Northern District of Texas

DALLAS — Justin Dishon Brathwaite, 27, of Dallas, Texas, appeared in federal court today before U.S. Magistrate Judge Renee Harris Toliver and pleaded guilty to one count of transportation of individuals to engage in prostitution, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Brathwaite, who remains on bond, faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Sentencing is set for June 17, 2015, before U.S. District Judge Barbara M. G. Lynn.

According to documents filed in the case, in early May 2012, Brathwaite called 19-year-old “Jane Doe,” after seeing her on Backpage.com in Oklahoma City. Jane Doe and Brathwaite spoke on the phone for about two weeks, and Brathwaite invited her to come to Dallas to live with him. He promised to take care of her if she moved to Dallas to be with him and told her she should stop engaging in commercial sex acts. Jane Doe agreed to the move.

On May 12, 2012, Brathwaite drove from Dallas to Oklahoma City, picked up Jane Doe and returned to Dallas. Once they arrived in Dallas, Brathwaite told her she needed to begin immediately to make money for him, or he would drop her off somewhere and leave her. Jane Doe eventually agreed to work at a strip club and engage in commercial sex acts. Brathwaite posted ads featuring her on Backpage.com, and he made Jane Doe give him all of the proceeds from her commercial sex acts. Brathwaite took Jane Doe to various cities in Texas, including Denton, Killeen, Houston and Austin.

On June 12, 2012, the Dallas Police Department’s vice unit encountered Jane Doe in a hotel room in Dallas and arrested her for prostitution. The investigation led to Brathwaite’s involvement in her commercial sex acts.

The FBI investigated. Assistant U.S. Attorney Cara Foos Pierce is prosecuting.

DALLAS — A federal grand jury in Dallas has returned an indictment charging Yolanda Lavell Kaiser with nine counts of wire fraud and two counts of aggravated identity theft, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Special agents with Internal Revenue Service (IRS) Criminal Investigation (CI) arrested Kaiser on those charges, and she made her initial appearance in federal court on February 12, 2015. Following a detention hearing held yesterday before U.S. Magistrate Judge Irma C. Ramirez, she was released on bond with conditions, including 24-hour home incarceration with electronic monitoring. In addition, Kaiser was ordered not to engage in the filing of any tax returns for anyone other than herself, not to possess any personal identification information for any person other than herself and any dependent, and not use a computer while charges are pending. According to the order setting those conditions, Kaiser is a resident of Mesquite, Texas.

According to the indictment, Kaiser prepared and filed tax returns through a tax preparation business known as Right 1 Tax Services, which, between September 2013 and April 2014, maintained an office on North Galloway in Mesquite. Subsequently, Right 1 Tax Service moved its office to Estate Lane in Dallas.

The indictment alleges that from September 2013 through August 2014, Kaiser prepared and filed fraudulent tax returns using the name, Social Security Number, and other means of identification of others, without their knowledge or consent. Using that information, she would obtain and possess prepaid debit cards issued in the names of those individuals, also without their knowledge or consent.

According to the indictment, using the identification of others, without their knowledge or consent, Kaiser filed false federal income tax returns to request tax refunds and direct the tax refunds to be deposited on prepaid debit cards. Kaiser then made cash withdrawals of refunds deposited into accounts, including making withdraws at ATMs with the prepaid debit cards.

A federal indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. Upon conviction, however, the penalty for each count of wire fraud is 20 years in federal prison and a $250,000 fine. Each count of aggravated identity theft carries, upon conviction, a mandatory two-year sentence.

IRSCI, with assistance from the Mesquite Police Department and the Dallas County District Attorney’s Office, is investigating. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution.

DALLAS — Christopher Washington, 49, who admitted committing the armed robberies of businesses in the Dallas area in 2012-2013, was sentenced today by U.S. District Judge Jane J. Boyle to 300 months (25 years) in federal prison, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

In August 2014, Washington pleaded guilty to two counts of interference with commerce by robbery and one count of carrying and brandishing a firearm during and in relation to a crime of violence.

In September 2014, co-defendant Darren Lewis, 45, was sentenced to 324 months in federal prison. He pleaded guilty to three counts of interference with commerce by robbery and one count of brandishing a firearm during and in relation to a crime of violence.

According to documents filed in the case, on October 30, 2012, Lewis entered a Hampton Inn and Suites in Desoto, Texas, inquired about room rates, looked around the lobby, and then left the hotel. Immediately afterwards, Washington entered the lobby and requested a room. He then pulled out a firearm, pointed it at the desk clerk, and demanded cash. Fearing for her life, the clerk complied. Washington then left the hotel and got into a waiting Ford expedition, driven by Lewis.

On November 6, 2012, Washington entered a La Quinta Inn in Cedar Hill, Texas, approached a desk clerk, displayed a shotgun, and while pointing it at the clerk, demanded money. The clerk complied, and Washington left and got into a dark colored car, parked outside of the hotel lobby, driven by Lewis.

On January 28, 2013, Lewis entered a 7-Eleven store in Dallas, grabbed a candy bar from a shelf and then pulled out a silver handgun, pointed it at the clerk, and demanded money from the cash register. In fear for his life, the clerk complied. Lewis then fled the store and drove away in a maroon Ford Expedition.

The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Dallas, Duncanville, Desoto, and Cedar Hill Police Departments investigated the case. Assistant U.S. Attorney Taly Haffar prosecuted.

WASHINGTON – Santander Consumer USA Inc. has agreed to pay at least $9.35 million to resolve a lawsuit by the Department of Justice alleging that the motor vehicle lender violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced today. The complaint and the settlement, which is subject to court approval, were filed today in the U.S. District Court for the Northern District of Texas.

The settlement covers the improper repossessions of 1,112 motor vehicles between January 2008 and February 2013. The proposed consent order represents the largest settlement for illegal automobile repossessions ever obtained by the United States under the SCRA.

“This is a just resolution that will provide service members with financial relief and help repair their bad credit caused by Santander’s improper repossessions and fee collections with respect to more than 1,100 cars,” said Acting Associate Attorney General Stuart Delery. “The Department of Justice will continue devoting time and resources to protect our service members and their families from such unjust actions and hold bad actors accountable."

“Those who answer this nation’s call to duty understandably have much on their minds while they are in military service,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Whether their car will be seized and sold at auction should not be an additional worry. We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it is owned by a service member.”

The SCRA protects service members against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the service member took out the loan, and made a payment, before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the service member, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the service member. By failing to obtain court orders before repossessing motor vehicles owned by protected service members, Santander prevented service members from obtaining a court’s review of whether their repossessions should be delayed or adjusted in light of their military service.

The lawsuit alleges that Santander initiated and completed 760 repossessions, without court orders, of motor vehicles owned by SCRA-protected service members. The agreement requires Santander to pay $10,000 plus compensation for any lost equity (with interest) to each of these service members. The lawsuit also alleges that Santander sought to collect fees arising from an additional 352 repossessions that unrelated motor vehicle lenders had conducted in violation of the SCRA before Santander acquired the loans. The agreement requires Santander to pay $5,000 to each of these service members. Santander also must repair the credit of all affected service members.

“The SCRA is an important protection for the men and women serving our country in the armed forces, and this settlement not only will rectify the past improper repossessions of service members’ vehicles, but will work to prevent such improper repossessions in the future,” said Acting U.S. Attorney John Parker of the Northern District of Texas.

For future repossessions, the settlement requires Santander to check the Defense Department’s automated database to see if a car’s owner is in military service prior to conducting a repossession.

The Department of Justice first learned of Santander’s repossession practices through a referral from the U.S. Army’s Legal Assistance Program. The referral involved a claim that Santander illegally repossessed the car of a service member, U.S. Army Specialist Joshua Davis, in the middle of the night, after having been informed that he was at basic training. The department also opened its investigation after learning that Santander used an arbitration clause included in its loan documents to prevent a second service member from pursuing systematic relief through a class action lawsuit he filed alleging that Santander had repossessed service members’ vehicles in violation of the SCRA.

As part of its investigation, the United States has already identified Santander’s illegal repossessions, and efforts to collect unlawful repossession fees, occurring between January 2008 and February 2013. Service members identified based on that investigation will be contacted by an independent settlement administrator later this year. The settlement also requires Santander to conduct a review and provide compensation for any additional unlawful repossessions that may have occurred since February 2013. All service members who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the Department of Justice.

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 37 lending matters under the Fair Housing Act, the Equal Credit Opportunity Act, and the Servicemembers Civil Relief Act. The settlements in these matters provide for over $1.2 billion in monetary relief for impacted communities and individual borrowers. The Attorney General’s annual reports to Congress on ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications.

The Civil Rights Division is a member of the Financial Fraud Enforcement Task Force. President Obama established this task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.

The Civil Rights Division is the component within the Department of Justice authorized to enforce the SCRA. This federal law provides protections for active duty service members in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about SCRA enforcement by the Justice Department, please visit www.servicemembers.gov or call 1-800-896-7743, Mailbox 91.

DALLAS — A Dallas attorney was arrested this morning on felony charges, outlined in a federal indictment returned by a grand jury earlier this week and unsealed today, stemming from her work in representing aliens, that is, non-U.S. citizens, before the U.S. Department of Homeland Security (DHS), U.S. Citizen and Immigration Service (USCIS), announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Sherin Thawer, 45, was arrested by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) at her residence in Coppell, Texas. She made her initial appearance today before U.S. Magistrate Judge Stickney, who released her on conditions.

The seven-count indictment charges Thawer with one count of conspiracy to commit fraud in connection with immigration documents; one count of mail fraud; one count of transfer or use of the means of identification of another person; and four counts of aggravated identity theft.

According to the indictment, Thawer represented aliens before USCIS when they were applying for various types of visas to enter or remain in the U.S., including through obtaining U Nonimmigrant Status, also known as a U-Visa. To be eligible for a U-Visa, the alien must have been a victim of a certain crime, suffered mental or physical abuse as a result of the crime, and helped law enforcement in the investigation and/or prosecution of the crime. In addition to the U-Visa application, applicants are to submit a Law Enforcement Certification form completed and signed by the certifying official for the law enforcement agency that investigated and/or prosecuted the crime for which the alien was a victim.

The indictment alleges that beginning in approximately March 2012 and continuing until September 2014, Thawer submitted fraudulently completed and forged Law Enforcement Certification forms to USCIS to obtain U-Visas for the aliens she represented. These Law Enforcement Certification forms, containing the names and badge numbers of police officers, were completed without the knowledge or authorization of the police officers, and the signatures purporting to be those of the named officers were forged.

A federal indictment is an accusation by a grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the statutory maximum penalty for the conspiracy charge is ten years in federal prison and a $250,000 fine. The statutory maximum for the transfer or use of the means of identification of another person charge is fifteen years in federal prison and a $250,000 fine, per count. The statutory maximum penalty for the mail fraud count is 20 years in federal prison and a $250,000 fine. Each of the aggravated identity theft counts carries a statutory penalty of a mandatory two years in federal prison and a $250,000 fine.

ICE HSI, the Irving Police Department, and USCIS are investigating. Special Assistant U.S. Attorney Dan Gividen and Assistant U.S. Attorney Aaron Wiley are prosecuting.

FORT WORTH, Texas — A husband and wife who were convicted at trial on multiple felony offenses stemming from their operation of a tax return preparation business in Tarrant County, were sentenced this morning by U.S. District Judge John McBryde, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Jacqueline Morrison and Gladstone Morrison, who operated Jacqueline Morrison & Associates (JMA) on North Collins in Arlington, Texas, and on James Street in Fort Worth, Texas, were each sentenced to serve 187 months in federal prison. In addition, Judge McBryde ordered them to pay nearly $18 million in restitution.

