Northern District of Texas

DALLAS — Three women, who were involved in a scheme to embezzle money from one of their former employers in Dallas, have been sentenced, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Dallas residents Lamonica Phillips and Pamela Gail Willis, aka Pamela Gayle Knight, both 44, and Oklahoma City resident, Audrey Starr, 51, each pleaded guilty to one count of conspiracy to commit mail fraud

Today, Chief U.S. District Judge Sidney A. Fitzwater sentenced Phillips to 24 months in federal prison and ordered her to pay approximately $171,000 in restitution. She must surrender to the Bureau of Prisons on September 30, 2014.

In June, Willis was sentenced to 12 months and one day in federal prison and ordered to pay approximately $75,000 in restitution. Also in June, Starr was sentenced to a two-year term of probation and ordered to pay nearly $60,000 in restitution.

According to documents filed in the case, Phillips and Willis devised and carried out a scheme to embezzle money from Phillips’ employer, Industry Consulting Group (ICG). Starr allegedly became a conspirator in the scheme through knowingly receiving and using stolen funds.

ICG is a tax consulting business based in Dallas that focuses on tax valuation of properties and the maintenance of tax portfolios. As part of their business ICG, on behalf of their clients, pays taxes on home mortgages and provides valuations of properties in order to contest tax appraisals.

As part of her duties, Phillips had access to ICG’s financial software, could prepare checks on behalf of ICG and was responsible for cashing and mailing checks to ICG’s customers. Phillips began the scheme to defraud ICG in March 2012, following a conversation with her good friend, Willis.

The FBI investigated and Assistant U.S. Attorney P. J. Meitl prosecuted.

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LUBBOCK, Texas — Justin Turcheck, 29, of Abilene, Texas, pleaded guilty this morning before U.S. District Judge Sam R. Cummings to one count of possession of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Turcheck, who is on bond, faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.

Turcheck admitted that in mid-June 2012, he possessed an external hard drive that contained numerous images of child pornography.

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

resources.” U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Abilene Police Department, and the Air Force Office of Special Investigations investigated the case. Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

FORT WORTH, Texas — A federal grand jury in Fort Worth, Texas, returned an indictment late today charging a former teacher with two counts of production of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Gregory Bogomol, 38, of Fort Worth, was arrested in May 2014 on a related federal criminal complaint and has been in custody since that time. He was employed by the Denton Independent School District as a teacher at Denton High School. He resigned from that position the week prior to his arrest.

According to the criminal complaint filed, 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.

Count one of the indictment alleges that on or about April 23, 2014, Bogomol used, persuaded, induced, enticed, and coerced a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of that conduct. Count two of the indictment alleges the same occurred on April 20, 2014, with another minor.

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 statutory penalty for each count of production is not less than 15 years or more than 30 years in federal prison and a $250,000 fine.

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.

LUBBOCK, Texas — A federal grand jury returned an eight-count indictment late today charging eight defendants with felony offenses stemming from their respective roles in a methamphetamine distribution conspiracy, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Each of the following defendants is charged with one count of conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine:

Natividad Gumaro Lopez-Guzman, 47, of Arizona

Flor Angelica Bustillos, 27, of Arizona

Gregorio Hernandez-Perez, a/k/a “Francisco Hernandez” and “Primo,” 27

Jesus Adrian Murillo-Angulo, a/k/a “Chavalon,” 20

Michael Alvarado Garcia, 41, of Lubbock, Texas

Haylie Nicole Moreno, 25, of Lubbock

Edward Adam Rodriguez, 22, of Lubbock

Brianna Lee Mendoza, 22, of Lubbock

In addition, Hernandez-Perez is charged with one substantive count of possession with intent to distribute 500 grams or more of methamphetamine and two substantive counts of distribution and possession with intent to distribute methamphetamine. Hernandez-Perez is also charged with two firearms offenses: one count of possession of firearms in furtherance of a drug trafficking crime and one count of being an illegal alien in possession of a firearm.

Garcia and Moreno are also each charged with one substantive count of possession with intent to distribute 500 grams or more of methamphetamine.

Rodriguez and Mendoza are also each charged with one count of possession with intent to distribute methamphetamine and one count of possession of a stolen firearm.

During the investigation, law enforcement seized approximately 11 pounds of methamphetamine and three firearms. All of the defendants, with the exception of Bustillos, are in custody.

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, each faces a maximum statutory penalty of life in federal prison and a $10 million fine.

The Bureau of Alcohol, Tobacco, Firearms and Explosives; Lubbock County Sheriff’s Office; Texas Department of Public Safety; Lubbock Police Department; Abilene Police Department; Department of Homeland Security, U.S. Border Patrol; Clovis, New Mexico Police Department; Curry County, New Mexico Sheriff’s Office; Albuquerque, New Mexico Police Department; New Mexico State Police, and the Maricopa County, Arizona HIDTA group are investigating.

Assistant U.S. Attorney Justin Cunningham is in charge of the prosecution.

DALLAS — The former directors of a community outreach center in Dallas, whose trial was to begin yesterday, pleaded guilty this morning to federal felony charges stemming from a joint investigation by the Department of Justice - Office of the Inspector General (DOJ-OIG) and the Department of Labor - Office of the Inspector General (DOL-OIG) into theft of federal grant funds. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Elazada Mays, 69, of Oak Leaf, Texas, pleaded guilty to one count of federal program theft. She faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Artis Lee Dean, 77, of Red Oak, Texas, pleaded guilty to one count of misprision of a felony. He faces a maximum statutory sentence of three years in federal prison and a $250,000 fine. In addition, restitution may also be ordered. Both defendants are on bond; a sentencing date was not set.

Dean was the Executive Director of the Alameda Heights Community Outreach Center (AHCOC), located on Lyola Street in Dallas. Mays was the Program Director.

In 2009, DOJ’s Office of Juvenile Justice and Delinquency Prevention (OJJDP) released funding for a three-year, $8.8 million grant for one-on-one mentoring services for 16 to 18 year-old at-risk youth. YouthBuild USA administered the grants. As the grantee, YouthBuild USA qualified and selected community-based organizations to perform one-on-one mentoring services for mentees within local communities. AHCOC was selected, and in June 2010, Dean signed a contract for a $45,000 grant, agreeing to match and mentor 25 mentees, stipulating that at least 15 of the mentees would complete the program within a 15-month cycle.

For various reasons, however, including the unwillingness of mentees to participate, some of the mentoring relationships ended shortly after the program began. In November 2010, AHCOC officials realized that mentee participation had fallen below the required number and that the remaining mentor/mentee meetings were not being documented and tracked in accordance with the grant’s requirements.

To receive reimbursements, AHCOC was required to generate and submit payroll records to YouthBuild USA. Even though AHCOC employees and staff no longer worked on the mentoring program, fraudulent time sheets were created, transmitted and certified by Dean or Mays that certified work was being done in the program throughout the entire 15-month period.

In August 2011, Dean submitted an application for another 15-month cycle funding to YouthBuild USA, knowing that AHCOC did not comply with the requirements of the grant’s first cycle. YouthBuild USA relied on Dean’s false statements in awarding AHCOC with a second grant for $75,000, with AHCOC committing to recruit and match 40 mentees. This second cycle of grant funding ran from December 1, 2011, to March 28, 2013, but by August 2012, AHCOC had expended all of its funds — a full six months before the end of the term.

Dean and Mays admitted that the invoices and timesheets submitted by AHCOC to YouthBuild USA were false because they did not accurately reflect the hours worked on the mentorship program by officials, staff and employees. Mays also admitted that during both cycles, AHCOC falsified records to indicate that the required number of students participated in and completed the mentorship program, when in fact, the required number of students neither participated in nor completed either of the cycles.

Assistant U.S. Attorney Aaron Wiley and Special Assistant U.S. Attorney Vivian Lee are prosecuting.

LUBBOCK, Texas — Three defendants who were indicted by a federal grand jury in Lubbock, Texas, earlier this summer have pleaded guilty to felony drug or firearms offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Yesterday, Adam Rico, 27, and Amber Lee Bengoa, 26, of Lubbock, pleaded guilty before U.S. District Judge Sam R. Cummings. Rico pleaded guilty to one count of possession with intent to distribute methamphetamine and aiding and abetting. He faces a maximum statutory penalty of 20 years in federal prison and a $1 million fine. Bengoa pleaded guilty to one count of possessing a firearm in furtherance of a drug trafficking crime and aiding and abetting. She faces a statutory penalty of not less than five years and up to life in federal prison and a $250,000 fine.

On July 24, 2014, co-defendant Alexis Starr Frausto, 23, also of Lubbock, pleaded guilty to one count of being a convicted felon in possession of a firearm. She faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.

Judge Cummings ordered presentence investigation reports on all defendants with sentencing dates to be set after the completion of those reports.

According to documents filed in the case, in March 2014, the South Plains Auto Theft Task Force received information from OnStar that a stolen vehicle they were attempting to find was located in the area of Lubbock’s North Frankford Storage Zone. Just as OnStar was to activate the vehicle’s horn to assist the Task Force, officers saw Rico coming out of one of the storage units. In response to their inquiry, Rico confirmed that the Camaro was inside the storage unit. After officers observed a semiautomatic rifle leaning against the wall of the storage unit, they entered the unit to perform a protective sweep for additional weapons or individuals. Rico and co-defendant Frausto were the only individuals in the unit, but officers observed methamphetamine in plain view.

Officers obtained a search warrant to search the storage unit and located methamphetamine, cocaine, marijuana, $4,452 in cash, two stolen vehicles, drug packaging and scales. Frausto admitted that she and Rico knowingly possessed the semiautomatic rifle, and she further admitted that she was a convicted felon.

Approximately two weeks later, the Lubbock County Sheriff’s Office, which had been investigating Bengoa for narcotics and counterfeiting, observed her driving a vehicle without a license. During the ensuing traffic stop, it was determined that the two adult passengers in the vehicle were wanted on warrants and were arrested. With Bengoa’s consent, officers searched the vehicle and located, in the front seat, a 9mm semiautomatic handgun, methamphetamine, cocaine, and drug trafficking materials, such as packaging material and scales, all within arms’ reach of Bengoa. She admitted that she and the adult passengers in the vehicle knowingly possessed the firearm in furtherance of intending to distribute the methamphetamine in the vehicle.

The Lubbock County Sheriff’s Office led the investigation, with the assistance of the Lubbock Police Department, South Plains Auto Theft Task Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Justin Cunningham is in charge of the prosecution.

DALLAS — Two Dallas men, who admitted committing the armed robberies of several businesses in the Dallas area in 2012-2013, have pleaded guilty to federal charges, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Today, Christopher Washington, 48, pleaded guilty, before U.S. Magistrate Judge Irma C. Ramirez to two counts of interference with commerce by robbery and one count of carrying and brandishing a firearm during and in relation to a crime of violence. In May, Darren Lewis, 45, 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.

If the Court accepts the defendants’ plea agreements, the parties agree that a total range of 300 to 360 months’ imprisonment is appropriate for each defendant. Both are scheduled to be sentenced by U.S. District Judge Jane J. Boyle on September 25, 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 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. Assistant U.S. Attorney Taly Haffar is in charge of the prosecution.

