Eastern District of Virginia

ALEXANDRIA, Va. – Joan Manuel Ramirez Lema, 41, of Sterling, was sentenced today to 20 months in prison for charges related to smuggling guns from the United States to Bolivia.

Ramirez Lema pleaded guilty on Sept. 22. According to court documents, from Jan. 2010 to Aug. 2015, Ramirez Lema smuggled 115 firearms from the United States to Bolivia. Ramirez Lema, a U.S. citizen, shipped used vehicles with multiple firearms hidden in door panels. In a statement to federal agents, Ramirez Lema said he shipped merchandise and cars to Bolivia via freight forwarding companies in Baltimore, Maryland and Newark, New Jersey. He stated that he usually purchased between two and three guns a month and bought most of the guns in Leesburg and Sterling.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington; and Michael Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Washington Field Division, made the announcement after the plea was accepted by U.S. District Judge T.S. Ellis, III. Assistant U.S. Attorney Ronald L. Walutes, Jr. prosecuted the case.

 

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-206.

ALEXANDRIA, Va. – Justin G. Liverman, 24, of Morehead City, North Carolina, pleaded guilty today for his role in a harassment scheme that targeted senior U.S. government officials. Liverman’s plea admits guilt to a conspiracy to commit unauthorized computer intrusions, identity theft, and telephone harassment.

According to the statement of facts filed with the plea agreement, beginning in November 2015, Liverman conspired to attempt to intimidate and harass U.S. officials and their families by gaining unauthorized access to victims’ online accounts, among other things. For example, Liverman publicly posted online documents and personal information unlawfully obtained from a victim’s personal account; sent threatening text messages to the same victim’s cellphone; and paid an unlawful “phonebombing” service to call the victim repeatedly with a threatening message. In November 2015, the conspiracy used that victim's government credentials to gain unlawful access to a confidential federal law enforcement database, where Liverman obtained information relating to dozens of law enforcement officers and uploaded this information to a public website.

Liverman faces a maximum penalty of five years in prison when sentenced on May 12. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. Co-defendant Andrew Otto Boggs, also from North Carolina, is expected to enter a plea of guilty for his role in the conspiracy on January 10.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; and Brian J. Ebert, Special Agent in Charge of the U.S. Secret Service’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee. The case is being prosecuted by Assistant U.S. Attorneys Maya D. Song and Jay V. Prabhu, and Special Assistant U.S. Attorney Joseph V. Longobardo. The U.S. Attorney’s Offices for the Eastern and Western Districts of North Carolina, and the FBI’s Charlotte Division provided significant assistance with the investigation.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-313.

NORFOLK, Va. – Institutional Pharmacy Solutions, LLC (IPS), headquartered in Montgomery, Alabama, has agreed to pay $500,000 to settle civil penalty claims involving controlled substances being dispensed by IPS’s Virginia Beach Retail Pharmacy.

In a parallel administrative proceeding, IPS will surrender its DEA registration for the Virginia Beach Retail Pharmacy, which will foreclose that pharmacy location from dispensing controlled substance medications.

IPS fills prescriptions for patients in long term care facilities and operates pursuant to a certificate of registration issued by the DEA. Through its Virginia Beach Retail Pharmacy, IPS uses Automated Dispensing Systems (ADS) to provide prescription drugs, including controlled substance medications, to residents at long-term care facilities.

In accordance with the DEA’s regulatory authority over registered pharmacies, DEA Diversion Investigators conducted a two-year investigation that examined the controlled substances prescriptions filled by IPS’s Virginia Beach Retail Pharmacy. This investigation revealed numerous instances where IPS’s Virginia Beach Retail Pharmacy violated the Controlled Substance Act (CSA). The failure to comply with prescription and recordkeeping requirements can cause the potential for unauthorized persons to access controlled substances and compromise effective accountability for controlled substances.

Under the terms of a parallel administrative proceeding, IPS will surrender its DEA registration for the Virginia Beach Retail Pharmacy, which will foreclose that pharmacy location from dispensing controlled substance medications on January 12, 2017. Until January 12, 2017, IPS will be allowed to continue to dispense prescribed controlled substances to its ADS from the IPS Virginia Beach Retail Pharmacy. The extended surrender deadline is to provide the long-term care facilities with adequate time to make alternative arrangements to address their controlled substance medication needs.

The resolutions obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia and the DEA’s Washington Division. Assistant U.S. Attorneys Richard Sponseller and Clare Wuerker handled the CSA civil penalty matter. The resolution also resolves a parallel administrative action, In the Matter of Institutional Pharmacy Solutions, LLC, Docket No. 16-35 (Drug Enforcement Admin. August 2016). The administrative action was handled by Scott Levin and Krista Tongring of the DEA Diversion & Regulatory Litigation Office of Chief Counsel.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

RICHMOND, Va. – Capri M. Williams, 26, of Richmond, was sentenced today to three years in prison for identity theft and bank fraud crimes related to her stealing personal identifying information (PII) of hundreds of patients while employed at Commonwealth Primary Care (CPC), Inc., in Richmond. Williams was also sentenced to three years of supervised release and ordered to pay $34,906.15 in restitution to the victims of her crimes.

Williams pleaded guilty on June 24, 2016. According to the statement of facts filed with the plea agreement, in February 2015, Williams was employed as a licensed practical nurse by CPC, and had access to PII of patients at CPC. On Feb. 11, 2015, Williams accessed the PII of a patient who had received care at CPC. That same day, Williams used the patient’s name, date of birth, and Social Security number to apply for a credit card with Citibank. The application was approved and Williams eventually used the account to issue a balance transfer check made out to her for $4,500. After receiving the check, she deposited it into an account in her name.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by Senior U.S. District Judge Robert E. Payne. Assistant U.S. Attorneys Heather H. Mansfield and David V. Harbach, II prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-76.

NEWPORT NEWS, Va. – Stefon I. Malone, 25, of Newport News, was sentenced today to 17 years in prison for various drug and gun crimes related to his involvement in drug trafficking conspiracy operating in Newport News.

Specifically, Malone was sentenced to 84 months for participating in a conspiracy to possess with intent to distribute and distribution of cocaine base, and 120 months for discharging a firearm in furtherance of a drug trafficking crime.

Malone pleaded guilty on June 21, 2016. According to court documents, Malone participated in a drug trafficking conspiracy in which he distributed cocaine base and provided security for a drug trafficking operation. On Feb. 28, 2013, Newport News Police officers executed a search warrant at a rooming house on Chestnut Avenue in Newport News where officers had received information about individuals with drugs and firearms. Malone fired his Glock 9mm pistol multiple times, striking one officer in his ballistic vest and striking a second police officer’s ballistic shield. Both officers survived without serious injury.

 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Washington Field Division; and Richard Myers, Chief of Newport News Police Department, made the announcement after sentencing by U.S. District Judge Raymond A. Jackson. Assistant U.S. Attorney Robert E. Bradenham II prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15-cr-65.

Lionel Nelson Williams, 26, of Suffolk, Virginia was charged today with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. Williams was arrested yesterday in Suffolk.

Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Dana J. Boente for the Eastern District of Virginia and Special Agent in Charge Martin W. Culbreth of the FBI’s Norfolk, Virginia Field Office made the announcement. 

According to the affidavit in support of the criminal complaint, in October and November 2016, Williams sent money to a person he believed was collecting money for ISIL to purchase weapons and ammunition for ISIL fighters. Williams also posted content on social media indicating his support for ISIL and attacks targeting police officers, military and armed civilians. In addition, the investigation revealed that Williams ordered an AK-47 assault rifle the day after the terror attack in San Bernardino, California, in December 2015. Two firearms, including a semi-automatic rifle consistent with the appearance of an AK-47, were recovered in a post-arrest search of Williams’ residence. 

Williams faces a maximum penalty of 20 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

This case was investigated by the Norfolk Joint Terrorism Task Force and the Suffolk Police Department.

Assistant U.S. Attorneys Joseph E. DePadilla and Andrew C. Bosse for the Eastern District of Virginia and Trial Attorney Alicia Cook of the National Security Division’s Counterterrorism Section are prosecuting the case.

Williams Affidavit

NORFOLK, Va. – Lionel Nelson Williams, 26, of Suffolk, was charged today with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. Williams was arrested yesterday in Suffolk and will have his detention and preliminary hearings on Tuesday morning at the federal courthouse in Norfolk.

According to the affidavit in support of the criminal complaint, in October and November 2016, Williams sent money to a person he believed was collecting money for ISIL to purchase weapons and ammunition for ISIL fighters.  Williams also posted content on social media indicating his support for ISIL and attacks targeting police officers, military, and armed civilians, according to the complaint affidavit.  In addition, the investigation revealed that Williams ordered an AK-47 assault rifle the day after the terror attack in San Bernardino, California, in December 2015, and two firearms, including an AK-47 and a semi-automatic handgun, were recovered in a post-arrest search of Williams’ residence. 

Williams faces a maximum penalty of 20 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mary B. McCord, Acting Assistant Attorney General for National Security; and Martin W. Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement.  Assistant U.S. Attorneys Joseph E. DePadilla and Andrew C. Bosse and Trial Attorney Alicia Cook of the National Security Division’s Counterterrorism Section are prosecuting the case.

This case was investigated by the Norfolk Joint Terrorism Task Force and the Suffolk Police Department.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-mj-524.

NORFOLK, Va. – Joshua Manuel Treat, 20, of Elizabeth City, North Carolina, was indicted by a federal grand jury today on charges of sex trafficking of children, use of interstate commerce in furtherance of prostitution, production of child pornography, and distribution of drugs to a person under 21 years old.

According to the allegations in the indictment and other court documents, from September 26 to October 12, Treat posted Jane Doe, a 14-year-old girl, on an Internet website and advertised her for prostitution.  In order to make Jane Doe more amenable to prostitution, Treat would administer heroin with a needle prior to Jane Doe’s appointments with customers. 

Treat faces a maximum penalty of life in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office; and James A. Cervera, Chief of Virginia Beach Police, made the announcement after the indictment was returned by the grand jury.  Assistant U.S. Attorney Elizabeth Yusi is prosecuting the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-172.

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

RICHMOND, Va. – Crystal Charmae Richards, 44, of Chester, was indicted yesterday by a federal grand jury on charges related to her alleged role in filing false tax returns.

According to allegations in the indictment, Richards and another individual, David Wayne Schneider, worked as tax return preparers from 2011 through 2015.  During that time, they regularly prepared returns on behalf of clients that falsely claimed dependents, small business income or losses, and education credits, which resulted in payment of inflated refunds to the clients.  Richards also used the identities of certain clients without their knowledge or permission to file tax returns that generated refunds. In those instances, Richards pocketed the entirety of the refund.  Schneider pleaded guilty on January 27 and was sentenced to 24 months in prison on April 25.   Schneider was also ordered to pay $515,104.74 in restitution to the IRS for losses resulting from his preparation of false tax returns.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after the indictment was returned yesterday. Assistant U.S. Attorney Michael C. Moore is prosecuting the case.

This case was investigated by IRS-CI, the Department of Treasury’s Office of Inspector General, and the Social Security Administration’s Office of Inspector General.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-155 and 3:15-cr-201.

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

ALEXANDRIA, Va. – Praepitcha Smatsorabudh, 41, of Arlington, was sentenced today to 30 months in prison for running a multiyear scheme to defraud department stores across the country.  Smatsorabudh was also sentenced to three years of supervised release, and ordered to pay $403,250.81 in forfeiture and the same amount in restitution to her victims.

