Eastern District of Virginia

RICHMOND, Va. – Vernon Matthews, 42, of Chesterfield, Virginia, pleaded guilty today to Mail Fraud, in violation of Title 18, United States Code, Section 1341.  Matthews faces a maximum of 20 years imprisonment, a $250,000 fine, and 3 years of Supervised Release when he is sentenced by United States District Judge Henry E. Hudson on December 6, 2013. 

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field office; and United States Postal Inspection Service, Richmond Inspector in Charge Keith Fixel made the announcement.  

            In a statement of facts filed with his plea agreement, Matthews admitted to operating First Capital Group (FCG), located at 4624 Pembroke Boulevard, Suite 102, Virginia Beach, Virginia.  He solicited United States Military personnel and their dependents to make investments with FCG, with misrepresentations about how the investment funds would be used, the security of the investments, and the promised amount of returns, which he represented ranged from 4% to 300%.  The defendant also misrepresented his affiliation with reputable investment companies and funds, including HB Group and American Funds.  In connection with his guilty plea, Matthews admitted that he did not have any relationship with HB Group or American Funds, and no investor funds were provided to either of those companies or any other investment-type company.  Instead, the defendant misappropriated the investors’ money, causing it to be used for the defendant’s own personal use and benefit to the investors’ detriment.  

The charged mail fraud centered around the defendant’s acts in defrauding investor A.G., a graduate of the U.S. Naval Academy who was attending medical school.  Through various communications, Matthews led A.G. to believe her investment monies would be transferred to a mutual fund with a guaranteed 7.27% rate of return.  That promised return was later revised to a higher amount (10%-12%), provided A.G. invested additional monies with the defendant.  A.G., in turn, invested the following amounts with FCG: $20,000 (12/21/2010); $3,500 (5/18/2012); and $6,000 (10/20/12).  Although Matthews had promised that these funds would be put in an investment fund, he did not transfer any of A.G.’s money to that promised destination.  When A.G. later tried to withdraw her investment funds, the defendant delayed returning her funds and later mailed her a refund check in the amount of $32,328.55.  Upon receipt of the mailing, A.G. attempted to cash the check but it bounced. 

Overall, from about July 2010 until about May 2013, Matthews received over $235,600 in funds from the victim investors.  The defendant did not invest any of those monies as promised and used the overwhelming majority of the funds for his own benefit. 

The investigation was jointly coordinated by the Richmond office of the FBI and the Richmond office of the United States Postal Inspection Service.  Assistant United States Attorney Michael Gill is prosecuting the case on behalf of the United States.

This investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia.  The task force is comprised of several federal and state agencies, including the Virginia Attorney General’s Office.  The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force (FFETF), an interagency national task force.

The FFETF was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

ALEXANDRIA, Va. –Royce DeWeese, 26, of Cherry Hill, New Jersey, pleaded guilty today to charges of travel with intent to engage in illicit sexual conduct with a minor.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Scot R. Rittenberg, Acting Special Agent in Charge, United States Department of Homeland Security, Homeland Security Investigations (HSI), Washington, D.C., made the announcement after DeWeese’s hearing before United States District Court Judge T. S. Ellis, III.

            According to court documents and court proceedings today, between March and May 2013, DeWeese communicated over the Internet with an undercover HSI agent.  DeWeese made a plan with the undercover agent to travel to Fairfax, Va. in order to engage in sexual activity with the undercover’s supposed 10-year-old daughter.  On May 14, 2013, DeWeese did travel from New Jersey to Fairfax, Va., where law enforcement arrested him.

            DeWeese pled guilty to one count of travel with intent to engage in illicit sexual conduct, in violation of 18 U.S.C. § 2423(b), and faces a maximum sentence of 30 years in prison at sentencing, which is scheduled for December 6, 2013.

The investigation was conducted by Homeland Security Investigations with assistance from the Northern Virginia-District of Columbia Internet Crimes Against Children Task Force. Special Assistant United States Attorney Alicia J. Yass, a Trial Attorney with the Child Exploitation and Obscenity Section of the U.S. Justice Department’s Criminal Division, are prosecuting the case on behalf of the United States.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

ALEXANDRIA, Va. – Bosung Shim, 24, of Rockville, MD, was sentenced today to three months in prison, followed by seven months in community confinement and three years of supervised release, for unauthorized access of a protected computer.  In addition, Shim was required to pay $31,653.24 in restitution to the victim and forfeit the computer equipment used in the crime.

Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia, and Kathy A. Michalko, Special Agent in Charge for the United States Secret Service’s Washington Field Office, made the announcement after sentencing by United States District Judge T.S. Ellis, III.

Shim pleaded guilty on October 4, 2013 to one count of computer intrusion.  In a statement of facts submitted with the plea agreement, Shim admitted that from approximately June 2011 through December 2012, Shim repeatedly attempted to gain unauthorized access to multiple victims’ computers, specifically the University of Michigan and the Association of American Medical Colleges (“AAMC”).  In 2012, over a period of six months, Shim attempted to hack into the AAMC’s computers in order to change his Medical College Admissions Test scores.  When Shim was unable to hack into the AAMC’s computers himself, he hired a number of other hackers to do it for him, causing tens of thousands of dollars in damage to the AAMC.  Shim also perpetrated related fraud against additional victims, including the National Institutes of Health.

This case was investigated by the United States Secret Service.  Special Assistant United States Attorney Peter V. Roman, who is on detail from the Justice Department’s Computer Crime and Intellectual Property Section, and Assistant United States Attorney Ryan K. Dickey prosecuted the case on behalf of the United States.

RICHMOND, Va. – Lawrence Paul Sayers, 32, of Chesterfield County, Va., pleaded guilty today to production of child pornography.  Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Kenneth T. Cuccinelli, II, Attorney General of Virginia, made the announcement after the plea was accepted by United States Magistrate Judge David J. Novak.

Sayers was indicted on July 16, 2013, by a federal grand jury on four counts of production of child pornography.  Sayers faces a mandatory minimum sentence of fifteen years’ imprisonment up to a maximum of thirty years’ imprisonment when he is sentenced on December 12, 2013, by Senior United States District Court Judge Robert E. Payne.

