of cocaine in Tarrant County in 2008.  Convicted felons are prohibited by federal law from owning or possessing firearms or ammunition.  London was indicted by a federal grand jury on Sep. 17, 2014.

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 Longview Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives and prosecuted by Assistant U.S. Attorney Jim Noble.

PLANO, Texas – Five additional defendants have been sentenced for their roles in a mortgage fraud conspiracy in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.  Sentencing hearings were held before U.S. District Judge Marcia Crone.

Djuana Pitts, 46, of DeSoto, Texas, pleaded guilty on Aug. 7, 2013, and was sentenced to 70 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $5,688,047.92.

Patricia Hines, 51, of Cedar Hill, Texas, pleaded guilty on Aug. 8, 2013, and was sentenced to 52 months in federal prison on Mar. 16, 2015, and ordered to pay restitution in the amount of $1,562,070.50.

Elliott Scott, 40, of Houston, Texas, pleaded guilty on Sep. 23, 2014, and was sentenced to 46 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $2,141,357.77.

Allen Kent Barnett, II, 39, of Rockwall, Texas, pleaded guilty on Feb. 18, 2014, and was sentenced to 31 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $3,156,943.31.

Jennifer Gipson, 49, of DeSoto, Texas, pleaded guilty on Oct. 28, 2013, and was sentenced to 12 months and a day in federal prison on Mar. 13, 2015.

Pitts pleaded guilty to conspiracy to commit money laundering.  Scott, Barnett and Hines pleaded guilty to conspiracy to commit wire fraud.  Gipson pleaded guilty to misprision of a felony.

According to information presented in court, from July 2006 to March 2008, in the Eastern District of Texas and elsewhere, these individuals along with other co-conspirators previously sentenced, were involved in a widespread mortgage fraud conspiracy.

Scott, as an appraiser, and Barnett, as an appraiser trainee, both played roles in the conspiracy to inflate values of properties and to conceal material information from the lending institution in order to induce the company to fund mortgage loans.  In addition, Scott and Barnett caused the appraisals to falsely reflect that a co-conspirator or her companies were the public record owners of the properties so as not to alert the lending institutions that they were funding flip transactions.

Pitts, Hines and Gipson all worked at Esquire Title, LLC, a title company.  Pitts was an operations manager and Hines and Gipson were assistant escrow officers.  Gipson worked under the supervision of Pitts.  Pitts and Hines facilitated loan closings.  Pitts and Hines’ roles in the conspiracy were to conceal information from the lending institutions in order to induce the lending institution to fund mortgage loans.  Pitts also knowingly allowed false title commitments to conceal the true record owner of the properties and false gift letters to be submitted to lending institutions.  Pitts and Hines both caused false HUD-1s to be submitted to the lending institutions that indicated the borrowers were the source of the down payments when they both knew that third parties – sometimes even the sellers in the transaction – were the source of the down payments.  Hines caused false occupancy affidavits to be submitted to lending institutions, which concealed that the same borrower had purchased multiple properties and indicated on all transactions that the borrower intended to occupy each property as his primary residence.  Hines also caused false title commitments to be submitted to the lending institutions that concealed the fact that the property had recently been sold and was a flip transaction.  Pitts authorized Hines’ distribution of the criminal proceeds of the underlying wire fraud scheme to other conspirators which distributions typically exceeded $10,000.  Gipson knew of the conspiracy between these individuals to defraud lending institutions and she provided a misleading statement to federal agents from IRS Criminal Investigation and FBI when questioned about the conspiracy.

This law enforcement action is part of President Barack Obama's Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case was investigated by Federal Bureau of Investigation and IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Andy Williams and Chris Eason.

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TYLER, Texas - A 54-year-old McKinney, Texas photographer has been sentenced to federal prison for sexual exploitation of children in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

            Todd Fleming pleaded guilty on October 2, 2014, to sexual exploitation of children and was sentenced to 240 months in federal prison today by U.S. District Judge Michael H. Schneider.  Fleming will be required to register as a sex offender and serve a life term of supervised release upon his release from federal prison.

            Fleming was indicted by a federal grand jury on April 17, 2013, and charged with twenty-four counts of sexual exploitation of children and one count of possession of materials involving the sexual exploitation of minors.