Smatsorabudh pleaded guilty to wire fraud on August 3.  According to court documents, Smatsorabudh bought brand name purses online and then returned in their place counterfeit purses, which were smuggled into the country from China.  She then sold the authentic purses on Instagram for more than $2,000 each.  In order to avoid detection, Smatsorabudh made fraudulent returns at over 60 department store locations in 12 states.  In total, her scheme defrauded department stores out of more than $400,000.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee.  Assistant U.S. Attorney Kellen S. Dwyer prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 16-cr-168.

NEWPORT NEWS, Va. – Roy E. Friend, 52, of Newport News, was sentenced today to 33 months in prison for stealing government property.

Friend pleaded guilty on March 24.  According to a statement of facts filed with the plea agreement, Friend, a civilian employee of the Department of Defense (DOD) who worked as the Chief of Logistics and Program Management, Aviation and Missile Command at Fort Eustis, admitted to fraudulently obtaining goods through the General Services Administration (GSA) Advantage website. The GSA Advantage system is an e-business website designed to facilitate on-line purchasing and GSA Schedules contract research by federal employees and local government entities.  GSA Advantage gives various government agencies access to millions of commercial products and services.  From in or about Aug. 19, 2010, to about mid-2015, Friend made approximately 666 orders totaling approximately $2.3 million using his GSA Advantage account

According to court documents, an investigation conducted by the GSA – Office of Inspector General (GSA – OIG), the DOD - Office of Inspector General (DOD – OIG), and the FBI determined that many of the items purchased by Friend were taken for personal use, and that Friend would take certain items to an outside business where he and/or another conspirator would remove GSA shipping labels and resell the items for private financial gain.  The investigation also revealed that certain items were sold over the eBay auction website.  Beyond Friend’s fraudulent use of GSA Advantage, law enforcement also determined that Friend fraudulently obtained $228,685.55 worth of equipment for Fort Lee through the U.S. Falcon contract.  In total, Friend fraudulently obtained goods valued at approximately $905,035.82.

Friend was also sentenced to three years of supervised release and ordered to pay restitution in the amount of $715,829.40 as well as criminal forfeiture.  Friend previously forfeited property valued at $189,206.42, which has been admitted to the United States.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Carol Fortine Ochoa, Inspector General, General Services Administration – Office of Inspector General; and Jonathan F. Trimble, Acting Special Agent in Charge of the FBI’s Norfolk Field Office; made the announcement after sentencing by U.S. District Judge Henry Coke Morgan, Jr.  Assistant U.S. Attorney Brian J. Samuels prosecuted the case.

 

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:16-cr-24.

NORFOLK, Va. – Patricia Means, 70, of Williamsburg, was sentenced today to 60 months in prison for orchestrating a Ponzi scheme through which she embezzled over $1.1 million from more than a dozen victims.  Means was also sentenced to three years of supervised release and ordered to pay restitution in the amount of $1,136,862.32 to the victims and the IRS.

Means pleaded guilty to wire fraud and money laundering on June 13. According to the statement of facts filed with the plea agreement, Means is a retired investment broker who worked in the industry for over 20 years. Sometime around February 2009, Means developed an investment scheme to raise funds for developing a purported product called “Savvy Bag,” a handbag organizer. Means went to substantial lengths to make the investment appear plausible, including having a seamstress make a prototype, setting up a website, applying for a patent, producing bound and printed copies of a brochure containing marketing and advertising information, and sales and profit projections. Most importantly, though, Means gained and manipulated the trust of her investors. Ultimately, between 2009 and 2015, Means embezzled over $1.1 million from investors of Savvy Bag, spending over $900,000 on housing, casino trips, vehicles and other personal items. Means solicited various individuals, some of whom were friends for a decade or more. The majority of the victims who invested their hard-earned savings were retirees or approaching retirement.

 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after sentencing by U.S. District Judge Henry C. Morgan Jr.  Assistant U.S. Attorney Brian J. Samuels prosecuted the case.

 

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:16-cr-29.

A Richmond, Virginia resident, formerly of Williamsburg, Virginia, was sentenced today to 60 months in prison for defrauding investors of more than $1.1 million, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.

“Patricia Means enticed her investors with false promises and then stole their funds to finance her lifestyle – evading taxes along the way,” said Principal Deputy Assistant Attorney General Ciraolo.  “Her five-year prison sentence sends a clear message to would-be fraudsters – you will be caught and held accountable for your deceptions and fraudulent misrepresentations.”

According to documents filed with the court, Patricia M. Means, 70, was a licensed investment broker from 1983 until 2009 with firms in California and Arizona.  Means moved to Virginia in 2006.  In or about February 2009, Means developed a scheme to defraud investors by creating a product called “Savvy Bag,” a purported handbag organizer and solicited investments in the product.  Sometime in 2010, Means began soliciting additional investments for what she claimed would be an initial public offering, but the shares were never offered to the public. 

As part of the scheme, Means started a product website and filed a trademark application that was later abandoned.  Means sent numerous emails to investors containing false explanations as to why the investments were not producing returns or being repaid.  Means also caused several nominee bank accounts to be opened in the name of a relative in order to receive the investment funds, while Means maintained control over all of the funds in the accounts.  Between 2009 and 2014, Means obtained over $1.1 million from victims of her investment fraud scheme and spent less than $3,000 to develop, produce or sell the Savvy Bag product.  Over that same period, Means spent hundreds of thousands of dollars in investors’ money on trips to casinos, real estate and other personal items.  Between 2010 and 2014, Means received taxable income of no less than $907,827.43, upon which no less than $201,065.49 in taxes were due and willfully evaded and defeated the income tax due and owing to the United States during each of these years.

“Internal Revenue Service Criminal Investigation (IRS-CI) is diligent in unraveling the fraudulent actions of those, such as Patricia Means, who scheme to defraud investors,” said Acting Special Agent in Charge Thomas Holloman of IRS-CI’s Washington, D.C. Field Office.  “Today’s sentencing is a reminder that there are detrimental consequences for this type of criminal behavior.”

Means pleaded guilty on June 13 to one count of wire fraud and one count of money laundering to conceal.  In addition to the term of imprisonment, Senior U.S. District Judge Henry Coke Morgan Jr. for the Eastern District of Virginia sentenced Means to three years of supervised release and ordered her to pay $1,136,862.32 in restitution, including $201,065.49 to the IRS.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-CI, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Brian J. Samuels of the Eastern District of Virginia, who are prosecuting this case.

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

ALEXANDRIA, Va. – Douglas Duran Cerritos, 20, of Falls Church, was sentenced to life in prison today for his role in an MS-13 gang murder in Northern Virginia in 2014.

According to court records and evidence presented at trial, on March 29, 2014, Cerritos and six other gang members murdered Gerson Adoni Martinez Aguilar, a gang recruit, for breaking gang rules.  The gang members lured the victim to Holmes Run Park and brutally killed him by stabbing him repeatedly in the back and the neck, ultimately severing his head. When they were done they buried him in a shallow grave in the park.  Cerritos was their leader, and he both planned and directed the murder.

A total of 13 defendants were charged in this case for a series of three murders and one attempted murder that took place in Northern Virginia between October 2013 and June 2014. Of those, six defendants pleaded guilty prior to trial. Six went to trial and were convicted of all charges on May 9. Cerritos went to trial separately and was convicted on September 22. Each defendant convicted at trial was sentenced to a mandatory sentence of life in prison. Please see the table at the end of this press release for additional information on each defendant.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Colonel Edwin C. Roessler Jr., Chief of Fairfax County Police Department; Earl L. Cook, Chief of Alexandria City Police Department; and Barry M. Barnard, Chief of Prince William County Police Department, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee.  Assistant U.S. Attorneys Julia K. Martinez and Tobias D. Tobler are prosecuting the case. 

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-306.

Name

Age, Hometown

Charges Convicted of

Sentencing Info

Pedro Anthony Romero Cruz

30, unknown

Conspiracy to Commit Murder in Aid of Racketeering; Possession of a Firearm During a Crime of Violence

30 years

Jose Lopez Torres

26, Falls Church

Conspiracy, Attempted, and Murder in Aid of Racketeering; Possession of a Firearm During a Crime of Violence

Life sentence plus 20 years

Jaime Rosales Villegas

31, Richmond

Conspiracy and Attempted Murder in Aid of Racketeering; Possession of a Firearm During a Crime of Violence

22 years and 8 months

Juan Carlos Marquez Ayala

23, Falls Church

Murder in Aid of Racketeering

Life sentence

Omar Dejesus Castillo

27, Arlington

Two Counts of Murder in Aid of Racketeering

Two life sentences

Alvin Gaitan Benitez

23, Falls Church

Murder in Aid of Racketeering, Accessory After the Fact

Life sentence plus 15 years

Christian Lemus Cerna

20, Falls Church

Murder in Aid of Racketeering

Life sentence

Araely Santiago Villanueva

20, Falls Church

Two Counts of Murder in Aid of Racketeering

Life sentence

Manuel Ernesto Paiz Guevara

21, Falls Church

Murder in Aid of Racketeering

Life sentence

Jose Del Cid

20, Alexandria

Two Counts of Murder in Aid of Racketeering

Two life sentences

Jesus Alejandro Chavez

26, Alexandria

Murder in Aid of Racketeering; Use of a Firearm During a Crime of Violence Resulting in Death; Felon in Possession of a Firearm

Two life sentences plus 10 years

Genaro Sen Garcia

21, unknown

Murder in Aid of Racketeering

Life sentence

ALEXANDRIA, Va. – Ahmad Sayed Hashimi, aka Jimmy Hashimi, of Woodbridge, was sentenced today to 25 years in prison for his role in beating and kidnapping his ex-girlfriend, in addition to leading drug distribution conspiracies.

Hashimi was indicted by a grand jury on four counts: 1) Conspiracy to Distribute Oxycodone; 2) Conspiracy to Distribute Cocaine; 3) Kidnapping; and 4) Interstate Domestic Violence. On September 29, after a three-day jury trial, he was convicted of all four counts. 

According to court documents and evidence presented at trial, from approximately November 2009 through March 2015, Hashimi created and managed a wide ranging drug distribution scheme involving both powder cocaine and oxycodone obtained fraudulently from pharmacies.  He distributed these drugs in Virginia, Maryland, and Washington, D.C.  Hashimi’s drug distribution schemes involved at least 46.5 kilograms of powder cocaine and at least 30,000 30mg oxycodone pills, approximately 9,000 of which have been directly attributed to Hashimi.  Ten co-conspirators have been convicted federally in connection with Hashimi’s drug schemes, and another 13 conspirators have been convicted in state courts.

According to court records and evidence presented at trial, Hashimi relied heavily on other people to distribute his drugs for him, believing that doing so insulated him from law enforcement attention. In the summer of 2011, Hashimi recruited his girlfriend, H.D., to begin assisting him with his cocaine scheme. Shortly thereafter, Hashimi concocted and pursued an opportunity to obtain oxycodone using fraudulent prescriptions passed at pharmacies. In connection with this scheme, Hashimi once again directed H.D. to act as a shield, recruiting runners to obtain pills from pharmacies, and obtaining and distributing the pills on his behalf.  The money from the scheme was returned to and controlled by Hashimi.   