According to a statement of facts filed with the plea agreement, the Chesterfield County Police Department (“CCPD”) executed a search warrant at Sayers’s residence in Chesterfield County on May 12, 2013.  During the search, the CCPD recovered two cellular telephones, which were both locked.  The CCPD asked the Federal Bureau of Investigation (“FBI”) for assistance in forensically examining the cellular telephones.  The forensic examination revealed approximately forty images and five videos depicting an eight-to-nine-year-old female engaged in sexually explicit conduct with an unidentified adult male.  On June 28, 2013, after Sayers was advised of his Miranda rights and waived those rights, FBI agents interviewed him.  During the interview, Sayers admitted that he was the unidentified adult male engaged in sexually explicit conduct with the juvenile female depicted in the images and videos recovered by the FBI.  Sayers also admitted producing the images and videos with his cellular telephones in his residence in Chesterfield County, Va.

This case was investigated by the Chesterfield County Police Department and the Federal Bureau of Investigation.  Special Assistant United States Attorney Thomas K. Johnstone IV is prosecuting the case on behalf of the United States.

RICHMOND, Va. – Reuben Thomas, 34, of Richmond, Virginia, pleaded guilty today to stealing 2 electrical generators from the American Victory Base Complex in Baghdad, Iraq on June 17, 2009.   

               Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office of the Federal Bureau of Investigation, made the announcement after the guilty plea before Magistrate Judge M. Hannah Lauck.  

               At the sentencing before the Honorable Robert E. Payne on November 21, 2013, Thomas is facing a maximum sentence of 10 years in prison and a fine of $250,000. 

               Thomas was a civilian employed as a Site Lead Property Book Manager by Honeywell Technologies Solutions, Inc., an American company that had a military contract and subcontract with the Department of Defense (DOD) to assist in its mission at the Camp Victory Base Complex (VBC) in Bagdad, in the Republic of Iraq (Iraq).

               According to documents filed with the court, a shortage of reliable electricity was a problem in Iraq during the period of occupation by coalition forces following the 2003 invasion.  To fulfill its mission, DOD had many contracts to create and import into Iraq a wide variety of electrical generators.  Forces opposing the United States also had the same electrical problems.  This demand helped form an active black market for these electrical generators. 

               One such generator purchased by the DOD was a 1.1 Megawatt, approximately 20,000 pound, diesel generator manufactured by F. G. Wilson, Model Number P1250P3/P1375E3.  These generators were typically used as prime power in Iraq, meaning that they supplied continuous electrical power in places where there was no commercial power available.  The price per generator was $176,055.00. 

               As part of the investigation into the June 17, 2009, theft of the two generators, it was determined that a rough terrain container handler (hereafter referred to as “retch”) was used to lift the generators from the sandy storage yard on to two flatbed trucks.

               In the Statement of Facts, Thomas admitted that he participated in obtaining permission to borrow the retch and the escorting of the retch to the generator  storage yard on the west side of the VBC.  At the storage yard, the retch was used to steal the generators by loading them on to two flatbed trucks which transported the generators off the VBC.  Thomas then escorted the retch back to the military facility on the east side of the VBC.

               This case was the product of an investigation by the FBI and the Criminal Investigation Division of the United States Army.  Assistant United States Attorney David T. Maguire and Department of Justice Trial Attorney J. P. Cooney are prosecuting the case on behalf of the United States.

RICHMOND, Va.– A principal of A&O Resource Management Ltd. has been resentenced for his role in a $100 million life settlement fraud scheme, which included more than 800 victims across the United States and Canada.  Today, Adley H. Abdulwahab, 38, of Houston, a hedge fund manager and part owner of A&O, was resentenced to 60 years in prison.

Abdulwahab originally was sentenced to 60 years in prison on September 28, 2011.  On April 29, 2013, the United States Court of Appeals for the Fourth Circuit reversed five of Abdulwahab’s money laundering convictions.  Today United States District Judge Robert E. Payne resentenced Abdulwahab to the same term of imprisonment on the remaining counts of conspiracy, mail fraud, and securities fraud.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service; Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation; and Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after sentencing by Judge Payne.

On September 7, 2010, a federal grand jury returned an 18-count indictment against Abdulwahab, Christian Allmendinger, 40, and David White, 41.  White and four others associated with the fraud scheme pleaded guilty in the fall of 2010. Allmendinger was convicted at trial on March 23, 2011, and Abdulwahab was convicted at trial on June 10, 2011.

According to court records and evidence presented at trial, the principals at A&O engaged in a scheme to defraud investors by making misrepresentations about such things as A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds.  Both Abdulwahab and Allmendinger were active in the day-to-day management of the companies, as well as in the marketing of A&O life settlement investment products to investors. Abdulwahab also lied to investors about having a college degree in economics, as well as failing to disclose to investors that he previously pleaded guilty to a felony charge of forgery of a commercial instrument in Texas state court.

When state regulators began to scrutinize A&O’s investment products, Abdulwahab and others manufactured a sham sales transaction to “sell” A&O to a shell corporate entity named Blue Dymond and later to another shell corporate entity named Physician’s Trust. This sale ended Allmendinger’s association with the fraud scheme; however, A&O and Physician’s Trust were still secretly controlled by Abdulwahab and his co-conspirators, who continued the fraud scheme through September 2009. The A&O fraud scheme caused more than 800 investors, many of whom were elderly, to lose more than $100 million. The vast majority lost all of their investment, which represented for many all of the money they had saved for their retirement.

Evidence at trial showed that Abdulwahab and the other A&O principals used the investors’ money for personal enrichment, including purchasing multi-million dollar homes, luxury cars, a 15-carat diamond ring and other property.

On September 27, 2011, Allmendinger was sentenced to 45 years in prison.  On June 22, 2011, five other individuals connected with the A&O fraud scheme were sentenced: Russell E. Mackert, 52, general counsel for A&O, was sentenced to 188 months in prison; Brent Oncale, 36, former owner and founder of A&O, was sentenced to 120 months in prison; White, the former president of A&O, was sentenced to 60 months in prison; Eric M. Kurz, 47, a wholesaler of A&O investment products, was sentenced to 60 months in prison; and Tomme Bromseth, 69, an A&O sales agent in the Richmond area, was sentenced to 36 months in prison.

This investigation was conducted by the U.S. Postal Inspection Service, Internal Revenue Service, and FBI, with significant assistance from the Texas State Securities Board, the Virginia Corporation Commission and the SEC. These cases are being prosecuted by Assistant U.S. Attorneys Michael S. Dry and Jessica D. Aber from the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr., of the Criminal Division’s Fraud Section.