            According to information presented in court, between 1999 and 2007, Fleming, knowingly employed, used, persuaded, induced, enticed, and coerced eight minor females to engage in sexually explicit conduct for the purpose of producing visual depictions of such conduct.
“Sexually exploiting children is a crime that has traumatic effects on the most vulnerable members of our society," said Katherine Greer, acting Special Agent in Charge of Homeland Security Investigations (HSI) in Dallas.  “HSI will continue to work aggressively with our law enforcement partners to identify and apprehend individuals who sexually exploit our children and deprive them of their innocence.
“Today, Todd Fleming received a sentence that was both fair and appropriately severe,” said U.S. Attorney Bales.  “I sincerely hope that the punishment, and the shame, experienced by this defendant will serve as a warning to others attempting to victimize our children.  We will continue to have zero tolerance for child pornographers in the Eastern District of Texas.”

The investigation leading to the charges was conducted by agents from the U.S. Department of Homeland Security - Homeland Security Investigations (DHS-HSI) and Texas Department of Public Safety - Criminal Investigations Division (DPS-CID).  Assistant U.S. Attorney Nathaniel C. Kummerfeld is prosecuting this case.

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TYLER, Texas - U.S. Attorney John M. Bales announced today that a Longview man has been sentenced to federal prison for his involvement in a drug conspiracy in the Eastern District of Texas.

            Antonio Cortez Gonzales, 35, of Longview, Texas, was sentenced to 136 months in federal prison today by United States District Judge Michael H. Schneider.  Gonzales had entered a guilty plea on October 2, 2014, on charges he conspired with others to distribute cocaine and marijuana.

            According to information presented in court, Gonzales, along with his co-defendants, distributed drugs including cocaine and marijuana in the Longview, Texas area.  Drugs were shipped from an individual in Houston, Texas to Gonzales’ residence in Longview, where he then distributed the drugs to other people. 

            Gonzales was indicted on August 28, 2013.  As part of his sentence, Gonzales was also ordered to forfeit a money judgment in the amount of $336,000, a residence in Longview, Texas, a vehicle, three firearms and ammunition.

            This case was investigated by the Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI) and the Texas Department of Public Safety.  The case is being prosecuted by Assistant United States Attorney Mary Ann Cozby.

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IR-2015-37, March 3, 2015
WASHINGTON — Continuing its enforcement push against refund fraud and identity theft, the Internal Revenue Service today announced the Top Ten Identity Theft Prosecutions for Fiscal Year 2014 (FY14).  The ongoing efforts to bring identity thieves to justice remains a significant priority as part of the IRS’s comprehensive identity theft strategy focusing on preventing, detecting and resolving identity theft cases as soon as possible.
“Identity theft is a crime that carries significant consequences, and these cases send a warning to criminals,” said Richard Weber, Chief, IRS-Criminal Investigation. “Our top 10 cases represent the seriousness of these crimes and the magnitude of the consequences that will be faced by those who victimize honest taxpayers and steal from hard-working Americans.”

Learn more about identity theft and what the IRS is doing to combat it at IRS.gov/identitytheft. You can also read IRS Fact Sheet 2015-1, IRS Combats Identity Theft and Refund Fraud on Many Fronts, and IRS Fact Sheet 2015-2, Identity Theft Information for Taxpayers and Victims.

The summary of the following 10 identity theft cases is based on public information available in court records: Top Ten Identity Theft Cases

1. Couple Sentenced for False Tax Refund Conspiracy -
On April 24, 2014, in Charlotte, North Carolina, Senita Birt Dill and Ronald Jeremy Knowles, were sentenced to 324 and 70 months in prison, respectively. Both were also ordered to pay $3,978,211 in restitution to the IRS. Dill and Knowles pleaded guilty to false claims of conspiracy and access device fraud. Dill also pleaded guilty to aggravated identity theft. Dill and Knowles used fraudulently obtained personal identification information (including names, dates of birth and social security numbers) to file false tax returns claiming tax refunds. Dill and Knowles used neighboring addresses to fill out the fraudulent tax returns and checked the homes’ mailboxes frequently to retrieve the fraudulent refund checks upon delivery. The defendants also used addresses in Greenville and Greer, S.C., which belonged to Knowles’ businesses. Dill and Knowles filed over 1,000 false tax returns using the fraudulently obtained personal identification information.