According to court records and evidence presented at trial, throughout their relationship, Hashimi was extremely controlling of H.D., including regularly assaulting her by punching her in the head and face causing bruising and bleeding. On several occasions, neighbors called 911 as a result of hearing Hashimi beating H.D., which resulted in police responding to the home. On at least two occasions, H.D. had to go to the emergency room as a result of injuries sustained from beatings by Hashimi. Evidence at trial established that H.D. still has bony lumps on her forehead from being repeatedly hit there by Hashimi, and that she has lost partial hearing in one ear as a result of a particularly bad assault. 

According to court records and evidence presented at trial, in the fall of 2013, the relationship between Hashimi and H.D. had further deteriorated. Shortly before Nov. 8, 2013, Hashimi became suspicious that H.D. had not returned to him all of the oxycodone pills he directed her to obtain from a pharmacy. This argument developed into a physical altercation in which Hashimi repeatedly punched and choked H.D. Ultimately, H.D. was able to flee the apartment, taking with her some of Hashimi’s cocaine prepared for resale. Upon discovering the theft of his cocaine, Hashimi began frantically looking for H.D. and vowing revenge.

According to court records and evidence presented at trial, a few days after the beating, Hashimi organized a group of five men and lured H.D. to a meeting place using a ruse. When H.D. arrived at the location for the meeting, Hashimi and the other men surrounded her vehicle with their cars to prevent her from leaving. The other men threatened the passengers that were with H.D. while Hashimi entered her vehicle and began violently beating her. One of the men Hashimi brought with him threatened to shoot one of the men in H.D.’s car for attempting to intervene on her behalf.  Hashimi dragged H.D. from her vehicle into a getaway car. While one of the other men drove away, Hashimi continued to repeatedly punch H.D. in her head and face.  Eventually, Hashimi’s getaway vehicle arrived at Hashimi’s own vehicle. Hashimi then dragged H.D. into the front passenger seat of his vehicle, and drove into the District of Columbia.  During this time, H.D. was able to call 911, but Hashimi cut off the call and answered the call back, telling the dispatcher that there was no problem.  He threatened to kill H.D.  He continued to beat her as he drove.  At a momentary stop at a red light in the District of Columbia, H.D. was able to run from the vehicle and escape to police assistance.  The police took her to the emergency room in D.C. where she received medical treatment for her substantial injuries.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Liam O’Grady.  Assistant U.S. Attorney Whitney Dougherty Russell and Special Assistant U.S. Attorney Sean M. Welsh prosecuted the case.

This case was investigated by the FBI, Fairfax County Police Department, Loudoun County Sheriff’s Office, Prince William County Police Department, Alexandria City Police Department, Arlington City Police Department, and the Montgomery County (Maryland) Police Department.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-135.

ALEXANDRIA, Va. – U.S. Attorney Dana J. Boente announced today that the Eastern District of Virginia (EDVA) collected $156,514,010.12 in criminal and civil actions in Fiscal Year 2016.  Of this amount, $49,997,392.53 was collected in criminal actions and $106,516,617.59 was collected in civil actions. 

Additionally, EDVA worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $3,635,377.40 in cases pursued jointly with these offices.    Of this amount, $29,737.34 was collected in criminal actions and $3,605,640.06 was collected in civil actions.

Attorney General Loretta E. Lynch announced yesterday that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016.  The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

ALEXANDRIA, Va. – ThunderCat Technology, LLC, located in Reston, has agreed to pay $1 million to settle civil False Claims Act, Anti-Kickback Act, and Procurement Integrity Act claims relating to bid rigging and kickback schemes in connection with six government procurements.

The settlement resolves civil claims against ThunderCat relating to the criminal pleas entered by ThunderCat principal, co-owner, and general manager, Edwin Keith McMeans, and ThunderCat sales representative, Anthony Bilby.  From September 2008 to February 2012, ThunderCat solicited or submitted inflated third party bids or “loser bids” during competitions for five government contracts and/or purchase orders awarded by the Department of Homeland Security (DHS) on behalf of the U.S. Customs and Border Protection (CBP) and U.S. Citizenship and Immigration Services and one government contract awarded by the General Services Administration (GSA).  In connection with one CBP contract, ThunderCat agreed to pay CPB employees 10 percent of ThunderCat’s profits on the contract in exchange for procurement sensitive independent government cost estimates prior to ThunderCat’s submission of its proposal.

The resolutions obtained in this matter were the result of a coordinated effort between the Civil and Criminal Divisions of the U.S. Attorney's Office for the Eastern District of Virginia, and the Offices of Inspector General for DHS and GSA.

The civil matter was investigated by Assistant U.S. Attorney Christine Roushdy.  The civil claims settled by this False Claims Act, Anti-Kickback Act, and Procurement Integrity Act agreement are allegations only; there has been no determination of civil liability.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Criminal Case No. 1:15-cr-264 (Edwin Keith McMeans) and No. 1:13-cr-466 (Anthony Bilby).

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

ALEXANDRIA, Va. – Nicholas Young, 37, of Fairfax, who was formerly employed as a police officer with the Metro Transit Police Department, was indicted today by a federal grand jury on charges of attempting to provide material support to a designated foreign terrorist organization and obstruction of justice.

According to allegations in the indictment, between on or about Dec. 3, 2015, and on or about July 28, 2016, Young attempted to provide material support and resources to the Islamic State of Iraq and the Levant (ISIL). The material support and resources that Young attempted to provide included, but was not limited to: Protection of ISIL personnel from capture or harm by attempting to mislead the FBI as to what Young believed to be his friend’s travel to Syria to join ISIL; and the provision of gift cards for ISIL. 

According to allegations in the indictment, between on or about Dec. 3, 2015, and Dec. 5, 2015, Young attempted to obstruct and impede an official proceeding.  In specific, Young believed an associate of his, who was actually an FBI confidential human source (CHS), had successfully joined ISIL in late 2014.  During an FBI interview, Young was told the FBI was investigating the attempt of his associate (the CHS) to join ISIL. Nevertheless, in an attempt to thwart the prosecution of the CHS and himself, Young attempted to deceive investigators as to the destination and purpose of the CHS’ travel. 

According to allegations in the indictment, on or about Nov. 20, 2014, Young attempted to obstruct, influence, and impede an official proceeding of the Grand Jury by sending a text message to the CHS’ cell phone in order to make it falsely appear to the FBI that the CHS had left the United States to go on vacation in Turkey. In actuality, Young believed the CHS had gone to Turkey and then to Syria in order to join and fight for ISIL.

 

Young faces a maximum penalty of 60 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the indictment was returned. The case is being prosecuted by Assistant U.S. Attorneys Gordon D. Kromberg and John T. Gibbs, and Trial Attorney David P. Cora of the National Security Division.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-265.

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

NORFOLK, Va. – Keiawn Demarco McDonald, 24, of Virginia Beach, was sentenced today to 188 months in prison for sex trafficking a child. McDonald is the seventh and final member of this sex trafficking ring to be sentenced. The defendants were sentenced to a total of 92 years in prison (see chart below). 

McDonald pleaded guilty on August 10. According to court documents, in the fall of 2015 McDonald, who is a member of a Virginia Beach-based set of the Bloods street gang, recruited a minor girl to engage in prostitution at various hotels in Norfolk, Chesapeake, and Virginia Beach. McDonald photographed the victim, posted online advertisements for her commercial sex services, and arranged prostitution appointments for her. McDonald also instructed the victim about how to conduct appointments with customers and monitored her activities by text message during her appointments. He coerced the victim to recruit another teenaged girl to prostitute for him as well, and required both girls to provide him with all the money they earned from their prostitution activities.

Name

Age, Hometown

Charges Convicted of

Sentencing Info

Keiawn Demarco McDonald

23, Virginia Beach

Sex Trafficking of a Child

Sentenced today to 188 months

Cordario Marcell Uzzle

23, Virginia Beach

Sex Trafficking of a Child

Sentenced on June 3 to 151 months

Darryl Trashaun Threat

22, Virginia Beach

Sex Trafficking of a Child

Sentenced on June 9 to 292 months

Tajaika R. Blackston

19, Virginia Beach

Conspiracy to Engage in Sex Trafficking of a Child

Sentenced on June 10 to 100 months

Keith Deontai Threat

22, Virginia Beach

Conspiracy to Engage in Sex Trafficking of a Child

Sentenced on September 16 to 96 months

Shade Audrey Castro

23, Virginia Beach

Conspiracy to Engage in Sex Trafficking of a Child

Sentenced on October 27 to 126 months

Gary Anthony Hassell

26, Virginia Beach

Sex Trafficking of a Child

Sentenced on October 28 to 151 months

 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office; and James A. Cervera, Chief of Virginia Beach Police, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen.  Assistant U.S. Attorney V. Kathleen Dougherty prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-2.

NORFOLK, Va. – Marcus D. Wilkins, 27, of Virginia Beach, was sentenced today to 42 months in prison for assault on a federal officer with a dangerous weapon.

Wilkins pleaded guilty on September 7. According to court documents, on May 1, Wilkins removed a shopping cart full of unpaid merchandise from the Navy Exchange at Naval Air Station Oceana in Virginia Beach.  A loss prevention officer saw him remove the merchandise and ordered him to stop.  Instead, Wilkins walked away from the shopping cart and toward his car.  An officer with the Naval Air Station Oceana base police observed Wilkins walking toward his vehicle and approached the vehicle, identified himself as base police and positioned himself in front of the vehicle and twice ordered Wilkins to stop.  Wilkins started his car and accelerated into the police officer, lifting him off the ground with the hood of the car and pushing him backward in the air and to the ground. Wilkins then fled the Navy Exchange parking lot and was apprehended by members of the Virginia Beach Police Department shortly thereafter.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Tim Quick, Special Agent in Charge of Naval Criminal Investigative Service (NCIS) Norfolk Field Office; and James A. Cervera, Chief of Virginia Beach Police, made the announcement after sentencing by District Judge Mark S. Davis.  Special Assistant U.S. Attorney Alyssa K. Nichol prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-84.

NORFOLK, Va. – Katherine Grobes, 45, of Chesapeake, pleaded guilty today to a charge of conspiracy to commit wire fraud.

According to the statement of facts filed with the plea agreement, Grobes owns the College of Beauty and Barber Culture (CBBC), located in Chesapeake. CBBC was purportedly a barber and cosmetology school approved by the Department of Veterans Affairs to provide education and training to military veterans, including veterans who received tuition assistance under the Post-9/11 GI Bill. Grobes represented to the VA that CBBC provided full-time schooling to hundreds of veteran students beginning in October 2011. In reality, the school was a sham. Most veterans enrolled in CBBC courses received few, if any, hours of instruction from CBBC employees, and there were no tests, exams, or practical exercises given. Rather, students were directed to simply sign in and out of the school each day so that Grobes could report to the VA that they were enrolled and attending.  In exchange, CBBC received Post-9/11 GI Bill tuition payments for each veteran from the VA.  Based on Grobes’ provision of false information to the VA concerning the number of hours of instruction and the manner and quality of the instruction provided to veteran students, CBBC received over $4.5 million in Post-9/11 GI Bill tuition payments between October 2011 and September 2016. Grobes owns CBBC along with her husband, William Grobes, who pleaded guilty on November 30, to charges of conspiring to commit wire fraud and money laundering.

Grobes was charged by criminal information on December 2, and faces a maximum penalty of 5 years in prison when sentenced on March 10, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs; Andrew L. Traver, Director of the Naval Criminal Investigative Service (NCIS); and Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after the plea was accepted by U.S. Magistrate Judge Douglas E. Miller. Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-164.

NORFOLK, Va. – Lamar Sinclair, 33, of Norfolk, was sentenced today to 105 months in prison for conspiracy to distribute heroin.