DALLAS — Timothy Rinehart, 35, of Dallas, pleaded guilty today before U.S. Magistrate Judge David L. Horan to a superseding indictment charging a multitude of child pornography offenses, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Specifically, according to the factual resume filed in the case, (there is no plea agreement), Rinehart pleaded guilty to one count of production of child pornography, which carries a statutory penalty of not less than 25 years or more than 50 years in federal prison; one count of attempted transportation of child pornography, which carries a statutory penalty of not less than 15 years or more than 40 years in federal prison; one count of transportation of child pornography, which carries a statutory penalty of not less than 15 years or more than 40 years in federal prison; two counts of possession of child pornography, which carry a statutory penalty of not less than 10 years or more than 20 years in federal prison, per count; and one count of a registered sex offender committing a felony offense involving a minor, which carries a mandatory, statutory, consecutive10-year penalty.

According to the Elements of the Offenses filed in the case, Rinehart faces a statutory penalty of at least 35 years of mandatory minimum imprisonment and up to 180 years in federal prison. The projected guideline sentence range, even with the acceptance of responsibility, will most likely be life imprisonment. A sentencing date, before U.S. District Judge Jane J. Boyle, has not been set.

According to court documents and the Stipulated Facts filed in this case, on August 15, 2006, in the Eastern District of Texas, Rinehart was sentenced to 51 months in federal prison after pleading guilty to one count of possession of child pornography.

In April 2012, Rinehart used John Doe, a four-year-old male minor, to engage in sexually explicit conduct and then used his cell phone to take photos of that conduct. In late May 2012, Rinehart used his computer, the Internet and peer-to-peer file sharing to share images of minor boys engaged in sexually explicit conduct. In early May 2013, Rinehart again used peer-to-peer file sharing to share images of minors engaging in sexually explicit conduct. On October 5, 2012, Rinehart possessed a cell phone and an external hard drive that each contained images of minors involved 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 FBI is investigating. Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

DALLAS — Jason Allen Neff, 33, pleaded guilty today to federal charges in a “swatting” case, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Swatting refers to falsely reporting an emergency to a police department to cause a Special Weapons and Tactics (SWAT) response to a physical address, or making a false report to elicit an emergency response by other first responders to a specific physical address.

Neff, also known as “Crazy J,” is from Omaha, Nebraska, although he was living in Jackson, Missouri when he was arrested. Neff pleaded guilty to one count of aiding and abetting the conspiracy to use access devices to modify telecommunications instruments and to make unauthorized access to protected telecommunications computers and one count of obstruction by retaliating against a witness, victim or informant. If the Court accepts the terms of the plea agreement, the parties have agreed that a specific sentence of 60 months in federal prison is the appropriate sentence for the obstruction conviction, and it should run concurrently to any sentence imposed for the other count of conviction. Neff, who remains in custody, is scheduled to be sentenced on December 1, 2014, by U.S. District Judge Sam A. Lindsay.

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

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

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

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

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

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

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

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

DALLAS — A Rowlett, Texas, man was arrested this morning by special agents with the FBI and inspectors with the U.S. Postal Inspection Service on a criminal complaint charging an offense stemming from hundreds of white powder hoax letters he allegedly mailed from North Texas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Hong Minh Truong, 66, is charged in the complaint with false information and hoaxes. Truong made his initial appearance this afternoon before U.S. Magistrate Judge Irma C. Ramirez, who ordered that he remain in federal custody.

“For almost six years, letters containing white powder - and believed to have been mailed by the same individual - have elicited law enforcement and public safety responses from numerous local, state and federal agencies. While it was determined that the mailings did not contain toxins or poisons, each incident required a field screening of the letter’s contents, which cost taxpayer dollars and diverted first responder resources,” explained Special Agent in Charge Diego Rodriguez of FBI Dallas. “We believe Hong Minh Truong is responsible for the hundreds of letters sent to locations worldwide, including U.S. government offices, aerospace companies, schools, daycares, and recently, hotels in the vicinity of Super Bowl XLVIII. The ongoing investigative work of the FBI and U.S. Postal Inspection Service is to be commended.”

According to the complaint, since December 2008, more than 500 hoax letters were mailed from the North Texas area to cities across the U.S. and to U.S. Embassies abroad. The initial letters, sent out on December 4, 2008, had a “Dallas, Texas” postmark and contained a white-powder substance. Law enforcement has identified more than 15 batches of similar letters sent from the Dallas area from December 2008 to the present. The language used in the letters as well as the method of sending the letters, indicate that one person, Truong, is responsible for sending all of the hoax letters. In all but two of the batches of letters, a white-powder substance was included in the envelope.

On May 7, 2012, the hoax letters mailed from the Dallas area contained a white-powder substance and the following statement:

Al Qaeda back! Special thing for you

What the hell where are you Scooby Doo, Counter Intelligence, CIA, you do not know how to catch the triple dealer spy in your law enforcement. What the hell where are you Scooby Doo, Internal Affairs, FBI, you don't know how to arrest the bad cop in your law enforcement.

You all flaming idiot, ignorant and arrogant, know nothing! How to protect this country! U.S.A

We are Al Qaeda, U.B.L FBI, Al Qaeda, SS Nazi FBI, working in your agency. We claim everything.

These letters were sent to pre-schools and elementary schools across the country as well as to Lockheed Martin in Grand Prairie, Texas.  HAZMAT responded to the location of many hoax letter recipients, including Mi Escuelita Preschool Crossover in Dallas.

In June 2013, 28 public schools in Boston received letters that resulted in HAZMAT responses. That investigation resulted in the identification of an IP address in Rowlett associated with Truong.

“Today's joint operation should send a warning to those who seek to terrorize the American public through powder letters, real or hoax,” said Fort Worth Division Inspector in Charge R.L. Faulkerson. “Postal Inspectors and FBI agents have worked tirelessly during this six-year investigation to locate the person responsible for sending hundreds of letters containing hoax white powders.  The U.S. Postal Inspection Service remains committed to our mission of protecting the nation’s postal system and ensuring our customers’ trust that mail they receive will be free from threats or dangerous substances.”

“Mr. Truong’s alleged criminal actions caused emergency responders and hazardous response teams immense unnecessary labor and expense, diverted personnel from actual emergencies and caused untold emotional distress to those who received the letters,” said U.S. Attorney Saldaña. “I commend the excellent investigative work of the FBI and the U.S. Postal Inspection Service that led to today’s arrest.”

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The government has 30 days to present the matter to a federal grand jury for indictment. The maximum statutory penalty for the offense as charged is five years in federal prison and a $250,000 fine.

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

Scheme Caused Nearly $2 Million in Losses to SNAP Program

DALLAS — Two North Texas men have been sentenced for their roles in a massive food stamp fraud scheme that caused nearly $2 million in losses to the Supplemental Nutrition Assistance Program (SNAP), announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Kamardeen Ogunleye, 52, of Arlington, Texas, was sentenced by Chief U.S. District Judge Sidney A. Fitzwater on Friday to 60 months in federal prison. On Thursday, July 24, 2014, Robert Gordon, 31, of Balch Springs, Texas, was sentenced by Judge Fitzwater to 27 months in federal prison. Each was also ordered to pay approximately $1.9 million in restitution, jointly and severally, to the U.S. Department of Agriculture (USDA), Food and Nutrition Service. Both must surrender to the Bureau of Prisons on September 9, 2014.

In April 2014, both Ogunleye and Gordon pleaded guilty to one count of conspiracy to commit food stamp fraud. Ogunleye also pleaded guilty to one count of wire fraud.

Ogunleye owned and operated KSO Dollar Mart, located in a strip mall at 1918 Martin Luther King Jr. Boulevard in Dallas. Gordon managed the business for Ogunleye. Ogunleye’s and Gordon’s scheme was funneled through this storefront, which offered very few food and beverage items to its customers.

According to plea documents filed in the case, from March 2010 to September 2013, Ogunleye and Gordon devised and executed a scheme to defraud the USDA by using, acquiring, transferring and possessing SNAP benefits. Ogunleye and Gordon conspired to purchase food stamp benefits from actual recipients in exchange for cash and at an approximately 50 percent exchange rate, meaning Ogunleye and Gordon would pay recipients approximately one dollar in exchange for every two dollars’ worth of benefits. Recipients were then free to spend the exchanged-for-cash without the restrictions imposed on SNAP benefits. Both Ogunleye and Gordon knew it was illegal to transfer SNAP benefits in exchange for cash, or for any consideration other than eligible food items.

The full amount of SNAP benefits redeemed in exchange for discounted cash were deposited into Ogunleye’s Omni American Bank and Bank of America accounts held in Arlington, Texas. Between April 9, 2010, and June 17, 2013, SNAP redemptions totaling $2,109,859 were deposited into those two accounts.

Ogunleye, who provided all cash funds that were distributed to customers in exchange for benefits, also collected and retained the bulk of the proceeds obtained from SNAP because of this scheme. For his part as a store clerk, Gordon, who was instructed by Gordon to purchase food stamp benefits in exchange for cash, received a weekly salary from Ogunleye ranging from $300 - $600 throughout the course of his participation in the conspiracy.

The USDA Office of Inspector General investigated the case. Assistant U.S. Attorney P. J. Meitl prosecuted.

DALLAS — A federal grand jury has returned a 13-count indictment charging a long-time Dallas County elected official and three of his associates with various alleged felony offenses stemming from their involvement in conspiracies involving bribes, announced Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas; Diego Rodriguez, Special Agent in Charge, FBI Dallas; and Kelly Carpenter, Assistant Special Agent in Charge, Dallas IRS Criminal Investigation.

The indictment, returned on Wednesday of this week and unsealed this morning, charges John Wiley Price, 64, Kathy Louise Nealy, 61, Dapheny Elaine Fain, 52, and Christian Lloyd Campbell, 44, with various felony counts of conspiracy, tax violations and false statements.

“The indictment unsealed today alleges that for more than a decade, in a shocking betrayal of public trust, Commissioner Price sold his office on the Dallas County Commissioners Court in exchange for a steady stream of bribes. While the vast majority of public officials are honest and maintain high ethical standards, it is unfortunate that some, as alleged in this indictment, choose to serve themselves,” said U.S. Attorney Saldaña. “I thank the hardworking men and women of the FBI and IRS Criminal Investigation who have spent countless hours, indeed years, investigating this case, dissecting his and others’ alleged schemes. Abuse of the public trust cannot and will not be tolerated.”

“The FBI’s top criminal program priority is investigating allegations of public corruption,” said Special Agent in Charge Rodriguez. “The defendants’ alleged actions were designed for personal financial gain at the expense of their constituents and the federal government. These types of actions constitute a breach of the public’s trust, erode confidence in government, and cost taxpayers money and resources.”

“Today’s indictment is a reminder that public officials and private industry who scheme to defraud the U.S. Government and violate the public’s trust will be brought to justice,” said Assistant Special Agent in Charge Carpenter. “Bribery, mail fraud and tax fraud will not be tolerated. IRS Criminal Investigation will continue to work with the U.S. Attorney’s Office and FBI to investigate corrupt behavior wherever we find it.”

According to the indictment, from January 2001 through June 27, 2011, Commissioner Price allegedly accepted more than $950,000 in cash, cars and land from Kathy Nealy, a Dallas lobbyist, in exchange for using his influence and position on the Commissioners Court to act favorably on behalf of Ms. Nealy’s clients and those of Christian Campbell, another consultant in Dallas. These financial benefits, averaging between $5,000 and $10,000 per month, were never disclosed on the Commissioner’s tax returns or on state-mandated Financial Disclosure Statements that he signed under oath and filed with the County Clerk for public inspection.

