Northern District of Texas

Darius Fields, a drug trafficker implicated in the kidnapping of 13-year-old Shavon Randle, was sentenced today to 216 months in federal prison, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

Following a three-day trial in April 2018, Mr. Fields, then 27, was convicted on two counts of “lying and buying” – aiding and abetting false statements in the acquisition of a firearm – and one count of unlawful possession of a pistol.   

At his sentencing, prosecutors introduced evidence indicating Mr. Fields was involved in the kidnapping of 13-year-old Shavon Randle, who was then brutally killed following a dispute over stolen marijuana.

The prosecution also presented evidence that Mr. Fields and his associates originally planned to kidnap Ms. Randle’s adult cousin, L.R., in retribution for her boyfriend’s supposed theft of their marijuana. When they arrived at her residence and discovered L.R. was gone, Mr. Fields’ associates instead abducted Ms. Randle, forcing her out of the house with a pillowcase over her head, agents testified. They later used a prepaid phone to call L.R. with a ransom demand: Return the stolen marijuana or they would kill the young girl.

Four days later, authorities discovered Ms. Randle’s body, with gunshot wounds in her head and torso, decomposing alongside the body of another dealer inside an abandoned home in Oak Cliff.  

Additional evidence introduced at sentencing also indicated that shortly after Ms. Randle’s body was found, Mr. Fields, then incarcerated at Fannin County Jail, bragged to a fellow inmate about his involvement in the Randle murder, the inmate testified.  

Taking into account Mr. Field’s relevant conduct in the Randle matter, Chief U.S. District Judge Barbara M.G. Lynn sentenced him to 216 months (18 years) behind bars.

“We can never heal this family’s wound, but we hope the knowledge that Mr. Fields will spend 18 years behind bars brings Ms. Randle’s loved ones some measure of relief,” said U.S. Attorney Nealy Cox.  “Thankfully, federal law gives Judges discretion to adjust a defendant’s sentence based on all the relevant circumstances of the crime and the defendant’s criminal history, provided the sentence remains within the statutory range for the crime of conviction.  In this case, as in all cases, we wanted the Judge to have all the pertinent facts – including the full extent of defendants’ involvement in the kidnapping of an innocent thirteen-year-old.  It would be irresponsible for us not to provide the Court with such evidence.” 

“Thank you to our partners at the Lancaster, Irving, and Dallas Police Departments as well as the FBI special agents whose tireless commitment ensured a positive outcome,” said Matthew J. DeSarno, Special Agent in Charge of the FBI Dallas Division. “This collaborative team effort demonstrates the dedication of DFW area law enforcement to the communities we serve.”

Local law enforcement has named Mr. Fields a “person of interest” in the Randle case, but has not charged Mr. Fields in connection with the girl’s murder.

The Federal Bureau of Investigation and the Lancaster Police Department conducted the investigation with assistance from Irving and Dallas Police. Assistant U.S. Attorneys Camille Sparks and Gary Tromblay prosecuted the case.

 

 

Just three years into serving an eight-year sentence for health care fraud, Alexis C. Norman was sentenced yesterday to another 30 years for a second health care fraud scheme, some of it committed while she was behind bars, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox. Her new sentence will run concurrent to her original one, starting this week.

In December, Ms. Norman pleaded guilty to one count of conspiracy to commit health care fraud and four counts of health care fraud – three committed before she was sentenced in the prior case and one committed while she was behind bars.

According to plea papers, Ms. Norman approached co-conspirator Karen Jones in February 2015 with a business idea she hoped could help pay legal fees from her previous case.  Ms. Jones agreed to help Ms. Norman by listing herself as the administrator of Janus Children Services, Inc., opening a bank account in Janus’ name, and leasing office space for Janus in Tyler, Texas.

The company never occupied the office space, never hired any employees, and never provided any services.

Together, Ms. Norman and Ms. Jones used stolen identities of licensed counselors and Medicaid recipients to submit more than $810,000 in fraudulent claims to Medicaid, and were paid more than $427,000.

After Medicaid paid Janus for the false claims, Ms. Norman directed Jones to withdraw cash from the Janus bank account, always in amounts less than $10,000. Roughly once a month from April 2015 to February 2016, the pair would meet at a restaurant. When they finished their meal, Ms. Jones – who carried the cash in a gift bag – would leave the package on a chair for Ms. Norman. 

Following Ms. Norman’s incarceration in April 2016, Ms. Jones agreed to help Ms. Norman submit additional fraudulent claims through a second company, Therapeutic Outreach Services Inc.

Ms. Jones helped Ms. Norman lease office space for Therapeutic in Waco, Texas, and visited Ms. Norman in prison on multiple occasions to gather billing instructions and identifying information of counselors and Medicaid clients.  Ms. Norman concealed the information on a piece of paper hidden in her shoe, which she retrieved during Ms. Jones’ visits.

Like Janus, Therapeutic never operated out of the Waco location, had no employees, and provided no services.

The U.S. Department of Health and Human Services – Office of Inspector General and the Texas Attorney General’s Medicaid Fraud Control Unit conducted the investigation.  Assistant U.S. Attorney Douglas Brasher and DOJ Trial Attorney Christina Liu are prosecuting the case.

Force Multiplier Solutions CEO Robert C. Leonard was sentenced today to seven years in federal prison and ordered to pay $125 million in restitution for his role in a bribery scheme that took down multiple public officials and precipitated the collapse of Dallas County Schools, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

Mr. Leonard, of New Orleans, Louisiana, pleaded guilty on August 9 to conspiracy to commit honest services wire fraud.

“In peddling bribes and kickbacks, Mr. Leonard undermined Dallas’ trust in its public officials. And in bringing him to justice, we hope to restore citizens’ faith in the system,” said U.S. Attorney Nealy Cox. “As I’ve said repeatedly over the past year and a half, the U.S. Attorney’s Office will be relentless in its pursuit of anyone involved in bribing public officials – from bribe recipients to bribe facilitators to bribe payers. The citizens of Dallas deserve integrity from City Hall.”

In plea papers, Mr. Leonard, now 71, admits he paid local officials – including then Mayor Pro Tem Dwaine Caraway and former DCS Superintendent Ricky Sorrells – more than $3.5 million in order to secure DCS contracts for his company’s stop-arm camera technology.  

In an attempt to conceal the illicit payments, the majority of the bribe money was funneled through ELF Investments, a sham consulting firm run by Mr. Leonard’s business associate, Slater Swartwood. The remainder was funneled through law firms or doled out in the form of credit card debt repayments, student loan payments,  custom-made suits, fully funded trips, casino chips, fake loans, funeral expenses, and cash payments.  

A criminal indictment against former DCS Board President Larry Duncan revealed Mr. Leonard also gave Mr. Duncan a quarter of a million dollars in campaign contributions – money the DCS Board President diverted from his re-election bid and instead used to cover personal expenses.  

Councilmembers Duncan and Caraway, as well as Mr. Sorrells and Mr. Swartwood, have pleaded guilty to criminal wrongdoing in the case.

Chief U.S. District Judge Barbara M.G. Lynn sentenced Mr. Caraway to 56 months in federal prison and Mr. Duncan to six months’ home confinement. Mr. Sorrells and Mr. Swartwood are set to be sentenced in August 2019.  

Dallas County Schools, which collected property taxes to purchase stop-arm cameras for its fleet of about 2,000 busses, was shuttered in November 2017, saddled with approximately $103 million in debt.

The Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation unit conducted the investigation. Assistant U.S. Attorneys Andrew Wirmani, NDTX’s Public Corruption Coordinator, Marcus Busch, NDTX’s Fraud Section Chief, Chad Meacham, and Joseph Magliolo prosecuted the case.

A “pill mill” physician who oversaw the illegal prescription of nearly a million units of narcotics with no legitimate medical purpose was sentenced today to 13 years in federal prison, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.   

Carlos Luis Venegas, 62, was convicted of conspiracy to distribute a controlled substance following a 5-day trial before U.S. District Judge David C. Godbey in early February.

According to evidence presented at trial, Dr. Venegas acted as the supervising physician for a series of sham medical clinics – all merely fronts for the illegal distribution of Hydrocodone and Alprazolam. 

“These pill mills help to perpetuate the tragic opioid crisis gripping our country,” U.S. Attorney Nealy Cox said following the guilty verdict. “Last year, America lost, on average, 116 people per day to opioid overdoses. We cannot allow unscrupulous conduct by physicians to add to the supply of dangerous drugs on the streets.”

“The DEA will continue to investigate these types clinics and health care personnel who are facilitating illegal distribution of prescription drugs”, said DEA Special Agent in Charge of the Dallas Field Division Clyde E. Shelley, Jr. “One overdose is one too many”.

At trial, witnesses testified that members of the conspiracy paid homeless and indigent people to pose as patients seeking pain medication. Runners coached these men and women on how to describe their (nonexistent) symptoms, drove them to the clinics, and paid for their appointments.

At the clinics, nurse practitioners and physician’s assistants, working under Dr. Venegas’ supervision, conducted only cursory medical exams, witnesses said. Medical files seized from the clinics showed that most exams were conducted without any medical testing and rarely produced documentation of patients’ purported ailments.

At the conclusion of the visit, patients were almost always prescribed a cocktail of medications, including Hydrocodone and Xanax, generally for the highest dosages available.

Several of his codefendants, including several nurse practitioners and clinic managers, previously pleaded guilty to their roles in the scheme.  

Codefendant sentences include:

• Christan Michael Hicks – 70 months
• Craig Zahn – 33 months
• Leslie Rodriguez – 33 months
• Don Broussard – 33 months
• Ron Cunningham – 18 months
• James Christopher Ware (co-owner of clinics, charged in a separate indictment) – 135 months
• Stanley James (co-owner of clinics, also charged in a separate indictment) – 97 months

For more information on the opioid epidemic, see the DEA's National Drug Threat Assessment.

The Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorneys Myria Boehm, Renee Hunter, and Nicholas Bunch prosecuted the case.

The United States Attorney’s Office for the Northern District of Texas and the Department of Justice’s Civil Division today announced an action to stop two Texas doctors from unlawfully prescribing powerful opioids linked to abuse and diversion. To protect the public, the United States sought and the court granted immediate relief through a temporary restraining order.

In a civil complaint unsealed today in the Northern District of Texas, the United States alleges that Cesar B. Pena Rodriguez M.D., and Leovares A. Mendez M.D., were prescribing in violation of the Controlled Substances Act. According to the complaint, the defendants issued thousands of prescriptions without apparent regard for patient harm, including prescriptions for a combination of an opioid, a short-acting benzodiazepine, and a muscle relaxer – a dangerous and frequently-abused drug cocktail known as the “trinity.” The United States Attorney’s Office worked with the Consumer Protection Branch of the Justice Department’s Civil Division in this effort.

“With opioid addiction ravaging communities across the nation, we are going to fight against doctors who are handing out prescriptions like candy,” said U.S. Attorney for the Northern District of Texas Erin Nealy Cox. “We are determined to stem the tide of the crisis and we will use all the legal authorities at our disposal -- both criminal and civil.” 

“The prescribing patterns of the doctors in this case are extremely disturbing and present a significant threat to the community,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “The Department of Justice will use every available tool to stop doctors who fail to uphold their legal obligation to prescribe controlled substances properly.”

The complaint alleges that Dr. Pena Rodriguez and Dr. Mendez issued numerous prescriptions without a legitimate medical purpose and outside the usual course of professional practice. Specifically, the complaint alleges that in the course of an investigation of the defendants by the U.S. Drug Enforcement Administration (DEA), the defendants repeatedly issued prescriptions for controlled substances, including hydrocodone, alprazolam, and tramadol, to undercover agents posing as prospective new patients in exchange for $250 cash payments. The complaint alleges that the defendants issued prescriptions despite performing only minimal or perfunctory medical evaluations, at best, during the visits. According to the complaint, the defendants sold medically unjustified prescriptions to undercover agents in all but one of 25 undercover visits.

“The DEA has teams of investigators specialized in finding negligence when writing perilous prescription, which can cause a harmful addiction or potential overdose,” said Special Agent in Charge Clyde E. Shelley Jr. of the DEA Dallas Field Division. “The DEA will investigate the doctors who conduct this kind of practice and continue to combat the opioid crisis.”

According to court documents that the United States filed with its complaint, the defendants’ troubling prescribing practices were widespread and raised multiple warning signs or “red flags” of abuse and diversion, such as patient overdoses and prescriptions issued to groups of related individuals as well as to individuals who traveled unusual distances to receive their controlled substances. 

The action represents an innovative use of the Department’s civil enforcement authorities – a tactic amplified by the Attorney General’s Prescription Interdiction & Litigation (PIL) Task Force, which was formed in early 2018 to promote deployment of all available criminal, civil, and regulatory tools to reverse the tide of opioid overdoses in the United States.

Judge Karen Scholer of the U.S. District Court for the Northern District of Texas issued the temporary restraining order.  Along with injunctive relief, the United States seeks civil monetary penalties.

The United States is represented by Northern District of Texas Opioid Coordinator Lindsey Beran and Assistant U.S. Attorney Sarah Delaney and Trial Attorneys Arturo DeCastro and Anwar Graves of the Justice Department’s Consumer Protection Branch.  This investigation is being conducted by the DEA.

A complaint is merely an allegation and there has been no determination of liability.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.

The Department of Justice’s Civil Division and the United States Attorney’s Office for the Northern District of Texas announced an action today to stop two Texas doctors from unlawfully prescribing powerful opioids linked to abuse and diversion. To protect the public, the United States sought and the court granted immediate relief through a temporary restraining order.

In a civil complaint unsealed today in the Northern District of Texas, the United States alleges that Cesar B. Pena Rodriguez M.D., and Leovares A. Mendez M.D., were prescribing in violation of the Controlled Substances Act. According to the complaint, the defendants issued thousands of prescriptions without apparent regard for patient harm, including prescriptions for a combination of an opioid, a short-acting benzodiazepine, and a muscle relaxer – a dangerous and frequently-abused drug cocktail known as the “trinity.” The United States Attorney’s Office worked with the Consumer Protection Branch of the Justice Department’s Civil Division in this effort.

“With opioid addiction ravaging communities across the nation, we are going to fight against doctors who are handing out prescriptions like candy,” said U.S. Attorney for the Northern District of Texas Erin Nealy Cox. “We are determined to stem the tide of the crisis and we will use all the legal authorities at our disposal -- both criminal and civil.” 

“The prescribing patterns of the doctors in this case are extremely disturbing and present a significant threat to the community,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “The Department of Justice will use every available tool to stop doctors who fail to uphold their legal obligation to prescribe controlled substances properly.”

The complaint alleges that Dr. Pena Rodriguez and Dr. Mendez issued numerous prescriptions without a legitimate medical purpose and outside the usual course of professional practice. Specifically, the complaint alleges that in the course of an investigation of the defendants by the U.S. Drug Enforcement Administration (DEA), the defendants repeatedly issued prescriptions for controlled substances, including hydrocodone, alprazolam, and tramadol, to undercover agents posing as prospective new patients in exchange for $250 cash payments. The complaint alleges that the defendants issued prescriptions despite performing only minimal or perfunctory medical evaluations, at best, during the visits. According to the complaint, the defendants sold medically unjustified prescriptions to undercover agents in all but one of 25 undercover visits.

“The DEA has teams of investigators specialized in finding negligence when writing perilous prescription, which can cause a harmful addiction or potential overdose,” said Special Agent in Charge Clyde E. Shelley Jr. of the DEA Dallas Field Division. “The DEA will investigate the doctors who conduct this kind of practice and continue to combat the opioid crisis.”

According to court documents that the United States filed with its complaint, the defendants’ troubling prescribing practices were widespread and raised multiple warning signs or “red flags” of abuse and diversion, such as patient overdoses and prescriptions issued to groups of related individuals as well as to individuals who traveled unusual distances to receive their controlled substances. 

The action represents an innovative use of the Department’s civil enforcement authorities – a tactic amplified by the Attorney General’s Prescription Interdiction & Litigation (PIL) Task Force, which was formed in early 2018 to promote deployment of all available criminal, civil, and regulatory tools to reverse the tide of opioid overdoses in the United States.