Specifically, in October 2014, a federal jury convicted Jacqueline and Gladstone Morrison each on one count of conspiracy to aid and assist in the preparation and presentation of false and fraudulent tax returns. Jacqueline Gladstone was also convicted on 13 counts and Gladstone Morrison on 12 counts of aiding and assisting in the preparation and presentation of false and fraudulent tax returns. Jacqueline was convicted on three counts and Gladstone on four counts of wire fraud.

Gladstone Morrison has been in custody since the conviction. Judge McBryde ordered Jacqueline Morrison to surrender to the Bureau of Prisons on March 13, 2015.

“This office is committed to working with IRS Criminal Investigation to pursue criminals who rob the U.S. Treasury by perpetrating tax fraud schemes,” said Acting U.S. Attorney Parker. “The aggressive prosecution of these individuals is vital to maintaining public confidence in our tax system.”

R. Damon Rowe, Special Agent in Charge of the Dallas Office of IRS Criminal Investigation said, “Most Certified Public Accountants strive for the highest ethical standards; Jacqueline Morrison, however, is one CPA who did not. She and her husband, Gladstone, abused the trust their clients placed in them and their company, Jacqueline Morrison & Associates. With today’s sentences, the Morrison’s are now being held accountable for their corrupt actions.”

The government presented evidence that the Morrison’s conspired to willfully aid and assist in and advise the preparation and presentation to the IRS of false and fraudulent individual income tax returns. Many of the tax returns were false and fraudulent because to increase client refunds, the returns claimed Schedule C business losses from income for which the Morrisons knew the taxpayers were not entitled. The Morrisons and JMA tax return preparers, who the Morrisons trained, would use the substantial losses reported on the false Schedules C to offset wage income, resulting in clients recovering all or most of their tax withholding. The Morrisons benefitted from this practice by charging higher fees for additional schedules, creating client loyalty and increasing their business through client referrals.

As part of the conspiracy, the Morrisons, according to evidence presented, developed a series of forms for the client to sign at the time the return was prepared. These forms were intended to protect the Morrisons by placing all the responsibility for any false information on the client, no matter how transparently implausible or unsubstantiated the information on the return.

During the time of the conspiracy, the Morrisons collected more than $2 million in fees from clients. They also attempted to profit by using JMA’s fraud to build a large client list, which they then leveraged into a lucrative franchise agreement with Express Tax Services, a subsidiary of H&R Block. However, after they entered the franchise agreement, the IRS terminated the Morrisons’ Electronic Filing Identification Numbers (EFINs) because of their fraudulent activities. To conceal that fact and perpetuate the continuation of the franchise agreement, the Morrisons provided Express Tax Services EFINs that belonged to a business associate.

Regarding the wire fraud offenses that occurred during the time of the conspiracy, the government presented evidence that the franchise agreement provided for the payment of $750,000 from Express Tax to the Morrisons. To secure the agreement, the Morrisons falsely represented to Express Tax that JMA was not under investigation, when in fact, they well knew JMA was the subject of a federal criminal investigation by IRS-Criminal Investigation.

Unbeknownst to Express Tax, the Morrisons entered into a separate agreement to sell JMA to an individual named V.H. Gladstone Morrison misled V.H. about the true nature of JMA’s relationship with Express Tax by telling V.H. that the arrangement was nothing more than a “co-branding” or “co-marketing” agreement.” Gladstone Morrison also tried to prevent Express Tax from learning they had executed an agreement to sell JMA to V.H. by falsely telling Express Tax that V.H. was only the Morrison’ office manager. By entering into parallel agreements with separate entities — Express Tax and V.H., the Morrisons received payments from both entities for the same asset.

When the Morrison’s agreements with both Express Tax and V.H. fell apart, they again tried to profit by selling JMA to RealTex Ventures LLC, owned by “D.A.” for $425,000. Again, the Morrisons represented that JMA was not under investigation, when it was.

The case was investigated by IRS Criminal Investigation. Assistant U.S. Attorneys Douglas Allen and Chris Wolfe prosecuted.

FORT WORTH, Texas — A Hurst, Texas, man appeared in federal court this morning and pleaded guilty to an indictment charging child pornography offenses, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Specifically, Randy Ray Wesson, 29, pleaded guilty, before U.S. Magistrate Judge Jeffrey L. Cureton, to one count of possession of child pornography and one count of receipt of child pornography. He faces a maximum statutory sentence on the possession count of 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. On the receipt count, he faces a statutory sentence of not less than five years and not more than 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. However, according to the plea agreement filed, if the Court accepts this plea agreement, the parties agree that the appropriate punishment in this case is no more than 30 years in federal prison. Sentencing is set for June 25, 2015, before U.S. District Judge Terry R. Means.

Wesson has been in custody since his arrest in November 2014 on related charges outlined in a federal criminal complaint.

According to the complaint, the investigation began when a detective with the Hurst Police Department received information form the Dallas Police Department’s Internet Crimes Against Children (ICAC) unit regarding a Cybertip received from the National Center for Missing and Exploited Children (NCMEC). That referral indicated that a particular Instagram member had uploaded an image of child pornography through their server on June 7, 2014. The investigation revealed that Wesson was the owner of that account.

Officers with the Hurst Police Department executed a state search warrant at Wesson’s home on November 18, 2014, in an effort to search for and seize evidence of child pornography. Wesson was present during the search. A forensic examination revealed that Wesson’s desktop computer contained files visually depicting minors, including a prepubescent minor, engaged in sexually explicit conduct.

In addition, according to the filed factual resume, on February 9, 2014, Wesson used the Internet and Instagram to receive visual depictions of minors engaged in sexually explicit conduct.

The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Hurst Police Department are investigating. Assistant U.S. Attorney A. Saleem is in charge of the prosecution.

DALLAS — A former resident of Garland, Texas, appeared in federal court this morning, before U.S. Magistrate Judge Irma C. Ramirez, and admitted aiming a laser pointer at a helicopter, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Steven Alexander Chavez, Jr., 23, pleaded guilty to an indictment charging one count of aiming a laser pointer at an aircraft. He faces a maximum statutory penalty of five years in federal prison and a $250,000 fine. Sentencing is set for June 3, 2015, before Chief U.S. District Judge Jorge A. Solis.

According to documents filed in the case, in August 2013, Chavez knowingly aimed the beam of a laser at a Texas Department of Public Safety (DPS) helicopter. Chavez aimed the laser at the helicopter from the backyard of a friend, while the helicopter was flying overhead.

A few days later, special agents with the FBI arrested Chavez in Lubbock, Texas, where he had recently relocated from Garland. Following his initial court appearance, he was released on bond.

The FBI, Texas DPS and Garland Police Department are investigating. Special Assistant U.S. Attorney Lara Burns is prosecuting.

LUBBOCK, Texas — Christopher Wayne Howard, 26, of Joshua, Texas, was sentenced today by U.S. District Judge Sam R. Cummings to 27 months in federal prison, following his guilty plea in October 2014 to one count of transferring obscene material to a minor, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Judge Cummings ordered Howard to surrender to the Federal Bureau of Prisons to commence service of his sentence on March 20, 2015.

According to documents filed in the case, in March 2014, Howard engaged in a series of online and telephone texting communications with “Jane Doe,” a person he knew to be a 13-year-old-female. During the communications, Howard often turned the subject to sexually explicit matters. On March 13, 2014, Howard chatted with “Jane Doe” and used an online application to send her an obscene, sexually explicit photograph of an adult male.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the San Angelo Police Department’s Special Operations Division investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted.

DALLAS — A federal grand jury in Dallas returned an indictment last week, that was unsealed today, charging a Lewisville, Texas, man with offenses stemming from his theft of others’ personal identifying information to steal income tax refunds, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Defendant John Bash made his initial appearance in federal court today, before U.S. Magistrate Judge Paul D. Stickney, who ordered him detained. During the hearing, it was revealed that Bash, who was arrested by special agents with the Internal Revenue Service (IRS) Criminal Investigation (CI) at his residence in Lewisville, is 30-years-old.

The indictment charges Bash with two counts of conspiracy to commit theft of federal public money and two counts of aggravated identity theft.

It alleges that beginning in January 2012, Bash conspired to steal federal public money, that is, income tax returns. As part of the conspiracy, according to the indictment, Bash would obtain the personal identifying information of third persons, including their names, Social Security Numbers and dates of birth. Then, Bash would prepare and submit false federal income tax returns to the IRS using that information. Bash prepared the false income tax returns to include false income and withholding information in a way that would result in a claim for a refund. He filed the returns requesting the refunds either be mailed in the form of a check to an address controlled by a conspirator or loaded onto debit cards acquired by a conspirator.

A federal indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. Upon conviction, however, the penalty for each count of conspiracy to commit theft of federal public money is 10 years in federal prison and a $250,000 fine. Each count of aggravated identity theft carries, upon conviction, a mandatory two-year sentence.

IRSCI is investigating. Assistant U.S. Attorney Aaron Wiley is in charge of the prosecution.

LUBBOCK, Texas — Larry Richie Fields, 45, of Wingate, Texas, appeared today in federal court before U.S. Magistrate Judge Nancy M. Koenig and pleaded guilty to one count of transportation of child pornography. Fields, who has been in federal custody since his arrest in January on related charges, faces a maximum statutory penalty of not less than five years and up to 20 years in federal prison, a $250,000 fine, and a lifetime of supervised release. Sentencing will be set at a later date. Acting U.S. Attorney John Parker of the Northern District of Texas made the announcement today.

According to documents filed in the case, on October 25, 2014, Fields used the Internet to transport two images of child pornography using an online social networking service. Over a period of years, beginning no later than 2012, Fields used various social networking services and online storage services to post and store images depicting minors engaging in sexually explicit conduct. Fields used multiple usernames to trade, collect, transport, and receive child pornography.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the Dallas Internet Crimes Against Children (ICAC) Task Force; the Texas Department of Public Safety, Criminal Investigations Division; the Taylor County Sheriff’s Office; and the San Angelo Police Department, Special Operations Division. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

DALLAS — A Hutchins, Texas, man, Servando Vega Cervantes, 24, appeared this morning before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to an indictment charging three counts of production of child pornography, announced John Parker, United States Attorney for the Northern District of Texas.

Cervantes faces a statutory penalty of not less than 15 years and not more than 30 years in federal prison, for each count. Each count also carries up to a $250,000 fine and up to a lifetime of supervised release. Cervantes has been in custody since his arrest in November 2014 on a related federal complaint. He is scheduled to be sentenced on May 28, 2015, by U.S. District Judge Jane J. Boyle.

According to documents filed in the case, the Hutchins Police Department contacted the FBI in May 2014 regarding questionable online communication between an 11-year-old victim, “John Doe #1,” and the Facebook user profile of “Laura Ortiz.” The victim’s mother believed the user of the Ortiz profile was actually an adult male and not a 13-year-old female as described in chat conversations between John Doe #1 and Ortiz. The investigation revealed that the user profile “Laura Ortiz” belonged to Cervantes. The investigation also revealed that John Doe #1 knew Cervantes as “Jordan,” an alias Cervantes used.

In May 2014, Cervantes enticed John Doe #1 to engage in sexually explicit conduct for the purpose of producing visual depictions of that conduct. In December 2013, Cervantes enticed another minor, under the age of 14, John Doe #2, to engage in sexually explicit conduct for the purpose of producing visual depictions of that conduct.

Cervantes admitted he had sexual contact with other minors.

