Northern District of Texas

DALLAS — A federal grand jury has returned a six-count superseding indictment charging three Dallas residents with conspiracy to obstruct justice and related felony offenses stemming from the arrest and subsequent trial last month of one of the defendants on a federal firearm offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Chaddrick Darrion Ashley, 25, Daisy Emerson, 24, and Ofelia Nunez, 19, are each charged with one count of conspiracy to obstruct justice. The indictment also charges Ashley with one count of possession of a firearm by a convicted felon. Emerson is also charged with one count, and Nunez with three counts, of making a false declaration before the Court. Ashley is in federal custody and Nunez is on pretrial release. Emerson is expected to surrender to federal authorities this week.

According to the indictment, Ashley was arrested on March 26, 2014, for possession of a firearm by a felon. The indictment alleges that shortly after his arrest, Ashley conspired with Emerson and Nunez to execute a false affidavit, claiming the gun Ashley was charged with belonged to Nunez. Nunez executed a false affidavit, and testified at Ashley’s trial last month on that charge, that she was riding in the car with her boyfriend, and they picked up Ashley and another friend. Nunez exited the vehicle and discovered she left her gun in the car. Nunez also claimed she did not know Ashley. Emerson also testified at Ashley’s trial, claiming she did not participate in assisting Nunez file the false affidavit. At the time, Ashley, Emerson and Nunez were living together in an apartment in Dallas.

An indictment is an accusation by a grand jury. A defendant is presumed innocent unless found guilty beyond a reasonable doubt. If convicted, however, each defendant faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine on the conspiracy to obstruct justice charge. Each count of false statements before the Court carries a maximum statutory penalty of five years in federal prison and a $250,000 fine. The possession of a firearm by a felon offense carries a penalty of 15 years to life in federal prison and a $250,000 fine.

The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case.

DALLAS — U.S. Attorney Sarah R. Saldaña, of the Northern District of Texas, announced today that she has appointed four Assistant U.S. Attorneys (AUSAs) to serve as District Election Officers (DEOs) in the Dallas, Fort Worth, Abilene, Lubbock, and Amarillo, Texas, offices. These DEOs will lead the efforts of her Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 4, 2014, general elections. As DEOs, AUSAs Errin Martin, Chris Wolfe, Juanita Fielden, Steve Sucsy, and Tim Hammer are responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.

U.S. Attorney Saldaña said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice is committed to protecting the integrity of the election process.”

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

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

The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 4, 2014, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Saldaña stated that each of the DEOs will be on duty while the polls are open, and may be contacted at the following telephone numbers:

Dallas AUSA Errin Martin 214-659-8838

Fort Worth AUSA Chris Wolfe 817-252-5221

Abilene AUSA Juanita Fielden 325-672-8160

Lubbock AUSA Steve Sucsy 806-472-7564

Amarillo AUSA Tim Hammer 806-324-2345

In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on Election Day. The Dallas FBI office can be reached by the public at 972-559-5000.

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

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

DALLAS — A federal jury in Dallas has convicted two brothers on multiple felony offenses stemming from their operation of a dangerous, designer synthetic drug trafficking organization, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Following a nearly two-week trial before U.S. District Judge Jane J. Boyle, Barry Bays, 43, and his brother, Jerad Coleman, 28, both of Fort Wayne, Indiana, were convicted on all counts of a fourth superseding indictment returned by a federal grand jury in July 2014. The charges stem from the Drug Enforcement Administration’s (DEA) Project Synergy that targeted these synthetic drug trafficking organizations.

Specifically, Bays and Coleman were each convicted on one count of conspiracy to defraud the U.S. Food and Drug Administration (FDA); one count of conspiracy to commit mail fraud; and one count of conspiracy to distribute a controlled substance analogue. In addition, Bays was also convicted on one count of possessing a firearm in furtherance of a drug trafficking crime and one count of using a communication facility to facilitate a drug felony.

Seven other defendants charged in the case have pleaded guilty to their respective roles: Samuel Madeley, 22, of Denton, Texas; David Muise, 23, of Londonderry, New Hampshire; Holden Bownds, 23, of Denton; and Aaron Parrish, 31, Jennie Miller, 41, Kyle Boyer, 31, and Brandon Zerler, 26, all of Fort Wayne. Miller was sentenced to 12 months and one day in federal prison for acting as a “straw purchaser” of the firearm possessed by Bays during the drug conspiracy. The other defendants are scheduled to be sentenced in the upcoming months.

Bays owned Little Arm, Inc., that did business as B&B Distribution (B&B) in Fort Wayne and then later in Defiance, Ohio. B&B sold products marketed as “incense,” “potpourri,” “air freshener,” or “aroma therapy products,” which claimed to be “not for human consumption,” to businesses in at least 38 states. Coleman served as a corporate officer for B&B and held various positions within the business.

The government presented evidence that during the conspiracy, Bays, Coleman and others conspired together to defraud the FDA by introducing or delivering an adulterated or misbranded drug into interstate commerce with the intent to defraud or mislead. As part of the conspiracy, Bays, Coleman and others possessed, packaged, labeled, marketed, distributed and sold substances containing various synthetic cannabinoids throughout the U.S. Synthetic cannabinoids are defined as “drugs” under the Federal Food, Drug, and Cosmetic Act (FDCA).

After acquiring the synthetic cannabinoids, Bays and B&B had them mixed with a green leafy (smokable) plant material to create a product commonly referred to as “spice.” That substance was then packaged and labeled with brand names such as “B2 Da Bomb,” “V8,” “Roses,” and “Street Legal.” The products were then sold to customers throughout the U.S. as “incense,” “potpourri,” “air freshener,” or “aroma therapy products,” and “not for human consumption,” when in fact, they were intended for human consumption as a drug.

During trial, the government introduced evidence that Bays had contracted with Muise for Muise to create multiple YouTube videos, reviewing Bays’ “spice” products. Muise’s reviews documented the intended use of Bays’ products as drugs.

Madeley and Bownds collaborated and collectively brokered the sale of Scheduled I controlled substance analogues. They solicited customers via the internet and knew the chemicals they were brokering were being used to produce “spice” intended for human consumption. Madeley and Bownds made multiple sales to Bays and B&B, where he made his own brands of synthetic “spice” and distributed it to various “smoke shops” and convenience stores throughout the U.S.

Bays and Coleman remain in federal custody. A sentencing date has not been set.

The maximum statutory penalties are: conspiracy to defraud the U.S. – three years and a $250,000 fine; conspiracy to commit mail fraud – 20 years and a $250,000 fine; conspiracy to distribute a controlled substance analogue – 20 years and a $1 million fine; possession of a firearm in furtherance of a drug trafficking crime – mandatory five years and a $250,000 fine; and use of a communication facility to facilitate a drug felony – four years and a $250,000 fine. The indictment also includes a forfeiture allegation that requires the defendants to forfeit their proceeds from the offenses as well as vehicles, a residence on Tillman Road in Fort Wayne, and approximately $437,000 in funds seized by the government during the investigation.

The DEA led the investigation with assistance from the Fort Wayne Police Department, Indiana State Police, and the Denton County Sheriff’s Office. Assistant U.S. Attorneys Brian Poe and Brandon McCarthy are prosecuting.

LUBBOCK, Texas — A 52-year-old League City, Texas, man appeared in federal court in Lubbock, Texas, this morning and pleaded guilty to a federal child obscenity offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Nilanjan Brahma pleaded guilty before U.S. District Judge Sam R. Cummings to one count of attempted transfer of obscene materials to a minor. He faces a maximum statutory penalty of 10 years in federal prison, a $250,000 fine, and three years of supervised release. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. Brahma remains on bond.

According to plea documents filed in the case, from approximately April 25, 2011, through February 19, 2012, Brahma engaged in a series of communications, via messaging, texting,, and telephone, with a person he believed to be a 13-year-old female, “Jane Doe,” who represented that she lived in Lubbock, Texas. In fact, Jane Doe was an undercover officer with the Lubbock Police Department.

On April 25, 2011, Brahma chatted with Jane Doe and sent her nine photographs. Five of those photographs depict an adult male engaged in sexually explicit conduct and are considered obscene.

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, the FBI, and the League City Police Department investigated the case. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.

FORT WORTH, Texas — A federal jury in Fort Worth, Texas, has convicted a husband and wife on multiple felony offenses stemming from their operation of a tax return preparation business in Tarrant County, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The trial began Monday morning before U.S. District Judge John McBryde.

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 convicted on all 18 counts of conspiracy, tax offenses and wire fraud as charged in a second superseding indictment returned by a federal grand jury in September 2014. Following the verdict late yesterday, Judge McBryde remanded them into federal custody.

The government presented evidence that Jacqueline, who is a Certified Public Accountant, and Gladstone Morrison conspired to willfully aid and assist in and advise the preparation and presentation to the Internal Revenue Service (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.

Specifically, Jacqueline and Gladstone Morrison were each convicted 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.

The conspiracy count carries a maximum statutory penalty of five years in federal prison and a $250,000 fine. Each count of aiding and assisting in the preparation and presentation of a false and fraudulent return carries a maximum statutory penalty of three years in federal prison and a $250,000 fine. Each count of wire fraud carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine. Restitution could also be ordered. Sentencing is set for February 6, 2015, before Judge McBryde.

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

DALLAS — Meliton Torres, 32, of Lancaster, Texas, was sentenced this afternoon by U.S. District Judge Ed Kinkeade to 80 months in federal prison following his guilty plea in September 2013 to one count of transporting and shipping child pornography. Judge Kinkeade remanded Torres, who had been on bond, into custody. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to plea documents filed in the case, Torres admitted using the Internet and file-sharing software to share and transmit images and video files of minors engaged in sexually explicit conduct. In March 2012, an officer with the Dallas Police Department’s Internet Crimes Against Children (ICAC) Unit, working online in an undercover capacity, downloaded images and videos from Torres’s shared files. On March 16, 2012, the Dallas Police Department executed a search warrant at Torres’s residence and seized computers and computer media, which were then analyzed by the North Texas Regional Computer Forensic Lab. More than 200 images and videos of child pornography were on the seized media. Of those, 23 images and 18 videos depicted victims who have been identified.

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 investigation was conducted by the Dallas Police Department’s ICAC and U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Camille Sparks prosecuted.

DALLAS — Two individuals who ran a tutoring business from offices located in Hurst, Texas, appeared in federal court today, before U.S. Magistrate Judge Paul D. Stickney, and pleaded guilty to federal offenses stemming from their fraudulent operation of that business, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Flori Mati, aka “Florine Shaw,” 42, and David Mbugua, 43, each pleaded guilty to one count of conspiracy to make false, fictitious or fraudulent claims. Each faces a statutory maximum penalty of five years in federal prison, a $250,000 fine and restitution. Following their arrests in March 2014, the Court determined they were flight risks and ordered them to remain in federal custody. Sentencing is set for February 20, 2015, before U.S. District Judge Barbara M. G. Lynn.

Under the No Child Left Behind Act of 2001, federal funds were distributed to state educational agencies, which in turn distributed them to school districts in the form of sub-grants. School districts used a portion of these federal dollars to fund a Supplemental Education Services (SES) program. That SES program provided extra academic assistance, such as tutoring, for eligible students at no cost. Tutoring providers billed the local school districts for the hours of tutoring provided and the school district paid for the tutoring with federal grant money.

For the 2011-2012 and 2012-2013 school years, the Dallas Independent School District (DISD) and the Fort Worth Independent School District (FWISD) each received sub-grants and offered an SES program to eligible students at eligible schools.

From 2011 through the beginning of August 2012, Mati, a former DISD teacher, and Mbugua formed four tutoring companies: Wise Links, LLC; Diverse Links, Inc.; Boost Academy and Avenue Academy. They operated all four entities as one business from offices located on West Bedford Euless Road in Hurst. Beginning in September 2011 and continuing through the end of May 2013, Mati and Mbugua contracted with DISD and FWISD, as well as other school districts in Texas, to provide tutoring services under the SES program.

Mati and Mbugua formed these four separate companies to hide their true ownership and mislead the Texas Education Agency into believing they were unrelated companies, and thus, obtain more SES business than a single company could obtain from the various school districts.