Not only did Commissioner Price hide these bribery benefits from the public and the IRS, but he also earned income from other businesses that he kept secret, including a business, Man Male Sales (MMS), operated by Dapheny Fain, his chief of staff. All told, Commissioner Price allegedly took in more than $1.1 million that he did not report, filing false and fraudulent income tax returns for 2007, 2008 and 2009. While Ms. Nealy was paying bribes to Commissioner Price, she actively evaded paying more than $600,000 in income taxes that she admitted owing. The indictment also alleges that Ms. Fain made false statements to special agents with the FBI regarding Commissioner Price’s involvement in MMS.

According to the indictment, Ms. Nealy’s business clients were vendors seeking contracts with Dallas County and businesses pursuing matters on which Commissioner Price voted in Commissioners Court. It alleges that Ms. Nealy arranged meetings, dinners, etc. with Commissioner Price for her corporate clients who had business in front of the Commissioners Court, and many of those meetings occurred during periods when contact with elected officials and other county employees was prohibited because the selection process for bids on county contracts was in progress. Commissioner Price sponsored and advocated Ms. Nealy’s clients’ interests, and he voted on these matters in a matter that benefitted them. In return, the indictment alleges, Ms. Nealy provided Commissioner Price with a stream of benefits, in the form of money, cars, and land, totaling approximately $950,000.

Specifically, Price and Nealy are each charged with one count of conspiracy to commit bribery concerning a local government receiving federal benefits; one count of conspiracy to defraud the IRS, and six counts of deprivation of honest services by mail fraud. In addition, Price is charged with three counts of subscribing to a false and fraudulent U.S. Individual Income Tax Return. Nealy is also charged with one count of attempting to evade or defeat payment of tax. Fain is charged with one count of conspiracy to defraud the IRS and one count of making a false statement. Campbell is charged with one count of conspiracy to commit bribery concerning a local government receiving federal benefits.

An indictment is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law. However, the penalties upon conviction are: 20 years in federal prison and a $250,000 fine for each count of deprivation of honest services by mail fraud and aiding and abetting; five years in federal prison and a $250,000 fine for each count of conspiracy to commit bribery concerning a local government receiving federal benefits, conspiracy to defraud the IRS, attempting to evade or defeat payment of tax, and making a false statement; and three years in federal prison and a $250,000 fine for subscribing to a false and fraudulent U.S. individual income tax return.

The FBI and IRS-Criminal Investigation are conducting this ongoing investigation. Assistant U.S. Attorneys Walt Junker, Katherine Miller, Jay Dewald and Chad Meacham are prosecuting.

LUBBOCK, Texas — Three defendants charged in unrelated cases appeared yesterday before U.S. District Judge Sam R. Cummings and pleaded guilty to various felony child pornography offenses. In each case, Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

Rocky Joe Williams, 37, of Littlefield, pleaded guilty to one count of transportation of child pornography. He faces a statutory penalty of not less than five years or more than 20 years in federal prison, a $250,000 fine and a lifetime of supervised release. Williams, who is on bond, admitted that he used his cell phone and the Google Picasa Web photo-sharing site on the Internet to transport numerous images of child pornography.

Parker James Chapman, 23, of Lubbock, pleaded guilty to an Information charging one count of attempted possession of child pornography and aiding and abetting. He faces a maximum statutory penalty of 10 years in federal prison, a $250,000 fine and a lifetime of supervised release. Chapman, who is on bond, admitted that he used his cell phone to communicate with a person he believed to be a minor, under age 18, after responding to an online personal add. That person, however, was an undercover police officer posing as a 15-year-old female. Chapman requested a photograph of the minor, but after he received a non-sexual image of a minor, Chapman requested something “more interesting.” Chapman admitted that in making this request, it was his intent to receive an image of child pornography.

Christopher Anthony Lovato, 30, of Lubbock, pleaded guilty to an Information charging one count of possession of child pornography and aiding and abetting. He faces a maximum statutory penalty of 10 years in federal prison, a $250,000 fine and a lifetime of supervised release. Lovato, who is on bond, admitted that he used his cell phone to possess numerous images of child pornography that had been received from the Internet.

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

The Lubbock Police Department Internet Crimes Against Children Task Force and the FBI investigated the cases, and the Littlefield Police Department and the Texas Department of Public Safety also assisted in the investigation of the Williams case. Assistant U.S. Attorney Steven M. Sucsy is prosecuting.

Approximately 45 Investors Invested Approximately $5.8 Million in Fraud Scheme

FORT WORTH, Texas — A Fort Worth man who was arrested in Oregon, where he fled when a fraudulent oil and gas Ponzi scheme he was running began to unravel, pleaded guilty today to one count of wire fraud, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Jeffrey Watts, aka “Jeff Watts,” 41, appeared before U.S. Magistrate Judge Jeffrey L. Cureton this morning and pleaded guilty to a felony information, filed on July 8, 2014, charging one count of wire fraud. He faces a maximum statutory penalty of 20 years in federal prison, a $250,000 fine and restitution. Watts has been in custody since his arrest in Eugene, Oregon, in early May 2014 on charges outlined in a related federal criminal complaint filed in March 2014. Sentencing is set for December 9, 2014.

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

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

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

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

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

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of the FFETF, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.   

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

Action E-File Services Had Several Locations in North Texas

DALLAS — Following a nearly two-week-long trial, two local tax preparers were convicted this morning by a federal jury in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas

Carolyn Joy Clark, the owner of Action E-File service, a tax preparation business with three locations in Irving and Grand Prairie, Texas, was convicted on one count of assisting in the preparation of a false tax return. Mickey Joe Perez, a manager and tax preparer, was convicted on seven counts of the same. Eight former employees have pleaded guilty and are awaiting sentencing: Frances Rodriguez Pineda, Maritza Munoz Villanueva, Clara Elizabeth Carcamo, Hugo Molino, Ivette Ramirez, Jose Paleo, Leslie Cisnero, and Veronica Torres.

The government presented evidence that during the years 2008 through 2010, Action E-File Services electronically filed 54,760 income tax returns for customers. According to testimony from six of the former employees who pleaded guilty, approximately 75 to 90 percent of the returns they prepared contained false deductions or credits.

Further evidence at trial revealed that during this same period, Clark, 72, received $5.5 million in fees from the bank that processed Refund Anticipation Loans for her many customers.

Each count of conviction for Clark and Perez carries a maximum statutory sentence of three years in federal prison and a $250,000 fine. Sentencing is set for November 7, 2014.

Internal Revenue Service Criminal Investigation investigated. Assistant U.S. Attorneys Christopher Stokes and J. Nicholas Bunch prosecuted.

DALLAS — Anthony Galloway, 38, of Dallas, was sentenced this morning by U.S. District Judge Sam A. Lindsay to 64 months in federal prison after pleading guilty in February 2014 to one count of bank robbery, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the complaint filed in the case, at approximately 4:00 p.m. on November 15, 2013, a man, later identified as Galloway, entered the Go Federal Credit Union located at 4040 North Central Expressway in Dallas and presented a note to a teller that stated, “I have a gun, give me the money or I’ll shoot you!” Realizing it was a robbery and seeing the robber act as though he were reaching for a gun, the teller, in fear of her life, gave the robber cash from her drawer.

Galloway was arrested a short time later at an apartment on Holmes Street in Dallas.

The FBI, the Dallas Police Department and the Mesquite Police Department investigated.  Assistant U.S. Attorney Keith Robinson prosecuted.

DALLAS — A Dallas woman, Estela Martinez, 54, was sentenced today to 12 months and one day in federal prison following her guilty plea in August 2013 to one count of making a false statement, under penalty of perjury, related to bankruptcy filings. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas, whose office has been placing increased emphasis on investigating and prosecuting bankruptcy fraud, made the announcement today.

Martinez, who had been on pretrial release, failed to appear for her July 9, 2014 sentencing hearing. Following the issuance of an arrest warrant that same day, Martinez was arrested at her home on July 10, 2014. After a hearing on July 11, 2014, the Court revoked her pretrial release and she was remanded into custody pending her sentencing hearing.

According to the original indictment filed in the case, Martinez filed six voluntary bankruptcy petitions: in April 2009, July 2009, January 2011, March 2011, November 2011 and in November 2012. Separate counsel represented her in each of the 2009 filings; she represented herself in each of the 2011 and 2012 filings.

In each of the four 2011 and 2012 filings, according to that indictment, Martinez falsely and fraudulently omitted information concerning previous bankruptcy filings that she was obligated to disclose, under the penalty of perjury. Martinez fraudulently omitted listing her assigned social security number in several of the filed bankruptcy petitions.

Martinez was sentenced today for making a false statement under penalty of perjury in her November 7, 2011 bankruptcy petition, in which she fraudulently concealed that she filed four other bankruptcy cases during the period 2009 through 2011.

This case is one of several felony prosecutions of bankruptcy-related crimes generated by the recent Bankruptcy Fraud Initiative within the Northern District of Texas. Since February 2013, seven debtors have been charged with various felony offenses. Four defendants have entered guilty pleas (two have been sentenced), one defendant is set for trial and two defendants remain in fugitive status with outstanding arrest warrants.

The Social Security Administration, Office of Inspector General, investigated the case. Assistant U.S. Attorney David Jarvis prosecuted.

Defendant Pleaded Guilty to Witness Tampering, Making a False Statement to HUD and Deprivation Under Color of Law

DALLAS — Lawrence Hart, 37, was sentenced on Monday by U.S District Judge David C. Godbey to serve 15 months in federal prison and ordered to pay $8,619 in restitution following his guilty plea in April 2014 to felony and misdemeanor offenses stemming from his role as a caseworker for an outreach program managed by the City of Dallas’s Housing Department. Hart must surrender to the Bureau of Prisons in mid-October 2014. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.

Hart pleaded guilty to one count of witness tampering, one count of making a false statement to the U.S. Department of Housing and Urban Development (HUD) and one count of deprivation of rights under color of law.

According to documents filed in the case, in 2012 and 2013, Hart was a caseworker for Project Reconnect, a HUD-funded outreach program managed by the City of Dallas’s Housing Department. Project Reconnect provides reentry case management and community referrals to help non-violent offenders on parole settle back into the Dallas community. One of the main components of Project Reconnect is to provide housing to eligible individuals. As the program was being applied at the time, to be eligible for Project Reconnect, an individual must reside in Dallas, have felony conviction, be 18 years or older, be currently on parole or probation and meet HUD low to moderate income guidelines.

Hart admitted that in July 2012, he arranged for “Person A” to sign a lease for an apartment in Carrollton, under the Project Reconnect program, even though Person A did not qualify for the program at that time. The apartment’s rent was $980.00 per month, and Project Reconnect was responsible for $975 of that amount and Person A was responsible for $5.00 per month. Hart admitted that while he worked for the City of Dallas’s Housing Authority, he was in fact the sole occupant of that apartment and Person A never resided there. Hart further admitted that he submitted documentation to HUD reflecting that Person A was the sole occupant.

When HUD, the Dallas Police Department (DPD) and the FBI began investigating fraudulent activity related to Project Reconnect, they interviewed Hart about his involvement in Project Reconnect and his potential criminal activity. After that interview, Hart contacted Person A and instructed Person A to lie to a DPD detective and FBI special agent by telling them that Person A lived in the Carrollton apartment.

