Northern District of Texas

DALLAS — Danny Jack Harder, 39, was sentenced today by U.S. District Judge Ed Kinkeade to 150 months in federal prison and a lifetime of supervised release, following his guilty plea in March 2013 to one count of transporting and shipping child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.  Harder has been in custody since his arrest in December 2012 on a related federal criminal complaint.

According to documents filed in the case, the investigation of Harder began on October 25, 2013, when an officer with the Plano Police Department, operating in an undercover capacity, encountered an individual online in a peer-to-peer (P2P) file-sharing network who appeared to have several files containing child pornography.

According to the factual resume filed in the case, on November 15, 2012, special agents with the FBI executed a search warrant at Harder’s residence in Dallas.  Harder admitted that he intentionally and knowingly received and transported child pornography via P2P file-sharing software and/or networks.  He also acknowledged that his P2P shared folder contained well over 350 videos of child pornography.  A forensic review of his computer and computer-related items indicated that he provided the password to his P2P shared folder approximately 265 times in 2011-2012 and that on October 25, 2012, his shared folder contained the equivalent of more than 600 images available for sharing. 

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 Plano Police Department.  Assistant U.S. Attorney Lisa J. Miller prosecuted.

DALLAS — Marci Johnson, 46, of Kaufman, Texas, was sentenced today by U.S. District Judge Jorge A. Solis to 18 months in federal prison for embezzling more than $772,000 from her employer, Spaeth Communications.  Judge Solis also ordered that Johnson serve a one-year term of supervised release with the first six months served in home confinement with electronic monitoring.  The Court also ordered that Johnson pay restitution of $772,829.  Prior to sentencing, Johnson paid the full amount of restitution to the clerk’s registry, and Judge Solis, as part of sentencing, ordered that the money be disbursed to the victim.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Johnson pleaded guilty in June 2013 to an Information charging one count of mail fraud.  According to documents filed in the case, from at least August 2003 to March 2011, Johnson embezzled $772,829 from Spaeth Communications of Dallas.  During part of that time, Johnson was the company’s Chief Administrative Officer, and in that role, had access to its company checks and company credit cards.  Based on her long-standing working relationship with the company’s owner, Johnson occupied a position of trust that provided her substantial discretion over the company’s bank accounts.

Johnson admitted using her corporate American Express card for numerous personal charges, such as dining, department stores and entertainment.  In addition, she used company checks to pay for outstanding charges on the company’s American Express bill, including charges she made for personal expenses.  She also wrote company checks to cover charges on her personal credit cards.  In fact, Johnson admitted that she wrote company checks to Citibank, her personal credit card provider, to cover the cost of an outdoor deck, hot tub, outdoor granite countertops and grill at her personal residence in Kaufman and caused false entries to be made in the company’s accounting software to prevent others from discovering her fraudulent purchases. 

The investigation was conducted by the U.S. Postal Inspection Service and the FBI.  Assistant U.S. Attorneys J. Nicholas Bunch and P. J. Meitl prosecuted; Assistant U.S. Attorney Melissa Childs handled the forfeiture.      

DALLAS — Upwardly departing from the U.S. Sentencing Guidelines, U.S. District Judge Jorge A. Solis sentenced James K. Jenkins, 38, most recently of Garland, Texas, to 48 month in federal prison.  Jenkins pleaded guilty in March 2013 to one count of failure to register as a sex offender.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Officers with the Garland, Texas, police department arrested Jenkins in October 2012 on a warrant out of DeKalb County, Georgia, for failure to register as a sex offender and a probation violation.  Jenkins had been convicted in DeKalb County for statutory rape in 2002 and was required to register as a sex offender for life.  After he served the sentence in this case, Jenkins registered as a sex offender, in DeKalb County, in 2006 and 2007.  Sometime between September 1, 2012 and October 1, 2012, Jenkins moved to Texas, and failed to register as a sex offender, even though he resided in Texas for more than 10 days.  In fact, Jenkins advised that he’d lived in Tennessee, Louisiana and Texas and had failed to register in any of those states.

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 Garland Police Department and the U.S. Marshals Service.  Assistant U.S. Attorney Camille Sparks prosecuted.

FORT WORTH, Texas — Philip Woolery, a former officer with the Grapevine, Texas, Police Department, was sentenced today by U.S. District Judge Terry R. Means to 180 months (15 years) in federal prison and fined $5,000 following his guilty plea in March 2013 to an Information charging one count of production of child pornography and one count of possession of child pornography.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Woolery, 47, has been in custody since his arrest in October 2012 at his residence in Crowley, Texas, by U.S. Postal Inspectors during the execution of a federal search warrant.  He admitted that in August 2011 he used his digital camera to record a minor male engaging in sexually explicit conduct in a swimming pool.  In addition, Woolery admitted that in October 2012, he possessed a laptop computer that contained a sexually explicit image of a nude minor male and that he used that computer and the Internet to search for websites containing child pornography.

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

The case was investigated by the U.S. Postal Inspection Service.  Assistant U.S. Attorney A. Saleem prosecuted.

DALLAS — Brent Dickey, 42, a former officer with the Alvarado, Texas, Police Department, appeared in federal court today and pleaded guilty to an Information charging one count of misprision of a felony.  He faces a maximum statutory penalty of three years in federal prison and a $250,000 fine.  Dickey, a resident of Burleson, Texas, will remain on bond pending sentencing, which is set for January 8, 2014, before U.S. District Judge Ed Kinkeade.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, in February 2010, Dickey was assigned to the Stop The Offender Program – Special Crimes Unit (STOP-SCU), a Johnson County law enforcement task force that investigated drug crimes occurring in the county.  Dickey knew that a particular individual, Person A, was unlawfully distributing anabolic steroids, and he failed to make this felony known to some judge or other person in civil or military authority under the United States, such as a federal grand jury or an FBI agent. 

On February 5, 2010, another STOP-SCU task force officer received information that Person A was unlawfully distributing anabolic steroids.  This task force officer told Dickey that he planned to make a case against, and arrest, Person A.  Unbeknownst to this task force officer, Person A had been supplying Dickey with anabolic steroids.

Two days later, Dickey went to Person A’s home and leaked this law enforcement sensitive information to Person A so that Person A would avoid getting caught, arrested or prosecuted for this felony drug offense.

The FBI and the Texas Ranger Division of the Texas Department of Public Safety are investigating.  Deputy Criminal Chief Assistant U.S. Attorney Gary Tromblay and Assistant U.S. Attorney J. Mark Penley are in charge of the prosecution.

Dr. Edgar A. Lockett, Jr. Formerly Resided and Practiced in Mineral Wells and McAllen, Texas

AMARILLO, Texas — After a four-day trial, before U.S. District Judge Mary Lou Robinson, a federal jury in Amarillo, Texas, has convicted Edgar A Lockett, Jr., on all six counts of an indictment charging tax evasion.  Lockett faces a maximum statutory sentence of five years in federal prison and a $250,000 fine for each of the counts of conviction.  He could also be ordered to pay restitution.  Judge Robinson remanded Lockett into the custody of the U.S. Marshal.  A sentencing date was not set.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

The government presented evidence at trial that Lockett is a self-employed anesthesiologist who currently resides in Amarillo; he formerly resided and practiced in other cities in Texas, including Mineral Wells and McAllen.  Lockett most recently billed under the name of Medical & Health Alliance Ministries.

According to evidence the government presented, Lockett has not filed income tax returns since 1999, except for a joint return filed with his spouse for tax year 2007.  He owes the United States $1,432,740 in unpaid income taxes for tax years 2000 through 2010.

The government presented further evidence that Lockett concealed from the IRS the nature, extent and location of his assets by placing funds and property in the names of nominee companies and secreting his income in bank accounts that he opened using his deceased father’s name and social security number.

The investigation was conducted by IRS Criminal Investigation.  Assistant U.S. Attorneys Christy Drake and Vicki Lamberson prosecuted.   

Defendant Used Home in Residential Area in Dallas to Deal Drugs

DALLAS — Brandon DeShawn Campbell, 32, who was convicted at trial in December 2012 on drug and firearms offenses, was sentenced yesterday afternoon by U.S. District Judge Reed C. O’Connor to 360 months (30 years) in federal prison, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Specifically, Campbell was convicted on one count of possession with intent to distribute marijuana, one count of possession with intent to distribute methylenedioxy methamphetamine (MDMA or “ecstasy”) and two counts of possessing a firearm in furtherance of, and used during and in relation to, a drug trafficking crime.

Shortly before that trial, his co-defendant, Tyrone Alan Allen, 33, pleaded guilty to possession with intent to distribute cocaine base (crack cocaine) and possession of a firearm in furtherance of a drug trafficking crime.  He was sentenced by Judge O’Connor in June 2013 to 96 months in federal prison.

According to evidence presented at trial and documents filed in the case, Campbell and Allen used a home on Teague Street, in a residential area of Dallas, to deal various drugs, including crack, PCP, marijuana and ecstasy.  During the execution of a search warrant at that residence on December 12, 2011, these drugs, along with five firearms, were recovered.  Campbell was a regular worker at the house and Allen would front Campbell $500 worth of cocaine and $500 worth of marijuana per week and allow Campbell to sell the drugs from the house to keep the “trap” running at all hours of the night.

The investigation was conducted by the Dallas Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Assistant U.S. Attorneys Lisa J. Miller and Taly Haffar prosecuted. 

LUBBOCK, Texas — Jacob Ray Albarado, 20, of Big Spring, Texas, was sentenced this morning by U.S. District Judge Sam R. Cummings to 10 years in federal prison and a 15-year term of supervised release, following his guilty plea in June 2013 to one count of possession of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Albarado has been in custody since his arrest in March 2013 on a federal indictment alleging possession and production of child pornography and attempted enticement of a child. According to documents filed in the case, after befriending a minor female (Jane Doe), Albarado communicated with her through the use of his cell phone for more than one year.  In late 2012, Jane Doe began a dating relationship with Albarado and ran away from her home to his apartment in Big Spring.  Albarado and Jane Doe agreed to produce a video depicting the two of them engaged in sexually explicit conduct.  Albarado then held Jane Doe’s cell phone and produced a video of her while she engaged in sexually explicit conduct with Albarado.

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 U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Big Spring Police Department.  Assistant U.S. Attorney Steven M. Sucsy prosecuted.

DALLAS - Forest Park Medical Center, LLC (FPMC), a North Texas physician-owned hospital, paid over $258,000 to settle allegations that it violated the civil False Claims Act, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.  The United States contends that a FPMC representative paid illegal kickbacks to area physicians to obtain referrals for Tricare patients, a federally funded health care program, in violation of the federal law, between 2008 and 2012.  Based on the same allegations, FPMC entered into a Non-Prosecution Agreement with the United States and agreed to certain conditions, as well as a federally imposed monitor for not more than 24 months.  FPMC fully cooperated with the investigation, and by settling civilly and criminally, did not admit any wrong-doing or liability.

