Eastern District of Virginia

RICHMOND, Va. – Connie E. Richardson, 64, of Richmond, Virginia, pleaded guilty today to a criminal information charging her with bribery concerning a program receiving federal funds.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the Richmond Division of the Federal Bureau of Investigation, made the announcement after the plea was accepted by U.S. Magistrate Judge Roderick Young.

Richardson faces a maximum penalty of 10 years in prison when she is sentenced on July 30, 2015. 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.

According to a statement of facts filed with the plea agreement, Richardson was employed by the Virginia Department of Juvenile Justice (VDJJ) as its Runaway Coordinator.  In that role, she was responsible for administering services related to the transport of juveniles from one state to another.  From October 2010 through February 2015, Richardson accepted over $30,000 from the owner of a security company that provided transportation and escort services for VDJJ.  In return, Richardson steered the vast majority of VDJJ’s transportation and escort requests to the company and she knowingly approved inflated and falsified invoices submitted by the company.  From October 2010 through February 2015, VDJJ paid this security company over $469,000 for transportation and escort services.

This case was investigated by Federal Bureau of Investigation and the Virginia State Police Assistant U.S. Attorney Katherine Lee Martin is prosecuting the case on behalf of the United States.

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. 3:15cr78.

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Forged 83 company checks totaling over $469,000

NORFOLK, Va. – Katherine Albert-McNaughton, 36, of Virginia Beach, Virginia, pleaded guilty today to one count of making forged securities and two counts of engaging in a monetary transaction in criminally derived property.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Douglas F. Mease, Special Agent in Charge of the United States Secret Service’s Richmond Field Office, made the announcement after the plea was accepted by U.S. Magistrate Judge Lawrence R. Leonard.

Albert-McNaughton was indicted by a federal grand jury on March 19, 2015.  She faces a maximum penalty of 10 years in prison on each of the three counts when she is sentenced on September 3, 2015. 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.

According to a statement of facts filed with the plea agreement, Albert-McNaughton was employed as a financial assistant by HBA Architecture & Interior Design, Inc., a business located in Virginia Beach, Virginia.  Between October 2011 and June 2014, Albert-McNaughton forged the signature of a principal of HBA Architecture & Interior Design, Inc. on 83 company checks, totaling $469,831.89.  She deposited all of the forged checks into bank accounts that she maintained and used the money for her own personal benefit, including vacations, shopping, plane tickets, photography, and the purchase of vehicles, concert and professional football tickets.

This case was investigated by the United States Secret Service. Assistant U.S. Attorney Alan M. Salsbury is prosecuting the case on behalf of the United States.

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. 2:15cr31.

RICHMOND, Va. – Heather Elizabeth Coffman, 29, of Glen Allen, Virginia, was sentenced today to 54 months in prison, followed by three years of supervised release for a charge related to her attempted support of the international terrorist group ISIS.

Coffman pleaded guilty to a one-count criminal information on Jan. 30, 2015.  According to the statement of facts filed with the plea agreement, Coffman admitted that beginning prior to June 2014 and continuing up through November 2014, she used several Facebook accounts under different names showing her support for the Islamic State of Iraq and the Levant’s (ISIL, referred to as ISIS by the defendant and within the case) cause.  These accounts also revealed the defendant’s romantic involvement with an individual referred to as “N.A.,” a foreign national living outside of the United States.  In the months leading up to September 2014, Coffman and N.A. communicated almost daily via Facebook and other communications platforms.  During their conversations, Coffman and N.A. explored options for N.A. to travel to Syria in order to fight for ISIS and die a “Shaheed,” referring to a martyr who dies for “jihad.” 

Coffman cultivated online relationships with individuals she believed were ISIS facilitators operating in Syria.  She put N.A. in contact with a facilitator to assist with his travel and eventual training with ISIS (with the Coffman’s financial assistance for travel) before he was to cross the border into Syria to fight with ISIS.  This plan was moving forward when the couple’s relationship deteriorated in early September 2014, and N.A. backed out of the plans.  Coffman later communicated with others about her disappointment and expressed how she wished that the plan had succeeded. 

According to the plea documents, Coffman admitted that she lied during the ongoing investigation on Nov. 13, 2014, when she told FBI agents that she did not know whether N.A. had talked to anybody else who supported ISIS, and that she did not know anybody N.A. had talked to when, as Coffman well knew, she had previously put N.A. in contact with ISIS fighters and N.A., in turn, had communicated with them to facilitate N.A.’s travel to Turkey to join ISIS.

John P. Carlin, Assistant Attorney General for National Security; 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 John A. Gibney, Jr.

This case was investigated by FBI’s Richmond Field Office and the Richmond Joint Terrorism Task Force (JTTF). The JTTF is a collection of state, federal and local law enforcement agencies, dedicated to the mission of proactively keeping communities safe by thwarting national security and terrorism issues before they become a reality.  Member agencies of the Richmond JTTF who assisted in this particular investigation include Virginia State Police, Henrico County Police, Chesterfield County Police, Richmond Police, Homeland Security Investigations, United States Secret Service, Bureau of Alcohol Tobacco and Firearms and Explosives, Department of State Diplomatic Security Service, Transportation Security Administration and Defense Criminal Investigative Service.

Assistant U.S. Attorneys Michael Gill and Jessica Aber of the Eastern District of Virginia, and Trial Attorney Annamartine Salick of the National Security Division's Counterterrorism Section 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. 3:15-cr-016.

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ALEXANDRIA, Va. – Jeffrey A. Sterling, 47, of O’Fallon, Missouri, was sentenced today to 42 months in prison for disclosing national defense information and obstructing justice.  Sterling disclosed classified information about a clandestine operational program concerning Iran’s nuclear weapons program to a New York Times reporter in 2003.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Leslie Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division; and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema.

“For his own vindictive purposes, Jeffrey Sterling carelessly disclosed extremely valuable, highly classified information that he had taken an oath to keep secret,” said U.S. Attorney Boente.  “His attempt to leverage national security information for his own malicious reasons brought him to this sentence today.  I would like to thank the trial team and our partners at the FBI’s Washington Field Office and the Central Intelligence Agency for their hard work and commitment to this case.”

“The sentence handed down by a federal judge is the culmination of a lengthy investigation, a protracted prosecution and a unanimous decision by a federal jury to convict Mr. Sterling for the unauthorized disclosure of national security information,” said Assistant Director in Charge McCabe.  “The time and effort dedicated to this case by FBI special agents, intelligence analysts and prosecutors working on this matter exemplify the extent the FBI will undertake in pursuit of justice.”

Sterling was found guilty by a federal jury on Jan. 26, 2015.  According to court records and evidence at trial, Sterling was employed by the CIA from May 1993 to January 2002.  From November 1998 through May 2000, he was assigned to a classified clandestine operational program designed to undermine the Iranian nuclear weapons program.  He was also the operations officer assigned to handle a human asset associated with that program, a person identified at trial as Merlin.  Sterling was reassigned in May 2000, at which time he was no longer authorized to receive or possess classified documents concerning the program or the individual.

In connection with his employment, Sterling, who is a lawyer, signed various security, secrecy and non-disclosure agreements in which he agreed never to disclose classified information to unauthorized persons, acknowledged that classified information was the property of the CIA, and also acknowledged that the unauthorized disclosure of classified information could constitute a criminal offense.  These agreements also set forth the proper procedures to follow if Sterling had concerns that the CIA had engaged in any “unlawful or improper” conduct that implicated classified information.  These procedures permit such concerns to be addressed while still protecting the classified nature of the information.  The media was not an authorized party to receive such classified information.

In August 2000, Sterling pursued administrative and civil actions against the CIA.  Evidence at trial showed that Sterling, in retaliation for the CIA’s refusal to settle those actions on terms favorable to him, disclosed information concerning the classified operational program and the human asset to a New York Times reporter working on an unpublished article in early 2003 and a book the reporter published in January 2006.  Sterling’s civil and administrative claims were ultimately dismissed by the court.

Evidence demonstrated that in February and March 2003, Sterling made various telephone calls to the reporter’s residence and e-mailed a newspaper article about the weapons capabilities of a certain country that was within Sterling’s previous clandestine operational assignment.  While the possible newspaper article containing the classified information Sterling provided was ultimately not published in 2003, evidence showed that Sterling and the reporter remained in touch from December 2003 through November 2005 via telephone and e-mail.  In January 2006, the reporter published a book that contained classified information about the program and the human asset.

Evidence at trial showed that Sterling was aware of a grand jury investigation into the matter by June 2006 when he was served a grand jury subpoena for documents relating to the reporter’s book.  Nevertheless, between April and July 2006, Sterling deleted the e-mail containing the classified information he had sent from his account in an effort to obstruct the investigation.

This case was investigated by the FBI’s Washington, D.C., Field Office, with assistance in the arrest from the FBI’s St. Louis Field Office.  This case was prosecuted by Assistant U.S. Attorneys James L. Trump and Dennis M. Fitzpatrick of the Eastern District of Virginia, and Trial Attorney Eric G. Olshan of the Criminal Division’s Public Integrity Section.

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ALEXANDRIA, Va. – Abdur Rahman Roland, 26, of Alexandria, was sentenced today to 156 months in prison, followed by three years of supervised release for his role in multiple armed robberies, including an armed home invasion robbery where innocent bystanders were assaulted and restrained.

Roland pleaded guilty to four felonies, including Hobbs Act robberies and firearms offenses, on Feb. 19, 2015.

According to court documents, Roland, along with other coconspirators, robbed a marijuana dealer in Prince William County.  During the robbery the assailants held the dealer and a passenger at gun point and proceeded to steal the marijuana, the dealer’s wallet, his keys, and his vehicle.  Following this armed carjacking, Roland and his coconspirators, using the carjacking victim’s identification and keys, engaged in an armed home invasion robbery. This robbery, which took place just hours after the carjacking, involved the physical assault and restraint of innocent bystanders who were in the home. In addition to these two robberies, Roland, who was previously convicted of a felony, illegally possessed a firearm during a confrontation in Prince William County.  During this particular incident, Roland and his coconspirators threw bricks through the windows of the occupied dwelling and fired shots into the residence. 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Andrew G. McCabe, 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 Leonie M. Brinkema.

This case was investigated by the FBI’s Washington Field Office and the Fairfax County Police Department, with assistance from the Prince William County Police Department as well as the Prince William and Spotsylvania Commonwealth Attorneys’ Offices.  Assistant U.S. Attorney Zachary Terwilliger and Special Assistant U.S. Attorney Catherine Ahn 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. 1:15-cr-53.

Prostituted Minor in Suffolk and Virginia Beach

NORFOLK, Va. – Doriean Barberi, 37, of Greenville, South Carolina, pleaded guilty today to charges of transporting a minor across state lines for prostitution purposes.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John S. Adams, Special Agent in Charge of the Federal Bureau of Investigations’ Norfolk Field Office; and James A. (Jim) Cervera, Chief of Police, Virginia Beach Police Department, made the announcement after the plea was accepted by Senior U.S. District Judge Henry Coke Morgan, Jr.

Barberi was indicted by a federal grand jury on December 3, 2014.  Barberi faces a maximum penalty of life in prison when she is sentenced on October 22, 2015. 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.

According to a statement of facts filed with the plea agreement, Barberi was first identified by the Virginia Beach Police Department in September 2014.  Barberi had posted advertisements on www.backpage.com for herself and a 17 year old minor offering their sexual services at a local hotel.  Upon being interviewed, Barberi and the minor confirmed that they drove into Virginia several days earlier and first worked in Suffolk.  Then, they moved to Virginia Beach.  Barberi set up the appointments for the minor and the minor gave Barberi all of the money she was paid for having sex with customers. 

This case was investigated by FBI and Virginia Beach Police Department.  Assistant U.S. Attorney Elizabeth M. Yusi is prosecuting the case on behalf of the United States.

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. 2:14-cr-162.

ALEXANDRIA, Va. – Global Computer Enterprises, Inc. (GCE), of Reston, Virginia, along with its president and sole owner, Raed Muslimani, 53, of Sterling, Virginia, have agreed to pay $9 million to settle civil claims stemming from allegations that GCE concealed its utilization of prohibited engineers and employees on software services contracts with the federal government.

GCE, a cloud-based “software as a service” provider, provided the U.S. Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) with financial management software services pursuant to competitively awarded federal contracts. During the competitions for those contracts and after award, GCE allegedly misrepresented and/or concealed that it was utilizing engineers and other employees who were expressly prohibited from working on the contracts due to their citizenship/immigration statuses.

GCE was additionally awarded software development services contracts with the General Services Administration (GSA), the United States Secret Service, and the United States Coast Guard (USCG). In those contracts as well, it is alleged that GCE repeatedly misrepresented and/or concealed its use of engineers and employees expressly prohibited from working on those contracts due to their security clearance statuses, labor qualifications, or overseas locations.