Anyone who may have been victimized in this case is asked to contact the FBI at 972-559-5000.

The matter was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The FBI’s Dallas Child Exploitation Task Force and the Hutchins Police Department are conducting the investigation. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

WICHITA FALLS, Texas — Two defendants, who pleaded guilty in June 2014 to their respective roles in a crack cocaine/cocaine powder distribution conspiracy that operated in Wichita Falls and McAllen, Texas, have been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas..

Yesterday, U.S. District Judge Reed C. O’Connor sentenced Rodolfo Trevino, 34, of Wichita Falls, to a 97-month term of imprisonment. Trevino pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine base and one count of money laundering. Judge O’Connor also ordered that Trevino forfeit a residence located in the University Park subdivision in Wichita Falls, a Land Rover Range Rover, a Hummer H2, a firearm and assorted ammunition.

In mid-December 2014, Judge O’Connor sentenced co-defendant Rene Villastrigo, Jr., 34, also of Wichita Falls, to 30 months in federal prison. He pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine.

Beginning sometime in 2012 and continuing to April 18, 2014, Trevino and Villastrigo conspired together and with Senobio Ortiz, Jr., of McAllen Texas, and others, to possess with the intent to distribute cocaine and cocaine base. Ortiz has pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine, and he is scheduled to be sentenced in April 2015.

According to court documents, Trevino traveled frequently to McAllen, where he recruited Ortiz to regularly transport cocaine and marijuana from McAllen to Wichita Falls. Trevino also recruited Villastrigo to rent a residence in Wichita Falls to store and repackage the cocaine and marijuana for distribution. Trevino used this residence to convert the powder cocaine into crack cocaine.

Trevino deposited the drug proceeds he acquired into bank accounts in Wichita Falls and withdrew those deposits in the McAllen area, intending for these financial transactions to conceal his drug trafficking activity.

On April 18, 2014, law enforcement executed a search warrant at a residence in Wichita Falls where Trevino and Villastrigo manufactured crack cocaine. Both Trevino and Villastrigo were present at the time, and officers found approximately 250 grams of cocaine base and eight packages of marijuana, each weighing more than one pound. Officers found a firearm during a search of Trevino’s girlfriend’s home, and they found ammunition for the firearm at Trevino’s home.

The FBI’s Safe Streets Task Force (SSTF), Wichita Falls Police Department, and Internal Revenue Service Criminal Investigation investigated. Assistant U.S. Attorney Suzanna Etessam prosecuted the criminal case, and Assistant U.S. Attorney John de la Garza prosecuted the forfeitures.

AMARILLO, Texas — Nine men who were arrested this past weekend during a multi-agency investigation into online solicitation now face federal charges, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Each of the following defendants has been charged in a separate federal complaint, just unsealed, with attempted enticement of a child. Each made his initial appearance in federal court yesterday before U.S. Magistrate Judge Clinton E. Averitte.

Aaron Joe Davis, 38

Jeffery Robert Abraham, 31

Kolby Shelb Kemp, 21

Mario Simental, 27

Brad Eugene Sharber, 44

Daniel Lee Garcia, 37

Robert James Tidwell, 20

Charles Alexander Diaz, 20

Kyle Andrew Adair, 22

All are residents of Amarillo, Texas, with the exception of defendant Tidwell, who is a Pampa, Texas, resident.

According to the complaints filed, at some time during the period January 29, 2015, and Jan 31, 2015, the defendants communicated via email and/or text messaging with an individual they believed to be 14 years-of-age. In all but one case, the defendant believed the 14-year-old was female. In at least one incident, the defendant sent a sexually explicit photograph to the individual they believed to be 14-years-old. In all instances, a meeting time and place was arranged, and in all but two instances, the defendant was arrested at the location. Defendant Davis was arrested after fleeing and leading officers and agents on a vehicle pursuit through Amarillo. Defendant Garcia was arrested after leading officers and agents on a brief foot chase.

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The statutory penalty for the offense as charged is not less than 10 years and up to life in federal prison, a $250,000 fine and up to a lifetime of supervised release. The government has 30 days to present the case to a federal grand jury for indictment.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Texas Department of Public Safety, the Amarillo Police Department, Randall County Sheriff’s Department, Potter County Sheriff’s Department, West Texas A&M Police Department, Canyon Police Department, the Amarillo and Randall County District Attorney’s Offices, and the U.S. Marshals Service are investigating. Assistant U.S. Attorneys Joshua Frausto and Tim Hammer are in charge of the prosecution.

AMARILLO, Texas — Hugo Gomez-Barrientos, most recently of Hereford, Texas, was sentenced this week by U.S. District Judge Mary Lou Robinson to 120 months in federal prison on a methamphetamine distribution conviction, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Gomez-Barrientos, 46, pleaded guilty in November 2014 to an indictment charging one count of possession with intent to distribute 50 grams or more of methamphetamine. He has been in custody since his arrest at his residence on September 25, 2014, after the return of that indictment.

According to documents filed in the case, on May 7, 2013, Gomez-Barrientos agreed to meet with an undercover Drug Enforcement Administration (DEA) Task Force Officer (TFO), at a convenience store in Hereford, and sell him a quarter pound of methamphetamine for $3,750 and front him an additional quarter pound to be paid for later. Gomez-Barrientos changed the meeting place from the convenience store to a cattle truck wash.

After the undercover TFO arrived at the cattle truck wash, Gomez-Barrientos walked up to his vehicle and the sale took place. The undercover TFO advised he would pay him the balance owed for the additional quarter pound of methamphetamine on the next buy.

Approximately one month later, on June 5, 2013, the undercover TFO called Gomez-Barrientos to discuss the remaining balance he owned. They agreed to meet at Gomez-Barrientos’s ranch. The undercover TFO advised that the prior amount of methamphetamine was short of the quarter pound and the undercover TFO and Gomez-Barrientos agreed that the undercover TFO would pay $3,000 for it.

The DEA, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Texas Department of Public Safety (DPS) investigated. Assistant U.S. Attorney Joshua Frausto prosecuted.

DALLAS — A Dallas man who met a 17-year-old female on the Internet, convinced her to leave her foster home and go to Texas with him where he facilitated her engagement in commercial sex acts, pleaded guilty yesterday in federal court, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Ladestro Douglas, a/k/a “Derek Douglas,” 35, appeared before U.S. Magistrate Judge David L. Horan and pleaded guilty to one count of conspiracy to commit sex trafficking of children. Douglas faces a maximum statutory sentence of life in federal prison. Sentencing is set for June 3, 2015.

According to documents filed in the case, in May 2012, Douglas contacted 17-year-old “Jane Doe #1” on the Internet and began communicating with her. He convinced her to leave her foster home in Alabama and travel with him to Texas. When they arrived in Texas, Douglas facilitated Jane Doe #1 engaging in commercial sex acts. He took provocative photos of her for use on commercial sex websites; posted her on Backpage.com and other similar commercial sex websites; provided her with contraceptives to use with customers; and drove her to various cities to engage in commercial sex acts. Jane Doe #1 gave Douglas all of the money she earned.

In June 22, 2012, officers with the Dallas Police Department responded to a disturbance call at a local hotel. In the parking lot, they encountered Jane Doe #1, who explained that she had gotten in an altercation with her pimp, Douglas. Officers learned Jane Doe #1 was a 17-year-old runaway from Alabama, and they arrested Douglas. Douglas admitted that he knew she was age 17 and that she had been engaging in commercial sex acts throughout Texas. Afterwards, Jane Doe #1 lost contact with Douglas for several months, but after she turned 18, they reunited and Douglas continued to facilitate her commercial sex acts.

In December 2013, Jane Doe #1 and another woman were in Odessa, Texas, working at Douglas’s direction. They encountered 16-year-old Jane Doe #2 walking down the street, offered her a ride and she joined them. Jane Doe #1 contacted Douglas about Jane Doe #2 and he travelled to Odessa to meet her.

Douglas, Jane Doe #1 and Jane Doe #2 traveled back to Dallas on a bus, and after they arrived, Jane Doe #1 began facilitating Jane Doe #2’s engaging in commercial sex acts. They took provocative photos of her and posted her ad on Backpage.com. Jane Doe #1, at Douglas’s direction, contacted certain customers to see if they wanted to pay to have sex with Jane Doe #2. Jane Doe #1 rode in the car with Jane Doe #2 to her commercial sex transactions, but she did not go into the room where they occurred. Jane Doe #2 gave all of the money she earned to Douglas.

Ultimately, in late December 2013, Jane Doe #2 told Douglas she wanted to go home for the Christmas holidays, and he allowed her to leave.

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Cara Foos Pierce is prosecuting.

DALLAS, Texas — A man, who, along with his sister, was indicted last year on felony offenses stemming from their attempts to extort money from a business in Dallas, pleaded guilty in federal court today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

William Stanley, 52, a/k/a “William Laurence,” “Bill Stanley,” “William Davis,” “William Harris,” and “William L. Stanley,” pleaded guilty today to one count of Hobbs Act – Extortion. He faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine. However, according to the plea agreement, if the Court accepts Stanley’s plea, the parties agree that the appropriate term of imprisonment in the case is a maximum of 36 months. Sentencing was set for June 1, 2015, at 9:00 am.

William Stanley, a U.S. citizen, most recently resided in Romania with his wife, a Romanian national. In 2013, he traveled several times between Europe and the United States. On March 3, 2014, he was arrested on a related federal criminal complaint at George Bush Intercontinental Airport in Houston, where he arrived on a flight from Europe.

Stanley’s sister, Lynn Faust, a/k/a “Lynn Michaels,” 54, was arrested in Sweden in May 2014. Ms. Faust was extradited and appeared in Court in the Northern District of Texas on October 16, 2014. On October 21, 2014, the government withdrew its motion to detain, and the Court released Faust on conditions of release. She is charged with one count of transmitting threats in interstate and foreign commerce and one count of Hobbs Act – Extortion. She has filed a motion to continue her trial date.

Faust assisted Stanley operate his search engine optimization (SEO) company. A legitimate SEO business engages in standard practices such as optimizing the underlying HTML code on a website for certain keywords that a search engine indexer, (e.g., q web crawler for Google, Bing, etc.) would associate with a given search query. An illegitimate SEO business engages in deceptive tactics to affect search engine rankings and the volume of results. Such deceptive tactics include creating fraudulent reviews (good or bad), creating fictitious websites, or hiding text on websites.

While Stanley engaged in some legitimate SEO work, he also engaged in illegitimate and illegal SEO activities. Stanley also extorted individuals and companies by threatening to engage in the illegitimate SEO work, that being posting fraudulent comments and creating negative reviews online, if the victim did not pay him a certain sum of money.

In November 2009, Generational Equity (GE), a Dallas-based merger and acquisitions firm, entered into a contract with Stanley for SEO services and reputation management. Stanley was hired because of his ability to improve a firm’s online reputation through search results. After approximately one year, however, GE sought to terminate its relationship with Stanley after it determined he had acted outside of his contracted duties. Stanley also created websites that had the ability to damage GE’s reputation by associating GE with a scam. Stanley demanded additional payments to end his contractual relationship with GE and to surrender the administrator rights to the websites to GE. From November 2010 through January 2011, GE paid Stanley a total of $80,000 to terminate the relationship.

Posing as “William Davis” and “William Laurence,” Stanley transmitted threatening communications, via email and telephone, from foreign countries to GE in the Northern District of Texas. Those communications threatened to post comments on the Internet wrongfully disparaging GE’s reputation, if GE did not send money to Stanley.