FPMC, located in Dallas, did not seek reimbursement from any federal sources such as Medicare and Medicaid, but only commercial payors and self-pay.  Federal and State law usually limits the amount of compensation paid to physicians and their ability to refer certain patients under federally-insured programs.  Because FPMC believed it did not accept federal funds, its representatives, to the benefit of FPMC’s behalf, offered and paid excessive remuneration and other things of value to actual and potential referring physicians or others, including amounts for “marketing” or “advertising.”  Payments also were made in the form of cash and giftcards/coupons for luxury items.  The United States alleges such payments were made to obtain federal health care program patients, such as TRICARE, a program for military retirees and their dependents.  The United States contends such payments were unlawful kickbacks for the referral of federal health care program patients in violation of the federal Anti-Kickback Statute between January 1, 2008, and October 31, 2012.  The United States initiated the investigation in response to numerous complaints.

In the Non-Prosecution Agreement, FPMC acknowledged the United States has sufficient evidence to seek an indictment for the offering and payment of illegal kickbacks in violation of federal law.  In return for the non-prosecution of the hospital, FPMC selected and retained an independent monitor to address any compliance issues and the United States’ concerns regarding the allegations of illegal conduct.  The monitor will be in place for not more than 24 months and will review and evaluate inpatient and outpatient claims submitted to all payors, not just federal programs. FPMC also agreed to cooperate with the United States’ ongoing investigation into certain individuals.  No persons were released under the civil and criminal agreements. The United States’ investigation remains ongoing.

U.S. Attorney Saldaña praised the efforts of the investigating agencies, including the Defense Criminal Investigative Services; FBI; Department of Labor, EBSA; Office of Inspector General of the Office of Personnel Management; and FDA-CI.

“This civil and criminal resolution spares the honest employees and investors of FPMC, while holding the hospital accountable for allowing an environment where its representatives paid illegal kickbacks for referrals,” said U.S. Attorney Saldaña.  “This outcome imposes well-deserved measures that we expect will ensure FPMC becomes fully compliant with federal and private health care program requirements.  Whether physician-owned, not-for-profit or for-profit, the Department of Justice expects, and requires, all providers to be trustworthy and abide by the law,” Saldaña continued. 

The case was handled by Assistant U.S. Attorneys Sean McKenna, Errin Martin and Lynette Wilson, and Special Assistant U.S. Attorney Glenn Harrison.

Defendant Sandy Jenkins, Who Allegedly Embezzled More Than $16 Million From the
Bakery, is Charged With 10 Counts of Mail Fraud

DALLAS — A federal grand jury returned an indictment late yesterday charging Sandy Jenkins, 64, of Corsicana, Texas, with 10 counts of mail fraud stemming from his alleged embezzlement of approximately $16 million from his former employer, the Collin Street Bakery (Bakery) in Corsicana.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Jenkins served as the Corporate Controller for the Bakery from February 1998 to June 21, 2013.  On June 21, 2013, Jenkins was terminated after the Bakery discovered the alleged fraud.

In particular, according to documents filed in the case, Jenkins caused Bakery checks to be written to his personal creditors and then manipulated the Bakery’s computerized accounting system to show that the checks had been voided.  To keep the Bakery’s books in balance and further disguise his fraudulent activity, Jenkins created checks in the Bakery’s accounting system purporting to go to an approved vendor in the same amounts as the checks to his personal creditors.  The checks to Jenkins’s personal creditors were used to bankroll a lavish lifestyle that included a house in Santa Fe, New Mexico, 43 luxury automobiles, frequent travel on private planes and a watch and jewelry collection worth approximately $3 million.

The indictment alleges that between 2005 and 2013, Jenkins caused approximately 888 fraudulent checks to be written on the Bakery’s account and mailed to Jenkins’s personal creditors, resulting in losses to the Bakery of approximately $16,649,786.00.

The investigation regarding assets is ongoing.  Restitution to the victim is mandatory upon conviction in this case.  The United States has various civil and criminal forfeiture and restitution collection remedies at its disposal, and makes its best efforts to maximize recovery for victims of crime.  As a legal and practical matter, the seizure and liquidation of assets may be a lengthy process due to various laws that affect the rights of third parties.

The investigation is being conducted by the FBI.  Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution and Assistant U.S. Attorney Melissa Childs is handling the forfeiture.

(Download Factual Basis)

Defendant to Be Deported Following Incarceration

DALLAS — Eulises Abraham Nava-Romero, 26, was sentenced this morning by U.S. District Judge Ed Kinkeade to 180 months (15 years) in federal prison and a lifetime of supervised release, following his guilty plea in February 2013 to one count of receipt of child pornography, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Nava-Romero has been in federal custody since his arrest in January 2013 on a related federal felony criminal complaint following the execution of a federal search warrant at his home in Dallas by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).  He will be referred for deportation proceedings following his incarceration. 

According to documents filed in the case, Nava-Romero admitted knowingly downloading and receiving images of child pornography from the Internet onto his home computer in March and September 2012. 

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.           

AMARILLO, Texas — Luis Gerardo Alvarado, 22, appeared in federal court yesterday afternoon, before U.S. District Judge Mary Lou Robinson, and pleaded guilty to one count of enticement of a minor and aiding and abetting.  While a sentencing date was not set, Alvarado, who is in custody, faces a maximum statutory penalty of not less than 10 years and up to life in federal prison, a $250,000 fine and a lifetime of supervised release.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, while living in Brownwood, Texas, Alvarado met a minor female, who lived in Coleman County, Texas, by contacting her through Facebook chat.  From mid-March 2013 until April 8, 2013, Alvarado communicated with the minor female and attempted to persuade and entice her to engage in sexual activity with him.  Alvarado knew the minor female was under 17 years of age.

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 is being conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Coleman Police Department, the Santa Anna Police Department and the Brownwood Police Department.  Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.

DALLAS — Erika Susan Perdue, 42, of University Park, Texas, appeared in federal court this morning and pleaded guilty, before U.S. Magistrate Judge Paul D. Stickney, to one count of transporting and shipping child pornography.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

A federal grand jury returned a four-count indictment in May 2012 charging Perdue with two counts of transporting and shipping child pornography, one count of receipt of child pornography and one count of possession of child pornography.  Purdue has been in custody since June 2012 when the court found that she had violated the conditions of release.

According to plea documents filed today in the case, if the court accepts the plea agreement, the parties agree that the appropriate term of imprisonment is 168 months (14 years) in federal prison.  The court may also order a fine of up to $250,000 and up to a lifetime of supervised release.  In addition, as part of her plea agreement with the government, Perdue will pay $5,000, at the time of sentencing, to one of the victims identified by the National Center for Missing and Exploited Children as “Vicky.”  Sentencing is set for January 13, 2014, before U.S. District Judge Sam A. Lindsay.

On January 4, 2012, a special agent with the FBI, and on January 5, 2012, an FBI Task Force Officer with the Plano Police Department, each acting online in an undercover capacity and assuming someone else’s identity, launched publicly-available peer-to-peer file-sharing programs and discovered that an individual, using the username, “Classybitch,” later identified as Perdue, was logged on to the network.  They observed that the individual’s shared folder contained numerous files, many with names consistent with child pornography.  They downloaded files, directly from this individual’s computer, and several did contain child pornography, including one video of a man and a woman engaged in sexually explicit conduct with a minor child.  That video is described in Count One of the indictment for which Perdue is pleading guilty. 

A search warrant was executed at Perdue’s residence on April 10, 2012.  She admitted that one of her screen names was “Classybitch,” and that she traded child pornography while her husband was at work.

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 Plano Police Department.  Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

DALLAS — Meliton Torres, 31, of Lancaster, Texas, pleaded guilty this morning, before U.S. Magistrate Judge Paul D. Stickney, to one count of transporting and shipping child pornography.  He faces a maximum statutory sentence of not less than five or more than 20 years in federal prison, a $250,000 fine and a lifetime of supervised release.  Torres, who will remain on bond, is scheduled to be sentenced on December 18, 2013, by U.S. District Judge Ed Kinkeade.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

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

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

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

Mortgage Fraud Conspiracy Resulted in More Than $10 Million in Fraudulently Obtained Loan Proceeds

DALLAS — Eric Damon Johnson, 51, and Tracie Elaine Stenson, 50, both of Dallas, were sentenced this morning by U.S. District Judge David C. Godbey to 48 months and 57 months, respectively, following their guilty pleas earlier this year to their roles in a mortgage fraud conspiracy.  In addition, Judge Godbey ordered that they pay, jointly and severally, $3,753,539 in restitution.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. 

Johnson pleaded guilty to a superseding information charging one count of conspiracy to commit wire fraud affecting a financial institution.  Johnson was a licensed loan officer and mortgage broker and the president of Bridgemark Investment Group (BIG), which had offices on Hampton Road in Desoto, Texas.  BIG’s motto was “Bridging the Gap between the Poor and the Wealthy.”

Stenson pleaded guilty to one count of conspiracy to commit wire fraud, as charged in the indictment returned by a federal grand jury in Dallas in October 2011.  As the Chief of Operations at BIG, Stenson worked as a loan officer and processor.

According to documents filed in the case, Johnson and Stenson conspired to fraudulently obtain mortgage loans in excess of the true sales price of residential real estate properties by making false statements on loan applications and submitting fake invoices for construction upgrades or repairs that were never performed.  The conspiracy resulted in more than $10 million in fraudulently-obtained loan proceeds.

BIG recruited individuals to purchase residential real estate as “investors” and Johnson and Stenson promised investors that BIG would find tenants to rent the property and make the mortgage payments.  Johnson and Stenson agreed to make payments to the “investors” when the loan closed that were not disclosed to the mortgage lender on the HUD-1 Settlement Statement.  Stenson prepared false loan applications for the investors that included, among other things, material misrepresentations regarding the borrower’s monthly income, intention to occupy the property, assets and liabilities.  The loan applications were submitted to residential mortgage lenders, who on the basis of the false statements in the loan applications, agreed to fund primary and secondary mortgages for residential real estate properties. 

This case was prosecuted in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s 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.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.stopfraud.gov.

The investigation was conducted by the FBI and Internal Revenue Service Criminal Investigation.  Assistant U.S. Attorneys J. Nicholas Bunch and P.J. Meitl prosecuted.