2. Georgia Man Sentenced for Tax Fraud and Identity Theft -
On Aug. 25, 2014, in Atlanta, Georgia, Mauricio Warner was sentenced to 240 months, three years of supervised release, ordered to pay $5,041,869 in restitution and forfeiture of bank accounts that contained $4,185,455. Warner was convicted on wire fraud, aggravated identity theft, filing false claims, and money laundering. Warner filed over 5,000 false tax returns using the names and social security numbers of unsuspecting victims that were told they could submit an application for an “Obama stimulus payment” or “Free Government Money” by providing their names and social security numbers. In addition to word-of-mouth marketing, Warner used toll-free telephone numbers to collect victims’ personal identifying information.

3.  Dallas Men Sentenced for Role in Massive Stolen Identity Refund Fraud Scheme -
On May 15, 2014, in Dallas Texas, Ogiesoba City Osula was sentenced to 210 months in prison and ordered to pay $15.9 million in restitution. Osula was convicted on conspiracy to commit wire fraud, mail fraud and bank fraud; presenting fraudulent claims upon the U.S.; access device fraud and aiding and abetting; and aggravated identity theft and aiding and abetting. Previously sentenced were co-defendants: George Ojonugwa, sentenced to 174 months and ordered to pay $15,979,187 in restitution; Eseos Igiebor, sentenced to 96 months and ordered to pay $9,660,658 in restitution; Ebenezer Legbedion, sentenced to 40 months and ordered to pay more than $1 million in restitution; and Evelyn Nyaboke Haley sentenced to 60 months and ordered to pay approximately $5.7 million in restitution.  The defendants conspired to defraud the United States by using stolen identity information and false information to create and electronically file false tax returns to claim refunds. On Nov. 8, 2011, police in a Cincinnati suburb questioned Osula and Ojonugwa, who were in a parked car.  When the vehicle was searched, police found more than $300,000 in cash and money orders and numerous debit cards.  During that incident, while Osula was in a police car and waiting to be questioned, he ate a debit card.

4. Floridian Sentenced in Identity Theft Tax Fraud and Social Security Schemes -
On Sept. 17, 2014, in Miami, Florida, Kevin Cimeus, was sentenced to 156 months in prison and three years of supervised release. Cimeus was convicted of conspiracy to steal government property or money, theft of government money or property, access device theft, and aggravated identity theft.  Federal agents found over 2,400 social security numbers and names of real people stored on thumb drives, laptop computers, iPad, and Cimeus’ email account at Cimeus’ residence. Cimeus recruited Miami Dade College students to allow him to use their bank accounts to receive fraudulently obtained tax refunds. Cimeus also used his own bank accounts to receive fraudulently obtained tax refunds. Cimeus filed at least one thousand tax returns from two IP addresses. He also used the two IP addresses to access the Social Security Administration’s web site and create online profiles for social security recipients in order to re-route the victims’ social security payments to other accounts.

5. Ohio Man Sentenced for Participation in $3.5 Million Identity Theft Scam -
On Aug. 21, 2014, in Columbus, Ohio, Roma L. Sims was sentenced to 100 months in prison, three years of supervised release, and ordered to pay $3,517,534 in restitution to the IRS. Sims pleaded guilty to aggravated identity theft, wire fraud and conspiring to commit identity theft in a scheme to defraud the IRS. Sims advertised through various means in order to collect personal identification information from low-income or unemployed single parents with children. After tricking the innocent individuals who responded into providing their personal identification information, Sims prepared and filed false income tax returns in their names. Sims also obtained additional personal identification information by conspiring with Robert Earthman, who had access to the Kentucky child support enforcement database, which contained personal identification information of single parents with children who were recipients of child support. In total, Sims was responsible for the preparation and filing of approximately 977 income tax returns for the 2010 - 2012 tax years. Samantha C. Towns was sentenced to three years of probation and ordered to pay $1,312,513 in restitution to the IRS. Robert S. Earthman was sentenced to 24 months in prison, three years of supervised release and was ordered to pay $1,312,513 in restitution to the IRS.

6. New York Tax Preparer Sentenced for Filing False Tax Returns and Aggravated Identity Theft
On April 24, 2014, Mahamadou Daffe, a tax preparer in Queens, N.Y., was sentenced to 102 months in prison and three years of supervised release. Daffe was found guilty of conspiracy to steal government funds, theft of government funds, conspiracy to file false claims, wire fraud, and aggravated identity theft in connection with the preparation and filing of nearly 1,000 false income tax returns submitted online using stolen identities.