Because of Stanley’s threats to harm GE’s reputation through negative Internet posts that would adversely affect GE’s ability to conduct business if it failed to send money, GE responded to the wrongful inducement by sending four payments totaling $29,556 by MoneyGram to Stanley in Brasov, Romania.

According to the stipulated facts outlined in the factual resume, the government can readily prove that Stanley’s extortive conduct caused GE to make the above payments and to lose revenue. The extortive conduct also affected interstate commerce. In addition, the government contends that as of May 2014, it could readily prove that Stanley engaged in similar extortionate conduct with approximately 40 to 45 victims (including GE), and the loss associated with those victims and attributed to Stanley was approximately $186,690.

The FBI is investigating. Assistant U.S. Attorney C.S. Heath is in charge of the prosecution.

DALLAS — A 31-year-old Hunt County man appeared this morning in federal court, before U.S. Magistrate Judge Paul D. Stickney, and pleaded guilty to two counts of production of child pornography, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Stephen Walker, most recently of Quinlan, Texas, faces a statutory penalty of not less than 15 years, and not more than 30 years in federal prison, a $250,000 fine and up to a lifetime of supervised release, on each count. He remains in custody. Sentencing is set for May 21, 2015, before U.S. District Judge Jane J. Boyle.

According to documents filed in the case, in September 2006, Walker enticed Jane Doe #2, a seven-year-old female child, to engage in sexually explicit conduct that he photographed.

Then, in November 2010, Walker enticed Jane Doe #1, a three-year-old female child, to engage in sexually explicit conduct that he video-recorded.

The investigation began in November 2014 when a memory card, containing images of child pornography, was turned in to the Marion County Sheriff’s Office. That memory card had been found at a deer lease in a hunting club in Marion County; the deer lease had been used by Walker.

A search warrant of the memory card revealed it contained multiple sexually explicit videos of prepubescent child pornography taken at a Walker’s previous residence in Rowlett.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The FBI and the Rowlett Police Department investigated. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

DALLAS — An Dallas, Texas, man was sentenced this morning by U.S. District Judge Sidney A. Fitzwater to 188 months in federal prison and a lifetime of supervised release on a child pornography conviction, announced Acting U.S. Attorney John R. Parker of the Northern District of Texas.

Timothy Bullard, 35, pleaded guilty in August 2014 to one count of transporting and shipping child pornography.

According to documents filed in the case, on November 1, 2013 FBI agents executed a search warrant at Bullard’s home, they seized computers and computer-related items.

Bullard admitted he possessed well over 600 images and possibly 500 videos of child pornography all of which were available for trading. Bullard admits to using the internet and other computer software to share and make files containing child pornography available to other users. He indicated that he had been downloading child pornography since he was sixteen years old.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The Federal Bureau of Investigations investigated. Assistant U.S. Attorney Lisa Miller prosecuted.

DALLAS — A 20-year-old Mesquite, Texas, man appeared in federal court today before Chief U.S. District Judge Jorge A. Solis and pleaded guilty to one count of production of child pornography, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Jeremiah Chayse Gardiner faces a statutory penalty of not less than 15 years or more than 30 years in federal prison and a $250,000 fine. Sentencing is set for May 20, 2015. Gardiner remains in federal custody.

According to plea documents filed in the case, an investigation into cybertips received on April 8, 2014, led a detective with the Mesquite Police Department to determine that Gardiner uploaded images of child pornography to a social networking application called Tumblr. On April 17, 2014, detectives with the Mesquite Police Department went to West Mesquite High School to speak with Gardiner and execute a search warrant on his cellphone.

Gardiner admitted uploading images of child pornography to Tumblr, and he further admitted inappropriately touching “Jane Doe #2,” when she was three-years-old. Based on those admissions, the detectives obtained and executed an arrest warrant and search warrant for Gardiner’s residence, and Gardiner was taken into custody.

An examination of Gardiner’s cell phone revealed several images of child pornography, taken with Gardiner’s phone, depicting “Jane Doe,” a two-year-old girl.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The Mesquite Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

FORT WORTH, Texas — A Fort Worth man convicted for running a fraudulent oil and gas Ponzi scheme was sentenced today, announced Acting U.S. Attorney John Parker of the Northern District of Texas.

Jeffrey Watts, a/k/a “Jeff Watts,” 41, was sentenced by U.S. District Judge Terry R. Means to 78 months in federal prison and ordered to pay $4,636,643 in restitution. Watts has been in custody since his arrest in May 2014 in Eugene, Oregon, where he fled when his scheme began to unravel.

According to documents filed in the case, beginning in fall 2011 and continuing to December 2013, Watts engaged in a scheme to defraud involving oil and gas investments. He presented himself as the founder and principal of Blue Alpha Energy, falsely representing to investors that the company had invested in oil and gas well in Texas and was owned and/or operated by Arrowhead Productions, a legitimate, but unrelated company based in Fort Worth.

Watts established Blue Alpha Energy and a group of related sham entities to perpetrate his fraud scheme by leading investors to believe they were investing in oil and gas wells owned and/or operated by Arrowhead Productions. For example, Watts represented to investors that Arrowhead LG, LLC was an assumed name or “d/b/a” of Arrowhead Productions, and he possessed documents that bore the purported signature of the actual president of Arrowhead Productions, as the President of Arrowhead LG, LLC.

Watts falsely portrayed these sham entities as legitimate, third party lenders or investors in his alleged oil and gas interests, and he transferred investor funds between these accounts and the accounts of Blue Alpha Energy.

Watts falsely represented to investors that they would receive monthly distributions according to their ownership percentage in oil and gas wells owned and/or operated by Arrowhead Productions. He also duped his business partners and employees into believing his fraudulent representations, causing them to disseminate printed investment information that conveyed his misrepresentations. To further the scheme, Watts made monthly payments to investors in Blue Alpha Energy, using investor funds transferred between bank account of the sham entities he controlled.

Between 2011 and 2013, approximately $5.8 million in investments was raised from approximately 45 investors. However, in December 2013, several investors in Blue Alpha Energy learned Watts never had investment agreements with Arrowhead Productions and, in fact, funneled the investor funds into the sham business entities he controlled.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. For more information on the task force, visit www.stopfraud.gov.

The FBI investigated the case.

DALLAS — A couple who admitted stealing mail from residential mailboxes in and around Roanoke, Southlake, and Keller, Texas, were sentenced this week, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

William Lee Maglicco, 28, was sentenced by U.S. District Judge Reed C. O’Connor to 30 months in federal prison. Erica Michele Gibson, 26, was sentenced to 41 months in federal prison. Each pleaded guilty in October 2014 to an indictment charging one count of possession of stolen mail. Each has been in custody since their arrest in August 2014 on charges outlined in a related criminal complaint.

According to documents filed in the case, in early 2014, individuals from Roanoke, Southlake, and Keller complained that mail was stolen from their residential mailboxes. One of the victims stated that an American Express card was mailed to him/her at his/her Southlake address, but it was never received. U.S. Postal Inspectors investigated and discovered that Maglicco and Gibson used this individual’s credit card at a Walmart store in Grapevine, Texas, in March 2014.

On April 11, 2014, law enforcement executed a search warrant at Maglicco’s residence in Watauga, Texas, and discovered hundreds of pieces of stolen mail, including credit/debit cards, bank statements, passports and tax information. Law enforcement also found mail at the location addressed to the above-reference victim.

Both Maglicco and Gibson confessed to stealing mail from residential mailboxes in and around Roanoke, Southlake, and Keller, and using the stolen credit/debit cards to purchase items. According to the affidavit filed with the complaint, Maglicco admitted he stole mail approximately two to three times per week with his girlfriend, Gibson. He stated he stole mail to fuel his and Gibson’s drug habit.

The U.S. Postal Inspection Service and the Roanoke, Southlake, and Keller Police Departments investigated. Assistant U.S. Attorney Chris Wolfe prosecuted.

DALLAS — A Dallas man who admitted to his role in an armed home invasion and carjacking conspiracy was sentenced today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Michael Wafer, 26, was sentenced this afternoon by U.S. District Judge Jane J. Boyle to serve a total of 15 years in federal prison. Wafer pleaded guilty in May 2013 to an indictment charging one count each of conspiracy to commit carjacking; using, carrying, and brandishing a firearm during and in relation to a crime of violence; and carjacking.

Wafer’s four co-conspirators, Blake Robertson, 22; Jeremiah Walker, 22; Christopher Staton, 20; and Ladavid Sims, 20; have each pleaded guilty to the same offenses as Wafer and are scheduled to be sentenced by Judge Boyle within the next few months. Statutorily, the conspiracy count carries a maximum penalty of five years in federal prison; the firearm offense carries a penalty of not less than seven and up to life in federal prison; and the carjacking offense carries a maximum penalty of 15 years in federal prison. Each count also carries a maximum statutory fine of $250,000.

On December 30, 2013, the five defendants discussed, planned, and agreed to rob an individual, “M.J.,” who was an acquaintance of Walker’s, at M.J.’s house in Dallas, and then steal his vehicle. Officers with the Dallas Police Department identified these five defendants as suspects in the armed home invasion and carjacking of M.J. during the early morning hours of December 31, 2013. Just prior to that, they had attempted another armed robbery in North Dallas, during which the victim was shot.

When the five conspirators entered M.J’s house, they were carrying firearms and were willing to inflict serious injury upon M.J. if he failed to comply with their demands. The conspirators demanded money and jewelry from M.J., at gunpoint, and M.J. was struck in the head several times with a weapon. The conspirators also took the keys to M.J.’s vehicle and all five conspirators fled in that vehicle.

The Dallas Police Department and the FBI investigated. Assistant U.S. Attorney Lisa J. Miller is prosecuting.

DALLAS — A Waxahachie, Texas, man, James Derek Howard, was sentenced today by U.S. District Judge Ed Kinkeade to serve one year and one day in federal prison, following his guilty plea last year to a bankruptcy fraud offense. In addition, Judge Kinkeade ordered that Howard pay $13,283 in restitution to Southwest Securities, FSB. The announcement was made today by John Parker, Acting U.S. Attorney for the Northern District of Texas.

Howard, 39, pleaded guilty on October 14, 2014, to one count of fraudulent transfer of property of the bankruptcy estate. He has been in federal custody since October 1, 2014, when a U.S. Magistrate Judge revoked his pretrial release based on a government motion to revoke his bond.

According to documents filed in the case, Howard filed a Chapter 11 bankruptcy petition for Waxahachie Heritage Partners, LLC in October 2011. Waxahachie was the named corporate debtor listed in the bankruptcy petition, and Howard signed the petition in his capacity as a member of Waxahachie Heritage Partners, LLC.

Howard was on the signature card of the Debtor in Possession (DIP) account and had access to all the funds in the account. Pursuant to Court order, Howard could only disburse funds from the DIP account with the Court’s prior authorization. From March 2011 through March 2012, the Bankruptcy Court conducted several hearings and issued several orders in an attempt to compel Howard to provide a full accounting to the Court for all funds in the DIP account. Howard admitted that in January 2012, without Court authorization, he knowingly fraudulently transferred $10,000 from the DIP account by writing a $10,000 check to himself.

This case is one of several felony prosecutions of bankruptcy-related crimes generated by the recent Bankruptcy Fraud Initiative within the Northern District of Texas. From May 2013 to the present, nine debtors have been charged with various felony offenses. To date, five of these defendants have entered guilty pleas and have been sentenced, three defendants are set for trial and one charged defendant remains in fugitive status with an outstanding arrest warrant.

The U.S. Postal Inspection Service investigated. Assistant U.S. Attorney David Jarvis prosecuted.