To resolve the allegations under the civil False Claims Act and other related statutory and common law remedies, GCE and Muslimani agreed to pay the United States $9 million, to be paid out of GCE’s Chapter 11 proceeding. The Bankruptcy Court approved the settlement on April 22, 2015. GCE filed its Chapter 11 bankruptcy petition on September 4, 2014, and the United States filed a proof of claim on February 27, 2015.

The civil claims settled by GCE, Muslimani, and the United States are allegations only; there has been no determination of civil liability.

The settlement obtained in this matter was the result of a coordinated effort by the U.S. Attorney’s Office for the Eastern District of Virginia and the Financial Litigation Section and Fraud Section of the Commercial Litigation Branch of the Civil Division of the Department of Justice. The matter was investigated by Assistant U.S. Attorney Peter S. Hyun and Special Assistant U.S. Attorney Josh Cavinato. John T. McConkie of the Financial Litigation Section of the Commercial Branch of the Civil Division of the Department of Justice is handling the bankruptcy matter on behalf of the United States.

The case was investigated by the GSA Office of Inspector General (OIG), the FBI’s Washington Field Office, the DOL-OIG, the EEOC-OIG, with assistance from the USCG Investigative Service and the United States Secret Service.

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 Bankruptcy Court for the Eastern District of Virginia or on PACER by searching for Case No. 14-13290-RGM.

ALEXANDRIA, Va. –Darian Robinson, 42, of Hyattsville, Maryland, pleaded guilty today to charges of using, carrying, and brandishing a firearm during and in relation to a crime of violence and being a felon in possession of a firearm. 

According to the statement of facts filed with the plea agreement, on Nov. 7, 2014, Robinson approached a woman outside of a Walgreens in Fairfax County, Virginia.  He then brandished a firearm, ordered her into her car, and forced her to drive to various ATMs to withdraw cash from her bank account.  He then forced the victim to drive to a drive-thru liquor store in Maryland to purchase alcohol for him before having her drop him off at the New Carrollton Metro station.  Then, on Nov. 12, 2014, Robinson followed a second woman as she exited the Vienna Metro Station.  After she was inside her car, Robinson tapped on the window with a gun.  He then forced her to drive to Washington, D.C. and then Maryland.  Once there, Robinson forced her to drive to various ATMs in attempts to withdraw money which were unsuccessful.  Thereafter, Robinson forced this victim to drive to drive-thru liquor stores before dropping him off at the New Carrollton Metro station.  During both incidents, Robinson threatened to shoot his victims.

Robinson was indicted by a federal grand jury on March 11, 2015. Robinson faces a maximum penalty of life in prison when he is sentenced on Aug. 21, 2015. 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; Ronald A. Pavlik, Jr., Chief of Metro Transit Police, Colonel Edwin C. Roessler, Jr., Fairfax County Chief of Police, and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady.

This case was investigated by Metro Transit Police Department, Fairfax County Police Department, and the FBI’s Washington Field Office with assistance from the United States Secret Service and the Baltimore County Police Department. Assistant U.S. Attorneys Patricia Giles and Tyler McGaughey 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. 1:15-cr-78.

Claimed over $1.6 million in fraudulent refunds

RICHMOND, Va. – Eddie Blanchard, 37, of Miami, Florida, was convicted yesterday by a federal  jury on charges of Conspiracy to Commit Mail and Wire Fraud, Mail Fraud, Wire Fraud, Aggravated Identity Theft, Conspiracy to Obstruct Official Proceedings, and Obstruction of Official Proceedings.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation; David M. McGinnis, Acting Inspector in Charge of the Washington Division of the United States Postal Inspection Service; and Douglas A. Middleton, Chief of Henrico Police Division made the announcement after the verdict was accepted by U.S. District Judge Henry E. Hudson.

Blanchard faces a maximum penalty of 20 years in prison on each of the two conspiracy counts, fourteen fraud counts and one obstruction count, and a mandatory consecutive 2 years on the aggravated identity theft count when sentenced on August 7, 2015.  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.

Blanchard was indicted on October 7, 2014.   According to evidence presented at trial, Blanchard participated in a Miami-based stolen identity refund fraud scheme.  He and three confederates, Ramoth Jean, Junior Jean Merilia, and Jimmy Lord Calixte traveled repeatedly to Richmond in the early part of 2012 and used stolen personal identifying information to file hundreds of fraudulent tax returns, utilizing online tax preparation programs.  Blanchard and his accomplices claimed significant refunds on those fraudulent returns, and requested that those refunds be placed on pre-paid debit cards, which were later mailed to Richmond addresses selected by the conspirators. 

The scheme began to unravel when a Henrico County police officer encountered Jean removing a box containing stolen personal identifying information from a storage unit rented by the co-conspirators.  Following  Jean’s subsequent arrest on June 20, 2013, Blanchard convinced him  to mislead federal investigators about the identity of his actual co-conspirators, going so far as to facilitate the creation of a fictional accomplice.  Jean ultimately refused to testify before a federal grand jury about this matter. 

On January 9, 2014, Jean was sentenced to 114 months’ imprisonment for his role in the fraud scheme.  His sentencing on a separate contempt charge for his refusal to testify before the grand jury is scheduled for May 21, 2015.  Merilia pled guilty to conspiracy to commit mail and wire fraud, aggravated identity theft, and obstruction of official proceedings.  His sentencing is scheduled for June 19, 2015. Calixte is currently a fugitive.

This case was investigated by the Internal Revenue Service’s Criminal Investigation Division and the United States Postal Inspection Service, with assistance from the Henrico County Police Department as members of the Metro-Richmond Identity Theft Task Force.  Other member agencies of the Task Force include: the United States Secret Service, the Bureau of Diplomatic Security, the U.S. Department of State, Richmond Police Department, and Chesterfield County Police Department.  Prosecutions for the Task Force are handled by the United States Attorney’s Office and the Office of the Attorney General for the Commonwealth of Virginia.  Assistant U.S. Attorneys Michael C. Moore and Thomas A. Garnett are prosecuting the case on behalf of the United States.

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. 3:13cr136,  3:14cr73, 3:14cr139, and 3:15cr39.

ALEXANDRIA, Va. – SB Medical Inc., and TC Medical Group, companies based in Toronto, Canada, and St. Michael, Barbados, along with Hanoch David Stein, 37, of Baltimore, Maryland, pleaded guilty today to a multi-year conspiracy to smuggle and sell misbranded prescription pharmaceuticals in the United States and unlicensed wholesaling of prescription drugs. During the conspiracy SB Medical Inc. and TC Medical Group received over $33 million in proceeds from the illegal smuggling and sale of misbranded prescription pharmaceuticals in the United States.

“The smuggling and distribution of misbranded drugs and medical devices of uncertain foreign origin has the potential for serious harm to patients,” said Dana Boente, U.S. Attorney for the Eastern District of Virginia. “They could be improperly stored and transported, ineffective, adulterated, or unsafe. With our law enforcement partners, we will aggressively investigate and prosecute those who illegally distribute such products.”

SB Medical Inc., TC Medical Group, and Stein were indicted by a federal grand jury on December 2, 2014. 

“Individuals who circumvent the FDA-regulated supply chain by distributing unapproved prescription drugs and medical devices put the health and safety of the American public at risk,” said George M. Karavetsos, Director, FDA Office of Criminal Investigations. “The FDA has zero tolerance for those who participate in these illegal trafficking networks and, as we did in this case, we will continue to protect consumers by bringing such criminals to justice.”

According to the statements of facts filed along with the plea agreements, the SB Medical Inc. organization from at least 2011 through 2014, smuggled orthopedic injections, rheumatology infusions, cosmetic devices, optomology products, and oncology drugs into the United States.  The non-FDA approved prescription pharmaceuticals were sourced from other foreign countries including India, Turkey, France, Italy, and other countries and included Lucentis, Mabthera, Botox, Dysport, Euflexxa, Remicade, Restylane, Synvisc, Prolia, Orencia, Orthovisc, and other products.

“The illegal smuggling and sale of misbranded prescription pharmaceuticals can pose life threatening consequences for consumers,” said Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C. “Our agents work tirelessly to protect the American public from criminals who disregard health and safety warnings solely to make a buck.”

Members of the conspiracy working for SB Medical Inc. and TC Medical Group used false names to sell the pharmaceutical products to doctors and clinics in the United States.  To smuggle pharmaceuticals across the United States border, large shipments were broken down into multiple small shipments.  Those shipments were sent to addresses in Maryland, New Jersey, Florida, and other locations under different false names over several days.  Customs forms falsely stated the contents and value of the shipments.  Drop shippers in the United States, including Stein, received these packages, removed indicia that they were from abroad, and re-shipped them to doctors and clinics in the United States so that packages would have a United States-based return address.

“This case serves as a perfect example of what can be accomplished when different law enforcement agencies partner together to protect the American public from the many perils of illegal prescription drugs,” said Acting Postal Inspector in Charge David M. McGinnis, U.S. Postal Inspection Service-Washington Division. “It is our duty as Postal Inspectors to investigate and stop those who attempt to ship illicit drugs through the U.S. Mail.”

Instead of storing pharmaceuticals at cool temperatures as required for many of the pharmaceuticals, members of the conspiracy used unregistered commercial mailboxes, residential backyards and porches, basement rooms, garages, kitchen fridges and freezers, which did not have adequate lighting, ventilation, temperature, humidity, and security as required for the safe storage and handling of the prescription drugs and devices.

To further deceive customers about the actual location of SB Medical Inc. and the foreign origin of the pharmaceuticals, members of the conspiracy further asked that customers send checks to locations in the United States; drop shippers bundled the checks and forwarded them to Canada where they would be cashed.

This investigation has resulted in the guilty pleas of other conspirators of SB Medical Inc. and TC Medical Group, including:

• David Eli Burke, 34, of Thornhill, Ontario, Canada, director of sales
• Shlomo David Rabi, 25, of Toronto, Ontario, Canada, director of sales and marketing
• Asaf Akiva Ibrahimian, 24, of West Orange, New Jersey, sales representative
• Reuven Daniel Mirlis, 23, of Passaic, New Jersey, sales representative
• Rivka Rabi, 26, of Lakewood, New Jersey, drop shipper

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; George M. Karavetsos, Director, FDA Office of Criminal Investigations, Clarke E. Settles, Special Agent in Charge of Homeland Security Investigations , Washington, D.C.; and David M. McGinnis, Inspector in Charge of the U.S. Postal Service-Washington Division, made the announcement after the pleas were accepted by U.S. District Judge Anthony J. Trenga.

This case was investigated by the FDA’s Office of Criminal Investigations, Homeland Security Investigations Washington, D.C., and the United States Postal Inspection Service. Assistant U.S. Attorneys Alexander T.H. Nguyen, Kellen S. Dwyer, and Jay V. Prabhu 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-397.

Trusted with Destroying the Firearms, Melvin Hinson Removed the Serial Numbers and Sold or Traded The Firearms

RICHMOND, Va. – Melvin Hinson, 65, of Westmoreland County, Virginia, was indicted yesterday by a federal grand jury on a charge of possessing firearms with the manufacturers’ serial numbers obliterated or removed. 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington
Field Division, made the announcement after Hinson’s indictment was returned. 

Hinson currently faces a maximum penalty of five 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.

The indictment alleges that from March 1 to March 19, 2014, Hinson possessed a Rohm 38 Special caliber revolver, model RG38; a Harrington and Richardson (H&R) 32 caliber revolver; and a Jimenez Arms 9mm caliber semi-automatic pistol, all with obliterated serial numbers.  Hinson was arrested on April 15, 2015, on a Criminal Complaint alleging this same offense.  According to the affidavit submitted in support of that Complaint, Hinson, a retired Westmoreland County Sheriff’s Deputy, received firearms from law enforcement agencies for the purpose of destroying them.     However, it is alleged, rather than do so, as required, he removed the serial numbers and sold or traded the firearms.  According to the affidavit, Hinson distributed at least 12 firearms that have been recovered, each with the manufacturer’s serial number removed or obliterated, including a Kel-Tec carbine style assault rifle with a folding stock and a short-barreled shotgun.  The affidavit asserts that a number of these firearms were determined to have come from the Westmoreland County Sheriff’s Office. 

This case was investigated by ATF, with the assistance of Virginia State Police, the Colonial Beach Police Department and the Westmoreland County Sheriff’s Office.  Assistant U.S. Attorney Olivia L. Norman is prosecuting the case on behalf of the United States.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

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. 3:15-cr-81.