In late 2012, according to the factual resume filed in the case, Hart met “Person B” and fast-tracked Person B through the Project Reconnect program. While Person B was qualified for the program, Hart propositioned her for sex and expedited her placement in an apartment because she agreed to have sex with him. In January 2013, Person B ended her intimate relationship with Hart. Acting under color of law, Hart removed her from the HUD-subsidized apartment, wilfully depriving her of the right, to be free from discrimination in the terms, condition and privileges of rental of a dwelling because of her sex.

The DPD, HUD and FBI investigated the case. Assistant U.S. Attorney Errin Martin prosecuted.

DALLAS — A licensed pharmacist, who along with four co-defendants was convicted at trial earlier this year for their roles in a “pill mill” operation in Dallas, was sentenced this afternoon, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Lisa L. Hollier, 44, of Sunnyvale, Texas, was sentenced by U.S. District Judge Barbara M. G Lynn to 60 months in federal prison. She has been in custody since her conviction in February 2014.

Hollier owned and operated Urban Independent Pharmacy (UIP), located at 6300 Samuell Blvd., in Dallas. The jury convicted Hollier on one count of conspiracy to distribute, unlawfully, a controlled substance.

The four co-defendants who were convicted at trial on the same offense, Dallas residents Joesephis Austin, 60, Patricia A. Bryant, 59, and Walter R. Hudspeth, 62, along with Flower Mound, Texas, resident, Jose L. Martinez, 54, are scheduled to be sentenced on September 17, 2014. Each faces a maximum statutory penalty of 10 years in federal prison and a $500,000 fine.

Twelve other defendants charged in the case have pleaded guilty to their respective roles, and they have received sentences ranging from probation to 72 months in federal prison. Fourteen “dealers” were indicted and convicted in the case.

Defendants Austin, Bryant and Hudspeth operated as dealers who recruited “patients,” often from homeless shelters, and drove them in groups to Padron Wellness Clinic (PWC), located at 1000 Emerald Isle Drive in Dallas. Co-conspirators physician Nicolas Alfonso Padron, 54, of Garland, Texas, and Martinez opened PWC in the fall of 2010. PWC operated not as a legitimate medical facility, but as a place to unlawfully obtain controlled substances, such as hydrocodone.

Dr. Padron and Martinez, the PWC’s business manager, charged cash only for office visits in which Dr. Padron would do little to no physical examination and prescribe a “cocktail” of controlled substances, including hydrocodone, a Schedule II controlled substance and alprazolam, a Schedule IV controlled substance. Generally, they charged $250 for a new patient office visit and $185 for an established patient visit.

Typically, the dealers set appointments on PWC’s schedule and brought in multiple patients at a time. The dealers escorted the patients into the clinic, coordinated with Martinez and paid cash for the patients they brought. Dr. Padron would sometimes see two or more patients at a time in one exam room. Patient visits were short in duration and patients normally left with a 30-day prescription of 120 pills of hydrocodone and 30-90 units of alprazolam. Most of the patients were diagnosed by Dr. Padron with lower back pain and anxiety, without regard of their true condition; thus these prescriptions were medically unnecessary and outside the scope of professional practice.

Dr. Padron, who pleaded guilty in September 2013 to his role in this conspiracy and testified at trial, is also scheduled to be sentenced on September 17, 2014. He, too, faces a maximum statutory penalty of 10 years in federal prison and a $500,000 fine on this conviction.

Hollier and Dr. Padron coordinated a procedure for PWC’s staff to fax prescriptions for the controlled substances to UIP. Once Dr. Padron issued the prescriptions, these dealers would drive the patients to UIP to get the prescription filled. Typically, they did this in groups and Hollier had large amounts of hydrocodone and alprazolam in pre-filled bottles ready each day to handle the large groups of dealers and their patients. These dealers furnished the money to pay for the narcotics. Sometimes they paid Hollier directly for the prescriptions. After Hollier filled the prescriptions, the patients would give the dealers the pills that they would sell on the street for a profit.

In a separate and unrelated case, Dr. Padron pleaded guilty in September 2013 to one count of conspiracy to commit health care fraud stemming from his role as medical director of A Medical House Calls, a physician house-call company. Dr. Padron was sentenced in March 2014 to 57 months in federal prison, and he was ordered to pay nearly $9.5 million in restitution to the Centers for Medicare and Medicaid Services (CMS).

The Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG), the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit, investigated. Assistant U.S. Attorneys Kate Pfeifle and J. Nicholas Bunch are prosecuting.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for almost $6 billion. In addition, HHS’s CMS, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the HEAT Strike Force, see: www.stopmedicarefraud.gov

Large Quantities of Meth, Numerous Firearms and Several Vehicles, Including a Bentley, Were Seized

DALLAS — The last defendant convicted in a Drug Trafficking Organization (DTO) conspiracy that distributed large quantities of methamphetamine in the North Texas area was sentenced today, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Dallas resident, Lashaun Lamont Warren, 40, was sentenced today by U.S. District Judge Reed C. O’Connor to 120 months in federal prison. Warren pleaded guilty in August 2013 to one count of conspiracy to distribute and possess with intent to distribute 500 grams or more of methamphetamine. All told, defendants convicted in the case, all Dallas residents, received federal prison sentences ranging from 120 months to 292 months, as noted below:

Tony Hernandez, aka “T,” 31, 200 months

Johnny Angel Gamez, 22, 120 months

Sergio Picasso-Nieto, 35, 240 months

Miguel Quintero, aka “Chuckie,” 20, 262 months

Agne Vasquez, 29, 292 months

Andres Vasquez, 45, 151 months

Baltazar Vasquez, 25, 168 months

Roberto Vasquez, aka “Beto/Bubba,” 21, 240 months

Maria Reyna Vasquez, 46, 240 months

All defendants pleaded guilty to their respective roles in the conspiracy, with the exception of defendant Agne Vasquez, who was convicted at trial in September 2013. At the time of his arrest, agents seized multiple firearms, including assault weapons, some of which he posed with on Facebook.

The investigation dates back to 2007, when the Dallas Police Department and the FBI began investigating a large-scale methamphetamine and cocaine trafficking organization operating in the Dallas-Fort Worth metroplex. Tony Hernandez was the organization’s leader, having gained that role after members of the Los Zetas Cartel murdered his brother, Gonzalo Hernandez.

In 2011, the FBI began investigating the Tony Hernandez DTO and learned the organization illegally imported approximately 1,200 kilograms of methamphetamine and multiple kilograms of cocaine from Mexico on a monthly basis. Once the drugs were smuggled across the border, they were transported to various distribution locations in Dallas.

During the course of the investigation, law enforcement also learned that Hernandez acquired multiple kilograms of cocaine and methamphetamine in Houston, Texas, and used members of his DTO to transport it to Dallas for distribution.

The investigation involved numerous undercover purchases involving significant quantities of methamphetamine and large amounts of cash as well as several court-ordered wiretaps. Law enforcement executed federal search warrants at four Dallas residences on Seevers Avenue that were used to store large shipments of cocaine, methamphetamine and large sums of cash derived from the distribution of the illegal narcotics. Law enforcement also executed state search warrants on Alaska Drive in Dallas and at a local residential tower. The investigation resulted in significant seizures of methamphetamine, cocaine, firearms and vehicles, including a Bentley Continental.

The FBI and the Dallas Police Department were in charge of the investigation.

DALLAS — A Garland, Texas, man, Jonathan Ramirez, 26, was arrested yesterday on a federal complaint charging possession of prepubescent child pornography, announced U.S. Attorney Sarah R. Saldana.

Ramirez, who is in the U.S. illegally, made his initial appearance in federal court this afternoon. He waived his preliminary and detention hearings, and a U.S Magistrate Judge ordered him detained.

Yesterday, special agents with FBI Dallas Child Exploitation Task Force and the Garland Police Department executed a federal search warrant at Ramirez’s home. Law enforcement located and forensically reviewed multiple files of child pornography, including three video files depicting prepubescent child pornography. Ramirez used a peer-to-peer file-sharing program on the Internet to obtain the child pornography.

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The maximum statutory penalty for the offense as charged is 20 years in federal prison, a $250,000 fine and a lifetime of supervised release.

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

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

DALLAS — A Dallas man is in federal custody after law enforcement executed a search warrant at his residence and found him in possession of prepubescent child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Jose de Jesus Galicia-Fuentes, 58, was arrested yesterday on a federal criminal complaint charging possession of prepubescent child pornography. He made his initial appearance yesterday afternoon before a U.S. Magistrate Judge in Dallas who ordered him detained pending a hearing set for July 14, 2014.

According to the criminal complaint, an investigation into the sharing of child pornography files using peer-to-peer networks revealed that a user at a particular IP address, later determined to belong to Galicia-Fuentes, was sharing files indicative of child pornography. In April 2014, the user shared at least 27 unique files with keywords or names indicative of child pornography, hash values matching identified child victims, or files containing images previously identified as child pornography. As recently as July 2, 2014, the user was sharing 125 unique files of investigative interest.

Yesterday, special agents with the FBI’s Dallas Child Exploitation Task Force and officers with the Dallas Police Department executed a federal search warrant at Galicia-Fuentes’ apartment in North Dallas. Law enforcement located several videos on Galicia-Fuentes’ laptop depicting prepubescent child pornography.

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The maximum statutory penalty for the offense as charged is 20 years in federal prison, a $250,000 fine and a lifetime of supervised release.

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

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

DALLAS — A computer repairman from Dallas was sentenced this morning following his guilty plea in January 2013 to a felony child pornography offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Andrew McMahon, 37, was sentenced by U.S. District Judge Reed C. O’Connor to 15 years in federal prison to be followed by a five-year term of supervised release. McMahon pleaded guilty to an information charging one count of transportation of child pornography; he has been in custody since he entered that plea.

According to documents filed in the case, during an undercover investigation to identify persons using peer-to-peer file-sharing networks to distribute child pornography, a special agent with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) identified a computer with more than 300 files available for sharing that had files names indicative of child pornography.

A search warrant was executed at McMahon’s residence in Dallas in October 2012, and ICE HSI special agents seized a significant amount of computer equipment and related storage media, including 45 hard drives. McMahon admitted he used the internet and peer-to-peer file-sharing networks to view, download and distribute child pornography. He also admitted that he had more than 600 images and videos available to share on his file-sharing program. He advised that he had been downloading child pornography since the 1990’s.

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 — James Brian Rivers, 23, of Dallas, was sentenced this afternoon by U.S. District Judge Sam A. Lindsay to serve a total of 288 months (24 years) in federal prison and 15 years supervised release. He pleaded guilty in January 2014 to an indictment charging one count of production of child pornography and one count of possession of prepubescent child pornography. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made today’s announcement.

Rivers used the camera function on his cell phone to take sexually explicit photos and a video of a 22-month-old child. Rivers left his cell phone at a neighbor’s home in June 2013, and the neighbor looked through the cell phone and observed multiple images of child pornography and called 911. When officers with the Dallas Police Department arrived at the residence, they seized the cell phone and obtained a search warrant for it. A forensic review of the phone revealed multiple images and one video depicting child pornography involving a prepubescent 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 investigation was conducted by the FBI and the Dallas Police Department. Assistant U.S. Attorney Camille Sparks prosecuted.

DALLAS — Andrew Lee Siegel, a Dallas attorney, appeared this morning before U.S. Magistrate Judge Paul D. Stickney and pleaded guilty to an information charging one count of felony criminal infringement of a copyright, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, Siegel, 54, admitted committing the criminal infringement by unlawfully reproducing the writings, letterhead and logos of The Northern Trust Company and the Federal Reserve Bank in several fraudulent and fictitious communications with the intent to deceive the owners of Dynasty Spirits, Inc.