DALLAS — A Mansfield, Texas, woman appeared today in federal court this morning before U.S. Magistrate Judge David L. Horan and pleaded guilty to one count of food stamp benefit fraud, announced John Parker, Acting U.S. Attorney for the Northern District of Texas

Rachel Hardy, 35, faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine or twice the pecuniary gain to Hardy or loss to the victims, and restitution. Sentencing is set for May 13, 2015, before U.S. District Judge Barbara M. G. Lynn. Hardy remains on pre-trial release.

The U.S. Department of Agriculture’s (USDA) Food Stamp Program is known as the Supplemental Nutritional Assistance Program (SNAP). The Texas Health and Human Services Commission (THHSC) administers SNAP in Texas.

The investigation began in 2012 when the Southwest Region USDA, Office of the Inspector General, received a referral about an individual who was receiving SNAP benefits who had failed to disclose a change in household composition and income from the ownership of two businesses. That individual was later identified as Hardy.

The investigation revealed that Hardy and her husband, who is the father of her youngest child, were married on February 14, 2010, in Las Vegas, Nevada. On April 8, 2010, Hardy submitted a SNAP benefits application, certifying she was a “single-parent-mother,” with no income, living in a household that consisted only of her children. Hardy’s application was approved, and she began receiving SNAP benefits.

On December 1, 2010, Hardy registered with Tarrant County as the owner operator of a tax refund and estate planning business called “Mighty Dollar Tax,” in Arlington, Texas. From April 8, 2010, through June 5, 2011, Hardy completed and submitted THHSC certifications reporting no income and claiming to live alone with her children.

On February 21, 2011, Hardy purchased a 2006 H2 Hummer for $26,000 and a 2008 Mercedes Benz CL S500 sedan for $41,700; she paid for each with a cashier’s check. At the time she purchased these vehicles, Hardy reported to THHSC that she was an unemployed, single-parent-mother living alone at home with her children.

On April 19, 2011, Hardy registered with Tarrant County as the owner operator of the Johnson Family Mortuary in Fort Worth, Texas. Again, on June 14, 2011, Hardy reported to THHSC that she was an unemployed single-parent-mother living alone at home with her children.

That same day, Hardy went to the Dallas County THHSC office where she completed and submitted a THHSC Application for Assistance Form. In doing so, she certified she was a “single-parent-mother” with no income living in a household that consisted only of her children.

On February 11, 2012, Hardy purchased a 2008 Land Rover Range Rover from Park Place Motors with a $53,000 cashier’s check. A few days later, on February 22, 2012, Hardy again certified to THHSC that she was an unemployed single-parent-mother living at home with her children.

The THHSC re-certifications and interviews revealed Hardy neither claimed a spouse nor any other income provided to her, or to anyone else in the household. Hardy admits that she failed to disclose material facts to THHSC and admits unlawfully receiving SNAP benefits to which she was not entitled.

The THHSC, OIG; USDA, OIG; U.S. Department of Housing and Urban Development, OIG; and U.S. Department of Education, OIG are investigating.

Assistant U.S. Attorney Aaron Wiley is in charge of the prosecution.

DALLAS — A 42-year-old Irving, Texas, man appeared this morning in federal court, before U.S. Magistrate Judge Paul D. Stickney, and pleaded guilty to an indictment charging one count of production of child pornography and one count of enhanced penalties for registered sex offenders, announced Acting U.S. Attorney John Parker of the Northern District of Texas.

Shannon Buck, who remains in federal custody, faces a maximum statutory penalty, for the two counts of conviction, of at least 35 years and up to 60 years of imprisonment. Each count also carries a maximum statutory penalty of a $250,000 fine and a lifetime of supervised release. Sentencing is set for May 13, 2015, before U.S. District Judge Jane J. Boyle.

According to documents filed in the case, in June 2014, Buck used Jane Doe, a real female under the age of 18, to engage in sexually explicit conduct, and then used his camera to record that conduct. In addition, Buck admitted that in February 2010, he pleaded guilty in the 195th District Court of Dallas County to two felony offenses of possession of child pornography, and he was sentenced to an eight-year period of deferred adjudication.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The Irving Police Department and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

LUBBOCK, Texas — Gregory James Flohr, 54, a former resident of Phoenix, Arizona, was sentenced today by U.S. District Judge Sam R. Cummings to 327 months in federal prison, following his guilty plea in August 2014 to one count of transportation of child pornography and one count of possession of child pornography. Today’s announcement was made by John Parker, Acting U.S. Attorney for the Northern District of Texas.

Flohr has been in custody since his arrest last summer on a related federal criminal complaint.

According to the factual resume filed in the case, when Flohr traveled from Arizona to Texas, he intentionally transported videos depicting a prepubescent female minor engaged in sexually explicit conduct. In addition, on the evening of July 2, 2014, Flohr knowingly possessed a Samsung cell phone that contained a child pornography video that had been transported from Arizona.

According to the complaint filed in the case, the investigation began on July 2, 2014, after Flohr entered a T-Mobile store in Lubbock, accompanied by “Jane Doe,” a female minor under age 12. Flohr purchased a new cell phone for himself and requested that the T-Mobile staff transfer data from his existing cell phone onto the newly purchased cell phone. This process involved Flohr telling the T-Mobile employee his Google Gmail account and password to facilitate the data transfer. During the data transfer, the employee noticed several images and videos of Flohr engaged in sexual contact with Jane Doe. After Flohr left the store, T-Mobile contacted the Lubbock Police Department to report the incident.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The Lubbock Police Department Internet Crimes Against Children (ICAC) Task Force, the Hockley County Sheriff’s Office, the Phoenix Police Department, Phoenix, Arizona, and the FBI, investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted.

DALLAS — A Dallas man who admitted committing a federal obscenity offense was sentenced today by U.S. District Judge Sidney A. Fitzwater, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Jason Paul Roberts, 38, was sentenced to 63 months in federal prison after pleading guilty in October 2013 to one count of attempted transfer of obscene material to a minor. Roberts will be required to register as a sex offender. He has been in custody since his arrest in September 2012 on a related federal indictment.

According to documents filed in the case, on September 29, 2012, Roberts emailed a sexually explicit photo depicting a partially nude male to a minor girl whom he knew was under the age of 16.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Garland Police Department investigated. Assistant U.S. Attorney Camille Sparks prosecuted.

LUBBOCK, Texas — Reymundo Alejandro Sanchez, 21, of Abilene, was sentenced today by U.S. District Judge Sam R. Cummings to 10 years in federal prison, following his guilty plea in October 2014 to one count of possession of child pornography. The announcement was made today by John Parker, Acting U.S. Attorney for the Northern District of Texas.

According to plea documents filed in the case, Sanchez used his cell phone to communicate with several persons using a mobile application called Kik, as well as through Facebook and other means. Many of those persons identified themselves to Sanchez as minors.

Sanchez engaged many of those persons in sexually oriented communication, which often included Sanchez sending one or more sexually explicit images of himself. In exchange, Sanchez sometimes received images or videos of minors engaged in sexually explicit conduct. One example of such child pornography was a video that Sanchez received on approximately April 30, 2014, which depicted a female minor, under age 18, engaged in sexually explicit conduct.

Sanchez’s pretrial release was revoked earlier this month when the Court found that he had violated conditions of his release.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The Abilene Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations investigated the case. Assistant U.S. Attorney Steven M. Sucsy prosecuted.

DALLAS — A Dallas businessman was sentenced today for intentionally setting fire to his business, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Edgar Dalmiro Diaz, 56, was sentenced by U.S. District Judge Jane J. Boyle to 60 months in federal prison and ordered to pay $1,508,533 in restitution. Diaz pleaded guilty in January 2014 to an indictment charging one count of malicious use of explosive materials. At the conclusion of today’s hearing, Judge Boyle remanded Diaz into federal custody.

Diaz is the creator of “Three Happy Cows” yogurt. That business was located in northwest Dallas at 2750 Northhaven Drive.

According to documents filed in the case, in mid-March 2013, Diaz intentionally set fire to that building. At that time, businesses located in the building were engaged in activities that affected interstate commerce, and the fire Mr. Diaz set damaged the building and its contents.

The Bureau of Alcohol, Tobacco, Firearms and Explosives and Dallas Fire-Rescue investigated. Assistant U.S. Attorney Taly Haffar prosecuted.

DALLAS — A grand jury in Dallas has indicted a Hunt County, Texas, man on a federal firearm offense, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Lee Clinton Hobdy, 36, of Commerce, Texas, is charged with one count of being a convicted felon in possession of a firearm.

The indictment alleges that in late August 2014, Hobdy, a convicted felon, knowingly and unlawfully possessed a Glock, .45 caliber pistol.

Hobdy is currently in custody on related state charges. A date has not yet been set for him to make his initial appearance in federal court.

A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, Hobdy faces a mandatory minimum 15-year sentence and a maximum sentence of life imprisonment.

The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Commerce Police Department are investigating. Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay is in charge of the prosecution.

DALLAS — Barrett Lancaster Brown, 33, who has been associated with the hacking group, Anonymous, was sentenced today by U.S. District Judge Sam A. Lindsay to serve a total of 63 months in federal prison and pay $890,250 in restitution, following his guilty pleas last year to three separate offenses. The announcement was made this afternoon by John Parker, Acting U.S. Attorney for the Northern District of Texas (NDTX).

In April 2014, Brown pleaded guilty to three separate offenses that essentially resolved all three criminal Indictments pending against him in the NDTX.

Pursuant to the plea agreements, Brown pleaded guilty to the felony offense of transmitting a threat to an FBI Special Agent in interstate commerce, as charged in an indictment returned by a federal grand jury in Dallas in October 2012. He also pleaded guilty to both counts of a superseding information that was filed on March 31, 2014, charging the felony offense of being an accessory after the fact to the unauthorized access to a protected computer and with the misdemeanor offense of interfering with the execution of a search warrant and aiding and abetting another person’s interference with the execution of a search warrant.

The Dallas office of the FBI investigated.

FORT WORTH, Texas — A local real estate investor, who operated Steelman Homes, was sentenced today for his role in a wire fraud conspiracy, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Calvin Richard Ford, 45, most recently of Grand Prairie, Texas, was sentenced today by U.S. District Judge Terry R. Means to 37 months in federal prison and ordered to pay $433,849 in restitution to Fannie Mae and Freddie Mac. Ford pleaded guilty on June 18, 2014, to an Information charging one count of conspiracy to commit wire fraud. He must surrender to the Bureau of Prisons on February 9, 2015.

Ford admitted that he conspired to defraud Colorado Federal Savings Bank. According to documents filed in the case, Ford encouraged people to buy homes as investments, and he told these potential investors that he would arrange to have the homes they purchased rented and would make all of the necessary mortgage payments from the rental proceeds.

Ford purchased the homes and then sold them to investors at an inflated price. To ensure these investors could qualify for the loans they needed to purchase the homes from him, Ford gave them money from the sales proceeds that they could use as a down payment. This arrangement was intended to deceive lenders into believing the investors had sufficient assets to make a down payment. The arrangement, however, was not disclosed on the HUD-1 forms or loan applications.

After selling the homes to investors, Ford often failed to find renters and did not pay the mortgages as promised. Consequently, the mortgages went unpaid and homes went into foreclosure. Ford sold more than 80 properties to investors during the course of the scheme.

The Federal Housing Finance Agency – Office of Inspector General and the FBI investigated.

FORT WORTH, Texas — The owner/operator of a chiropractic clinic in Fort Worth, Texas, was sentenced this morning on a federal felony conviction stemming from her submission of false reimbursement claims to Medicare and Medicaid, announced Acting U.S. Attorney John Parker of the Northern District of Texas.