Cards were re-encoded with other account numbers

NORFOLK, Va. – Rickie Bailey, Jr., 25, of Chesapeake, was sentenced today to 33 months in prison for possession of 15 or more unauthorized access devices.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Douglas F. Mease, Special Agent in Charge of the United States Secret Service’s Richmond Field Office; and Kelvin L. Wright, Chief of Police, Chesapeake Police Department, made the announcement after Bailey was sentenced by Senior U.S. District Judge Robert G. Doumar.

Bailey pled guilty on October 30, 2014.  According to the statement of facts filed with his plea agreement, in April of 2014, Bailey was in possession of counterfeit debit cards when he was confronted by officers from the Chesapeake Police Department.  The officers were able to enter and speak to Bailey in his room at the Sun Suites Motel in Chesapeake.  It was there that the officers found debit cards, a magnetic card reader/writer, receipts for recent purchases, and a notebook that contained a handwritten list of names with associated dates of birth and social security numbers.  Agents with the United States Secret Service later analyzed all of the debit cards.  Of the 46 cards analyzed, 36 of them had been re-encoded with other account numbers.  Twenty-seven of the 36 cards were associated with names that were found among the list of names in the notebook or notebook papers.      

This case was investigated by the U.S. Secret Service and the Chesapeake Police Department.  Assistant United States Attorney Randy Stoker prosecuted the case on behalf of the United States.

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. 2:14-cr-121.

Also illegally sold practice grenade fuses

ALEXANDRIA, Va. – Eric Mark Way, 29, of Aliquippa, Pennsylvania, was sentenced today to 12 months and one day in prison, followed by two years of supervised release, for transferring an illegally modified flare gun.

Way pleaded guilty on January 20, 2015.  According to court documents, Way sold multiple modified flare gun kits.  These kits consisted of a flare gun, an insert that converted the legal signaling device into an illegal 12 gauge device, and a canvass carrying pouch.  One of the individuals who purchased this modified weapon from Way was a violent, convicted felon.

In addition to selling the modified flare guns, Way also was caught illegally selling M228 practice grenade fuses.  In order to sell these fuses, both the seller and purchaser must possess a federal explosives license.  Way does not have a federal explosives license.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, 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 Claude M. Hilton.

This case was investigated by the ATF Falls Church Field Office.  Assistant U.S. Attorney Zachary Terwilliger and Special Assistant U.S. Attorney Caroline Friedman 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. 1:15-cr-08.

Prostituted Two Teenage Girls in Virginia, Utah, and California

ALEXANDRIA, Va. – Lenny Paul Haskins, 34, also known as “2 Much,” of Las Vegas, Nevada, and Richmond, California, was sentenced today to 40 years in prison, followed by a life term of supervised release, for sex trafficking of a child.  The court also ordered Haskins to pay $538,250 in restitution to the victims and to forfeit $738,250 to the United States.

Haskins pleaded guilty on January 8, 2015.  According to court documents, since at least 2005, Haskins has been a pimp and has derived his income primarily from prostituting women and girls in numerous cities and states.  By 2012, Haskins was regularly prostituting victims in northern Virginia.  The United States discovered 17 women and girls who were prostituted by Haskins in the past few years.  Two of the victims were less than 18 years old, and one was only 15 years old.  When recruiting women and girls to prostitute, Haskins frequently would fail to mention that he would take all or nearly all of the money that these women would earn from prostitution.  Haskins typically made false promises to the women and girls whom he prostituted.

Haskins frequently provided drugs to the women and girls whom he prostituted and some of the women and girls prostituted by Haskins were or became addicted to drugs. 
Haskins instructed the women and girls whom he prostituted to call him “daddy.”  Some of the women prostituted by Haskins were tattooed with Haskins’s moniker: “2 Much.”  Haskins sometimes isolated women and girls whom he prostituted from their families and from each other as a means of preventing them from leaving Haskins.

Haskins obtained sex customers for the women and girls he prostituted by posting advertisements on Internet sites such as Backpage.com, Eros.com, Cityvibe.com, and MyRedBook.com.  Thousands of customers called the listed telephone numbers to arrange to perform commercial sex acts with the women and girls prostituted by Haskins.

Haskins set a monetary quota that the victims whom he prostituted were required to meet each day.  For example, in some places, Haskins required these women and girls to earn $1,000 per day from prostitution, and provide him with these proceeds.  When Haskins was incarcerated, he continued to run his prostitution business from jail.

Around June 2014, two minor victims encountered Haskins at a hotel around Sacramento, California, where they were prostituting.  Both were runaways from foster care.  Haskins provided marijuana to them and eventually recruited them to work for him.  Haskins prostituted them in California, Utah, and Virginia.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; and Colonel Edwin C. Roessler, Jr., Chief of the Fairfax County Police Department, made the announcement after sentencing by U.S. District Judge Claude M. Hilton.

This case was investigated by the FBI’s Washington Field Office and the Fairfax County Police Department.  Assistant U.S. Attorney Michael J. Frank 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. 1:14-CR-432.

Defendants admit to torturing and prostituting a woman

RICHMOND, Va. – Aldair Hodza, 36, and Laura Sorensen, 31, of Clive, Iowa, pleaded guilty today to charges of Sex Trafficking by Force, Fraud, or Coercion, and Interstate Transportation of a Person for Prostitution. 

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 Division, made the announcement after the plea was accepted by U.S. District Judge Henry Hudson.

Hodza and Sorensen, who were indicted by a federal grand jury on March 3, 2015, face a mandatory-minimum term of 15 years in prison and a maximum of life in prison when they are sentenced on August 14, 2015. As set forth in the plea agreement, the United States and the defendants have agreed to recommend a sentence of 35 years imprisonment on Count One and 10 years on Count Two to run concurrently.  This recommendation is not binding on the court.  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.

In a statement of facts filed with the plea agreement, the defendants admitted that on December 19, 2014, they convinced the victim to join them in their recreational vehicle (“RV”) using a ruse.  When the victim arrived, the defendants took her phone, forced her to consume alcohol and marijuana, and sexually assaulted her.  The defendants then told the victim that she was not free to leave and forced her to prostitute for the next several days.  Sorensen and Hodza worked together to post advertisements on Craigslist soliciting the victim for sexual acts and arrange meetings for the victim to perform sexual acts for money.  Sorensen collected all of the money paid for these sexual acts for use by Sorensen and Hodza.

On December 24, 2014, the defendants began their trip to Virginia to visit Hodza’s minor daughter, forcing the victim to come with them.  The defendants attempted to prostitute the victim along the trip at various truck stops.  Upon arriving in Virginia several days later, they went to campgrounds in Virginia and North Carolina, where they continued to force the victim to engage in prostitution.  During this time, the defendants engaged in a pattern of torture and sexual abuse toward the victim, including burning the victim on her back and abdomen with a key and scissors that had been heated on the stove, putting cigarettes out on the victim’s body, whipping the victim with a rope, driving nails into the victim’s feet, and spraying bleach into the victim’s wound. 

On January 6, 2015, New Kent County Sheriff’s Deputies and Virginia State Police troopers responded to a call at a gas station in Providence Forge, Virginia after a call by a concerned truck driver who observed suspicious behavior at the RV.  Upon arriving, the officers entered the RV and observed the victim displaying signs of fright and malnourishment and removed her from the RV to speak with her alone.  The victim then told them that she was being held against her will and abused by the defendants. 

This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Heather L. Hart, Dominick S. Gerace, and Angela Mastandrea-Miller are prosecuting the case on behalf of the United States.

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. 3:15-cr-032.

ALEXANDRIA, Va. – Twin brothers Muneeb and Sohaib Akhter, 23, of Springfield, Virginia, were indicted by a federal grand jury today on charges of aggravated identity theft, conspiracy to commit wire fraud, conspiracy to access a protected computer without authorization, access of a protected computer without authorization, conspiracy to access a government computer without authorization, false statements, and obstruction of justice.

According to the indictment, beginning in or about March 2014, the Akhter brothers and coconspirators hacked into the website of a cosmetics company and stole its customers’ credit card and personal information.  They used the stolen information to purchase goods and services, including flights, hotel reservations, and attendance at professional conferences.  In addition, the brothers and coconspirators devised a scheme to hack into computer systems at the U.S.  Department of State to access network traffic and to obtain passport information.

Muneeb Akhter faces a maximum penalty of 59 years in prison if convicted on all counts, and Sohaib Akhter faces a maximum penalty of 39 years in prison if convicted on all counts.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants 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; Gregory Marshall, Chief Security Officer, Department of Homeland Security (DHS); Gregory Starr, Assistant Secretary for the U.S. Department of State’s Bureau of Diplomatic Security; and Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the indictment was returned.

This case was investigated by the Internal Security and Investigations Division of the Office of the Chief Security Officer, DHS Headquarters; the U.S. Department of State’s Bureau of Diplomatic Security, and FBI’s Washington Field Office.  Special Assistant U.S. Attorneys John Taddei and Jennifer Clarke 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. 1:15-cr-124.

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.

Kolon Sentenced to Pay $360 Million in Restitution and Fines

ALEXANDRIA, Va. – Kolon Industries Inc., a South Korean industrial company, pleaded guilty this morning in federal court in Alexandria, Virginia, to conspiracy to steal trade secrets involving E.I. DuPont de Nemours & Co.’s (DuPont) Kevlar technology.  The company was sentenced to pay $85 million in criminal fines and $275 million in restitution.

United States Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Special Agent in Charge Adam S. Lee of the FBI’s Richmond, Virginia, Division made the announcement.

Kolon Industries Inc., appearing through two successor entities—Kolon Industries Inc. and Kolon Corporation (collectively, Kolon)—pleaded guilty to one count of conspiracy to convert trade secrets before U.S. District Judge Anthony J. Trenga of the Eastern District of Virginia.

“Research and development are pillars of our economy, and we cannot allow anyone to obtain by theft what innovators develop through effort and ingenuity,” said U.S. Attorney Boente.  “Today’s outcome confirms that we will aggressively investigate and prosecute intellectual property crimes, regardless of whether the perpetrators are foreign or domestic, corporations or individuals.  There are no safe harbors for those who seek to steal trade secrets in the Eastern District of Virginia.”

“Protecting the trade secrets of American businesses sustains the integrity and competitiveness of the American economy, and encourages the development of new products, including advanced technologies,” said Assistant Attorney General Caldwell.  “The Criminal Division is committed to ensuring that foreign companies, like Kolon Industries, cannot escape the reach of the criminal justice system when they have conspired to steal the results of American ingenuity and our companies’ intellectual property.” 

“Protecting American companies from the theft of their trade secrets is a high priority for the FBI,” said Special Agent in Charge Lee.  “Each year, billions of U.S. dollars are lost to foreign competitors who pursue illegal commercial short cuts by stealing valuable advanced technologies.  This case demonstrates the FBI’s ability to penetrate these highly sophisticated criminal schemes and bring their perpetrators to justice.  Its outcome should send a clear message to foreign commercial actors who seek to illegally exploit American companies and steal our nation’s innovation and technology.” 

According to the statement of facts filed with the plea agreement, from June 2006 to February 2009, Kolon conspired with former DuPont employees and others to steal DuPont’s trade secrets for making Kevlar, a high-strength, para-aramid synthetic fiber.  Kevlar, a trademarked name, is one of DuPont's most well-known products and is used is a wide range of commercial applications such as body armor, fiber optic cables, and automotive and industrial products.  Kolon admitted that it was attempting to improve the quality of its own para-aramid fiber known as Heracron. 

Kolon personnel met repeatedly with former DuPont employees, including Edward Schulz, 72, of Brownstown, Pennsylvania, and Michael Mitchell, 58, of Chesterfield, Virginia, to obtain confidential and proprietary DuPont information about Kevlar.  Schulz pleaded guilty to conspiracy to steal trade secrets in September 2014 and is scheduled to be sentenced on June 26, 2015.  Mitchell pleaded guilty to theft of trade secrets and obstruction of justice in December 2009 and was sentenced to 18 months in prison. 

Kolon admitted that it obtained technical and business documents regarding Kevlar, including instructional materials that described DuPont’s “New Fiber Technology,” documents on polymerization, and a detailed breakdown of DuPont’s capabilities and costs for the full line of its Kevlar products and DuPont’s Kevlar customers.

According to the statement of facts and Mitchell’s admissions at his guilty plea, Mitchell exchanged numerous telephone calls and emails with Kolon personnel.  On more than one occasion, Mitchell advised Kolon personnel that some of the information they sought was proprietary and that DuPont considered such information to be trade secrets.  Mitchell also coordinated a meeting at a hotel in Richmond, at which Kolon personnel were introduced to a cooperating witness who pretended to be a disgruntled scientist from DuPont.  During the Richmond meeting, Kolon personnel indicated that they would only be comfortable communicating with the cooperating witness in a manner that was confidential and that would not leave an evidentiary trail.