DALLAS — Michael Musacchio, 62, of Plano, Texas, was sentenced late yesterday by U.S. District Judge Jorge A. Solis to serve a total of 63 months in federal prison, following his conviction at trial in March 2013 for conspiring to hack into his former employer’s computer network.  The issue of restitution is still under consideration by the court.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Musacchio was convicted on one felony count of conspiracy to make unauthorized access to a protected computer (hacking) and two substantive felony counts of hacking. He will remain on bond until he is required to surrender to the Bureau of Prisons on a date to be determined.

According to the evidence submitted at trial, from 2000 to September 2004, Musacchio was the president of Exel Transportation Services, a third party logistics or intermodal transportation company that facilitated links between shippers and common carriers in the manufacturing, retail and consumer industries. In 2004, Musacchio left Exel to form a competing company, Total Transportation Services, where he was the original president and CEO. Two other former Exel employees from the Exel IT Department, Joseph Roy Brown and John Michael Kelly, also went to work at Musacchio’s new company. Trial testimony and exhibits established that between 2004 and 2006, Musacchio and Brown, assisted by Kelly engaged in a scheme to hack into Exel’s computer system for the purpose of conducting corporate espionage. Through their repeated unauthorized accesses into Exel’s email accounts, co-conspirators Musacchio and Brown were able to obtain Exel’s confidential and proprietary business information and use it to benefit their new employer and themselves as investors.

A federal grand jury returned an indictment against the three men on Nov. 2, 2010. Brown and Kelly entered guilty pleas on May 19, 2011, and Aug. 2, 2012, respectively, and are scheduled to be sentenced on September 25, 2013.

This was the first investigation of hacking for the purpose of corporate espionage that was conducted by the Justice Department’s Computer Crime and Intellectual Property (CCIP) Section, the U.S. Attorney’s Office for the Northern District of Texas and the FBI.

The FBI Dallas Field Office was in charge of the investigation.  Deputy Criminal Chief Assistant U.S. Attorney Linda Groves and Assistant U.S. Attorney Candina Heath, of the U.S. Attorney’s Office in the Northern District of Texas, and Trial Attorney Rick Green, of the Criminal Division’s CCIP Section, prosecuted. 

Banjo Player Arrested While in Dallas to Perform With County Band

DALLAS — Abraham Eugene Spear, 31, of Nashville, Tennessee, was sentenced this morning by Chief U.S. District Judge Sidney A. Fitzwater to 210 months in federal prison, following his guilty plea in February 2013 to one count of attempted enticement of a minor.  He has been in custody since his arrest on September 21, 2012, in Dallas, on a related federal criminal complaint.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, approximately one month before he was to be in Dallas to perform at a local country music establishment, Spear sent a chat request to an undercover officer who was posing online as a “mom of curious girls.”  He requested the “mom” send him photos of the girls and later asked the “mom,” if she “still need[s] a teacher when I’m down there?”

Spear admitted that over the course of the next few weeks he communicated, via the internet and cell phone, with the undercover officer, who he thought was a mother of two girls, ages seven and nine.  During these communications, many of which were sexual in nature, he persuaded the “mother” to allow him to meet her two girls to engage in different sexual acts with him.  On September 20, 2012, Spear traveled from Tennessee to Dallas to perform with a band at a local bar and he agreed to meet the “mom” at a restaurant in Dallas.  After he was positively identified, Spear was arrested by FBI agents. 

Spear also acknowledged that he had engaged in sexually explicit communications with other mothers of minor girls, including one where he offered to pay $200 to engage in sexual acts with one mother’s minor daughter.

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

AMARILLO, Texas — A California man, who had 100 pounds of methamphetamine hidden in the recreational vehicle he was driving, was sentenced yesterday in federal court in Amarillo, Texas.  Felix Lopez Vasquez, 61, of Perris, California, was sentenced by U.S. District Judge Mary Lou Robinson to 10 Years in Federal Prison.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement.

Vasquez was arrested by a Texas Department of Safety (DPS) Trooper on Interstate 40 in Carson County, Texas, on May 13, 2013.  The Trooper had stopped the vehicle, driven and owned by Vasquez, after observing a traffic violation.

Because the Trooper noticed that Vasquez seemed unusually nervous, as well as noting other suspicious circumstances, he asked Vasquez for consent to search the vehicle.  Vasquez consented and the Trooper located 45 bundles of methamphetamine, with a gross weight of 100 pounds, located in a storage area above the driver and passenger seats.

The investigation was conducted by the Drug Enforcement Administration and the DPS.  Assistant U.S. Attorney Vicki Lamberson of the U.S. Attorney’s Office in Amarillo, and Assistant U.S. Attorney Jeffrey Haag of the U.S. Attorney’s Office in Lubbock, Texas, prosecuted.

DALLAS — James Brian Rivers, 23, of Dallas, who remains in custody following his arrest earlier this summer on a federal complaint alleging that he used a prepubescent child to produce child pornography, has been indicted by a federal grand jury on one count of production of child pornography and one count of possession of prepubescent child pornography.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, on June 30, 2013, Rivers left his cellphone at a neighbor’s home.  The neighbor looked through the cellphone 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 obtained a search warrant for the phone.  A forensic review of the phone revealed multiple images and one video depicting child pornography involving a prepubescent child. 

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 production count carries a maximum statutory penalty of not less than 15 years or more than 30 years in federal prison and the possession count carries a maximum statutory penalty of 20 years in federal prison.  Each count of conviction also carries a maximum statutory fine of $250,000 and up to a lifetime of supervised release.

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

The investigation was conducted by the FBI and the Dallas Police Department.  Assistant U.S. Attorney Camille Sparks is in charge of the prosecution.

Defendant Also Ordered to Pay More Than $25 Million in Restitution

DALLAS — Cyprian Akamnonu, 64, of Cedar Hill, Texas, was sentenced this morning by U.S. District Judge Sam A. Lindsay to the statutory maximum of 10 years in federal prison and ordered to pay $25,466,779 in restitution, following his guilty plea in October 2012 to one count of conspiracy to commit health care fraud.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

In handing down the sentence and in response to a plea for leniency, Judge Lindsay stated, “For persons out there who are inclined to commit health care fraud, a low sentence in this case would have no deterrent effect.”  Judge Lindsay also ordered that Akamnonu, who is in custody, forfeit the following property to the government:  four vehicles, 21 parcels of real estate located in Dallas, Cedar Hill and Grand Prairie, Texas and funds in several business and personal bank accounts. 

According to documents filed in the case, Akamnonu and his wife/business partner/co-defendant, Patricia Akamnonu, R.N., co-owned Ultimate Care Home Health Services.  Akamnonu admits that from January 2006 through November 2011, he conspired with co-defendants Dr. Jacques Roy and others to defraud Medicare in connection with the delivery of, and payment for, health care benefits, items and services. 

A trial date of January 13, 2014, is set for Akamnonu’s co-defendants, Dr. Roy, Patricia Akamnonu, Cynthia Stiger, Wilbert James Veasey, Teri Sivils and Charity Eleda. 

According to documents filed in the case, at Akamnonu’s direction, his wife Patricia, and others, recruited Medicare beneficiaries to Ultimate to receive home health care services for which they did not qualify and did not need.   Akamnonu and others would approach people throughout Dallas-area neighborhoods to see if they were qualified Medicare beneficiaries, and if they were, they would attempt to sign them up for home health services.

Once a beneficiary was recruited, Akamnonu would take paperwork to Sivils and other employees of Medistat Group Associates, PA., to be signed on behalf of Dr. Roy, certifying that the Medicare beneficiary was under Dr. Roy’s care, homebound and in need of skilled nursing services, thus allowing Ultimate to bill Medicare for the skilled nursing services.  Akamnonu and Dr. Roy had an agreed-upon, fraudulent arrangement in which Ultimate provided Dr. Roy with the beneficiaries to bolster Medistat’s patient roster in exchange for Roy’s certification for skilled nursing services of any beneficiary sent to him.  In addition, Sivils signed Ultimate’s paperwork on behalf of Dr. Roy because Akamnonu paid her cash kickbacks in exchange for doing so.

At Akamnonu’s direction, nurses would perform cursory visits to the beneficiaries at their homes that bore little relationship to the skilled nursing services for which the beneficiaries had been certified.  Then, at Akamnonu’s direction, Ultimate would bill Medicare for skilled nursing services that were not necessary and were never in fact provided.

During this five-year period, more than 72% of Ultimate’s beneficiaries were certified by Dr. Roy or another Medistat physician acting at his direction.  Ultimate billed more than $40 million to Medicare for skilled nursing services for these beneficiaries and Dr. Roy, in turn, incorporated these patients into his own practice and billed more than $2.3 million for services related to them.

The case is being investigated by the FBI, the U.S. Department of Health and Human Services - Office of Inspector General (HHS-OIG) and the Texas Attorney General’s Medicaid Fraud Control Unit and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division Fraud Section and the U.S. Attorney’s Office for the Northern District of Texas.

Assistant U.S. Attorneys Michael C. Elliott, Mindy Sauter, P. J. Meitl and John DeLaGarza are in charge of the prosecution.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Defendant Arrested at JFK International Airport Prior to
Boarding Flight to Ghana

DALLAS — A federal grand jury in Dallas returned an indictment yesterday afternoon charging two recent, Dallas-area residents, Annetta Lou Smith, aka “Annette Crawford,” 49, and Warren Michael Hills, 54, with felony offenses related to a gold purchase investment fraud scheme they ran.  U.S. Attorney Sarah R. Saldaña of the Northern District of Texas made the announcement today.

On August 27, 2013, according to the criminal complaint filed in the case, Smith was informed that an indictment charging Smith and Hills with fraud would be presented to a federal grand jury on Wednesday, September 4, 2013.  On Sunday evening, September 1, 2013, Smith was arrested by FBI agents at JFK International Airport where she was awaiting a flight she had booked to Ghana that was scheduled to depart later that evening.  She made her initial appearance in federal court in the Eastern District of New York on Tuesday, September 3, and remains in custody; a date has not been set for her to appear in federal court in Dallas.  A warrant has been issued for Hills’ arrest.

The indictment charges each defendant with one count of conspiracy to commit wire fraud and two substantive counts of wire fraud.  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, each count of the indictment carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine.  In addition, restitution could also be ordered.

The indictment alleges that beginning in July 2010 and continuing at least to December 2010, Smith and Hills represented to investors that they were in the business of buying gold at a discount price in Ghana.  This gold, according to the defendants, came from small gold mines in Ghana that did not produce enough gold to sell to large gold refining companies.  The defendants invited investors to travel to Achimoto, Ghana, and other locations in Ghana, so that they could further explain the discount gold purchase program and convince investors that the investment program was a legitimate investment opportunity.