The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.

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

NORFOLK, Va. – Keith Jermaine Everett, 34, of Norfolk, Virginia, was sentenced today to 188 months in prison, followed by five years of supervised release, for conspiracy to distribute and possess with intent to distribute cocaine.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia and Royce E. Curtin, Special Agent in Charge, Federal Bureau of Investigation Norfolk Office, made the announcement after sentencing by United States District Judge Mark S. Davis.

Everett waived indictment and pleaded guilty to a criminal informationon May 29, 2013.  The criminal information charged him with conspiracy to distribute and possess with intent to distribute 500 grams or more cocaine.   According to court documents, Everett distributed cocaine and marijuana on a regular basis in Norfolk and surrounding cities.  On December 18, 2012, a controlled purchase of cocaine was conducted by law enforcement from Everett at a location on North Military Highway in Norfolk. 

This case was investigated by the Norfolk Field office of the Federal Bureau of Investigation and the Norfolk Police Department. Assistant United States Attorney Sherrie S. Capotosto prosecuted the case on behalf of the United States.

ALEXANDRIA, Va. – William Joseph Stuart, age 52, of Bealton, Va., the former President of the Remington Volunteer Fire Department, pleaded guilty today to one charge of theft from a program receiving federal funds.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Thomas J. Kelly, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation, made the announcement after the plea was accepted by United States District Judge Leonie M. Brinkema.  Stuart was indicted on July 25, 2013, by a federal grand jury with one count of Theft from an Organization Receiving Federal Funds.  Stuart faces a maximum penalty of 10 years when he is sentenced on November 15, 2013.

In a statement of facts filed with the plea agreement, Stuart admitted that between September 2008 and April 2009, he did steal funds totaling more than $40,000 from the Remington Volunteer Fire & Rescue Department (“RVFD”) in Remington, Virginia by submitting false and fraudulent invoices to the RVFD.  Stuart admitted that he then wrote checks to himself and acquired a second signature from another RVFD officer based on the false invoices that Stuart created.

This case was investigated by the Federal Bureau of Investigation’s Washington Field Office and the Internal Revenue Service, Criminal Investigation.  Assistant United States Attorney Mark D. Lytle is prosecuting the case on behalf of the United States.

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.

NEWPORT NEWS, Va. – Gabriel Daniel Morrison Mitchell, 32, of Norfolk, Va. was sentenced on Friday to 260 months in prison.  Mitchell was convicted by a federal jury on June 22, 2012, on charges of conspiracy to commit robbery, robbery, carjacking, and brandishing a firearm during a crime of violence.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Carl J. Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the sentencing by United States District Judge Mark S. Davis. 

On January 10, 2012, Gabriel D. M. Mitchell and co-defendant, Antonio D. McGhee,  carjacked a Sears delivery truck while it was delivering appliances in Hampton, Virginia. They were given information as to the property on the truck and the delivery schedule by an employee of a Sears sub-contractor, Travis Williams, who posed as one of the two victims. The actual victim was handcuffed, duct taped, and blind folded while Williams was barely restrained.  Mitchell and McGhee used a U-Haul truck to off load the appliances. The Sears appliances were later recovered. McGhee was also convicted by a jury on June 22, 2012, and on February 4, 2013, was sentenced to 244 months in prison.

            This case was investigated by Bureau of Alcohol, Tobacco, Firearms and Explosives and assisted by Hampton Police Department.  Assistant United States Attorney Howard J. Zlotnick and Brian J. Samuels prosecuted this case on behalf of the United States.

NORFOLK, Va. – Prince Lee, 20, Henry Olson, 21, and Arielle Pierre, 21, all from New York, have been indicted by a federal grand jury on charges of conspiracy, transportation for prostitution and coercion and enticement.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia and Royce E. Curtin, Special Agent in Charge, Federal Bureau of Investigation Norfolk Office, made the announcement.

Lee, Olson, and Pierre all face a maximum penalty of 20 years if convicted.

According to the indictment, on May 15 2013, Prince Lee and a young woman posted an ad on craigslist.com in Hampton Roads offering to sell the woman as a “sex slave” for $10,000.  The Virginia Beach Police Department was monitoring the site and came across the ad and responded.  The undercover officer spoke with Prince Lee, of New York, and the young woman and they agreed to sell three women for approximately $225,000.  They agreed to meet in Virginia Beach on June 1st.  Prince Lee and Henry Olson recruited Jane Doe 1, a 30 year-old also from New York, and told the woman she would receive $10K just to hang out with a friend of Prince Lee’s in Virginia.  After much persuasion, she agreed.  Arielle Pierre and Prince Lee recruited Jane Doe 2 also to spend a few hours with the man.  Neither of the women was told that they were being “sold” to the man.  Lee, Olson, Pierre and two others drove with the Jane Does from New York and arrived in Virginia Beach on the morning of June 1.  Under observation by the police, Lee and Pierre were seen yelling at and grabbing the Jane Doe 2, trying to force the woman to remain and go to the “date.”  Jane Doe 2 eventually ran into a nearby hotel, where employees hid her in the back room.  Prince Lee also threatened to desert Jane Doe 1 in Virginia and throw away her car keys if she did not go forward with the plan.  In the afternoon of June 1, the UC arrived for the “date” and all defendants were arrested. 

This case was investigated by the Virginia Beach Police Department and Federal Bureau of Investigation. Assistant United States Attorney Elizabeth Yusi 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.

United States Attorney for the Eastern District of Virginia (EDVA) Neil H. MacBride, announced today that he is stepping down as United States Attorney, effective midnight September 13, 2013.  An acting United States Attorney will be appointed until a permanent replacement is nominated and confirmed by the U.S. Senate. 

            “It has been a dream job to serve as U.S. Attorney in the Eastern District of Virginia for the last four years,” said United States Attorney Neil H. MacBride.  “My first job as a lawyer was clerking for Judge Henry Morgan here 21 years ago, and my wife and I have lived and raised our children in this District.  Not only is EDVA home to great symbols of our country – the Pentagon, the CIA, the Norfolk Naval Base - we are also blessed to have the most talented and dedicated prosecutors and professional staff in the Justice Department.  The sacrifice and hard work of my colleagues make our communities safer and I will miss being part of their tireless pursuit of justice.  I am incredibly grateful to the President and Attorney General Holder for the confidence and trust they placed in me and for the experience of leading this great office.”