Judge Karen Scholer of the U.S. District Court for the Northern District of Texas issued the temporary restraining order.  Along with injunctive relief, the United States seeks civil monetary penalties.

The United States is represented by Northern District of Texas Opioid Coordinator Lindsey Beran and Assistant U.S. Attorney Sarah Delaney and Trial Attorneys Arturo DeCastro and Anwar Graves of the Justice Department’s Consumer Protection Branch.  This investigation is being conducted by the DEA.

A complaint is merely an allegation and there has been no determination of liability.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.

Two leaders of a Houston-based robbery conspiracy were sentenced to more than a dozen years in prison each this week, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

Chrisheena Ladale Milburn, 28, of Houston, and her brother, Brandon Chermaine Mallet, 32, of Missouri City, Texas, pleaded guilty in July 2018 to one count of conspiracy to interfere with commerce by robbery and two counts of interference with commerce by robbery for their role in spate of local “juggings.” 

“Jugging” refers to a scheme in which a group of perpetrators follows bank customers suspected of having large containers of cash – often small business owners – leaving financial institutions. At the customers’ next location, the group takes the money by force, either by confronting victims or by breaking into their vehicles.

On Wednesday, U.S. District Judge Ed Kinkeade sentenced Ms. Milburn to 220 months (18 years, 4 months) and Mr. Mallet to 170 months (14 years, 2 months) in federal prison. 

The FBI began investigating this conspiracy – which eventually netted 13 defendants – after the Dallas area experienced a surge in jugging offenses in 2016 and 2017. 

Ms. Milburn, Mr. Mallet, and two others were first arrested by Dallas Police Department in June 2016, while fleeing from a robbery.  Ms. Milburn, Mr. Mallet, and three others were arrested again in July 2017 during a DPD undercover sting targeting jugging activity. 

Through various investigative techniques, the FBI tied the Houston-based crew to an estimated 30+ jugging offenses in the Dallas area.  The FBI concluded that the crew had taken more than three-quarters of a million dollars, primarily from Dallas-area small business owners and operators.

Thirteen defendants were charged in federal court. Eleven have pleaded guilty. 

Previously sentenced co-defendants include:

•             Jarvis Broussard — 90 months

•             Gemarcus Dontae Earl — 72 months

•             Christian Demond Gilbert — 50 months

•             Randy Lamark Hammond — 50 months

•             John Christopher Jones — 180 months

•             Tony Jarel Russell — 65 months

•             Fernando Rafael Taylor — 60 months

•             Jonathan Walker — 50 months

Charges remain pending against three defendants in connection with the conspiracy.

This is believed to be the first federal prosecution of a jugging robbery conspiracy in the nation.

“These defendants were systematically harming small business owners, who represent a backbone of Dallas’ economy,” said U.S. Attorney Erin Nealy Cox. “I’m proud of the prosecutors, agents, and officers who helped us bring justice in this milestone case.” 

“FBI Dallas and its local partners worked together through our Violent Crimes Task Force to combat the threat of jugging and dismantled this criminal enterprise," said FBI Dallas Acting Special Agent in Charge Michael Schneider. "We will continue to pursue criminals with all available resources at our disposal and remain determined to eradicate violent crime from our streets."

In 2017, the FBI Violent Crimes Task Force received reports of in excess of 80 jugging robberies in the Dallas area.  The FBI received a report of only one jugging robbery in 2018.

However, the agency urges the banking public to remain vigilant.

The Federal Bureau of Investigation conducted the investigation with assistance from the Dallas, Garland, Irving, and Richardson Police Departments.  Assistant United States Attorneys Brian McKay and Sid Mody are prosecuting the case.

A Fort Worth man today pleaded guilty to a federal terrorism charge, announced Assistant Attorney General for National Security John C. Demers and U.S. Attorney Erin Nealy Cox for the Northern District of Texas.

Michael Kyle Sewell, 18, who was arrested in February, formally pleaded guilty to conspiracy to provide material support to Lashkar-e-Taiba, a Pakistani-based foreign terrorist organization also known as LeT.  

According to court documents, Sewell admitted to encouraging an individual, identified in court documents only as coconspirator 1, to join LeT.

Sewell then provided the coconspirator, who he spoke to on social media, with contact information for an individual he believed could facilitate the coconspirator’s travel to Pakistan to join LeT.  Unbeknownst to Sewell and the coconspirator, the facilitator was an undercover FBI agent.

Sewell and the coconspirator discussed what the coconspirator should say to the undercover agent who posed as the facilitator, in order to gain the facilitator’s trust and be permitted to join LeT.  Sewell also contacted the facilitator to vouch for the coconspirator’s authenticity.

Sewell now faces up to 20 years in federal prison and a fine of up to $250,000.  He will be sentenced on Aug. 12, 2019 in Fort Worth.

The Federal Bureau of Investigation and its Joint Terrorism Task Force members, including the Arlington Police Department, the Fort Worth Police Department, the Tarrant County Sheriff’s Office, the Naval Criminal Investigation Service, Homeland Security Investigations, and the Texas Department of Public Safety conducted the investigation.  Assistant U.S. Attorney Jay Weimer prosecuted the case with the assistance of Trial Attorney Bridget Behling of the National Security Division's Counterterrorism Section.

Six men were charged in an indictment unsealed today for their alleged participation in a five-year high-yield investment fraud scheme. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas and Inspector in Charge Delany DeLeon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group in Washington, D.C., made the announcement.

Cengiz Jan “CJ” Comu, 58, of Dallas, Texas; John Mervyn Price, 63, also of Dallas;   Harley E. “Buddy” Barnes, III, 60, of Plano, Texas; Richard Laurence Kadish, 57, of Miami, Florida; Richard Lawrence Green, 69, also of Miami; and Daniel Thomas Broyles Sr., 61, formerly of Malibu, California, were charged in an indictment returned in the Northern District of Texas with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and 10 counts of wire fraud.  Price and Barnes were arrested and appeared Monday before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas.  Comu was arrested and appeared on Wednesday, also before Judge Toliver.  Kadish was arrested and appeared Wednesday in Miami before U.S. Magistrate Judge Jacqueline Becerra of the Southern District of Florida.  Kadish was arrested and appeared Wednesday in Fort Lauderdale before U.S. Magistrate Judge Lurana S. Snow of the Southern District of Florida.  A trial date has not yet been set.

Broyles, who was previously indicted in the Western District of North Carolina for his role in another high-yield investment fraud scheme, also remains a fugitive.

“These individuals are charged with making multiple false and fraudulent representations as part of a five-year fraud scheme that ripped off investors, many of whom were elderly,” said Assistant Attorney General Benczkowski.  “The indictment unsealed today underscores the Criminal Division’s commitment to combating high-yield investment fraud, which often targets and victimizes some of the most vulnerable members of our community.”

“The defendants peddled an absurd get-rich-quick scheme, deceiving hundreds of hardworking Americans,” said U.S. Attorney Erin Nealy Cox. “We will not stand for this type of blatant fraud.”

“Anyone who engages in deceptive securities practices needs to know they will not go undetected and will be held accountable,” said Inspector in Charge DeLeon-Colón.  “The Postal Inspection Service has been investigating crimes like the ones alleged here for many years. Our duty is to protect investors and defend the integrity of the marketplace and the U.S. Mail.”

The indictment alleges that, beginning in 2013, Comu, Price, Barnes, Kadish, Green and Broyles conspired to sell stock in EarthWater, a United Kingdom company headquartered in Dallas County, Texas.  EarthWater manufactured and sold bottled water that it claimed was infused with special minerals mined from an 80-million-year-old deposit hidden in a secret location. 

According to the indictment, Comu, who is EarthWater’s founder, chairman and chief executive officer, falsely represented to victim investors that he was a successful Wall Street veteran with decades of experience and did not disclose to investors that, among other things, he was permanently barred from selling unregistered securities as a result of actions filed by state and federal securities regulators.

The indictment further alleges that, to induce victims to purchase EarthWater stock, Comu, Price, Barnes, Kadish, Green, Broyles, and others made numerous false and misleading representations, including that victim investors only had a brief opportunity to purchase EarthWater stock for anywhere from $.10 to $.50 per share in an unregistered offering before EarthWater launched an initial public offering (IPO) or was acquired by a large well-known company and EarthWater’s stock price would increase anywhere from 10- to 50- times the purchase price.  In reality, EarthWater allegedly never initiated an IPO, or a merger or acquisition.    

The indictment also alleges that defendants falsely represented to victim investors that EarthWater would use 90 percent of invested funds to grow its business and expand operations, and that any fees paid to broker-dealers with respect to the sale of EarthWater stock would not exceed 10 percent of the purchase price of the shares.  In reality, Comu, Price and Barnes allegedly agreed to split victim investors’ funds 50-50 with Kadish, Green, Broyles and other individuals who sold EarthWater stock.  As a result, nearly half of all of the money victims invested in EarthWater allegedly went directly into the pockets of the individuals who sold them the stock.

In addition, according to the indictment, the defendants also falsely represented to victim investors that Comu, Price and Barnes did not receive salary from EarthWater in 2014, 2015 or 2016.  In reality, Comu, Price and Barnes allegedly used EarthWater’s investment account as a personal piggybank, using victim investor funds for their own personal benefit and transferring victim investor funds to bank accounts controlled by them for their own personal use.  

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.        

This case was investigated by the U.S. Postal Inspection Service.  Trial Attorneys Christopher Fenton and William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary F. Walters of the Northern District of Texas are prosecuting the case. 

The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.

A Fort Worth man today pleaded guilty to a federal terrorism charge, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox and Assistant Attorney General for National Security John C. Demers.

Michael Kyle Sewell, 18, who was arrested in February, formally pleaded guilty Wednesday morning to conspiracy to provide material support to Lashkar-e-Taiba, a Pakistani-based foreign terrorist organization also known as LeT. 

According to court documents, Sewell admitted to encouraging an individual identified in court documents as coconspirator 1 to join LeT.

Sewell provided the coconspirator, who he spoke to on social media, with contact information for an individual he believed could facilitate the coconspirator’s travel to Pakistan to join LeT.  Unbeknownst to Sewell and the coconspirator, the facilitator was an undercover FBI agent.

Sewell and the coconspirator discussed what the coconspirator should say to the undercover agent who posed as the facilitator, in order to gain the facilitator’s trust and be permitted to join LeT.  Sewell also contacted the facilitator to vouch for the coconspirator’s authenticity.

Sewell now faces up to 20 years in federal prison and a fine of up to $250,000.  He will be sentenced on August 12 in Fort Worth.

The Federal Bureau of Investigation and its Joint Terrorism Task Force members, including the Arlington Police Department, the Fort Worth Police Department, the Tarrant County Sheriff’s Office, the Naval Criminal Investigation Service, Homeland Security Investigations, and the Texas Department of Public Safety conducted the investigation.  Assistant U.S. Attorney Jay Weimer prosecuted the case.

A federal jury convicted a Dallas, Texas man on multiple terror charges, Assistant Attorney General for National Security John C. Demers and U.S. Attorney Erin Nealy Cox for the Northern District of Texas announced today.

Following a three-and-a-half day trial, Said Azzam Mohamad Rahim, a 42-year-old United States citizen, was convicted of one count of conspiracy to provide material support to a designated foreign terrorist organization (FTO), one count of attempting to provide material support to an FTO, and six counts of making false statements involving international terrorism to federal authorities.

“Said Azzam Mohamad Rahim operated online to spread ISIS’s poisonous message of hate and violence,” said Assistant Attorney General Demers.  “Then he attempted to travel to support ISIS and he lied to the FBI when questioned about his activities.  With the jury’s guilty verdicts, he is being held accountable for his crimes.  I want to thank the prosecutors, agents, and analysts who are responsible for this result.”

“We will not allow radical terrorists motivated by dangerous ideologies to promote violence against innocent people,” said U.S. Attorney Nealy Cox.  “The Justice Department is committed to combatting terror at home and abroad.”

According to evidence presented at trial, Mr. Rahim moderated a social media channel dedicated to recruiting fighters for the Islamic State of Iraq and al-Sham, or ISIS, a State Department designated terror group. 

Mr. Rahim used Zello, a push-to-talk direct messaging application, to promote violence in ISIS’s name, prosecutors said.

Records showed he spent hours on Zello’s “State of the Islamic Caliphate” channel, where he touted acts of terror under various monikers: 

“Kill and do not consult anyone,” he said in July 2016.  “Kill by any means, smash his head on the wall, spit in his face, burn -- I mean anything, anything – poison, anything.” 

“Brothers!  What are you waiting for?,” he said a month later.  “Mobilize and perform jihad for the cause of Allah…. Some of the brothers mobilized from this channel, they were amongst us. ”

He even praised several terrorist attacks after the fact.

“I was happy for this act,” Rahim said after a truck barreled into a crowd of people in Nice, France, killing 86.  “Those dogs.”

Mr. Rahim was arrested on March 5, 2017 at the Dallas Fort Worth International Airport, where he was attempting to board a flight to Amman, Jordan.  Asked by agents if he had ever supported ISIS, advocated travel for the purposes of jihad, promoted violence on ISIS’s behalf, or encouraged anyone to kill infidels at the urging of ISIS spokesman Abu Mohammed Al Adnani, Mr. Rahim said “no.”

Rahim now faces up to 20 years in federal prison for each material support count and eight years for each false statement count, for a total of up to 88 years imprisonment.  The FBI, the U.S. Department of State – Diplomatic Security Services and the Joint Terrorism Task Force conducted the investigation. Assistant United States Attorney Errin Martin and Trial Attorney Taryn Meeks of the National Security Division’s Counterterrorism Section prosecuted the case.  U.S. District Court Judge Jane J. Boyle presided over the trial.

A federal jury convicted a Dallas man on multiple terror charges, U.S. Attorney for the Northern District of Texas Erin Nealy Cox and Assistant Attorney General for National Security John C. Demers announced today.

Following a three-and-a-half day trial, Said Azzam Mohamad Rahim, a 42-year-old United States citizen, was convicted Friday of one count of conspiracy to provide material support to a designated foreign terrorist organization (FTO), one count of attempting to provide material support to an FTO, and six counts of making false statements involving international terrorism to federal authorities.

“We will not allow radical terrorists motivated by dangerous ideologies to promote violence against innocent people,” said U.S. Attorney Nealy Cox. “The Justice Department is committed to combatting terror at home and abroad.”

“Said Azzam Mohamad Rahim operated online to spread ISIS’s poisonous message of hate and violence,” said Assistant Attorney General Demers.  “Then he attempted to travel to support ISIS and he lied to the FBI when questioned about his activities.  With the jury’s guilty verdicts, he is being held accountable for his crimes.  I want to thank the prosecutors, agents, and analysts who are responsible for this result.”

According to evidence presented at trial, Mr. Rahim moderated a social media channel dedicated to recruiting fighters for the Islamic State of Iraq and al-Sham, or ISIS, a State Department designated terror group.  

Mr. Rahim used Zello, a push-to-talk direct messaging application, to promote violence in ISIS’s name, prosecutors said.

Records showed he spent hours on Zello’s “State of the Islamic Caliphate” channel, where he touted acts of terror under various monikers: 

“Kill and do not consult anyone,” he said in July 2016. “Kill by any means, smash his head on the wall, spit in his face, burn -- I mean anything, anything – poison, anything.” 

“Brothers!  What are you waiting for?” he said a month later. “Mobilize and perform jihad for the cause of Allah…. Some of the brothers mobilized from this channel, they were amongst us.”

He even praised several terrorist attacks after the fact.

“I was happy for this act,” Rahim said after a truck barreled into a crowd of people in Nice, France, killing 86. “Those dogs.”

Mr. Rahim was arrested on March 5, 2017 at the Dallas Fort Worth International Airport, where he was attempting to board a flight to Amman, Jordan.  Asked by agents if he had ever supported ISIS, advocated travel for the purposes of jihad, promoted violence on ISIS’s behalf, or encouraged anyone to kill infidels at the urging of ISIS spokesman Abu Mohammed al-Adnani, Mr. Rahim said “no.”