7. Alabama Man Sentenced for Scheme Using Prisoner Identities to Obtain False Tax Refunds
On April 29, 2014, in Montgomery, Ala., Harvey James was sentenced to 110 months in prison, three years of supervised release and ordered to pay $618,042 in restitution. James pleaded guilty to mail fraud and aggravated identity theft. James and his sister, Jacqueline Slaton, obtained stolen identities from various individuals, including one person who had access to inmate information from the Alabama Department of Corrections. James and others used those inmate names to file federal and state tax returns that claimed fraudulent refunds.  Vernon Harrison, a U.S. Postal Service employee, provided James with addresses from his postal route, which were used as mailing addresses for the fraudulent prepaid debit cards and state tax refund checks. In total, James filed over 1,000 federal and state income tax returns that claimed over $1 million in fraudulent tax refunds. Slaton was sentenced to 70 months in prison and Harrison was sentenced to 111 months in prison.

8. Several Sentenced in $19 Million Tax Fraud Conspiracy -
On December 30, 2013, in Anchorage, Alaska, Joel Santana-Pierna and Abel Santana-Pierna, citizens of the Dominican Republic residing in Alaska, were sentenced to 135 months and 72 months in prison, respectively. In addition, they were ordered to pay $559,755 in restitution to the IRS and agreed to forfeit approximately $130,000 obtained as part of their drug trafficking activities.  The brothers pleaded guilty to conspiracy to distribute cocaine and conspiracy to defraud the government. The Santana-Pierna brothers conspired to use more than 3,000 stolen Puerto Rican identities to file false income tax returns and obtain large income tax refunds to which they were not entitled. In total, eleven individuals have been sentenced in this scheme with sentencings ranging from probation to 135 months in prison.

9. Woman Sentenced for Tax Fraud and Aggravated Identity Theft -
On Oct. 22, 2014, in Orlando, Florida, Tanya Fox was sentenced to 240 months in prison for conspiracy to defraud the federal government, wire fraud, theft of government property, and aggravated identity theft. Fox was also ordered to pay a money judgment in the amount of $4,055,735. On July 24, 2014, Fox was found guilty by a jury of one count of conspiracy, five counts of wire fraud, ten counts of theft of government property, and ten counts of aggravated identity theft. According to court documents, Fox orchestrated a scheme to file fraudulent tax returns using identities that had been stolen from a variety of sources. Fox directed other individuals to open business bank accounts in the name of a fraudulent tax preparation business and to have the tax refunds deposited into those accounts. She then worked with those individuals to withdraw the funds and she spent the money on several luxury and other vehicles, cosmetic surgery and to open a restaurant in the Orlando area. Four others have been sentenced for providing approximately 2,400 names from the Orange County Health Department to Fox, with sentencing’s ranging from five years to two years and six months in prison.   

10. Bogus Charity Operator Sentenced for ID Theft and Wire Fraud Scheme -
On June 12, 2014, in Columbus, Ohio, Jonathan Webster was sentenced to 108 months in prison, three years of supervised release and ordered to pay $1,457,936 in restitution. Webster pleaded guilty to wire fraud and aggravated identity theft.  Webster purchased advertising in newspapers representing himself as a charity seeking to provide financial assistance to others. Webster set up an online website where individuals responding to the advertisements could provide their names and social security numbers. Webster and a co-conspirator electronically filed more than 500 false income tax returns using the names and social security numbers of the individuals.

Statistical Information
In fiscal year 2014, the IRS initiated 1,063 identity theft related investigations. Criminal Investigation enforcement efforts resulted in 748 sentencings as compared to 438 in FY 2013, an increase of 75 percent. The incarceration rate rose 7.1 percent to 87.7 percent. The courts also imposed more jail time in 2014, with the average months of those being sentenced rising to 43 months as compared to 38 months in FY 2013. The longest sentence was 27 years.

Enforcement Efforts
During FY 2014, Criminal Investigation dedicated significant time and resources to bringing down identity thieves attempting to defraud the federal government.

The nationwide Law Enforcement Assistance Program provides for the disclosure of federal tax return information associated with the accounts of known and suspected victims of identity theft with the express written consent of those victims. There are now more than 755 state/local law enforcement agencies from 47 states participating. Since the start of the program, more than 6,776 requests were received from state and local law enforcement agencies.

The Identity Theft Clearinghouse (ITC) continues to develop and refer identity theft refund fraud schemes to CI Field Offices for investigation. Since its inception in FY 2012, it has received over 7,600 individual identity theft leads. These leads involved approximately 1.47 million returns with over $6.8 billion in refunds claimed. 