            “Throughout his tenure as United States Attorney for the Eastern District of Virginia, Neil has worked tirelessly to make a lasting difference for Americans across – and far beyond – his district,” said Attorney General Holder.  “At every turn, he has exemplified the highest standards of excellence, integrity, and professionalism.  He has distinguished himself as an exceptional leader, a committed public servant, and a brilliant attorney – handling complicated cases with extraordinary skill.  Over the many years we have worked together, I’ve always been grateful for Neil’s dedicated service, his personal friendship, and his principled stewardship of our nation’s justice system.  I am certain that his enduring contributions, his many achievements, and his fine example will guide the men and women who serve the Eastern District for years to come.  And I wish him all the best as he takes the next steps in his already remarkable career.”

            Mr. MacBride was appointed by President Obama and unanimously confirmed by the United States Senate, on September 15, 2009, to a four year term.  Under MacBride’s leadership, EDVA has adopted a proactive, strategic approach to prosecuting crime, focused on disrupting local, national and international threats.  From financial fraud to terrorism, MacBride helped position EDVA to meet and confront the challenges of 21st century criminal networks.  As a result, the Eastern District of Virginia currently has cases and investigations in over 60 countries across six continents.  During his tenure as U.S. Attorney, MacBride served on the Attorney General’s Advisory Committee and chaired its Terrorism and National Security Subcommittee.  MacBride has made detecting and disrupting domestic terrorism a key priority for the office.  During MacBride’s time in office, EDVA prosecutors convicted several high-profile defendants involved in terror plots, including defendant Amine el-Khalifi, who plotted to carry out a suicide bomb attack on the U.S. Capitol, and Farooque Ahmed, who planned to bomb the Washington, D.C. metro rail system.  EDVA prosecutors also secured the first high-seas piracy convictions since 1820 for 26 Somali pirates, including the high-ranking pirate negotiator Mohammed Shibin, who attacked U.S. vessels.  

            U.S. Attorney MacBride also created the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in Virginia and across the nation.  Under his leadership, EDVA prosecutors secured fraud convictions for: bank executives that contributed to the 2008 financial crisis; mortgage lenders that contributed to the collapse of one of the 25 largest banks in the United States; stock manipulators; inside traders; contractors that cheated the government and the U.S. military; and life settlement schemers who preyed on the elderly. 

            During his tenure, MacBride dramatically expanded EDVA’s Affirmative Civil Enforcement (ACE) program, yielding more than $375 million in civil fraud recoveries against companies and individuals who engaged in procurement, programmatic, health care, and grant fraud.  The recoveries included a $199.5 million settlement with Oracle Corp. – the General Services Administration’s largest single False Claims Act recovery.   Under MacBride’s leadership, EDVA also defended the public fisc and major government programs in a wide array of civil litigation, including in high-profile constitutional, programmatic, employment discrimination and tort lawsuits.  MacBride reinforced EDVA’s commitment to civil rights by partnering with the Civil Rights Division on cases that protected victims of lending discrimination and the severely disabled, and by launching a civil rights initiative focused on protecting the rights of service members and persons with disabilities.    

            Another key priority for MacBride was protecting America’s ingenuity and intellectual property from theft.  Under his leadership, EDVA indicted Megaupload.com for alleged intellectual property infringement (valued at $500 million), in one of the largest criminal copyright cases ever brought by the United States; and Kolon Industries Inc. for allegedly engaging in a multi-year campaign to steal trade secrets valued at $200 million related to DuPont’s Kevlar technology. Since MacBride’s appointment, EDVA prosecutors have also secured convictions of defendants who operated large-scale counterfeit luxury goods businesses; engaged in music and movie piracy; and imported counterfeit computer equipment.    

            MacBride also carried on EDVA’s tradition of protecting public institutions from corruption.  Since 2009, EDVA prosecutors secured a conviction for illegal conduct and bribery by former U.S. Congressman William J. Jefferson and prevailed on appeal.  Jefferson was sentenced to 13 years in prison, the longest term ever imposed on a United States Congressman.  In addition, prosecutors obtained convictions for former Virginia Secretary of Finance John W. Forbes, II, for wire fraud, and former Virginia House Delegate Phillip A. Hamilton for bribery and extortion. 

            Further, MacBride focused on protecting children from predators.  In the past three years, EDVA has prosecuted 54 defendants for human trafficking, helped 42 juvenile trafficking victims seek justice and secured substantial sentences for traffickers to include 40, 50 year and life sentences.   EDVA prosecutors also dismantled violent and organized criminal enterprises including convictions for leaders of the MS-13 gang; the Underground Crips gang; the “Dump Squad”; Bounty Hunter Bloods; the Nine Tech Gangsters; and the Outlaw Motorcycle Gang.  Moreover, prosecutors secured convictions for the leader and members of one of the largest and most violent false document rings in the United States.  EDVA has also become a leader in prosecuting domestic and international drug trafficking operations, breaking up numerous organizations that smuggled cocaine, methamphetamine, heroin and other narcotics into the United States. 

            Prior to his time as U.S. Attorney, Neil H. MacBride spent most of his 21-year career as a government attorney, serving in all three branches of government. He served as Associate Deputy Attorney General at the Department of Justice and as an Assistant United States Attorney for the District of Columbia. MacBride was also the chief counsel for then-Senator Joseph R. Biden, Jr., Chairman of the Senate Judiciary Subcommittee on Crime and Drugs.  MacBride served as a law clerk for the Honorable Henry Coke Morgan, Jr., U.S. District Judge for the Eastern District of Virginia. Apart from his public service, MacBride practiced criminal and civil litigation at the Washington, D.C. law firm now known as DLA Piper and served as Vice President and General Counsel of the Business Software Alliance.  MacBride is a graduate of Houghton College and the University of Virginia School of Law. 

            The United States Attorney’s Office for the Eastern District of Virginia employs 300 attorneys and professional staff and serves more than six million residents living in Northern Virginia, Richmond and the Tidewater region and surrounding communities.  The District of Virginia was one of the original 13 judicial districts created by the Judiciary Act of 1789. In 1871, Virginia was divided into two districts: the Eastern and Western Districts of Virginia. Today, the Eastern District of Virginia has offices in Alexandria, Newport News, Norfolk, and Richmond, the capital of the Commonwealth.