In fall 2010, Siegel established Dynasty Spirits, LLC, and later Dynasty Spirits, Inc. and Speak Easy Distillers, LLC, to facilitate the production and bottling of “Nue Vodka.” In February 2012, Siegel created a private placement memorandum for Dynasty Spirits, Inc. (Dynasty) authorizing the sale of up to $2,000,000 of common stock shares by Dynasty.

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

For example, on April 11, 2012, Siegel unlawfully used $175,000 previously tendered to Dynasty in order to issue himself 700,000 shares of Dynasty stock on June 15, 2012. As part of a civil settlement in June 2013, Siegel agreed to release and surrender any claim to the 700,000 shares.

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

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

In June 2013, Siegel and Dynasty reached a civil settlement in connection with various civil claims and counterclaims arising from Siegel and Dynasty’s business relationship. That settlement was before the commencement of the federal investigation, but only after Dynasty discovered and confronted Siegel about his unlawful use of investor funds.

Siegel faces a maximum statutory penalty of five years in federal prison and a $250,000 fine. He will remain on bond pending sentencing set for October 29, 2014.

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

LUBBOCK, Texas— The last of eight defendants charged with various offenses in a cocaine distribution conspiracy that operated in Mexico and in Lubbock, Borger and Odessa, Texas, pleaded guilty today, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Efren Fabela Lopez, 34, of Odessa, pleaded guilty today, before U.S. Magistrate Judge Nancy M. Koenig, to one count of possession of cocaine and aiding and abetting.  He faces a maximum statutory penalty of one year in federal prison and a $1,000 fine. 

This investigation, led by the Lubbock County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), resulted in the seizure of 30 pounds of cocaine in Lubbock and Odessa that had been brought in from Mexico, 10 firearms and nearly $200,000 in cash in Borger.

Each of the four below-listed defendants pleaded guilty last month to one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine.  Each faces a statutory penalty of not less than 10 years and up to life in federal prison and a $10 million fine. 

Martin Cardona Gutierrez, 46, of Odessa

Javier Lopez Lujan, 47, of Borger

Refugio Navarrete Gutierrez, 34, of Mexico

Manuel Carillo Ortiz, 38, of Mexico

Defendant, Israel Velasco, 35, of Odessa, pleaded guilty last month to one count of conspiracy to distribute and possess with intent to distribute cocaine.  He faces a statutory maximum penalty of 20 years in federal prison and a $1 million fine.

Defendant, Jerardo Salcedo Garcia, 27, of Odessa, pleaded guilty last month to possession with intent to distribute cocaine.  He, too, faces a statutory maximum penalty of 20 years in federal prison and a $1 million fine.

Defendant Ismael Velasco, 35, of Odessa, pleaded guilty last month to one count of unlawful use of a communication facility.  He faces a statutory maximum penalty of four years in federal prison and a $250,000 fine.

The indictment was dismissed against Gisselle Lujan, 26.

Judge Cummings ordered presentence investigation reports on all the convicted defendants with sentencing dates to be set after the completion of those reports.

The Ector County Sheriff’s Office and the Drug Enforcement Administration assisted the Lubbock County Sheriff’s Office and ATF in the investigation.

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

LUBBOCK, Texas — A former mechanic from Lake Charles, Louisiana, pleaded guilty in federal court in Lubbock, Texas, today to a federal obscenity charge, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. 

Nicholas W. Schofield, 25, pleaded guilty before U.S. District Judge Sam R. Cummings to one count of attempted transfer of obscene material to a minor.  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.  Schofield was released on bond following his arrest in May 2014 in Lake Charles, and remains on bond pending his sentencing hearing.

According to documents filed in the case, in November 2013, a minor female, “Jane Doe,” from San Angelo, Texas, began texting with a person, whom she did not know, who purported to be an 18-year-old mechanic from Louisiana named “Nick.”  Nick was in fact, defendant Schofield.  They engaged in numerous texting communications until February 2014, when Jane Doe’s communications were assumed by an undercover special agent with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). 

In the course of his communications with the undercover agent, Schofield sent various sexually explicit images and videos, all the while believing he was communicating with 15-year-old Jane Doe.  According to the factual resume filed, the video Schofield sent to the minor is obscene, in that it appeals to a prurient interest in sex, depicts a sexually explicit act and is patently offensive and, taken as a whole, lacks serious literary, artistic, political or scientific value.

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 Steven M. Sucsy is prosecuting.

FORT WORTH, Texas — A federal jury in Fort Worth, Texas, has convicted Jeffery James on an indictment charging one count of tax evasion, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The trial began yesterday morning before U.S. District Judge John McBryde.

According to evidence presented during trial, James, between 2006-2009, embezzled over $250,000 from the Las Colinas Country Club in Irving, Texas, where he was employed as Director of Club Accounting.  James evaded assessment and payment of taxes by failing to disclose his stolen money on his federal income tax return.

The government presented evidence at trial that during calendar year 2008, James, a married resident of Richland Hills, Texas, attempted to evade and defeat a large part of the federal income tax he and his spouse owed for calendar year 2007 by filing a fraudulent joint federal income tax return. That return stated, according to evidence presented, their joint taxable income for calendar year 2007 was $57,542, and tax due and owing was $5,639.  In fact, as James well knew, their joint taxable income for that year was $153,959, of which tax due and owing was $32,059.

James, who is on bond, faces a maximum statutory penalty of five years in federal prison and a $250,000 fine.  Sentencing is set for October 17, 2014.

Internal Revenue Service Criminal Investigation investigated the case.  Assistant U.S. Attorneys Chris Wolfe and Doug Allen are prosecuting.

Defendant Possessed Firearms, Large Amount of Chemicals, Supplies and Literature for Bomb Making Purposes

DALLAS — A Waxahachie, Texas, man, who was arrested a year ago after law enforcement discovered a firearm, bomb-making chemicals and related literature in his vehicle, was sentenced this morning in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Clayton Todd Earthman, 25, was sentenced by Chief U.S. District Judge Sidney A. Fitzwater to 41 months in federal prison. He pleaded guilty in March 2014 to one count of possession of a firearm by a prohibited person and one count of possession of an unregistered firearm.

According to documents filed in the case, on the afternoon of June 18, 2013, officers with the Dallas Police Department (DPD) stopped Earthman for committing a traffic violation in the 6600 block of Lovett Avenue in Dallas.  Upon removing Earthman from the car, officers located a loaded Glock model 32 .357 pistol from the driver’s side floorboard.  Officers also observed several large pieces of PVC pipe, end caps and assorted unknown chemicals in the back seat of the car.  Earthman was the sole occupant of the vehicle.

Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) were contacted, and upon a search of the car, they discovered fuses, handwritten documents, as well as downloaded material and published documents on how to construct an array of destructive devices and improvised weapons, including grenades.

Earthman advised law enforcement that he was a heroin addict and admitted to using methamphetamine three days three days prior to his arrest.  He advised law enforcement, according to the complaint filed in the case, that he is a “Doom’s day prepper,” and that he had more firearms and chemicals at his residence. 

Agents searched his residence in Waxahachie and located a Ruger .223 rifle, a black bag with pipes, a jar of Pyrodex, a box of 12.5 pounds of potassium nitrate, two bags of Hexamine, six silver caps, a bag of aluminum powder, a container with carbon steel balls, a box of grenade parts, a box of sodium nitrate, a box with 100 feet of cord, sodium bisulfate, a bottle of Thermite Ignition, assorted rounds of ammunition, black iron oxide, a jar of smokeless powder, a coffee can with nails and small silver pipes, primers, white pellets, peroxide, iodine, match heads, pipe collars, bolts and washers, detonators, a scale and ammonium perchlorate.

On June 20, 2013, ATF agents executed a warrant at an additional residence leased by Earthman in Dallas.  In the house, agents located a Taurus revolver, ammunition, fifteen marijuana plants, a package of hexamine, assorted wigs, bomb making supplies, unknown liquids and powder chemicals.

A search of the National Firearms Registration and Transfer Record revealed no firearms or destructive devices registered to Earthman.  An ATF Explosive Enforcement Officer (EEO) examined all of the items seized in this investigation and determined that the materials Earthman possessed were consistent with an improvised explosive weapon/destructive device.  Because of Earthman’s possession of specialized literature regarding mines, grenades and bobby traps, coupled with the necessary parts and components, the EEO believed Earthman could have readily assembled a functioning explosive device.

ATF and the DPD investigated the case.  Assistant U.S. Attorney Taly Haffar prosecuted.

LUBBOCK, Texas — Dale Wray Fulford, 77, of Slaton, Texas, was sentenced today by U.S District Judge Sam R. Cummings to 15 years in federal prison, following his guilty plea in March 2014 to one count of production of child pornography.  The announcement was made today by U.S. Attorney Sarah R. Saldaña. 

Fulford admitted that between February 2013 and early February 2014, he used, persuaded, induced and enticed a female minor, under age 18, to engage in sexually explicit conduct that he recorded on a digital camera. 

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 Lubbock County Sheriff’s Office investigated.  Assistant U.S. Attorney Steven M. Sucsy prosecuted.

LUBBOCK, Texas — A former resident of Lubbock, Texas, appeared today before U.S. District Judge Sam R. Cummings and pleaded guilty to a felony child pornography offense, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Jeremy Daniel Labrec, 23, pleaded guilty to one count of possession of child pornography. He faces a maximum statutory penalty of 10 years in federal prison, a lifetime of supervised release and a $250,000 fine. Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.

Labrec, who is in custody, admitted that while he lived in Lubbock, he used his cell phone to take a sexually explicit photograph of a prepubescent minor. He further admitted sending that image, via Skype, to an acquaintance who shared his interest in child pornography depicting prepubescent minor males.

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 investigated and Assistant U.S. Attorney Steven M. Sucsy is prosecuting.

Defendant Convicted at Trial on Four Child Pornography Offenses

DALLAS — A Dallas man who was convicted at trial in March 2014 on various child pornography offenses, was sentenced today, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. 

Ted Lynn Snider, 44, of Dallas, was sentenced by U.S. District Judge Barbara M. G. Lynn to 336 months (28 years) in federal prison and a 10-year term of supervised release.  After a two-day trial followed by less than one hour of deliberation, a federal jury convicted him on two counts of transporting and shipping child pornography, one count of receipt of child pornography and one count of possession of child pornography. 

In May 2013, the FBI discovered that a particular individual, later identified as Snider, was online sharing images and videos of young children engaged in vile and graphic sexual acts.  On May 29, 2013, the FBI executed a search warrant at Snider’s residence, and while at the residence agents spoke with Snider.  He admitted he had been using a file sharing program to trade files depicting child pornography and that he maintained a categorized, child pornography collection on his computer and external hard drives.  The FBI seized electronic evidence that contained hundreds of images and videos of child pornography.

During trial, a detective testified he located chat logs between Snider and others with a sexual interest in children who talked about their desire to sexually assault children.  They also exchanged child pornography with each other, and in fact, chats between Snider and two individuals were part of the evidence elicited regarding counts two and three.  In those chats, Snider and the two other individuals discussed how they wanted to molest the prepubescent children depicted in the photos. 

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 investigated.  Assistant U.S. Attorney Camille Sparks and Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay prosecuted.