They also obtained as many student names as possible. Mati obtained student identifying information by using her online teacher access to the DISD network. Mati, Mbugua and their employees would also go door-to-door with gifts and prizes to induce students to sign up for their tutoring services, regardless of the students’ intent to attend. Mati, Mbugua and their empoyees would then use student information to mass enroll students, via the Internet, from their residence, their Hurst offices and even from Kenya. They falsified documentation supporting their fraudulent claims by inducing students to sign attendance logs for tutoring sessions they did not receive. They even recruited a friend and her children to complete false and forged attendance sheets.

During the course of their conspiracy, Mati, Mbugua and others submitted false claims to DISD, FWISD and other school districts in Texas, for tutoring services under the SES program that were not provided to students. They billed DISD $2,730,389, and they were paid $1,523,079. They billed FWISD $1,430,687, and they were paid $1,003,318. Approximately 75% of the total amounts billed – approximately $3,120,807 – was for services not provided. Mati and Mbugua wired some of the proceeds they received from these false claims to Kenya, beyond the reach of U.S. authorities.

The FBI and U.S. Department of Education – Office of Inspector General investigated. Assistant U.S. Attorneys Nancy Larson and Megan Fahey are prosecuting.

DALLAS — A man who admitted defrauding a couple from Wichita Falls, Texas, out of their life savings, was sentenced this morning in federal court in Wichita Falls, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Paul Eugene Prewitt, 44, most recently of Phoenix, Arizona, was sentenced by U.S. District Judge Reed C. O’Connor to the statutory maximum sentence of 60 months in federal prison and ordered to pay $242,250 in restitution. Judge O’Connor remanded Prewitt, who had been on bond, into federal custody. Prewitt pleaded guilty in May 2014 to a superseding information charging one count of conspiracy to commit wire fraud.

According to documents filed in the case, from February 2009 through at least 2012, Prewitt ran a scheme to defraud an elderly couple of their retirement savings through a series of fraudulent, false and fictitious investment opportunities. Prewitt admitted making false and fraudulent representations to the couple about investment opportunities, including a condominium project in Utah that did not even exist. As a result of Prewitt’s representations, the elderly victims wired or mailed all of their retirement savings to Prewitt, who used the money for personal expenses. Prewitt admitted that he never invested the money and that he received approximately $242,250 from the victims.

The case was investigated by the FBI, Wichita Falls Resident Agency, with special assistance from the FBI’s Phoenix Division. Assistant U.S. Attorney J. Nicholas Bunch prosecuted.

DALLAS — A Dallas man who attempted to rob a bank in Carrollton, Texas, last summer, and who led police on a vehicular chase, wrecked that vehicle and then entered a store to avoid apprehension, was sentenced this morning in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Michael Antonio Canez, aka Rudolph Rudy Casillas, 36, was sentenced by Chief U.S. District Judge Sidney A. Fitzwater to 84 months in federal prison. Canez pleaded guilty in January 2014 to one count of attempted bank robbery. He has been in custody since his arrest shortly after the attempted robbery.

According to documents filed in the case, on August 10, 2013, Canez entered Capital One Bank, located at 2603 Old Denton Road in Carrollton with the intent to rob it. After he entered the bank, he presented a note to a teller that stated, “Give me all of the money. I have a gun.” Canez had his right hand in his pocket as if he had a gun. The teller advised that his cash drawer was in the drive-through area and that he needed to walk there to retrieve the cash. The teller walked away, but when he did not return, Canez became upset and tried to get the teller’s attention by yelling, “Hey, Sir!”

A second teller approached Canez and offered assistance. Canez told her to get the first teller. When the second teller walked to the drive-through area, the first teller advised her of the robbery in progress. When neither returned, Canez jumped the teller counter, looked in the back of the bank, and then jumped back over the counter, leaving the bank without obtaining any cash.

Officers with the Carrollton Police Department observed Canez running from the bank and entering a pickup truck. He evaded apprehension and a vehicular chase ensued. During that evasion, he discarded a BB/pellet pistol that officers later recovered and he later admitted to having in his right pants pocket during the attempted robbery. Canez ultimately wrecked his truck in the parking lot of a Target store and he entered the store in an attempt to avoid apprehension. Inside the store, according to the complaint filed, Canez put on a shirt from the store, purchased beer and attempted to walk out of the store. He was arrested as he left the store.

The FBI and Carollton Police Department investigated. Assistant U.S. Attorney Keith Robinson prosecuted.

LUBBOCK, Texas — A 21-year-old Abilene, Texas, man appeared in federal court in Lubbock, Texas, this morning and pleaded guilty to a federal child pornography offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Reymundo Alejandro Sanchez pleaded guilty before U.S. District Judge Sam R. Cummings to one count of possession of child pornography. He faces a maximum statutory penalty of 10 years in federal prison, a $250,000 fine and a lifetime of supervised release. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. Sanchez remains on bond.

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.

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 is prosecuting the case.

DALLAS — A detective who worked in the Dallas Police Department’s (DPD) Vice Unit, Jose Luis Bedoy, 40, of Dallas, was convicted yesterday by a federal jury on all four counts of an indictment charging obstruction of official proceedings and obstruction of the due administration of justice, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Each of the three counts of obstruction of an official proceeding carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine. The one count of obstruction of due administration of justice carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Bedoy will remain on bond pending sentencing, which is set for February 2015, before U.S. District Judge Barbara M. G. Lynn.

Bedoy worked in DPD’s Vice Unit from November 28, 2007 through July 2013. The government presented evidence at trial that in early 2009, after a DPD Vice raid on an adult entertainment establishment, Bedoy met a female prostitute who worked at that establishment. Later, when she tried to reclaim property DPD seized during the raid, Bedoy assisted her.

Bedoy later contacted her and expressed an interest in seeing her and wanting a massage from her. A relationship ensued between the two and they began communicating, with Bedoy giving her advice on the adult entertainment establishments at which she could work. Bedoy later met her for a massage, and during the massage, he explained how to screen her clients to avoid being arrested. Bedoy and the female began an intimate relationship.

From 2009 until 2013, while they were engaged in a sexual relationship, Bedoy provided law enforcement-sensitive information to her about DPD Vice Unit prostitution raids and other enforcement actions. In January 2013, Bedoy met her at her residence and showed her a DPD investigative case file targeting “Wet,” an adult entertainment establishment, which he had brought with him. Two days later, Wet was raided, and after the raid, Bedoy arranged to meet her at her residence.

When the Coppell Police Department began an investigation of “Studio Serene,” an adult entertainment establishment, it enlisted the help of the DPD Vice Unit in its investigation. In March 2013, Bedoy advised the female that Studio Serene was being targeted and advised her against working there. Bedoy told her that the information was only for her benefit, but she relayed the information to Studio Serene’s owner. Based on that information, Studio Serene closed for a number of days.

After it reopened on April 25, 2013, however, the Coppell Police Department and the DPD Vice Unit raided Studio Serene. In subsequent interviews they conducted, members of the Coppell Police Department were informed that a DPD Vice Unit detective, named “Jose,” later identified as Bedoy, had “tipped off” the business weeks earlier about the pending raid.

On multiple occasions, Bedoy instructed the female on how to avoid being arrested while using Backpage.com for prostitution. He advised her to not only change her phone number every two weeks, but also advised her of the best days and times to work and the best days and times to avoid. On June 25, 2013, Bedoy contacted her to ensure that she wasn’t working Backpage.com during that week because DPD Vice was “working Backpage” that week. In fact, that same day, DPD Vice Unit, including Bedoy, and the FBI conducted a joint operation that was designed to deter prostitution by directing enforcement efforts at Internet-based prostitution.

As a result of Bedoy’s conduct, FBI and federal grand jury investigations were initiated. After learning of the investigation, Bedoy obstructed the federal grand jury proceeding by telling the female to move, to never give her real name if she is pulled over by law enforcement, to not let the FBI into her apartment to talk to her, and to change her cell phone so that there would be no link between them. Bedoy also lied to law enforcement about his contacts with the female and whether he provided her with sensitive law enforcement information.

The FBI and the DPD’s Public Integrity Unit investigated. Assistant U.S. Attorneys Errin Martin and P.J. Meitl prosecuted.

LUBBOCK, Texas — A licensed psychiatrist, who submitted claims for services rendered to nursing home residents in San Angelo, Texas, and other communities in the counties surrounding Tom Green County, Texas, is in federal custody on charges that he defrauded Medicare and Medicaid of nearly $1.75 million, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Robert Hadley Gross, who is licensed by the Texas Medical Board with a primary practice in psychiatry, is charged in an indictment returned yesterday by a federal grand jury in Lubbock, Texas, with 52 counts of health care fraud. Gross was arrested yesterday evening at his office in San Angelo and is scheduled to make his initial appearance before a U.S. Magistrate Judge today in Abilene, Texas.

The indictment alleges that beginning in approximately January 2009 and continuing to approximately June 20, 2014, Gross ran a scheme to defraud Medicare and Medicaid, and other health insurance carriers, by filing claims for payment for services that were never rendered and for services that were billed using inappropriate CPT codes. When submitting a claim, the provider identifies the type of service performed in each submitted claim by means of a code for the type of service listed in the American Medical Association’s publication called the Current Procedural Terminology (CPT) Manual. This five-digit code dictates the amount of payment the provider receives for the rendered service.

In addition to regularly submitting claims for services rendered to nursing home residents, Gross also regularly submitted claims for services provided to clients of mental health and mental retardation (MHMR) organizations in San Angelo, Midland, and Abilene, Texas, in addition to claims for services rendered to patients in his office in San Angelo. In addition, during 2009 and 2010, Gross submitted claims for services provided to foster care children in Brownwood, Texas.

As part of his scheme, according to the indictment, Gross, for numerous dates of service, filed claims for services rendered which, for each of those dates, would entail Gross spending more time than his typical workday. In many instances involving his nursing home, MHMR and office patients, Gross upcoded claims for services for patients with whom he actually had contact. Upcoding is a fraudulent practice in which a provider claims a higher level CPT procedure code than was actually performed, resulting in a higher payment to the provider.

Gross, in numerous instances involving his nursing home patients, filed claims for services on dates he did not actually see the patients. In those instances, the patient may have been present at the nursing home at the time of his visit, or the patient may have died or been discharged before Gross’ visit.

Counts one through five of the indictment allege that Gross submitted claims to Medicaid and Medicare for services allegedly rendered on days in April and May 2014, to patients at MHMR and nursing home facilities, which Gross could not have rendered during the limited amount of time he was at the facilities.

Count six alleges that on March 20, 2013, Gross submitted a claim to Medicaid and Medicare for services allegedly rendered to a patient at a nursing home in San Angelo on the patient’s actual date of death, when, in fact, the patient had been discharged from the nursing home the previous day and admitted to the hospital where the patient died.

Counts seven through 52 allege that on various dates ranging from March 26, 2009, to July 20, 2012, Gross submitted claims to Medicare and Medicaid for services allegedly rendered after patients had died.

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, each of the 52 counts of health care fraud carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Restitution could also be ordered. In addition, the indictment includes a forfeiture allegation that would require Gross, upon conviction, to forfeit: 1) at least $1.75 million in a money judgment for the proceeds traceable to the commission of each offense; 2) approximately $3 million in cash seized from various bank accounts in San Angelo and in Ft. Washington, Pennsylvania, as well as from T. Rowe Price accounts; and 3) three parcels of real estate in San Angelo and Rockport, Texas.

The Federal Bureau of Investigation, Health and Human Services Office of Inspector General, and Medicaid Fraud Control Unit, Office of the Texas Attorney General are investigating. Assistant U.S. Attorney Ann Cruce-Haag is handling the prosecution, and Assistant U.S. Attorney John de la Garza is handling the forfeiture.

FORT WORTH, Texas — A former teacher at Denton High School appeared in federal court today and pleaded guilty to federal child pornography charges, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Gregory Bogomol, 38, of Fort Worth, appeared this morning before U.S. Magistrate Judge Jeffrey L. Cureton and pleaded guilty to an indictment charging two counts of production of child pornography. Each count carries a statutory penalty of at least 15 years in federal prison and a maximum of 30 years in federal prison, up to a $250,000 fine, and up to a lifetime of supervised release. Bogomol has been in custody since May 2014 on charges outlined in a related federal criminal complaint. He resigned from his position with the Denton Independent School District the week prior to his arrest. Sentencing is set for February 12, 2015, before U.S. District Judge Terry R. Means.