Sinclair pleaded guilty on September 7. According to court documents, from 2012 to April 2016, Sinclair has conspired to distribute heroin in Norfolk and Virginia Beach with approximately eight other individuals.  Sinclair’s heroin was laced with fentanyl which caused six of his heroin customers to overdose.  In each case the police or emergency services were able to revive the victims of the overdoses.  Sinclair was aware of the overdoses and bragged that his heroin was very potent because of the added fentanyl, and referred to his heroin as “The Missile.” Law enforcement conducted nine controlled purchases of heroin from Sinclair, with two of those purchases testing positive for fentanyl. 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith.  Assistant U.S. Attorney Bill Muhr prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-114.

RICHMOND, Va. – Larry Jay Horsey, 41, of Chesterfield, pleaded guilty today to charges related to his role in an investment fraud scheme that caused a loss of $1.9 million to nine investors.

According to the statement of facts filed with the plea agreement, Horsey, a licensed insurance agent, was the founder and operator of “Heroes Academy,” a business that marketed itself as both a non-profit financial education school and a financial management company.  Horsey represented himself to the public as a financial advisor, conducting financial planning seminars in Virginia and North Carolina.  Between October 2012 and May 2016, Horsey targeted nine separate individuals, convincing those individuals to open what they believed would be investment or savings vehicles, such as an annuity or a Roth IRA, through Horsey’s Heroes Academy business.  Instead of using those individuals’ savings as promised, however, Horsey instead spent the funds on various personal or business expenses.  In total, Horsey defrauded those nine investors of a combined $1.9 million, and today pleaded guilty to charges of mail fraud and engaging in monetary transactions derived from specified unlawful activities. 

Horsey faces a maximum penalty of 20 years in prison when sentenced on March 17, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service (USPIS), made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson.  Assistant U.S. Attorney Thomas A. Garnett is prosecuting the case.

 

The case was investigated by the Fraud Task Force, including the FBI’s Richmond Field Office, IRS-CI, and USPIS, with assistance from the Virginia State Corporation Commission.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16cr153.

RICHMOND, Va. – Troy Baldridge, 48, of Richmond, pleaded guilty today to charges related to his role in an investment scheme that caused a loss of over $540,000.

According to the statement of facts filed with the plea agreement, Baldridge was a Senior Vice President and Director of Managed Investments at an investment brokerage in Glen Allen.  He also was a registered investment advisor and registered broker-dealer.  From September 2011 through July 2016, on at least 15 occasions, Baldridge transferred funds from client investment accounts to Baldridge’s own accounts for his own use.  Baldridge forged the requisite client signatures to effectuate the transactions when necessary.  In total, Baldridge embezzled $543,206.23 from various individual clients.  

Baldridge waived indictment and pleaded guilty to a criminal information.  Baldridge faces a maximum penalty of 20 years in prison sentenced on March 10, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson.  Assistant U.S. Attorney Jessica D. Aber is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-148.

The Justice Department announced today that it has opened an investigation into the conditions at the Hampton Roads Regional Jail in Portsmouth, Virginia. 

The investigation will focus on whether the jail violates the constitutional rights of inmates to adequate medical and mental health care; violates the constitutional rights of inmates who have mental illness by secluding them in isolation for prolonged time periods; and violates the rights of inmates who have mental illness by denying them access to services, programs and activities because of their disability.   

“All prisoners, including those with mental illness, have a constitutional right to receive necessary medical care, treatment and services,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “The Justice Department will conduct a thorough investigation, led by the facts and the law, to review conditions in the jail.”

“We are committed to protecting the civil rights of all citizens, including those who are incarcerated,” said U.S. Attorney Dana J. Boente of the Eastern District of Virginia.  “Prisoners with mental illness are a particularly vulnerable population, and their rights must be safeguarded.  We look forward to conducting a full and fair investigation of this matter in partnership with the Civil Rights Division.”

The department has not reached any conclusions regarding the allegations in this matter.  The investigation will be conducted under the Civil Rights of Institutionalized Persons Act (CRIPA) and under Title II of the Americans with Disabilities Act (ADA).  Under CRIPA, the department has the authority to investigate violations of prisoners’ constitutional rights that result from a “pattern or practice of resistance to the full enjoyment of such rights.”  The department has conducted CRIPA investigations of many correctional systems, and where violations have been found, the resulting settlement agreements have led to important reforms.  

The Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office of the Eastern District of Virginia are conducting this investigation.  Individuals with relevant information are encouraged to contact the department via phone at 844-664-0225 or by email at Community.HamptonRoads@usdoj.gov.

NORFOLK, Va. – Anthony L. Burfoot, 48, of Norfolk, was convicted today by a federal jury on charges of conspiracy to commit honest services wire fraud, honest services wire fraud, conspiracy to obtain property under color of official right, obtaining property under color of official right, and perjury.  Burfoot is the current Norfolk City Treasurer and a former Vice Mayor of Norfolk and City Councilman.

“Public corruption strikes at the heart of democracy and erodes public confidence in government,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia.  “Anthony Burfoot violated the sacred trust we place in our elected officials and in doing so his greed eclipsed his vision for building up his own community.  The citizens of Norfolk have a right to nothing less than fair and honest government, and this conviction should serve as a warning to anyone who thinks about selling their office.  My office will continue to investigate and prosecute those who would sell their office.  I want to thank the Assistant United States Attorneys and the FBI for their diligence and dedication in pursing this important case.”

“Public officials are entrusted with authority by their constituents and are expected to serve with integrity and honor,” said Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office.  “Greed and self-interest are a fundamental betrayal to the community and have no place in public service.  This conviction demonstrates the FBI’s commitment to thoroughly investigating public corruption at all levels of government and bringing justice to those who violate the law at the expense of the public’s trust.” 

According to court records and evidence presented at trial, from 2005 through in or about Feb. 15, 2011, Burfoot engaged in a scheme to defraud the citizens of Norfolk of their right to the honest services of a Norfolk Councilman, Vice Mayor, and Chief Deputy Treasurer.  Specifically, Burfoot solicited things of value including money, car payments, and home appliances from individuals with matters before city council and, in exchange, promised to perform specific official acts as well as other actions on an as needed basis on their behalf.  Burfoot had illicit relationships with the managers of Tivest Development company as well as Thomas Arney, another developer and local restaurant owner.  The managers of Tivest paid hundreds of thousands of dollars to Burfoot and, in exchange, Burfoot voted in favor of City ordinances that provided City-owned land to Tivest for nominal cost and additional City funds for infrastructure improvements.  At Burfoot’s request, Arney paid $25,000 to the mother of two of Burfoot’s children after Burfoot promised to obtain the necessary votes for Arney to open a gentlemen’s club on Granby Street in Norfolk.  Burfoot also committed perjury, in numerous ways, by claiming under oath during a federal trial that he never accepted nor solicited a thing of value in exchange for performing an official act.  Furthermore, according to court records and evidence presented at trial, Ronald Boone, another developer and local restaurant owner, provided cash, gifts, free access to a beach house, other things of value to Burfoot.  In exchange, Burfoot performed specific official actions and promised to engage in future official actions to benefit Boone and his business interests.  

Burfoot faces a maximum penalty of 5 to 20 years in prison when sentenced on April 17, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after the verdict was accepted by U.S. District Judge District Judge Henry C. Morgan, Jr. Assistant U.S. Attorneys Melissa E. O’Boyle, Uzo E. Asonye, and Katherine Lee Martin are prosecuting the case.

 

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-6.

ALEXANDRIA, Va. – Koissy Thomas Kemmeth, 52, of New York, New York, was sentenced today to 15 months in prison for conspiracy to commit wire fraud and making a false, fictitious and fraudulent claim against the United States.  Kemmeth was also sentenced to three years of supervised release, and ordered to forfeit $37,000 and pay $105,000 in restitution.

Kemmeth pleaded guilty on Sept. 14.  According to court documents, Kemmeth was a native and citizen of the Ivory Coast who worked as a driver for the Ivory Coast Mission to the United Nations. From 2010 through February 2015, Kemmeth worked with another national of the Ivory Coast, Kouame Tanoh, to defraud others of money and property. As part of the conspiracy, Kemmeth created false and fraudulent employment verification letters for Tanoh, using Tanoh’s real name and also his aliases, on the official letterhead of the Ivory Coast Mission, thus appearing to have been issued under the official authority of the Mission. These letters falsely represented that Tanoh, or one of his aliases, was employed by the Mission.  At least one of these letters, Kemmeth used the name of another diplomat who had previously served at the Mission, but had returned to the Ivory Coast by the date of the letter.

During that same time period, Kemmeth assisted Tanoh with a scheme that involved the preparation and electronic filing of false and fictitious federal and state income tax returns that requested fraudulent refunds.  Some of these false claims were filed on behalf of Kemmeth, who knew he was not supposed to be filing any federal or state tax returns because he was in the United States as a foreign diplomat.  Kemmeth also assisted with the scheme by providing his bank account information to Tanoh so that fraudulent refunds could be deposited into Kemmeth’s account.  With Kemmeth’s knowledge and consent, Tanoh also used the mailing address for the Ivory Coast Mission on some of the fraudulent income tax returns.  Kemmeth would then collect any mail sent to the Mission for these returns. 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington; Michael McGill, Special Agent-in-Charge, Social Security Administration Office of the Inspector General; and Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), and Eric M. Thorson, Inspector General, U.S. Department of Treasury made the announcement after sentencing by U.S. District Judge T.S. Ellis, III.  Assistant U.S. Attorney Katherine L. Wong prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-129.

NEWPORT NEWS, Va. – Frederick Forson-Peebles, Jr., 25, of Hampton, was sentenced today to 10 years in prison for possession of a firearm by a convicted felon. This is the maximum sentence of imprisonment allowed under federal law.

Forson-Peebles pleaded guilty on June 2. According to court records, on March 18, 2014, a Hampton Police Officer encountered Forson-Peebles after responding to a call about a large group of people fighting at Liberty Estates Apartment Complex.  When the officer tried to talk to Forson-Peebles he ran.   Forson-Peebles then stopped, drew a black semi-automatic handgun from his waistband and fired at the officer, causing the officer to fall to the ground.  While the officer was on the ground, Forson-Peebles fired at him a second time.  The officer then crawled to cover at the corner of an apartment building and returned fire.  Soon after multiple officers responded to the location and arrested Forson-Peebles.  A loaded Glock 22 handgun was recovered on the scene. Further investigation and interviews of residents of the complex revealed that Forson-Peebles had attempted to gain entry into multiple apartments in his flight from police, banging on doors and trying door handles throughout at least two of the buildings. 

Forson-Peebles was previously found not guilty of Attempted Capital Murder of a Law Enforcement Officer in Hampton Circuit Court in November, 2015. The case was then adopted federally.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael B. Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; and Terry L. Sult, Chief of Hampton Police Division, made the announcement after sentencing by U.S. District Judge Mark S. Davis. Special Assistant U.S. Attorney Amy E. Cross prosecuted the case.

 

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:16-cr-39.

RICHMOND, Va. – Michael P. Klekamp, 67, of Charlottesville, pleaded guilty today to charges of bank fraud that resulted in a $10.5 million loss to Fauquier Bank.