ALEXANDRIA, Va. – Mehdi Khorramshahgol, 50, formerly of Centreville, Va., was convicted on Tuesday by a federal judge after a bench trial for violating U.S. economic sanctions on Iran by sending explosion-graded industrial parts to a petrochemical company in Iran.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, John P. Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Rick Shimon, Special Agent in Charge of the Department of Commerce’s Office of Export Enforcement’s Washington Field Office, made the announcement after the verdict by United States District Judge Gerald Bruce Lee.

Khorramshahgol faces a potential maximum penalty of 90 years of imprisonment when he is sentenced on November 1, 2013, though the anticipated sentencing guideline range is much lower.

Khorramshahgol was indicted on April 25, 2013, by a federal grand jury on four counts of violating and conspiring to violate the United States economic sanction on Iran, one count of conspiring to defraud the United States, and one count of aiding and abetting a material false statement. According to court records and evidence at trial, the defendant conspired with others in Iran to purchase industrial goods from United States businesses for the Iranian petrochemical industry.  The defendant falsely represented that the end users for his purchases were in Dubai.  After the defendant purchased the goods and shipped them to Dubai, other co-conspirators repackaged the goods for onward shipment to Tehran.  The conspiracy used a series of false invoices, false end users, and front companies to hide its illicit activity.  

This case was investigated by HSI and the Department of Commerce’s Office of Export Enforcement. Assistant United States Attorneys Carter Burwell and Andrew Peterson are prosecuting the case on behalf of the United States.

NORFOLK, Va. – Robert Patrick Hoffman II, 40, of Virginia Beach, Va., was convicted today by a federal jury of attempting to provide classified information to individuals who he believed to be representatives of the Russian Federation. 

            Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; John P. Carlin, Acting Assistant Attorney General for the Justice Department’s National Security Division; Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office; and Charles T. May, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement. 

            Hoffman faces a maximum penalty of life in prison when he is sentenced on December 2, 2103.

            Hoffman was indicted on May 8, 2013, in a one-count superseding indictment charging him with attempted espionage.  According to court records and the evidence at trial, Hoffman is a U.S. citizen born in Buffalo, N.Y., who served for 20 years in the U.S. Navy until his retirement on Nov. 1, 2011.  While serving in the Navy, Hoffman held security clearances that granted him access to classified and national defense information relating to programs and operations in which he participated.  Even though he repeatedly signed agreements to not disclose that sensitive information, on Oct. 21, 2012, he passed classified information to what he believed to be the Russian Federation.  Hoffman in fact, delivered the information to the FBI, which was conducting an undercover operation.

This case was investigated by the FBI and NCIS. Assistant U.S. Attorneys Robert J. Krask and Alan M. Salsbury, and Trial Attorney Heather M. Schmidt of the Counterespionage Section of the Justice Department’s National Security Division, are prosecuting the case on behalf of the United States.

NORFOLK, Va. – Robert Patrick Hoffman II, 40, of Virginia Beach, Va., was convicted today by a federal jury of attempting to provide classified information to individuals who he believed to be representatives of the Russian Federation. 

            Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; John P. Carlin, Acting Assistant Attorney General for the Justice Department’s National Security Division; Royce E. Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office; and Charles T. May, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement. 

            Hoffman faces a maximum penalty of life in prison when he is sentenced on December 2, 2103.

            Hoffman was indicted on May 8, 2013, in a one-count superseding indictment charging him with attempted espionage.  According to court records and the evidence at trial, Hoffman is a U.S. citizen born in Buffalo, N.Y., who served for 20 years in the U.S. Navy until his retirement on Nov. 1, 2011.  While serving in the Navy, Hoffman held security clearances that granted him access to classified and national defense information relating to programs and operations in which he participated.  Even though he repeatedly signed agreements to not disclose that sensitive information, on Oct. 21, 2012, he passed classified information to what he believed to be the Russian Federation.  Hoffman in fact, delivered the information to the FBI, which was conducting an undercover operation.

This case was investigated by the FBI and NCIS. Assistant U.S. Attorneys Robert J. Krask and Alan M. Salsbury, and Trial Attorney Heather M. Schmidt of the Counterespionage Section of the Justice Department’s National Security Division, are prosecuting the case on behalf of the United States.

ALEXANDRIA, Va. – William Orlando Contreras-Barrera, 32, an illegal alien of Guatemala, was sentenced today to 24 months in prison, followed by three years of supervised release, for illegally reentering the United States after previously being removed following a conviction for an aggravated felony.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and John Torres, Special Agent in Charge, United States Department of Homeland Security, Homeland Security Investigations (HSI), Washington, D.C., made the announcement after sentencing by United States District Judge Anthony J. Trenga.

On May 9, 2013, Contreras-Barrera was found guilty of illegally re-entering the United States.  According to court documents, Contreras-Barrera is a citizen of Guatemala who has unlawfully entered the United States on at least two occasions.  In August 2009, Contreras-Barrera was convicted of aggravated sexual battery in Arlington, Virginia and was subsequently deported to Guatemala.

This case was investigated by HSI and Special Assistant United States Attorneys John Sinfelt and Sarah Devlin prosecuted the case on behalf of the United States.

NORFOLK, Va. – Patrick R. Lambert, 56, of Virginia Beach, Va., was sentenced today to 12 months in prison, followed by three years of supervised release, for fraud in connection with a local government receiving federal funds.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia and Royce E. Curtin, Special Agent in Charge, Federal Bureau of Investigation Norfolk Office, made the announcement after sentencing by Chief United States District Judge Rebecca Beach Smith.

Lambert pleaded guilty on May 9, 2013.  According to court documents Lambert was a facilities maintenance supervisor with the City of Norfolk and was acquainted with Andrew T. Zoby, Jr., who had a plumbing contract with the City of Norfolk.  Lambert owned a home and several rental properties in the Cities of Norfolk and Virginia Beach and at various times from approximately 2006 through 2011, would request that Zoby’s plumbing business perform certain work on the properties.  Zoby’s employees performed the requested work which had a total value of $17,547.57.  Lambert did not pay Zoby or his company for the work that was performed on these properties.  In order to obtain reimbursement for these services, Zoby with the knowledge of Lambert, would submit fraudulent invoices for alleged plumbing services to the City of Norfolk.  Lambert was aware of and acquiesced in the payment of these fraudulent invoices.  As a result of this scheme, Lambert received free plumbing services in the approximate amount of $17,547.57 and Zoby was reimbursed this amount from the City of Norfolk funds.  Zoby was sentenced to 15 months in prison on July 10, 2013.  Zoby was also involved in a bribery scheme with another former city employee, Michael Brown, who is scheduled for sentencing September 25th, 2013.     