CI continues to be the lead agency that investigates identity theft and is actively involved in more than 78 multi-regional task forces or working groups including state, local and federal law enforcement agencies solely focusing on identity theft.  CI has one of the highest conviction rates in all of federal law enforcement -- at 93.4% -- and is the only federal law enforcement agency with jurisdiction over federal tax crimes.  CI is routinely called upon to be the lead financial investigative agency on a wide variety of financial crimes including international tax evasion, identity theft and transnational organized crime.

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TYLER, Texas - U.S. Attorney John M. Bales announced today that a Flint man has been sentenced to federal prison for his involvement in a drug conspiracy in the Eastern District of Texas.

            Isaac Dion Smith, also known as “Ike”, 34, of Flint, Texas, was sentenced to 144 months in prison today by United States District Judge Michael H. Schneider.  Smith had entered a guilty plea on October 14, 2014, on charges he conspired with others to distribute methamphetamine and heroin.

            According to information presented in court, Smith, along with his co-defendants, distributed drugs including methamphetamine and heroin in the north Tyler, Texas area.  Firearms were also bartered and sold by the group.  The group was supplied by sources primarily in the Dallas, Texas area. 

            Smith and 12 co-defendants were indicted on a 23-count indictment by a federal grand jury on April 23, 2014.  To date, his co-defendants have been sentenced as follows:

            Desirae Dewberry, 34, of Longview, was sentenced on January 16, 2015, to 60 months; Deidra Duran, 22, of Mineola, was sentenced on January 16, 2015, to 32 months; Jacob Durst, also known as "Bubba" and "Chucky", 23, of Tyler, was sentenced on January 22, 2015, to 72 months; Victor Grant, also known as "Vic", 23, of Tyler, was sentenced on December 3, 2014, to 66 months; Keith Kimbrough, 47, of Huntsville, Alabama, was sentenced on January 16, 2015, to 24 months; Hannah McCartney Manziel, 25, of Lindale, was sentenced on January 15, 2015, to 32 months; Sabrina Tutt, also known as "Taylor Breeze" and "Breezy", 35, of Tennessee Colony, was sentenced on January 16, 2015, to 32 months; and Cedric Williams, also known as "Ced", 34, of Tyler, was sentenced on January 15, 2015, to 36 months.

Additionally, Smith and codefendants agreed to forfeit multiple firearms and money judgments totaling $18,000.00 to the United States.

            This case was investigated by the Smith County Sheriff’s Department, Tyler Police Department, the Drug Enforcement Administration (DEA), and the Bureau of Alcohol, Tobacco and Firearms (ATF), and it was prosecuted by Assistant United States Attorney Bill Baldwin.

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BEAUMONT, Texas – A 32-year-old Orange, Texas man has been sentenced to 10 years in federal prison for child pornography violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
 
Jason Ryan Bickham pleaded guilty on Sep. 17, 2014 to possession of child pornography and was sentenced to 120 months in federal prison today by U.S. District Judge Thad Heartfield.

According to information presented in court, law enforcement authorities were alerted by a citizen that Bickham had images containing child pornography on his cellular phone.  Bickham provided officers consent to search the phone and a forensic analysis revealed multiple images and videos of child pornography.  Bickham was indicted by a federal grand jury on June 4, 2014.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the 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 U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Orange Police Department and the Beaumont Police Department and prosecuted by Assistant U.S. Attorney Randall L. Fluke.

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TYLER, Texas –  U.S. Attorney John M. Bales announced today that a former executive has been indicted for making false declarations before court in a civil trade secrets case in the Eastern District of Texas.

                Albert Davis, 54, formerly of Richardson, Texas, was arrested on Feb. 19, 2015 in Lewisville, Texas on a federal arrest warrant issued by the Eastern District of Texas and the Western District of Missouri.  Davis was recently charged in Missouri for his role in a fraud scheme in which a Dallas-area hospital paid more than $1 million to purchase an MRI machine from Davis and co-conspirators who impersonated representatives of Kansas City-based Cerner Corporation.  Davis will have a detention hearing on Feb. 25, 2015.

                Davis was indicted on Feb. 19, 2015 in Tyler on three counts of false declaration before court.  The indictment alleges that on May 5, 2014, Davis, while under oath as a witness in a case being tried before the U.S. District Court for the Eastern District of Texas entitled, LBDS Holding Company, LLC vs. ISOL Technology, Inc. et al., Docket No. 6:11-CV-428, knowingly made false material declarations.