According to documents filed in the case, the investigation began when U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) was contacted by the parents of a 15-year-old male victim regarding an individual who solicited a nude photograph of the minor through a smartphone application.

Specifically, according to the factual resume, Bogomol used social media applications such as KIK, Grindr, and Pinger to initiate conversations with underage males. Bogomol posed as a minor female and sent nude images of females to entice the boys to produce sexually explicit pictures.

After Bogomol received an image from the minor male, Bogomol would make additional explicit demands. If the minor male did not comply with his demands, Bogomol would threaten to send sexually explicit pictures of the boy to the boy’s friends via social media applications.

On approximately April 20, 2014, Bogomol coerced one minor victim to send a sexually explicit image of himself. A few days later, Bogomol coerced another minor victim to send a sexually explicit image of himself.

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.”

Anyone who may have been victimized in this case is asked to contact HSI at its toll-free number: 1-866-347-2423.

Assistant U.S. Attorney A. Saleem is in charge of the prosecution.

FORT WORTH, Texas — A former financial administrator at the Bureau of Prisons (BOP), who admitted submitting a false document to the U.S., was sentenced this morning in federal court in Fort Worth, Texas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Cary J. Hudson, 49, of Mansfield, Texas, was sentenced by U.S. District Judge John McBryde to three years’ probation and fined $5,000.00, following his guilty plea in June 2014 to one count of submitting a false document to an agency of the U.S.

According to documents filed in the case, Hudson was employed as a financial administrator by the BOP since 1999, having worked at the Federal Correctional Institutions in Fort Worth and Seagoville, Texas, and at the Federal Medical Center Carswell in Fort Worth.

Hudson knew that BOP employees with fiduciary and management responsibilities were required to file annual reports disclosing any outside positions, employment and income. These disclosures are made through an Office of Government Ethics (OGE) Form 450. Government officials review these forms to identify conflicts of interests that may exist between BOP employees and private entities doing business with the BOP or seeking business with the BOP. For instance, a conflict of interest could, among other things, provide a BOP contractor an economic advantage over others and defeat the government’s attempt to secure a competitive contract.

In or around 2006, while employed by the BOP, Hudson entered into a business relationship as a consultant with Integrated Medical Solutions (IMS), a private, for-profit federal contractor that competes for BOP-administered contracts for inmate health care services at BOP institutions nationwide. IMS paid Hudson for these consulting services, but Hudson failed to disclose that relationship and the money paid to him to the BOP on the OGE Form 450 he submitted in February 2013.

The Department of Justice Office of the Inspector General investigated. Assistant U.S. Attorney Chris Wolfe prosecuted.

FORT WORTH, Texas — The owner/operator of a chiropractic clinic in Fort Worth, Texas, pleaded guilty this afternoon to a federal felony offense stemming from her submission of approximately $718,000 in false reimbursement claims to Medicare and Medicaid, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Melva Mitchell, 35, of Fort Worth, a licensed chiropractor, pleaded guilty before U.S. District Judge Reed C. O’Connor to one count of making false statements relating to health care matters. Mitchell operated Best Choice Chiropractic and Wellness Center on Oakland Boulevard in Fort Worth. She faces a maximum statutory penalty of five years in federal prison, a $250,000 fine and restitution. She will remain on bond pending sentencing, which is set for January 26, 2015, before Judge O’Connor.

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. For these 25 chiropractic manipulations, Mitchell submitted claims to Medicare totaling $1,750 and was paid $827.80. During this same time, Mitchell submitted claims to Medicaid totaling $4,515 and was paid $387.34.

The U.S. Department of Health and Human Services – Office of Inspector General, FBI, and Texas Attorney General’s Medicaid Fraud Control Unit are investigating the case. Special Assistant U.S. Attorney Douglas Brasher is in charge of the prosecution.

DALLAS — A member of a major methamphetamine distribution conspiracy that operated in the Dallas-Fort Worth metroplex and elsewhere since October 2012, was sentenced this afternoon in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Adiel Fuentes, a/k/a “Mack,” 34, of Dallas, was sentenced by U.S. District Judge Jorge A. Solis to 216 months in federal prison for conspiring to possess with intent to distribute and distribute 500 grams or more of methamphetamine and 180 months in federal prison for conspiring to launder monetary instruments. Judge Solis ordered the sentences run concurrently. Fuentes previously agreed to forfeit a vehicle and two firearms.

This summer, the local cell head of the conspiracy, Gerardo Cisneros, aka “Tatuado,” “Gera,” and “Jerry,” 27, was sentenced by Judge Solis to serve a total of 20 years in federal prison. Cisneros pleaded guilty in October 2013 to the same offenses and agreed to forfeit five vehicles and a firearm.

Fuentes and Cisneros have been in custody since their arrest in August 2013 when special agents with the Drug Enforcement Administration (DEA) and other law enforcement members executed numerous arrest warrants for defendants charged in the methamphetamine conspiracy as outlined in a federal indictment returned the previous month. The methamphetamine was imported into the U.S. from Mexico, and it was delivered to the Dallas area for distribution.

According to documents filed in the case, Cisneros acted as the local cell head of the conspiracy. He worked with co-defendants to set up a receipt and distribution center for controlled substances, including methamphetamine and marijuana. Cisneros admitted that he received and distributed methamphetamine in multi-kilo quantities, collected money from his customers and returned money to his supply source in Mexico. Cisneros admitted sending money to Mexico via couriers to conceal the nature, location, source, ownership or control of the drug proceeds.

Fuentes admitted collecting drug proceeds at Cisneros’ request and delivering the drug proceeds to Cisneros so that Cisneros would continue to supply Fuentes and others with the methamphetamine.

Fuentes and Cisneros also admitted conspiring to launder money. During this conspiracy, they collected drug proceeds from the sale of methamphetamine and sent the money to individuals in Mexico. The money was sent to Mexico so that their source of supply would continue to send them methamphetamine and so that they could continue to profit from their illegal activity.

Twenty-four defendants were charged in the conspiracy. The case against one defendant was dismissed, and one defendant is awaiting trial. All other captured defendants have pleaded guilty and have been sentenced or are awaiting sentencing.

This Organized Crime and Drug Enforcement Task Force (OCDETF) case was investigated by the DEA, the Dallas Police Department, Grand Prairie Police Department, Garland Police Department, Rockwall Police Department and the Arlington Police Department.

Assistant U.S. Attorney George Leal is leading the prosecution with assistance from Assistant U.S. Attorneys Brian Poe and John DeLaGarza.

LUBBOCK, Texas — Jeremy Daniel Labrec, 24, formerly of Lubbock, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 120 months in federal prison following his guilty plea in June 2014 to one count of possession of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Labrec has been in custody in Lubbock since his transfer from FCI Otisville, New York, where he had been serving a 330-month sentence imposed in relation to a federal child sexual exploitation conviction out of Indiana. Sixty months of the new sentence will be served consecutively to his Indiana sentence, and 60 months will be served concurrently with that sentence. Labrec was also ordered to pay $150,000 in restitution to a victim of his Lubbock offense.

According to documents filed in the case, in 2011, while living in Lubbock, Labrec saved an image of child pornography that he had earlier produced, on a hard drive located in his laptop computer, and he possessed the hard drive, knowing it contained child pornography. One image was a sexually explicit photo of a minor child.

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 Lubbock Police Department investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted the case.

DALLAS — A Dallas-area tax return preparer who was indicted in 2007 on federal felony charges stemming from the operation of that business and who remained a fugitive until November 2013, was sentenced yesterday. U.S. District Judge Jane J. Boyle sentenced Ousmane Sow, who pleaded guilty in April 2014 to one count of aiding and assisting in the preparation of a fraudulent tax return, to 30 months in federal prison. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

According to the factual resume filed in the case, from 2003 to 2005, Sow and co-defendant Tichafara Mpariwa provided tax preparation services through a business they jointly owned and operated under the name of DSL Tax Services, LLC, located on Forest Lane in Dallas. In 2004, Sow opened a second location of DSL on Airport Freeway in Irving, Texas. Both Sow and Mpariwa were the electronic return originators at the Dallas and Irving office locations of DSL.

From 2003 to 2005, according to the factual resume, Sow knowingly prepared, and caused to be filed, U.S. individual tax returns, along with supporting schedules and forms, which contained materially false credits and deductions to fraudulently increase the taxpayer clients’ refunds. This included the use of false business expenses and the use of false education expenses to create a false education credit, thus increasing the taxpayer client’s refund.

Sow voluntarily returned to the U.S to face charges after contacting Internal Revenue Service Criminal Investigation (IRS-CI) from Burundi about returning. Defendant Mpariwa remains a fugitive.

IRS-CI led the investigation and the U.S. Department of State’s Bureau of Diplomatic Security assisted in securing Sow’s return to the U.S.

Assistant U.S. Attorney Chris Stokes prosecuted.

LUBBOCK, Texas — The president of American Commercial Colleges, Inc. (ACC), Doyle Brent Sheets, 58, of Lubbock, Texas, who pleaded guilty, personally and on behalf of ACC, to federal charges, was sentenced this morning, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

U.S. District Judge Sam R. Cummings sentenced Sheets, who pleaded guilty to an Information charging one count of misprision of a felony, to 24 months in federal prison, restitution in the amount of $972,794.70 and a $5,000.00 fine.

Authorized by corporate resolution, Sheets pleaded guilty to one count of theft of government funds and aiding and abetting, on behalf of ACC. Today, Judge Cummings sentenced ACC to 5 years probation, restitution in the amount of $972,794.70 and a $1,200,000.00 fine.

According to Sheets’ plea agreement with the government, ACC stole government funds by converting Federal Student Aid (FSA) program funds, and thus caused a loss to the government of approximately $972,794. Sheets admitted that he knew about the theft but did not report it, and he agreed that he would be personally, individually, jointly and severally liable for the total loss amount.

According to ACC’s plea agreement with the government, ACC is excluded, directly and indirectly from participating in any FSA programs. This voluntary exclusion is also a voluntary debarment, and ACC will not contest any actions taken to execute the debarment. ACC agrees that it will not have any ownership or interest in, or serve as an officer, director or any legal entity acting as a post-secondary educational institution participating in any FSA program.

Two others associated with ACC have also pleaded guilty to federal charges. Michael James Otto, 61, of Lubbock, who served as the Chief Operating Officer and Campus Director for ACC’s Lubbock campus, pleaded guilty in May 2014 to one count of misprision of a felony. He was sentenced last week to 3 years probation, restitution in the amount of $66,606.48 and a $5,000.00 fine. Bruce Alan Reed, 64, of San Angelo, Texas, who served as the Campus Director for ACC’s San Angelo campus, pleaded guilty to the same offense and was also sentenced last week to 3 years probation, restitution in the amount of $66,606.48 and a $5,000.00 fine.

ACC is a proprietary institution with corporate office in Lubbock. At one time, ACC operated five campuses in Texas — Lubbock, Abilene, Odessa, San Angelo and Wichita Falls — and one in Shreveport, Louisiana. ACC admitted that it knowingly converted FSA program funds from its students solely for its benefit to represent falsely to the U.S. Department of Education that it was in compliance with the requirement that a proprietary institution may not derive more than 90% of its revenue from the FSA program to remain eligible to participate in the FSA program. The remaining 10% of revenue must come from other sources. This is known as the 90/10 Rule, and if an institution did not satisfy it, it would lose its eligibility to participate in the FSA programs.

In 2007, 2008 and 2009, ACC failed to meet the requirements of the 90/10 Rule, however, as early as 2003, ACC had devised a scheme to represent falsely to the Department of Education that it had met the requirements. From 2007-2009, ACC had students obtain private loans from a private bank in San Angelo, Texas, with whom ACC had made arrangements, of approximately $953,897. ACC recorded the loan funds received from the private bank as “good cash,” thus falsely representing to the Department of Education that ACC complied with the 90/10 Rule. By obtaining the loans from the private bank and delaying the students’ FSA program funds, ACC lowered their total FSA program funds revenue for the 90/10 Rule. ACC repaid and intended to repay those loans with approximately $972,794 of FSA program funds to give the appearance of complying with the 90/10 Rule. The private short-term loans were obtained entirely to benefit ACC so that it could falsely represent its compliance. To further the scheme, ACC employees advised students that the school would close if they did not satisfy the 90/10 Rule, and this would jeopardize the students’ education at ACC.