In February 2009, DuPont filed a civil lawsuit against Kolon in the Eastern District of Virginia, alleging theft of trade secrets.  Thereafter, certain Kolon personnel attempted to delete files and emails related to Mitchell, Schulz and outside consultants hired to improve Kolon’s para-aramid fiber, and urged other Kolon personnel to search for such materials and mark them for deletion.

Kolon also admitted that certain employees approached a former employee of an American subsidiary of Teijin Ltd. – a Japanese company that makes the para-aramid fiber called Twaron—in an unsuccessful effort to obtain information about Twaron.

This case represents the first time that foreign corporations with no direct presence in the United States were found to be successfully served with U.S. criminal process, over their objections, based on service pursuant to an international treaty.  In December 2014, the district court found that both of the successor companies were properly served, and ordered them to appear for arraignment.  In February 2015, the Fourth Circuit Court of Appeals denied Kolon’s petition for extraordinary relief seeking reversal of the district court’s order.

Five former Kolon executives and employees, all of South Korea, were charged in an August 2012 indictment filed in the Eastern District of Virginia: Jong-Hyun Choi, 58, a senior executive who oversaw the Heracron Business Team; In-Sik Han, 52, who managed Kolon’s research and development related to Heracron; Kyeong-Hwan Rho, 49, the head of the Heracron Technical Team; Young-Soo Seo, 51, the general manager for the Heracron Business Team;  and Ju-Wan Kim, 42, a manager on the Heracron Business Team.

None of these individuals has appeared in the United States to face the charges.  The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The case was investigated by the FBI’s Richmond Division.  The case is being prosecuted by Assistant U.S. Attorneys Kosta S. Stojilkovic and Matthew Burke of the Eastern District of Virginia, Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section and Senior Counsel Rodolfo Orjales of the Criminal Division’s Computer Crime and Intellectual Property Section.  The Criminal Division’s Office of International Affairs has provided valuable assistance.

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. 3:12-cr-137.

Transported cocaine and heroin to the Norfolk area

NORFOLK, Va. – Steve Jacob Joseph 35, of Alpharetta, Georgia, was sentenced today to 420 months in prison, followed by 5 years of supervised release for conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine and one kilogram or more of heroin. 

Dana J. Boente, United States Attorney for the Eastern District of Virginia and Michael Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Norfolk, made the announcement after sentencing by United States District Judge Mark S. Davis.

Joseph and his co-conspirator, Nicole Felicia Clark, were found guilty on December 5, 2014 after a three-day trial by a federal jury.  According to court records and evidence at trial, Joseph and Clark were both members of a large-scale drug trafficking organization that transported cocaine and heroin to the Norfolk area from New York City and Atlanta, Georgia.  Clark transported kilograms of cocaine and heroin from Georgia to Norfolk in a secret compartment in a 2007 GMC Yukon SUV.  Clark transported hundreds of thousands of dollars in drug money from Norfolk to Atlanta.  Joseph managed the drug operation in Atlanta.  He loaded cocaine and heroin into the GMC Yukon for delivery by Clark to Virginia.  Joseph handled the drug money generated by drug sales in Virginia and paid the group’s California supplier.  On November 4, 2013, Clark was arrested by Officers with the Clayton County Georgia Police Department following a traffic stop of the GMC Yukon in suburban Atlanta.  During the stop, the investigating officer conducted a search of the Yukon, discovered the secret compartment with 2.5 kilograms of cocaine and 595 grams of heroin inside.  Trial testimony indicated that Clark was in the process of transporting the seized drugs to Norfolk.  Joseph was arrested by the Clayton County PD later that evening in a car stereo installation shop named JMW Customs Auto in Rex, Georgia.  Police seized approximately $10,000 in cash from Joseph.  The police also seized from the shop a DVR security camera system on which were found videos depicting Joseph and Clark placing items in the secret compartment in the GMC Yukon.     

Clark, 36, also of Ellenwood, Georgia, was found guilty of three counts of possession of heroin with intent to distribute and was sentenced on March 20, 2015 to 240 months in prison.

 This case was investigated by the Department of Homeland Security, Homeland Security        Investigations.  Assistant United States Attorney Darryl J. Mitchell prosecuted the case on behalf of the United States.

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. 2:14-cr-8.

Received in excess of $2.6 million in fraudulent income tax refunds

NORFOLK, Va. – Mark J. Jones, Sr., 51, of Aurora, Colorado, pleaded guilty today to mail fraud and aggravated identity theft in connection with a scheme to defraud the Internal Revenue Service. 

Dana J. Boente, United States Attorney for the Eastern District of Virginia; and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, Internal Revenue Service-Criminal Investigations; made the announcement after the plea was accepted by United States Senior District Judge Robert G. Doumar.

Jones waived indictment and was charged in a criminal information on April 13, 2015.  Jones faces a maximum penalty of 42 years when he is sentenced on September 21, 2015.

In a statement of facts filed with the plea agreement, Jones’ scheme was discovered in 2013 after a local check cashing business noticed one of its employees had cashed over $2 million in U.S. Treasury checks.  The employee of the check cashing business identified another co-conspirator as the individual who cashed the treasury checks and indicated he paid her $200 per check to cash the treasury checks in violation of the company’s policies.  A subsequent IRS investigation determined that Jones, along with unidentified co-conspirators stole the personal identifying information of numerous people and filed at least 810 fraudulent income tax returns.  As a result of these false returns, Jones and his co-conspirators received in excess of $2.6 million in fraudulent income tax refunds.

This case was investigated by the Criminal Investigations division of the Internal Revenue Service.  Assistant United States Attorney Joseph L. Kosky is prosecuting the case on behalf of the United States.

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. 2:14-cr-132.

Indictment Alleges Moore Used Internet to Sell the Girl’s Sexual Services in Tidewater
 

NORFOLK, Va. – Alvin Norlee Moore III, of Virginia Beach, Virginia, was indicted by a federal grand jury today on charges of sex trafficking of a minor and use of the Internet to promote prostitution.

According to the indictment and other public documents, the government alleges that Moore met a 15 year old girl in November 2015 and immediately started using her as a prostitute at various hotels at the ocean front and other places in Virginia Beach.  He advertised her services on www.backpage.com.  After about three weeks, the victim was able to return home to her family, who then notified the authorities.  Moore also had other women working for him as prostitutes for the past several years in the Tidewater area.

Moore 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; John S. Adams, Special Agent in Charge of the Federal Bureau of Investigations’ Norfolk Field Office; and James A. (Jim) Cervera, Chief of Police, Virginia Beach Police Department, made the announcement after the grand jury returned the indictment.

This case was investigated by the FBI and Virginia Beach Police Department.  Assistant U.S. Attorney Elizabeth M. Yusi 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. 2:15-cr-52.

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. – Kouame “Innocent” Tanoh, 53, of Ashburn, Virginia, pleaded guilty today to wire fraud and aggravated identity theft in operating a longstanding fraudulent scheme used stolen personal identifying information and claimed over $400,000 in false tax refunds.

The investigation was initiated in August 2014, when the Metropolitan Washington Airports Authority Police stopped Tanoh on a traffic violation.  A subsequent search yielded several financial documents and fraudulent identification cards to include a driver’s license and Social Security card in the name of other individuals.  Tanoh advised that he was in possession of the documents because he was a tax preparer, and the documents belonged to his clients.  From there, several law enforcement agencies initiated an investigation into Tanoh’s illegal activities. 

According to court documents, from April 2008 through February 2015, Tanoh obtained individuals’ names and personal identifying information, including their Social Security numbers and dates of birth.  Tanoh acquired some of this information by holding himself out as being in the business of preparing tax returns, in part through a Virginia corporation called Alpha and Omega Financial Services.  Some of the individuals who provided their personal information to Tanoh were clients of this business. Tanoh would then use peoples’ names and personal identifying information for several different purposes, including the preparation and filing of false and fraudulent federal and state tax returns that made false claims for tax refunds.  To increase the amount of the refund requested by the fraudulent returns, Tanoh would add items to the returns, including false dependents, false businesses on the taxpayer’s Schedule C, false education expenses, and false moving expenses.  The actual loss to the IRS and state departments of revenue as a result of the returns prepared and filed by Tanoh is over $400,000.

In addition to filing false tax returns, Tanoh also used and lived other people’s identities, in part because he had no legal status to work or remain in the United States.  From at least 2009 through 2015, Tanoh used the names and personal identifying information of at least 8 individuals to seek and obtain employment, housing, and other items of value, such as bank accounts.  To facilitate his use of these stolen identities, Tanoh would obtain false means of identification in these person’s names, including driver’s licenses and Social Security cards.

Tanoh faces a maximum penalty of 20 years in prison on the wire fraud charge and a mandatory consecutive term of two years in prison on the aggravated identity theft charge when he is sentenced on July 31, 2015. 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; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, DC; Stephen L.  Holl, Chief of Police, Metropolitan Washington Airports Authority; Thomas J. Kelly, Special Agent in Charge of  IRS-Criminal Investigations, Washington Field Office; David M. McGinnis, Acting Inspector in Charge of the Washington Division of the United States Postal Inspection Service; John Phillips, Assistant Inspector General for Investigations, Washington Field Office of the Inspector General’s Office of the U.S. Department of the Treasury; Michael McGill, Special Agent in Charge, Philadelphia Field Division of the Inspector General’s Office of the Social Security Administration, made the announcement after the plea was accepted by U.S. District Judge T.S. Ellis, III.

This case was investigated by Homeland Security Investigations; the Metropolitan Washington Airports Authority Police; IRS-Criminal Investigations; U.S. Department of the Treasury, Office of the Inspector General; United States Postal Inspection Service; and the Social Security Administration, Office of the Inspector General.  Assistant U.S. Attorney Katherine L. Wong and Special Assistant U.S. Attorney Kathryn Kimball 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. 1:15-cr-99.

Produced and possessed images of minors met on the Internet

ALEXANDRIA, Va. – Patrick Joseph Friedel, 29, of Arlington, Virginia, was sentenced today to 192 months in prison, followed by 10 years of supervised release for the production and possession of child pornography. 

Friedel pleaded guilty on January 16, 2015.  According to court documents, Friedel met five young teenagers over the Internet and exchanged sexually explicit images with them.  Friedel used persuasion, which included sending the minors depictions of other minors engaged in sexually explicit conduct, and coercion, which included threats to post images online and tell parents about the minor’s activities.  On three occasions, Friedel picked up one of the minors and engaged in sexual activity with her.  He took pictures and videos of this activity, which included sadistic or masochistic conduct or other depictions of violence.     

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 Homeland Security Investigations Washington, D.C.; and Edwin C. Roessler, Jr., Chief of Police, Fairfax County Police Department made the announcement after sentencing by U.S. District Judge T.S. Ellis, III. 

This case was investigated by Homeland Security Investigations and the Fairfax County Police Department with the assistance of the Northern Virginia/DC Internet Crimes Against Children Task Force.  Assistant U.S. Attorneys Matthew Gardner and Tracy Doherty-McCormick 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. 1:14-cr-383.

Firearms were stolen during the course of numerous burglaries throughout Hampton Roads and Northeastern North Carolina

NORFOLK, Va. – Direll Lamar Jackson, 30, of Suffolk, Virginia, was sentenced today to 240 months in prison, the maximum sentence, followed by 3 years of supervised release for possessing and concealing stolen firearms and being a felon in possession of firearms.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Charles E. Smith, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Washington Field Division; and Karl C. Colder, Special Agent in Charge for Drug Enforcement Administration’s Washington Division Office made the announcement after the sentencing by U.S. District Judge Arenda Wright Allen.

Jackson pled guilty to possessing and concealing stolen firearms and being a felon in possession of firearms on January 20, 2015. 

According to a statement of facts filed with the plea agreement, in the autumn of 2014 Jackson was part of a conspiracy that was breaking into homes and cars in the area and stealing property, including firearms.  Soon after the burglaries, the conspirators would sell the stolen guns.  Jackson was the one responsible for reaching out to potential buyers, negotiating prices, and arranging the sales.  One of the potential buyers Jackson contacted was a confidential informant, who turned the information over to the DEA and ATF.  During the course of the investigation, DEA and ATF used an informant to purchase a total of nineteen firearms from Jackson and his co-conspirators.  On November 17, 2014, DEA and ATF executed a search warrant at the property where the gun transactions had been occurring and recovered a total of over twenty additional firearms.  The investigation has revealed that Jackson and his co-conspirators possessed at least forty-six firearms, thirty-nine of which have been confirmed to be stolen from numerous break-ins in Hampton Roads and Northeastern North Carolina.  The losses to the victims from the larcenies and burglaries in this case exceed $70,000.  Jackson has been ordered to make full restitution as part of his sentence.