                If convicted, Davis faces up to five years in federal prison for each count.

                The investigation leading to the charges was conducted by agents from the Federal Bureau of Investigation and the U.S. Attorney's Office for the Western District of Missouri.  Assistant U.S. Attorney Nathaniel C. Kummerfeld is prosecuting this case.

It is important to note that a grand jury indictment is not evidence of guilt.

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BEAUMONT, Texas – A 27-year-old California, Maryland man has been sentenced to federal prison for child exploitation violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Felix Alexandro Pinto, Jr., pleaded guilty on Oct. 10, 2014, to transporting a minor with intent to engage in criminal sexual activity and was sentenced to 144 months in federal prison today by U.S. District Judge Marcia A. Crone.

According to information presented in court, on May 25, 2011, Pinto was pulled over for a traffic violation in Harrison County, Mississippi.  During the stop, the deputy noticed the passengers, a male and female, appeared extremely nervous.  Pinto advised the deputy that he had driven from Maryland to Houston and was returning to Maryland.  The vehicle had been rented by Pinto in Maryland at 8:00 am the day before, approximately 30 hours before the traffic stop.  While interviewing the female passenger, the deputy learned she was a 14-year-old runaway from Liberty County, Texas.  As she was being transported back to Texas, the girl reported that Pinto had sexually assaulted her.  This was confirmed by a sexual assault nurse’s examination (SANE) in Beaumont, Texas.  Further investigation revealed Pinto met the girl through a social media website.  They communicated by the internet and cellular telephone networks for about two months before Pinto drove to Liberty County and picked the girl up from school on May 25, 2011.  During this time, Pinto sent the girl sexually explicit photos of himself and asked her to send similar photos of herself to him.  At one point the girl asked Pinto if her only being 14 years old would be a problem and he replied it would not.  A forensic examination of the girl’s cell phone confirmed the conversations and photos.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the 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, Harrison County, Mississippi, Sheriff’s Office, and Liberty County, Texas, Sheriff’s Office and prosecuted by Assistant U.S. Attorney Randall L. Fluke.

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BEAUMONT, Texas – A 55-year-old Plano, Texas man has been sentenced to federal prison for violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales. 
                 
Kevin G. White pleaded guilty on Dec. 11, 2013, to committing mail fraud in connection with a commodity trading fraud scheme and was sentenced to 97 months in federal prison on Feb. 18, 2015 by U.S. District Judge Marcia A. Crone.  White was also ordered to pay restitution in the amount of $3,926,870.

According to information presented in court, White operated Revelation Forex Fund (RFF), which was a fund that conducted foreign exchange currency trading.  RFF had its offices in Plano.  In order to lure investors to purchase partnership interests in RFF, White falsely overstated the past rate of return on investment for RFF, that RFF returns had been audited, and the length of time RFF had actually been in existence.  RFF received investments totaling over $7.4 million.  White admitted to using approximately $1.8 million of investor funds for non-investment purposes.  The loss to investors was approximately $4 million.

White was ordered to surrender to the Bureau of Prisons on Apr. 6, 2015 to begin his sentence.

This case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney J. Andrew Williams.

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SHERMAN, Texas – A 61-year-old Colleyville, Texas man has been sentenced to prison for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

James Donald Cagle pleaded guilty on Nov. 19, 2013 to conspiracy to engage in monetary transactions in property derived from the sale of cocaine and was sentenced to 57 months in federal prison today by U.S. District Judge Marcia A. Crone.  Cagle was also ordered to pay a fine of $10,000.

According to information presented in court, from May 19, 2008, through April 28, 2010, Cagle knowingly conspired with Jose Vasquez, Sr., a large-scale distributer of cocaine in Texas.  Knowing that Vasquez was involved in some form of illegal activity, Cagle financed and purchased real and personal property in Cagle's name or in the names of Vasquez' family members on behalf of Vasquez.  Cagle received payments for these properties from Vasquez in cash that had been transported from Richardson, Texas to Cagle in Colleyville, Texas.

Vasquez was indicted by a federal grand jury in Dec. 2010 and pleaded guilty to conspiracy to possess with intent to distribute cocaine in Feb. 2013.  He was sentenced to 147 months in federal prison by Judge Crone on Nov. 19, 2014.

This case was investigated by the U.S. Drug Enforcement Administration and IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney J. Andrew Williams.