When investors arrived in Ghana, the defendants had them open bank accounts where one account was used for investor funds, in U.S. dollars, and the other was used to deposit and transfer Ghana currency.  In fact, to build each investors’ trust, the defendants encouraged each investor to conduct a “test transaction” or “test purchase” in which the defendants had a particular investor wire a relatively small amount of funds from a bank in the U.S. to the defendants to purchase one kilogram of gold.  This was done with the understanding that if the investor was satisfied with this initial small purchase, the investor would later agree to send additional funds to an account he had opened. 

Defendants, however, fraudulently transferred investor funds to accounts they controlled in Ghana and they fraudulently retained all of the investor funds even though they well knew that they did not make all of the gold shipments which they had promised to investors.  The defendants tried to keep the scheme going by making false statements to investors to explain why all the promised gold had not been shipped.  When investors demanded that all their invested funds be returned, the defendants refused and kept the money for themselves.

Smith and Hills caused substantial monetary losses to many investors.  For example, one investor, M.W., transferred $586,833 to Hills’ account in Ghana.  After the test transaction of one kilogram of gold, Smith and Hills falsely promised another 12.5 kilograms of gold would be delivered to M.W.  However, Smith and Hills only shipped a total of six kilograms to M.W., fraudulently retaining approximately $325,000 of M.W.s funds. 

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’s 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.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

The case is being investigated by the FBI.  Assistant U.S. Attorney David Jarvis is in charge of the prosecution.

DALLAS — The bank robber who was dubbed the “Checkbook Bandit” by the FBI, as he used a checkbook registry to display his demand notes in the robberies, Victor Lemond Williams, 43, of Dallas, was sentenced this morning by U.S. District Judge Ed Kinkeade to 90 months in federal prison.  Williams has been in custody since his arrest in January 2012.  U.S. Attorney Sarah R. Saldaña, of the Northern District of Texas, made the announcement today.  

Williams pleaded guilty to an indictment charging five counts of bank robbery, admitting that he committed the following five bank robberies in Desoto, Texas:

• Chase Bank                             September 19, 2011
  721 W. Beltline Road             December 5, 2011
                                                  December 23, 201

• Bank of America                    September 22, 2011
  931 W. Beltline Road             January 3, 2012

The case was investigated by the Desoto Police Department and the FBI.  Assistant U.S. Attorney Taly Haffar was in charge of the prosecution.          

DALLAS — Franklin Bratcher, 44, of Dallas, was sentenced today by U.S. District Judge Ed Kinkeade to 66 months in federal prison, following his guilty plea in February 2013 to one count of possession of child pornography.  Bratcher’s roommate, Howard Tyson, 45, was sentenced in June 2013 to the statutory maximum of 10 years in federal prison, following his guilty plea in March 2013 to the same offense.  Both men have been in federal custody since they entered their guilty pleas.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, Bratcher and Tyson each used peer-to-peer file-sharing to download child pornography from the internet onto their computers.  When agents with the U.S. Secret Service executed a federal search warrant at their residence on July 26, 2011, both Bratcher and Tyson admitted that they had been downloading child pornography for at least one year.  Tyson admitted that he downloaded most of the child pornography onto his wife’s laptop computer.  A forensic examination of Tyson’s computer and his wife’s computer revealed that the hard drives contained more than 8000 images and 20 videos of child pornography.  A forensic analysis of Bratcher’s hard drive revealed more than 200 images and nine videos of child pornography.  Both Bratcher and Tyson acknowledged that some of the images were sadistic and that the images and videos were of real prepubescent and pubescent minors.

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

The investigation was conducted by the U.S. Secret Service and the Plano Police Department.  Assistant U.S. Attorney Camille Sparks prosecuted.

Always Consulting, Inc. Located in Richardson, Texas

DALLAS — The chairman and director of field operations of Always Consulting, Inc. (ACI), an oil and gas well promotions company with offices in Richardson, Texas, was convicted this morning by a federal jury on one count of conspiracy to commit securities fraud and 23 substantive counts of securities fraud.  David Kevin Lewis, aka “David Shane Lewis” and “DW,” 52, of Albany, Kentucky, faces a maximum statutory penalty of five years in prison and a $250,000 fine per count.  A forfeiture of $2,538,642 will be ordered at the defendant’s sentencing; restitution may also be ordered.  Chief U.S. District Judge Sidney A. Fitzwater, who presided over the week-long trial, set a sentencing date of December 20, 2013.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Lewis’s co-defendants in the case, Bruce Kyle Griffith, 59, of Dallas, and Thomas Alden Markham, Jr., 63, of Plano, Texas, have each pleaded guilty to their roles and are scheduled to be sentenced on December 6, 2013.  Griffith, who was the president and CEO of ACI, pleaded guilty to one count of conspiracy to commit securities fraud and one count of securities fraud.  Markham, ACI’s chief geologist, pleaded guilty to one count of misprision of a felony.

Lewis, Griffith and Markham conspired together to scheme to obtain money and property by making untrue statements and omitting material facts to defraud investors, located throughout the United States, who purchased interests in well program units, representing fractional, undivided interests in oil, gas or other mineral rights and investment contracts.

They sent investment documents and monthly investment newsletters from ACI to induce investors to invest money and purchase interests in the Rattlesnake Springs Drilling Program or other oil and gas drilling programs.  Rattlesnake, was one of several investment programs offered and sold by ACI to investors, was to be located in Osage County, Oklahoma.

They also used ACI sales employee “fronters” to contact prospective investors and referred interested and financially-able investors to ACI employee “closers,” including Lewis and Griffith, who contacted the interested investors to convince them to invest.  The “fronters” were equipped with scripts, pitches and talking points all touting the investment and designed to make prospective investors believe that ACI’s programs were potentially profitable investments.

They also provided the ACI sales employees with a “do not call” list, entitled “Undercover Regulators,” which listed contact information of individuals the defendants suspected of being state or federal regulators posing as potential investors.

The defendants misapplied and converted the Rattlesnake Springs Drilling Program investor funds to their own use and benefit, and the use and benefit of others, including the purchase of real and personal property and to pay for expenses of other ACI programs.

The defendants falsely stated that:  ACI would perform all necessary services to complete the Rattlesnake Springs Drilling Program; ACI would use investor funds to begin site preparation, drilling, testing and completion of the Rattlesnake Springs Drilling Program wells; ACI would pay all costs necessary to get the wells into production for approximately $3.5 million; ACI had influence inside the Osage Nation in Oklahoma and could acquire oil and gas leases on terms unavailable to others; pipelines had been laid; and Griffith begin in the oil and gas business in 1985 as a private pilot flying oil executives and equipment to foreign countries.

The defendants concealed from investors that:  Rattlesnake investor funds were being comingled with funds from other ACI projects and were being used to pay operating expenses of other ACI projects; most of Rattlesnake’s investor funds had been misapplied and diverted an no longer available to drill the promised 20 wells; funds invested in Rattlesnake had been diverted, for the use and benefit of the defendants; ACI relied on investor funds to operate and upon production revenue from oil and gas wells.

ACI’s offering memorandum identified “DW” and “Griffith” as registered operators in Texas and Oklahoma, but omitted that “DW” was Lewis and that Lewis and Griffith weren’t registered to sell securities in Texas.  ACI represented that “DW” (Lewis) had 25 years’ experience in finance, investing, management and the oil and gas industry, but omitted facts including:  Lewis was a convicted felon, having been convicted in 2000 of securities fraud and conspiracy to commit mail fraud, in connection with oil and gas offerings; Lewis was under federal court orders to pay approximately $2.2 million in restitution to previously defrauded oil and gas investors; and Lewis was under an injunction barring him from violating federal securities laws in connection with oil and gas offerings.

ACI’s offering memorandum also noted that Griffith had 20 years’ experience in the oil and gas industry, having started out as a private pilot with a twin engine rating and instrument rating.  Griffith, however, was never a pilot, had little experience in the industry, and in fact, was a convicted felon, having been specifically convicted in federal court of bank robbery in 1994 and conspiracy to possess and utter counterfeit federal reserve notes in 1989.

ACI’s offering stated that Markham had more than 30 years in the oil and gas industry as a geologist, supervisor and manager, but failed to disclose he was a convicted felon, having been convicted of mail fraud in 2000 in connection with an oil and gas offering, and that as part of his sentence, he was under court order to pay nearly $400,000 in restitution to defrauded investors.

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’s 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.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

The case is being investigated by the FBI and the Texas State Securities Board (TSSB).  Assistant U.S. Attorney Joseph Revesz and TSSB Enforcement Attorney Suzanne Steinmetz are in charge of the prosecution.

DALLAS — Brothers Johnny Charles Butler, 46, and James Robert Cleveland Butler, 44, of Quinlan, Texas, were sentenced this afternoon by U.S. District Judge Jorge A. Solis to 35 years and 25 years, respectively, in federal prison, following their guilty pleas earlier this year, announced U.S. Attorney Sarah R. Saldaña  of the Northern District of Texas.

Johnny Butler pleaded guilty to two counts of armed bank robbery, one count of assaulting a federal officer and one count of using and carrying a firearm during and in relation to a crime of violence.  James Butler pleaded guilty to two counts of armed bank robbery and one count of using, carrying and brandishing a firearm during and in relation to, and possession of a firearm in furtherance of a crime of violence.  Both have been in custody since their arrest in August 2012.

According to documents filed in the case, both Johnny Butler and James Butler admitted committing the armed, takeover-style robberies of Bank of America, 100 West Highway 80, Forney, Texas, on November 25, 2011, and May 18, 2012.

Johnny Butler also admitted firing three shots from a .357 caliber pistol at FBI SWAT agents while they were attempting to execute a federal search warrant at his Quinlan residence on August 2, 2012.

The investigation was conducted by the Safe Street Violent Crime Task Force of the FBI.  Assistant U.S. Attorney Keith Robinson was in charge of the prosecution.

LUBBOCK, Texas—Jose Francisco Madrigal, 43, of Plainview, Texas, appeared today before U.S. District Judge Sam R. Cummings and pleaded guilty to one count of production of child pornography.  Madrigal, who is on bond, faces a statutory penalty of not less than 15 years or more than 30 years in federal prison, a $250,000 fine and up to a lifetime of supervised release.  Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

In October 2012, according to plea documents filed in the case, Madrigal, using a digital camera and aiming the camera through a hole in a bathroom wall, took sexually explicit videos of a female child, while the child was taking a shower.

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 is being conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Plainview Police Department.  Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.