The investigation was conducted by the United States Department of Education, Office of Inspector General. Assistant U.S. Attorney Paulina Jacobo prosecuted.

DALLAS, Texas — A federal grand jury returned a four-count indictment last week charging Rachel Hardy, 35, with Food Stamp Benefit Fraud, two counts of Theft of Federal Public Money, and Theft of Educational Funds announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Hardy self-surrendered today.

According to the indictment, Hardy failed to disclose her household composition and ownership of two businesses that generated income and as a result she obtained benefits from multiple government programs.

Count one of the indictment alleges that beginning in or around April 8, 2010, through July 31, 2012, Hardy obtained from the Department of Agriculture Food Stamp Program and its successor, SNAP, benefits having a value in excess of $5,000. Count two of the indictment alleges during the same time period Hardy received Medicaid benefits having a value in excess of $1,000.00.

Beginning in or around June 28, 2010 and continuing through May 22, 2013 the indictment alleges in count three Hardy received funds, assets, and property provided or insured under the Federal Pell Grant Program and the William D. Ford Federal Direct Loan Program, having a value in excess of $200.

Count four of the indictment alleges that beginning in or around November 2, 2010 and continuing through December 14, 2011 Hardy received housing subsidies in excess of $1,000.00.

A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. The maximum statutory penalty for the offenses charged is 20 years in federal prison and a $250,000 fine.

The Texas Health & Human Services Commission, OIG; U.S. Department of HUD, OIG; Department of Agriculture, OIG; and U.S. Department of Education, OIG are investigating.

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

DALLAS — A documented member of the 59 Bounty Hunter Bloods criminal street gang in Dallas, Keith Williams, a/k/a “Chucky Blood,” was sentenced this morning by U.S. District Judge David C. Godbey to 262 months in federal prison. Williams, 25, pleaded guilty in February 2014 to one count of sex trafficking of children. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas, made the announcement today.

Williams’ girlfriend, Erin Patton, also 24, was sentenced in August 2014 to 87 months in federal prison by Judge Godbey. She pleaded guilty in May 2014 to one count of conspiracy to commit sex trafficking of children.

According to documents filed in the case, in September 2012, after she ran away from home, 14-year-old “Jane Doe” met Erin Patton. Patton let Jane Doe stay with her, and Patton facilitated Jane Doe’s engaging in commercial sex acts by driving her to locations where the acts occurred and providing her a cell phone so she could post her services on “Mocospace” and Backpage.com. Jane Doe gave Patton a portion of the money she earned from engaging in the sex acts.

Again, in November 2012, after she again ran away from home, Jane Doe contacted Patton. This time, both Patton and Williams picked up Jane Doe and posted her availability to engage in commercial sex acts on Backpage.com. While Williams went to serve a jail sentence shortly thereafter, Patton continued facilitating Jane Doe’s commercial sex acts. Jane Doe eventually left.

In April 2013, Jane Doe again contacted Patton and told her she was still in school, but wanted to leave and wanted Patton to pick her up. Patton and Williams agreed to let Jane Doe stay with them, but they told her she was going to have to engage in commercial sex acts, as she had done in the past, to pay for her expenses. Williams and/or Patton drove Jane Doe to meet with customers and Jane Doe gave all the money she earned to Williams and Patton. Williams also had sex with Jane Doe.

On May 4, 2013, officers with the Dallas Police Department (DPD) encountered now 15-year-old Jane Doe, in a car parked in an area known for prostitution. Williams came by shortly thereafter. He admitted knowing she was 15, driving her to meet with customers, and to keeping the proceeds from her “dates.”

The Dallas Police Department’s Gang Unit and Child Exploitation Squad investigated the case in conjunction with the FBI. Assistant U.S. Attorney Cara Foos Pierce prosecuted.

DALLAS — Angel Escobedo, 29, a methamphetamine distributor who was selling drugs in the Dallas area was sentenced yesterday in federal court. Escobedo was sentenced by U.S. District Judge Jane J. Boyle to 235 months in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Escobedo will also be required to forfeit firearms seized during his arrest.

Escobedo was charged in a drug conspiracy that was outlined in a federal indictment returned by a grand jury in Dallas in November 2013. Escobedo pleaded guilty in March 2014 to one count of conspiracy to distribute a controlled substance.

According to documents filed in the case, on November 6, 2013 Escobedo was approached in the lobby of the Super 8 Motel located at 8901 E. RL Thornton Freeway, Dallas by law enforcement officers who were looking for an individual on an outstanding warrant. Officers located a .40 caliber handgun during a pat down of Escobedo and a .380 caliber handgun during a search of his vehicle.

Escobedo admitted to staying at a room at the Super 8 Motel. A search of the motel room revealed various drug paraphernalia items, and over 700 grams of methamphetamine.

The Texas Department of Public Safety Criminal Investigations Division (DPS-CID) was in charge of the investigation. DPS-CID were assisted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Marshal Service and the Dallas Police Department.

Assistant U.S. Attorney Phelesa Guy was in charge of the prosecution and Assistant U.S. Attorney John de la Garza handled the forfeiture.

DALLAS — Darren Lewis, 45, who admitted committing the armed robberies of several businesses in the Dallas area in 2012-2013, was sentenced today by U.S. District Judge Jane J. Boyle to 324 months (27 years) in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

In May, Lewis 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. In July, co-defendant Christopher Washington pleaded guilty to two counts of interference with commerce by robbery and one count of brandishing a firearm during and in relation to a crime of violence. Washington is scheduled for sentencing November 2014.

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.

DALLAS — The last defendant convicted in a drug conspiracy that distributed large quantities of methamphetamine in north Texas was sentenced yesterday in federal court in Dallas. Jesus Velasquez, aka “Chuy,” 44, was sentenced by U.S. District Judge Barbara M.G. Lynn to 270 months (22.5 years) in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Velasquez will also be required to forfeit the proceeds of his criminal activity, which includes a 2008 Jeep Commander and several firearms.

Velasquez and 8 codefendants were charged in the drug conspiracy that was outlined in a federal indictment returned by a grand jury in Dallas in January 2013. Velasquez pleaded guilty in June 2013 to one count of conspiracy to distribute 50 grams or more of methamphetamine. All defendants received federal prison sentences ranging from 46 months to 270 months.

According to documents filed in the case, Velasquez admitted that on multiple occasions between April 2011 and June 30, 2011, he distributed methamphetamine in exchange for payment in the Dallas area. Specifically, Velasquez admitted that he was intercepted over a court-authorized wiretap discussing narcotics transactions with co-defendants Gregory Guysinger, Miguel Velasquez, aka “Ramone,” and Heriberto Luna, aka “Beto.”

The Federal Bureau of Investigation (FBI) was in charge of the investigation. The FBI was assisted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Dallas Police Department, the Texas Department of Criminal Justice - Office of the Inspector General (TDCJ-OIG), and the North Texas High Intensity Drug Trafficking Areas (HIDTA) Program.

Assistant U.S. Attorney Phelesa Guy was in charge of the prosecution and Assistant U.S. Attorney John de la Garza handled the forfeiture.

ABILENE, Texas — Former Correctional Officers at Big Spring Correctional Center (BSCC), in Big Spring, Texas, who pleaded guilty to federal charges stemming from a Department of Justice (DOJ) Office of the Inspector General (OIG) investigation that was initiated when an inmate committed suicide in the facility two years ago while they were on duty, were sentenced today, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

U.S. District Judge Sam R. Cummings sentenced Frederick Hernandez, 45, of Big Spring, to 10 months in federal prison. Hernandez pleaded guilty in June 2014 to one count of making false statements and aiding and abetting. Judge Cummings sentenced Christopher Moore, 42, of Dallas, to 3 years probation. Moore pleaded guilty to one count of misprision of a felony.

According to plea documents filed in the case, from August 22 - 23, 2012, Hernandez and Moore were assigned to the Flight Line Unit in the Special Housing Unit (SHU) at BSCC; Hernandez was the Senior Correctional Officer whose primary responsibility was to ensure the safety and security of the inmates. Their duties included making mandatory 30-minute safety checks of each cell and conducting six mandatory formal inmate counts during a 24-hour period, beginning at 12:01 a.m., 3:00 a.m., 5:00 a.m., 10:00 a.m., 4:00 p.m. and 10:00 p.m. Each Correctional Officer is further required to certify that the mandatory 30-minute safety check of each cell and the mandatory formal inmate counts were made.

An inmate housed in the Flight Line Unit committed suicide during the 8:00 p.m., to 8:00 a.m. shift on August 22 - 23, 2012, and was discovered during the morning feeding on August 23, 2012.

Hernandez admitted that he completed, signed and submitted to the Department of Justice, as required by law, the “SHU Control Log” forms indicating that formal counts of inmates had been performed from 12:01 a.m. to 5:10 a.m., on August 22 – 23, 2012. Hernandez further admitted he knew the logs were not correct and were false in that the formal counts of inmates were not conducted.

Moore admitted he knew Correctional Officers at BSCC submitted forms to the Department of Justice, as required by law, indicating that safety check rounds were conducted, when, in fact, he knew they had not been conducted. He further admitted that he concealed this fact and failed to advise an authority.

In related cases, two other defendants, James McKinnon, 22, and Jamie Navarette Salgado, 24, each pleaded guilty in September 2013; McKinnon pleaded guilty to one count of misprision of a felony and Salgado pleaded guilty to one count of making false statements and aiding and abetting. In December 2013, McKinnon was sentenced to six months in federal prison and ordered to pay a $500.00 fine. McKinnon has served his prison time, and Salgado is awaiting sentencing. McKinnon and Salgado also worked as Correctional Officers assigned to the Flight Line Unit in the SHU at BSCC. Salgado admitted making false entries on logs and falsely indicating he had conducted safety rounds. McKinnon admitted that he knew entries on the logs were incorrect and that he failed to advise an authority.

The Department of Justice Office of the Inspector General conducted the investigation. Assistant U.S. Attorney Paulina Jacobo prosecuted.

LUBBOCK, Texas — A convicted felon who led police on a high-speed chase through San Angelo, Texas, earlier this year, was sentenced this morning, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

James Allen Baimbridge, 31, of San Angelo, was sentenced by U.S. District Judge Sam R. Cummings to 63 months in federal prison. Baimbridge pleaded guilty in June 2014 to one count of being a felon in possession of a firearm.

According to plea documents filed in the case, on March 13, 2014, officers with the San Angelo Police department were in pursuit of the vehicle Baimbridge was driving. During the pursuit, Baimbridge threw his .45 caliber semiautomatic pistol, which was later recovered, from the vehicle. Baimbridge eluded the police and was able to run from his car; he was arrested soon thereafter.

The San Angelo Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigated. Deputy Criminal Chief Assistant U.S. Attorney Denise Williams, of the U.S. Attorney’s Office in Lubbock, Texas, prosecuted.

DALLAS — A Dallas man who met a 15-year-old female run-away at a bus station, took her, and made her engage in sex acts for money, was sentenced this morning by U.S. District Judge David C. Godbey to 15 years in federal prison and a lifetime of supervised release. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

In June 2014, Dereck Johnson, 33, pleaded guilty to one count of sex trafficking of children. According to documents filed in the case and information revealed at today’s sentencing hearing, on June 1, 2012, a 15-year old female, “Jane Doe,” took $200 from her father before spending the night at a friend’s house. While there, she asked a friend to drive her to a Greyhound station where she bought a ticket, with several transfers, to Arizona where a friend lived. Her bus stopped at the Greyhound station in downtown Dallas, where Johnson approached her. Jane Doe told Johnson she was 15 and that her parents did not know where she was. Johnson told her to go with him, and he would help her find Wi-Fi for her phone. Instead, he called a friend who picked them up and eventually took them to his home.