Co-defendants Lamonte Rashawn Willis and Travis Travel Scott will both be sentenced on May 14, 2015.  Both co-defendants face a maximum penalty of 20 years in prison when sentenced.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Drug Enforcement Administration.  The burglaries were investigated by the City of Suffolk Police, Isle of Wight County Sheriff’s Office, Surry County Sheriff’s Office, and Gates County Sheriff’s Office. Assistant U.S. Attorney Kevin Hudson is prosecuting the case on behalf of the United States.

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. 2:14-cr-178.

Nine Trash Bags of Mail Recovered from Overgrown Lot
 

NORFOLK, Va. – Shalita Corley, 31, of Portsmouth, Virginia, pleaded guilty today to one count of secreting and delaying U.S. mail, which she had been entrusted to deliver.

A statement of facts filed with the plea agreement reported Corley worked as a city carrier assistant with the United States Postal Service (USPS) from November 3, 2014 through February 6, 2015, when she resigned her position.  On February 3, 2015, a Norfolk resident observed Corley acting suspiciously and walking about an overgrown lot abutting the Lafayette River in Norfolk.  After Corley drove away in her USPS vehicle, the resident investigated and found two trash bags containing hundreds of pieces of mail, including what appeared to be one or more envelopes containing checks.  The resident collected the mail and promptly turned it over to the USPS.  Further investigation during the ensuing week by residents and the USPS led to the recovery of other mail scattered about the lot and seven additional trash bags containing undelivered U.S. mail, including what appeared to be bank statements, end of year tax mailings, USPS priority mail, letters from service members in the armed forces, and other mailed advertisements and the like.  Review by agents with the USPS Office of Inspector General revealed that these items of U.S. mail had been postmarked on days falling within the first four weeks of January and the first week of February 2015.  The USPS later delivered all of the recovered mail to its intended recipients.

A Norfolk federal grand jury indicted Corley on March 4, 2015. Corley faces a maximum penalty of five (5) years in prison when she is sentenced on July 15, 2015. 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 Bowman, Special Agent in Charge, USPS, Office of Inspector General, made the announcement after the plea was accepted by Chief Judge Rebecca Beach Smith of the United States District Court.

This case was investigated by USPS, Office of the Inspector General. Assistant U.S. Attorney Robert J. Krask 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. 2:15-cr-25. 

NEWPORT NEWS, Va. – The local owners of a business charged with selling “Spice” were arrested yesterday based upon federal warrants issued in the Eastern District of Virginia.

According to court documents and court proceedings, Nadir Abdallah, age 54, and Sharif Abdallah, age 31, both of Newport News, Virginia, were arrested on an indictment issued by a Federal Grand Jury sitting in Newport News, Virginia.  The indictment charges both individuals with Conspiracy to Possess with Intent to Distribute and Distribution of Controlled Substances and Controlled Substance Analogues (also known as Spice) and Making a False Statement.  

Nadar and Sharif Abdallah each face a maximum penalty of 25 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; Terry Sult, Chief of Hampton Police, Richard W. Myers, Chief of Newport News Police, and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement's Homeland Security Investigations Washington, D.C., made the announcement after Nadar Abdallah’s initial appearance before U.S. Magistrate Judge Douglas E. Miller. Sharif Abdallah was arrested in the Western District of New York and will appear for a detention hearing on April 22, 2015, in Rochester, New York. Nadar Abdallah’s detention hearing is scheduled for April 22, 2015 at 2:00 p.m. in Newport News Federal Court.

This case was investigated by the Department of Homeland Security, Hampton Police Division, Newport News Police Department, the United States Postal Inspection Service, the Virginia State Police, and the Virginia Peninsula Narcotics Enforcement Task Force. Assistant U.S. Attorneys Eric M. Hurt and Kevin Hudson and Special Assistant United States Attorney Amy Cross 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. 4:15cr18.

Conducted his criminal activities out of several local motels

NORFOLK, Va. – Antuane Keyone Armstrong, 35, of Newport News, was sentenced yesterday to 125 months in prison, followed by 3 years of supervised release for three counts of use of an interstate facility for unlawful activity.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and John S. Adams, Special Agent in Charge of the Federal Bureau of Investigation’s Norfolk Field Office, made the announcement after sentencing by Senior U.S. District Judge Robert G. Doumar.

Armstrong pled guilty on November 13, 2014.  According to court documents, from April 2014 to about June 25, 2014, Armstrong posted advertisements on-line for his business enterprise involving the illegal prostitution of several women, including a sixteen-year-old minor.  Armstrong conducted his criminal activities out of several local motels and was arrested in Norfolk on June 25, 2014, as a result of a surveillance operation.  

This case arose out of prostitution investigations conducted by the Newport News, Norfolk, and Virginia Beach Police Departments.  The FBI’s Norfolk Field Office handled the investigation subsequent to its initiation by the respective police departments.  Assistant United States Attorney Randy Stoker prosecuted the case on behalf of the United States.

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. 2:14cr124.

ALEXANDRIA, Va. – The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against HCR ManorCare alleging that ManorCare knowingly and routinely submitted false claims to Medicare and Tricare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today.  ManorCare is one of the nation’s largest healthcare providers, operating approximately 281 skilled nursing facilities (SNFs) in 30 states.

“The Department of Justice is committed to ensuring that healthcare providers who pressure their employees to provide medically unnecessary services to Medicare beneficiaries and Tricare recipients, solely to increase their own profits, are held accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will not relent in our efforts to stop these false billing schemes and recover funds for federal healthcare programs.”

The government’s complaint alleges that ManorCare, which is owned by The Carlyle Group, exerted pressure on SNF administrators and rehabilitation therapists to meet unrealistic financial goals that resulted in the provision of medically unreasonable and unnecessary services to Medicare and Tricare patients.  ManorCare allegedly set prospective billing goals designed to significantly increase revenues without regard to patients’ actual clinical needs and threatened to terminate SNF managers and therapists if they did not administer the additional treatments necessary to qualify for the highest Medicare payments.  ManorCare also allegedly increased its Medicare payments by keeping patients in its facilities even though they were medically ready to be discharged.

“We strive for a system whereby health care providers provide reasonable and necessary services without overbilling Medicare for unreasonable and unnecessary services” said U.S. Attorney Dana Boente of the Eastern District of Virginia.  “We will continue our robust investigations of the companies operating in this important sector of our economy.”

“We want to ensure that taxpayer dollars are used to pay for health care for Americans that need it, not to unjustly enrich health care companies,” said U.S. Attorney Barbara McQuade of the Eastern District of Michigan.  “Medical providers will be held accountable when they exploit patients for profit by subjecting them to therapies they don’t need and then billing Medicare for reimbursement.” 

“Today’s action is the result of a robust investigation into alleged false billings submitted to Medicare and Tricare for rehabilitation therapy services that were not necessary for patients,” said Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington, D.C., Field Office.  “Healthcare fraud is a top priority for the FBI and we will continue to work closely with federal, state and local law enforcement partners to address vulnerabilities, fraud and abuse in the healthcare industry.”

The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  The False Claims Act permits the government to intervene in such lawsuits, as it has done in these cases.  A defendant that violates the False Claims Act is liable for three times the government’s losses plus civil penalties. 

The government’s intervention in these matters illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.  Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

These matters were investigated by the Civil Division’s Commercial Litigation Branch; the U.S. Attorney’s Office for the Eastern District of Virginia, the Northern and Southern Districts of Iowa, Eastern and Western Districts of Michigan, Northern and Southern Districts of Ohio, and the Eastern District of Pennsylvania; the Department of Health and Human Services’ Office of Inspector General; the Department of Defense’s Office of Inspector General; the Defense Health Agency; the Medicaid Fraud Control Units of the California Attorney General’s Office, Delaware Department of Justice, the Florida Attorney General’s Office, Illinois State Police, Iowa Department of Inspections and Appeals, the Maryland Attorney General’s Office, the Michigan Attorney General’s Office, the Ohio Attorney General’s Office, and the Virginia Attorney General’s Office; the National Association of Medicaid Fraud Control Units; and the FBI.

 The cases are captioned United States ex rel. Ribik v. ManorCare, Inc., et al., Case No. 1:09cv13-CMH-HCB (E.D. Va.); United States ex rel. Slough v. HCR ManorCare, et al., Case No. 1:14cv1228  (E.D. Va.); and United States ex rel. Carson v. HCR ManorCare, et al., Case No. 1:11cv1054 (E.D. Va.).

The claims asserted against ManorCare are allegations only, and there has been no determination of liability.

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. – Damion Latoras Foster, 34, of Atlanta, Georgia, was sentenced today to 97 months in prison, followed by 5 years of supervised release, on charges of conspiring to commit bank fraud and aggravated identity theft.  He was also ordered to pay restitution in the amount $37,308.95.

Foster pleaded guilty on January 7, 2015.  According to court documents and evidence presented at the trial of co-defendant Rasheeda McConnell, Foster was part of a group that stole business checks from commercial mailboxes and used them to make counterfeit checks. The group then recruited people to cash the checks from areas where homeless or unemployed persons would congregate.  The check-cashers received a small sum of cash for cashing counterfeit checks made payable to them. The remaining proceeds went to the recruiters.  Foster was responsible for printing the counterfeit checks that were cashed by the check-cashers.  Foster’s fingerprints were found on a laptop computer, stolen checks, and other items shipped from a Richmond FedEx store on February 6, 2014, the date co-defendants Brandon Jermaine Johnson and Devante Carson were arrested.  Forensic analysis of the laptop computer revealed digital images of counterfeit checks created using stolen business checks as exemplars.  Foster’s fingerprints were also found on counterfeit checks passed in Kansas City, Missouri and Sioux Falls, South Dakota.  He was arrested at a hotel in Jacksonville, Florida, on September 16, 2014, and found in possession of a computer, scanner, printer, check stock, and business checks apparently stolen from the U.S. Mail. 

Five other co-defendants in this case pleaded guilty and have been sentenced to prison terms as follows:  Jeffrey Keith Barnes, II, 7 ½ months; Devante Carson, 33 months; Christopher Eugene Pope, 15 months; Kevin Lavon Smith, 9 months; Brandon Jermaine Johnson, 96 months.  Another co-defendant, Rasheeda McConnell, was convicted by a jury and sentenced to serve 60 months. 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; David M. McGinnis, Acting Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; and Douglas F. Mease, Special Agent in Charge of the United States Secret Service’s Richmond Field Office, made the announcement after the sentencing by U.S. District Judge John A. Gibney.

This case was part of Operation Homeless, a nationwide initiative being conducted by the U.S. Postal Inspection Service and U.S. Attorney’s Offices to aggressively prosecute groups who recruit the homeless and indigent to cash counterfeit checks.   It was investigated by the United States Postal Inspection Service, United States Secret Service, Chesterfield County Police Department, and Henrico County Police Department as members of the Metro-Richmond Identity Theft Task Force.  Prosecutions for the Task Force are handled by the U.S. Attorney’s Office and the Office of the Attorney General for the Commonwealth of Virginia.  Virginia Assistant Attorney General and Special Assistant U.S. Attorney Charles A. Quagliato and Assistant U.S. Attorney Michael C. Moore 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. 3:14-cr-28.

Defendant possessed over 600 images of Child Pornography

NEWPORT NEWS, Va. – Isaiah Al’Von Holloman, 22, of Newport News, Va., was sentenced today to 160 months in prison, followed by 25 years of supervised release for Receipt of Child Pornography.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, John S. Adams, Special Agent in Charge of the Norfolk Field Office, and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Washington, D. C., made the announcement after sentencing by U.S. District Judge Raymond A. Jackson.

Holloman plead guilty on January 14, 2015. According to court documents, federal agents identified the defendant via a Peer-to-Peer network on his computer. On May 29, 2014 members of FBI and Homeland Security Investigations executed a search warrant at the defendant’s apartment in Newport News. Holloman was home and agreed to speak to the agents.  He admitted he conducted internet activities using on-line applications including Facebook, Instagram, Kik, livechat, Dropbox, anonymous chat, and Sharazza, and that he obtained child pornography using Sharazza. Further, he created and used a Dropbox to obtain and provide images and videos of child pornography. During the search Holloman identified a laptop computer, tablet, and smartphone all belonging to him and all were seized pursuant to the search warrant. A subsequent forensic examination of these devices revealed over 600 images of child pornography.  

This case was investigated by the Federal Bureau of Investigation and Homeland Security Investigations. Assistant U.S. Attorney Lisa R. McKeel is prosecuting the case on behalf of the United States.

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. 4:14cr68.