Mr. Rahim now faces up to 20 years in federal prison for each material support count and eight years for each false statement count, for a total of up to 88 years imprisonment. 

The Federal Bureau of Investigation, the U.S. Department of State – Diplomatic Security Services, and the Joint Terrorism Task Force conducted the investigation. Assistant United States Attorney Errin Martin and Trial Attorney Taryn Meeks of the National Security Division’s Counterterrorism Section prosecuted the case.  U.S. District Judge Jane Boyle presided over the trial.

Following a three-day trial, a federal jury in Amarillo convicted a New Mexico man who kidnapped and assaulted a young girl from Texas, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

Royce Wade Lander, 32, of Continental Divide, N.M., was convicted Wednesday evening of transportation of a minor with intent to engage in criminal sexual activity.

According to testimony presented at trial, Mr. Lander picked up his minor victim at a truck stop near Amarillo. He drove her hundreds of miles along I-40 into New Mexico, where he sexually assaulted her until she was able to escape.

Mr. Lander now faces a sentence of up to life in federal prison.

The Federal Bureau of Investigation and the Potter County Sheriff’s Office conducted the investigation. Assistant U.S. Attorneys Sean Taylor, Anna Marie Bell, and Josh Frausto prosecuted the case.

Tesa Keith, 37, pleaded guilty yesterday to violating the civil rights of a resident at the San Angelo State Supported Living Center in San Angelo, Texas, announced Assistant Attorney General Eric Dreiband of the Department of Justice’s Civil Rights Division, U.S. Attorney for the Northern District of Texas Erin Nealy Cox, and Michael Schneider, Acting Special Agent in Charge of the FBI Dallas Division.

“This defendant physically assaulted a resident at the Living Center with no legal justification,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Department of Justice will continue to defend the civil rights of Americans and seek justice for those who have suffered unlawful abuses.”

“Instead of the care and compassion she deserved, this victim suffered abuse and humiliation,” said U.S. Attorney Erin Nealy Cox. “One of the DOJ’s most sacred duties is seeking justice for our district’s most vulnerable. We will not tolerate this sort of terrible behavior.”

“The FBI works closely with our federal, state, and local partners to investigate any type of civil rights violation,” said Michael Schneider, Acting Special Agent in Charge of the FBI Dallas Division. “The victim was unfairly prevented from receiving the care she was entitled to under the law.”

According to the plea agreement, Keith was working on June 13, 2017, as a Direct Service Provider at the San Angelo State Supported Living Center, a state-run facility. K.B. was a resident of the facility. Keith admitted to kicking K.B. in the face without legal justification and for the purpose of punishing her. Keith’s assault on K.B. resulted in bodily injury to K.B.

Keith faces a maximum statutory penalty of 10 years in prison and a fine of up to $250,000 for the civil rights offense. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentence will be determined by the court based on the advisory sentencing guidelines and other statutory factors. 

The FBI’s San Angelo Field Office conducted the investigation. Assistant U.S. Attorney Juanita Fielden of the Northern District of Texas and Trial Attorneys Rose E. Gibson and Kate Hill of the Department of Justice’s Civil Rights Division are prosecuting the case.

Gas marketer B. Charles Rogers Gas Ltd. (BCR), which operated in the San Juan Basin area of New Mexico and southern Colorado, and its owners Billy Charles Rogers Jr. and Wynon Rogers, of Fort Worth, Texas, have agreed to pay $3.575 million to resolve False Claims Act (FCA) allegations that they caused reduced mineral royalty payments to the United States, the Department of Justice announced today. In addition, Thomas R. Lutner III, of Katy, Texas, who worked with BCR while employed as a gas supply manager at a natural gas distributor based in Houston, Texas, has agreed to pay $800,000 to resolve FCA allegations relating to his role in BCR’s alleged royalty fraud.

“The Department of Justice is committed to ensuring that those who remove valuable assets from public or Indian lands pay a fair price for those assets,” said Assistant Attorney General Jody Hunt, of the Department of Justice’s Civil Division. “We will continue to pursue claims against those who evade, or cause others to evade, their royalty obligations.”

“Businesses that underpay for our nation’s natural resources must be held to account,” said U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

The United States alleged that, while operating as a gas marketer in the San Juan Basin, BCR, at the direction of Mr. and Mrs. Rogers and Mr. Lutner, issued to producers false transaction statements in connection with BCR’s gas purchases. Those transaction statements allegedly underreported the volume and value of the natural gas liquids that BCR purchased. The United States alleged that many of the producers had federal gas leases, and that BCR’s fraudulent conduct caused those producers to underpay royalties owed to the United States on gas removed from those leases. BCR, Mr. and Mrs. Rogers, and Mr. Lutner have admitted and accepted responsibility for making and using, or causing to be made and used, false records that were material to producers’ obligations to pay royalties to the United States.

“The Department of the Interior (DOI) Office of the Inspector General (OIG) is committed to working with the Department of Justice and the Office of Natural Resources Revenue to ensure that public oil and gas revenues are properly accounted for and collected on behalf of the American public and all mineral interest owners,” said Ron Gonzales, Special Agent in Charge of the DOI OIG Energy Investigations Unit.

The civil settlement was the result of a coordinated effort by the Justice Department’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Northern District of Texas; and the DOI OIG.

Except to the extent of the facts admitted by the settling parties, the claims resolved by the settlement agreement are allegations only and there has been no determination of liability.

SENTENCING -- Mario Melendez
On April 26, Dallas tax return preparer Mario Melendez was sentenced to 51 months in prison for conspiring to defraud the United States and aiding in the preparation of false tax returns. From November 2013 to April 2014, Mr. Melendez, a manager at Uptown Multi Services, helped prepare fraudulent income tax returns for clients, including false education credits, Schedule C expenses, and other items. He also assisted in trainings instructing new employees how to prepare fraudulent tax returns. The IRS – Criminal Investigations unit conducted the investigation.

INDICTMENT* – J. Concepcion Serrano-Alba
On April 24, a federal grand jury indicted J. Concepcion Serrano-Alba, 47, on three counts of straw purchase, or acquiring a firearm from a licensed dealer by false or fictitious statement. Over a 13-month period, Mr. Alba allegedly purchased several pistols from pawn shops across the Northern District of Texas. He told the shops that he was the actual buyer of the firearm, when in fact, the guns were meant for someone else. If convicted, Mr. Serrano-Alba faces 30 years in federal prison. The Bureau of Alcohol, Tobacco, Firearms & Explosives investigated.

INDICTMENT* – Austin Reed
On April 24, a federal grand jury indicted Austin David Reed, 26, of Dallas, Texas, for carjacking and brandishing a firearm during a crime of violence. When Dallas police officers responded to a domestic violence all at his hotel room, Mr. Reed allegedly donned a bullet-proof vest and stated he was “not going down like this.” He then lead officers on a dangerous pursuit through a wooded area and into a neighborhood, firing several rounds at officers as he fled. Once inside the neighborhood, he allegedly brandished his weapon to carjack a vehicle, which he promptly crashed into a light pole. He exited the mangled vehicle and entered a home, where he demanded the keys to another car. When the victims confronted him with a gun, he fled the home through the garage. If convicted, Mr. Reed faces up to 22 years in federal prison. ATF and Dallas Police Department and investigated the case.

INDICTMENT* – Lilla Haiddar
On April 24, a federal grand jury indicted Lilla Haiddar, 56 of Arlington, Texas on two counts of making false statements in her passport applications. In October 2011 and again in November 2018, Ms. Haiddar applied for a passport without disclosing a name she had used previously: Marufa Khashim Surgul. If convicted, Ms. Haiddar faces up to 120 months in federal prison on each count. United States Department of State, Diplomatic Security Service conducted the investigation.

SENTENCING – Toure couple
On April 22, Mohamed Toure, 58, and Denise Cros-Toure, 58, of Southlake, Texas, were sentenced seven years in prison each and ordered to pay $288,620.24 in restitution following a January forced labor conviction. According evidence preented at trial, the defendants, members of powerful Guinean families, arranged for the victim, then a young child from a rural Guinean community, to travel alone from her home in West Africa to the defendants’ home in Southlake, Texas, in early 2000. Once in the United States, the defendants forced the victim to cook, clean, and take care of their biological children, some of whom were close in age to the victim, without pay for the next 16 years. The U.S. Department of State’s Diplomatic Security Service, Houston Field Office, investigated the case. More here.

SENTENCING -- Matias Alacala
On April 22, 23-year-old Matias Medina Alcala, of Zacatecas, Mexico, was sentenced to 97 months confinement in federal prison for conspiracy to possess with intent to distribute methamphetamine.  According to Court documents, in December 2015, Mr. Alcala delivered approximately 1 kilogram of meth to another individual at the request of Domingo Arreola Avalos (see below).  As part of the plea agreement, the defendant, who was in the U.S. illegally at the time of the offense, agreed to forfeit a firearm and $36,900 in U.S. currency.  The case was investigated by the Federal Bureau of Investigation and the IRS – Criminal Investigations Division and prosecuted by AUSA George Leal.

SENTENCING -- Pedro Barriga-Avalaos
On April 22, 28- year-old Pedro Barriga-Avalos, of Michoacán, Mexico, was sentenced to 97 months confinement in federal prison for conspiracy to possess with intent to distribute methamphetamine.  Court documents indicate that on New Year’s Day 2016, the defendant delivered approximately 1 kilogram of methamphetamine to another person.  During the delivery, the defendant advised he had two kilograms of methamphetamine but one was for another person.  Mr. Barriga Avalos, who was in the U.S. illegally at the time of the offense, forfeited $9236.00 in U.S. currency, as well as a firearm. The case was investigated by the Federal Bureau of Investigation and the IRS – Criminal Investigations Division and prosecuted by AUSA George Leal.

* An indictment is merely an accusation of criminal conduct, not evidence. All criminal defendants are presumed innocent until proven guilty in a court of law.

A Dallas, Texas-area tax return preparer was sentenced to 51 months in prison today for conspiring to defraud the United States and aiding and assisting in the preparation of false tax returns, announced Principal Deputy Assistant Attorney Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Erin Nealy Cox for the Northern District of Texas. 

According to documents and information provided to the court, Mario Melendez worked as a manager and return preparer at Uptown Multi Services, a tax preparation business located in the Northern District of Texas. Co-defendant, Francisco Ventura owned Uptown and other tax preparation businesses.

From November 2013 and continuing through April 2014, Melendez conspired with others to prepare fraudulent federal income tax returns for clients that included false education credits, Schedule C expenses and other such items. Melendez also assisted Ventura during training classes for new tax return preparers during which they instructed employees how to prepare fraudulent tax returns in order to maximize clients’ refunds. Melendez is responsible for attempting to cause an estimated $3.8 million tax loss to the United States.

In addition to the term of imprisonment imposed, Melendez was ordered to serve one year of supervised release and to pay restitution in the amount of $3,885,456 to the Internal Revenue Service (IRS).

Ventura pleaded guilty to aiding and assisting in the preparation of a false return. His sentencing is scheduled for June 14, 2019.

Principal Deputy Assistant Attorney Zuckerman and U.S. Attorney Nealy Cox commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorney Alexander Effendi of the Tax Division and Assistant United States Attorney Melanie Smith, who are prosecuting this case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

U.S. District Court Judge Reid O’Connor sentenced defendants Mohamed Toure, 58, and Denise Cros-Toure, 58, of Southlake, Texas, to seven years in prison each and ordered them to pay $288,620.24 in restitution. A federal jury convicted the defendants of forced labor, conspiracy to commit alien harboring, and alien harboring on Jan. 11 following a four-day trial. As a consequence of their convictions, the defendants, who are citizens of Guinea and lawful permanent residents of the United States, may lose their U.S. immigration status and be removed to Guinea pursuant to law. Today’s sentences were announced by Assistant Attorney General Eric Dreiband of the Department of Justice’s Civil Rights Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas, and Special Agent in Charge Jeffrey McGallicher of the U.S. Department of State’s Diplomatic Security Service (DSS) Houston Field Office.  

“I hope that today’s sentence brings some measure of justice and healing to the victim, who suffered untold trauma as a result of the defendants’ heinous crimes. The defendants stole her childhood and her labor for years, enriching themselves while leaving her with pain and an uncertain future,” said Assistant Attorney General Eric Dreiband. “I am very grateful to all who supported, and continue to support, the victim as she attempts to rebuild her life. The Department of Justice will continue to investigate and vigorously prosecute human traffickers and vindicate the rights of their victims.”

“Forced labor trafficking cases are notoriously difficult to prosecute – in part because victims are often afraid to speak out,” said U.S. Attorney Erin Nealy Cox. “It took tremendous courage for this young woman to share her story at trial. She was brought to this country at a young age, pressured to stay quiet, and forced to work for this family without pay for 16 years. I want to commend her, as well as the witnesses who helped shine a light on her circumstances. If we want to wipe out human trafficking, we need to remind witnesses to speak up, and ask the community to remain alert.”

“Today’s sentence sends a strong message to those abusing and exploiting individuals: you will be held responsible for your vicious acts,” said Jeffrey McGallicher, Special Agent in Charge of the DSS Houston Field Office. “The Diplomatic Security Service wields a global law enforcement reach, is committed to investigating these crimes wherever they occur, and remains dedicated to its partnerships in pursuing justice for the victims of human trafficking.”

According to the evidence at trial, the defendants, members of wealthy and powerful Guinean families, arranged for the victim, then a young child from a rural Guinean community, to travel alone from her home in West Africa to the defendants’ home in Southlake, Texas, in early 2000. Once in the United States, the defendants forced the victim to cook, clean, and take care of their biological children, some of whom were close in age to the victim, without pay for the next 16 years.

Evidence at trial further established that the defendants physically, emotionally, and verbally punished the young victim when she disobeyed or otherwise failed to perform the required labor to their satisfaction. For example, the defendants called the victim a “dog,” “slave,” and “worthless.” They repeatedly hit her on multiple occasions, including with an electrical cord.  They forced her to sleep alone in a nearby park as punishment, abused her by shaving her head and washing her outside with a hose, and rendered her completely dependent on them for everything. They isolated her from her family and society and prevented her from receiving any education, while their own children attended school and college. 

The U.S. Department of State’s Diplomatic Security Service, Houston Field Office, investigated the case. It was prosecuted by Trial Attorney Rebekah Bailey and Special Litigation Counsel William Nolan of the Civil Rights Division’s Criminal Section and Human Trafficking Prosecution Unit and Assistant U.S. Attorney Alex Lewis of the Northern District of Texas.

If you know someone who may be a victim of trafficking or otherwise believe you have information pertaining to human trafficking, please call the National Human Trafficking Hotline at 1-888-373-7888.

U.S. District Court Judge Reid O’Connor sentenced defendants Mohamed Toure, 58, and Denise Cros-Toure, 58, of Southlake, Texas, to seven years in prison each and ordered them to pay $288,620.24 in restitution. A federal jury convicted the defendants of forced labor, conspiracy to commit alien harboring, and alien harboring on Jan. 11 following a four-day trial. As a consequence of their convictions, the defendants, who are citizens of Guinea and lawful permanent residents of the United States, may lose their U.S. immigration status and be removed to Guinea pursuant to law. Today’s sentences were announced by Assistant Attorney General Eric Dreiband of the Department of Justice’s Civil Rights Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas, and Special Agent in Charge Jeffrey McGallicher of the U.S. Department of State’s Diplomatic Security Service (DSS) Houston Field Office.  

“I hope that today’s sentence brings some measure of justice and healing to the victim, who suffered untold trauma as a result of the defendants’ heinous crimes. The defendants stole her childhood and her labor for years, enriching themselves while leaving her with pain and an uncertain future,” said Assistant Attorney General Eric Dreiband. “I am very grateful to all who supported, and continue to support, the victim as she attempts to rebuild her life. The Department of Justice will continue to investigate and vigorously prosecute human traffickers and vindicate the rights of their victims.”