While at the house, Johnson used methamphetamine and then forced Jane Doe to use it. Johnson then sexually assaulted Jane Doe. When Johnson’s friend came home and discovered Jane Doe was underage, he made them leave. Johnson’s friend then drove them back to the Greyhound bus station where Johnson and Jane Doe took a taxi to a Flying J Truck stop. There, they got a ride from a truck driver to a Love’s truck stop near another Greyhound station in Dallas. At that bus station, Jane Doe used a Greyhound employees’ cellphone to call her father to come pick her up, but she was unable to describe exactly where she was. She rushed off the phone, and Johnson was waiting for her. He told her not to contact her father again, that she was staying with him, and she needed to come with him. Jane Doe’s father called the number back and spoke to a Greyhound employee, who told him Jane Doe had left with a man.

Johnson took Jane Doe back to the Love’s truck stop with him, where he begged for money. Johnson found a truck driver who was willing to drive them to Houston, where they were dropped off at a Flying J truck stop. Johnson told Jane Doe they needed to make money so she needed to go into a specific man’s truck cab. After entering the man’s truck cab, the man repeatedly raped her and then provided Johnson compensation for the sex. Johnson forced Jane Doe to engage in several commercial sex acts while at the truck stop.

A few days later, on June 5, 2012, Johnson sent her to take a shower, and while she was in the bathroom at the truck stop, she plugged in her prepaid cellphone and was able to send out a text message for the first time since arriving at the truck stop. She was rescued soon thereafter by a local family member.

At sentencing, the now 18-year-old Jane Doe read a victim impact statement addressing the court, speaking to Dereck Johnson. In that statement, Jane Doe read, “I head you screaming at me telling me I was worthless…but you started the fire behind my drive and after that you stood no chance. I know you can’t stand the fact that I no longer fear you. That nobody will ever fear you again… That I survived when you didn’t, that you are alone. So knowing that is punishment enough for me.” She continued, “No one is ever going to be able to trick me again, not like you did.”

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Dallas Police Department investigated. Assistant U.S. Attorney Cara Foos Pierce prosecuted.

ABILENE, Texas — Troy E. Powell, 46, most recently of Tuscola, Texas, was sentenced yesterday by U.S. District Judge Jorge A. Solis to 48 months in federal prison for failing to register as a sex offender, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Following a bench trial before Judge Solis in April 2014, Powell was convicted on an indictment charging one count of failure to register as a sex offender.

The government presented evidence that law enforcement learned in late 2013 that Powell, a sex offender from Illinois, had moved to the Abilene, Texas area, and that he may be in violation of his obligation under federal law to register as a sex offender. The investigation validated that fact and revealed that Powell had located and purchased a piece of property with a home on it in Tuscola, Texas, where he had been living since December 26, 2013.

The government presented further evidence that Powell left his residence in Illinois in November 2013 and travelled in interstate commerce to the Abilene, Texas, area. Powell never registered in Texas as a sex offender, as required by the Sex Offender Registration and Notification Act (SORNA), as he had been convicted of a sex offense in Fremont County, Colorado, and sentenced in September 1992.

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 the U.S. Marshals Service, the Abilene Police Department, the Texas Department of Public Safety and the Sterling, Illinois, Police Department. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, prosecuted.

ABILENE, Texas — A 25-year-old Abilene, Texas, resident, Johnny Ray Martinez, was sentenced on Wednesday, by U.S. District Judge Jorge A. Solis, to 15 years in federal prison on a child pornography production offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Martinez pleaded guilty in May 2014 to one count of attempted production of child pornography. He has been in custody since his arrest in February 2014 on a related criminal complaint.

According to documents filed in the case, in January and February 2014, Martinez used cell phones to communicate with a female minor whom he had previously met in person, and whose profile he had located online. He initially communicated with the girl anonymously, using alias online identities. He used Pinger, an online texting application, and Facebook, to chat online and text with the female minor. Martinez became sexually explicit with the girl, whom he knew to be 15-years-old, and on more than one occasion, he sent the girl a sexually explicit photo of himself.

After his conduct was reported to law enforcement, an investigation was initiated, during which a U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) special agent consensually assumed the identity of the female minor. Communication continued between Martinez and the person Martinez believed to be the 15-year-old girl, with Martinez again sending sexually explicit images of himself.

On February 5, 2014, Martinez used his cell phone to communicate with the person he believed to be the 15-year-old girl and asked her to send him a photograph of her genitals. Although no image was created as a result of Martinez’s request, the request amounted to an attempt by him to cause a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of the conduct.

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.”

ICE HSI and the Abilene Police Department investigated. Assistant U.S. Attorney Steven M. Sucsy prosecuted.

in a Room Full of Stolen and Fake IDs

DALLAS — A federal jury deliberated just under two hours before convicting a Dallas County man on all nine counts of an indictment charging him with various federal felony offenses stemming from an identity (ID) theft conspiracy he ran in the metroplex from October 2009 to July 2013. With this conviction, six of the seven defendants charged in the conspiracy have been convicted; one remains a fugitive. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Anthony Minor, 26, of Cedar Hill, Texas, was convicted on one count of conspiracy to commit bank fraud, five counts of bank fraud, one count of using or trafficking in an unauthorized access device, and two counts of aggravated identification theft.

Minor’s girlfriend, Tilisha Morrison, 24, of Dallas, pleaded guilty in April 2014 to one count of conspiracy to commit bank fraud. Defendants Katrina Thomas, 40, of Garland, Texas; Kario Butler, 28, of Mansfield, Texas; Cyrus Pritchett, 24, of Dallas; and Jamilah Karriem, 20, of Dallas and Desoto, Texas; also pleaded guilty earlier this year to the conspiracy offense. Defendant Karen Mendoza, 43, most recently of Dallas, remains a fugitive.

Minor was the leader of the conspiracy. The government presented evidence at trial that he stole identities in a variety of ways, including purchasing them from a group of safe robbers and recruiting a Federal National Mortgage Association (Fannie Mae) employee, Katrina Thomas, to steal more than 1000 identities from her Fannie Mae workstation. Once the IDs were in hand, Minor and Morrison accessed the victims’ bank accounts and performed hundreds of account take-overs. As part of the conspiracy, they recruited their co-conspirators to walk into banks and withdraw cash.

Minor was eventually caught and arrested at the W Hotel in Dallas, in a room full of stolen and fake IDs, counterfeit checks, a laptop containing a template for the Texas Department of Public Safety Temporary Driver’s License, printer, and a $900 bottle of Dom Perignon that he had just ordered from room service using a stolen credit card. He had rented the room using another’s identification.

The government presented further evidence at trial that Minor and the conspirators stole personal identifying information for true Bank of America and JP Morgan Chase account holders (the victim-customers) and used this information to fraudulently access funds contained in their bank accounts. They also created false identities using the stolen personal identifying information.

Minor is to be sentenced by U.S. District Judge Sam A. Lindsay on January 20, 2015; others are scheduled to be sentenced in the next few months. The conspiracy to commit bank fraud count, as well as each of the bank fraud counts, carry a maximum statutory penalty of 30 years in federal prison and a $1 million fine. The producing, using or trafficking in a counterfeit access device count carries a maximum statutory penalty of 10 years in prison and a $250,000 fine. The maximum statutory penalty for the identity theft count is a mandatory term of two years in prison, to be served consecutively to any other term or imprisonment, and a $250,000 fine.

The case was investigated by the U.S. Secret Service and the Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorney P. J. Meitl and Special Assistant U.S. Attorney Christopher G. Poor are prosecuting.

ABILENE, Texas — Steven Edward Robb, 59, of Abilene, Texas, was sentenced today by U.S. District Judge Jorge A. Solis to 168 months in federal prison, following his guilty plea in April 2014 to one count of receipt of child pornography. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

According to documents filed in the case, in July 2013, Robb knowingly received two video files depicting minor females engaging in sexually explicit conduct.

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 Abilene Police Department investigated the case. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, prosecuted.

AMARILLO, Texas — Five residents of Amarillo, Texas, who pleaded guilty earlier this year to their roles in an illegal gambling conspiracy, were sentenced on Friday, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

U.S. District Judge Mary Lou Robinson sentenced the four below-listed defendants, who each pleaded guilty to one count of conspiracy to conduct an illegal gambling business, as follows:

Anthony Diaz, 44, nine months in federal prison and a $2,000 fine

Jessica Rios, 35, 12 months in federal prison

Mario Castillo, 37, 13 months in federal prison and a $2,000 fine

Raul Montes, 48, three months in federal prison and a $1,000 fine

In addition, Judge Robinson sentenced Santino Castillo, 31, who pleaded guilty to one count of conspiracy to launder monetary instruments, to 15 months in federal prison and a $3,000 fine. In addition, Castillo was ordered to forfeit a retail strip center on 8th Street in Amarillo; a building on 7th Street in Amarillo; a 2010 Ford truck; approximately $118,000.00 in cash; and approximately $180,000.00 seized from three bank accounts.

According to documents filed in the case, Santino Castillo owned Payless Liquors and T’s Laundromat, located at 1910 SE 8th Street, Suites 100 and 200, respectively, in Amarillo. Sometime in 2011, he organized an illegal gambling business in Suite 300 of 1910 SE 8th Street, known to its operators and customers as Mario’s or G’s. In 2013, he organized an illegal gambling business located at 823 SW 7th Street in Amarillo, known to its customers as Adams. Both illegal gambling businesses housed numerous gambling-type, electronic video game machines and generated hundreds of thousands of dollars in profits. Mario Castillo (Santino Castillo’s brother) managed Payless Liquors, as well as the 8th Street gambling business, and Anthony Diaz and Jessica Rios (Diaz’s sister) worked there. Raul Montes cashed checks tendered by customers to play at the two gambling businesses at a local money service business.

In late September 2013, after undercover officers observing the gambling activity, law enforcement agents executed search warrants at the two gambling business locations, as well as at Santino Castillo’s residence on Parkwood. During the searches of the businesses, officers discovered and seized over 75 gambling machines and nearly $8,000 in cash. At the residence, law enforcement located approximately $78,421 in cash that was involved in Castillo’s laundering activity.

In late September 2013, law enforcement also executed a search warrant at the residence of Anthony Diaz and Raul Montes and seized approximately $12,277 in cash from the illegal gambling business.

In a related case earlier this year, Conrad Nava was convicted and sentenced for participating in the operation of the 7th Street gambling business. Law enforcement agents searched his residence in late September 2013 and found close to $40,000 in gambling cash there.

The FBI and the U.S. Marshals Service investigated.

Assistant U.S. Attorneys John de la Garza and Brian Poe of the U.S. Attorney’s Office in Dallas, Texas led the prosecution.

DALLAS – Several employees of the U.S. Attorney’s Office for the Northern District of Texas, who were members of the District’s prosecution team in what became known as the Dallas City Council public corruption case, were recognized by Attorney General Eric Holder and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 30th annual Director’s Awards Ceremony today in Washington D.C.

The Northern District of Texas was one of 44 districts represented at the ceremony held in the Great Hall at the Robert F. Kennedy Department of Justice Building.

Attorney General Holder and EOUSA Director Wilkinson recognized U.S. Attorney Sarah R. Saldaña, who, at that time was the Deputy Criminal Chief in charge of the District’s Fraud and Public Corruption section; Criminal Chief Assistant U.S. Attorney Chad Meacham; Assistant U.S. Attorney Leigha Simonton; and paralegal specialists Diana Christensen and Lisa Anderson. Former Assistant U.S. Attorney Marcus Bush, who is now with the Department’s Office of International Affairs, as well as three special agents with the FBI’s Dallas Division, David Garcia, Allen Wilson and Donald Sherman, were also recognized.

In his prepared remarks to awardees, Attorney General Holder said, “Locally, nationally, and internationally, you represent the very best that this Department has to offer. Your work embodies our ongoing commitment – not merely to win cases, but to do justice; to protect our fellow citizens from crime, violence, and terrorism; to empower the most vulnerable among us; and to uphold the rule of law.”

EOUSA Director Monty Wilkinson echoed those sentiments, saying to the recipients, “You have persevered, and remained focused and motivated – achieving remarkable results in work that makes a difference in the lives of citizens across our great country. The vast scope of your collective accomplishments is nothing short of exceptional.”