            This case was investigated by Federal Bureau of Investigation, Norfolk Office.  Assistant United States Attorney Robert J. Seidel, Jr. prosecuted the case on behalf of the United States.

RICHMOND, Va. Barton Pasco, 58, of Richmond, Va., was sentenced today to 48 months in prison, followed by 3 years of supervised release, for stealing $2.5 million from a family trust.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after sentencing by United States District Judge John A. Gibney, Jr.

Pasco pleaded guilty to one count of wire fraud on May 1, 2013.  According to court documents, Pasco was the Trustee for several of the trusts created by his parents. From 2000 through about July 2010, Pasco fraudulently obtained $2.5 million from the Trusts by transferring funds from the Trusts in the form of checks, cash withdrawals, and wire transfers for his own benefit. 

This case was investigated by the FBI.  Assistant United States Attorney Heather L. Hart prosecuted the case on behalf of the United States.

ALEXANDRIA, Va. – Ten individuals have been charged in Alexandria for their alleged involvement in a large-scale identity theft ring operating in the Washington, D.C. metropolitan area since at least January 2012.  The seven individuals arrested were:

Janero Blalock, 31, of Fort Washington, Maryland; Christopher Bush, 39, of District Heights, Maryland; Adrienne Pritchett, 42, of District Heights, Maryland; Segale Battle, 30, of Washington, D.C.; Jamille Ferguson, 31, of New York, New York, and Virginia; Tekia Thomas, 20, of Alexandria, Virginia; and
Elizabeth Monika Hunter, 19, of Fredericksburg, Virginia. 

Two additional defendants were already in state custody when federal charges were filed:  Jennifer Scruggs, 44, of Hyattsville, Maryland; and Rungnatee Pearson, 45.  An arrest warrant was issued for the remaining defendant, Kevin Middleton, 32, of Charleston, South Carolina.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Kathy A. Michalko, Special Agent in Charge for the United States Secret Service’s Washington Field Office; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after a number of the defendants made their initial appearances before U.S. Magistrate Judge John F. Anderson in Alexandria, Va.

            According to the 16-count indictment and a related criminal complaint, Blalock and Bush allegedly recruited women to steal personal information, such as social security numbers, addresses, and dates of birth, from their employers, which included a local dental practice, insurer, and rental car company.  To date, over 600 potential victims have been identified, including many overseas employees of the U.S. Department of State, the U.S. Department of Defense, and the U.S. Agency for International Development.  Members of the ring are alleged to have used the stolen identity information to manufacture fraudulent identification documents bearing their photographs and victims’ personal information, and would then use those fraudulent identification documents and victims’ social security numbers to open credit lines under victims’ names.  Through this scheme, members of the ring were allegedly able to obtain merchandise from various retailers, including Macy’s, Jared the Galleria of Jewelry, and Kay Jewelers.  To date, law enforcement has recovered 284 suspected fraudulent identification documents bearing victim information and ring members’ photographs.   

            The indictment charges the following offenses: Conspiracy to commit bank fraud, access device fraud, and identity theft, which is punishable by a maximum term of imprisonment of five years; bank fraud, which is punishable by a maximum term of imprisonment of thirty years; access device fraud, which is punishable by a maximum term of imprisonment of ten years; identity theft, which is punishable by a maximum term of imprisonment of fifteen years; and aggravated identity theft, which is punishable by a mandatory term of imprisonment of two years in addition to any other sentence.  

The investigation was conducted by the United States Secret Service and the Fairfax County Police Department, with assistance from the City of Fairfax Police Department, Prince George’s County W.A.V.E. (Washington Area Vehicle Enforcement), Prince George’s County Financial Crimes Section, the Metropolitan Washington Airport Authority, Delaware State Police, Maryland State Police, D.C. Metropolitan Police Department, U.S. Postal Inspection Service, the Office of the  Inspector General of the U.S. Department of Agriculture, and the Office of the Inspector General of the U.S. Department of State.

Assistant United States Attorney Lindsay A. Kelly and Special Assistant United States Attorney Peter V. Roman are 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 proven guilty.

NORFOLK, Va. – Diana Shipping Services S.A., a Panamanian corporation,  Ioannis Prokakis, 61, and Antonios Boumpoutelos, 56, both citizens of Greece, were convicted today after a twelve-day bench trial on charges related to the illegal discharge of waste oil and oil-contaminated waste water from the M/V Thetis, a cargo vessel operated by Diana Shipping Services.

All the defendants were convicted of conspiracy, knowing failure to fully maintain an oil record book, falsification of records and concealing tangible object in a federal investigation.  In addition, Diana Shipping Services and Prokakis were also convicted of obstruction of justice.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia and Robert G. Dreher, of the Justice Department’s Environment and Natural Resources Division,  made the announcement after the verdicts were given by United States District Judge Mark S. Davis.

Diana Shipping Services, S.A. faces a maximum fine of $5.5 million and five years of probation.  Prokakis and Boumpoutelos face a maximum sentence of 5 years for the conspiracy conviction, 6 years per failure to maintain an oil record book conviction, and 20 years per falsification of record conviction.  Prokakis faces an additional 5 year sentence for obstruction of justice.  All three defendants will be sentenced on November 8, 2013.

Diana Shipping Services S.A., Prokakis, and Boumpoutelos, were indicted on May 22, 2013, in an eleven-count superseding indictment alleging the illegal discharging of waste oil and oil-contaminated waste water in violation of the Act to Prevent Pollution from Ships.  According to court records, in September 2012, crewmembers of the M/V Thetis, a cargo vessel operated by Diana Shipping Services, reported that the vessel was discharging its bilge waste and sludge illegally by various means, including a “magic pipe” that bypassed the oily water separator.  Coast Guard inspectors boarded the vessel when it entered port in Norfolk and discovered the “magic pipe” and that the oily water separator was non-functioning.  The inspectors were also presented with an oil record book that contained false entries made by the ship’s Chief Engineer, Ioannis Prokakis and the Second Engineer Antonios Boumpoutelos.  During the inspection, Prokakis lied to inspectors about the “magic pipe” and told other members of the engineering crew to not disclose its existence to the Coast Guard inspectors.