ALEXANDRIA, Va. – Omar Fabian Valdes Gualtero, 28, and Edgar Javier Bello Murillo, 28, both Colombian citizens, were sentenced today for their roles in the kidnapping and murder of former Drug Enforcement Agency (DEA) Special Agent James “Terry” Watson in Bogata, Colombia, on June 20, 2013.  Gualtero was sentenced to 348 months in prison and five years of supervised release. Murillo was sentenced to 440 months in prison and five years of supervised release.

Attorney General Eric H. Holder; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Dana J. Boente, Eastern District of Virginia; DEA Administrator Michele M. Leonhart; Special Agent in Charge George L. Piro of the FBI’s Miami Field Office; and Director Bill A. Miller of the State Department’s Diplomatic Security Service (DSS), made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee.

“These two defendants bear responsibility for the kidnapping and murder of a courageous federal agent,” said Attorney General Eric Holder.  “With this sentencing, they face justice for their involvement in this brutal crime.  Our nation owes a great debt to Special Agent Terry Watson and his loved ones.  We will never rest in our determination to honor his profound sacrifices, to pursue all who would threaten our brave men and women in law enforcement, and to carry on the vital work for which he gave his life.”

“Today’s sentencing is another important step in bringing justice to those responsible for the murder of Special Agent Terry Watson,” said DEA Administrator Michele M. Leonhart.  “Terry was a respected and dedicated DEA Special Agent and we will not rest until all those involved in this heinous act are sentenced.  Our thoughts and prayers continue to go out to the Watson family as this case moves towards a final resolution.”    

Both Gualtero and Murillo previously pleaded guilty to murder of an internationally protected person and conspiracy to kidnap an internationally protected person.

In the statements of facts filed with their plea agreements, as well as other evidence presented in open court, Gualtero and Murillo admitted that they conspired to conduct “paseo milionarios” or “millionaire’s rides” in which victims in Bogotá, Colombia, were lured into taxi cabs, kidnapped and then robbed.  Both admitted that on the evening of June 20, 2013, they were a part of a robbery crew that included five other individuals who targeted Special Agent Watson.  Gualtero was the ring leader, who organized the robbery crew.  One of the members of the crew picked up Special Agent Watson in his taxi, while another drove a second taxi carrying the assailants.  Murillo entered the taxi carrying Special Agent Watson and stabbed him multiple times.  Special Agent Watson was able to escape from the taxi, but he later collapsed and died from his injuries.   

A total of six defendants were charged in this case for their involvement in the murder and kidnapping of Special Agent Watson:  Héctor Leonardo López, 34; Julio Estiven Gracia Ramírez, 32; Andrés Álvaro Oviedo García, 22; Fabián Valdes Gualtero, 28; Edwin Gerardo Figueroa Sepulveda, 40; and Wilson Daniel Peralta Bocacachica, 30.

Defendant Name & Age

Charge(s)

Sentencing Information

Héctor Leonardo López, 34

Guilty to Conspiracy to Kidnap and Aiding and Abetting the Murder of an Internationally Protected Person.

December 12, 2014. 25 years in prison.

Julio Estiven Gracia Ramírez, 32

Same as above.

December 12, 2014. 27 years in prison.

Andrés Álvaro Oviedo García, 22

Same as above.

December 12, 2014. 20 years in prison.

Edwin Gerardo Figueroa Sepulveda, 40

Same as above.

February 18, 2015. 30 years in prison.

Omar Fabian Valdes Gualtero, 28

Same as above.

April 13, 2015. 29 years in prison.

Edgar Javier Bello Murillo, 28

Same as above.

April 13, 2015. 36 years in prison.

Wilson Daniel Peralta Bocacachica,

Obstruction of justice.

February 18, 2015. 40 months in prison.

This case was investigated by the FBI, DEA and DSS, in close cooperation with Colombian authorities and with assistance from INTERPOL and the Justice Department’s Office of International Affairs.  The case is being prosecuted by Assistant U.S. Attorney Michael P. Ben’Ary and Special Counsel Stacey Luck of the Criminal Division’s Human Rights and Special Prosecutions Section.

The Department of Justice gratefully acknowledges the Colombian Attorney General’s Office, Colombian National Police, Colombian Directorate of Criminal Investigation and Interpol (DIJIN), DIJIN Special Investigative Unit, Bogotá Metropolitan Police, Bogotá Police Intelligence Body (CIPOL) Unit and Colombian Technical Investigation Team for their extraordinary efforts, support and professionalism in responding to this incident.

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. 1:13-cr-310.

Used eDonkey peer-to-peer network, Usenet Newsgroup to download child pornography

ALEXANDRIA, Va. – Ralph Freeman, 54, of Falls Church, Virginia, was sentenced today to six years in prison, followed by 15 years of supervised release, for receiving and possessing thousands of child pornography files that he downloaded from online networks.

Freeman was found guilty on January 2, 2015, following a bench trial that concluded in November 2014. According to court documents, Freeman used the eDonkey peer-to-peer network and Usenet Newsgroup to download child pornography. More than 2,900 still-image files and 180 video files of suspected child pornography were found on a desktop, and more than 9,000 images were found on an external hard drive at Freeman’s residence. Freeman viewed, accessed, received, and downloaded child pornography files between 2005 and 2013.

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 Homeland Security Investigations, Washington, D.C., made the announcement after sentencing by U.S. District Judge James C. Cacheris.

This case was investigated by Homeland Security Investigations. Assistant U.S. Attorneys Matthew Gardner and Tracy Doherty-McCormick 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. 1:14-cr-322.

Illegally imported and distributed steroid products to individuals in over 30 states

RICHMOND, Va. – Carl E. Macchiarulo, 43, of Midlothian, Virginia, pleaded guilty today to conspiring to distribute and possess with intent to distribute anabolic steroids.

Macchiarulo faces a maximum penalty of 10 years in prison when he is sentenced on June 19, 2015.  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.

In a statement of facts filed with the plea agreement, Macchiarulo admitted that he operated an illegal steroid distribution business known as CK Labs out of his home in Midlothian between December 2012 and September 2014.  In operating the business, Macchiarulo imported raw steroid powders and pills from China and other foreign countries, manufactured finished steroid products at his home, and distributed them to his customers through the mail.  Macchiarulo advertised his business on various internet sites known to serve as a marketplace for the distribution of anabolic steroids.  During the course of the conspiracy, Macchiarulo imported at least 16 kilograms of raw steroid powders and thousands of steroid pills, and distributed steroids to customers located in over 30 states, including to at least one amateur athlete.  As part of the plea agreement, Macchiarulo agreed to forfeit $163,455 in U.S. currency that was seized by law enforcement as proceeds of the conspiracy. 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division; and David M. McGinnis, Inspector in Charge of the Washington Division of the United States Postal Inspection Service, made the announcement after the plea was accepted by U.S. District Judge John A. Gibney, Jr. 

This case was investigated by the FBI’s Richmond Division and the United States Postal Inspection Service.  Assistant U.S. Attorneys Dominick S. Gerace and Erik S. Siebert 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. 3:15CR00050.

Users Traveled from Fairfax County to Purchase Heroin

ALEXANDRIA, Va. – Antonio Torrez Woodson, 33, of Washington, D.C., was sentenced today to 72 months in prison followed by four years of supervised release for conspiracy to distribute 100 grams or more of heroin.

Woodson pleaded guilty to the offense on December 17, 2014. According to court documents, Woodson regularly sold heroin to at least nine adults between the ages of 21 and 36, who traveled from in and around Fairfax County, Virginia, to purchase heroin from the defendant in Washington, D.C. Woodson previously served 60 months in federal prison for selling drugs.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Mark R. Herring, Attorney General of Virginia; Karl C. Colder, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Washington Field Division; and Colonel Edwin C. Roessler, Jr., Fairfax County Chief of Police, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee.

This case was investigated by the DEA’s Washington Field Division and the Fairfax County Police Department. Special Assistant U.S. Attorney and Virginia Assistant Attorney General Marc J. Birnbaum 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. 1:14-cr-419.

Cashed over two million dollars in fraudulent income tax refund checks

NORFOLK, Va. – Tanya Evans, 34, of Norfolk, was sentenced today to 87 months in prison, followed by 3 years of supervised release for conspiracy to defraud the government with respect to claims.  Evans was also ordered to pay $2,087,571.14 in restitution to the Internal Revenue Service.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigations, made the announcement after sentencing by Chief U.S. District Judge Rebecca Beach Smith.

Evans waived indictment and pled guilty to criminal information on December 30, 2014.  According to court documents, she and a co-conspirator’s scheme was discovered in 2013 after a local check cashing business noticed that she had cashed over $2 million in U.S. Treasury checks.  Evans indicated she was paid her $200 per check to cash the treasury checks in violation of the company’s policies.  A subsequent IRS investigation determined that she cashed 640 checks that totaled just over two million dollars in fraudulent income tax refunds. 

This case was investigated by the Criminal Investigations Division of the Internal Revenue Service.  Assistant United States Attorney Joseph L. Kosky is prosecuted the case on behalf of the United States.

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. 2:14cr174.

Defendant evaded paying over $1 million in sales tax to Virginia while selling cigarettes to traffickers

RICHMOND, Va. – Mohamed Seid Ahmed Mohamed, 57, of North Chesterfield, Virginia, was sentenced today to 41 months in prison, followed by 3 years of supervised release, for conspiring to commit wire fraud and to traffic in contraband cigarettes.  He was also ordered to pay $1,009,046 in restitution to the Commonwealth of Virginia, Department of Taxation. 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office, made the announcement after sentencing by Senior U.S. District Robert E. Payne.

Mohamed pleaded guilty on September 3, 2014.  According to court documents, Mohamed was the owner and operator of The Cigarette Club, LLC, a cigarette retail store in Richmond, Virginia, doing business as City Cigarettes.  From June 2011 to January 2014, Mohamed and his co-conspirators purchased over 440,000 cartons—worth approximately $19.8 million—of various brands of cigarettes at wholesale stores in the Richmond area using multiple membership accounts.  In making the cigarette purchases, Mohamed and/or co-conspirators certified that the cigarettes would be resold through Mohamed’s retail business.  As a result, he and his co-conspirators were not required to pay the Virginia Retail Sales and Use Tax on the cigarettes at the time they purchased them.  Instead, they were responsible to collect and pay the taxes once they sold them.   

In fact, at the time of each purchase, Mohamed and his co-conspirators intended to sell, and ultimately did sell, the overwhelming majority of the cigarettes to individuals who they knew were transporting the cigarettes to jurisdictions outside of the Commonwealth of Virginia for resale as untaxed cigarettes.  Mohamed and his co-conspirators never intended to, and ultimately did not, collect or pay the applicable Virginia Retail Sales and Use Tax for the cigarettes purchased at the wholesale stores.  As a result of the conspiracy, the Commonwealth of Virginia lost sales tax revenue in the amount of $1,009,046.

This case was investigated by the IRS-Criminal Investigation in Richmond, Virginia, with assistance from the Multi-Jurisdictional Special Operations Group.  Assistant U.S. Attorney Dominick S. Gerace is prosecuting the case on behalf of the United States.

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. 3:14CR00143.

ALEXANDRIA, Va. – An attorney from Vienna, Virginia, who failed to pay his taxes for three years and instead spent hundreds of thousands on personal expenses for himself and his family, was sentenced today to 12 months and one day in prison followed by three years of supervised release for willful failure to pay federal income taxes.  The court also ordered him to pay $451,955 in restitution to the Internal Revenue Service.

William M. Weisberg, 53, pled guilty on Dec. 13, 2014, to three counts of willful failure to pay personal income taxes. According to court documents, from 2008 through 2010, Weisberg was a practicing attorney who filed his tax returns for those years, but failed to pay his taxes for 2008 and 2010, and paid only a portion of his taxes for 2009.  During that same period, however, he paid approximately $250,000 to rent a house in Vienna, $150,000 for private and parochial schools for his two children, $35,000 for maid service, and $130,000 for travel and entertainment.  In addition, when the IRS tried to work with Weisberg in 2010 to obtain the money he owed, Weisberg falsified a document from his law firm, which told the IRS that the firm was withholding money from his paychecks to give to the IRS, when, in fact, no money was being withheld.   

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and, Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigations, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee.

This case was investigated by IRS-Criminal Investigations. Assistant U.S. Attorney Jack Hanly 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. 1:14-CR-380.

Steward planned the robbery with his girlfriend 

NEWPORT NEWS, Va. – Christopher Steward, 24, of Newport News, Va, was convicted today following a three day jury trial on charges of conspiracy to commit robbery, robbery, and use, carry and brandish a firearm in relation to a crime of violence.

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 John S. Adams, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after the verdict was accepted by U.S. District Judge Arenda Wright Allen.