AMARILLO, Texas — Aaron Robert Wells, 23, of Borger, Texas, was sentenced today by U.S. District Judge Mary Lou Robinson to five years in federal prison, following his guilty plea in April 2014 to one count of transportation of child pornography.  Judge Robinson remanded Wells, who had been on bond, to the custody of the U.S. Marshal.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

According to documents filed in the case, in March 2012, Wells was contacted online by an undercover law enforcement officer through file sharing software.  Wells had saved numerous images of child pornography on his computer and had made them available for online sharing.  Among other images, the undercover officer downloaded two images of minor males 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 FBI investigated the case, and Assistant U.S. Attorney Steven M. Sucsy of the U.S. Attorney’s Office in Lubbock, Texas, prosecuted.

FORT WORTH, Texas — Following a three-day trial before U.S. District Judge Reed C. O’Connor, a federal jury has convicted Dr. Abbas Zahedi of Carrolton, Texas, and Reginald Guy of Arlington, Texas, on all counts of a superseding indictment charging each with one count of conspiracy to commit health care fraud, five counts of health care fraud and four counts of aggravated identity theft. Following the verdicts, both defendants were remanded to the custody of the U.S. Marshal. U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

Zahedi, 49, a chiropractor, owned and operated DFW Rehab & Diagnostics (DFW) out of the office of Metroplex DFW Sports Rehab Center (Metroplex) in Arlington and later at a stand-alone location in Grand Prairie, Texas, until it closed in September 2012.

Guy, 44, worked at a factory in Arlington, and from approximately 2003 until 2009, he was a union representative.  His employment was terminated in November 2009.

The government presented evidence at trial that from 2009 to 2012, Dr. Zahedi and Reginald Guy, along with four coconspirators, James Sterns, Tina Perkins, Donna Harris and Gregory Wattron, conspired to submit health insurance claims to Blue Cross Blue Shield of Texas (BCBS) and other insurers for services not rendered.  Sterns, Perkins, Harris and Wattron have pleaded guilty to their respective roles in the conspiracy and are scheduled to be sentenced by Judge O’Connor on September 15, 2014.

Guy used as his role as a union representative at the factory to recruit and refer his co-workers to Metroplex, where, in exchange for monthly kickbacks, work excuse notes and a variety of prizes, they agreed to allow their insurance company to be billed for services they did not receive.

Sterns, 50, of DeSoto, Texas, owned and operated Metroplex.  In early 2010, Sterns hired Guy, whose employment at had been terminated, to be the office manager of Metroplex.  Guy served as Metroplex’s office manager from 2010 to mid-2011, shortly before the clinic closed.  In March or April 2011, Dr. Zahedi hired Guy as a consultant for DFW at its Grand Prairie location.  After Guy began working for Dr. Zahedi, Guy helped transfer patients and patient information from Metroplex to Dr. Zahedi at DFW, where the fraudulent referral and billing scheme continued.

Tina Perkins, 43, of Dallas, was responsible for submitting claims to insurance companies and also worked as the biller and office consultant for Dr. Zahedi at DFW.  Perkins’ sister-in-law, Donna Harris, 43 of Haltom City, Texas, permitted Metroplex, in exchange for cash payments, to submit claims to BCBS for services purportedly performed by Dr. Zahedi and Wattron, when in fact she received no treatment.  In early 2011, Dr. Zahedi hired Harris to be the office manager at DFW’s location in Grand Prairie.  As such, she continued to allow Dr. Zahedi to submit claims under her name to BCBS for services that were not performed.  Harris also permitted Dr. Zahedi to submit claims to BCBS for Harris’ immediate and extended family members for services they did not receive.  Wattron, 56, of Grapevine, Texas, was an occupational therapist at Metroplex from approximately 2008 until July 2011 and at DFW from June 2010 through August 2011.  Wattron agreed to allow Sterns and Dr. Zahedi bill insurance companies for occupational therapy that he did not perform.

Dr. Zahedi and Guy face a maximum statutory penalty of 10 years in federal prison and a $250,000 fine for the conspiracy count and each of the substantive health care fraud counts.  Each count of aggravated identity theft carries a maximum statutory penalty of two years.  They are scheduled to be sentenced on November 17, 2014.

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

DALLAS — A Dallas man, who admitted committing the armed robberies of insurance companies in Dallas last year, has pleaded guilty to federal charges, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Michael Dewayne Cleveland, 31, pleaded guilty this morning, before U.S. Magistrate Judge David L. Horan, to four of seven counts charged in an indictment returned by a federal grand jury in Dallas in December 2013. Specifically, Cleveland pleaded guilty to two count of interference with commerce by robbery and two counts of carrying or possessing a firearm during and in relation to a crime of violence.

Cleveland faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine for each robbery conviction. For the first firearm conviction, he faces seven years in federal prison, because he brandished the weapon, which will run consecutively to all other charges. For the second firearm conviction, he faces 25 years in federal prison that will also run consecutively to all other charges. Sentencing is set for October 15, 2014, before U.S. District Judge Ed Kindeade.

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

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

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

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

FORT WORTH, Texas — The Justice Department’s Civil Rights Division, the U.S. Attorney’s Office of the Northern District of Texas, and the FBI Dallas Division announced that Brice Johnson, 19, of Springtown, Texas, pleaded guilty today in federal court to kidnapping a young gay man after inviting the victim to his home and brutally assaulting him.

Johnson admitted in plea documents that in the early morning hours of Sept. 2, 2013, he  connected with the adult male victim, identified as A.K., through the cell phone application for MeetMe.com.  A.K.’s MeetMe.com page indicated he was a gay man, while Johnson’s web page indicated he was not gay.  During their chat communications, Johnson said that he was interested in engaging in sexual activity with A.K.  He invited A.K. to his home, gave A.K. his cell phone number and address, and they exchanged text messages planning their sexual encounter.  Just a few minutes after A.K. arrived at the house, Johnson severely beat him and bound A.K.’s wrists with an electrical cord.  Johnson then locked the victim into the trunk of his own car and drove the car to a family friend’s house.  Individuals at the home repeatedly warned Johnson that they would call the police if he didn’t take A.K. to the hospital.  Johnson eventually transported A.K. to an Emergency Medical Services (EMS) station in Springtown.

A.K. suffered multiple skull and facial fractures from the beating, causing him to be  hospitalized for ten days at Harris Methodist Hospital in Fort Worth.  Johnson admitted that he saved A.K.’s cell phone number using a gay slur as a contact name.  

During the plea hearing this morning, before U.S. District Judge Reed C. O’Connor, Johnson admitted that he held and confined the victim against his will in order to conceal the violent assault and to remove A.K’s severely injured body from the home where Johnson was a long-term houseguest. 

Sentencing has been set for Nov. 17, 2014.  Johnson faces a maximum statutory penalty of up to life in prison and a $250,000 fine

“This was a senseless act of brutal violence that has no place in a civilized society,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels.  “We are hopeful that today’s guilty plea brings some sense of justice for the victim and makes clear that the Department of Justice is committed to using every tool available to vindicate the rights of victims of violent crimes.  The department will continue to work with our state, local and federal law enforcement partners to vigorously investigate hate crimes allegations throughout the country.”

“Violent crimes of this nature will not be tolerated, and I commend the victim for his continued cooperation in the investigation and prosecution of this reprehensible conduct,” said U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

“The FBI is committed to thoroughly investigating violent crimes of this nature, and will continue to work with our local and state law enforcement partners to ensure justice for victims of these crimes,” said Diego Rodriguez, Special Agent in Charge of FBI Dallas Division.

The investigation is being conducted by the FBI, the Springtown Police Department and the Parker County Sheriff’s Office.  The case is being prosecuted by Assistant U.S. Attorney Cara Foos Pierce and Trial Attorney Saeed Mody of the Civil Rights Division.

Previously Dubbed "T Shirt Bandit," Defendant Committed Four Bank Robberies After Serving Federal Prison Sentence for 18 Bank Robberies Committed in 2006

DALLAS — A serial bank robber, who was on supervised release after serving a federal prison sentence for committing 18 bank robberies in Dallas in 2006, was sentenced today for committing four more bank robberies in 2013, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

William Clark Perschman, 51, most recently of Addison, Texas, was sentenced by U.S. District Judge Jane J. Boyle to a total of 198 months in federal prison. Perschman admitted committing these bank robberies:

           July 17, 2013                Woodforest National Bank
                                                         3770 Belt Line Road, Addison
           August 3, 2013              Capital One Bank
                                                         3790 Belt Line Road, Addison
           August 14, 2013            Green Bank
                                                          16771 Dallas Parkway, Addison
           August 31, 2013            Capital One Bank                 
                                                          17561 Dallas Parkway, Dallas

In most of the bank robberies, Perschman wore a long-sleeved shirt and either a t-shirt or towel draped over his head to disguise his identity. In each robbery, he presented a demand note to a teller.

Perschman was released from federal custody in February 2011, after serving a 63-month federal prison sentence for robbing 18 banks in Dallas in 2006. He was serving a three-year term of supervised release that would have ended in February 2014.

The FBI, Addison Police Department and Dallas Police Department investigated. Assistant U.S. Attorney Keith Robinson prosecuted.

Defendant Commits Offense While Waiting to Report to Federal Prison on Separate Conviction

DALLAS — A Dallas man who used family members’ personal identifiers and photos to apply for admission to, and receive financial aid from, certain institutions and colleges was sentenced this afternoon, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Desmond Ladell Johnson, 35, was sentenced by U.S. District Judge Jane J. Boyle to 24 months in federal prison and ordered to pay $22,442.00 in restitution.  Johnson pleaded guilty in October 2013 to one count of financial aid fraud.  He must surrender to the Bureau of Prisons in late August 2014.

At the hearing, it was noted that Johnson committed the instant crimes while on pre-sentence release for another conviction in the Northern District of Texas. Johnson pleaded guilty to one count of theft of government property on May 19, 2009, and in November 2009, he was sentenced to serve 46 months in federal prison for that offense. He was ordered to surrender to the Bureau of Prisons exactly two months later, on January 19, 2010, which he did, to begin serving that sentence. It was during that two-month period that Johnson committed the financial aid fraud crimes.

According to documents filed in the case, between May 2009 and January 2010, Johnson used the personal identifiers, including social security numbers, dates of birth and photo identifications of several family members, including his brother, stepbrother and father, to apply for admission to, and financial aid from the Dallas County Community College District and Trinity Valley Community College (TVCC). Those family members had no knowledge that Johnson was using this information or receiving disbursed funds.

When an address was required or requested on applications and forms, Johnson would typically list an address where he resided, or over which he had control, as opposed to the correct address for the relevant family member. When a telephone number or email address was required, Johnson would typically list a telephone number and email address over which he had control, as opposed to the correct telephone number or email address for the relevant family member. Johnson also obtained a student identification card at TVCC under his brother’s name, but which contained Johnson’s picture.

Using this scheme, Johnson stole $25,429.00 that he used for non-educational purposes.

The U.S. Department of Education investigated the case. Assistant U.S. Attorney P. J. Meitl prosecuted.

DALLAS — A man who travelled from the Pacific-Northwest to Dallas to engage in sexual activity with a minor, was sentenced today in federal court in Dallas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Phillip Amisano-Camillo, 43, a resident of Canada, was sentenced to 300 months (25 years) in federal prison, to be followed by a 10-year term of supervised release, by U.S. District Judge Jorge A. Solis.  Amisano-Camillo pleaded guilty on Friday, August 16, 2013, to one count of enticement of a minor.  His trial, on a two-count indictment charging not only enticement, but also one count of traveling with intent to engage in sexual acts with a minor, was scheduled to begin the following Monday.  Today, per the plea agreement, the Court dismissed the traveling count.