“Forced labor trafficking cases are notoriously difficult to prosecute – in part because victims are often afraid to speak out,” said U.S. Attorney Erin Nealy Cox. “It took tremendous courage for this young woman to share her story at trial. She was brought to this country at a young age, pressured to stay quiet, and forced to work for this family without pay for 16 years. I want to commend her, as well as the witnesses who helped shine a light on her circumstances. If we want to wipe out human trafficking, we need to remind witnesses to speak up, and ask the community to remain alert.”

“Today’s sentence sends a strong message to those abusing and exploiting individuals: you will be held responsible for your vicious acts,” said Jeffrey McGallicher, Special Agent in Charge of the DSS Houston Field Office. “The Diplomatic Security Service wields a global law enforcement reach, is committed to investigating these crimes wherever they occur, and remains dedicated to its partnerships in pursuing justice for the victims of human trafficking.”

According to the evidence at trial, the defendants, members of wealthy and powerful Guinean families, arranged for the victim, then a young child from a rural Guinean community, to travel alone from her home in West Africa to the defendants’ home in Southlake, Texas, in early 2000. Once in the United States, the defendants forced the victim to cook, clean, and take care of their biological children, some of whom were close in age to the victim, without pay for the next 16 years.

Evidence at trial further established that the defendants physically, emotionally, and verbally punished the young victim when she disobeyed or otherwise failed to perform the required labor to their satisfaction. For example, the defendants called the victim a “dog,” “slave,” and “worthless.” They repeatedly hit her on multiple occasions, including with an electrical cord.  They forced her to sleep alone in a nearby park as punishment, abused her by shaving her head and washing her outside with a hose, and rendered her completely dependent on them for everything. They isolated her from her family and society and prevented her from receiving any education, while their own children attended school and college. 

The U.S. Department of State’s Diplomatic Security Service, Houston Field Office, investigated the case. It was prosecuted by Trial Attorney Rebekah Bailey and Special Litigation Counsel William Nolan of the Civil Rights Division’s Criminal Section and Human Trafficking Prosecution Unit and Assistant U.S. Attorney Alex Lewis of the Northern District of Texas.

If you know someone who may be a victim of trafficking or otherwise believe you have information pertaining to human trafficking, please call the National Human Trafficking Hotline at 1-888-373-7888.

A Lewisville man who stole more than a thousand credit and debit card numbers was sentenced today to 58 months in federal prison, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox. 

Odis Edwards, 40, pleaded guilty to conspiracy to commit access device fraud in January.

In plea papers, Mr. Edwards admits he stole more than 1,200 credit and debit card numbers via the darknet and internet chat rooms. He and his co-conspirators used counterfeit cards to book more than $250,000 in rooms and incidentals at hotels around Dallas. 

An agent testified in Court on Monday that Mr. Edwards sub-rented the rooms to drug dealers and pimps at a fraction of their true cost.

Hotel personnel became suspicious when multiple people racked up hefty room service bills, all charged to Mr. Edward’s account. Inside the rooms, law enforcement officers found altered credit cards as well as notebooks containing what appeared to be credit card numbers and URLs for digital credit card number generators.

“More and more, we’re seeing perpetrators attempt to cloak themselves in the seeming anonymity of the darknet. But they should know that we prioritize the investigation of illicit activity on the darknet and will vigorously prosecute this unlawful behavior ,” said U.S. Attorney Nealy Cox. “In this case, I applaud the hard work of our Secret Service and police partners, as well as the hotel workers who reached out to law enforcement when they felt something was amiss.”

“The Dallas Field Office and the entire Secret Service is dedicated to the investigation of financial crime,” said William Noonan, Special Agent in Charge of the Secret Service’s Dallas Field Office. “This investigation is a testament to the Secret Service’s commitment to working with our partners on accomplishing our dual mission.”

The U.S. Secret Service conducted the investigation with the assistance of the Colleyville Police Department. Assistant U.S. Attorneys Ryan Raybould and Damien Diggs prosecuted the case.

A New York man appeared in federal court in Dallas Tuesday afternoon on charges related to his alleged role in a $1.5 million Apple gift card scheme, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox. 

Syed Ali, 29, and his co-conspirator, Jason Tout-Puissant, 27, were both charged with conspiracy to commit wire fraud and wire fraud in December.  

“These defendants may have assumed their fraud would go unnoticed simply because $1.5 million is small compared to the revenue that Apple expects to generate  – but thankfully, the FBI is vigilant for fraud of all shapes and sizes,” said U.S. Attorney Nealy Cox. “DOJ is committed to protecting American companies, large and small, from fraudulent schemes like this.”

“The FBI worked to identify and end the scheme carried out by the defendants,” said Michael Schneider, Acting Special Agent in Charge of the FBI Dallas Division. “Our private sector partnerships allow us to effectively target cyber criminals who attempt to steal property or sensitive information.”

According to the indictment, Mr. Tout-Puissant allegedly obtained an Apple point-of-sale device called an “Isaac” and used it to load thousands of dollars of fraudulent store credits onto gift cards over the course of about 16 months.

He then sent the gift cards digitally to Mr. Ali, who allegedly used them to purchase computers and other Apple products from the company’s brick-and-mortar retail stores across the country.

Mr. Ali was arrested in New York in March, and subsequently removed to the Northern District of Texas, where he appeared before U.S. Magistrate Judge David L. Horan Tuesday afternoon. If convicted, Mr. Ali and Mr. Puissant face up to 20 years in federal prison on each count.

An indictment is merely an allegation of wrongdoing, not evidence. Both defendants are presumed innocent until proven guilty in a court of law.

The Federal Bureau of Investigations conducted the investigation. Assistant U.S. Attorney Sid Mody prosecuted the case.  

Following four days of deliberations, a federal jury returned guilty verdicts for seven individuals implicated in the Forest Park Medical Center bribery scheme Tuesday evening, announced U.S. Attorney Erin Nealy Cox.

Wilton McPherson “Mac” Burt, Jackson Jacob, Douglas Sung Won, Michael Bassem Rimlawi, Shawn Mark Henry, Mrugeshkumar Shah, and Iris Kathleen Forrest were all convicted of conspiracy to pay or receive healthcare bribes.

“The verdict in the Forest Park case is a reminder to healthcare practitioners across the District that patients – not payments –  should guide decisions about how and where doctors administer treatment,” said U.S. Attorney Nealy Cox. “We are grateful to the Forest Park jury, 12 men and women who listened attentively through seven long weeks of trial. It’s obvious from the verdict that they deliberated each charge carefully, and we appreciate their service.”

Ten other defendants had already pleaded guilty in the $200 million scheme, designed to induce doctors to steer lucrative patients – particularly those with high-reimbursing, out-of-network private insurance – to the now defunct hospital.

Most of the kickbacks, which totaled more than $40 million, were disguised as consulting fees or “marketing money” doled as a percentage of surgeries each doctor referred to Forest Park. 

Instead of billing patients for out-of-network co-payments, instituted by insurers to de-incentivize the high costs associated with out-of-network treatment, Forest Park allegedly assured patients they would pay in-network prices. Because they knew insurers wouldn’t tolerate such practices, they concealed the patient discounts and wrote off the difference as uncollected “bad debt.”

Hospital manager Alan Beauchamp, who testified for the government, admitted that Forest Park “bought surgeries,” and then “papered it up to make it look good.”

The verdict was as follows:

Mr. Burt, Forest Park’s managing partner, was found guilty on 10 of 12 counts, including one count of conspiracy, two counts of paying kickbacks, six counts of commercial bribery in violation of the Travel Act, and one count of money laundering. He faces up to 65 years in federal prison.

Mr. Jacob, owner of the shell companies through which some of the bribes were routed, was found guilty on four of 14 counts, including conspiracy and three counts of paying kickbacks. He faces up to 20 years in federal prison.

Dr. Won, a spinal surgeon, was found guilty on one of two counts, conspiracy. He faces up to 5 years in federal prison.

Dr. Rimlawi, a spinal surgeon who partnered with Won, was found guilty on three of four counts, including conspiracy and two counts of receiving kickbacks. He faces up to 15 years in federal prison.

Dr. Henry, a spinal surgeon who invested in FMPC, was found guilty on three of three counts, including conspiracy, commercial bribery, and money laundering. He faces up to 30 years in federal prison.

Dr. Shah, a pain management doctor, was found guilty on four of four counts, including conspiracy, two counts of paying kickbacks, and one count of commercial bribery. He faces up to 20 years in federal prison.

Ms. Forrest, a nurse who recruited and preauthorized worker’s comp requests, was convicted on two of two counts, including conspiracy and paying kickbacks. She faces up to 10 years in federal prison.

Dr. William Daniel “Nick” Nicholson, a bariatric surgeon who invested in FPMC, was found not guilty on all three counts against him.

The jury could not come to a verdict as to Ms. Carli Adele Hempel, and the judge declared a mistrial for her.

Defendants who pleaded guilty before the case went to trial include: Alan Andrew Beauchamp,  Richard Ferdinand Toussaint, Jr., Wade Neal Barker, Kelly Wade Loter, David Daesung Kim, Israel Ortiz, Andrea Kay Smith, Frank Gonzales, Jr., Andrew Jonathan Hillman, and Semyon Narosov.

Sentencing dates for convicted defendants have not yet been set.

The case was investigated by the U.S. Office of Personnel Management Office of Inspector General, the Federal Bureau of Investigation, the U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration, the U.S. Department of Defense - Defense Criminal Investigative Service, and Internal Revenue Service Criminal Investigation, with assistance from the Food and Drug Administration Office of Criminal Investigations.

Assistant U.S. Attorneys Andrew Wirmani, Kate Pfeifle, Marcus Busch, Mark Tindall and Gail Hayworth are prosecuting the case.

 

Former Dallas City Councilman Larry Duncan was sentenced this morning on charges stemming from the public corruption investigation into Dallas County Schools (DCS), announced U.S. Attorney Erin Nealy Cox.

A former DCS Board of Trustees President, Mr. Duncan, 73, pleaded guilty in October to one count of tax evasion, admitting he failed to pay income tax on campaign contributions from a DCS vendor. He was sentenced this morning to six months of home confinement and three years of probation; he will also be required to repay more than $45,000 in back taxes and interest and perform community service for the City of Dallas.

“This particular investigation has netted six convictions to date,” said U.S. Attorney Nealy Cox. “We expect elected officials to be absolutely fastidious with money they receive as a result of their official position. When public officials behave unscrupulously, North Texas can count on federal prosecutors to intervene. We hope officials will heed our commitment to exposing corruption in any form it takes, and act accordingly.”

According to plea papers, between 2012 and 2016, Mr. Duncan accepted nearly a quarter of a million dollars in campaign contributions from Force Multiplier Solutions president Robert Leonard, who happened to be pursuing lucrative stop-arm camera contracts with DCS.

Instead of putting Mr. Leonard’s money towards legitimate campaign expenses associated with his DCS re-election bid, Mr. Duncan admits he used at least $184,726.03 for personal benefit, taking out cash withdrawals, passing on money to his wife, and even using funds to pay car-related expenses.

He then failed to disclose the money he diverted from the campaign on his tax returns, hiding the income from the IRS.

Mr. Duncan’s campaign contributor, Mr. Leonard, along with former Mayor Pro Tem Dwaine Caraway, pleaded guilty in August to conspiracy to commit honest services wire fraud, after the DCS investigation revealed that Mr. Leonard had funneled over $3 million in bribes to Caraway and Dallas County Schools Superintendent Ricky Sorrells. Mr. Sorrells pleaded guilty in April to conspiracy to commit honest services wire fraud. Another defendant, Slater Swartwood, who operated the shell companies used to conceal the bribes, admitted in December 2017 to conspiring to launder money.

Dallas County Schools, an agency that collected property taxes to fund its fleet of around 2,000 buses, was shuttered in November 2017, saddled with approximately $103 million in debt.

The Internal Revenue Service Criminal Investigation unit (IRS-CI) and Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorneys Andrew Wirmani,  NDTX’s Public Corruption Coordinator, Marcus Busch, and Chad Meacham prosecuted the case.

Former Dallas Mayor Pro Tem Dwaine Caraway was sentenced this afternoon to 4 years and 8 months in federal prison for public corruption, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.  

Councilmember Caraway pleaded guilty on August 9 to one count of conspiracy to commit honest services wire fraud and one count of tax evasion. He resigned his seat on the Dallas City Council later that same day.

“Over the past year and a half, the Northern District of Texas has been relentless in rooting out public corruption, and we will continue to prioritize corruption cases,” said U.S. Attorney Nealy Cox. “This case should serve as a warning to public officials across North Texas:  If you betray the trust of your constituents, we will prosecute you. We’ll prosecute the bribe payers. And we’ll prosecute those who attempt to conceal bribe payments.  Anyone who fosters a kickback culture, prioritizing financial interest ahead of constituent rights, will be prosecuted to the fullest extent of the law.”

According to plea papers, Councilmember Caraway, now 66, admits he accepted roughly $450,000 in bribes from Force Multiplier Solutions CEO Robert Leonard, an entrepreneur who sold faulty stop-arm cameras for use on Dallas County school busses.  

In return for these kickbacks, Councilmember Caraway voted to promote and continue Dallas County Schools’ stop-arm camera program, which relied on equipment sold by Force Multiplier.  He also promoted Mr. Leonard’s planned real estate development in South Dallas.  

The majority of bribes from Mr. Leonard to Councilmember Caraway – which the former Mayor Pro Tem admits he omitted from his tax returns – were funneled through a sham consulting firm run by Mr. Leonard’s business associate, Slater Swartwood. The remainder was doled out in the form of custom-made suits, fully funded trips, casino chips, fake loans, funeral expenses, and cash payments.   

Both Mr. Leonard and Mr. Swartwood have pleaded guilty to their roles in the scheme.

Dallas County Schools, which collected property taxes to purchase stop-arm cameras for its fleet of about 2,000 busses, was shuttered in November 2017, saddled with approximately $103 million in debt.

The Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation unit conducted the investigation. Assistant U.S. Attorneys Andrew Wirmani, NDTX’s Public Corruption Coordinator, Marcus Busch, NDTX’s Fraud Section Chief, Chad Meacham, and Joseph Magliolo prosecuted the case.

An Amarillo man who shot at his wife during a youth football practice session was sentenced yesterday to 2 years and 9 months in federal prison, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

Stephen Andrew Hale pleaded guilty to discharge of a firearm in a school zone in December 2018.

According to his plea documents, Mr. Hale – who was under a protective order at the time of the incident – confronted his wife at Horace Mann Middle School’s football field in August 2018.

As the argument escalated, he gave chase, shooting five rounds from his Ruger .357 magnum revolver in her direction. Though around 50 parents and children were present, no one was injured. When law enforcement arrested Mr. Hale shortly thereafter, officers discovered the firearm, loaded, in the front seat of his car.

“Anytime we can use federal firearm laws to stem the tide of violence against women, we will,” said U.S. Attorney Nealy Cox.  “Randomly firing a weapon at a public school is unlawful, no matter who the intended victim – and the fact that Mr. Hale targeted his wife makes this incident all the more troubling. In fact, because of the protective order against him, Mr. Hale was prohibited from having a gun at all.”

Research shows that abusers with a gun in the home are five times more likely to kill their partners than abusers who don’t have that same access to a gun. The U.S. Attorney recently announced an initiative designed to fight domestic violence using existing federal firearm laws.

“Mr. Hale’s actions endangered the lives of his family and approximately 50 innocent people,” stated ATF Special Agent in Charge of the Dallas Field Division Jeffrey C. Boshek II.  “One instance of violent crime against an intimate partner or family member is one too many. Firearms do not belong in the hands of domestic violence offenders.”

The Bureau of Alcohol, Tobacco, Firearms & Explosives, the Amarillo Police Department, and the Potter County Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Joshua Frausto prosecuted the case.

A Collin County, Texas man was sentenced to 60 months in prison today following his trial conviction for conspiracy to commit health care fraud.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region, Acting Special Agent in Charge Michael Schneider of the FBI’s Dallas Field Office and Director of Law Enforcement David Maxwell of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement. 