LUBBOCK, Texas—Stephen Carpenter, 33, of Slaton, Texas, appeared in federal court today, before U.S. District Judge Sam R. Cummings, and pleaded guilty to one count of possession of child pornography.  Carpenter, who is on bond, 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.  U.S. Attorney Sarah R. Saldaña, of the Northern District of Texas, made the announcement today.

According to plea documents filed in the case, Carpenter used a file-sharing program to search for depictions of minors engaged in sexually explicit conduct.  Carpenter downloaded and viewed many of these depictions in the form of video files, and on February 14, 2013, Carpenter was found to be in possession of a computer containing depictions of minors 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 investigation is being conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Slaton Police Department.  Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.

LUBBOCK, Texas — The getaway driver in the May 1, 2013, armed robbery of a Lubbock National Bank branch appeared in federal court today, before U.S. District Judge Sam R. Cummings,  and pleaded guilty to one count of aggravated bank robbery and aiding and abetting as charged in a superseding indictment.  Gabriel Tenorio, 30, of Lubbock, has been in custody since his arrest in early June 2013 on a related federal criminal complaint.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Tenorio’s co-defendant, Russell Eugene Heath,44, also of Lubbock, was arrested two weeks ago in Calexico, California.  He is charged in a superseding indictment with multiple counts of aggravated bank robbery and firearms violations related to two bank robberies in Lubbock and one in Amarillo, Texas, in May 2013.  A date has not yet been set for him to make his initial appearance in U.S. District Court in Lubbock.

According to the factual resume filed today, on May 1, 2013, Tenorio and Heath planned and executed the robbery of the Lubbock National Bank located at 4420 19th Street in Lubbock.  At approximately 12:45 p.m., Heath, wearing a mask and gloves and carrying what appeared to be a Glock firearm, entered the bank, pointed the firearm at the tellers and began yelling at them to give him money.  He jumped over a counter, opened a teller drawer and began stuffing money in his pockets.  He then ran from the bank to a waiting vehicle driven by Tenorio.  Tenorio and Heath split the proceeds of the robbery.

Tenorio faces a maximum statutory penalty of 25 years in federal prison.  Judge Cummings ordered a presentence investigation report with a sentencing date to be set following the completion of that report.

An indictment contains allegations that a defendant has committed crime.  Every defendant is presumed to be innocent until and unless proven guilty in court.

The investigation is being conducted by the FBI, the Lubbock Police Department, the Amarillo Police Department and the Lubbock County Sheriff’s Office.  Deputy Criminal Chief Assistant U.S. Attorney Denise Williams is in charge of the prosecution.

Defendant Believed He Was Sending Video to a 15-Year-Old Girl

LUBBOCK, Texas — Paul Harvilicz, 62, of Copperas Cove, Texas, pleaded guilty today, before U.S. District Judge Sam R. Cummings, to a superseding indictment charging one count of attempted transfer of obscene material to a minor.  Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.  Harvilicz, who has been in custody since he was arrested in Waco on March 27, 2013, on related charges, faces a maximum statutory penalty of 10 years in federal prison, a $250,000 fine and a lifetime of supervised release.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the factual resume filed in the case, from May 29, 2011, through mid-October 2011, while living in Big Spring, Texas, Harvilicz engaged in a series of communications using Yahoo! messaging and email with a person he believed to be a 15-year-old girl, who represented that she lived in Kentucky.  In fact, Harvilicz was actually communicating with a law enforcement officer in Kentucky.  On June 28, 2011, Harvilicz emailed this person an obscene video file, depicting an adult male and female 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 investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Kenton County Police Department, Kenton County, Kentucky.  Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.

DALLAS — Mary Ngacha appeared this morning before U.S. Magistrate Judge David L. Horan and pleaded guilty to one count of filing false claims against an agency of the United States.  She faces a maximum statutory penalty of five years in federal prison, a $250,000 fine and restitution.  Ngacha will remain on bond, pending sentencing, which is scheduled for December 4, 2013, before U.S. District Judge Ed Kinkeade.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Ngacha’s co-defendant in the case, Harriet Mathita, pleaded guilty in November 2012 to a related tax offense and is currently serving a 30-month federal prison sentence.  She was also ordered to pay $45,906 in restitution.

According to the factual resume filed in her case, Mathita admitted that from December 2009 through June 2010, an individual in Dallas, later identified as Ngacha, mailed multiple federal tax returns to the IRS that used stolen identification information and made false and fictitious claims for payment of tax refunds.  Each return contained a false Form W-2 that reported significant, although fictitious, wages and withholding so as to result in a claim for a large tax refund.  The returns directed the IRS to pay the refund either into a bank account or a physical address controlled by a conspirator.

The factual resume further stated that three of these fraudulent tax returns directed the refund check to be delivered to the Mathita’s address in Plano, Texas.  In May 2010, a U.S. Treasury check in the amount of $45,206 was, in fact, delivered to her Plano address.  Only one of the three fraudulent returns actually resulted in a refund check being mailed; the other refunds were not released by the IRS. 

Ngacha, according to the order setting the conditions of her release, is a Dallas resident.

According to the stipulated facts outlined in her factual resume, from at least November 2009 through April 2010, Ngacha willfully assisted in the preparation of, and then filed, 10 federal income tax returns that contained false information.  These returns had been mailed to Ngacha from an accomplice located outside the United States.  After receiving them, Ngacha printed them, signed the purported taxpayer’s name and then mailed them to the IRS for processing.  These returns used the last names and social security numbers of taxpayers without their knowledge or authorization and each return included a false form W-2 with fictitious wages and withholding amounts.  A form schedule C was also attached showing a substantial business loss from a sole proprietorship.

Specifically, on November 2, 2009, according to the factual resume, Ngacha signed and then mailed to the IRS a tax return in the name of “Motachwa Poliquin” that used the social security number belonging to an individual that had been used without that individual’s knowledge or consent.  The return also included a fictitious form W-2 that falsely reported “Motachwa Poliquin” had earned $495,855 from Fann Contracting for 2008 and that $152,054 had been withheld by the IRS.  The return claimed a $147,464 refund and directed the IRS to electronically deposit that refund into an account at JPMorgan Chase Bank that Ngacha had opened.  On November 27, 2011, the IRS electronically deposited the “Poliquin” refund of $148,264 into that account, and on the same day, Ngacha transferred the entire amount from that account to her personal bank account at JPMorgan Chase.  Ngacha then wired $100,000 of that amount to a bank in Nairobi, Kenya, and spent the rest of the refund for her own personal use and benefit.

The investigation was conducted by IRS-CI.  Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.

One Defendant Sentenced to 480 Months in Federal Prison

WICHITA FALLS, Texas —Three Wichita Falls, Texas area residents, who pleaded guilty earlier this year to their roles in a large scale methamphetamine distribution conspiracy, were sentenced yesterday morning in federal court in Wichita Falls, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Anthony Rueben Johnston, 28, was sentenced by U.S. District Judge Reed C. O’Connor to 480 months (40 years) in federal prison.  Judge O’Connor sentenced Rachel Dawn Billen, 20, and Christina Gail Thompson, 32, to 36 months and 42 months, respectively.  Each of the defendants pleaded guilty earlier this year to one count of conspiracy to possess with intent to distribute methamphetamine.  All are in custody.

Four other defendants charged in the case, Louis Griego, Jr., Janis Hernandez, James Allan Holley and Darren Scott Murphy, Jr., also pleaded guilty; their sentencing dates are scheduled during the next few months.

According to documents filed in the case, between October 25, 2012, and February 21, 2013, Johnston possessed and distributed methamphetamine that he received from his supplier, co-defendant Murphy.  On October 25, 2012, officers with the Wichita Falls Police Department executed a state search warrant at Johnston’s residence.  On February 15, 2013, investigators with the Wichita County District Attorney’s Office executed a second state search warrant at Johnston’s home.  During those searches notes identifying customers and amounts owed, small plastic bags, a digital scale, firearms and methamphetamine were located.  Johnston also admitted that during conversations he had with co-defendant Griego on February 18, 19 and 20, 2013, he told Griego that law enforcement had not found methamphetamine that was hidden inside a wall heater in his residence.  He instructed Griego to get the methamphetamine and sell it.  Law enforcement, however, seized the methamphetamine before Griego was able to distribute it.

Billen, who lived with Johnston, admitted that co-defendant Johnston supplied the methamphetamine she distributed.  She also admitted that when customers wanted to obtain methamphetamine from Johnston, they contacted her and she, in turn, contacted Johnston.  Billen also admitted that she told law enforcement officers that the firearm they seized from Johnston’s residence on October 25, 2012 was hers, when, in fact, it was not and told law enforcement it was to assist Johnston in avoiding prosecution for possessing it.

Thompson, who lived with co-defendant Holley, admitted that on multiple occasions between September 2012 and November 20, 2012, she sold methamphetamine that was supplied to her by co-defendant Murphy, to customers in the Electra, Texas and Wichita Falls areas.  Thompson also admitted that on November 16, 2012, she and Holly obtained three ounces of methamphetamine from Murphy at co-defendant Hernandez’s residence in Burkburnett, Texas.  Later that day, however, a Wichita Falls County Sheriff’s deputy executed a traffic stop on a vehicle that Holley was driving and in which Thompson was riding.  After the vehicle stopped, a deputy observed Thompson exit the vehicle, walk away and drop something, which was later determined to be a small plastic bag containing smaller bags of methamphetamine.  On November 20, 2012, law enforcement executed a state search warrant at the residence that Thompson and Holley shared in Electra and among other things, recovered notes identifying several methamphetamine customers and money owed to Thompson and Holley.

The Texas Department of Public Safety, the Wichita Falls Police Department, the Wichita County District Attorney’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. 

Assistant U.S. Attorney Mary F. Walters is in charge of the prosecution.  

DALLAS — A Dallas woman, Estela Martinez, 53, appeared in federal court yesterday afternoon, before U.S. Magistrate Judge Paul D. Stickney, and pleaded guilty to one count of making a false statement, under penalty of perjury, related to bankruptcy filings.  Martinez faces a maximum statutory penalty of five years in federal prison and a $250,000 fine.  Sentencing is set for January 20, 2014, before U.S. District Judge Sam A. Lindsay.  The announcement was made by 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.

According to documents 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, 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.

The case was investigated by the Social Security Administration, Office of Inspector General.

Assistant U.S. Attorney David Jarvis is in charge of the prosecution.