Each of the 16 defendants charged in the Dallas City Council case either pleaded guilty or were found guilty by a jury. Four jury trials resulted in the conviction of eight defendants, including one trial that lasted more than 16 weeks. Public officials, Texas State Representative Gladys “Terri” Hodge, Dallas City Council members James Fantroy and Donald Hill, and Dallas City Planning Commissioner D’Angelo Lee, were convicted. The U.S. Court of Appeals for the Fifth Circuit in New Orleans, Louisiana affirmed the convictions and sentences.

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao/eousa/

FORT WORTH, Texas — Three Mexican citizens are in federal custody following their arrest last Friday, September 5, 2014, in McAllen, Texas, on federal charges stemming from the murder of a Southlake, Texas, man in May 2013. The announcement was made this afternoon at a press conference, held at Southlake’s Department of Public Safety, by Stephen Mylett, Chief of the Southlake Police Department; John Parker, First Assistant U.S. Attorney, Northern District of Texas; Diego Rodriguez, Special Agent in Charge for the FBI Dallas Division; and Daniel R. Salter, Special Agent in Charge of the Drug Enforcement Administration’s Dallas Field Division.

“The Southlake Police Department could not have been successful without the assistance of our regional partners,” said Chief Mylett. “Over the past year, a great deal of work has been conducted in order to bring those responsible for Mr. Chapa’s murder to justice. Through this collaborative effort, three individuals were identified as having played a principal role in the conspiracy to commit this heinous murder.”

Jesus Gerardo Ledezma-Cepeda, a/k/a “Chuy” and “Juan Ramos,” 58, is charged in a federal indictment, returned in early July 2014 by a federal grand jury in Fort Worth, Texas, and unsealed yesterday, with one count of interstate stalking resulting in death and aiding and abetting. He was arrested on the Anzalduas International Bridge at the checkpoint.

Two others were arrested on the same charge as outlined in a federal criminal complaint filed on Friday, September 5, 2014, and unsealed this afternoon. Jesus Gerardo Ledezma-Campano, 30, was also arrested on the Anzalduas International Bridge at the checkpoint. Jose Luis Cepeda-Cortes, 58, who is legally in the U.S. on a green card, was arrested at a residence in Edinburg, Texas. Ledezma-Cepeda is Ledezma-Campano’s father and Cepeda-Cortes’s cousin.

Two of the defendants made their initial appearances yesterday before a U.S. Magistrate Judge in McAllen. Defendant Ledezma-Campano made his initial appearance this morning; his preliminary, detention and identity hearings are set for 11:00 a.m. on Friday in federal court in McAllen. The Northern District of Texas is coordinating with the U.S. Marshals Service to transport the defendants to the Northern District for prosecution.

“Today I commend the dedicated and relentless efforts of the FBI, assisted by the DEA, who, along with the Southlake Police Department, led this extensive investigation to identify and apprehend those responsible for Mr. Chapa’s murder last year,” said First Assistant U.S. Attorney Parker. “I also want to thank our other law enforcement partners who assisted in this 16-month-long investigation — ATF, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Customs and Border Protection, the Texas Department of Public Safety, the Tarrant County Sheriff’s Office and the Tarrant County District Attorney’s Office. These law enforcement agencies have a proven history of working extremely well together and I’m very proud of that fact.”

“I am proud for our collective agencies, and for the community, that we are able to make these arrest announcements today,” said Special Agent in Charge Rodriguez. “While the investigation of this heinous, public crime remains ongoing, residents can be assured that your safety and protection is of greatest concern to law enforcement.”

“This is a perfect example of cooperative and effective law enforcement,” said Special Agent in Charge Salter. “The long arm of the law is far reaching and the efforts of these investigators and prosecutors has asssured that those responsible face justice in the courts of the United States of America.”

On May 22, 2013, at approximately 6:47 p.m., Juan Jesus Guerrero Chapa was ambushed and shot multiple times with a 9mm pistol while seated in a Range Rover vehicle that was parked in Southlake Town Square. Video surveillance showed an individual exit the rear passenger side of a Toyota Sequoia after it pulled behind Mr. Chapa’s vehicle, and then walk to the passenger side where Mr. Chapa was seated. A few seconds later, the Sequoia drove away and Mr. Chapa was dead.

According to documents filed in the case, beginning on approximately March 1, 2011 and continuing to May 22, 2013, the three defendants traveled in interstate and foreign commerce from Mexico to Southlake, and elsewhere, with the intent to kill Mr. Chapa.

Cepeda-Cortes used email in an effort to locate Mr. Chapa, exchanging personal information regarding Mr. Chapa’s family, photographs of Mr. Chapa’s residence, vehicles associated with Mr. Chapa’s family and personal information about Mr. Chapa. In addition, at various times during this period, the defendants rented an apartment in Grapevine, Texas, where they stayed while tracking Mr. Chapa.

The defendants used various means to track Mr. Chapa and members of his family. Cepeda-Cortes purchased surveillance cameras that were placed in various locations in Mr. Chapa’s neighborhood. In addition, while in the area, the defendants purchased and rented several vehicles that, according to the complaint, allowed them to change vehicles often and use non-descript rental vehicles to avoid detection by Mr. Chapa and his family. They placed automobile tracking devices on their vehicles, as well as vehicles owned and operated by Mr. Chapa and his relatives, including the Range Rover Mr. Chapa was in when he was murdered.

An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law. A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a U.S. magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The government has 30 days to present the case to a federal grand jury for indictment. The maximum statutory penalty for the offense as charged is life in federal prison and a $250,000 fine.

The investigation remains ongoing and additional arrests are expected.

FORT WORTH, Texas — A Lipan, Texas, man who pleaded guilty in May 2014 to one count of money laundering stemming from an oil and gas investment scheme he ran, was sentenced today, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

James M. McConathy, 62, was sentenced by U.S. District Judge John McBryde to 60 months in federal prison, and he was ordered to pay $112,746 in restitution. Judge McBryde ordered McConathy to surrender to the Bureau of Prisons on September 26, 2014. According to documents filed in the case, McConathy admitted that in October 2010, he wired $75,000 in funds he derived as a result of wire fraud from his account at First National Bank Lipan to Southlake Energy’s account at Bank of Texas.

In April 2010, McConathy purchased rights to an oil and gas lease known as the “T.W. Martin Lease,” which is located in Navarro County, for approximately $20,000. In late September 2010, McConathy placed a call from Lipan, Texas, to an individual, “S.H.” in Evanston, Wyoming, and told S.H. that he could purchase a 50% interest in the lease for $125,000. During that call, McConathy falsely represented to S.H. that the T.W. Martin Lease was producing an amount of oil significantly greater than it was actually producing. In early October 2010, McConathy traveled to Evanston and met with S.H. Agreeing to buy one-half stake in the lease, S.H. gave McConathy a check for $125,000.

Less than a week later, McConathy loaned $75,000 of that money to Southlake Energy, in Southlake, Texas. S.H. did not know McConathy loaned the money. As directed by McConathy, Southlake Energy repaid the $75,000 loan by sending a $75,000 wire transfer to a bank account held by McConathy’s wife, and by doing this, was able to conceal the funds’ origins.

In late December 2010, McConathy sent S.H. a check for approximately $4,500, purported to be S.H.’s portion of the proceeds of the sale of 146 barrels of oil produced in October 2010 at the T.W. Martin Lease to a third party. In fact, McConathy had not sold any oil to a third party, and the lease had not produced 146 barrels of oil in October.

In late January 2011, S.H., believing the T.W. Martin Lease was generating revenue as promised, sent McConathy an additional $7,500 for an oil rig. The following day, McConathy sent S.H. a check for $5,358, purported to be S.H.’s portion of the sale of 174.4 barrels produced in November 2010 at the T.W. Martin Lease to a third party.

Similar representations and transactions occurred in March and May 2011. After May 2011, McConathy stopped sending checks to S.H.

These periodic payments McConathy made to S.H. were designed to convince him that the T.W. Martin Lease was productive and profitable. In fact, the payments were funded with money unrelated to the T.W. Martin Lease oil sales.

The Internal Revenue Service Criminal Investigation and FBI investigated the case.

ABILENE, Texas — A Trent, Texas, man appeared in federal court in Abilene, Texas, today and pleaded guilty, before U.S. Magistrate Judge E. Scott Frost, to a federal indictment charging one count of video voyeurism, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Jeremy Wayne Griffith, 28, of Trent, Texas, was arrested in November 2013 on the federal offense and was released on bond. He faces a statutory penalty of one year in federal prison and a $100,000 fine. A sentencing date was not set.

According to documents filed in the case, from November 2009 until November 2010, Griffith was employed by KBR, Inc., as an HVAC operator assigned to the U.S. Army installation C3 Camp Warhorse in Iraq. Griffith was responsible for the installation and repairing of heating and air conditioning units at Camp Warhorse.

The FBI received information that Griffith had installed a hidden camera in the female barracks at Camp Warhorse and had videos of nude female soldiers and/or contractors stationed at the military installation. On June 13, 2013, the FBI executed a federal search warrant at Griffith’s residence in Trent, and agents located and seized an external hard drive. A forensic review of that hard drive revealed videos of captured hidden camera footage of multiple female soldiers and/or contractors undressing in the female locker room at Camp Warhorse.

The female locker room was a place where female soldiers and/or contractors had a reasonable expectation of privacy.

The case is being prosecuted by Assistant U.S. Attorney Justin Cunningham of the U.S. Attorney’s Office in Lubbock, Texas.

DALLAS — A man who came to the attention of law enforcement in Toronto, Canada, during an undercover investigation into the distribution of child pornography, was sentenced today in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Christopher Briseno, 45, was sentenced by U.S. District Judge Jorge A. Solis to 108 months in federal prison and a 10-year term of supervised release, following his guilty plea in May 2014 to an Information charging one count of pandering of child pornography.

According to documents filed in the case, in January 2014, an individual, later identified as Briseno, contacted an undercover officer with the Toronto Police Service who was acting in a covert capacity online to identify individuals engaged in distributing child pornography. Briseno indicated he was sexually abusing his two minor daughters, age 11 and 16, and he sent the undercover officer two images of his “daughters,” depicting the sexual abuse.

When it was learned that Briseno lived in Grand Prairie, Texas, the investigative lead was sent to U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Dallas. On February 4, 2014, Special Agents with HSI executed a search warrant at his residence.

Briseno admitted that he does not have children of his own and that he had created an online persona and used children he knew to be minors as the victims of sexual abuse. The children whom he said were his daughters were actually the children of acquaintances. He also admitted stealing pictures posted on social media websites of three different minor children and using them during chats about incest. He admitted searching the Internet for sexually explicit images of young females and sending those photos, in conjunction with the clothed photos of the minor females he claimed were his daughters, as proof of his involvement in the sexual abuse of minors.

Briseno admitted chatting with an individual in Canada, (the undercover officer) who was the mother of two minor children, and instructing her to sexually abuse her two-year-old daughter. He further admitted sending photos to this individual of the two minor girls, as well as a sexually explicit photo of a young girl, telling this person that it was his 11-year-old daughter.

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.”

Assistant U.S. Attorney Camille Sparks was in charge of the prosecution.

DALLAS — A Grand Prairie, Texas, resident was sentenced by U.S. District Judge Barbara M. G. Lynn following his guilty plea in April 2013 to a felony child pornography offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Kevin Arthur Miles, 44, was sentenced on Friday to 210 months in federal prison to be followed by a 10-year term of supervised release. He pleaded guilty in April 2013 to one count of transportation of child pornography; he has been in custody since his arrest the previous month.

According to the factual resume and testimony from Miles’ detention hearing, from at least August 2012 through November 27, 2012, Miles transported child pornography using Frostwire peer-to-peer file sharing network on his computer.

The investigation began in August 2012 when a special agent with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) identified more than 28 files with names indicative of child pornography available to share from Miles’ computer. Law enforcement executed a federal search warrant at Miles’ residence on November 29, 2012, and seized a computer and external hard drive. A forensic examination of his computer revealed 422 images and 33 videos of child pornography. In addition, several chats between Miles and others with like interests in the exploitation of children were located. In one chat, Miles and another discuss their interest in molesting small children.

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.”