Melva Mitchell, 35, of Fort Worth, a licensed chiropractor, was sentenced by U.S. District Judge Reed C. O’Connor to 12 months and one day in federal prison and ordered to pay $126,048 in restitution to Medicare and Medicaid for making false statements relating to health care matters. Mitchell operated Best Choice Chiropractic and Wellness Center on Oakland Boulevard in Fort Worth. She must surrender to the Bureau of Prisons on February 24, 2015.

According to documents filed in the case, Mitchell submitted claims for reimbursement to Medicare and Medicaid for chiropractic services that were not performed. She obtained the Medicare and Medicaid provider information for other individuals who were licensed Occupational Therapists, and used those persons’ provider information to obtain payments from Medicare and Medicaid for occupational therapy services that were not provided or were not provided by requisitely licensed individuals. Mitchell paid one of the individuals whose provider information she used a portion of the Medicare and Medicaid reimbursements she received.

As one example of her false statements, Mitchell submitted claims to Medicare and Medicaid indicating that she performed 25 separate chiropractic manipulations in her office from March 8, 2011 to March 10, 2011. These claims were false and fraudulent because she was on vacation in Puerto Rico at the time.

The U.S. Department of Health and Human Services – Office of Inspector General, FBI, and Texas Attorney General’s Medicaid Fraud Control Unit investigated. Special Assistant U.S. Attorney Douglas Brasher prosecuted.

DALLAS — Two men who conspired together to use counterfeit credit cards to make hundreds of thousands of dollars of purchases at various Sam’s Club store locations in North Texas and Missouri, have been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Yesterday, Leonel Martiatu, 29, was sentenced by U.S. District Judge Barbara M. G. Lynn to serve a total of 72 months in federal prison. Martiatu pleaded guilty in August 2014 to one count of conspiracy to commit access device fraud and one count of aggravated identity theft.

Co-conspirator Alian Gamboa, 20, who pleaded guilty to the same offenses, was sentenced last month by Judge Lynn to serve a total of 60 months in federal prison.

In addition, Judge Lynn ordered that Martiatu and Gamboa pay, jointly and severally, $340,497 in restitution. Both defendants have been in custody since their arrest in March on a related federal criminal complaint. Both have ties to Miami, Florida, according to detention orders entered in the case.

According to plea documents filed, from January 17, 2014, to approximately March 4, 2014, Martiatu and Gamboa conspired together and used counterfeit access devices encoded with credit card numbers – issued to others – to make purchases at Sam’s Club locations in and near Dallas and elsewhere, including Missouri. Together, the two obtained a total of $340,497 of things of value, affected interstate commerce, and acted with the intent to defraud the persons to whom the credit cards were issued.

According to the complaint filed in the case, on March 3, 2014, the defendants were located at a motel on N. Central Expressway in Dallas. The following day, a federal search warrant was executed at their room in the motel, and numerous items purchased from Sam’s Clubs were located.

The U.S. Secret Service investigated. Special Assistant U.S. Attorney Danial Gividen prosecuted.

DALLAS — A Keller, Texas, woman who continued to collect a family member’s Social Security retirement insurance benefits even after that family member died, was sentenced this afternoon, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Jeani Mulligan, 43, was sentenced by U.S. District Judge Jane J. Boyle to serve 27 months in federal prison. Mulligan, who pleaded guilty in September 2014 to one count of theft of government funds, must also pay a total of $124,825 in restitution. At the conclusion of the hearing, Judge Boyle remanded Mulligan into federal custody.

According to documents filed in the case, Mulligan admitted that she received approximately $124,825 in Social Security benefits to which she was not entitled. Specifically, from approximately December 30, 2000, to February 2013, Mulligan received Title II Retirement Insurance benefits paid to her mother-in-law, to which she knew she was not entitled. Mulligan continued to receive these funds after her mother-in-law died on December 30, 2000.

The case was investigated by the Social Security Administration’s Office of the Inspector General. Special Assistant U.S. Attorney Nicole Dana prosecuted.

WASHINGTON – The Justice Department announced today that First United Bank, of Dimmitt, Texas, will maintain uniform pricing policies, conduct employee training and pay $140,000 as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of national origin.

The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Northern District of Texas. The complaint alleges that First United Bank charged higher prices on unsecured consumer loans made to Hispanic borrowers in violation of the Equal Credit Opportunity Act (ECOA).

“The Civil Rights Division is committed to ensuring that lenders price all types of loans based on appropriate credit factors and not based on prohibited factors such as national origin,” said Acting Assistant Attorney General Vanita Gupta for the Justice Department’s Civil Rights Division. “We commend First United Bank for implementing a system of loan pricing that provides objective guidance to the bank’s employees.”

The lawsuit originated from a referral by the Federal Deposit Insurance Corporation (FDIC) to the Civil Rights Division. First United Bank is a member of the FDIC.

Under the settlement, First United Bank will pay a total of $140,000 to compensate hundreds of victims of discrimination, monitor its loans for potential disparities based on national origin and provide equal credit opportunity training to its employees. First United Bank will also maintain its revised pricing policies to ensure that the price charged for its loans is set in a non-discriminatory manner consistent with the requirements of ECOA. The agreement also prohibits the bank from discriminating on the basis of national origin in any aspect of a credit transaction.

“This district is committed to ensuring banks and other lending institutions do not discriminate against borrowers on the basis of national origin,” said Acting U.S. Attorney John Parker for the Northern District of Texas. “I join the Acting Assistant Attorney General in recognizing First United Bank’s cooperation in accomplishing this settlement that will compensate hundreds of victims of this discrimination.”

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 36 lending matters under the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The settlements in these matters provide for over $1.2 billion in monetary relief for impacted communities and individual borrowers. The Attorney General’s annual reports to Congress subject to ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publication.

The Civil Rights Division and the FDIC are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov .

A copy of the complaint and proposed order, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department website at www.justice.gov/fairhousing.

DALLAS — Jason Allen Neff, 34, was sentenced yesterday by U.S. District Judge Sam A. Lindsay to serve a total of 60 months in federal prison and ordered to pay $79,440 in restitution, following his guilty plea in a “swatting” case last summer, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Swatting refers to falsely reporting an emergency to a police department to cause a Special Weapons and Tactics (SWAT) response to a physical address, or making a false report to elicit an emergency response by other first responders to a specific physical address.

Neff has been in custody since FBI special agents arrested him in April 2011 on charges outlined in a related criminal complaint filed in the Northern District of Texas in September 2010.

Neff, also known as “Crazy J,” is from Omaha, Nebraska, although he was living in Jackson, Missouri at the time of his arrest. Neff pleaded guilty to one count of aiding and abetting the conspiracy to use access devices to modify telecommunications instruments and to make unauthorized access to protected telecommunications computers and one count of obstruction by retaliating against a witness, victim or informant.

According to documents filed in the case, Neff, along with previously charged and convicted co-conspirators Guadalupe Martinez, Stuart Rosoff, Jason Trowbridge, Chad Ward, Matthew Weigman, Angela Roberson and others, were members of, and participated in, telephone chat/party lines in which they made, or facilitated the making of, swatting 911 calls. They concealed the true caller ID and made false reports of violent crimes to elicit a police SWAT response to the targeted members of the telephone chat/party line, their family members, and associated persons.[1]

Neff participated in multiple telephone party line chat groups (party lines) that conspirators and thousands of other callers frequented. Participants in these party lines generally used pseudonyms or nicknames to protect their identities, and they would often be rude and obnoxious to antagonize other party line participants, other conspirators and their families.

Neff, along with Martinez, Rosoff and Weigman, according to the indictment, were “phone phreakers,” using social engineering or subterfuge to acquire sensitive information from telephone service providers. That sensitive information enabled them to exploit telephone network computer service by obtaining subscriber information; altering billing information and service plans; redirecting, changing service charges, and discontinuing telephone service; monitoring or taping telephone lines; and obtaining telephone company security policies and procedures.

In May 2006, Neff obtained publicly available voter information about another party line member and provided it to co-conspirator Roberson so she could repeat the information in the party line. Neff knew the information could be used for harassment.

A few days later, Neff obtained identifying information about another party line member with whom co-conspirator Roberson was upset. Neff listened in on a three-way phone call made from a private room on the party line where co-conspirator Rosoff used information that Roberson provided in order to social engineer an SBC employee and obtain the caller’s current phone number and address. That information was verified and used to prompt a neighbor of the caller to respond to a false request for assistance.

In January 2007, Neff confronted a party line member, “SP,” about her providing what he claimed was misleading and inaccurate information to the FBI regarding his ownership of a party-line related website, which he did not own, and his being a member of the group that had previously swatted her. Neff threatened her on the party line, stating, “snitches get stitches.” Neff made the threats to intimidate SP and to retaliate against her for providing information about him to the FBI.

The FBI investigated the case. Assistant U.S. Attorney C.S. Heath prosecuted.

[1] Martinez sentenced in March 2008 to 30 months; Rosoff sentenced in May 2008 to 60 months; Trowbridge sentenced in May 2008 to 60 months; Ward sentenced in May 2008 to 60 months; Weigman sentenced in June 2009 to 135 months; and Roberson sentenced in July 2008 to 30 months.

LUBBOCK, Texas — Seven defendants charged with various offenses stemming from their respective roles in a methamphetamine distribution conspiracy have pleaded guilty, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Today, the last defendant charged in the case entered a guilty plea. Flor Angelica Bustillos, 26, of Phoenix, Arizona, pleaded guilty, before U.S. District Judge Sam R. Cummings, to one count of unlawful use of a communication facility. She faces a statutory maximum penalty of four years in federal prison and a $250,000 fine.

Last month, Gregorio Hernandez-Perez, 27, pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine. He faces a maximum statutory penalty of life imprisonment, a $10 million fine and a life term of supervised release.

According to plea documents filed in the case, on July 16, 2014 search warrants were executed at multiple locations in Lubbock County, including, Hernandez-Perez’s residence in Slaton, Texas, after law enforcement in Lubbock, Texas, seized 4.47 kilograms of methamphetamine attributable to Hernandez-Perez. During the execution of the search warrant, law enforcement seized surveillance cameras, drug ledgers, drug trafficking paraphernalia, wire transfer receipts, and a handgun. During the arrest of Hernandez-Perez, an additional handgun was found in his possession.

Each of the four below-listed defendants pleaded guilty in October 2014 to one count of possession with intent to distribute methamphetamine and aiding and abetting. Each faces a statutory maximum penalty of 20 years in federal prison and a $1 million fine.

Haylie Nicole Moreno, 26, of Lubbock

Jesus Adrian Murillo-Angulo, 21, of Lubbock

Michael Alvarado Garcia, 42, of Lubbock

Miguel Angel Ruiz-Cabanillas, 30, of Lubbock

Edward Adam Rodriguez, 23, of Lubbock, pleaded guilty on October 31, 2014, to one count of possession of a firearm in furtherance of a drug trafficking crime and aiding and abetting. He faces a statutory maximum penalty of life in federal prison and a $250,000 fine.

Natividad Gumaro Lopez-Guzman, 48, of Phoenix, pleaded guilty October 17, 2014, to one count of conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine. He faces a statutory maximum penalty of life in federal prison and a $10 million fine.

Presentence investigation reports have been ordered for all defendants; sentencing dates will be set after the completion of those reports.

The Bureau of Alcohol, Tobacco, Firearms and Explosives, Lubbock County Sheriff’s Office, Lubbock Police Department, Texas Department of Public Safety, United States Border Patrol, Department of Homeland Security, and Maricopa County Sheriff’s Office investigated.