Steward faces a maximum penalty of twenty years on the conspiracy conviction, twenty years on the robbery conviction, and a mandatory consecutive seven years in prison on the firearm conviction when he is sentenced on July 1, 2015.  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.

According to court records and evidence at trial, in June, 2014, two masked men entered the Lonestar Steakhouse in Hampton, Virginia armed with firearms. Various employees, as well as the infant child of an off duty employee were in the restaurant at the time.  The robbery was planned by Cynthia Presley, a Lonestar employee, and her boyfriend, Christopher Steward.  Presley advised Steward by text message as to the timing of the robbery which was passed onto Steward by two unknown conspirators. Presley pled guilty in December, 2014, and testified against Steward at trial. Presley was sentenced on March 10, 2015, to 87 months in prison.

This case was investigated by the Federal Bureau of Investigation, as well as Norfolk and Hampton Police Departments. Assistant U.S. Attorney Brian J. Samuels, and Jennifer Sykes from the Organized Crime and Gang Section of the Justice Department’s Criminal Section, are prosecuting the case on behalf of the United States.

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. 4:14CR75.

Executed Extortion Scheme from Prison

RICHMOND, Va. – Christopher J. Burruss, 37, of Toano, Virginia, was sentenced today to 24 months in prison, followed by one year of supervised release for Interstate Threat to Injure the Reputation of Another, in violation of 18 U.S.C. § 875(d). 

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Richmond Division, made the announcement after sentencing by Senior U.S. District Judge James R. Spencer.

Burruss pled guilty on October 21, 2014.  According to court documents, the victim of the scheme, T.N., is an attorney who previously represented Burruss in an Eluding Police and Driving Under the Influence (First Offense) criminal case in New Kent County, Virginia.  In November 2010, Burruss went to trial and was convicted on both offenses.  In November 2012, Burruss filed a Habeas Corpus Petition in state court, alleging ineffective assistance of counsel by T.N.  After a hearing on the matter, the Virginia Circuit Court with jurisdiction over the case rejected Burruss’s challenge.  He appealed and the case was set for oral argument before the Virginia Supreme Court on February 11, 2014. 

As part of his guilty plea, Burruss admitted that on September 12, 2013, he filed a Virginia State Bar complaint against T.N.  Among other allegations, Burruss stated that he believed that T.N. had mishandled the New Kent County criminal case and had inappropriate communications and contact with Burruss’s friend, S.B., and another woman leading up to and after the criminal case that affected T.N.’s representation.  Included with the complaint, Burruss attached several embarrassing email and text messages between T.N. and three other women.  Also included were affidavits from S.B. and another woman detailing some of their interactions with T.N. before and after the New Kent County criminal case.  These emails, text messages, and affidavits later served as the basis for Burruss’s extortionate threats against T.N. 

From January 23-26, 2014, Burruss, with the assistance of S.B., began a direct email exchange with T.N. in which Burruss communicated extortionate demands.  In a series of three emails, his demands evolved, ultimately requiring that to avoid disclosure of the embarrassing communications to the press, T.N. would have to submit an affidavit to the Virginia Supreme Court admitting he mishandled Burrus’s the New Kent County criminal case and repay almost $20,000 in legal fees incurred by Burruss in connection with that case. 

Burrus’s guilty plea was premised on the following extortionate communication that he caused to be sent on January 24, 2014, in response to a series of questions from T.N.:

Hi [T.N.]-

In response to your letter this morning Chris is seeking that you write an affidavit to be submitted to the Supreme Court admitting that you mishandled the case. He is also seeking complete restitution, which would include your retainer and the $20,000 in legal fees since then.  In the event that the DUI fine remains in effect he asks that you pay that, as well.  Neither of the affidavits from [C.E.] or myself were submitted to the court.  They are not yet public record, however Chris intends to move forward on Monday afternoon.  As far as the Bar is concerned we all know they would prefer to keep all of this very quiet.

Best regards-

[S.B.]

After receiving the final email on the afternoon of January 26, 2014, T.N. had no further communication with Burruss or S.B.  T.N. reported this matter to federal and state authorities, which led to the current prosecution. 

The case was investigated by the FBI’s Richmond office.  Assistant United States Attorneys Michael Gill and Heather Hart are prosecuting the case on behalf of the United States

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. 3:14-cr-135.

Second Shooter From Southside Richmond Convenience Store Convicted of Illegally Possessing a Firearm and Drug Trafficking

RICHMOND, Va. – William Bell, 30, of Richmond, Virginia, pleaded guilty today to possession of a firearm by a convicted felon in connection with a June 12, 2014 shootout at the EZ Mart convenience store and to possession with the intent to distribute cocaine base related to a September 22, 2014, vehicular pursuit with the Virginia State Police.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Charles E. Smith, 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 M. Hannah Lauck.

A federal grand jury indicted Bell on February 3, 2015.  He faces maximum sentences of 10 years in prison on the firearm charge and 20 years on the drug charge when he is sentenced on June 29, 2015.  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.

In a statement of facts filed with his plea agreement, Bell admitted that on June 12, 2014, a masked gunman later identified as DeAndre Yellardy fired multiple shots into a vehicle occupied by Bell in the parking lot of the South Richmond EZ Mart convenience store.  Both Bell and his passenger were wounded.  Bell returned fire with a .40 caliber pistol, but failed to hit Yellardy.  Bell also admitted in his statement of facts that on September 22, 2014, he refused to stop for a Virginia State Police Trooper in Richmond related to a traffic offense.  During the ensuing pursuit, Bell threw the .40 caliber pistol and approximately 13 grams of cocaine base from his vehicle.  The firearm and cocaine were later recovered.  Shell casings from the EZ Mart shooting scene were later matched to the gun recovered from Bell.  At the time of both incidents, Bell was a convicted felon, and, as a result, was prohibited from possessing a firearm.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearm, and Explosives, the Virginia State Police, and the Richmond Police Department. Assistant U.S. Attorney Erik S. Siebert is prosecuting the case on behalf of the United States.

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. 3:15-cr-20.

RICHMOND, Va. – Faye C. Morgan, 64, of Richmond, Virginia, pleaded guilty today to use of an unauthorized access device.

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. Magistrate Judge Roderick C. Young.

Morgan faces a maximum penalty of 10 years for this offense when she is sentenced on June 29, 2015.  The maximum statutory penalty 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.

In a statement of facts filed with her plea agreement, Faye Morgan admitted that she was employed for over a decade as the bookkeeper for Rawlings Wilson and Associates, an architectural firm located in Richmond, Virginia.  In that capacity, Morgan opened a credit card in the name of Rawlings Wilson without the firm’s knowledge or authorization.  From November 2003 through March 2013, Morgan charged over $159,000 to this credit card, which she used to purchase VISA and American Express gift cards in varying amounts.  Morgan paid off her charges to the credit card by making unauthorized electronic transfers from the firm’s operating accounts.  None of these payments were reflected in the firm’s accounting records.  Instead, Morgan falsified the firm’s accounting records by recording payments to the Internal Revenue Service that never actually occurred.  Besides the electronic payments to the credit card, Morgan also made numerous unauthorized electronic transfers from the firm’s operating account to pay other personal expenses, including her power, cable and phone bills.  In total, Morgan embezzled $168,009.96 from Rawlings Wilson and Associates, which ceased operating in January 2013 due to a lack of income.

This case was investigated by the Federal Bureau of Investigation.  Assistant U.S. Attorney Katherine Lee Martin is prosecuting the case on behalf of the United States.

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. 3:15cr30.

RICHMOND, Va. – Kateresea L. Ford, 42, of Glen Allen, Virginia, pleaded guilty today to one count of Health Care Fraud.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Mark R. Herring, Virginia Attorney General, made the announcement after the plea was accepted by U.S. Magistrate Judge David J. Novak.

On March 9, 2015, the United States filed a one count criminal information charging Ford with Health Care Fraud in violation of 18 .U.S.C. § 1347. Ford faces a maximum penalty of 10 years in prison when sentenced on July 9, 2015 by U.S. District Court Judge Robert E. Payne. 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.

In a statement of facts filed with the plea agreement, Ford admitted that she owned and operated Delta House LLC, a company authorized to provide services to Medicaid recipients under the age of 21. Delta House provided a community-based residential program for pregnant or parenting teenage mothers to allow them to complete their education and transition to independent living as parents. Ford submitted fraudulent claims for payment representing that 739 units of community-based residential services had been provided to twenty-one Medicaid recipients, when, in fact, no such services had been provided. As a result of Ford's fraud, Medicaid was overbilled $81,216.08.

This case was investigated by the Medicaid Fraud Control Unit of Attorney General Mark Herring's Office. Assistant U.S. Attorney Heather L. Hart and Senior Assistant Attorney General and Special Assistant United States Attorney David W. Tooker of the Virginia Attorney General's Office are prosecuting the case on behalf of the United States.

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. 3:15-cr-041.

Fraud resulted in over $800,000 in unpaid fees to select resorts

NEWPORT NEWS, Va. – Keith D. Kosco, 56, of Williamsburg, Va., pleaded guilty today to Conspiracy to Commit Mail and Wire Fraud, Aggravated Identity Theft and Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity.

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 Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office made the announcement after the plea was accepted by U.S. District Judge Robert G. Doumar.

Kosco was indicted by a federal grand jury on November 17, 2014. Kosco faces a maximum penalty of twenty years on the conspiracy count, ten years for engaging in monetary transactions with proceeds from unlawful activity, and a mandatory two year sentence for aggravated identity theft when he is sentenced on July 13, 2015.  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.

In a statement of facts filed with his plea agreement Keith Kosco, admitted to being the owner and operated of a number of entities involved in travel, tourism and timeshare businesses including Resort Realty, Inc., Resort Solutions, Inc., and Exotic Equity Transfers, LLC (“EET”). A timeshare unit, generally a fully furnished resort accommodation, is a deeded or non-deeded interest in real estate divided into intervals, most commonly by week.  Since at least 2007, EET conducted timeshare transfers in exchange for a fee charged to the original owner.

Keith Kosco and his employees represented that the timeshare unit transfers conducted by EET would be legitimate and result in clean title passing to a new owner with no further obligations of timeshare ownership (including maintenance fees) on the original owner once the transfer was complete. Transfer paperwork was handled by EET in coordination with Professional Closing Company which served as a third party closing entity, and was operated by co-defendant Julie Duffield.  From at least 2009 – 2013, Kosco, Duffield and their employees conducted fraudulent transfers of over 1,000 timeshare units into the names of stolen identities, including Kosco’s incarcerated daughter, who were unaware that they were receiving these properties, and straw buyers (about ten total), who they paid $35-$50 for each transferred unit.  The defendants collected fees for conducting the transfers from the original owners.  None of the stolen identities / straw buyers paid the required maintenance fees or taxes on the timeshare units, resulting in over $800,000 in losses to select resorts for the unpaid fees.  Kosco, Duffield and their employees engaged in various fraudulent acts in support of the scheme, including false reps and promises to resorts, propping up stolen identities with email accounts, bank accounts and tax returns, falsely notarizing signatures and preparing fraudulent deed paperwork. The transfers also had devastating impacts on the credit of the stolen identities/straw buyers. Julie Duffield pled guilty on January 12, 2015, to conspiracy to commit mail and wire fraud. Her sentencing is scheduled for May 5, 2015. In a related case, Brendan Hawkins pled guilty on December 22, 2014, to conspiracy to commit mail fraud and his sentencing is scheduled for April 20, 2015.

This case was investigated by the FBI and the Internal Revenue Service. Assistant U.S. Attorneys Brian J. Samuels and Kaitlin C. Gratton are prosecuting the case on behalf of the United States.
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. 4:14cr66.

NORFOLK, Va. – Diamond Latroy Hawkins, Jr., 39, of Virginia Beach, was sentenced today to seven years in prison, followed by twenty years of supervised release, for transporting women for prostitution.

Dana J. Boente, United States Attorney for the Eastern District of Virginia; John S. Adams, Special Agent in Charge of the Federal Bureau of Investigations’ Norfolk Field Office; and James A. (Jim) Cervera, Chief of Police, Virginia Beach Police Department, made the announcement after sentencing by United States District Judge Raymond A Jackson.

Hawkins pled guilty on October 16, 2014.   According to court documents, between August of 2009 and April of 2014, Hawkins was a pimp who prostituted multiple women in Virginia and Florida, as well as other locations.  Hawkins would recruit these women to work for him and, once they agreed, he took all the money they made and kept control over their movements through physical violence, threats of harm to them and their families, and protracted sexual and verbal abuse.  In March 2013, Hawkins forced a group of his prostitutes to move to Florida with him in the hopes of getting better rates for their services.
 
This case was investigated by the FBI and the Virginia Beach Police Department.  Assistant United States Attorneys Elizabeth M. Yusi and V. Kathleen Dougherty prosecuted the case on behalf of the United States.