ICE HSI investigated. Assistant U.S. Attorney Camille Sparks prosecuted.

DALLAS — Three individuals who were involved in burglaries at two post offices in Dallas have been sentenced to lengthy federal prison sentences, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Today, Gabriel Granado, 33, of Dallas, was sentenced by U.S. District Judge Jorge A. Solis to 96 months (eight years) in federal prison and ordered to pay $2,820 in restitution. He pleaded guilty in April 2014 to one count of burglary of a U.S. Post Office and two counts of possessing stolen mail.

Two co-defendants, Corina Denise Alfaro, 28, also of Dallas, and Esteban Segovia, 39, of San Antonio, Texas, were sentenced earlier this summer for their roles. Alfaro, who pleaded guilty to one count of burglary of a U.S. Post Office and one count of possessing stolen mail, was sentenced to 52 months in federal prison and ordered to pay $2,820 in restitution. Segovia, who pleaded guilty to one count of burglary of a U.S. Post Office, was sentenced to 26 months in federal prison.

According to plea documents filed in the case, on June 16, 2013, Granado, Alfaro and Segovia forcibly broke into a U.S. Post Office located at 2736 Royal Lane in Dallas, with the intent to commit larceny. Each further admitted they possessed checks they knew had been stolen from post offices.

According to the complaint filed in the case, on the evening of June 16, 2013, U.S. Postal Inspectors were continuing surveillance on U.S. Postal Service blue collection boxes at the Oak Lawn Station, 2825 Oak Lawn Avenue in Dallas, after several reports of break-ins at those collection boxes. The investigation of those break-ins led to the identification of Granado and Alfaro as possible suspects.

The investigation revealed, however, that late the same evening, Alfaro’s vehicle was at the Brookhollow Station, and then later, it arrived at a motel in Dallas where she and Granado were staying. Law enforcement observed them, along with Segovia, who was carrying what appeared to be two large shopping bags, exit the vehicle and enter a room at the motel.

Later that evening, while inspecting the Brookhollow Station, a U.S. Postal Inspector and a Postal Police Officer noticed that the dutch door of the lobby had been forcibly opened. In addition, an alarm had been activated from that location at the approximate time Granado and Alfaro were believed to have been at that location.

The U.S. Postal Inspection Service investigated. Special Assistant U.S. Attorney Nicole Dana prosecuted.

LUBBOCK, Texas — A former resident of Phoenix, Arizona, pleaded guilty today before U.S. District Judge Sam R. Cummings to federal child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Gregory James Flohr, 54, pleaded guilty to one count of transportation of child pornography and one count of possession of child pornography. He faces a statutory penalty of from five years to 30 years in federal prison, and a $500,000 fine. Judge Cummings ordered a presentence investigation report with a sentencing date to be set following the completion of that report. Flohr has been in custody since his arrest early last month 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 two cell phones, one for himself and one for Jane Doe. Flohr 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, the Hockley County Sheriff’s Office, and the FBI were involved in the investigation of the case. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.

LUBBOCK, Texas — A former resident of Phoenix, Arizona, pleaded guilty today before U.S. District Judge Sam R. Cummings to federal child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Gregory James Flohr, 54, pleaded guilty to one count of transportation of child pornography and one count of possession of child pornography. He faces a statutory penalty of from five years to 30 years in federal prison, and a $500,000 fine. Judge Cummings ordered a presentence investigation report with a sentencing date to be set following the completion of that report. Flohr has been in custody since his arrest early last month 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 two cell phones, one for himself and one for Jane Doe. Flohr 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, the Hockley County Sheriff’s Office, and the FBI were involved in the investigation of the case. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.

LUBBOCK, Texas — Scott Brandon Hutcheson, 37, of Lubbock, Texas, pleaded guilty today before U.S. District Judge Sam R. Cummings to one count of transportation of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Hutcheson faces a statutory penalty of not less than five years or more than 20 years in federal prison, up to a $250,000 fine, and up to a lifetime of supervised release. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. Hutcheson remains on bond.

According to the factual resume filed in the case, in January 2014, Hutcheson used his computer to send an image of child pornography to the wife of a childhood classmate of his. The image depicted the recipient’s son, age four or five, eating an ice cream cone. The image, however, had been modified to make it appear the child was engaged in sexually explicit conduct. The child’s name was also displayed across the top of the image. Hutcheson sent the image, under the name of a third party, with the message:

A friend of mine asked me to send you this, and to inform you that it has been re-blogged onto NAMBLA (North American Boy Love Association) sponsored websites. He said that you would understand that filth is an aesthetic.

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 the Lubbock Police Department and the FBI. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.

FORT WORTH, Texas — A former executive at First Command Financial Services, an investment advisor and financial planning firm located in Fort Worth, Texas, pleaded guilty this morning before U.S. District Judge Reed C. O’Connor to a felony offense stemming from a fraud scheme she ran while employed there, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Redonda Russell, 66, of Fort Worth, pleaded guilty to a felony Information charging one count of wire fraud. She faces a maximum statutory penalty of 20 years in federal prison, a $250,000 fine, and restitution. She will remain on bond pending sentencing, which is set for December 8, 2014.

Russell worked for First Command for 22 years, before leaving the company in the spring of 2013. She is a registered Investment Advisory Representative and Broker-Dealer Agent. She is able to buy and sell securities, and she is authorized to give investment advice to clients. She is a Chartered Financial Consultant (ChFC), a designation she earned by completing a comprehensive course of financial education, examinations, and practical experience. Through First Command’s client database, Russell had access to clients’ personal identifying information (PII), investment/insurance account numbers, and balances for the account holder and beneficiaries.

According to plea documents filed in the case, beginning on approximately April 3, 2012, and continuing through April 18, 2013, Russell obtained PII for at least 18 First Command clients, eight of whom were deceased. Russell admitted using that information to forge, or otherwise present claims as the account holder, beneficiary, or legal representative of the account holder/beneficiary, to First Command’s affiliated investment and insurance partners to liquidate the targeted accounts.

Russell admitted that part of her scheme was to steal funds from inactive clients’ accounts, thus making the fraud harder to detect. She also targeted accounts that were maintained by First Command’s business partners that were part of an industry-standard, paperless signature program that eliminated the need for the verifying entity to send additional substantiating paperwork to the receiver. After Russell altered ownership/control of the targeted customers’ accounts, Russell sent a policy cancellation/disbursement form and W-9 tax withholding form and instructed the affiliated partner to either liquidate or take a loan against the targeted accounts.

Funds were subsequently wired into one of Russell’s 12 bank accounts or, if checks were mailed, Russell would endorse and deposit them. Checks were endorsed by Russell, Russell signing as her husband, Russell signing as her daughter-in-law, or an amalgam of signatures she used to perpetuate the scheme usually having the surname “Russell.”

Russell’s scheme resulted in the liquidation of more than $316,000 from First Command’s clients’ accounts.

The FBI investigated the case; Assistant U.S. Attorney Nancy Larson is in charge of the prosecution.

DALLAS —A federal grand jury has indicted Steven Alexander Chavez, Jr., 23, on one count of aiming a laser pointer at an aircraft, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Today, special agents with the FBI arrested Chavez in Lubbock, Texas, where he had recently relocated from Garland, Texas.

According to the indictment, returned earlier this week in Dallas, on or about August 24, 2013, in the Dallas Division of the Northern District of Texas, Chavez knowingly aimed the beam of a laser pointer at a Texas Department of Public Safety (DPS) helicopter.

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, the maximum statutory penalty is five years in federal prison and a $250,000 fine.

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

DALLAS — A Dallas woman, who, along with her gang member boyfriend, pleaded guilty in a sex trafficking case earlier this year, was sentenced this morning, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Erin Patton, 24, was sentenced by U.S. District Judge David C. Godbey to 87 months in federal prison and she will be required to register as a sex offender. Patton pleaded guilty in May 2014 to a superseding information charging one count of conspiracy to commit sex trafficking of children. Her boyfriend, Keith Williams, aka “Chucky Blood,” a documented member of the 59 Bounty Hunter Blood criminal street gang, also 24, pleaded guilty in February 2014 to one count of sex trafficking of children. His sentencing is currently set for September 8, 2014; he faces a maximum statutory sentence of life in federal prison.

According to documents filed in the case, in September 2012, after she ran away from home, 14-year-old “Jane Doe” met Erin Patton. Patton let Jane Doe stay with her, and Patton facilitated Jane Doe’s engaging in commercial sex acts by driving her to locations where the acts occurred and providing her a cell phone so she could post her services on “Mocospace” and Backpage.com. Jane Doe gave Patton a portion of the money she earned from engaging in the sex acts.

Again, in November 2012, after she again ran away from home, Jane Doe contacted Patton. This time, both Patton and Williams picked up Jane Doe and posted her availability to engage in commercial sex acts on Backpage.com. While Williams went to serve a jail sentence shortly thereafter, Patton continued facilitating Jane Doe’s commercial sex acts. Jane Doe eventually left.

In April 2013, Jane Doe again contacted Patton and told her she was still in school, but wanted to leave and wanted Patton to pick her up. Patton and Williams agreed to let Jane Doe stay with them, but they told her she was going to have to engage in commercial sex acts, as she had done in the past, to pay for her expenses. Williams and/or Patton drove Jane Doe to meet with customers and Jane Doe gave all the money she earned to Williams and Patton.

On May 4, 2013, officers with the Dallas Police Department (DPD) encountered now 15-year-old Jane Doe, in a car parked in an area known for prostitution. Williams came by shortly thereafter. He admitted knowing she was 15, driving her to meet with customers, and collecting proceeds from her “dates.”

DPD led the investigation, with assistance from the FBI. Assistant U.S. Attorney Cara Foos Pierce prosecuted.

DALLAS — Hong Jae Kim, aka “Randy Kim,” 45, was sentenced today by U.S. District Judge Jane J. Boyle to 10 years in federal prison and ordered to pay $1,795,125 in restitution for his nearly two-year role in a scheme to launder mortgage fraud proceeds, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

A felony information was filed in February 2013 charging Kim with one count of conspiracy to engage in monetary transactions in property derived from specified unlawful activity. He agreed to plead guilty to the offense, but failed to appear at an arraignment set for the following month. The Court issued a bench warrant, and special agents with IRS Criminal Investigation arrested Kim a few months later in California. He returned to the Northern District of Texas, where he entered his guilty plea in July 2013.

According to documents filed in the case, Kim, along with others, including Arlington, Texas, resident, David Joe Cano, a mortgage loan officer, conspired to engage in monetary transactions in property derived from specified unlawful activity. Cano was a mortgage loan officer at 1st Capital Investment located in Richardson, Texas. He pleaded guilty to the same offense and was sentenced in November 2013 to 87 months in federal prison and ordered to pay nearly $1.8 million in restitution.

From January 2006 to November 2007, Kim, Cano, along with other coconspirators, operated a scheme to obtain fraudulent loans from Bank of America and IndyMac Bank, as well as GreenPoint Mortgage Funding, Inc. and WMC Mortgage Corporation, both located in California, and Everett Financial Inc. dba Supreme Lending and America Homekey, Inc., both in Dallas. Kim, Cano and their co-conspirators then laundered the money from those loans back to themselves using shell corporations such as Comex International Korea Corporation, Eagle’s Marc Enterprises, Inc. and Sunko Construction.

To defraud the banks and mortgage lenders, Kim, Cano and their co-conspirators selected newly constructed or distressed properties whose value could be inflated without raising lenders’ suspicions. Kim, Cano and others then recruited individuals with good credit scores to act as loan applicants for the purchase of the properties and paid them to apply for loans using applications that falsely inflated the applicant’s income and assets. The applicants were deceitfully promised that the properties would be leased until they were sold at a profit and that the applicants would receive regular payments from the rental income that would be sufficient to repay their loans until the properties sold. In reality, the applicants were left with unpaid loans that ruined their credit scores.

As charged in the Information, the scheme focused on seven properties located at: St. George Place in DeSoto, Texas; Golden Pond Drive in Cedar Hill, Texas; Summerfield Court in Fairview, Texas; Tangleglen Drive in Dallas; Roma Court in Allen, Texas; Avondale Drive in Murphy, Texas; and Stephenville Drive in Frisco, Texas.