Assistant U.S. Attorney Justin Cunningham is prosecuting the case.

LUBBOCK, Texas — Nine defendants convicted for their respective roles in a large cocaine distribution conspiracy that operated in Lubbock, Odessa, and Borger, Texas, have been sentenced, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

The last defendant to be sentenced in the case, Javier Lopez Lujan, 47, most recently of Odessa, was sentenced this morning by U.S. District Judge Sam R. Cummings to 120 months in federal prison.

Other defendants were sentenced as follows:

Manuel Carrillo Ortiz, 38, 46 months

Martin Cardona Gutierrez, 46, 168 months

Refugio Navarrete Gutierrez, 34, 70 months

Efren Fabela Lopez, 34, 6 months

Jerardo Salcedo Garcia, 27, 37 months

Ismael Velasco, 36, 48 months

Israel Velasco, 36, 70 months

During the investigation, law enforcement seized approximately 15 kilograms of cocaine, $200,000.00 in drug proceeds, and 10 firearms in Lubbock, Odessa, and Borger.

The investigation was conducted by the Lubbock County Sheriff’s Office, Ector County Sheriff’s Office, Midland Police Department, Texas Department of Public Safety, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration and the U.S. Border Patrol.

Assistant U.S. Attorney Justin Cunningham prosecuted.

DALLAS — A Dallas man, who admitted committing the armed robberies of insurance companies in Dallas last year, received a lengthy federal prison sentence today, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Michael Dewayne Cleveland, 31, was sentenced this morning by U.S. District Judge Ed Kinkeade to 420 months (35 years) in federal prison. Cleveland pleaded guilty in June 2014 to four of seven counts charged in an indictment returned by a federal grand jury in Dallas in December 2013. Specifically, Cleveland pleaded guilty to two count of interference with commerce by robbery and two counts of carrying or possessing a firearm during and in relation to a crime of violence.

According to plea documents filed in the case, Cleveland admitted entering a Baja Insurance company office in Dallas on September 3, 2013, approaching an employee with a gun drawn and demanding money. He admitted stating, “Tell me where it’s at or I’m gonna kill you.” The employee, in fear for her life, pointed to a desk drawer. Cleveland, later dubbed the “Baja Bandit,” took the money from the drawer and left the location.

Cleveland also admitted entering a State Farm Insurance company office in Dallas on September 18, 2013, pulling out a gun, pointing it at employees and demanding money. Two employees, in fear for their lives, complied with Cleveland’s demands. Cleveland took money and credit cards from the business and fled.

Baja Insurance lost money as a direct result of the robbery, temporarily closed its office and lost several employees who feared for their safety. The State Farm office also lost money as a direct result of the robbery, temporarily closed its office and the branch made less in overall monthly proceeds. The robberies had a direct effect on both company’s revenue and commerce.

The FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives and the Dallas Police Department investigated the case. Assistant U.S. Attorney Taly Haffar prosecuted.

DALLAS — A North Texas man who pleaded guilty to his role in a stolen identity refund fraud conspiracy was sentenced yesterday, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

Tonderai Sakupwanya was sentenced to 87 months in federal prison and ordered to pay more than $2.6 million in restitution. Sakupwanya, who is in custody, pleaded guilty in May 2014 to one count of theft of public funds.

Co-defendant Reminico Zhangazha, also in custody, pleaded guilty to the same offense and is awaiting sentencing. He faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Restitution could be ordered.

The plea agreements with the government note that the defendants will forfeit the following property seized by law enforcement in May 2012 during the investigation of this case: $10,613 cash seized from Zhangazha’s vehicle; $93,513 cash from Villa Piana Luxury Apartments on Noel Road in Dallas; and $4,500 from a residence on Spring Mountain in Plano, Texas.

According to the factual resumes filed in the case, Zhangazha and Sakupwanya engaged in a scheme to defraud the Internal Revenue Service (IRS) by obtaining stolen tax refunds that were generated by e-filing false and fraudulent income tax returns. They rented private mailboxes in the names of aliases by using forged United Kingdom passports. They then established bank accounts using the alias names and mailing addresses acquired at the private mailboxes. During the course of the scheme, Zhangazha used the aliases of “Martin V. Masters” and “Roy Daniel Black.” Sakupwanya used the aliases of “Webster G. Rice,” “Floyd Robbins,” and “Floyd Roberts,” during the scheme, according to the factual resume.

According to the factual resumes, the Forms 1040 directed the IRS to electronically deposit the refunds into bank accounts the defendants established. Alternatively, the Forms 1040 directed refunds to be issued by a treasury check and mailed to an address under the control of the defendants. The income tax returns also directed refunds to accounts established at a third-party financial services company, such as EPS Financial, that would enable them to issue a check containing the tax refund. These third party checks and the treasury checks were deposited into bank accounts the defendants established. After the checks were deposited, or the tax refunds were electronically deposited, the defendants would withdraw the funds for their own use and benefit. The factual resumes note that the cash, mentioned above, which was seized from the defendants during the investigation, was obtained by them as a result of their scheme.

The case was investigated by IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Chris Stokes is in charge of the prosecution.

DALLAS — Leroy Nelson, 61, of DeSoto, Texas, was sentenced yesterday by U.S. District Judge Sam A. Lindsay to 108 months in federal prison and ordered to pay $4,973,046 in restitution for his role in a staged accident fraud scheme, announced Acting U.S. Attorney John Parker of the Northern District of Texas.

Nelson pleaded guilty in March 2014 to one count of mail fraud and one count of engaging in illegal monetary transactions. According to the plea agreement in the case, Nelson agreed to forfeit several vehicles, a motor home, a boat and trailer and real estate in Duncanville and Cooper, Texas.

According to the factual resume filed in the case, beginning in 2005 and continuing through 2012, Nelson engaged in a scheme to defraud automobile insurance companies by fabricating and submitting false and fraudulent claims for damage to technical equipment damaged in fictitious road accidents.

As part of the scheme, Nelson promised cash payments to individuals he recruited for them to falsely report to their automobile insurance company that, while driving, they inadvertently damaged a piece of equipment. Typically, the individual would falsely report that while driving, he or she had either rear-ended a trailer pulling equipment, or swerved to avoid something in the road and collided with equipment on the side of the road. Nelson would instruct the individual on how to make the telephone call to the insurance company.

Nelson then prepared and submitted the claims for property damage in the name of a “DBA” he created. The claim would include a photo of the equipment and a fictitious repair estimate that Nelson prepared. The damaged equipment was described as very technical in nature, such as: a “Remote Aircraft Landing Marker,” a “chemical Pipeline Examiner” or a “Seismographic Probe.” . The claimed repair expenses would usually be from $16,000 to $19,000.

Nelson opened private mailboxes in states including Minnesota, Missouri, Washington, Arizona, Connecticut and Louisiana to receive the insurance checks. The mailboxes were opened under an assumed business name that Nelson used as the owner of the damaged equipment in the claims. Nelson also used the addresses of two warehouses on Explorer Street in Dallas, and directed that mail received at the private mailboxes be forwarded to one of those two addresses.

The cumulative total of the insurance claims prepared and submitted to insurance companies by Nelson from 2005 to 2012 totaled approximately $5 million.

This investigation was brought to the attention of federal law enforcement by the National Insurance Crime Bureau (NICB) and Farmers Insurance Group, Special Investigations. The FBI, Internal Revenue Service Criminal Investigation and U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorney Christopher Stokes prosecuted.

DALLAS — Andrew Lee Siegel, a Dallas attorney, appeared this morning before U.S. Magistrate Judge Irma C. Ramirez and pleaded guilty to Count Two of a Superseding Information charging mail fraud, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.

In July 2014, Siegel pleaded guilty to one count of felony criminal infringement of a copyright – Count One of the Superseding Information.

Siegel, 54, faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine, or twice any pecuniary gain to the defendant or loss to the victim, on the mail fraud conviction and five years and a $250,000 fine on the criminal infringement conviction. Restitution may be ordered. Siegel remains on bond pending sentencing, which is set for April 22, 2015, before U.S. District Judge Ed Kinkeade.

In fall 2010, Siegel established Dynasty Spirits, LLC, and later Dynasty Spirits, Inc. and Speak Easy Distillers, LLC, to facilitate the production and bottling of “Nue Vodka.” In February 2012, Siegel created a private placement memorandum for Dynasty Spirits, Inc. (Dynasty) authorizing the sale of up to $2 million of common stock shares by Dynasty. In June 2013, Siegel became the registered agent and manager of Vanguard Spirits, LLC, which was established for the purpose of distilling, branding and marketing “Vanguard Vodka.”

From September 2011 through July 2012, Siegel collected approximately $1,595,000 from 35 investors for the sale of Dynasty stock certificates. Siegel concealed from Dynasty owners that he unlawfully used up to $410,000 of that amount for his personal benefit, which he had collected from no more than six of the 35 investors.

In November 2012, Dynasty owners suspected Siegel had unlawfully used investor funds, and when confronted, Siegel falsely stated that he had attempted to wire $185,000 in investor funds to Dynasty but the transfer was misrouted. The following month, Siegel created fraudulent and fictitious emails to Dynasty owners representing he attempted to wire transfer $185,000 from his bank account to the Dynasty owners’ bank account. Some of the fraudulent emails Siegel created contained copyrighted writings and the logo of The Northern Trust Company.

Later that month, Siegel created another fraudulent email to Dynasty owners that contained copyrighted writings, letterhead and logos of the Federal Reserve Bank Services. In fact, Siegel used several fraudulent and fictitious emails that falsely represented to Dynasty owners that he was in contact with The Northern Trust Company and the Federal Reserve Bank Services in connection with his “attempted” $185,000 wire transfer to the Dynasty owners. Siegel engaged in this fraudulent conduct to deceive the owners of Dynasty and convince them that he was making a good faith effort to transfer investor funds to the investors of Dynasty.

On June 24, 2013, Siegel fraudulently disbursed $210,000 from a client’s (EP) escrow account to use as part of a legal settlement payment to owners of Dynasty Spirits. Those owners were the victims in Siegel’s infringement conviction. Siegel continued to fraudulently disburse funds from EP’s escrow account through November 2014.

On May 21, 2014, Siegel reimbursed EP by fraudulently and secretly disbursing $285,310 of Vanguard Spirits investor funds. Siegel concealed this fraudulent disbursement of Vanguard investor funds from Vanguard investors and management.

When Siegel pleaded guilty to Count One in July 2014, he made no admission or reference to his fraudulent disbursement of funds from both EP’s escrow account and from Vanguard Spirits’ investor funds.

The FBI is investigating, and Assistant U.S. Attorney David L. Jarvis is in charge of the prosecution.

FORT WORTH, Texas — A local chiropractor, who was convicted at trial on felony offenses stemming from his involvement in a health care fraud case, was sentenced this morning, announced John R. Parker, Acting U.S. Attorney for the Northern District of Texas.

Dr. Abbas Zahedi, 49, of Carrollton, Texas, was sentenced by U.S. District Judge Reed C. O’Connor to serve 145 months in federal prison and ordered to pay approximately $2.4 million in restitution. He was convicted at trial in June 2014 on all counts of a superseding indictment charging one count of conspiracy to commit health care fraud, five counts of health care fraud and four counts of aggravated identity theft. Dr. Zahedi, who has been in custody since his conviction, owned and operated DFW Rehab & Diagnostics.

Five other defendants convicted in the case have also been sentenced.