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. 2:14cr98

NORFOLK, Va. – Michael Odell Shaddeau, 31, of Chesapeake, Virginia, was sentenced today to 10 years in prison, followed by 15 years of supervised release for distribution of child pornography. 

Shaddeau pleaded guilty to a criminal information on December 2, 2014. According to court documents, Shaddeau was discovered distributing and trading images of child pornography via e-mail using his Sony PlayStation Vita handheld console.  Homeland Security Investigations and   parallel agencies made the discovery which resulted in Shaddeau’s identification.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Clark Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Washington, D.C., and Colonel K. L. Wright, Chief of Police, Chesapeake Police Department, made the announcement after sentencing by Senior U.S. District Judge Robert G. Doumar. 

This case was investigated by Homeland Security Investigations and the Chesapeake Police Department.  Assistant U.S. Attorney Elizabeth M. Yusi 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. 2:14cr143

NORFOLK, Va. – Douglas Lawrence True, 23, formerly of Owensboro, KY, was sentenced today to 20 years in prison, followed by a life term of supervised release for receiving child pornography.

Dana J. Boente, United States Attorney for the Eastern District of Virginia and Susan E. Triesch, Special Agent-in-Charge of the Naval Criminal Investigative Service Norfolk Field Office, made the announcement after sentencing by United States District Judge Mark S. Davis.

True pled guilty to the charge on November 10, 2014.  According to court documents, True, an active duty sailor, came to the attention of investigators based upon the improper use of a Navy laptop computer.  During an interview with True, the command developed probable cause to seize and search True’s cellphone.  Investigators forensically analyzed the cellphone and found images of child pornography.  In addition, agents learned that True was communicating with many different minors and enticing them to send explicit photos of themselves to him.  Agents also found messages between True and his co-defendant, Rebecca Gibbs.  In these communications, True convinced Gibbs to create child pornography videos and images and send them to him. 

Rebecca Gibbs pleaded guilty to production of child pornography on September 30, 2014 and was sentenced on January 5, 2015 to 17 ½ years in prison, followed by a life term of supervised release.

This case was investigated by the Naval Criminal Investigative Service.  Assistant U.S. Attorney Joseph L. Kosky and Special Assistant United States Attorney Alyssa Nichol prosecuted the case on behalf of the United States.

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. 2:14-cr-97.

RICHMOND, Va. – Marvin Leon Clair, 61, of Richmond, Virginia, was sentenced today to sixty months in prison, followed by three years of supervised release, for Conspiring to Commit Mail Fraud, Wire Fraud, and Making False Statements to FDIC-Insured Institutions.  He was also ordered to pay restitution in the amount of $1,770,670.72.  Two other defendants were also sentenced on charges arising from the same scheme.  Janelle Irene Davis, 47, of Waynesboro, Virginia, and Jeffrey Paul Evans, 53, of Waldorf, Maryland, were each sentenced to one day of incarceration followed by three years of supervised release and seven months of home detention for, respectively, Conspiring to Commit Mail Fraud, Wire Fraud, and Make False Statements to FDIC-Insured Institutions and Bank Fraud.  Davis was ordered to pay restitution in the amount of $818,978 and Evans was ordered to pay restitution in the amount of $777,283.  
      
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Adam Lee, Special Agent-in-Charge of the Federal Bureau of Investigation Richmond Field Office; Cary Rubenstein, Special-Agent-in-Charge of the HUD-OIG Philadelphia Field Office; Gary Barksdale, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; and Douglas S. Mease, Special Agent-in-Charge of the U.S. Secret Service Richmond Field Office, made the announcement after sentencing by U.S. Senior District Judge Robert E. Payne.

Clair pled guilty on September 10, 2014.  Davis pled guilty on February 25, 2014.  Evans pled guilty on February 7, 2014.  According to court documents, Clair, Davis, and Evans were all involved in a scheme to obtain mortgage loans by making false statements about income, assets, and liabilities on loan applications and about the disposition of closing proceeds on HUD-1 settlement statements.  Many of the transactions were closed by Walter L. Hooker, a Richmond attorney.  Hooker was charged with Conspiracy to Commit Bank Fraud via criminal information, but died before adjudication of that charge. 
Two other defendants have been sentenced on charges arising from this scheme.  On October 27, 2014, Tiffany Nicole Robinson was sentenced to time-served followed by three years of supervised release and ordered to pay $352,975 in restitution.  On March 18, 2014, Magarette Stanton, who was employed in Hooker’s office, was sentenced to five years of probation and ordered to pay $204,803.04 in restitution. 

This case was investigated by the Federal Bureau of Investigation; Department of Housing and Urban Development—Office of Inspector General; U.S. Postal Inspection Service; and U.S. Secret Service.  Assistant U.S. Attorney Michael C. Moore is prosecuting the case on behalf of the United States.

ALEXANDRIA, Va. – James Glenn Warner, 44, of Manassas, Virginia, waived indictment and pleaded guilty to soliciting a $500,000 bribe from executives working for a private company on a contract that Warner managed out of the Pentagon.

According to court documents, in October 2014, Warner made arrangements to meet with two executives of Company A, a Virginia-based company which held a five-year contract with the Department of the Army worth up to $120 million.  At the meeting, which took place at a restaurant located in the Pentagon Centre in Arlington, Virginia, Warner instructed the two executives to communicate with him by typing messages into his cell phone, which was passed around the table.  Warner then passed a menu to the two executives.  Inside the plastic covering for the center section of the menu was a piece of paper which outlined a bribe and extortion solicitation, suggesting that if Company A paid $500,000 it would secure a contract renewal from the Department of the Army and that alleged damaging information about Company A would be destroyed.  The Company A executives declined Warner’s solicitation, reported the conduct and began cooperating with law enforcement agents.  Acting at the direction of law enforcement, a Company A executive then met with Warner on five subsequent occasions, paying Warner a total of $150,000 cash bribes out of the total $500,000 solicited by Warner.  On January 28, 2015, at the last of these meetings, Warner was arrested while in possession of $100,000 in bribe payments.

Warner faces a maximum penalty of 15 years in prison, up to a $1.5 million fine, and mandatory forfeiture of criminal proceeds when he is sentenced on June 19, 2015.  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; Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office; Robert E. Craig, Special Agent in Charge, Mid Atlantic Field Office, Defense Criminal Investigative Service; and Frank Robey, Director, Major Procurement Fraud Unit, 701st Military Police Group, U.S. Army Criminal Investigation Command, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema.

This case was investigated by the FBI’s Washington Field Office, the Defense Criminal Investigative Service, and the U.S. Army Criminal Investigative Command. Assistant U.S. Attorneys Kosta S. Stojilkovic and Mark D. Lytle are prosecuting the case.

Any person who believes they may have information regarding public corruption in the Northern Virginia area is encouraged to call the FBI’s Northern Virginia Public Corruption Hotline at 703-686-6225.

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. 1:15-cr-77.

ALEXANDRIA, Va. – Lend Lease Construction, Inc., a global company locally based in Rockville, Maryland, and Cindell Construction Company, based in Frederick, Maryland, agreed to pay a total of $400,000 to settle False Claims Act allegations in connection with an agreement to perform construction work to renovate a property the government is currently leasing in Reston, Virginia known as “Patriots Park.”

“We encourage whistleblowers to come forward in instances where the government is a victim,” said Dana Boente, U.S. Attorney for the Eastern District of Virginia. “This case exemplifies the important role whistleblowers can play in recovering money for the government.”

The purpose of the construction work was to make the property at Patriots Park compliant with General Services Administration (GSA) and Department of Defense security regulations and requirements. Pursuant to the lease agreement, the construction work on the Patriots Park project is subject to the requirements of the Davis-Bacon Act and the Contract Work Hours and Safety Standards Act (CWHSSA). The Davis-Bacon Act requires government contractors to pay the prevailing wage to workers as set by the Secretary of Labor for the corresponding class of laborers and mechanics in the state in which they are employed. The CWHSSA requires that workers be compensated at time and a half their prevailing wage rate for all hours worked over 40 hours per week for contracts subject to the prevailing wage. Lend Lease was hired by the owner of the property to provide construction management services; Lend Lease, in turn, subcontracted with Cindell to perform drywall installation. 

The United States will receive $400,000 to settle allegations that Lend Lease and Cindell submitted false claims to the government after lower-tier subcontractors hired by Cindell underpaid workers and failed to compensate the workers properly for overtime hours despite certifying compliance on weekly certified payrolls.

The investigation was initiated after a lawsuit was filed under the qui tam or whistleblowerprovisions of the False Claims Act, which permit private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to receive a share of any recovery. The False Claims Act permits the government time to investigate allegations in qui tam complaints and to intervene in such lawsuits, when the government deems it appropriate.  The whistleblower will receive $72,000 from the settlement. 

This resolution in this matter was the result of a coordinated effort between the United States Attorney’s Office for the Eastern District of Virginia, the Department of Labor Office of Inspector General, and the GSA Office of Inspector General. The matter was investigated by Assistant United States Attorney Monika Moore and former Special Assistant United States Attorney Erin Murdock-Park.  The civil claims settled by this False Claims Act agreement are allegations only; there has been no determination of civil liability. 

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. 1:12-cv-1170.

ALEXANDRIA, Va. – Lend Lease Construction, Inc., a global company locally based in Rockville, Maryland, and Cindell Construction Company, based in Frederick, Maryland, agreed to pay a total of $400,000 to settle False Claims Act allegations in connection with an agreement to perform construction work to renovate a property the government is currently leasing in Reston, Virginia known as “Patriots Park.”

“We encourage whistleblowers to come forward in instances where the government is a victim,” said Dana Boente, U.S. Attorney for the Eastern District of Virginia. “This case exemplifies the important role whistleblowers can play in recovering money for the government.”

The purpose of the construction work was to make the property at Patriots Park compliant with General Services Administration (GSA) and Department of Defense security regulations and requirements. Pursuant to the lease agreement, the construction work on the Patriots Park project is subject to the requirements of the Davis-Bacon Act and the Contract Work Hours and Safety Standards Act (CWHSSA). The Davis-Bacon Act requires government contractors to pay the prevailing wage to workers as set by the Secretary of Labor for the corresponding class of laborers and mechanics in the state in which they are employed. The CWHSSA requires that workers be compensated at time and a half their prevailing wage rate for all hours worked over 40 hours per week for contracts subject to the prevailing wage. Lend Lease was hired by the owner of the property to provide construction management services; Lend Lease, in turn, subcontracted with Cindell to perform drywall installation. 

The United States will receive $400,000 to settle allegations that Lend Lease and Cindell submitted false claims to the government after lower-tier subcontractors hired by Cindell underpaid workers and failed to compensate the workers properly for overtime hours despite certifying compliance on weekly certified payrolls.

The investigation was initiated after a lawsuit was filed under the qui tam or whistleblowerprovisions of the False Claims Act, which permit private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to receive a share of any recovery. The False Claims Act permits the government time to investigate allegations in qui tam complaints and to intervene in such lawsuits, when the government deems it appropriate.  The whistleblower will receive $72,000 from the settlement. 

This resolution in this matter was the result of a coordinated effort between the United States Attorney’s Office for the Eastern District of Virginia, the Department of Labor Office of Inspector General, and the GSA Office of Inspector General. The matter was investigated by Assistant United States Attorney Monika Moore and former Special Assistant United States Attorney Erin Murdock-Park.  The civil claims settled by this False Claims Act agreement are allegations only; there has been no determination of civil liability. 

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. 1:12-cv-1170.

NORFOLK, Va. – Michael Angelo Perry, 46, of New York, NY, was sentenced today to 10 years in prison, followed by 3 years of supervised release for possession with intent to distribute heroin.

Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Karl C. Colder, Special Agent in Charge for Drug Enforcement Administration’s (DEA) Washington Office made the announcement after sentencing by U.S. District Judge Raymond A. Jackson.

Perry pled guilty on November, 24, 2014.  According to court documents, Perry operated throughout Norfolk.  Perry was selling heroin from his vehicle using a Super 8 motel room in Ocean View.   Perry was selling heroin at the Janaf Shopping Center when he was arrested on July 14, 2014.  Investigators recovered 14.72 grams of heroin, $1,718 in U.S. currency, and paraphernalia from the trunk of his vehicle that day.  At the time of his arrest, he gave investigators written consent to search his motel room.   A search of Perry’s motel room resulted in the recovery of 34.22 grams of heroin and a large quantity of a cutting agent used to manufacture heroin for distribution.

This case was investigated by DEA’s Norfolk Resident Office with the assistance of the Norfolk Police Department.  Assistant U.S. Attorney Kevin Comstock prosecuted the case on behalf of the United States.