This case was investigated by the Coast Guard Investigative Service.  Assistant United States Attorney Joseph L. Kosky and Trial Attorney Kenneth E. Nelson with the Department of Justice’s Environment and Natural Resources Division, Environmental Crimes Section, are prosecuting the case on behalf of the United States.

RICHMOND, Va. – Anthony Romey Carter, 52, of Elk Grove, California, was sentenced today to 61 months in prison, followed by 5 years of supervised release, for conspiracy to commit bank fraud and aggravated identity theft.  He was also ordered to pay $226,677.00 in restitution to Wells Fargo Bank.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and William G. Frantzen, Special Agent in Charge of the United States Secret Service’s Richmond Field Office, made the announcement after sentencing by Senior United States District Judge Robert E. Payne.

“Defendant Carter stole from Wells Fargo Bank and the account holders who entrusted their money to that institution,” said United States Attorney Neil H. MacBride.  “Theft of identities and funds will not be tolerated and we are committed to prosecuting these twenty-first century thefts.”

Carter pleaded guilty on May 10, 2013.  According to court documents, Carter admitted to participating in a conspiracy involving the unauthorized withdrawal of hundreds of thousands of dollars from accounts held at Wells Fargo Bank.  Members of the conspiracy created false forms of identification for several Wells Fargo accountholders using personal identifying information obtained without lawful authority.  Between November 2012 and December 2012, Carter traveled from California to bank branches in Virginia and South Carolina, where he posed as the individual accountholders.  Using customer account information and false forms of identification, Carter personally withdrew over $225,000 from numerous Wells Fargo accounts.  Carter and his co-conspirators divided the stolen proceeds among themselves following the withdrawals.            

This case was investigated by the United States Secret Service.  Assistant United States Attorneys Dominick S. Gerace and Michael Gill prosecuted the case on behalf of the United States.

RICHMOND, Va. – Torry Little, of Petersburg, Va., was sentenced today to 132 months in prison for possession with the intent to distribute 5 grams or more of methamphetamine and 500 grams or more of cocaine hydrochloride.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration (DEA)’s Washington Division, made the announcement after sentencing by United States District Judge James Spencer.

Little pleaded guiltyon May 9, 2013.  According to court documents, Little sold cocaine to a confidential informant on two separate occasions.  Later, officers executed a search warrant on Little’s residence and recovered 39 grams of an unusually high-purity form of methamphetamine, 1003 grams of cocaine hydrochloride, $13,218 in United States currency, and a .380 caliber handgun.

This case was investigated by the Drug Enforcement Administration and the Virginia State Police Central Virginia Regional Narcotics Task Force.  Assistant United States Attorney Erik S. Siebert prosecuted the case on behalf of the United States.

ALEXANDRIA, Va. – Seven arrests have been made in a coordinated operation spanning several states, related to the unsealing of a 17-count indictment and criminal complaint involving Gallant Pharma International Inc., an allegedly unlicensed company that is accused of distributing misbranded prescription drugs from its headquarters in Crystal City, Virginia, and an office in Springfield, Virginia.  The individuals arrested were:

Syed “Farhan” Huda, 38, of Arlington, Virginia;

Deeba Mallick, 36, of Arlington, Virginia;

Anoushirvan R. Sarraf, 47, of Rockville, Maryland;

Talib Khan, 42, of Montreal, Canada, and Barbados;

Harvey Whitehead, 67, of Troy, Michigan;

Lisa Coroniti, 46, of Devon, Pennsylvania; and

Robert J. Sparks, 30, of Springfield, Virginia.  

Munajj Rochelle, 36, a dual U.S.-Canadian citizen, is currently incarcerated in Montreal, Canada, on unrelated charges.  Arrest warrants have been issued for the remaining three defendants, Robert Wachna of Ottawa, Canada, Mirwaiss Aminzada, 43, of Montreal, Canada.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Antoinette V. Henry, Special Agent in Charge, FDA’s Office of Criminal Investigations, Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service, and Special Agent in Charge John P. Torres, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) Washington, made the announcement after the four defendants arrested in the Eastern District of Virginia – Huda, Mallick, Sarraf, and Sparks – made their initial appearances before Judge John F. Anderson. 

            According to the 17-count indictment unsealed today, Khan and Huda were principals of Gallant Pharma, which allegedly began illegally importing prescription drugs, including intravenous chemotherapy drugs and injectable cosmetics, into the United States in or around August 2009.  Gallant Pharma represented itself as a “Canadian company” and told potential customers that it sold drugs from Canada.  The indictment alleges, however, that Khan, with the assistance of Huda, Mallick, Aminzada, and others, acquired drugs from other parts of the world, including India, Switzerland, and Turkey. These drugs were allegedly not manufactured and packaged in accordance with FDA requirements and, in some cases, were not approved by the FDA for use in the United States.  The indictment states that Gallant Pharma imported the drugs with the assistance of co-conspirators in Canada and the United Kingdom, including Aminzada, who broke large shipments into many small packages, mislabeled the contents of packages, and addressed deliveries to Dr. Sarraf at his medical practice in McLean, Virginia, in order to lessen scrutiny by Customs and Border Protection.  Initially, Gallant Pharma allegedly operated out of the apartment of Huda and his wife, Mallick, in Crystal City, where Huda is alleged to have served as the day-to-day head of Gallant Pharma in the United States and Mallick had primary responsibility for processing sales invoices and customer payments.  Until June 2013, Gallant Pharma allegedly stored the misbranded drugs at an office in Springfield, Virginia.

            According to the indictment, Gallant Pharma was not licensed to distribute prescription drugs in the United States.  Nonetheless, Gallant Pharma is alleged to have sold drugs to doctors, hospitals, and medical practices across the United States, generating more than $8.6 million in revenue since August 2009.  Gallant Pharma allegedly employed a cadre of sales representatives with dedicated sales territories across the United States.

            The defendants are charged with the following offenses: conspiracy to commit importation fraud, introduction of misbranded drugs into interstate commerce, unlicensed medical wholesaling, wire fraud, and to defraud the FDA, each of which is punishable by a maximum term of imprisonment of five years; importation contrary to law, which is punishable by a maximum term of imprisonment of twenty years; introduction of misbranded drugs into interstate commerce, which is punishable by a maximum term of imprisonment of three years; unlicensed medical wholesaling, which is punishable by a maximum term of imprisonment of three years; wire fraud, which is punishable by a maximum term of imprisonment of twenty years; and monetary transactions with criminally derived proceeds, which is punishable by a maximum term of imprisonment of ten years.  