Paul Emordi, 52, was sentenced by U.S. District Judge Jane Boyle of the Northern District of Texas, who also sentenced Emordi to two years of supervised release and ordered Emordi to pay restitution in the amount of $3,559,154.22.  After a six-day trial, Emordi; Celestine “Tony” Okwilagwe, 50, of Dallas County, Texas; Adetutu Etti, 60, also of Dallas County; and Loveth Isidaehomen, 49, also of Dallas County, were each convicted of one count of conspiracy to commit health care fraud.  In addition, Okwilagwe and Etti were each convicted of two counts of false statement in connection with a health care benefit program.  Sentencing has been scheduled for Etti on March 28 and for Okwilagwe and Isidaehomen on April 18. 

According to evidence presented at trial, Okwilagwe and Emordi owned and operated Elder Care, a Medicare and Medicaid provider in Garland, Texas, when both were previously excluded from participating in any federal health care benefit program.  Etti, the administrator of Elder Care, concealed Okwilagwe’s ownership and Okwilagwe and Emordi’s exclusions from Medicare and Medicaid.  Etti signed false documents that indicated that no one associated with Elder Care was excluded and that another individual owned Elder Care, the evidence showed.  The evidence further established that Isidaehomen, who is Okwilagwe’s wife, signed bank documents and wrote employee paychecks to conceal both Okwilagwe’s and Emordi’s involvement with Elder Care.  The defendants also engaged in a scheme to submit false and fraudulent bills to Medicare for services that were not needed, the evidence showed. 

This case was investigated by HHS-OIG, the FBI and MFCU.  Assistant Deputy Chief Adrienne Frazior and Trial Attorney Catherine Wagner of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Russell Fusco of the Northern District of Texas are prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Michael Atkinson, 24, pleaded guilty today to kidnapping and conspiracy charges in connection with his involvement in a scheme using Grindr to target gay men for violent crimes, announced  U.S. Attorney for the Northern District of Texas Erin Nealy Cox and Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division.

“The Department of Justice will continue to protect individuals and communities from violence based on sexual orientation or gender identity,” said Assistant Attorney General Eric Dreiband. “The Department will continue to bring perpetrators of hate crimes to justice.”

“The Northern District of Texas will not tolerate criminals who single out victims based on their sexual orientation,” said U.S. Attorney Erin Nealy Cox. “Unfortunately, this is not the first time we’ve seen despicable crimes committed on apps like Grindr. I want to urge the public to be vigilant online and recognize the dangers that are lurking there.”

“Michael Atkinson targeted the victims in this case because of their sexual orientation. Hate crimes affect not only the victims, but also have a devastating impact on their families and an entire community,” said Michael Schneider, Acting Special Agent in Charge of the FBI Dallas Division. “The FBI works tirelessly with our federal, state, and local partners to thoroughly investigate many types of hate crimes, hold the perpetrators accountable for their actions, and bring justice to the victims.”

According to his plea papers, Mr. Atkinson admitted to joining a conspiracy to use Grindr, a social media dating platform, to lure gay men to areas around Dallas, including a vacant apartment, for robbery, carjacking, kidnapping, and hate crimes. 

On Dec. 11, 2017, Atkinson reached out to one co-conspirator and asked to join the conspiracy. 

Following this conversation, Atkinson brought a loaded handgun to a vacant apartment where the victims were being held captive. Upon arriving, Atkinson learned that a co-conspirator had sexually assaulted at least one of the victims and that a co-conspirator had wiped human feces and urinated on another victim.

Atkinson remained with the conspirators and allowed a co-conspirator to use his handgun to hold victims in the apartment against their will. Atkinson and a co-conspirator then took one of these victims at gunpoint to the victim’s home in an attempt to steal the victim's property. 

According to the plea papers, Atkinson witnessed a co-conspirator assault one victim and call the victim gay slurs.  In addition, Atkinson admitted to going to local ATMs to withdraw cash from the victims’ accounts. 

Atkinson faces a maximum statutory penalty of life in prison for the kidnapping charge and five years in prison for the conspiracy charge, and a fine of up to $250,000 with respect to each offense.  The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentence will be determined by the court based on the advisory sentencing guidelines and other statutory factors.

The FBI’s Dallas Field Office conducted the federal investigation with the assistance and cooperation of the Dallas Police Department. Assistant U.S. Attorney Nicole Dana of the Northern District of Texas and Trial Attorneys Rose E. Gibson and Kathryn Gilbert of the Justice Department’s Civil Rights Division are prosecuting the case.

Read the indictment release here. 

Michael Atkinson, 24, pleaded guilty today to kidnapping and conspiracy charges in connection with his involvement in a scheme to target gay men for violent crimes, announced Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division, U.S. Attorney for the Northern District of Texas Erin Nealy Cox, and Acting FBI Special Agent-in-Charge of the Dallas Division Michael Schneider.

“The Department of Justice will continue to protect individuals and communities from violence based on sexual orientation or gender identity,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Department will continue to bring perpetrators of hate crimes to justice.”

“The Northern District of Texas will not tolerate criminals who single out victims based on their sexual orientation,” said U.S. Attorney Erin Nealy Cox. “Unfortunately, this is not the first time we’ve seen despicable crimes committed on apps like Grindr. I want to urge the public to be vigilant online and recognize the dangers that are lurking there.”

“Michael Atkinson targeted the victims in this case because of their sexual orientation. Hate crimes affect not only the victims, but also have a devastating impact on their families and an entire community,” said Michael Schneider, Acting Special Agent in Charge of the FBI Dallas Division. “The FBI works tirelessly with our federal, state, and local partners to thoroughly investigate many types of hate crimes, hold the perpetrators accountable for their actions, and bring justice to the victims.”

According to the plea agreement, Atkinson admitted to joining a conspiracy to use Grindr, a social media dating platform, to lure gay men to areas around Dallas, including a vacant apartment, for robbery, carjacking, kidnapping, and hate crimes. On Dec. 11, 2017, Atkinson reached out to one co-conspirator and asked to join the conspiracy.  Following this conversation, Atkinson brought a loaded handgun to a vacant apartment where the victims were being held captive. Upon arriving at the apartment, Atkinson learned that a co-conspirator had sexually assaulted at least one of the victims and that a co-conspirator had wiped human feces on and urinated on another victim. Atkinson remained with the conspirators and allowed a co-conspirator to use his handgun to hold victims in the apartment against their will. Atkinson and a co-conspirator then took one of these victims at gunpoint to the victim’s home in an attempt to steal the victim's property. According to the plea papers, Atkinson witnessed a co-conspirator assault one victim and call the victim gay slurs. In addition, Atkinson admitted to going to local ATMs to withdraw cash from the victims’ accounts. 

Atkinson faces a maximum statutory penalty of life in prison for the kidnapping charge and five years in prison for the conspiracy charge, and a fine of up to $250,000 with respect to each offense. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentence will be determined by the court based on the advisory sentencing guidelines and other statutory factors.

The FBI’s Dallas Field Office conducted the federal investigation with the assistance and cooperation of the Dallas Police Department. Assistant U.S. Attorney Nicole Dana of the Northern District of Texas and Trial Attorneys Rose E. Gibson and Kathryn Gilbert of the Justice Department’s Civil Rights Division are prosecuting the case.

For more information about DOJ’s work to combat and prevent hate crimes, visit www.justice.gov/hatecrimes: a one-stop portal with links to DOJ hate crimes resources for law enforcement, media, researchers, victims, advocacy groups, and other organizations and individuals.

A federal grand jury returned a superseding indictment today charging a Texas man with two counts of kidnapping a minor, one count of coercion and enticement of a minor into illegal sexual activity and one count of cyberstalking. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas and Acting Special Agent in Charge Michael Schneider of the FBI’s Dallas Field Office made the announcement. 

According to the indictment, on Dec. 24, 2018, Rene Gloria, 57, of Muleshoe, Texas allegedly kidnapped two minors to whom he was not related.  In addition, Gloria allegedly used a cellular phone to attempt to coerce and entice a third minor victim into illegal sexual activity.  He also allegedly used a cellular phone to cause substantial emotional distress to an adult victim. 

The case is being investigated by the FBI with the assistance of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Muleshoe Police Department, the Bailey County Sheriff’s Office, the Plainview Police Department and the Hale County Sheriff’s Office.  Trial Attorney Kyle P. Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Russell Lorfing of the Northern District of Texas are prosecuting the case.

An indictment is merely an allegation.  All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

The inventor of cryptocurrency AriseCoin pleaded guilty today to duping investors out of more than $4 million, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox. 

AriseBank CEO Jared Rice, Sr. – who settled a civil action involving AriseCoin filed by the SEC’s Fort Worth regional office last year – pleaded guilty to one count of securities fraud Wednesday afternoon.  His plea makes this case one of the first in which an individual has pleaded guilty to securities fraud involving a cryptocurrency in U.S. federal court.

According to his plea papers, Mr. Rice, 30, admits he lied to would-be investors, claiming that AriseBank – billed as the world’s “first decentralized banking platform” based on the proprietary digital currency AriseCoin – could offer consumers FDIC-insured accounts and traditional banking services, including Visa-brand credit cards, in addition to cryptocurrency services.  In actuality, AriseBank had not been authorized to conduct banking in Texas, was not FDIC insured, and did not have any sort of partnership with Visa.

Even as he touted AriseBank’s nonexistent benefits, Mr. Rice quietly converted investor funds for his own personal use, spending the money on hotels, food, transportation, a family law attorney, and even a guardian ad litem – facts he failed to disclose to investors. He also failed to disclose that he’d plead guilty to state felony charges in connection with a prior internet-related business scheme. 

Meanwhile, hundreds of investors bought approximately $4,250,000 in AriseCoin using digital currencies like Bitcoin, Ethereum, and Litecoin, as well as fiat currency.

“I’m proud of the Northern District of Texas’ innovative work enforcing the rule of law in the cryptocurrency space,” said U.S. Attorney Nealy Cox. “We will not tolerate flagrant deception of investors – virtual or otherwise.”

Statutorily, Mr. Rice faces 0 to 20 years in federal prison. His sentencing is slated for July 11, 2019.  He is expected to be required to reimburse investors he deceived.

The Federal Bureau of Investigations conducted the investigation. Assistant U.S. Attorneys Mary Walters and Sid Mody are prosecuting the case.

 

Xu Jia Bao (aka Fred Xu), of Shanghai, China, was sentenced in Dallas yesterday to 18 months’ imprisonment and one year of supervised release in connection with a scheme to sell mislabeled dietary supplements, the Department of Justice announced today. 

Xu, 48, is the principal of Shanghai Waseta International Trade Co. Ltd., a Chinese firm that sells raw ingredients for use in dietary supplements. Xu pleaded guilty in August 2018 in the Northern District of Texas to one count of wire fraud. Waseta, the company, also pleaded guilty to wire fraud in September 2018. The company was sentenced in February 2019 to one year of probation and ordered to pay a $500,000 fine. 

In pleading guilty, Xu admitted that he agreed with others working at Waseta to sell synthetic stimulant ingredients, including the substance known as DMHA, to a purported dietary supplement manufacturer in the United States. Xu admitted that the purported dietary supplement manufacturer, actually a confidential government informant, told him that Waseta ingredients would not be accurately listed on the labels of the finished dietary supplement. Xu admitted that he knew major American retailers would refuse to carry supplements known to contain certain stimulants, such as DMHA. Xu also admitted that he and Waseta caused a falsely labeled shipment of DMHA to be sent to Texas.

“Consumers are entitled to trust that dietary supplements products accurately identify their ingredients,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will vigorously pursue and prosecute those who attempt to circumvent the law by falsely identifying the substances they import into the United States.”

Xu and Waseta both were sentenced by U.S. District Court Judge Sam A. Lindsay of the Northern District of Texas. Xu was arrested in September 2017 while attending a dietary supplement trade show in Las Vegas. Another defendant named in the case, Li Ting Ting (a.k.a. Sunny Lee), the overseas sales manager for Shanghai Waseta, is not believed to be in the United States.

“Consumers deserve to know what’s in the supplements they ingest,” said U.S. Attorney Erin Nealy Cox. “The Northern District of Texas will not stand by as companies mislead consumers.”

“Dietary supplements that contain undeclared synthetic stimulant ingredients pose a risk to the health of U.S. consumers,” said Charles L. Grinstead, Special Agent in Charge, FDA Office of Criminal Investigations’ Kansas City Field Office. “We will continue to investigate and bring to justice those who jeopardize the public health by importing and selling misbranded supplements.”

The case was investigated by FDA’s Office of Criminal Investigations. The case was prosecuted by David Sullivan and Patrick R. Runkle, Trial Attorneys in the Department of Justice’s Consumer Protection Branch, and Kate Rumsey and Douglas Brasher, Assistant United States Attorneys for the Northern District of Texas.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.

Five individual defendants and two companies pleaded guilty in Dallas to felony charges in connection with a scheme to fraudulently sell workout supplements, the Department of Justice announced today. 

All of the defendants played roles in developing, manufacturing, or marketing the popular workout and weight loss supplements known as Jack3d and OxyElite Pro, which were distributed by Dallas-based dietary supplement company USPlabs. Cyril Willson, 38, of Ralston, Nebraska, and Matthew Hebert, 40, of Dallas, pleaded guilty today to introducing misbranded food into interstate commerce with the intent to defraud or mislead. Jonathan Doyle, 40, of Dallas, the president of USPlabs, pleaded guilty February 21 to conspiracy to introduce misbranded food into interstate commerce. Sitesh Patel, 35, of Irvine, California, the vice president of S.K. Laboratories, a California dietary supplement manufacturer, pleaded guilty on February 25 to conspiracy to introduce misbranded food into interstate commerce and to the introduction of misbranded food into interstate commerce. Jacobo Geissler, 42, of University Park, Texas, the CEO of USPlabs, pleaded guilty on February 28 to conspiracy to introduce misbranded food into interstate commerce. In addition, S.K. Laboratories pleaded guilty on February 25 to introduction of misbranded food into interstate commerce, and USPlabs pleaded guilty to conspiracy to introduce misbranded food into interstate commerce on March 5.

The misbranding charges all relate in part to OxyElite Pro, which was recalled in 2013 in the wake of an investigation by the Food and Drug Administration into whether the supplement caused liver injuries in consumers. All of the defendants were charged in a 2015 indictment returned by a Dallas federal grand jury in the Northern District of Texas.

“Dietary supplement makers may not disregard the law and trick consumers about what is in their products,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Consumers are entitled to trust that the products they consume are safe. We will continue to investigate and prosecute those who enable the sale of mislabeled and potentially unsafe dietary supplements.”

The indictment alleged that the defendants participated in a conspiracy to import dietary supplement ingredients from China, including the stimulant known as “DMAA,” using false certificates of analysis and false labeling, and then lied about the source and nature of those ingredients. According to the indictment, the defendants told some of their retailers and wholesalers that USPlabs products contained natural plant extracts, when in fact they contained a synthetic stimulant manufactured in a Chinese chemical factory. The indictment also alleged that the defendants sold some of their products without determining whether they would be safe to use. According to the indictment, USPlabs products related to the conspiracy brought the company hundreds of millions of dollars.

In pleading guilty, Doyle, Geissler, and Patel admitted that they imported substances with false and misleading labeling in part to avoid law enforcement and regulatory agency attention. Willson and Hebert admitted that they helped to cause a dietary supplement to be shipped with false labeling regarding the ingredients it contained.

“Consumers deserve to know exactly what’s in their dietary supplements,” said U.S. Attorney for the Northern District of Texas Erin Nealy Cox. “We cannot stand by as supplement companies deceive customers – especially when they use untested, suspect ingredients in their products.”

“Americans who choose to take dietary supplements expect that those products are safe and properly labeled,” said FDA Commissioner Scott Gottlieb, M.D. “Dietary supplement labeling that falsely or misleadingly declares its contents presents a risk to the public, and the FDA will exercise its full authority under the law to bring to justice all those who produce and distribute misbranded dietary supplements.”   