According to court documents, Klekamp was the President of Capitol Components and Millwork, Inc. (CCM), of Culpeper. CCM was involved in the manufacture, fabrication and distribution of architectural building material millwork items for mid to high-end residential and commercial buildings.  To run its business, CCM drew money from a standard secured revolving line of credit line at Fauquier Bank.  The credit line agreement required CCM to submit periodic reports to the Bank about the value of the underlying collateral, such as accounts receivable and inventory, and the creditworthiness of CCM. 

According to court documents, Klekamp fraudulently maintained the credit line by misrepresenting the true financial condition of CCM and made a variety of false statements to the bank about the true amount and quality of the collateral of CCM.  On Oct. 25, 2015, Klekamp submitted documents to the bank fraudulently stating there was approximately $17 million of total accounts receivable and inventory securing the bank’s $11.5 million credit line, while in actuality there was no more than $3.4 million of total accounts receivable and inventory.  Contrary to the fake financial statements submitted to the bank, CCM was not able to repay the interest or principal amount of the loan, resulting in a loss of approximately $10.5 million as a result of the scheme. 

Klekamp faces a maximum penalty of 30 years in prison when sentenced on March 24, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson. The case was investigated by Richmond Division, Charlottesville Resident Agency of the FBI.   Assistant U.S. Attorney David T. Maguire is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-CR-141.

NORFOLK, Va. – Joseph Downing Barnes Jr., 26, of Portsmouth, was sentenced today to 108 months in prison for distribution of child pornography, as well as 25 years of supervised release.

Barnes pleaded guilty on August 31. According to court documents, Barnes was arrested on August 3, for trading child pornography on the internet. In October 2015, Justin Clark was arrested for trading child pornography using the KIK application on his phone. The forensic examination of Clark’s cell phone revealed he regularly traded child pornography with others using KIK, including Barnes. During the investigation of Barnes, his phone was seized and revealed 74 videos and four images of child pornography. In addition to the phone and the email account, his other online accounts contained images of child pornography. Clark was sentenced separately to six years in prison.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Michael K. Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Norfolk, made the announcement after sentencing by U.S. Chief Judge Rebecca Beach Smith.  Assistant U.S. Attorney Elizabeth M. Yusi prosecuted the case.

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

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-120.

ALEXANDRIA, Va. – James C. Bedford, 50, of Dumfries, pleaded guilty today to charges of conspiracy to commit bribery and bribery of a public official.

According to the statement of facts filed with the plea agreement, in 2006, the computer systems of the Bureau of Industry and Security (BIS), a bureau within the Department of Commerce, were infected by a computer virus that required BIS to shut down internet access to its computer systems and to construct a new computer network that had not been infected by the virus. Because BIS employees needed access to files that resided on the old system, files needed to be migrated from the old, infected network to the new, uninfected network.

According to the statement of facts, from May 2010 through October 2011, Bedford conspired with Raushi J. Conrad, then a BIS employee, to pay bribes to ensure that Bedford’s companies were awarded and maintained a lucrative subcontract and contract to perform the data migration work. Conrad was then serving within the Office of the Chief Information Officer for BIS and had been designated to oversee the data migration project. Conrad has been indicted for his role in the conspiracy and bribery scheme.

According to the statement of facts, Bedford made $208,000 in payments through a construction company he owned to a restaurant business owned by Conrad, many payments were concealed through false and fictitious invoices created by Conrad. The fake invoices made it appear that Conrad’s restaurant business had performed various services for Bedford’s construction company, when in fact no such services ever had been provided. Bedford also paid for over $7,000 worth of renovation work performed at Conrad’s residence. In exchange, Bedford’s companies reaped over $1 million in profits from the data migration subcontract and contract.

Bedford faces a maximum penalty of 20 years in prison sentenced on March 31, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Duane E. Townsend, Special Agent in Charge of the U.S. Department of Commerce, Office of Inspector General; and Robert Craig, Special Agent in Charge for Defense Criminal Investigative Service Mid-Atlantic Field Office made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Matthew Burke and Jamar K. Walker are prosecuting the case.

 

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-264 and 1:16-cr-169.

NEWPORT NEWS, Va. – Michael Hopson, 39, of Newport News, was convicted today by a federal jury on charges of racketeering conspiracy, including acts of murder, attempted murder, robbery, obstruction of justice, murder in aid of racketeering, conspiracy and attempted murder in aid of racketeering, and other charges.

According to court records and evidence presented at trial, Hopson, (aka “Hop” aka “Big Homie”) was the founding member and leader of the P-Stones, also referred to as the P-Stone Bloods and Cobra Stones, that operate primarily in the Denbigh area of Newport News. The P-Stones engage in violent crimes including murders, illegal drug trafficking, obstruction of justice and robberies that often target narcotics dealers and use stolen currency and inventory to purchase firearms and fund gang members’ court dues.

According to evidence presented at trial, as the leader, Hopson planned, directed and participated in recruitment of members, including minors; collected monthly gang dues; carried out and ordered violations; ordered and presided over meetings; and organized other firearm and marijuana distribution. Hopson also served as a security officer at Denbigh High School, in which he used his security officer position to further the Black P-Stones gang by recruiting minors and selling narcotics to high school students.

According to evidence presented at trial, Hopson personally ordered multiple shootings and murders between October 2007 and June 2009, including:

• On Oct. 31, 2007, Hopson ordered P-Stone members to murder A.J., a member of the rival Thugs Relations street gang. At Hopson’s direction, the P-Stones members attempted to lure A.J. from the home while armed.  A.J. did not come out of the house and the P-Stone members left.

   

• On Nov. 6, 2007, a P-Stone, acting on Hopson’s orders lured E.S., a 17-year-old P-Stone member, to a location in Newport News to kill him. Hopson had previously given him the “green light” for the killing of E.S. for his relations with Thug Relations. Once E.S. arrived he was shot and killed, and Hopson rewarded the P-Stone member with a promotion.

   

• On Dec. 10, 2008 Hopson authorized the murder of J.W., a Crip who was disrespectful to members of the P-Stones. Acting on those orders, two P-Stone members went to the home of J.W. and fired multiple rounds into the home. J.W.’s father, who was sitting in the living room when the assault occurred, was hit with debris from the bullet shrapnel and suffered injury to his eye.

 

• On March 9, 2009, Hopson ordered the murder of two members of 10-1 Mafia Crips, rivals of the P-Stones, for the beating of a P-Stone member. Acting on Hopson’s orders, two P-Stone members shot multiple times into the home of the two 10-1 Mafia Crips. 

   

• On April 17, 2009, Hopson ordered two P-Stones to fire multiple rounds into a home he knew to be occupied because the individuals inside the home were disrespectful to him.

   

• On June 12, 2009, Hopson ordered the murder of A.J., a Thug Relations member who was responsible for the murder of a P-Stone member. A P-Stone member acting on Hopson’s orders shot and wounded A.J. 

Hopson faces a mandatory penalty of life in prison when sentenced on March 3, 2017. The maximum statutory sentence of life is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the statutory penalty, the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; and Special Agent in Charge Martin W. Culbreth of the Federal Bureau of Investigation’s Norfolk, Virgina, Field Office made the announcement after the verdict was accepted by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorney Eric M. Hurt and Trial Attorney Marianne Shelvey of the Organized Crime and Gang Section in the Justice Department’s Criminal Division prosecuted the case. FBI’s Safe Streets Peninsula Task Force investigated the case, with the assistance of the Newport News Police Department and the James City County Police Department.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:13-cr-96.

A federal jury convicted a Newport News, Virginia, man on numerous charges related to the racketeering enterprise activity of a gang known as the Black P-Stones.
            
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Dana J. Boente of the Eastern District of Virginia and Special Agent in Charge Martin W. Culbreth of the Federal Bureau of Investigation’s Norfolk, Virgina, Field Office made the announcement.

Michael Hopson, aka “Hop” aka “Big Homie,” 39, was convicted today by a federal jury sitting in the Eastern District of Virginia of racketeering conspiracy – including acts of murder, attempted murder, robbery, obstruction of justice – murder in aid of racketeering, conspiracy and attempted murder in aid of racketeering, as well as various narcotics charges.

According to evidence presented at trial, Hopson was the founding member and leader (OG) of the Black P-Stones gang, also referred to as the P-Stone Bloods and Cobra Stones, which operates primarily in the Denbigh area of Newport News.  The Black P-Stones engage in violent crimes including murders, illegal drug trafficking, obstruction of justice and robberies that often target narcotics dealers and use stolen currency and inventory to fund gang members’ court dues.

According to the trial evidence, as the OG, Hopson planned, directed and participated in recruiting members, including minors; collected monthly gang dues; carried out and ordered violent crimes; ordered and presided over meetings; and organized the gang’s distribution marijuana.  Trial evidence also demonstrated that Hopson used his position as a security officer at Denbigh High School to recruit minors to join the Black P-Stones and sell narcotics to high school students.

Trial evidence showed that Hopson personally ordered multiple shootings and murders between October 2007 and June 2009.  On October 31, 2007, Hopson ordered Black P-Stones members to murder A.J., a member of the rival Thugs Relations street gang.  At Hopson’s direction, the armed Black P-Stones members attempted to lure him from the home, but were unsuccessful. 

On November 6, 2007, a Black P-Stones member, acting on Hopson’s orders, lured E.S., a 17-year-old Black P-Stones member, to a Newport News location and killed him.  Hopson had given the “green light” to kill E.S. because of his friendships with Thug Relations members, and rewarded the Black P-Stone member with a promotion. 

On December 10, 2008, Hopson authorized the murder of J.W., a Crip who had been disrespectful to members of the Black P-Stones.  Acting on those orders, two Black P-Stones members went to the home of J.W. and fired multiple rounds into the home.  J.W.’s father, who was sitting in the living room when the assault occurred, was hit with debris from the bullet shrapnel and suffered injury to his eye.

On March 9, 2009, Hopson ordered the murder of two members of 10-1 Mafia Crips, a rival gang of the Black P-Stones, in reponse to the beating of a Black P-Stones member.  Acting on Hopson’s orders, two Black P-Stones members shot multiple times into the home of the two 10-1 Mafia Crips.  

On April 17, 2009, Hopson ordered two Black P-Stones members to fire multiple rounds into a home he knew to be occupied because the individuals inside the home were disrespectful to him.

On June 12, 2009, Hopson ordered the murder of A.J., a Thug Relations member who was responsible for the murder of a Black P-Stones member.  A Black P-Stones member acting on Hopson’s orders shot and wounded A.J.  

FBI’s Safe Streets Peninsula Task Force investigated the case, with the assistance of the Newport News Police Department and the James City County Police Department.  Trial Attorney Marianne Shelvey of the Organized Crime and Gang Section in the Justice Department’s Criminal Division and Assistant United States Attorney Eric M. Hurt of the Eastern District of Virginia are prosecuting the case.

ALEXANDRIA, Va. – Dorothea Lassiter, 45, of Ashburn, was sentenced today to 18 months in prison for conspiracy to commit mail and wire fraud.  Lassiter was also ordered to pay restitution and agreed to an asset forfeiture judgment of more than $258,000.

Lassiter pleaded guilty on September 7.  According to court documents, Lassiter was an accountant for a transportation logistics company in Chantilly that provided home and business delivery services.  From at least July 2011 through December 2015, Lassiter and a co-employee in the company’s claims department, Okai Quashie-Idun, engaged in an embezzlement scheme that included five other co-conspirators who were non-employees.  With Lassiter’s assistance, Idun created false property damage claims and then forwarded the fictitious claims to Lassiter, who would create a corresponding account payable, generate checks for each false claim, and remit the checks to the payees who agreed to deposit or cash the checks. Typically, a large portion of the embezzled funds were deposited into Lassiter’s bank account, who would then provide a portion of the funds to Idun. 