DALLAS --- Quincy Lamar Poole, 24, appeared today in federal court in Dallas, before U.S. Magistrate Judge David L. Horan, and pleaded guilty to one count of transporting and shipping child pornography.  He faces a statutory penalty of not less than five or more than 20 years in federal prison, a $250,000 fine and up to a lifetime of supervised release.  Poole, who is in custody, is scheduled to be sentenced on December 18, 2013, by U.S. District Judge Barbara M. G. Lynn.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to plea documents filed in the case, when special agents with the FBI executed a search warrant at Poole’s home in Lancaster, Texas, on July 16, 2013, they seized a laptop computer, a thumb drive and Poole’s cell phone.  Email transmissions were located that showed Poole had sent two emails with a video of child pornography attached to each.  In addition, five videos and one image of child pornography were located on his cell phone. 

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 matter is being investigated by the FBI.  Assistant U.S. Attorney Camille Sparks is prosecuting.

Defendant Worked as a Pediatric Dental Provider at Kool Smiles and Personally Benefitted From Scheme

ABILENE, Texas — A dentist who practiced pediatric dentistry at Kool Smiles in Abilene, Texas, has admitted that he made false and fraudulent statements and entries on patient records, which caused Medicaid to be billed for, and pay, at least $120,000 for services falsely claimed to have been performed, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Dr. Tuan Truong, aka “Terry Truong,” of Abilene, pleaded guilty this afternoon, before U.S. District Judge Jorge A. Solis, to an information charging one count of making a false statement in connection with a health care matter.  Truong, who will remain on bond, faces a maximum statutory penalty of five years in federal prison, a $250,000 fine and restitution.  A sentencing date was not set. 

According to documents filed in the case, in summer 2008, Truong began working for Kool Smiles, which paid him a base salary and offered opportunities for bonuses based on additional procedures he performed in excess of daily targets set by Kool Smiles management.  Dentists were required to use professional judgment in the treatment and management of patient care.

Beginning on June 30, 2008, and continuing to July 10, 2009, Truong made false entries on Kool Smiles patient records, purporting to have performed dental services for Medicaid beneficiaries that he well knew he had not performed.  As a result of the false and fraudulent statements and entries Truong made, Kool Smiles billed Medicaid for procedures that were not performed.  In fact, during this time period, Truong made false entries in the Kool Smiles electronic database that caused Kool Smiles to bill and receive payment from Medicaid (and Medicaid affiliates) of more than $120,000, but less than $200,000 for services he claimed to have performed, but did not. 

In addition, according to the factual resume filed, Truong personally benefitted from this scheme by receiving bonuses of $32,749 to which he would not have been otherwise entitled.

Kool Smiles has cooperated throughout the investigation, which was conducted by the Medicaid Fraud Control Unit of the Office of the Attorney General for the State of Texas and the FBI.  Assistant U.S. Attorney Amy Burch, of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

LUBBOCK, Texas — Gary Edward Larock, Jr., 35, most recently a resident of Eden, Texas, pleaded guilty today, before U.S. District Judge Sam R. Cummings, to an indictment charging one count of failure to register as a sex offender.  Larock, who has been in custody since his arrest in June 2013 on a related criminal complaint, 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.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

In August 2005, Larock was convicted in New York of third-degree rape, a felony.  He was notified that based on that conviction, he was required to register as a sex offender under the Sex Offender Registration and Notification Act.  Larock left New York and traveled to California, where, in December 2012, he was arrested by the San Joaquin County Sheriff’s Office on an outstanding warrant from New York for failing to comply with sex offender registration requirements in that state.  He was released from jail in California in early February 2013 and traveled to Eden, Texas, where he gained employment.  Larock failed to register as a sex offender while living and working in Eden, Texas.

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 U.S. Marshals Service, the Concho County Sheriff’s Office and the Texas Department of Public Safety.  Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.

ABILENE, Texas — Jacob Alan Powell, 28, of Abilene, Texas, appeared in federal court today and pleaded guilty, before U.S. District Judge Sam R. Cummings, to an indictment charging one count of aggravated bank robbery stemming from the July 8, 2013, robbery of a Citibank location in Abilene.  He faces a maximum statutory penalty of 25 years in federal prison and a $250,000 fine.  Judge Cummings ordered a presentence investigation report with a sentencing date to be set following the completion of that report.  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, during the early afternoon of July 8, 2013, Powell, wearing business attire and a Hardin-Simmons University baseball cap, entered the Citibank, N.A., located at 3409 South 14th Street in Abilene.  He waited several minutes before an available teller asked him to her station.  Once at the teller counter, he told the teller that he was making a withdrawal.  When the teller asked him for his account number, he told her that she didn’t understand and then lifted his suit jacket to show her a gun in his waistband.  The gun appeared to be real to the teller and placed her in fear for her life.  The teller then opened her cash drawer and put cash in a bag that Powell provided, and Powell quickly left the bank. 

The following day, bank surveillance photos were shown on the local news and Powell was identified by witnesses.

The investigation was conducted by the FBI and the Abilene Police Department.  Deputy Criminal Chief Assistant U.S. Attorney Denise Williams is in charge of the prosecution.

51 Defendants Convicted and Sentenced Since June 2011 OCDETF Takedown

DALLAS — Sergio Moreno Vidales, 37, of Dallas, was sentenced yesterday by U.S. District Judge Ed Kinkeade to 336 months (28 years) in federal prison following his conviction at trial in February 2013 on conspiracy, drug and firearms charges.  Vidales is the 51st defendant to be arrested, convicted and sentenced as the result of a June 7, 2011, widespread Organized Crime Drug Enforcement Task Force (OCDETF) takedown in North Texas of defendants running a methamphetamine distribution conspiracy related to the La Familia Mexican drug cartel.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Over the course of the conspiracy, agents seized approximately 100 kilograms of methamphetamine, several kilograms of cocaine, $725,000 in cash and numerous firearms and vehicles.  Sentences of the 51 convicted defendants ranged from 27 months to 336 months in federal prison.

“Targeting drug cartels that have infiltrated north Texas and jeopardized the safety and security of our communities will continue to be a priority in this district,” said U.S. Attorney Saldaña.  “I commend the dedicated efforts of the DEA, who led this OCDETF investigation, as well as the dedicated men and women in numerous federal, state and local agencies who worked hand-in-hand with them to strategically infiltrate and disrupt this organization.”

The jury in Vidales’ trial deliberated just 35 minutes before convicting him on all counts of the indictment:  conspiracy to possess with intent to distribute and to distribute 500 grams or more of methamphetamine, possession with intent to distribute 500 grams or more of methamphetamine, possession of a firearm in furtherance of a drug trafficking crime and illegal alien in possession of a firearm.  Vidales had been previously deported from the U.S. to Mexico.

On June 7, 2011, the DEA, with assistance from the Texas Department of Public Safety (DPS), executed a search warrant at a residence in Seagoville, Texas.  When law enforcement entered the residence, they found Vidales in bed with his hands behind his head.  Another person in the bedroom with him ran to the closet and was arrested.  Vidales refused to comply when agents ordered him to show his hands, so they pulled him off the bed.  Law enforcement found a loaded 9mm semi-automatic handgun underneath the pillow where Vidales had his head and hands.  A further search of the home revealed approximately1.2 kilograms of methamphetamine, several scales, a bullet-proof vest, a safe, nearly $6,000 in cash, drug ledgers and six additional firearms including another handgun, shotguns and a rifle.  In addition, an inert hand grenade and 12 cell phones were seized. 

The cases were prosecuted by Executive Assistant U.S. Attorney Jennifer Tourje and Assistant U.S. Attorney George Leal.  Assistant U.S. Attorney John de la Garza handled the forfeitures.

LUBBOCK, Texas — Jacob Aniceto Jose Villarreal, 29, of Brownwood, Texas, appeared today before U.S. District Judge Sam R. Cummings and pleaded guilty to one count of production of child pornography and one count of receipt of child pornography.  Villarreal has been in custody since his arrest in June 2013 on a related federal criminal complaint.  He faces a total maximum statutory penalty of not less than 15 years or more than 50 years in federal prison, a $500,000 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.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

On June 25, 2013, agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed a federal search warrant at Villarreal’s home and five computers, two telephones and three thumb drives were found.

According to documents filed in the case, Villarreal used his cell phone to create a video of a minor male engaged in sexually explicit conduct.  In addition, Villarreal admitted that he collected and traded images and videos of child pornography.  Some of the child pornography was collected using peer-to-peer file-sharing software, but most of the images and videos depicting minors engaged in sexually explicit conduct were received and sent by way of his cell phone.

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 ICE HSI, the U.S. Marshals Service and the Brown County Sheriff’s Office.  Assistant U.S. Attorney Steven M. Sucsy is in charge of the prosecution.

Defendant Concocted Convincing Story That He Was a Wounded Combat Veteran

DALLAS — Michael Duye Campbell, 30, was sentenced this afternoon, by U.S. District Judge Jorge A. Solis, to 54 months in federal prison and ordered to pay $40,993 in restitution for running a fraudulent scheme to obtain financial assistance so that he could play professional golf, announced U.S. Attorney Sarah R. Saldaña.

Campbell pleaded guilty in March 2013 to one count of mail fraud. According to documents filed in the case, Campbell served in the U.S. Marine Corps from 2000 to 2004; he never deployed overseas and was never injured, severely or otherwise, in combat. Nonetheless, he began representing himself as a Marine combat veteran who had suffered a traumatic brain injury (TBI) while deployed to Iraq in support of Operation Iraqi Freedom.

As part of his elaborate scheme, Campbell falsely told others that while on patrol in Fallujah, Iraq, his unit was attacked when an improvised explosive device (IED), or bomb, detonated. He told others that members of his unit died in the explosion and that he awoke from his serious injuries months later at Walter Reed Army Hospital. He claimed that he couldn’t speak, and that when he did regain his speech, he stuttered. He also claimed that he suffered short-term memory loss from his TBI.

Campbell told numerous individuals that his doctor suggested that he take up golf to help with his rehabilitation for his combat injuries. Campbell also created a website and obtained a promotional video recording to further his scheme — all to obtain financial help to play in the PGA.

Campbell was convincing in his story. He met famous people who supported charity golf tournaments for wounded warriors and convinced them to write stories on his behalf and provide him access to expensive golf schools and golf courses. All of this provided Campbell with opportunities to continue his scheme, defraud others and afford him opportunities to search out endorsement contracts for golf apparel and equipment.

In fact, it was during this process that Campbell learned of the Troops First Foundation and Operation Proper Exit. These charities provide opportunities for severely-injured service members to return to the location where they sustained their injury and, instead of being medically evacuated, provide them the opportunity to walk to the aircraft and climb the ramp. Campbell participated in Operation Proper Exit VIII, co-sponsored by the USO, in December 2010. He was flown from DFW to Dubai and then provided military transportation for the remainder of the trip. Even though Campbell was neither a combat veteran nor a wounded warrior, he made the trip, which cost thousands of dollars.