Doyle and Geissler pleaded guilty before U.S. Magistrate Judge Renee Harris Toliver. Patel, Willson, Hebert, S.K. Laboratories, and USPlabs pleaded guilty before U.S. District Judge Sam A. Lindsay. Patel faces a maximum sentence of six years’ imprisonment; Doyle and Geissler face up to five years’ imprisonment; and Willson and Hebert face up to three years’ imprisonment. The individual defendants, together with the companies, agreed to pay criminal fines and forfeitures totaling about $60 million. The court set sentencing hearings for Willson and Hebert on July 8, 2019, for Patel and S.K. Laboratories on Aug. 12, 2019, and for USPlabs on Aug. 19, 2019.  The remaining sentencing dates have not yet been set.       

The case was investigated by FDA’s Office of Criminal Investigations. The case is being prosecuted by Trial Attorneys David Sullivan, Patrick Runkle, and Raquel Toledo with the Department of Justice’s Consumer Protection Branch, and Assistant United States Attorneys Errin Martin and John DelaGarza of the U.S. Attorney’s Office for the Northern District of Texas.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.

The District Court for the Northern District of Texas entered a consent decree of permanent injunction against defendants JMA Partners Inc., a compounding pharmacy doing business as Guardian Pharmacy Services (Guardian), and Jack R. Munn, Guardian’s owner, the Department of Justice announced today.  The injunction permanently enjoins the defendants from distributing adulterated, misbranded, and unapproved new drugs in violation of the federal Food, Drug, and Cosmetic Act (FDCA).

The Department filed a complaint in the U.S. District Court for the Northern District of Texas on March 6, 2019, at the request of the U.S. Food and Drug Administration (FDA), alleging, among other things, that the defendants failed to adequately address insanitary conditions at their drug-compounding facility.  The complaint further alleges that defendants distributed misbranded and unapproved new drugs because, among other things, the drugs were distributed by the defendants without patient-specific prescriptions.

As part of the ordered permanent injunction, defendants cannot resume manufacturing, processing, or distributing sterile drugs until FDA determines that they have complied with specific remedial measures.  Those measures seek to ensure that defendants manufacture and distribute drugs in conformity with applicable manufacturing standards.   

“Doctors and patients must be able to rely on the safety and quality of drugs produced by compounding pharmacies,” said Assistant Attorney General Jody Hunt of the Justice Department’s Civil Division.  “The Department of Justice will continue to work with FDA to enforce the provisions of the Food, Drug, and Cosmetic Act.”

According to the complaint, defendants’ drugs were adulterated because they were prepared, packed, or held under insanitary conditions whereby they may have been contaminated or may have been rendered injurious to health.  For example, the complaint alleges that during a 2018 FDA Inspection, defendants used non-sterile disinfectants that were labeled as sterile throughout the facility.  The complaint further alleges that defendants failed to take adequate corrective actions after documenting repeated instances of high humidity levels in an area specially designed for aseptic processing of sterile drugs.  High humidity levels in aseptic processing areas can lead to an increase in the proliferation of microorganisms present in those areas.

On July 28, 2017, FDA issued a Compounding Risk Alert to warn health professionals of adverse event reports concerning at least 43 patients who were administered intravitreal (eye) injections of a drug containing triamcinolone (a steroid) and moxifloxacin (an antibiotic) compounded by Guardian.  According to the FDA’s Compounding Risk Alert, these patients developed various symptoms, including vision impairment.

Guardian initiated voluntary recalls of drug products in 2016 and 2018.  The 2016 recall involved certain unexpired sterile drug products, and was initiated due to a lack of sterility assurance.  The 2018 recall, initiated after FDA’s 2018 Inspection, involved products within expiry intended to be sterile.  Guardian also temporarily ceased sterile production at that time.

“The Food, Drug, and Cosmetic Act is designed to protect the public health,” said U.S. Attorney Erin Nealy Cox for the Northern District of Texas. “Our district is a committed partner in enforcing the provisions of the Act in the interest of public safety.”

“When the FDA finds compounders that continue to violate the law by not adhering to manufacturing requirements, and put patients at risk, we are going to hold them accountable under the law,” said FDA Commissioner Scott Gottlieb, M.D. “We’ve continued to see violative behavior among compounding pharmacies, and we’re committed to taking enforcement actions against drug compounders that threaten the public health.”

The government is represented by Trial Attorney Raquel Toledo of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Mary M. (Marti) Cherry of the U.S. Attorney’s Office for the Northern District of Texas, with the assistance of Associate Chief Counsel, Enforcement, Jennifer Argabright of the Department of Health and Human Services’ Office of General Counsel.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Texas, visit its website at https://www.justice.gov/usao-ndtx.

A U.S. District Judge has granted federal prosecutors’ motion to shut down a drug-infested hotel located just 1000 feet from a Dallas elementary school, U.S. Attorney Erin Nealy Cox announced today.

On Thursday, a task force of more than 50 agents and officers, accompanied by several attorneys, converged on Han Gil Hotel Town to effect arrests, execute search warrants, and post notices requiring the immediate clearing of the premises. 

The Han Gil – which prosecutors say served as home base for multiple drug dealers selling cocaine, heroin and meth – became a “safe haven for drug distributors” and a “breeding ground for escalating criminal activity,” the government argued in a civil motion requesting the hotel’s immediate closure.

The Court’s resulting Temporary Restraining Order, signed Wednesday by Judge C. David C. Godbey, prohibits anyone other than Han Gil proprietors and immediate family from occupying the hotel, which the Court agreed likely “endangers the general welfare of the community.”

“The Han Gil is a magnet for drug dealers and violent criminals and needed to be shut down immediately for public safety reasons,” said U.S. Attorney Nealy Cox. “Instead of simply picking off dealers one-by-one, we asked the Court to issue a Temporary Restraining Order enjoining the hotel’s further operation. We believe this business was nothing but a front for criminal activity and posed significant danger to our community. We will continue to push to keep it shut down.”

Over the past eight months, the hotel, which is essentially caddy corner to Herbert Marcus Elementary, has seen three deaths, two non-fatal shootings, and dozens of drug-related incidents, according to the motion. 

The husband-wife duo operating the Han Gil, Su Amos and Micha Mun, brazenly allowed controlled substances to be distributed on their property, the motion asserts. In return for an $80 per day “drug tax,”  Mr. and Mrs. Mun allegedly permitted dealers to distribute drugs from inside guest rooms.

The motion alleges that at least one exterior door of the Han Gil was left unlocked so individuals who weren’t renting their own rooms could access the rooms where drug deals occurred. Mr. Mun also permitted dealers to install cameras and peepholes in order to detect and avoid police, and even gave dealers advance notice of upcoming inspections.  On at least one occasion, he claimed to have deleted surveillance video evidence of an overdose victim being carried from the premises. 

About a month after another woman with a history of drug abuse died in one of the rooms at the Han Gil, law enforcement recovered her body in a nearby wooded area.

“Rather than requesting assistance to combat this criminal activity,” the government’s motion says, “the Muns take advantage of it, knowingly profiting from the rampant drug use and sales occurring at the Han Gil.”

In a separate criminal case, Mr. Mun and his hotel corporation, One Way Investments, Inc. have been indicted on one count of maintaining a drug-involved premises, a violation of the Controlled Substances Act. If convicted, Mr. Mun, who is currently in federal custody, faces up to 20 years in federal prison and a fine of $500,000, while the corporation faces a fine of up to $2 million.

The indictment against Mr. Mun also includes drug charges against several dealers, including Erick Dewayne Freemen, aka “Stuff,” Kendrick Lamel Washington, aka “Kiki”, Kimberly Rosha Robinson, aka “Miss K,” and others. Mr. Freeman and Mr. Washington have also been charged with firearm offenses. These defendants face potential sentences of 10 years to life in prison. 

“The Han Gil is a well-known haven and attraction for drug dealers and users,” said DEA Special Agent in Charge of the Dallas Division Clyde E. Shelley, Jr.  “It is a place linked to violence and death within close proximity of a school.  We will continue to pursue these investigations and make our communities safer.”

The government’s complaint and motion are merely allegations of violations of the law, not evidence or findings of liability. Similarly, an indictment is merely an accusation of criminal conduct, not evidence. All criminal defendants are presumed innocent until proven guilty in a court of law.

The Drug Enforcement Administration conducted the investigation with assistance from the Federal Bureau of Investigation, Coppell Police Department, Dallas Police Department, the Bureau of Alcohol, Tobacco, Firearms & Explosives, the U.S. Marshal’s Service, Grand Prairie Police Department, Arlington Police Department, Grapevine Police Department, Lancaster Police Department, the State Department, IRS, U.S. Postal Inspection Service, Plano Police Department, Farmers Branch Police Department, Homeland Security Investigations, Garland Police Department, Rowlett Police Department, Denton Police Department, Lewisville Police Department and McKinney Police Department.  Assistant U.S. Attorneys Scott Hogan, NDTX Civil Chief, Lindsey Beran, NDTX Deputy Civil Chief, and Braden Civins filed the civil motion. Assistant U.S. Attorneys Rick Calvert, Chief of NDTX’s Narcotics Section, and Phelesa Guy, Deputy Chief of the Narcotics Section, are prosecuting the criminal case. 

The former CEO of Palo Pinto General Hospital has pleaded guilty to defrauding three major insurance providers – BlueCross BlueShield of Texas, CIGNA Texas, and United Healthcare – out of millions of dollars, U.S. Attorney for the Northern District of Texas Erin Nealy Cox announced today. 

According to his plea papers, Palo Pinto General Hospital CEO Harris Brooks, along with his co-conspirators, used PPGH’s in-network contracts with large health insurance companies to engage in pass-through billing for laboratory services, a scheme that lasted from September 2017 through June 2018. 

Using PPGH’s national provider identification number, Mr. Brooks and his co-conspirators submitted claims to insurance companies for allergy and genetic testing purportedly performed at PPGH, Harris admits.  In reality however, PPGH did not have the equipment on-site to perform the tests for which it submitted claims, and the patients for whom claims were submitted were receiving treatment  at various spas and clinics throughout Texas and elsewhere, not PPGH. The patients did not know about the pass-through charges using PPGH’s insurance contracts. 

Over the nine-month period, Brooks and his co-conspirators submitted claims to health insurance providers for laboratory services totaling more than $55 million, the vast majority of which were fraudulent.  As a result of these claims, the insurance companies paid PPGH more than $9 million.

The purpose of the scheme was to receive higher rates of reimbursement from the insurance companies, Harris said. 

According to his plea agreement, Brooks faces up to five years in prison and will be required to pay restitution to those he defrauded.

The Federal Bureau of Investigation conducted the investigation; Assistant U.S. Attorney Megan Fahey prosecuted the case.

SENTENCING – Gary Morris (AUSA David Jarvis)
Following a four-day sentencing hearing, 70-year-old Gary Ronald Morris, of McKinney, was sentenced on March 6 to 5 years in federal prison and ordered to pay more than $2.2 million in restitution for his role in an investor fraud scheme. Mr. Morris pleaded guilty to wire fraud in May 2018. In his plea papers, Mr. Morris admitted he devised a scheme to defraud investors by deceiving them about the true state of his business, Greystone Digital Technologies.  He admits he sent emails to investors falsely claiming that a third party was willing to invest millions in Greystone’s “cargo scanner” project; that he was working closely with Federal Express on the scanner project; and that other companies had partnered with him on the scanner project. At the conclusion of the hearing, a U.S. District Judge ordered Mr. Morris taken into custody immediately.

INDICTMENT – Charles Grant (AUSA Walt Junker) 
On March 7, a federal grand jury indicted Charles Edward Grant, of Dallas, on two counts of bank robbery. Mr. Grant, 23, allegedly robbed two Dallas banks, a Chase Bank and a Bank of America, in January 2019. He faces up to 20 years in prison on each count.

PLEA -- Louis Medford (AUSA John Boyle)
Louis Douglas Medford pleaded guilty on March 7 to firearm and drug charges. Mr. Medford – who was an already convicted felon at the time -- admits he fled the scene of a June 2017 traffic stop after Garland police officers noticed marijuana in his vehicle.  Search of the vehicle later revealed a 9 mm Glock under the driver’s seat. Less than a month later, Mr. Medfords admits, he was stopped again, this time with 486 grams of marijuana, a digital scale, and several small plastic bags. This week, he pleaded guilty to two counts of  possession with intent to distribute a controlled substance, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of felon in possession of a firearm. The Garland Police Departmet] investigated. 

INDICTMENT* – Bertha Garay (AUSA Danielle Jones)
On March 6, 2019, a federal grand jury indicted Bertha Garay, 46, for theft of government funds, false statement to the Social Security Administration and Representative Payee Fraud.  She was allegedly receiving SSA benefits on behalf of her minor daughter as her representative payee.  However, her minor daughter was not in her custody and Ms. Garay was not using the benefits on her daughter.  She mislead SSA by submitting signed paperwork stating that her daughter lived with her and she was using the benefits for the care of her daughter.  If convicted of this case, Ms. Garay could potentially be compelled to pay back over $82,000. The SSA Office of the Inspector General investigated the case. 

SENTENCING -- Tony Contreras (AUSA George Leal)
On March 4, 39-year old Tony Contreras, of Hutchins, Texas, was sentenced to more than 8 years behind bars for conspiracy to possess with intent to distribute methamphetamine. According to court documents reflect, in February 2016, he ordered two kilograms of cocaine and one kilogram of methamphetamine from a co-defendant, and complained about a previous kilogram of methamphetamine being wet.  The co-defendant told Contreras he would call Contreras when the methamphetamine was ready but that no cocaine was available. The case was investigated by the FBI and the Criminal Investigations Division of the Internal Revenue Service.

SENTENCING -- Jose Juan Ortiz-Pacheco (AUSA George Leal)
On March 4, 23- year-old Jose Juan Ortiz-Pacheco, of Michoacán, Mexico, was sentenced to more than 7 years in federal prison for conspiracy to possess with intent to distribute cocaine by United States District Judge Sam A. Lindsay.  Court documents reflect that in  March 2017, Ortiz-Pacheco and his two co-defendants were arrested with three kilograms of cocaine at an apartment complex after they offered to sell it to another individual.  It was noted at sentencing the defendant is an undocumented alien and should not have been in the United States at the time of the offense. The case was investigated by the Drug Enforcement Administration and the Lewisville Police Department. 

* An indictment is merely an accusation of criminal conduct, not evidence. All criminal defendants are presumed innocent until proven guilty in a court of law.

Friday morning, four-term Dallas City Council Member Carolyn Davis pleaded guilty to accepting more than $40,000 in bribes, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

According to plea papers, Council Member Davis actively sought these bribes from a real estate developer who stood to benefit from her support of his low-income housing project.

In return for the money – plus the offer of a consulting contract once her tenure at the City Council concluded – Council Member Davis admits she lobbied and voted for the authorization of a $2.5 million development loan to fund the Royal Crest housing project, along with a City of Dallas resolution supporting 9 percent tax credits for Royal Crest, which was competing with another project.  She also wielded her considerable influence as Chair of the Dallas Housing Committee in Royal Crest’s favor while advocating for the project with Dallas housing officials.

“Over the course of my 15-month tenure here at the U.S. Attorney’s Office, our team has been relentlessly dedicated to rooting out public corruption,” said U.S Attorney Nealy Cox. “I hope this case sends a message to public officials across our districts: When you prioritize your own financial interests ahead of your duty to you constituents, we will dig as deep as we have to in order to uncover the scheme. And we will bring you to justice.”

“As FBI Dallas continues to proactively investigate Public Officials who misuse their positions of trust, our investigative efforts will be just as focused on those who seek to use their personal wealth, influence, or facilitate relationships between those willing to pay or accept bribes,” said Eric K. Jackson, Special Agent in Charge of the FBI’s Dallas Division. “All of these actions continue to erode the public’s trust and do harm to the communities they were elected to serve.”

An Indictment charging the bribe payer, Ruel Hamilton, a principal with AmeriSouth Realty Group, was unsealed this morning as well.  