Idun pleaded guilty on September 13, and one of the payees, Denise (“Dennis”) Crawford, pleaded guilty on October 25. Idun and Crawford are both awaiting sentencing.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Special Assistant U.S. Attorney Edward P. Sullivan prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-185.

ALEXANDRIA, Va. – American Management Services LLC, based in Seattle, agreed to pay approximately than $1.6 million pursuant to a deferred prosecution agreement to resolve criminal charges that the company defrauded the U.S. Army and Virginia-based Clark Realty Capital LLC (Clark) while performing property management services for military housing at Fort Belvoir, Virginia; Fort Benning, Georgia; Fort Irwin, California; and the Presidio at Monterey, California.

In connection with today’s resolution, American Management Services (also known as AMS or Pinnacle) admitted that from 2004 to 2011, it fraudulently obtained approximately $1 million by skimming and concealing undisclosed fees from insurance premiums paid by entities that oversaw privatized housing at the four bases. 

According to factual stipulations agreed to by AMS, beginning in or about 2003, the U.S. Army entered into a series of agreements with AMS and Clark to implement the Military Housing Privatization Initiative, which was established to improve housing conditions for members of the armed forces.  At each base, a Clark-affiliated entity was given responsibility for developing new housing and general oversight, and an AMS-affiliated entity was given responsible for routine property management services, including obtaining property and general liability insurance. 

Also according to the factual stipulation, AMS was paid a fee pursuant to the agreement at each base for its services, which was the sole compensation AMS was permitted to receive.  Any excess funds not spent under the agreements were obligated to be used, at least in part, to renovate and construct new military housing.  Among the services it provided, AMS arranged for property and general liability insurance for each military base through an insurance broker that would invoice the premiums to Clark and the Army.  Unbeknownst to the Army or Clark, however, that broker kicked back to AMS a “risk management fee” taken from the premiums paid by Clark, the Army and various joint AMS-Clark entities, which AMS concealed in invoices to the Army and Clark.

Under the terms of the agreement entered into between AMS and the United States, the United States agreed to defer prosecution of AMS for a period of three years on a pending criminal information, which charges AMS with major government fraud.  In exchange, AMS admitted its criminal conduct, agreed to pay a fine of $1,625,124.80 and agreed to be subject to other terms and conditions for the period of the agreement.  The United States may seek to prosecute AMS for the scheme if the company violates the terms of the agreement or commits other criminal conduct as outlined in the agreement.

Two individuals previously pleaded guilty and were sentenced as part of the government’s investigation: Eddie T. Hudspeth III, a former AMS maintenance director at Fort Belvoir, was sentenced in May 2015 to two years in prison and fined $15,000 for soliciting and accepting more than $27,000 in kickbacks from a heating, ventilation and air-conditioning company based in Lorton, Virginia, from December 2008 through February 2011; and Philip Robrahn, a partial owner of that company, was sentenced to probation and ordered to pay a $10,000 fine for his role in the kickback scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Dana J. Boente of the Eastern District of Virginia; Director Frank Robey of U.S. Army Criminal Investigation Command (CID); Special Agent in Charge Robert E. Craig of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office; and Director Anita Bales of the Defense Contract Audit Agency (DCAA) made the announcement after U.S. District Judge Claude M. Hilton entered an order approving the agreement.  Assistant U.S. Attorney Ryan S. Faulconer and Trial Attorney Jennifer Ballantyne are prosecuting the case.

The Defense Contract Audit Agency assisted in the investigation.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case Nos. 1:16-cr-249, 1:15-cr-45, and 1:15-cr-46.

American Management Services LLC, based in Seattle, agreed to pay more than $1.6 million pursuant to a deferred prosecution agreement to resolve criminal charges that the company defrauded the U.S. Army and Virginia-based Clark Realty Capital LLC (Clark) while performing property management services for military housing at Fort Belvoir, Virginia; Fort Benning, Georgia; Fort Irwin, California; and the Presidio at Monterey, California.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Dana J. Boente of the Eastern District of Virginia; Director Frank Robey of U.S. Army Criminal Investigation Command (CID) Major Procurement Fraud Unit; Special Agent in Charge Robert E. Craig of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office; and Director Anita Bales of the Defense Contract Audit Agency (DCAA) made the announcement after U.S. District Judge Claude M. Hilton of the Eastern District of Virginia entered an order approving the agreement. 

In connection with today’s resolution, American Management Services (also known as AMS or Pinnacle) admitted that from 2004 to 2011, it fraudulently obtained approximately $1 million by skimming and concealing undisclosed fees from insurance premiums paid by entities that oversaw privatized housing at the four bases. 

According to factual stipulations agreed to by AMS, beginning in or about 2003, the U.S. Army entered into a series of agreements with AMS and Clark to implement the Military Housing Privatization Initiative, which was established to improve housing conditions for members of the armed forces.  At each base, a Clark-affiliated entity was given responsibility for developing new housing and general oversight, and an AMS-affiliated entity was given responsible for routine property management services, including obtaining property and general liability insurance. 

Also according to the factual stipulation, AMS was paid a fee pursuant to the agreement at each base for its services, which was the sole compensation AMS was permitted to receive.  Any excess funds not spent under the agreements were obligated to be used, at least in part, to renovate and construct new military housing.  Among the services it provided, AMS arranged for property and general liability insurance for each military base through an insurance broker that would invoice the premiums to Clark and the Army.  Unbeknownst to the Army or Clark, however, that broker kicked back to AMS a “risk management fee” taken from the premiums paid by Clark, the Army and various joint AMS-Clark entities, which AMS concealed in invoices to the Army and Clark.

Under the terms of the agreement entered into between AMS and the United States, the United States agreed to defer prosecution of AMS for a period of three years on a pending criminal information, which charges AMS with major government fraud.  In exchange, AMS admitted its criminal conduct, agreed to pay a fine of $1,625,124.80 and agreed to be subject to other terms and conditions for the period of the agreement.  The United States may seek to prosecute AMS for the scheme if the company violates the terms of the agreement or commits other criminal conduct as outlined in the agreement.

Two individuals previously pleaded guilty and were sentenced as part of the government’s investigation: Eddie T. Hudspeth III, a former AMS maintenance director at Fort Belvoir, was sentenced in May 2015 to two years in prison and fined $15,000 for soliciting and accepting more than $27,000 in kickbacks from a heating, ventilation and air-conditioning company based in Lorton, Virginia, from December 2008 through February 2011; and Philip Robrahn, a partial owner of that company, was sentenced to probation and ordered to pay a $10,000 fine for his role in the kickback scheme.

Army CID, DCIS, FBI and DCAA investigated the case.  Trial Attorney Jennifer Ballantyne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan Faulconer of the Eastern District of Virginia are prosecuting the case.

ALEXANDRIA, Va. – Francis Joseph Douglas, 33, of Dumfries, was sentenced today to 120 months in prison for conspiracy to distribute 500 grams or more of cocaine and the use and carry of a firearm during a drug trafficking crime.

Douglas pleaded guilty on September 7.  According to court documents, Douglas sold cocaine from October 2014 until his initial arrest in August 2015.  During this time, Douglas made bi-weekly trips to New York to obtain between $5,000 and $8,000 worth of cocaine, which Douglas redistributed in Prince William County.  While distributing cocaine, Douglas was regularly armed with a Glock .40 caliber pistol with an extended magazine.  Further, despite being convicted of multiple felonies, Douglas aided and abetted his wife in providing false statements during the purchase of four firearms for him, including an AK-47 and AR-15 rifle.  On Nov. 12, 2015, Douglas also aided and abetted McGary Dean Williams in providing false statements during the purchase of two firearms from a federal firearms dealer located in Woodbridge.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Michael B. Boxler, Special Agent in Charge, Washington Field Division, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorney Carina A. Cuellar prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-200.

A medical doctor and entrepreneur pleaded guilty today to inducing interstate travel to commit a fraud and failing to account for and pay over employment taxes announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Assistant Director in Charge Paul Abbate of the FBI’s Washington Field Office.

According to the plea agreement, statement of facts, and other court documents, in or about September 2000, Sreedhar Potarazu, 51, of Potomac, Maryland, an ophthalmic surgeon licensed in Maryland and Virginia, founded VitalSpring Technologies, Inc. (VitalSpring), a Delaware corporation.  VitalSpring operated in McLean, Virginia and provided data analysis and services relating to health care expenditures.  In or around the end of 2015, VitalSpring started doing business as Enziime LLC, a Delaware corporation.  From its inception, Potarazu was VitalSpring’s Chief Executive Officer and President, and served on its Board of Directors.

As early as 2009, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $30 million in capital investments in the company.  Potarazu represented on numerous occasions that the sale of VitalSpring was imminent, which would have resulted in profits for shareholders, and concealed that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the IRS. For example, in 2014, Potarazu provided shareholders with a written summary of operating results that reflected VitalSpring’s 2013 revenues to be approximately $12.9 million when, in fact, the 2013 revenue was less than $1 million.

“Sreedhar Potarazu created a complex web of lies to deceive VitalSpring shareholders, using false documents, fictitious websites, and fake potential buyers to induce investments and conceal the precarious financial status of the company, including millions of dollars of employment tax that he diverted from the U.S. Treasury,” said Principal Deputy Assistant Attorney General Ciraolo.  “Due to the extraordinary work of the prosecutors and agents on this case, we were able to unravel this multi-layered scheme and today hold Potarazu accountable for his criminal conduct.”

“For years Potarazu enriched himself by abusing the trust of his company’s many investors and stealing millions of dollars from them through a complex scheme of fraud and deceit, said U.S. Attorney Boente.  “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”

“Throughout nearly a decade of deceit, Sreedhar Potarazu not only defrauded his investors, but also the American tax system,” said IRS-CI Chief Weber.  “Motivated by pure greed, Potarazu created an elaborate scheme to hide his stolen funds and evade paying his employment tax liability.  Today’s plea should serve as a stark reminder that criminals, such as Potarazu, will be held accountable for their misdeeds.”

“The FBI’s investigation into Sreedhar Potarazu’s multi-million scheme to defraud VitalSpring’s shareholders serves as a continued affirmation of our commitment to investigate and expose financial fraud,” said Assistant Director in Charge Abbate.  “The FBI and our law enforcement partners will continue to pursue and bring to justice those who engage in criminally deceitful business practices.”

Scheme to Defraud

From VitalSpring’s inception, but specifically from 2009 to the present, Potarazu solicited investments through in-person meetings, emails, telephone conference calls, webinars, and phone calls.  From in or about 2009 through in or about 2016, Potarazu raised approximately $32 million from more than 160 victim investors.

Potarazu induced investments from shareholders by making false representations, concealing material facts, and telling deceptive half-truths about VitalSpring’s financial condition, tax compliance, and alleged imminent sale.  Potarazu also caused someone to pose as a representative of a prospective buyer on shareholder conference calls to add legitimacy to his claims regarding VitalSpring’s imminent sale.

VitalSpring had not generated a profit since 2009.  Nonetheless, Potarazu falsely represented to shareholders that VitalSpring’s financial position and profitability was improving from 2009 to 2015, and that VitalSpring had millions of dollars in cash reserves.  To support his scheme, Potarazu presented fake bank statements to some shareholders that showed inflated balances.

Potarazu also concealed from shareholders that VitalSpring owed substantial employment tax to the IRS.  Potarazu provided or caused to be provided false corporate income tax returns to some shareholders that overstated VitalSpring’s income and omitted the accruing employment tax liability.