According to documents filed in the case, Camillo admitted he met “John Doe” in an Internet chat room in April 2012.  In the days and weeks after he met John Doe, whom he knew was a 14-year-old minor, Camillo “chatted” online with him via Skype.  Camillo admitted that in May 2012, he traveled from Washington State to Dallas to meet John Doe for a sexual encounter.  Camillo also admits that before and during his time in the Dallas/Fort Worth area, he enticed and persuaded John Doe to sneak out of his home and meet him to engage in unlawful sexual activity.  Camillo admits that he took John Doe to a local hotel and engaged in sexual activity with him.

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 Irving Police Department investigated.  Assistant U.S. Attorneys Lisa J. Miller and Aisha Saleem prosecuted.

DALLAS — At a hearing concluding late Friday afternoon, Chief U.S. District Judge Sidney A. Fitzwater sentenced Duc Luu, a naturalized U.S. citizen from Vietnam, to 14 years in federal prison for laundering monetary proceeds from sex trafficking, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

During the hearing, Chief Judge Fitzwater noted the horrific nature of the crime and added that he was incapable of capturing its heinousness in words.  Chief Judge Fitzwater also ordered Luu to pay $16,766 in restitution to the victim.

“I commend the dedication and hard work of law enforcement, not only in their persistence in investigating this case, but in their efforts to locate and rescue victims who may be unable to seek help themselves,” said U.S. Attorney Saldaña.  “This district remains vigilant in our efforts to vigorously and aggressively prosecute human traffickers and hold them accountable for their crimes.”

Luu, 50, was indicted in August 2011, while he was living in Vietnam, on one count of sex trafficking by force, fraud or coercion and two counts of money laundering.  According to documents filed in the case, Luu travelled to Vietnam on his U.S. passport, but shortly after his indictment, the U.S. initiated efforts to arrest and extradite him.  Ultimately, the U.S. Department of State revoked Luu’s passport and Vietnam expelled him.  Luu was then arrested and returned to the Northern District of Texas, where he made his initial appearance in federal court on the charges in September 2012.

Luu pleaded guilty in August 2013 to two counts of money laundering.  According to the stipulated facts in the factual resume, in October 2008, Luu caused $12,000 to be wire-transferred from a bank in Texas to a bank in Vietnam, knowing that the funds had been derived from sex trafficking.  Again, in July 2009, Luu caused $26,000 to be wire-transferred from a bank in Texas to the same bank in Vietnam, knowing that these funds also were derived from sex trafficking.  Luu was the sender and beneficiary of both wire transfers.

The victim testified at the sentencing hearing regarding the depraved acts of the defendant in recruiting, grooming, manipulating, exploiting and subjecting her to a fraud of the most serious nature.

“Individuals such as Mr. Luu, who use money laundering to conceal the true source of their money run the risk of federal prosecution and imprisonment,” said R. Damon Rowe, Special Agent in
Charge of the IRS-CI Dallas Field Office.  “IRS Criminal Investigation is committed to unraveling money laundering schemes and assisting our law enforcement partners to ensure that the type of criminal conduct engaged in by Mr. Luu is not ignored.  Mr. Luu’s sentence is a reminder to criminals that money laundering schemes will be vigorously investigated and prosecuted.”

“Even a harsh prison sentence seems inconsequential compared to the horrors visited on the victim in this case,” said Special Agent in Charge David Marwell of HSI Dallas. “Nonetheless this is a stern warning to criminals who flee justice that Homeland Security Investigations will continue to use our unique authorities and international partnerships to bring criminals to justice, no matter how far they run or in what country they hide.”

IRS Criminal Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Department of State and the Garland Police Department investigated.  Assistant U.S. Attorney Errin Martin prosecuted.

DALLAS — A local man was sentenced yesterday afternoon, by U.S. District Judge Jane J. Boyle, to 45 months in federal prison and ordered to pay approximately $52,000 in restitution on a conspiracy conviction stemming from his role in a tax refund fraud scheme, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Elijah Meskano pleaded guilty in May 2013 to a superseding information charging one count of conspiracy to commit theft of public funds.  Following the hearing yesterday, Judge Boyle remanded him into the custody of the U.S. Marshal.

According to a complaint filed in Meskano’s case, he and Cephas Msipa were roommates in Plano, Texas.  Msipa, who has been in federal custody since his arrest on an indictment in November 2012, pleaded guilty to the same offense and was sentenced in February 2014 to 46 months in federal prison and ordered to pay more than $118,000 in restitution.  The Court stated during his sentencing hearing that Msipa will be deported to Zimbabwe after he serves his prison sentence.

According to the factual resume filed in Msipa’s case, Msipa admitted that from January 5, 2012, until June 2012, he was involved in a conspiracy to obtain tax refunds generated through the submission of fraudulent tax returns.  For his part in the conspiracy, Msipa used a false name to open bank accounts in order to receive the refunds from the fraudulently filed tax returns. 

Msipa used a forged United Kingdom passport to establish a private mailbox at a postal store on Preston Road in Dallas.  Thereafter, according to the factual resume, Msipa used this false name, and the address of the mailbox, to open three accounts at Bank of America and two accounts at Chase Bank.

Meskano, according to the factual resume filed in his case, from December 22, 2011 through November 29, 2012, also opened bank accounts using a false name to receive refunds from fraudulently filed tax returns. 

According to the factual resume filed in Meskano’s case, from January through November 2012, the co-conspirators electronically filed 192 fraudulent tax returns using stolen identities and false income information that directed the IRS to deposit refunds into one of six bank accounts Meskano opened.

IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated.  Assistant U.S. Attorney Christopher Stokes prosecuted.

Defendants on Duty When an Inmate Commits Suicide

ABILENE, Texas — Former Correctional Officers at Big Spring Correctional Center (BSCC), in Big Spring, Texas, have 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, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Today, Frederick Hernandez, 45, of Big Spring, appeared before U.S. District Judge Sam R. Cummings and pleaded guilty to one count of making false statements and aiding and abetting.  He faces a maximum statutory penalty of five years in federal prison and a $250,000 fine.  Last Friday, Christopher Moore, 42, of Dallas, pleaded guilty to one count of misprision of a felony.  He faces a maximum statutory penalty of three years in federal prison and a $250,000 fine.  Judge Cummings ordered a presentence investigation report for each defendant with a sentencing date to be set after the completion of those reports.

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 Officer in Charge.  Part of 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.  He is presently serving his prison time.  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 is prosecuting.

Defendant is the Last of 39 Convicted in Case to be Sentenced

WICHITA FALLS, Texas— A Wichita Falls, Texas, man, Stuart Ray Mitchell, 40, who pleaded guilty in January 2014 to one count of conspiring to possess with intent to distribute and to distribute methamphetamine, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to 151 months in federal prison.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, Mitchell admitted that on multiple occasions between November 2011 and August 2012, he distributed quantities of methamphetamine, and received payments for it, from customers in the Wichita Falls area.  Mitchell’s sources of methamphetamine included co-conspirator Steve Ysasaga, who supplied Mitchell quantities of at least one ounce of methamphetamine at a time.  Mitchell distributed quantities of methamphetamine to various individuals in Wichita Falls, and he made payment for the methamphetamine he received from Ysasaga to both Ysasaga and co-defendant Kimberly Williams.  Mitchell admits he possessed with intent to distribute at least 50 grams of methamphetamine during the conspiracy.

Ysasaga, 41, of Arlington, Texas, was sentenced in late February 2014 to 240 months in federal prison.  Kimberly Williams, 27, was sentenced to 72 months in federal prison in July 2013.

With Mitchell’s sentencing yesterday, all 39 defendants charged in this conspiracy have entered guilty pleas and have been sentenced.  Federal prison sentences have ranged from 24 months to 300 months.

The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Texas Department of Public Safety and the Wichita Falls Police Department investigated this Organized Crime and Drug Enforcement Task Force (OCDETF) case.  Assistant U.S. Attorney Mary F. Walters prosecuted.

WICHITA FALLS, Texas— Leonardo L. Sanchez, of Wichita Falls, Texas, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to 110 months in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Sanchez, 37, has been in custody since his arrest in June 2013 on a related federal criminal complaint. 

According to plea documents filed in the case, on October 25, 2012, when officers with the Wichita Falls Police Department executed a narcotics search warrant at his home, officers found two semi-automatic pistols in a safe.  In Sanchez’s truck, officers located a tube of caulk that contained two small plastic bags containing additional small plastic bags of methamphetamine.  Sanchez admitted he possessed this methamphetamine and intended to distribute it later.

The Texas Department of Public Safety, the Wichita Falls Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated; Assistant U.S. Attorney Mary F. Walters prosecuted.

WICHITA FALLS, Texas — Joseph Higgins, 35, most recently of Wichita Falls, Texas, was sentenced yesterday by U.S. District Judge Reed C. O’Connor 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.

According to documents filed in the case, Higgins was convicted in the Circuit Court for the State of Oregon for Union County in June 2000 of rape and sodomy and was sentenced to 75 months on each count, to run concurrently.  He was also required to register as a sex offender, a requirement that he acknowledged when he was released from custody in May 2012.  On November 9, 2012, Higgins registered as a sex offender with the LaGrande Police Department in Oregon.

In January 2012, Higgins moved to Texas.  He failed to advise the State of Oregon of the move and he failed to register in Texas as a sex offender, as required by the Sex Offender Registration Notification Act (SORNA).  The Wichita Falls Police Department issued an arrest warrant for Higgins on May 15, 2013, charging him with failing to comply with registration requirements, and he was arrested the following day.

Higgins admitted he knew he was a sex offender, and he knew of his duty to register.  He admitted he had been convicted of raping a 13-year-old victim.

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 Wichita Falls Police Department and the U.S. Marshals Service investigated.  Assistant U.S. Attorney Camille Sparks prosecuted.

Brian Marshall Taken Into Custody Immediately Following Sentencing

DALLAS — Businessman Brian Marshall, 50, of Tampa, Fla., was sentenced today by U.S. District Judge Barbara M. G. Lynn to four years in federal prison for defrauding investors in connection with the sale of Home Solutions of America, Inc. stock, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.  Marshall was remanded immediately to custody following the sentencing hearing.

Marshall pleaded guilty on November 18, 2013, the day his trial was to begin in federal court in Dallas, to one count of securities and commodities fraud.

Marshall was a vice-president and a member of the board of Home Solutions of America, Inc., a NASDAQ-traded company that was based in Dallas before it relocated to New Orleans, Louisiana in July 2008.  Home Solutions was in the business of construction and restoration, including new construction and restoration following natural disasters such as hurricanes.  Home Solutions conducted some of its business through its largest subsidiary, Fireline Restoration, Inc., which was based in Tampa.  Marshall was the president of Fireline.  Frank J. Fradella of Covington, Louisiana, who was the CEO of Home Solutions, pleaded guilty to securities fraud in the Eastern District of Louisiana and is scheduled to be sentenced on September 24, 2014.

In filed plea documents, Marshall admitted that between December 2006 and August 15, 2007, he ran a scheme to defraud public investors by fabricating false and fictitious revenue, operating income and costs in connection with a series of construction contracts in Tampa.  Marshall caused Fireline to enter into construction contracts with private companies that he wholly or partially owned, including a $4 million contract for the construction of his personal residence. 