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

IRS Criminal Investigation investigated the case, with assistance from the U.S. Postal Inspection Service and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant U.S. Attorney Walt M. Junker prosecuted.

DALLAS — Michael G. Johnson, 46, formerly of Fort Worth, Texas, was sentenced late yesterday, by U.S. District Judge Barbara M. G. Lynn, to 28 months in federal prison and ordered to pay $354,529 in restitution, following his guilty plea in January 2014 to felony offenses stemming from an investigation by the Environmental Protection Agency (EPA) into violations of the Clean Air Act. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Specifically, Johnson pleaded guilty to one count of wire fraud and one count of making false statements under the Clean Air Act. He has been in federal custody since his arrest in July 2013 in the Billings, Montana, area.

From 2007 through 2009, Johnson owned and operated System Launch Associates from an apartment in Fort Worth. After 2009, Johnson conducted business from Austin, Texas; Dallas, Texas; Sterling Heights, Michigan; and Miles City, Montana.

Pursuant to the Clean Air Act, manufacturers are prohibited from selling a vehicle or engine that is subject to emission standards unless the vehicle or engine is covered by an EPA-issued Certificate of Conformity. System Launch purported to arrange testing of new vehicles and new vehicle engines for U.S. distributors of foreign-made vehicles. System Launch itself, however, did not perform the testing. In fact, the testing was never done, and Johnson fabricated the testing data.

Johnson instructed his clients to have the vehicles delivered to him or to a test lab he chose, instructing them to pay half of the testing/application fee to him upfront and the remainder when the testing was completed. After Johnson submitted the completed Certificate of Conformity application to the EPA, he provided a copy of the fraudulent vehicle test data to his clients.

From August 2009 through June 2012, Johnson submitted multiple Certificates of Conformity applications containing fraudulent vehicle test data to the EPA and delivered that data to more than a dozen clients. The applications Johnson submitted were approved, and the EPA issued Certificates of Conformity based on fraudulent data he provided.

“False reports or incorrect data undercut EPA’s commitment to protect clean air for all Americans,” said Vernon Jackson, Acting Special Agent in Charge of EPA’s criminal enforcement program in Texas. “EPA and its law enforcement partners will actively pursue those who undermine the integrity of programs designed to protect public health and the environment. This sentence sends a clear message that violators whose actions place the public at risk will be prosecuted.”

“I commend the excellent investigative work of the EPA and the Texas Commission on Environmental Quality- Environmental Crimes Unit in unravelling Mr. Johnson’s scheme,” said U.S. Attorney Saldaña. “The enforcement of our nation’s environmental laws is a vital part of our work here.”

Assistant U.S. Attorney Errin Martin was in charge of the prosecution.

DALLAS — Four Dallas-area individuals, along with a defendant from Georgia, who were convicted for their roles in a mortgage fraud scheme that caused more than $3 million in losses to lenders, have been sentenced, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

On Friday, August 15, Jarrod Jamiel Williams, 35, most recently of McKinney, Texas, was sentenced by U.S. District Judge Barbara M. G. Lynn to 87 months in federal prison and ordered to pay approximately $3.6 million in restitution. He pleaded guilty in January 2014 to one count of conspiracy to commit wire fraud affecting a financial institution.

Williams has been in custody since June 2012 on charges stemming from a foreclosure-rescue scheme that was prosecuted in the Eastern District of Texas and for which he was sentenced to 57 months imprisonment. Judge Lynn ordered that 27 months of Williams’s sentence in the Dallas case would run concurrently with the Eastern District of Texas sentence with the remaining 60 months to run consecutively. It total, between the two different fraud schemes, Williams will serve 117 months in federal custody and was ordered to pay more than $5 million in restitution.

Other defendants convicted and sentenced for their role in the scheme include Christopher Davis Allen, 42, and his ex-wife, Cheryl Renee Allen, 51, who were each sentenced in June 2014 to 42 months in federal prison and ordered to pay approximately $3.6 million in restitution. Arzonda Murchison, 43, was sentenced in March 2014 to 36 months in federal prison and ordered to pay approximately $2.8 million in restitution. Aaron Robert Martell, of Georgia, was sentenced in May 2014 to 21 months in federal prison and ordered to pay approximately $1.3 million in restitution. Each pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution.

From March 2006 to at least February 2008, Williams, a real estate investor who owned Jade Capital Group, along with escrow officers/loan processors/notaries Christopher and Cheryl Allen, title company owner, Murchison, and recruiter, Martell, engaged in the fraud scheme by facilitating fraudulent property transactions to obtain mortgage loans for residential real estate properties.

Part of the defendants’ scheme involved submitting false and fraudulent statements on loan applications and other closing documents to obtain proceeds from the transactions and making more false statements and material omissions regarding the disbursement of monies.

Williams recruited, or caused others to recruit, straw buyers to purchase the properties, knowing the purchasers buying the properties could not quality for the loans without making false statements on loan applications and other closing documents. Williams also knew that payments were made to straw buyers outside of closing.

As an example of the mortgage fraud scheme, Williams and Martel recruited an individual to purchase a residential property located on Dartmouth Avenue in Highland Park, Texas, knowing that the individual could not qualify for the necessary loans without making false statements concerning income, assets and intention to occupy the property. Williams referred the individual to Cheryl Allen who prepared the fraudulent loan applications. Chris Allen notarized the documents and assisted in the closing of the transaction, which occurred at Viewpoint Title, a company owned and operated by Murchison. Not only were the loan applications false, the closing documents falsely represented that the borrower made a $270,000 down payment when, in fact, that money was supplied by Williams. In addition, Williams, along with coconspirators, created a fraudulent check that purported to show the down payment coming directly from the borrower. At closing, Williams received more than $800,000 from Viewpoint Title as proceeds from the transaction, which were disbursed among the coconspirators. Because of the false statements on the documents, the lender approved two interstate wire transfers of approximately $2.1 million and $270,000 to fund the mortgage for the individual.

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

The FBI investigated the case. The FBI and the U.S. Attorney’s Office received assistance from the Texas Appraiser Licensing and Certification Board in connection with the investigation. Assistant U.S. Attorney J. Nicholas Bunch prosecuted.

DALLAS — A Dallas man who pleaded guilty to felony offenses stemming from his role as a major participant in a marijuana distribution conspiracy operating in north Texas was sentenced this morning in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas

Andres Hernandez, Jr., a/k/a “Gordo,” 34, was sentenced by U.S. District Judge Sam A. Lindsay to serve a total of 300 months in federal prison. Hernandez pleaded guilty in September 2013 to one count of conspiracy to distribute 100 kilograms or more of marijuana and one count of money laundering. Judge Lindsay sentenced him to 25 years on the drug conspiracy conviction and 10 years on the money laundering conviction, to run concurrently.

Hernandez and others were arrested on November 1, 2012, following a law enforcement operation led by the Drug Enforcement Administration (DEA) and the North Texas High Intensity Drug Trafficking Area (HIDTA) task force, during which federal search warrants were executed at various locations, including Hernandez’s residence on W. Colorado Blvd. in Dallas. At his residence, law enforcement located approximately 20 pounds of marijuana, digital scales and a loaded firearm. Hernandez has remained in custody since his arrest.

According to documents filed in the case, Hernandez admitted that on multiple occasions between January 2011 and the date of his arrest, he received multi-pound quantities of marijuana from several supply sources, including co-defendants Serviano Contreras, a/k/a “Seven” and “Junior,” 27, and Virgilio Espinosa Delacruz, a/k/a “Chaparro,” 41. Hernandez admitted that he stored this marijuana both at his residence and at the residence of co-defendant Benicio Pena, Jr., a/k/a “Nene,” 63, on Lourdes Street in Dallas. Contreras, Delacruz and Pena pleaded guilty to their respective roles in the conspiracy and are serving federal prison sentences of 48 months, 44 months, and 42 months, respectively.

Hernandez admitted that he routinely distributed multi-pound quantities of marijuana to co-defendants Jarvis Holmes, 43; Claudia Castillo, 21; Jerry Cardenas, 32; Lamont Morgan, 35; Roberto Lopez Delacruz, 27; and Paul Santoy, 28. They each pleaded guilty to their roles in the conspiracy. Holmes was sentenced to 51 months; Cardenas, 48 months; Morgan, 46 months; Roberto Delacruz, 16 months; and Santoy, 15 months. Claudio Castillo is scheduled to be sentenced on November 17, 2014.

Hernandez further admitted that in March 2012, an individual purchased a parcel of land located in Barry, Texas, using $28,854 in cash provided by Andres Hernandez’s wife, Griselda Hernandez, 34. That same day, that individual deeded the property to Andres and Griselda Hernandez. Andres Hernandez admitted that the cash used to purchase the property included drug proceeds. Griselda Hernandez also pleaded guilty to her role in the conspiracy and was sentenced to 57 months in federal prison.

The DEA, North Texas HIDTA and Internal Revenue Service Criminal Investigation investigated. Assistant U.S. Attorney Phelesa Guy was in charge of the prosecution.

DALLAS — Two confessed heroin dealers were sentenced this morning in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Misael Perla, a/k/a “Irving” and “Weasal,” 26, of Dallas, was sentenced by U.S. District Judge David C. Godbey to 300 months in federal prison. Perla pleaded guilty in January 2014 to two counts of possession of heroin with intent to distribute, the use of which caused the death of victims Alexandra Julia Moreno, 20, of Irving, Texas, in July 2012, and Cassidy Seward, 18, of Grapevine, Texas, in August 2012.

Hugo Sanchez, a/k/a “Juice,” 25, also of Dallas, was sentenced by Judge Godbey to an aggregate sentence of 360 months in federal prison. Sanchez pleaded guilty in April 2014 to seven counts of a superseding indictment including: one count of conspiracy to possess with intent to distribute a controlled substance; possession of heroin with intent to distribute and distribution to a person under age 21; possession of cocaine with intent to distribute; possession of heroin with intent to distribute; possession of methamphetamine with intent to distribute; possession of a firearm by a prohibited person and possession of a firearm in furtherance of a drug-trafficking offense. Although Sanchez did not admit his role in providing the narcotics that resulted in several overdose deaths, the Court heard evidence that Sanchez provided narcotics that were responsible for at least three known overdose deaths in 2011 and 2012.

“Often drug users are seen as victims of their own choices. Today, however, in federal court, two drug dealers who preyed upon those addictions, faced the families who have been forever harmed because of their actions,” said U.S. Attorney Saldaña. “While we cannot replace the young lives that were lost to heroin and other dangerous drugs, this office will continue to hold those accountable who make those poisons available in our communities.”

According to documents filed in the case, Perla admitted that on July 16, 2013, he knowingly distributed heroin to Ms. Moreno, a woman he had recently met at a club. Perla provided the heroin to Ms. Moreno while she was staying with him at his mother’s home and he watched as she used the heroin in his presence. Later that evening and into the next morning, Perla attempted to wake Ms. Moreno, and he became concerned that she may have overdosed. He put her into the bed of a truck, drove to Baylor Medical Center at Irving and left her body with medical personnel at the emergency room. Ms. Moreno was pronounced dead shortly after her arrival at the hospital, and a subsequent autopsy report concluded that she “died as the result of the toxic effects of heroin.”

Perla also admitted in the factual resume that he had a relationship with Cassidy Seward, to whom he knowingly supplied heroin. After returning home one morning in August 2012, Ms. Seward used heroin provided by Perla and methamphetamine from Sanchez. After her family found her unresponsive, paramedics arrived and transported Ms. Seward to the hospital, where she was soon pronounced dead. A subsequent autopsy report concluded that she died from the “mixed drug toxicity” of heroin and methamphetamine.

According to documents filed in the case, Hugo Sanchez admitted to possessing heroin, cocaine, and methamphetamine with the intent to further distribute, as well as possessing numerous firearms in furtherance of his drug-trafficking activities. Additional documents filed in the case tied Sanchez’s narcotics to the 2011 and 2012 overdose deaths of Robert Nugent II, Henry Wiley II, and Solina Marin, all residents of the DFW Metroplex.

The Irving Police Department and the Grapevine Police Department led the investigation, with assistance from U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

Assistant U.S. Attorney Jason Schall prosecuted.