In November 2014, Potarazu created a Special Review Committee (SRC) in response to a lawsuit filed in Delaware by shareholders that claimed Potarazu misled the victim investors about VitalSpring’s finances, the status of the impending sale, and Potarazu’s compensation.  Potarazu provided the SRC with false financial records, fake tax returns, and fake bank statements to induce the SRC to believe that VitalSpring was financially healthy and to cause the SRC to make materially false representations to the Delaware court and victim investors.  He also falsely represented that the alleged imminent sale would yield substantial returns to the shareholders, and used this to induce additional investments.  Members of the SRC traveled interstate to the Eastern District of Virginia to attend meetings in which Potarazu presented false information for their review.

In truth, there was no imminent sale pending. Potarazu provided false financial records, including fake balance sheets, fabricated bank statements, and false tax returns, to several prospective buyers, financial advisors, and investment banks. In December 2014, when he was questioned by Prospective Buyer 1 as to the accuracy and authenticity of bank records provided, Potarazu presented false or misleading emails purporting to be from a bank employee to bolster the legitimacy of the false bank records. Potarazu also presented Prospective Buyer 1 with a link to a fake website that was made to look like a website for a major national bank, and which referred Prospective Buyer 1 to VitalSpring’s false bank statements, and used a shadow, secondary email account assigned to a VitalSpring employee to provide false information to Prospective Buyer 1, thereby creating the appearance that Potarazu had not provided the information.

In October 2014, Prospective Buyer 2 informed Potarazu that it was no longer interested in VitalSpring.  Nevertheless, Potarazu continued to represent to shareholders for months thereafter that there was a deal pending with Prospective Buyer 2. In March 2015 and February 2016, Potarazu organized, or caused to be organized, conference calls with shareholders to discuss the alleged sale.  In advance of the calls, Potarazu obtained questions from the shareholders and used them to prepare the individual who posed as a representative of Prospective Buyer 2 for each call.

From 2011 to 2015, in addition to his salary paid by VitalSpring, Potarazu diverted a portion of the investments from the victim investors for his own personal use.

Employment Tax Fraud

Potarazu admitted that from 2007 to 2016, VitalSpring accrued employment tax liabilities of more than $7.5 million.   Potarazu withheld taxes from VitalSpring employees’ wages, but failed to fully pay over the amounts withheld to the IRS.  As CEO and President of VitalSpring, Potarazu was a “responsible person” obligated to collect, truthfully account for, and pay over VitalSpring’s employment taxes.  Ultimate and final decision-making authority regarding VitalSpring’s business activities rested with Potarazu.

Potarazu was aware of the employment tax liability as early as 2007 and, between 2007 and 2016, was frequently apprised of VitalSpring’s employment tax responsibilities by his employees.  In addition, IRS special agents interviewed Potarazu in 2011 and informed him of the employment tax liability.  In all but one quarter between the first quarter of 2007 and the last quarter of 2011, as well as the second and third quarters of 2015, Potarazu failed to file VitalSpring’s Employer’s Quarterly Federal Tax Return (Forms 941) with the IRS.  Potarazu also failed to pay over any of the employment tax withheld from VitalSpring’s employees’ wages in all but one quarter between the second quarter of 2007 and the third quarter of 2011, as well as the third and fourth quarters of 2015.

Between 2008 and 2015, instead of paying over employment tax, Potarazu caused VitalSpring to make millions of dollars of expenditures, including thousands of dollars in transfers to himself and others, the publication of his book, “Get Off the Dime,” a sedan car service, and travel.

U.S. District Court Judge T.S. Ellis III scheduled sentencing for March 3, 2017.  Potarazu faces a statutory maximum sentence of 10 years in prison for inducing interstate travel to commit a fraud and five years in prison for failing to account for and pay over employment taxes, as well as a period of supervised release, forfeiture, restitution and monetary penalties. 

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-CI and the FBI, who conducted the investigation, and Assistant Chief Caryn Finley and Trial Attorney Jack Morgan of the Tax Division, and Assistant U.S. Attorney Jack Hanly, who are prosecuting the case. 

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

ALEXANDRIA, Va. – Sreedhar Potarazu, 51, of Potomac, Maryland pleaded guilty today to charges of inducing interstate travel to commit a fraud and failing to account for and pay over employment taxes.

“For years Potarazu enriched himself by abusing the trust of his company’s many investors and stealing millions of dollars from them through a complex scheme of fraud and deceit, said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia.  “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”

According to the statement of facts filed with the plea agreement, Potarazu was an ophthalmic surgeon who was licensed in Maryland and Virginia, founded in or about September 2000, VitalSpring Technologies Inc. (VitalSpring), a Delaware corporation.  VitalSpring operated in McLean, Virginia and provided data analysis and services relating to health care expenditures.  In or around the end of 2015, VitalSpring started doing business as Enziime, LLC, a Delaware corporation.  From its inception, Potarazu was VitalSpring’s Chief Executive Officer, President, and served as a member of the Board of Directors.

Beginning in or around 2009, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $30 million in capital investments in the company.  Potarazu represented to VitalSpring shareholders on numerous occasions that VitalSpring’s sale was imminent, which would have resulted in profits for shareholders, and also concealed from shareholders that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the Internal Revenue Service (IRS). 

“Sreedhar Potarazu viewed himself as above the law – deliberately defrauding investors and stealing from the U.S. Treasury – and with today’s guilty plea, he is held accountable for his criminal conduct,” said Principal Deputy Assistant Attorney General Ciraolo. “Like other individuals who willfully ignore their employment tax obligations, Potarazu faces incarceration and substantial monetary penalties. The department will continue to work with its partners within the IRS to identify and prosecute these offenders.”

Scheme to Defraud

From VitalSpring’s inception, but specifically from 2009 to the present, Potarazu solicited investments in VitalSpring from investors and shareholders by way of in-person meetings, emails, telephone conference calls, webinars, and phone calls.  From in or about 2009 through in or about 2016, Potarazu raised approximately $32 million from more than 160 victim investors.

Potarazu induced investments from shareholders by making false representations, concealing material facts, and telling deceptive half-truths about VitalSpring’s financial condition, tax compliance, and alleged imminent sale.

Potarazu falsely represented to shareholders that VitalSpring’s financial position and profitability was improving from 2009 to 2015 and that VitalSpring had millions of dollars in cash reserves.  Since 2009, VitalSpring never generated a profit.  To substantiate the false statements concerning the bank account balances, Potarazu presented fake bank statements to some shareholders that showed inflated balances.

Potarazu also concealed from shareholders that VitalSpring owed substantial employment tax to the IRS.  Potarazu provided or caused to be provided false corporate income tax returns to some shareholders that overstated VitalSpring’s income and omitted VitalSpring’s accruing employment tax liability.

In November 2014, Potarazu created a Special Review Committee (SRC) in response to a lawsuit filed by shareholders in Delaware that claimed Potarazu misled the victim investors about VitalSpring’s finances, the status of VitalSpring’s impending sale, and Potarazu’s compensation.  Potarazu provided the SRC with false financial records, fake tax returns, and fake bank statements to induce the SRC to believe that VitalSpring was financially healthy and to cause the SRC to make materially false representations to the Delaware court and victim investors.  Members of the SRC traveled interstate to the Eastern District of Virginia to attend meetings in which Potarazu presented false information for their review.

Potarazu also falsely represented to VitalSpring shareholders that the company was going to be sold imminently, and in at least one instance, that a deal was in place. Potarazu falsely represented that a sale of VitalSpring would yield substantial returns to its investors. 

In truth, VitalSpring was never going to be imminently sold.  Potarazu provided false financial records, including fake balance sheets, fabricated bank statements, and false tax returns to several prospective buyers, financial advisors, and investment banks. When Potarazu was questioned in December 2014 by Prospective Buyer 1 as to the accuracy and authenticity of bank records provided, Potarazu then presented Prospective Buyer 1 with false or misleading emails purporting to be from a bank employee in order to bolster the legitimacy of the false bank records. Potarazu also presented Prospective Buyer 1 with a fake website that was made to look like a website for a major national bank, and a link to this website, which referred Prospective Buyer 1 to VitalSpring’s false bank statements. Additionally, Potarazu used a shadow, secondary email account for one of VitalSpring’s legitimate employees, to provide false information to Prospective Buyer 1, thus creating the appearance that Potarazu himself had not provided the information.

In October 2014, Prospective Buyer 2 informed Potarazu that it was no longer interested in VitalSpring.  Potarazu continued to represent to shareholders for months afterwards that there was a still a pending deal with Prospective Buyer 2. In March 2015 and February 2016, Potarazu organized, or caused to be organized, conference calls to confirm the existence of the sale of the company. A different shareholder spoke on each call with a purported representative of Prospective Buyer 2. In advance of the calls, Potarazu asked the shareholders to give him a list of questions they intended to ask the buyer. Potarazu caused an individual to pose as the purported representative of Prospective Buyer 2 on these conference calls.

From 2011 to 2015, in addition to his salary paid by VitalSpring, Potarazu diverted a portion of the investments from the victim investors for his own personal use. 

Employment Tax Fraud

Potarazu admitted that from 2007 to 2016, VitalSpring accrued an employment tax liability of more than $7.5 million. As CEO and President of VitalSpring, Potarazu was a “responsible person” obligated to collect, truthfully account for, and pay over VitalSpring’s employment taxes.  Ultimate and final decision-making authority regarding VitalSpring’s business activities rested with Potarazu.

Potarazu was aware of the employment tax liability as early as 2007 and, between 2007 and 2016, was frequently apprised of VitalSpring’s payroll tax responsibilities by his employees.  In addition, IRS special agents interviewed Potarazu in 2011 and informed him of the employment tax liability.  In all but one quarter between the first quarter of 2007 and the last quarter of 2011, as well as the second and third quarters of 2015, Potarazu failed to file VitalSpring’s Employer’s Quarterly Federal Tax Return (Forms 941) with the IRS.  In all but one quarter between the second quarter of 2007 and the third quarter of 2011, as well as the third and fourth quarters of 2015, Potarazu failed to pay over any tax withheld from wages of VitalSpring’s employees.

Between 2008 and 2015, instead of paying over employment tax, Potarazu caused VitalSpring to make millions of dollars of expenditures, including thousands of dollars in transfers to himself and others, the publication of Potarazu’s book called, “Get Off the Dime,” a sedan car service, and travel.

Potarazu faces a maximum penalty of 10 years in prison sentenced on March 3, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, made the announcement after the plea was accepted by U.S. District Court Judge T.S. Ellis, III. Assistant U.S. Attorney Jack Hanly and Assistant Chief Caryn Finley and Trial Attorney Jack Morgan of the Tax Division are prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-261.

ALEXANDRIA, Va. – Ariel Monet-Viola Long, 22, of Burke, was sentenced today to 138 months in prison for robbery and discharging a firearm during a crime of violence.

Long pleaded guilty on July 19.  According to court documents, from Dec. 24, 2015 to May 9, 2016, Long’s boyfriend, Larry Pyos, Jr., used a handgun to rob at least six commercial establishments in northern Virginia: Good Fortune Supermarket, Shri Krishna Grocery, Dollar Power Store, Ding How Carry-Out, Hong Kong Palace, and Subway, in addition to robbing a man on the street outside of the Laze Café in Falls Church.  Long lived with Pyos, was aware he was committing armed robberies, and purchased the handguns Pyos used to commit each crime.  On multiple occasions Long acted as Pyos’ getaway driver.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI's Washington Field Office; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Michael Rich and Tyler McGaughey prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-150.