Campbell deceived other charities including Operation Homefront and Counter Valor by making continued material false statements in furtherance of his scheme to defraud. He obtained many things of value from them including automobile payments, automobile insurance payments, utilities, room and board, transportation, living expenses and golf tournament entry fees. Likewise, Campbell deceived Vola LLC (an athletic apparel and footwear company located in Richardson, Texas) and Golf Technology Xtreme, Inc. (GTX) (a manufacturer of golf clubs), by obtaining, and attempting to obtain golf clothing, equipment, money and other things of value from them.

The case was investigated by the FBI and prosecuted by Criminal Chief Assistant U.S. Attorney Chad Meacham.

DALLAS — Today, Shaunthina Daniel Rushing was sentenced by U.S. District Judge Jorge A. Solis to 56 months in federal prison, following her guilty plea in March 2013 to one count of conspiracy to file false claims. Her co-conspirator, Tommy Dean Turner, was sentenced in June 2013 to 36 months in federal prison; he pleaded guilty in February 2013 to the same offense. In addition, Judge Solis ordered that Rushing and Turner pay, jointly and severally, $365,626 in restitution. The announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to factual resumes filed in the cases, Rushing and Turner conspired together and with others to file approximately 50 fraudulent tax returns that resulted in more than $400,000 in false claims. The returns included Forms 5405, representing that the taxpayers were entitled to claim a First-Time Homebuyer Tax Credit (FTHTC) under the provisions of the Housing and Economic Recovery Act of 2008.

That refundable tax credit could be claimed if a person purchased a main home in the U.S. after April 8, 2008, and before December 1, 2009, and if the person (and spouse, if married) did not own any other main home during the previous three years of the date of purchase. Qualifying taxpayers who purchased a home between January 1, 2009, and December 1, 2009, could claim up to $8,000 as the FTHBC.

Rushing and Turner admitted, according to the factual resumes filed in the case, that they caused bank accounts to be opened to receive the fraudulent tax refund checks, obtained and disbursed the proceeds among themselves and others and maintained detailed records and logs that identified the fraudulent tax returns, the money received and the disbursement of proceeds.

Internal Revenue Service Criminal Investigation investigated. Assistant U.S. Attorney J. Nicholas Bunch and DOJ Trial Attorney Robert Kemins prosecuted.

Defendant Pleads Guilty on Friday; Trial Was to Have Begun Today

DALLAS, Texas — Phillip Amisano-Camillo, 42, a resident of Canada, pleaded guilty on Friday, before U.S. District Judge Jorge A. Solis, 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 to have begun this morning in federal court in Dallas. The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the plea agreement filed in the case, the parties agree that the appropriate term of imprisonment is not more than 480 months, if the court accepts the plea agreement. Sentencing is set for December 18, 2013, before Judge Solis.

According to documents filed in the case, Camillo admits that he met John Doe in an Internet chat room in April 2012. In the days and weeks after he met Doe, who he knew was a 14-year-old minor, Camillo “chatted” online with him via Skype. Camillo admits 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.”

The case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Irving Police Department. Assistant U.S. Attorney Lisa J. Miller is in charge of the prosecution.

AMARILLO — Scott Leavitt, 39, of Shamrock, Texas, was sentenced this morning by U.S. District Judge Mary Lou Robinson to 21 months in federal prison following his guilty plea in May 2013 to a felony information charging one count of unlawful possession of a machine gun. Judge Robinson remanded Leavitt into custody. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the factual resume filed in the case, on August 14, 2012, deputies with the Wheeler County Sheriff’s Office were dispatched to the Cemetery Road Trailer Park in Shamrock, where they found Leavitt, outside a mobile home, suffering from a severe injury to his hand. Leavitt advised that he had been making an explosive device and that it exploded in his hand. He was rushed to the hospital.

Deputies obtained a warrant and searched Leavitt’s mobile home. Inside they found remnants of the explosive device that had injured Leavitt, some hand grenades and two machine guns that had been originally manufactured as semi-automatic weapons, but had been converted to fully automatic weapons.

The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI, the Wheeler and Winkler County Sheriff’s Offices and the Amarillo Police Department’s bomb squad. Assistant U.S. Attorney Vicki Lamberson prosecuted.

Defendant Had Flash Drive Containing Numerous Images and Videos of Child Pornography in Pants Pocket When Arrested for Traffic Violation

FORT WORTH, Texas — Kenneth David Greer, 42, of North Richland Hills, Texas, was sentenced today by U.S. District Judge John McBryde to 78 months in federal prison following his guilty plea in March 2013 to one count of possession of child pornography.  Greer has been in custody since his arrest in February 2013.  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, an officer with the Bedford Police Department stopped Greer when he ran a stop sign in January 2013.  He had no driver’s license and a search incident to his arrest led to the discovery of a flash drive in his pants pocket that was found to contain numerous images and videos 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.” 

The case was investigated by the Bedford Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Assistant U.S. Attorney A. Saleem prosecuted.

Defendant, a Former Resident of Arlington, Texas, Must Also Pay More Than $228,000 in Restitution to the IRS

DALLAS — Jessica Pillow Venable has been sentenced to 24 months in federal prison and ordered to pay $228,060 in restitution to the Internal Revenue Service (IRS) following her guilty plea in April 2013 to an indictment charging two counts of tax evasion. The Court ordered that she surrender to the Bureau of Prisons on August 26, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas (NDTX).

Venable, a former resident of Arlington, Texas, was charged by indictment in the NDTX on January 23, 2013, and shortly thereafter formally stated that she intended to plead guilty and requested that jurisdiction of her case be transferred to the Western District of Oklahoma (WDOK). At the time of her guilty plea, Venable was 26, according to the petition she filed with the Court.

According to the indictment and other documents filed in the case, Venable willfully failed to report income embezzled from Dream Machines of Texas for tax years 2009 and 2010. According to the judgment filed in the case, the $228,060 in restitution ordered paid to the IRS is a condition of supervised release. This is in addition to her obligation, pursuant to a separate settlement agreement, to pay $400 per month to the victim of the embezzlement.

This case was investigated by IRS Criminal Investigation. Assistant U.S. Attorneys Joseph Revesz of the NDTX and Charles Brown of the WDTX prosecuted.

Defendant Allegedly Embezzled More Than $16 Million from CSB

DALLAS — Sandy Jenkins, 64, of Corsicana, Texas, was arrested by special agents of the FBI yesterday afternoon on a federal criminal complaint charging mail fraud. Jenkins appeared before a magistrate judge this afternoon where he waived preliminary and detention hearings and was remanded into custody pending the outcome of his case. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to the affidavit filed with the complaint, as well as the government’s motion for detention, Jenkins was the corporate controller for the Collin Street Baker (“CSB”) in Corsicana, Texas, from February 1998 through June 21, 2013. On June 21, 2013, Jenkins was terminated after CSB discovered the alleged fraud. In particular, Jenkins caused CSB checks to be written to his personal creditors and then manipulated CSB’s computerized accounting system to show that the checks had been voided. In order to keep CSB’s books in balance and further disguise his fraudulent activity, Jenkins created checks in CSB’s accounting system purporting to go to an approved vendor in the same amounts as the checks to his personal creditors. The checks to Jenkins’s personal creditors were used to bankroll a lavish lifestyle that included a house in Santa Fe, New Mexico, 43 luxury automobiles, frequent travel on private planes and a watch and jewelry collection worth approximately $3 million. The government’s investigation shows that Jenkins caused 888 fraudulent checks to be sent to his personal creditors, resulting in approximately $16.65 million in losses to the bakery.

A 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 grand jury for indictment. The maximum statutory penalty for the offense of mail fraud is 20 years in federal prison and a $250,000 fine, per count. In addition, restitution could be ordered.

The investigation is being conducted by the FBI. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution and Assistant U.S. Attorney Melissa Childs is handling the forfeiture.

DALLAS — On Friday, Aug. 2, the U.S. Court of Appeals for the Fifth Circuit in New Orleans, La., issued a 32-page published opinion affirming the convictions and sentences of the last four remaining defendants in the Dallas City Hall Corruption case, including former Dallas Mayor Pro Tem Donald Hill, his wife Sheila Farrington Hill, former City Plan & Zoning Commissioner D’Angelo Lee and Darren Reagan, head of the Black State Employees Association. In so doing, the Court emphasized that the government’s evidence was “strong” and that it “amply” supported the convictions and sentences in a case “involving substantial and wide-ranging public corruption charges related to government-subsidized [housing] development projects in Dallas.” The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

“The successful resolution of this case would not have been possible without the tireless efforts of many dedicated public servants,” said U.S. Attorney Saldaña. “I commend their efforts.”

The opinion was released three months after the three-judge panel heard oral argument in the case. The appellate briefing spanned nearly 1,000 pages and included close to 20 issues. The opinion was the third released by the Fifth Circuit in this corruption prosecution. The first opinion was released in July 2012 and affirmed the conspiracy conviction of codefendant Jibreel Rashad, who was tried separately in January and February 2010. The second was released in October 2012 and affirmed the bribery and money laundering convictions of contractor Ronald Slovacek, who was tried in November 2010.

The appeal involving the final defendants, including Hill, Lee, and two others, followed a three-month trial that began in June 2009. Hill, who testified in the case, and Farrington and Lee were convicted of counts related to bribery, extortion and money laundering. Reagan was convicted of counts related to extortion. Hill received a sentence of 18 years, Lee and Reagan received 14 years and Farrington Hill received nine years.

All of the defendants appealed their convictions, and two, Reagan and Lee, appealed their sentences. In affirming the bribery and money laundering convictions, the Court reasoned that “in order to obtain Hill’s political support for his housing developments, [housing developer Brian] Potashnik agreed to hire Farrington as a community consultant … [and] regularly paid Farrington … despite Farrington never having done any work for him. Hill and Lee also demanded that Potashnik involve various non-profit organizations in his developments, and these organizations then remitted part of their fees to Farrington…. Farrington used money from [her business] account to buy cars for Hill and Lee and made cash withdrawals from the account for Lee. In return for Potashnik’s cooperation, Hill, among other acts, pushed the City Council to approve a financing deal for one of Potashnik’s housing developments.”

In affirming the extortion convictions, the Court noted that “[w]hile these machinations with respect to Potashnik were ongoing, the appellants were also involved in illegal schemes related to Potashnik’s rival, Fisher,” which culminated in “[t]he FBI … photograph[ing] Reagan giving Hill an envelope containing $10,000” after Reagan received one of the extortion payments from Fisher.