According to the charging document, Mr. Hamilton allegedly paid out about a quarter of Council Member Davis’ bribe money – around $11,000 – in cash, often immediately after he withdrew the money from his bank account. The remaining 75 percent – roughly $29,500 – was funneled through a not-for-profit intermediary.

In an attempt to disguise the payments, Mr. Hamilton allegedly made out checks to the owner of the not-for-profit, then handed the checks to Council Member Davis, who delivered them to the not-for-profit owner; the owner then deposited or cashed these checks and gave the majority of the proceeds back to Council Member Davis. Not surprisingly, Council Member Davis did not disclose any of these payments to the City Council, or to the Housing Committee, or on her financial disclosure report.

According to the Indictment, Mr. Hamilton also bribed another public official, referred to in the documents as Council Person A, in August 2018.  In return for Council Person A’s assistance in getting a referendum on the Council’s agenda and promoting another housing project, Mr. Hamilton wrote a $7,000 check to Council Person A to cover his personal needs.

Neither Council Member Davis nor Council Person A are currently serving in official capacities. Council Member Davis left office in 2016, and Council Person A’s tenure on the City Council ended August 9, 2018.

An indictment is merely an allegation of wrongdoing, not evidence. Mr. Hamilton is considered innocent until proven guilty in a court of law. If convicted, Mr. Hamilton faces up to 20 years in federal prison for two counts of bribery concerning a local government receiving federal benefits. Council Member Davis faces up to 5 years in federal prison on the charge to which she pleaded guilty, conspiracy to commit bribery concerning an agent of a local government receiving federal benefits.

The Federal Bureau of Investigation conducted the investigation with assistance from the Internal Revenue Service - Criminal Investigations. Assistant U.S. Attorneys Marcus Busch, Andrew Wirmani, and Chad Meacham prosecuted the case. 

A Los Angeles man today pleaded guilty to murdering a postal worker during a road rage incident in Dallas last February, announced U.S. Attorney Erin Nealy Cox.

Donnie Arlondo Ferrell, 26, admits he shot and killed U.S. Postal Service employee Tony Mosby, who was behind the wheel of a USPS vehicle, on Feb. 19, 2018.

According to plea papers, Mr. Ferrell – one of three passengers inside a Mazda traveling eastbound on I-30 – became incensed at something he perceived Mr. Mosby had done on the freeway. He leaned out of the Mazda and fired four shots at the USPS vehicle.

Mr. Ferrell then watched as the USPS vehicle crashed into a retaining wall on the freeway.  

When Mr. Ferrell later learned Mr. Mosby had been killed by a bullet to the head, Mr. Ferrell instructed the Mazda’s other passengers not to discuss the incident with anyone else.

When law enforcement attempted to arrest Mr. Ferrell two days later, he retreated into his residence and refused to surrender for several hours, according to his plea papers.

This morning, Mr. Ferrell pleaded guilty to one count of murder of an employee of an agency of the United States government, and one count of discharging a firearm during a crime of violence. He faces up to life in prison.

“It was devastating to learn of the senseless act of violence that took the life of a federal postal employee while on the job in our district,” said U.S. Attorney Nealy Cox. “I’m gratified we could bring the perpetrator to justice. My heart goes out to Mr. Mosby’s family and friends.” 

“The wanton road rage murder of Postal Employee Tony Mosby by Donnie Ferrell was senseless and tragic,” said Damon  E. Wood, Acting Inspector in Charge of the U.S. Postal Inspection Service’s Fort Worth Division.  “Postal Inspectors will ensure an offense like this is investigated and the perpetrators are prosecuted to the fullest extent of the law. I’d like to thank the U.S. Attorney’s Office, Northern District of Texas, for their assistance and guidance.  I would also like to thank the Dallas Police Department and the Federal Bureau of Investigation for their partnership in this investigation.”

A codefendant, Bei-jing Tashawna Walker, accused of accessory after the fact, entered a plea of not guilty last March. 

The U.S. Postal Inspection Service conducted the investigation with assistance from the Dallas Police Department and the Federal Bureau of Investigation. U.S. Attorneys P.J. Meitl and John Kull prosecuted the case.

A federal corrections officer was sentenced yesterday to more than a year behind bars – the same environment where she took advantage of a prison inmate less than two years ago. 

Erica McCoy, 32, pleaded guilty in August to abusive sexual contact with an inmate at FCI Seagoville, an all-male, low-security institution southeast of Dallas .

In plea papers, Ms. McCoy said she stumbled upon the inmate – identified only by his initials, D.E. – cleaning her office carpet in the summer of 2017. They had regular sexual contact, Ms. McCoy admitted.

Their relationship ended when D.E. was placed into the Special Housing Unit (SHU) and Ms. McCoy resigned amid an investigation by the Department of Justice Office of the Inspector General.

“Today’s sentence demonstrates that corruption and abuse of power have no place in our federal prisons and will not be tolerated,” stated Deputy Assistant Inspector General for Investigations Elise Chawaga.  “Our office takes allegations of sexual contact between correctional officers and inmates seriously, and we thank the U.S. Attorney’s Office for the Northern District of Texas for their hard work on this case.”

A federal judge sentenced Ms. McCoy to one year and one day in federal prison and ordered her to self-surrender within 90 days. She will also be required to register as a sex offender.

The Department of Justice – Office of the Inspector General conducted the investigation. Assistant U.S. Attorney Suzanna Etessam prosecuted the case.

More than 25 defendants apprehended in connection with OCDETF “Operation Flat Rate” –  a methamphetamine trafficking investigation in Wichita Falls that netted 25 defendants in the summer of 2018 – have been sentenced, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

Sentences ranged from a few months to 20 years in federal prison.

One defendant, Chmira Denise Williams, pleaded guilty to misprision of a felony (concealing the commission of felonious acts) and was sentenced to 8 months behind bars. Another defendant, Denene Griggs, pleaded guilty to concealing a person from arrest and was sentenced to 4 months in federal prison. She admits to sheltering two fugitives – her child’s father, Javaris Damon Scott, and his brother, Trevor Clifford Scott – inside her apartment; they were later arrested climbing out of her window.

The remaining defendants pleaded guilty to conspiracy to possess with intent to distribute a controlled substance and were sentenced by U.S. District Judge Reed O'Connor: 

• LONTA HOBBS: 20 years in federal prison
• AARON TAYLOR : 19 years, 7 months in federal prison
• CHRISTIAN CHAVEZ: 17 years, 6 months  in federal prison
• BRAD WHITE: 13 years in federal prison
• CHADRICK MCBRIDE: 12 years in federal prison
• JOHN DUPREE WESLEY:  7 years, 8 months in federal prison
• ADDIS SCALES: 7 years, 3 months in federal prison
• CHRISTOPHER DAVIS: 7 years in federal prison
• FLOYD RICHARDSON: 7 years in federal prison 
• GALVIN DANIELS: 5 years in federal prison
• TERRY MURRAY: 5 years in federal prison
• DJUANNA NEWMAN: 5 years in federal prison
• JAVARIS SCOTT: 5 years in federal prison
• ADAM GARCIA: 4 years, 3 months in federal prison
• CANDACE RODGERS: 4 years in federal prison
• TEASIE SCOTT: 3 years in federal prison
• JACINDA BURRIS: 2 years, 6 months in federal prison
• AMBER HATCHER: 2 years in federal prison
• TREVOR SCOTT: 2 years in federal prison
• DEMARCUS MADISON:  1 year, 2 months in federal prison
• SHELBY FUNK: 1 year, 1 month in federal prison
• WAYLAND BRENT BALLARD: 6 months in prison
• ALVIN TRAVIS: 6 months in federal prison
• VIRGINIA WHITE: 6 months in federal prison
   

“As the U.S. Attorney, I lead an office that prosecutes a variety of very important federal cases, but few investigations are more important than those that protect the public from the danger and devastation caused by illegal drug trafficking,” Nealy Cox said at a press conference in Wichita Falls on July 12, following the bust.

The Federal Bureau of Investigation and Texas Department of Public Safety conducted the investigation with assistance from the Wichita Falls Police Department, Wichita County Sherriff’s Office, Vernon Police Department, 46th Judicial District Attorney’s Office, and the U.S. Marshals Service.  Assistant U.S. Attorney Shawn Smith is prosecuting the case.

The United States filed a civil injunction suit to permanently bar Smart Ilesanmi Ajayi, individually and doing business as Harplet Marketing LLC, Topps Tax Services, and Smart Tax Services, as well as JoAnn Villarreal, from preparing federal income tax returns for others, the Justice Department announced today. 

The complaint, filed in the United States District Court for the Northern District of Texas, alleges that Ajayi and Villarreal prepare and file tax returns that falsely increase their customers’ deductions or losses. As a result, the complaint alleges, the customers’ tax returns claim larger refunds than they were entitled to receive.

The complaint alleges that defendants’ have prepared returns with fabricated or inflated noncash charitable donation deductions. The complaint further alleges that the defendants have prepared returns with fabricated or inflated businesses losses on Schedule C (Profit or Loss from Business).

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website for choosing a return preparer and has launched a free directory of federal tax preparers.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

A Florida man has been formally indicted for his role in a scheme to steal money from Crowley Independent School District (ISD) in Crowley, Texas, announced  U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

A federal grand jury indicted Donald Howard Conkright, 61, on two counts of wire fraud after a phishing email duped the district into sending nearly $2 million to his personal bank account.

According to the indictment, in October 2018, an email was sent to Crowley ISD’s Director of Accounting, falsely claiming to contain updated banking information for a construction company with which Crowley ISD did business. In reality, the information was for Mr. Conkright’s personal bank account.

Relying on the false information provided in the email, Crowley ISD sent two wire payments, totaling $1,995,715.52, to Mr. Conkright’s account. Mr. Conkright used those funds to purchase a luxury vehicle and wrist watches, execute wire transfers, and make cash withdrawals.

“Unfortunately, these sorts of spear-phishing email attacks have become all-too-common – and perpetrators are targeting not just individuals, but corporations and public institutions as well,” said Nealy Cox. “We cannot allow bad actors to divert precious school resources away from educating our children.”

“We urge constant vigilance on email, and pledge to continue to partner with the FBI to identify perpetrators and bring them to justice,” she added.

An indictment is merely an allegation of wrongdoing, not evidence. Mr. Conkright is presumed innocent until proven guilty in a court of law.

The Federal Bureau of Investigation conducted the investigation. Assistant U.S. Attorney Robert Boudreau is prosecuting the case. 

A tax return preparer operating in Irving, Texas, pleaded guilty today to conspiring to defraud the United States and to aiding and assisting in the preparation of a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Erin Nealy Cox for the Northern District of Texas. 

According to documents and information provided to the court, Francisco Ventura owned and operated several tax preparation businesses located in Irving from at least 2012 through at least 2015. During 2014, Ventura ran a tax return preparation business named AJJ Tax and More, along with a second preparation business named Uptown Multi Services, which he co-owned with his co-defendant Mario Melendez.

From November 2013 and continuing through May 2014, Ventura conspired with Melendez and others to prepare fraudulent federal income tax returns, and he personally prepared individual income tax returns for clients that included false education credits and Schedule C expenses. Ventura also taught training classes for new tax return preparers during which he instructed employees how to prepare fraudulent tax returns in order to maximize client refunds. Ventura is responsible for attempting to cause over $8.3 million of tax loss to the United States.

Sentencing for Ventura is scheduled for June 14, 2019. Ventura faces a maximum of five years in prison for the conspiracy charge and three years in prison for the aiding and assisting in the preparation of a false tax return count, as well as a period of supervised release, restitution, and monetary penalties. Melendez pleaded guilty in November 2018 to conspiring to defraud the United States and to aiding and assisting in the preparation of false tax returns, and is awaiting sentencing.

Principal Deputy Assistant Attorney Zuckerman and U.S. Attorney Nealy Cox commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorney Alexander Effendi of the Tax Division and Assistant United States Attorney Melanie Smith, who are prosecuting this case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

A Dallas man was sentenced today to 8 years in prison after officers caught him with a partially 3D-printed AR-15 rifle and a list of lawmakers’ addresses in his backpack, despite a court order that prohibited him from possessing a firearm, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

In August 2015, following a violent altercation with a live-in girlfriend, a county judge enacted a protective order against Eric Gerard McGinnis, then 39. Despite that order – which barred him from possessing firearms or ammunition for two years – Mr. McGinnis attempted to buy a semi-automatic rifle component at a federally licensed gun shop in June 2016. The prospective purchase was rejected after an NICS background check uncovered the order, and ATF reminded Mr. McGinnis he wasn’t allowed to have a gun.

Instead, Mr. McGinnis obtained a barrel, stock, upper receiver, and grip, then used a 3D printer to create a “lower receiver,” the gun’s firing mechanism, and assembled the parts to construct a short-barrel AR-15 style rifle.

In July 2017 – with just over one month left on his protective order – Mr. McGinnis took the 3D-printed gun to a wooded area just outside Dallas. Grand Prairie police officers, out on another call, heard three shots fired and eventually located him just off a major road. Ordered to put his hands up, Mr. McGinnis falsely claimed to be a member of the CIA. Body-cam video shows that officers directed him to kneel on the pavement, cuffed him, and shortly thereafter, inspected his backpack.

In the backpack, the officers discovered the partially 3D printed gun, loaded, and a list labeled “9/11/2001 list of American Terrorists.” The hit list – not included as evidence at trial but presented at sentencing – included office and home addresses of several federal lawmakers, both Democrat and Republican.

A subsequent forensic analysis of Mr. McGinnis’ electronic devices by U.S. Capitol Police suggests Mr. McGinnis had a strong interest in James Hodgkinson, the shooter who wounded Rep. Steve Scalise and several others at a GOP Congressional baseball practice in Virginia in June 2017, the federal prosecutor revealed at sentencing Wednesday.

In a jailhouse phone call to a family member, Mr. McGinnis admitted he’d “printed” part of the gun. 

“I didn’t buy a gun, I built the gun,” he said in the recorded phone call. “The upper, I printed a lower, and I built it -- installed the trigger and did all that stuff. I built it.”

After a two-day trial presided over by Chief U.S. District Judge Barbara M.G. Lynn, a jury found McGinnis guilty of possessing an unregistered short barrel rifle and unlawfully possessing ammunition while subject to an active protective order.

This case, investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives with assistance from the Grand Prairie Police Department and U.S. Capitol Police, was brought as part of U.S. Attorney Erin Nealy Cox’s initiative to keep firearms out of the hands of domestic abusers. Assistant U.S. Attorneys Brian McKay and Rick Calvert prosecuted the case.

“When he realized he couldn’t legally purchase a firearm, Eric McGinnis circumvented our gun laws by 3D-printing his weapon, eliminating the need for a background check,” said Nealy Cox. “This case should send a message to prohibited persons contemplating acquiring guns by any method: this office is committed to keeping guns out of the hands of those who violate protective orders for domestic violence, no matter how the guns are obtained – by theft, purchase, or 3D printing.”

"Controls to determine if an individual is prohibited from purchasing firearms and ammunition worked," said Jeffrey C. Boshek II, Special Agent in Charge of ATF’s Dallas Field Division. “Mr. McGinnis applied evolving technology to by-pass those controls to manufacture an untraceable NFA weapon. The fact a prohibited person was able to manufacture an untraceable firearm with apparent ease and anonymity presents a significant challenge and major concern to law enforcement and our community.”

Mr. McGinnis is one of a number of defendants prosecuted for possessing firearms or ammunition after domestic violence convictions or while under protective orders in the Northern District of Texas.

Police body-cam footage of his arrest and audio of his jailhouse call are available upon request. 

A north Texas man was charged today with conspiring to provide material support to a foreign terrorist organization, announced Assistant Attorney General for National Security John C. Demers and U.S. Attorney Erin Nealy Cox.

Michael Kyle Sewell, 18, was charged Friday morning by criminal complaint in Fort Worth, Texas with conspiring to provide material support and resources to Lashkar-e-Taiba, a Pakistani-based foreign terrorist organization.

As set forth in the complaint, Sewell recruited an individual, identified in the complaint as coconspirator 1, to join Lashkar-e-Taiba (LeT), a designated foreign terrorist organization.  Sewell met the coconspirator online and encouraged him to join LeT. 