RICHMOND, Va. – Michael Pankey, 29, of Brooklyn, New York, was convicted late yesterday by a federal jury on charges of possession with intent to distribute cocaine hydrochloride and heroin. 

According to court records and evidence presented at trial, Pankey was stopped for speeding in Mecklenburg County by the Virginia State Police. Pankey was the sole occupant in a car that was rented 12 days earlier in North Carolina. A probable cause search of the car revealed 598 grams of cocaine hydrochloride and 54 grams of heroin in Pankey’s bag. Pankey admitted he was delivering the drugs from New York to an individual in South Carolina. 

Pankey faces a maximum penalty of 20 years in prison when sentenced on Feb. 9, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

This case was investigated by the Virginia State Police with assistance from Homeland Security Investigations and the Drug Enforcement Administration.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Colonel W. Steven Flaherty, Superintendent of Virginia State Police; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after the verdict was accepted by Senior U.S. District Judge Robert E. Payne.  Assistant U.S. Attorney Olivia L. Norman is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-179. 

NORFOLK, Va. – Harry Paul, Jr., 65, of Grandy, North Carolina, pleaded guilty today to charges of embezzling funds from an employee pension fund.

According to the statement of facts filed with the plea agreement, Paul is the owner and president of Freedom Mechanical, Inc., located in Virginia Beach. The company maintained an employee benefit retirement account plan known as the Freedom Mechanical Simple IRA Plan. The Plan was funded by employees who elected to contribute to the plan, as well as mandated matching contributions made by the employer. Between approximately April 2013 and June 2016, Paul, assisted by the company’s vice-president who acted at the Paul’s direction, embezzled and unlawfully converted the monetary contributions to the Plan made by nine employees, in the amount of $47,056. During that period, W-3 Wage and Tax Statements transmitted by the company to the IRS included an amount for “deferred compensation” that falsely represented that employee contributions to the company had been made. Also during that period, the defendant failed to make the employer contributions owed to the Plan. The contributions embezzled and unlawfully converted were used to cover the company’s operating costs during a period when the company experienced severe economic difficulties.

Paul waived indictment by a federal grand jury and pleaded guilty to a criminal information. Paul faces a maximum penalty of five years in prison when sentenced on March 7, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Robin Blake, Special Agent in Charge of the Washington, D.C. Regional Office, U.S. Department of Labor, Office of Inspector General, made the announcement after the plea was accepted by U.S. District Judge Mark S. Davis.  Assistant U.S. Attorney Alan M. Salsbury is prosecuting the case.

 

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-150. 

NORFOLK, Va. – William E. Grobes, IV, 45, of Chesapeake, pleaded guilty today to charges of conspiring to commit wire fraud and money laundering.

According to the statement of facts filed with the plea agreement, Grobes owns the College of Beauty and Barber Culture (CBBC), located in Chesapeake. CBBC was purportedly a barber and cosmetology school approved by the Department of Veterans Affairs to provide education and training to military veterans, including veterans who received tuition assistance under the Post-9/11 GI Bill. Grobes represented to the VA that CBBC provided full-time schooling to hundreds of veteran students beginning in October 2011. In reality, the school was a sham. Most veterans enrolled in CBBC courses received few, if any, hours of instruction from CBBC employees, and there were no tests, exams, or practical exercises given.  Rather, students were directed to simply sign in and out of the school each day so that Grobes could report to the VA that they were enrolled and attending.  In exchange, CBBC received Post-9/11 GI Bill tuition payments for each veteran from the VA.  Based on Grobes’ provision of false information to the VA concerning the number of hours of instruction and the manner and quality of the instruction provided to veteran students, CBBC received over $4.5 million in Post-9/11 GI Bill tuition payments between October 2011 and September 2016.

Grobes was charged by criminal information on November 16, and faces a maximum penalty of 20 years in prison when sentenced on March 8, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs; Andrew L. Traver, Director of the Naval Criminal Investigative Service (NCIS); and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after the plea was accepted by U.S. Magistrate Judge Lawrence R. Leonard. Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-154.

RICHMOND, Va. – Pamela Minor-Chiles, 47, of Chesterfield, was sentenced today to one year in prison for misappropriating approximately $200,000 from a medical practice.

Minor-Chiles pleaded guilty to a criminal information on August 17.  According to court documents, from 2007 through 2012, while the office manager of the Central Virginia OB/GYN Associates (CVOG), Minor-Chiles misappropriated approximately $200,000 from the practice. Minor-Chiles wrote numerous checks on the CVOG operating account at SunTrust Bank and fraudulently deposited them into her personal accounts at Bank of America. Minor-Chiles concealed the misappropriations by putting fraudulent entries on the check stubs to make it appear that the checks were written to outside vendors for legitimate expenses of the practice and then submitted the fraudulent check stubs to the outside accountants.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Douglas F. Mease, Special Agent in Charge of the U.S. Secret Service’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge M. Hannah Lauck.  Assistant U.S. Attorney David T. Maguire prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-83.

NORFOLK, Va. – John Francis Aragon, 50, of Virginia Beach, pleaded guilty today to charges of coercion and enticement of a minor to engage in sexual activity.

According to the statement of facts filed with the plea agreement and other court documents, in May 2016, Aragon posted an ad on Craigslist seeking “fetish sex with young girl.” A detective with the Virginia Beach Police Department, in an undercover capacity, responded to the ad pretending to be a 14-year-old girl. The two chatted over a period of time, and the conversations became sexually explicit. Eventually, a special agent with Homeland Security Investigations took over the alleged 14-year-old’s role. On three occasions, Aragon left money under a rock at a local park in exchange for a pair of the girl’s underwear. Aragon also expressed his desire to meet the girl in person in order to engage in sexual activity and on August 16, Aragon showed up at the park in Virginia Beach to meet the girl and was then arrested.

Aragon was indicted by a federal grand jury on September 21, and faces a mandatory minimum of 10 years in prison and a maximum penalty of life in prison when sentenced on Feb. 24, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael K. Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Norfolk; and James A. Cervera, Chief of Virginia Beach Police, made the announcement after the plea was accepted by U.S. Magistrate Judge Douglas E. Miller. Assistant U.S. Attorney Elizabeth M. Yusi is prosecuting the case.

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

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-129.

NORFOLK, Va. – Norman Baynard, Jr., 54, of Norfolk, was sentenced today to 235 months in prison for being a convicted felon in possession of a firearm.

Baynard pleaded guilty on May 11.  According to court documents, Norfolk Police conducted a series of undercover purchases of heroin from Baynard. On the last scheduled controlled purchase, officers attempted to arrest Baynard and it resulted in a high speed chase. During the chase Baynard drove through a number of red-lights and almost hit a small child.  After throwing a loaded handgun and drugs out of the car window, Baynard eventually pulled over and was arrested. Baynard’s criminal record consists of 43 convictions for various crimes, including drug dealing, voluntary manslaughter, arson, assaults and various firearm convictions.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Michael Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by U.S. District Judge Davis. Assistant U.S. Attorney Bill Muhr prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-136.

A Virginia man was sentenced today to 204 months in prison for production of child pornography, enticing minors to engage in sexually-explicit conduct online and recording the acts. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Dana J. Boente of the Eastern District of Virginia; Colonel Edwin C. Roessler Jr., Chief of the Fairfax County, Virginia, Police Department; and Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C., made the announcement. 

Lucas Aronson, 31, of Alexandria, pleaded guilty on Aug. 23, 2016, and was sentenced today by U.S. District Judge Anthony J. Trenga of the Eastern District of Virginia, who also ordered Aronson to serve a lifetime of supervised release. 

According to admissions made in connection with his plea, Aronson posed as a minor girl while using video and text chat websites to chat with minor girls online.  Aronson engaged in sexually explicit chats and enticed some of the minors to engage in sexually explicit activity on web camera and recorded the videos, which he maintained on a thumb drive that was found in his residence.  In January 2015, Aronson was arrested after streaming a video of a toddler-aged female engaged in sexually explicit conduct with an adult male on a chat website.

The Fairfax County Police and HSI investigated the case.  Trial Attorney Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia prosecuted the case. 

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

NEWPORT NEWS, Va. – Robert Alan Durkee, 58, of Hampton, and Julie Rae Rock, 38, of Newport News, have been indicted by a federal grand jury on charges of distribution of heroin and fentanyl resulting in death.

According to the indictment, on or about Nov. 17, 2015, Durkee and Rock distributed heroin and fentanyl to E.H. in Newport News, and E.H. died as a result of using the heroin.

Durkee and Rock each face a maximum penalty of life in prison if convicted.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division; and Richard W. Myers, Chief of Newport News Police, made the announcement after initial appearances before U.S. Magistrate Judge Douglas E. Miller.  Assistant U.S. Attorneys Lisa R. McKeel and Megan M. Cowles are prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:16-cr-84. 

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

ALEXANDRIA, Va. – Anthony Taylor, 59, of Washington, D.C., was sentenced today to 42 months in prison for conspiracy to distribute heroin. 

Taylor pleaded guilty on August 12.  According to court documents, Taylor was a member of a crew that distributed heroin in and around the Washington, D.C. metropolitan area.  The leader of the crew was Taylor’s cousin, Allen Christopher Morton, who has pleaded guilty to federal gun and drug charges.  When customers drove to Morton’s residence in Washington, D.C., Taylor would walk outside, deliver heroin to the customers who were typically waiting in their vehicles and collect drug proceeds on Morton’s behalf.  Taylor worked for Morton delivering heroin for approximately two-and-a-half years.  During that time period, Taylor and his co-conspirators distributed between 700 grams and 1 kilogram of heroin. 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Washing5ton Field Division, made the announcement after sentencing by U.S. District Judge T.S. Ellis, III.  Assistant U.S. Attorney J. Tyler McGaughey prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-171.

ALEXANDRIA, Va. – Razak A. Dosunmu, 61, of Washington, D.C, was sentenced today to 15 months in prison for offering bribes to a procurement official with the U.S. Department of Defense (DoD), Defense Logistics Agency (DLA), while negotiating aviation fuel contracts worth over $1 billion.

Dosunmu was found guilty by a federal jury on August 18.  According to court documents, Dosunmu was the owner and operator of United Globe Auto Body, LLC, a classic cars restoration and auto repair shop and international trade and business development company located in Takoma Park, Maryland.  Beginning in mid-2014, on behalf of United Globe, Dosunmu solicited government contracts with DLA-Energy.  DLA-Energy is responsible for the procurement of large volumes of aviation and marine diesel fuel for the military services.  In May 2015, investigators received an allegation that Dosunmu, while negotiating for a supply contract with DLA-Energy, offered to buy a procurement official a house in exchange for awarding the contract to United Globe. 

According to court documents, the procurement official cooperated with the investigation and over a six-month period recorded several conversations during which Dosunmu pursued two separate contracts worth hundreds of millions of dollars, including one to provide the aviation fuel needed by military forces in the Middle East.  The recordings, documents, and the testimony of several witnesses confirmed the existence of the original offer and revealed that the defendant offered multi-million dollar payments for official acts by the procurement officer.  In addition to offering a house, $2 million in cash, and percentage points on future contracts, Dosunmu explicitly discussed how to conceal the illicit relationship and payments.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Robert E. Craig, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorney Jack Hanly and Special Assistant U.S. Attorney Edward P. Sullivan prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-54.