Reginald Guy, 44, of Arlington, Texas, was sentenced to serve 156 months in federal prison and ordered to pay approximately $2.4 million in restitution. He was convicted at trial on the same offenses as Dr. Zahedi. Guy was a factory worker in Arlington, and from approximately 2003 until November 2009, when his employment was terminated, he served as a union representative.

Guy used that union position to recruit and refer his co-workers to DFW Rehab & Diagnostics, which was operated from the office of Metroplex DFW Sports Rehab Center in Arlington, and then later from a stand-alone location in Grand Prairie, Texas. In exchange for monthly kickbacks, work excuse notes and a variety of prizes, the workers agreed to allow their insurance companies to be billed for services they did not receive.

From 2009 to 2012, Dr. Zahedi, Guy, and their four codefendants conspired to submit health insurance claims to Blue Cross Blue Shield of Texas (BCBS) and other insurers for services not rendered. These four coconspirators, James Sterns, Tina Perkins, Donna Harris and Gregory Wattron, cooperated with the government in the investigation and testified against Zahedi and Guy at their trial.

Sterns, 50, of DeSoto, Texas, was sentenced to 10 months in federal prison and ordered to pay approximately $2.2 million in restitution. Sterns owned and operated Metroplex. In early 2010, Sterns hired Guy to be the office manager of Metroplex, where he worked in that position to mid-2011, shortly before the clinic closed. In March or April 2011, Dr. Zahedi hired Guy to work as a consultant at the clinic’s Grand Prairie location. After Guy began working for Dr. Zahedi, Guy helped transfer patients and patient information to Dr. Zahedi, and the fraudulent referral and billing scheme continued.

Perkins, 43, of Dallas, was sentenced to 10 months in federal prison and was ordered to pay approximately $2.4 million in restitution. Perkins worked as the biller and office consultant for Dr. Zahedi and was responsible for submitting claims to insurance companies.

Perkins’ sister-in-law, Donna Harris, 43 of Haltom City, Texas, was sentenced to eight months in federal prison and was ordered to pay approximately $2 million in restitution. Harris permitted the clinic, in exchange for cash payments, to submit claims to BCBS for services purportedly performed by Dr. Zahedi and Wattron, when in fact she received no treatment. Then, in early 2011, Dr. Zahedi hired Harris to be the office manager at the Grand Prairie location. There, she continued to allow Dr. Zahedi to submit claims under her name to BCBS for services that were not performed. Harris also permitted Dr. Zahedi to submit claims to BCBS for Harris’ immediate and extended family members for services they did not receive.

Wattron, 56, of Grapevine, Texas, was sentenced to six months in federal prison and was ordered to pay approximately $1.3 million in restitution. He worked as an occupational therapist at the clinic from approximately 2008 until August 2011. Wattron agreed to allow Sterns and Dr. Zahedi bill insurance companies for occupational therapy that he did not perform.

The FBI and the Office of Personnel Management - Office of Inspector General investigated. Assistant U.S. Attorney Nancy Larson and Special Assistant U.S. Attorney Douglas Brasher prosecuted the case.

FORT WORTH, Texas — A local chiropractor, who was convicted at trial on felony offenses stemming from his involvement in a health care fraud case, was sentenced this morning, announced John R. Parker, Acting U.S. Attorney for the Northern District of Texas.

Dr. Abbas Zahedi, 49, of Carrollton, Texas, was sentenced by U.S. District Judge Reed C. O’Connor to serve 145 months in federal prison and ordered to pay approximately $2.4 million in restitution. He was convicted at trial in June 2014 on all counts of a superseding indictment charging one count of conspiracy to commit health care fraud, five counts of health care fraud and four counts of aggravated identity theft. Dr. Zahedi, who has been in custody since his conviction, owned and operated DFW Rehab & Diagnostics.

Five other defendants convicted in the case have also been sentenced.

Reginald Guy, 44, of Arlington, Texas, was sentenced to serve 156 months in federal prison and ordered to pay approximately $2.4 million in restitution. He was convicted at trial on the same offenses as Dr. Zahedi. Guy was a factory worker in Arlington, and from approximately 2003 until November 2009, when his employment was terminated, he served as a union representative.

Guy used that union position to recruit and refer his co-workers to DFW Rehab & Diagnostics, which was operated from the office of Metroplex DFW Sports Rehab Center in Arlington, and then later from a stand-alone location in Grand Prairie, Texas. In exchange for monthly kickbacks, work excuse notes and a variety of prizes, the workers agreed to allow their insurance companies to be billed for services they did not receive.

From 2009 to 2012, Dr. Zahedi, Guy, and their four codefendants conspired to submit health insurance claims to Blue Cross Blue Shield of Texas (BCBS) and other insurers for services not rendered. These four coconspirators, James Sterns, Tina Perkins, Donna Harris and Gregory Wattron, cooperated with the government in the investigation and testified against Zahedi and Guy at their trial.

Sterns, 50, of DeSoto, Texas, was sentenced to 10 months in federal prison and ordered to pay approximately $2.2 million in restitution. Sterns owned and operated Metroplex. In early 2010, Sterns hired Guy to be the office manager of Metroplex, where he worked in that position to mid-2011, shortly before the clinic closed. In March or April 2011, Dr. Zahedi hired Guy to work as a consultant at the clinic’s Grand Prairie location. After Guy began working for Dr. Zahedi, Guy helped transfer patients and patient information to Dr. Zahedi, and the fraudulent referral and billing scheme continued.

Perkins, 43, of Dallas, was sentenced to 10 months in federal prison and was ordered to pay approximately $2.4 million in restitution. Perkins worked as the biller and office consultant for Dr. Zahedi and was responsible for submitting claims to insurance companies.

Perkins’ sister-in-law, Donna Harris, 43 of Haltom City, Texas, was sentenced to eight months in federal prison and was ordered to pay approximately $2 million in restitution. Harris permitted the clinic, in exchange for cash payments, to submit claims to BCBS for services purportedly performed by Dr. Zahedi and Wattron, when in fact she received no treatment. Then, in early 2011, Dr. Zahedi hired Harris to be the office manager at the Grand Prairie location. There, she continued to allow Dr. Zahedi to submit claims under her name to BCBS for services that were not performed. Harris also permitted Dr. Zahedi to submit claims to BCBS for Harris’ immediate and extended family members for services they did not receive.

Wattron, 56, of Grapevine, Texas, was sentenced to six months in federal prison and was ordered to pay approximately $1.3 million in restitution. He worked as an occupational therapist at the clinic from approximately 2008 until August 2011. Wattron agreed to allow Sterns and Dr. Zahedi bill insurance companies for occupational therapy that he did not perform.

The FBI and the Office of Personnel Management - Office of Inspector General investigated. Assistant U.S. Attorney Nancy Larson and Special Assistant U.S. Attorney Douglas Brasher prosecuted the case.

DALLAS, Texas —Sarah R. Saldaña has announced her resignation as United States Attorney for the Northern District of Texas, effective immediately. She was nominated by President Barack Obama to be Assistant Secretary of the U.S. Department of Homeland Security on August 28, 2014 and was confirmed by the United States Senate on December 16, 2014. The President signed her commission last Thursday, December 18, and the Honorable Chief District Judge Jorge Solis administered the oath of office to her this afternoon.

“I am overwhelmed by the outpouring of good wishes and kind remarks from the North Texas law enforcement and citizen community,” Saldaña said. “I have never had a greater privilege than to serve this community as United States Attorney. And at this particular time, when the perils faced by law enforcement are heightened even beyond that which they face every day, I offer my utmost gratitude and admiration for the extraordinary service provided by police departments, sheriff’s offices, and all state and federal officers everywhere, particularly those with whom I have served side-by-side for the last 10 years in the 100 counties of this district.”

Saldaña has served as United States Attorney for the Northern District of Texas since September 29, 2011. Prior to that appointment, she served as Deputy Criminal Chief of the District’s Major Fraud/Public Corruption Section, having joined the office in 2004. As United States Attorney, Saldaña has directed some of the most high-profile and successful prosecutions in the country. Moreover, faced with significant challenges during her tenure, including hiring freezes, an unprecedented sixteen-day government shutdown, and new Department of Justice policies aimed at managing limited resources on the most important federal law enforcement priorities, Saldaña’s office actually increased the number of cases prosecuted by 51% from 2011 to 2014.

Most recently, Saldaña served on the Attorney General’s Advisory Committee as one of 17 United States Attorneys appointed by the AG to advise him on policy, management and operational issues affecting the Department of Justice.

From 1985 to 1999, Saldaña was an Attorney at Haynes and Boone, LLP and Baker Botts LLP. She clerked for Judge Harold Barefoot Sanders in U.S. District Court for the Northern District of Texas from 1984 to 1985. From 1974 to 1981, she worked for several federal agencies including the Equal Employment Opportunity Commission, the Department of Labor, and the Department of Housing and Urban Development. She received her J.D. from Southern Methodist University and her B.A. from Texas A&I University.

Upon Saldaña’s departure, First Assistant United States Attorney John R. Parker will be appointed Acting United States Attorney until a new United States Attorney is selected.

The United States Attorney’s Office for the Northern District of Texas has prosecutive responsibility over 100 counties in the northern and western areas of Texas, encompassing nearly 96,000 square miles and a population in excess of seven million. The District is headquartered in Dallas and has staffed offices in Fort Worth, Lubbock, Abilene, and Amarillo, Texas.

DALLAS — A former youth minister in Garland, Texas, was indicted by a federal grand jury in Dallas yesterday on child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Derek Hutter, 37, was charged with one count of attempted production of child pornography and one count of receipt of child pornography. He was arrested on those charges and entered a plea of not guilty before U.S. Magistrate Judge Paul D. Stickney on December 18, 2014.

Hutter worked as a youth minister at the South Garland Baptist Church.

The indictment alleges that on approximately August 14, 2014, Hutter sent an email to Jane Doe #1, a minor girl, requesting she take sexually explicit photos of herself and text them to him. The indictment further alleges that on approximately September 14, 2014, Hutter received images of child pornography on his email account.

An indictment is an accusation by a federal grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the statutory penalty for the attempted production count is not less than 15 or more than 30 years in federal prison and not less than five or more than 20 years on the receipt count. In addition, each count carries a maximum statutory fine of $250,000 and a lifetime of supervised release.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HIS) and the Garland Police Department investigated. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

LUBBOCK, Texas — A 54-year-old Lubbock man appeared in federal court today and pleaded guilty to one count of possession of prepubescent child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Roberto Garcia, who is on bond, faces a maximum statutory penalty of 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. U.S. District Judge Sam R. Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.

According to plea documents filed in the case, Garcia used a computer at his residence to, among other things, search for images and videos of child pornography. In the course of his searches, Garcia located, downloaded and viewed numerous images and videos constituting child pornography. He saved the material onto the computer’s hard disk drive. Some of the numerous images of child pornography that Garcia saved involved prepubescent minors.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The Department of Homeland Security, Homeland Security Investigations, investigated. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.

LUBBOCK, Texas — A 27-year-old Shallowater, Texas, man appeared in federal court today and pleaded guilty to one count of possession of prepubescent child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Michael Wayne Brown, who is in custody, faces a maximum statutory penalty of 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. U.S. District Judge Sam R. Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. Brown was taken into custody last month during the investigation of the case, and remains in custody pending sentencing.

According to documents filed in the case, Brown owned various telephones and electronic devices, and he stored pornographic images on some of them, including an 8GB Sandisk memory card. On that memory card, Brown stored numerous images of child pornography, some of which involved prepubescent minors.

The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about Internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”

The Lubbock Police Department Internet Crimes Against Children (ICAC) Task Force and the FBI investigated. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.