Sewell provided the coconspirator with contact information for an individual he believed could facilitate the coconspirator’s travel to join the organization. Unbeknownst to Sewel and the coconspirator, the facilitator was an undercover FBI agent.

Sewell coached the coconspirator about what to say to convince the facilitator that he was sincere in his desire to fight for LeT.  Sewell also contacted the facilitator to vouch for the coconspirator’s authenticity.  Sewell told both the coconspirator and the facilitator that he would kill the coconspirator if he turned out to be a spy. 

The coconspirator made contact with the facilitator and made arrangements with the facilitator to travel to Pakistan to join LeT. 

“Sewell allegedly used social media to recruit and encourage an individual to travel overseas to join a foreign terrorist organization and conspired with that person to provide material support to that organization,” said Assistant Attorney General Demers.  “The National Security Division is committed to hold accountable those who engage in this behavior.” 

“We stay on constant alert for radicals plotting attacks targeting citizens of the United States, here or abroad,” said U.S. Attorney Nealy Cox. “Countering terrorist threats is our highest priority, and we will continue to work to stem the flow of foreign fighters abroad and bring justice to those who attempt to provide material support to foreign terror organizations. I would like to thank the FBI and our Joint Terrorism Task Force partners for all that they do to keep our communities safe.”

"The men and women of FBI Dallas along with our local, state, and federal partners will continue to work diligently against homegrown violent extremists who provide support to any foreign terrorist organization," said Eric K. Jackson, Special Agent-In-Charge of the FBI Dallas Division. "As threats are uncovered to the community we serve, the FBI and its partners must continue to ensure we are vigilant and determined to prevent any harm to this great nation."

The Federal Bureau of Investigation and its Joint Terrorism Task Force members, including the Arlington Police Department, the Fort Worth Police Department, the Tarrant County Sheriff’s Office, the Naval Criminal Investigation Service, the Department of Homeland Security, and the Texas Department of Public Safety, investigated the case.

 

SENTENCING – Bradley Matocha
On Feb. 8, Bradley James Matocha, II, was sentenced to more than 13 years in prison, followed by a 20-year term of supervised release, after pleading guilty to attempted enticement of a minor.  Matocha, 32, of Plano, responded to an ad in which a father stated he had a daughter who needed to “learn the ropes.” Matocha chatted with both the father and the daughter, offering to meet them and have sex with the minor.  With the meeting scheduled for June 26, 2018, Matocha suggested that he and the father first meet at a Jack-in-the-Box in Fort Worth and from there go back to their house where he would have sex with the daughter. When Matocha arrived at the Jack-in-the-Box, however, he was arrested by Fort Worth police, who had engaged in an undercover online operation to ferret out sexual predators.

SENTENCING – Paul Morris
On Feb. 8, Paul David Morris of Irving, TX was sentenced to 20 years in prison on drug charges. Mr. Morris pleaded guilty to possession with intent to distribute methamphetamine in March. The Texas Department of Public Safety investigated the case.

SENTENCING – Alvin Penn
On Feb. 5, Alvin Christopher Penn was sentenced to 14 years in prison for escape from federal custody and unlawful possession of a firearm. In July, a jury found Mr. Penn guilty of escaping from a residential reentry center in Hutchins, Texas. According to evidence presented at trial, shortly after he escaped from the halfway house, Mr. Penn took possession of a Smith & Wesson pistol and engaged in a gunfight with two men at an apartment complex in Grand Prairie. Shortly thereafter, he fled from police, driving 70 mph in a residential neighborhood, and ultimately crashed into another apartment building. Brandishing the gun at bystanders, he then fled on foot, and was subsequently apprehended by a U.S. Marshals and Grand Prairie Police officers.

INDICTMENT* -- Modesto Balderas
On Feb. 5, a federal grand jury indicted Modesto Balderas on a firearm charge. Mr. Balderas, a convicted felon, allegedly possessed a Ruger 9 mm pistol with an obliterated serial number. If convicted, Mr. Balderas faces up to 10 years in federal prison. 

SENTENCING – Jose Velasquez
On Feb. 4, Jose DeJesus Velasquez was sentenced to more than a year in prison for conspiracy to defraud the United States. Mr. Vasquez, a commercial tax preparer, admits he allowed employees to file tax returns claiming education credits regardless of whether the taxpayer was entitled to those credits. The IRS - Criminal Investigation Division conducted the investigation.  

* An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

U.S. Attorney Erin Nealy Cox today announced a new initiative to fight domestic violence using federal firearm laws.

Federal law prohibits convicted domestic violence abusers, as well as those subject to certain protective orders, from possessing guns.

Working in tandem with state and local law enforcement partners, U.S. Attorney Nealy Cox pledged to prosecute domestic violence offenders discovered with guns. 

“With so many domestic disputes escalating from bruises to bullets and bloodshed, we can and should play a part in ending this senseless violence,” she said. “We’re hopeful that highlighting this focus will send a message to convicted abusers: Not only can the Justice Department prosecute you for firearm possession, but in the Northern District of Texas, we will.”

Research shows that abusers with a gun in the home are five times more likely to kill their partners than abusers who don’t have that same access to a gun. Dallas County alone sees an average of 15 intimate partner violence fatalities each year – and more than half of victims are killed by gunfire.

Federal prosecutors in the Northern District of Texas have already indicted several domestic violence offenders on various firearm charges:

• John Gabriel Mejia, Jr. was indicted for possession of a firearm while subject to a domestic violence protective order, a violation of 18 U.S.C. § 922 (g)(8). Mr. Mejia, 25, was served with a protective order in 2018, after allegedly holding his girlfriend and her 7-year-old daughter in his garage against their will. With the protective order in effect, he used a 9 mm Glock to threaten his girlfriend.
   
• Rolando Novell was indicted for possession of a firearm by a prohibited person, a violation of 18 U.S.C. § 922 (g)(9). In 2018, Mr. Novell, 33, pleaded guilty to several assaults, including striking his girlfriend and choking her in front of their infant child. Following his conviction in state court, he signed a statement claiming he did not and would not possess any guns. Authorities arrested him with three pistols two months later.
   
• James Otis Foley was indicted for felon in possession of a firearm, a violation of 18 U.S.C. § 922 (g)(1). Mr. Foley, also 33, was convicted with aggravated assault with a deadly weapon in March 2011, after he beat his girlfriend, then followed her, brandishing a handgun, as she fled in her car. In 2016, he was again convicted of assault for slamming his girlfriend into a washing machine. Due to his felony convictions, he was not permitted to own guns. But following his release from prison, law enforcement, responding to a domestic dispute call, discovered him with a .45 caliber Glock.

If convicted, all three men face up to 10 years in federal prison. However, as usual, all three defendants are innocent until proven guilty in a court of law. 

 “We are committed to supplementing the passionate efforts of our state and local partners to hold abusers accountable – and to deter them from taking aim at their partners in the first place,” said U.S. Attorney Nealy Cox.

A federal jury on Friday returned a guilty verdict against a so-called “pill mill” physician who oversaw the illegal prescription of nearly a million units of narcotics with no legitimate medical purpose, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.    

Carlos Luis Venegas was convicted of conspiracy to distribute a controlled substance before U.S. District Judge David C. Godbey in Dallas yesterday afternoon.

“These pill mills help to perpetuate the tragic opioid crisis gripping our country,” said U.S. Attorney Nealy Cox. “Last year, America lost, on average, 116 people per day to opioid overdoses. We cannot allow unscrupulous conduct by physicians to add to the supply of dangerous drugs on the streets.” (For additional facts and figures on the opioid epidemic, see the DEA's 2018 National Drug Threat Assessment.)

According to evidence presented at trial, Mr. Venegas acted as the supervising physician for a series of sham medical clinics – all merely fronts for the illegal distribution of hydrocodone and alprazolam.  

Members of the conspiracy, witnesses testified, paid homeless and indigent people to pose as patients seeking pain medication. Runners coached these men and women on how to describe their (nonexistent) symptoms, drove them to the clinics, and paid for their appointments. 

At the clinics, nurse practitioners, working under Mr. Venegas’ supervision, conducted only cursory medical exams, witnesses said. Medical files seize from the clinics showed that most exams were conducted without any medical testing and rarely produced documentation of patients’ purported ailments. 

At the conclusion of the visit, patients were almost always prescribed a cocktail of medications, including Hydrocodone and Xanax, generally for the highest dosages available. 

Mr. Venegas now faces up to 20 years in federal prison. Sentencing has not yet been set.

Several of his codefendants, including several nurse practitioners and clinic managers, previously pleaded guilty to their roles in the scheme.  

The Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorneys Myria Boehm, Renee Hunter, and Nicholas Bunch prosecuted the case.

 

PLEA – Roberto Rodriguez Salinas          
On Jan. 17, Robert Rodriguez Salinas, 38, of Nuevo Laredo, Tamaulipas, Mexico, pleaded guilty to conspiracy to possess 500 grams or more of a mixture or substance containing a detectable amount of cocaine and conspiracy to launder money.  Plea documents reveal Mr. Salinas was arrested with approximately 8 kilograms of cocaine, $115,913.00 in United States Currency, and a .380 Bersa Firearm.  Mr. Salinas admitted he was conspiring with others to distribute the cocaine he had in his possession and that the currency was drug proceeds which he was going to send to an individual located in Mexico.  Rodriguez Salinas agreed to forfeit the currency and the firearm.  The case was investigated by the Drug Enforcement Administration, the Dallas Police Department, and the Dallas County Sheriff’s Department.

SENTENCING – LaPorshya Polley
On Jan. 16, Chief Judge Barbara Lynn sentenced LaPorshya Polley, convicted of firearms offenses last April, to 4 years in federal prison, followed by 2 years of supervised release. Last year, a jury found her and her codefendant, Darius Fields, guilty of straw purchasing. Mr. Fields --  who was at the time a person of interest in the kidnapping and eventual murder of 13-year-old Shavon Randle --  is set to be sentenced in April.  The FBI and Irving Police Department conducted the investigation.

PLEA – Corry Jessie
On Oct. 16, Corry Jessie, 26, of Dallas pleaded guilty to two counts of felon in possession of a firearm. Jessie was prosecuted in connection with the Project Safe Neighborhoods program, an initiative bringing together federal and local law enforcement to stem violent crime in hard-hit communities. He now faces up to 20 years in prison and a fine of up to $500,000. The FBI investigated.

SENTENCING – Jose Benavidez III
On Jan. 14, Judge Sam A. Lindsay sentenced 29-year-old Jose Benavidez, III, of Dallas, to 13 years in federal prison for conspiring to possess with intent to distribute 50 grams or more of methamphetamine between February 2017 and October 2017.  Plea documents reveal that, on multiple occasions, Jose Benavidez, III sold methamphetamine from an address located on Duleth Street in Dallas.  Lab reports revealed the methamphetamine ranged in purity from 94% to 100%.  During one of the methamphetamine transactions Jose Benavidez, III opened the door of his residence and discharged a firearm. The Texas Department of Public Safety investigated.

SENTENCING – Roger Zamora, 41
On Jan. 14, Roger Zamora was sentenced to 8 years in federal prison for his role in a RICO conspiracy.  In March 2018, Zamora pled guilty to participation in a transnational criminal enterprise, comprised mostly of Colombian nationals or individuals of Colombian descent, whose members targeted and robbed traveling diamond and jewelry salesmen across the United States.  Zamora participated in six armed robberies of traveling diamond and jewelry salesmen over a four month period, between 2015 and 2016, in Texas, Florida, Indiana, and Virginia.

 

NOTE: Due the the lapse in appropraitions, the U.S. Attorney's Office in the Northern District of Texas will not be issuing press releases or distributing news roundups via email. We will, however, post roundups online. 

Defendants Mohamed Toure and Denise Cros-Toure, of Southlake, Texas, were convicted late yesterday by a federal jury in Ft. Worth, Texas, of forced labor and other federal felonies for compelling the domestic labor of a young, undocumented West African girl for 16 years. The verdicts were announced by Assistant Attorney General Eric Dreiband the Justice Department’s Civil Rights Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas, and Special Agent in Charge Jeffrey McGallicher of the U.S. Department of State’s Diplomatic Security Service (DSS) Houston Field Office. 

“The defendants preyed on a young and extremely vulnerable girl. Their despicable actions included cruelly abusing her, forcing her to work in their home, hidden in plain sight, for years without pay, and robbing her of her childhood,” said Assistant Attorney General Eric Dreiband. “Human trafficking is a disgraceful and unacceptable crime, and this verdict should send the very clear message that the Justice Department will investigate and vigorously prosecute these cases to hold human traffickers accountable and bring justice to their victims.”

“Our district is passionate about combatting forced labor. I’m gratified that we were able to obtain a measure of justice for this young woman, who suffered for years at the hands of this couple – people who assumed they could deprive a little girl of her rightful freedoms with impunity,” said U.S. Attorney Nealy Cox. “I’m especially grateful to the witnesses who helped rescue this woman and brought the defendants’ crimes into the light of day. If we want to wipe out human trafficking, we need the whole community to support the effort and be alert.” 

“This verdict sends a strong message: Diplomatic Security is committed to making sure that those who exploit and traffic individuals, especially children, will face consequences for their criminal actions,” said Jeffrey McGallicher, Special Agent in Charge of the DSS Houston Field Office. 

Following a four-day trial, the jury convicted the defendants of forced labor, conspiracy to commit alien harboring, and alien harboring. The defendants were acquitted of conspiracy to commit forced labor, and defendant Mohamed Toure was acquitted of making false statements to federal agents.

According to the evidence presented in court, in January 2000, the defendants arranged for the victim, then a young child, to travel alone from Guinea to Southlake, Texas, to work as their servant.  The defendants were from powerful, wealthy, and politically connected families in Guinea, while the victim was uneducated, impoverished, and from a small, rural village.  When the victim’s mother learned that the defendants were bringing the victim to the United States, she unsuccessfully attempted to hide her because she “didn’t want her [daughter] to be someone’s slave.”  Despite her mother’s efforts, the defendants managed to bring the victim to Texas where they required her to cook, clean, and take care of their biological children, some of whom were close in age to the victim, without pay for the next 16 years.

The evidence further showed that the defendants gained the victim’s compliance from an early age and abused her to maintain that compliance. The defendants isolated the victim, deprived her of basic opportunities they afforded their children, and rendered her completely dependent on them for everything. While the defendants’ children attended school and some attended college, the defendants prevented the victim from doing the same and never enrolled her in school.  When the victim disobeyed or otherwise did not perform the required labor to their liking, the defendants physically, emotionally, and verbally punished her. The defendants called the victim a “dog,” “slave,” “worthless” and an “idiot,” and repeatedly hit her. Defendant Denise Cros-Toure choked the victim on multiple occasions, pulled her hair, and whipped her with an electrical cord after realizing that the belt she had been using was no longer causing sufficient pain.  On one occasion, defendant Mohamed Toure held the victim down, sitting on her back, while defendant Cros-Toure hit her. As another form of punishment, defendant Cros-Toure expelled the victim from their house, forcing her to sleep alone in a nearby park, where she kept warm using a public restroom hand dryer. Defendant Toure also shaved the victim’s head, because defendant Cros-Toure did not like the appearance of her hair.  On another occasion, defendant Cros-Toure hosed off the victim outside because she thought the victim smelled.  After years of abuse and being forced to work for the defendants, the victim was able to escape in 2016 with the assistance of several neighbors.

Sentencing has not yet been scheduled. The defendants face a maximum sentence of 20 years for forced labor, a maximum sentence of 10 years for conspiracy to commit alien harboring, and a maximum sentence of 5 years for alien harboring.  Restitution in this case is mandatory under the law.

The U.S. Department of State’s Diplomatic Security Service, Houston Field Office, investigated the case. It is being prosecuted by Trial Attorney Rebekah Bailey and Special Litigation Counsel William Nolan of the Civil Rights Division’s Criminal Section and Human Trafficking Prosecution Unit and Assistant U.S. Attorney Alex Lewis for the Northern District of Texas.