Marshall admitted that he also caused Fireline to record revenue and income from the construction contracts that were false, because little, if any, work had actually been performed.  Even though Marshall knew that the revenue, costs and income on the construction projects were false, he caused Home Solutions to report it to public investors in Home Solutions’ 2Q 2007 10-Q. 

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

The FBI, with substantial assistance from the Enforcement Division staff of the Securities and Exchange Commission, conducted the investigation.  Assistant U.S. Attorneys J. Nicholas Bunch and Andrew Wirmani prosecuted.

DALLAS — A Ph.D. chemical engineer from Terrell, Texas, Dr. Mattias Tezock, self-surrendered to special agents of the FBI this morning on felony offenses outlined in a federal indictment returned last week by the grand jury, stemming from his use of trade secrets stolen from his former employer, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Dr. Tezock is charged with four counts of unauthorized possession of stolen trade secrets.  He made his initial appearance is federal court this afternoon in Dallas and was released on bond.

From April 12, 2004, to September 30, 2005, Tezock was employed as a chemical engineer at Voltaix, LLC, a multinational corporation, headquartered in North Branch, New Jersey, which manufactures specialty chemicals for the semiconductor and solar energy industries.  Over approximately 25 years and at great expense, according to the indictment, Voltaix developed a specific, industry-leading and exacting secret and confidential scientific method to make and purify germane to specifications required by its customers.  In particular, Voltaix developed a particular secret and confidential recipe that it uses to manufacture high-purity germane, as required by its customers.  It has taken reasonable measure to keep this information secret and confidential and it derives economic value from it not being known to, or readily ascertainable through proper means, by the public.

As part of his employment at Voltaix, Tezock signed and agreed to an “Employment and Non-Compete Agreement” and an “Employee Confidentiality Acknowledgement Form” when he joined the company, which prohibited him from improper disclosures of Voltaix’s confidential, proprietary and trade secret information.  While he was employed at Voltaix, Tezock primarily worked on the pre-commissioning of Voltaix’s germane processing and manufacturing plant.  Tezock’s employment was terminated as of September 30, 2005.

The indictment alleges that Tezock later moved to Terrell and opened Metaloid Precursors, Inc., a company set up to manufacture, produce, purify and sell the specialty gas, germane.  According to the indictment, from September 30, 2005 until at least March 17, 2011, Tezock unlawfully possessed confidential, proprietary and trade secret information from Voltaix, and he attempted to convert, and did convert, that information for his economic benefit by developing, manufacturing, marketing and selling the germane.  After his termination from Voltaix, Tezock almost immediately began taking steps to misappropriate Voltaix’s confidential, proprietary and trade secret recipes and process for manufacturing and purifying high-purity germane gas (GeH4), a hazardous chemical, by creating a competing business entity and attempting to steal business from Voltaix by actively soliciting at least one of Voltaix’s customers.

In addition, according to the indictment, during subsequent civil litigation brought by Voltaix, Tezock took steps to hide his possession of this trade secret information by deleting files or manipulating computer evidence in an attempt to prevent Voltaix from learning the scope and magnitude of his breach.  He also provided false testimony about it under oath in a deposition in the civil litigation.

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, each count of theft of trade secrets carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.  The indictment also includes a forfeiture allegation that would require Tezock, if convicted, to forfeit to the government all proceeds traceable to the offense.  Restitution could also be ordered.

The FBI is investigating the case.  Assistant U.S. Attorneys J. Nicholas Bunch and Paul Yanowitch are prosecuting.

(Download Factual Basis)

DALLAS — Yesterday afternoon, two businessmen, Stanley Thaw, 72, of Frisco, Texas, and Michael Kincaid, 57, of Plano, Texas, who owned and operated hyperbaric oxygen therapy (HBOT) companies located in Plano, Denton, Hurst, Houston, and San Antonio, Texas, were each sentenced to five years in federal prison by U.S. District Judge Jorge A. Solis for conspiring to commit health care fraud.  In addition, Judge Solis ordered them to pay approximately $1.5 million in restitution, jointly and severally.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

Each defendant pleaded guilty in July 2013 to one count of conspiracy to commit health care fraud, admitting they conspired together, and with others, to defraud Medicare by making false and fraudulent representations and promises in connection with payments of HBOT services and items.  HBOT is a therapy used to assist in healing diabetic sores or amputations in an outpatient setting.  HBOT is administered by placing the patient in a hyperbaric oxygen chamber to receive increased levels of oxygen; each session of HBOT is commonly referred to as a “dive,” and generally lasted between ninety minutes and two hours. 

The HBOT companies employed physicians to attend and supervise HBOT sessions to ensure that a patient was medically appropriate for the HBOT on that particular day and also to treat any medical emergency that may occur.  Stanley Thaw and Kincaid admitted that they defrauded Medicare by billing multiple times for the physician supervision and attendance of HBOT-related services, when, in fact, the physician only supervised and attended one session/dive that day. 

Stanley Thaw and his co-conspirators were advised on multiple occasions that billing for multiple dive sessions was improper and that they had overbilled Medicare.  They continued to direct fraudulent claims to Medicare and other health care programs through at least June 2011.

The case was investigated by the FBI, the U.S. Department of Health and Human Services - Office of Inspector General, the Office of Personnel Management - Office of Inspector General and the Texas Department of Public Safety.  To learn more health care fraud, please visit: http://www.stopmedicarefraud.gov/.

Assistant U.S. Attorney P.J. Meitl prosecuted.

Led by Two Brothers and Their Sister; Other Family Members Also Involved

DALLAS — Following a law enforcement operation yesterday by special agents with the FBI and officers with the Dallas Police Department, 10 defendants who are charged in a drug distribution and robbery conspiracy are in custody.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas, Special Agent in Charge Diego Rodriguez of Dallas FBI and Chief David O. Brown of the Dallas Police Department.

Defendants indicted and in custody are:

• Cesar Ibarra, aka “Bling,” 39, of Mansfield, Texas
• Hilberto Ibarra, aka “Gilberto,” 29, of Mansfield, Texas
• Cesar Ibarra, Jr., aka “Chicho,” 21, of Dallas, Texas
• Lauro Reyes-Serrano, aka “Wicho” and “Gordo,” 29, of Dallas
• Nicholas Manriquez, 28, of Dallas, Texas
• Andres Garcia, aka “Mentiras,” 30, of Dallas, Texas
• Victor Anderson, aka “Old School,” 51, of Dallas, Texas
• Quinton Walker, 30, of Dallas, Texas
• Mark Anthony Nolasco, 22 of Dallas, Texas and Mansfield, Texas

One defendant named in the indictment, Elva Sofia Ibarra, 36, also of Dallas, has not been arrested.  Another defendant, Felipe Gonzalez, 27, was arrested today on a related federal criminal complaint.  The 10 arrested defendants made their initial appearances in federal court this afternoon and will remain in custody pending detention hearings scheduled for next week.

“This indictment and the arrests of these defendants represent the culmination of many months of diligent work by the FBI and the Dallas Police Department, and serves as an excellent example of the collaborative efforts of the federal government and local law enforcement to apprehend those individuals who are the most dangerous in our communities,” said U.S. Attorney Saldaña.  “We believe this case will have a significant impact on the communities in which these criminals operated.”

“These arrests have resulted in a significant disruption of a criminal enterprise in the Dallas Division,” said Special Agent in Charge Rodriguez.  “This joint investigation is a clear example of law enforcement’s commitment to remove the elements that pose significant social and criminal threats to our communities.”

“The Dallas Police Department was pleased to be involved in the investigation which led to the successful indictment and arrest of several members of the Goon Squad street gang,” said Chief Brown.  “The arrests of these individuals is the culmination of a successful collaboration between the FBI, the US Attorney’s Office and our Department, as well as other members of the law enforcement community.”

The indictment alleges that Cesar Ibarra and his brother, Hilberto Ibarra, and their sister, Elva Sofia Ibarra (the Ibarra siblings) conspired with each other and others to commit illegal narcotics-trafficking offenses and criminal offenses in furtherance of their drug-trafficking activities, including the commission or planned commission of burglaries, robberies and other acts of violence.  The Ibarra siblings and certain other co-conspirators called themselves the “Goon Squad,” and while Cesar and Hilberto Ibarra led the Goon Squad, the Ibarra siblings involved other family members, including Cesar Ibarra, Jr., in their cocaine, methamphetamine and marijuana trafficking activities.

According to the indictment, the Goon Squad targeted individuals known, or believed, to be drug dealers for burglary, robbery or other acts of violence, because those individuals were likely to possess large quantities of illegal narcotics, U.S. currency or firearms, and would not be likely to report any offenses by the Goon Squad.

The Goon Squad performed surveillance and reconnaissance on their potential victims.  They also attempted to perform similar surveillance on members of law enforcement they believed were investigating their illicit activities by taking photographs and recording vehicle-specific information.

Count One of the indictment alleges that between November 2011 and June 3, 2014, these 10 defendants conspired to possess with intent to distribute 500 grams or more of methamphetamine, five kilograms or more of cocaine and marijuana.

Count Two of the indictment alleges that during the same time frame, defendants Cesar Ibarra, Hilberto Ibarra, Elva Sofia Ibarra, Lauro Reyes-Serrano and Victor Anderson conspired with each other and others to obstruct, delay and affect interstate commerce by robbery, in that the defendants and their co-conspirators conspired to unlawfully take and obtain controlled substances, firearms and cash from others, by actual or threatened force and violence.  Cesar and Hilberto were the leaders and organizers of the robberies, or other acts of violence, and personally participated in such illegal activities.

A federal indictment is an accusation by a grand jury.  A complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge.  The government has 30 days to present the matter to a grand jury for indictment.  A defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, however, the statutory maximum penalty for each count of the drug trafficking conspiracy is life in federal prison and millions of dollars in fines.  The statutory maximum penalty for each count of conspiracy to commit robbery affecting interstate and foreign commerce is 20 years in federal prison and a $250,000 fine.

Assistant U.S. Attorneys P. J. Meitl and Jason Schall are prosecuting.

(Download Factual Basis)

ABILENE, Texas — A former Correctional Officer at Big Spring Correctional Center (BSCC), Matthew Castaneda, 24, and an inmate at BSCC, Ferdinand Trinidad, 45, have been sentenced for offenses related to contraband smuggling at the facility, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Today, Trinidad was sentenced by U.S. District Judge Sam R. Cummings to six months in federal prison.  He pleaded guilty in February 2014 to one count of misprision of a felony.  Castaneda, who pleaded guilty in January 2014 to one count of making false statements, was sentenced by Judge Cummings on May 16, 2014, to six months in federal prison and six months home monitoring.  He must surrender to the Bureau of Prisons on June 20, 2014.

According to documents filed in the case, from mid-September 2012 to mid-December 2012, Castaneda accepted monetary bribes from Trinidad’s wife to smuggle cell phones and other contraband into the facility for Trinidad.  Trinidad’s wife would receive the contraband at her residence and then mail it to Castaneda at BSCC.  She would deposit money directly into a bank account that Castaneda had set up to hide the scheme.  Castaneda admitted receiving a $1,700 bribe, and Trinidad admitted he failed to notify an authority as soon as possible that Castaneda had agreed to bring contraband into the prison in exchange for monetary bribes.

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