Assistant U.S. Attorneys Leigha Simonton and Wes Hendrix were the lead attorneys in the appeals. The district court cases were investigated by the FBI and Internal Revenue Service – Criminal Investigation. They were prosecuted by Assistant U.S. Attorneys Chad Meacham and Marcus Busch and Ms. Saldaña, before becoming U.S. Attorney.

Districts to Build on Local Successes to Develop and Implement Statewide Anti-Human Trafficking Strategy

DALLAS — The four U.S. Attorneys in Texas, John Malcolm Bales of the Eastern District, Sarah R. Saldaña of the Northern District, Kenneth Magidson of the Southern District and Robert L. Pitman of the Western District, met yesterday in the U.S. Attorney’s office in Dallas to discuss anti-human trafficking initiatives in their districts and explore implementing a statewide anti-human trafficking strategy.

“Involuntary servitude and other forms of human abuse are an anathema to the American way of life and must be met with all the fervor and creativity that we can muster,” said U.S. Attorney Bales. “I am very pleased to join forces with our sister districts.”

“The Northern District is fully engaged, with our federal, state and local law enforcement partners, and our colleagues in governmental and non-governmental organizations, in preventing and fighting human trafficking in all its detestable forms,” said U.S. Attorney Saldaña. “While our commitment has never been stronger and we are encouraged by many recent achievements in this fight, we can always do more. By partnering with the other federal judicial districts in Texas we can maximize the effectiveness of our joint efforts in prevention and advance high-impact human trafficking prosecutions.”

“The Southern District of Texas has had tremendous success through leadership of our longstanding Human Trafficking Rescue Alliance, which partners with a variety of federal, state and local agencies and has served as a model to other districts,” said U.S. Attorney Magidson. “This is an issue that doesn't just affect us, but the entire state and nation. We hope to continue our efforts, to share ideas, to identify areas of improvement and ensure all the work in Texas is consistent and continues to be an example to the nation in this significant law enforcement arena.”

“Because of Texas’ extensive border with Mexico, we are on the front lines in the effort to combat human trafficking,” said U.S. Attorney Pitman. “It’s shocking to realize that human trafficking persists in our communities in the form of child exploitation, forced prostitution and involuntary servitude. As United States Attorneys in Texas, we are determined to re-focus our efforts to identify and rescue victims, as well as to prosecute and hold accountable those responsible for these inhumane crimes.”

The U.S. Attorneys met with Nick Sensley, the Anti-Trafficking Strategist for Humanity United (HU), a foundation committed to building peace and advancing human freedom. Mr. Sensley is a key player in HU’s efforts to guide states in developing statewide anti-trafficking strategies that use collaborative, innovative efforts to identify and stop traffickers and help victims heal and rebuild their lives. Members of the North Texas Anti-Trafficking Team’s Executive Board joined the meeting for further discussion.

The Justice Department’s commitment to preventing human trafficking, bringing traffickers to justice and assisting victims has never been stronger. While the Department’s work has sent a clear and critical message that human trafficking crimes will not be tolerated, there is still much to be done. This meeting constitutes another step in the fight against modern day slavery.

Impoverished Taxpayers Were Recruited to
Allow Their Names and SSNs to be Used in Filing Fraudulent Returns

DALLAS — Four defendants, whose trial was to begin this Monday on charges related to a tax refund conspiracy they were involved in regarding the misuse of the First-Time Home Buyer Tax Credit, pleaded guilty this afternoon before U.S. District Judge Jorge A. Solis.  The four have been on bond since their arrest in January 2012 by special agents with Internal Revenue Service (IRS) – Criminal Investigation.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Jason Phread Altman, Emanuel James Harrison and Fread Jamille Jenkins each pleaded guilty to one count of conspiracy to file false claims, which carries a maximum statutory penalty of 10 years in federal prison.  However, according to the plea agreements filed today, the parties agree that 84 months is the appropriate custody disposition of each case.  If the Court accepts the plea agreements, this provision is binding upon the Court.

Also today, Jarrod Phread Altman pleaded guilty to one count of false, fictitious or fraudulent claims.  He faces a maximum statutory penalty of five years in federal prison.  The two other defendants charged in the case, Rickel Shine and Billy Hamilton, each pleaded guilty, in May 2012 and February 2013, respectively, to one count of conspiracy to file false claims.

Each count of conviction also carries up to a $250,000 fine and restitution.  In addition, according to administrative forfeiture settlement agreements filed, Jason and Jarrod Altman must forfeit two luxury vehicles that were seized by the government.

According to the factual resumes filed in the case, Jason and Jarrod Altman, along with Harrison, owned and operated a tax preparation business, Tax On The Run, located in Dallas.  Jenkins worked as office manager for the business, while Shine and Hamilton worked as intermediaries and recruited clients on behalf of the owners.

Beginning in March 2009, Jason and Jarrod Altman, Jenkins, Harrison, Shine and Hamilton conspired to defraud the IRS, according to the factual resumes filed in the case.  They used Tax On The Run to file false Forms 1040, in the names of numerous clients, which overstated and fabricated income and tax deductions on Schedule C and Forms 5405 by falsely representing that the taxpayers were entitled, under the provisions of the Housing and Economic Recovery Act of 2008, to claim a tax credit as a first-time homebuyer.  As part of the scheme, according to factual resumes filed in their cases, Shine and Hamilton acted as intermediaries to recruit clients, and they were paid after they recruited impoverished taxpayers to allow their names and social security numbers to be used to file fraudulent tax returns.  The fraudulent returns were routinely filed even though the tax preparers never met the taxpayers and with the full knowledge that none of the taxpayers qualified to claim the credit, according to the factual resumes.

Tax On The Run used Santa Barbara Bank and Trust (SBBT) to process refund anticipation loans based on the fraudulent returns filed.  The factual resumes filed further state that after electronically filing the false tax returns, Tax On The Run would be notified by SBBT that the loan had been approved and a check could be printed and provided to the taxpayer.  Once the check was printed, the taxpayer was transported to a local check cashing business and instructed to cash the refund check.  After it was cashed, members of the conspiracy paid the taxpayer a small percentage of the refund and kept the remainder of the proceeds, according to the factual resume.

Defendant Jarrod Altman admitted, according to the factual resume filed in his case, that during tax year 2009, he failed to report approximately $71,133 in taxable income which was obtained from his business, Tax On The Run.  Of that amount, Jarrod Altman admitted that he received $54,140 in the form of a payment by check by his brother, Jason Altman, for a 2007 Mercedes Benz S550, which was purchased in June 2009, for Jarrod Altman’s use, with money from Tax On The Run.  He further admitted that he falsely reported $57,207 in taxable income for tax year 2009 that did not include the $71,133 income described above, and as a result of his false statements regarding his taxable income, Jarrod Altman caused $20,135 in tax harm to the IRS.

IRS-CI investigated the case.  Assistant U.S. Attorneys J. Nicholas Bunch, Brian Poe and Rick Calvert are prosecuting

Approximately 160 Pounds of Marijuana on Board Plane
That Belly Landed at Airport in Plains, Texas

LUBBOCK, Texas — A pilot and his passenger, who belly landed their Beechcraft plane at the Yoakum County Airport on April 30, 2013, appeared this morning before U.S. District Judge Sam R. Cummings and pleaded guilty to a felony drug charge.  Pilot Gregory Thomas, 50, of Sacramento, California, and his passenger, Dorothea Cangelosi, 66, of Waller, Texas, each pleaded guilty to one count of possession with intent to distribute 50 kilograms or more of marijuana and aiding and abetting.  They each face a maximum statutory penalty of 20 years in federal prison and a $1 million fine, and will remain on bond pending sentencing.  Judge Cummings ordered a presentence investigation report with a sentencing date to be set after the completion of that report.   Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to plea documents filed in the case, on April 30, 2013, deputies with the Yoakum County Sheriff’s Department (YCSD) responded to a plane crash at the Yoakum County Airport, in Plains, Texas.  When they arrived, they observed a Beechcraft Bonanza A36 plane that had belly landed in a field approximately 50 yards past the end of the runway.

On April 29, 2013, the day before the crash, Cangelosi flew a commercial airline from Houston, Texas, to Sacramento, California, where she met up with Thomas, a charter pilot, who was paid approximately $5,000 cash to fly her from Sacramento back to Houston.  They left Sacramento during the early morning hours of April 30, 2013, and in route to Houston, landed in Plains to refuel.  After fueling, the plane encountered engine problems when attempting to take off and crashed.

The YCSD received a 911 call from an individual who reported seeing a female with bags by a road that runs parallel to the airport.  Later, deputies located four large canvas duffel bags that were hidden next to a bush more than 100 yards from the crash site.  A YCSD drug-detector dog alerted on the bags for the presence of drugs and deputies discovered 151 individual packages of marijuana, with a total weight of 72.8 kilograms or 160 pounds.  The drug-detector dog also alerted to the presence of drugs inside the plane.

Thomas admits that after the plane crashed, he and Cangelosi retrieved the duffel bags from the plane’s passenger compartment and hid them more than 100 yards away, across two barbed-wire fences and a road, from the plane.  Cangelosi admitted that Thomas carried most of the bags and threw some of them over the fence.  They both admitted that they had intended to distribute the marijuana to other individuals in Houston.

The case was investigated by the Drug Enforcement Administration, the Federal Aviation Administration, the YCSD and the Texas Department of Public Safety.  Assistant U.S. Attorney Justin Cunningham prosecuted.

DALLAS — Billy Wayne Johnson, 55, of Scurry, Texas, was sentenced today by Chief U.S. District Judge Sidney A. Fitzwater to 30 years in federal prison and a lifetime of supervised release following his guilty plea in April 2013 to a superseding information charging one count of transportation of child pornography and one count of possession of child pornography.  Johnson has been in custody since his arrest in February 2013 on a related federal criminal complaint.  Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

According to documents filed in the case, the investigation began in December 2012 when a special agent with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) was conducting an undercover investigation to identify persons who were distributing child pornography using peer-to-peer file-sharing and the Internet.  The investigation revealed an IP address that was connected to Johnson.

Johnson admitted that he obtained images of child pornography from other peer-to-peer users/members in his private network of contacts, and that he downloaded, viewed and shared images of child pornography.  A forensic evaluation of Johnson’s laptop and thumb drive that were seized revealed more than 1600 images and 194 videos of child pornography.  Also located on his laptop were lewd and lascivious photographs, as well as a video, that he admitted taking of boys under age six.  He further admitted that some of the images and videos he possessed depicted sadistic images of prepubescent minors.  He also admitted that he engaged in several chats with other members of his peer-to-peer network in which he and the others discussed their interest in molesting and sexually assaulting children under the age of six.

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 was in charge of the investigation; Assistant U.S. Attorney Camille Sparks prosecuted.