The investigation was conducted by FDA Office of Criminal Investigations, Drug Enforcement Agency Group 33 Diversion Task Force, Department of Homeland Security Office of Immigration and Customs Enforcement, the United States Postal Inspection Service, with assistance from the Arlington County Police Department.  Assistant United States Attorneys Lindsay A. Kelly, Alexander T.H. Nguyen, and Ryan K. Dickeyare 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.

RICHMOND, Va. – Samad Jafari, 55, of Henrico, Va., was sentenced to 30 months in prison for a tax evasion scheme involving his used car sales business known as United Import Company, Ltd. (United Import), and was ordered to pay restitution in the amount of $668,791.  In addition, on March 25, 2013, United Import was ordered to pay forfeiture in the amount of $735,225 as a result of its guilty plea to structuring cash deposits to prevent banking institutions from reporting currency transactions to the Internal Revenue Service (IRS).   

Neil H. MacBride, United States 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 the sentencing by United States District Judge Henry E. Hudson. 

Jafari and United Import pled guilty on March 25, 2013.  In a statement of facts filed with both plea agreements, Jafari admitted he was the owner and operator of United Import, which has been in business since 1999.  Jafari was the sole signatory and owner of a business account in the name of United Import.  He acknowledged that beginning in 2006, Jafari developed a scheme to receive cash payments for the financing of used cars, and subsequently structured cash deposits into the business account, as well as other personal bank accounts.  Jafari also created a second set of figures to provide to his accountant in preparing his 2006 and 2007 Federal Income Tax returns, which significantly understated the amount of cash payments he received for vehicle financing.  The total tax loss identified in the investigation was in excess of $698,000. 

In addition, Jafari acknowledged that, acting as President of United Import, he structured or caused to be structured, over $735,000 in cash deposits during a 24-month time period in an effort to prevent banking institutions from filing a “Currency Transaction Report” or CTR.  Banks are required to file CTRs under the Bank Secrecy Act for cash transaction in excess of $10,000, and the forms are used to detect criminal activity, including tax evasion.  To avoid the reporting requirement, which had the potential to alert the authorities to the actual amount of cash he had received, Jafari broke deposits down into multiple transactions in amounts below $10,000, and used both business and personal accounts. 

This case was investigated by the Internal Revenue Service – Criminal Investigation.  Assistant United States Attorney David T. Maguire prosecuted the case on behalf of the United States. 

ALEXANDRIA, Va. – Kathleen D. McGrade, age 64, and Brian C. Collinsworth, age 47, of Stafford, Va., pleaded guilty today to major fraud against the government, conspiracy to launder monetary instruments, and engaging in unlawful monetary transactions.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Harold W. Geisel, Acting Inspector General for the Department of State; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Section, Washington, D.C. Field Office, made the announcement after the plea was accepted by United States District Judge Liam O’Grady.

            “Defendants McGrade and Collinsworth- now convicted felons-defrauded and stole from the American people, plain and simple,” said U.S. Attorney Neil H. MacBride.  “We, along with our law enforcement partners, are committed to ferreting out and prosecuting those that destroy the integrity of the government contracting process.”

            "I commend our investigators on their excellent work in this case, and diligence in protecting taxpayer dollars," said Harold W. Geisel, Acting Inspector General, U.S. Department of State and Broadcasting Board of Governors.

            “The scope and breadth of this fraud is reprehensible, not just because of the dollars involved, but because of the position of trust that Ms. McGrady held,” said Special Agent In Charge Kelly.  “Her actions denied small businesses the opportunity to compete for these government contracts and that is unacceptable.  Today's pleas put corrupt business owners like Ms. McGrade and Mr. Collinsworth on notice, that the government will get to the truth no matter how they try to disguise their business transactions.  IRS-CI will continue to work with the United States Attorney and our other law enforcement partners to root out these corrupt business owners.”

McGrade and Collinsworth were indicted on April 25, 2013, by a federal grand jury on charges of conspiracy, major fraud against the government, wire fraud, false statements, and engaging in unlawful monetary transactions.  Each defendant faces a maximum penalty of 30 years imprisonment when they are sentenced on November 8, 2013. 

In a statement of facts filed with the plea agreement, the defendants admitted that McGrade was a contract employee for the Department of State and performed the role of a contract specialist for an office that awarded construction contracts for work done at U.S. embassies worldwide.  Collinsworth worked at one of the companies that received contracts.  In 2006, the defendants married, but did not tell others at the Department of State.  The defendants started a company, the Sterling Royale Group, or SRG, with McGrade serving as the president and Collinsworth the vice-president and project manager.

In late 2007, McGrade caused a State Department contracting officer to sign a contract between the Department of State and SRG, and McGrade failed to disclose her role in SRG, her marriage, or that proper contracting competitive procedures had not been followed.  The contract made SRG eligible to receive task orders for work to be done at embassies and McGrade  began steering work to the company. She acted as the contract negotiator between the Department of State engineers responsible for getting the jobs done, on the one hand, and Collinsworth, who was acting on behalf of SRG and the subcontractors, on the other.  Between 2008 and 2011, McGrade caused  Department of State contracting officers to sign 17 task orders awarding work worth almost $53 million.  In 2010, the defendants also lied about their marriage to investigators conducting McGrade’s background investigation regarding renewal of her security clearance.

In the summer of 2011, a news article disclosed the defendants’ marriage and the Department of State terminated her employment.  The Department of State, however, had paid SRG about $39 million, and after the defendants had paid their subcontractors, they still had millions of dollars.  Among other things, they bought houses, a condominium, a yacht, a Lexus automobile, jewelry, and a Steinway piano with the fraudulently obtained money.  The defendants have agreed to forfeit all of those items.

This case was investigated by the Department of State, Office of Inspector General, and the Global Illicit Financial Team, a task force led by the Criminal Investigation Section of the Internal Revenue Service.  Assistant United States Attorneys Jack Hanly and Mark Lytle are prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

RICHMOND, Va. – Robert Kropp, 26, of Colonial Heights, Va., was sentenced today for coercion and enticement of a minor under the age of fifteen and receipt of child pornography.  Kropp was sentenced to 120months in prison on each of the two counts, to run concurrently, followed by 20 years of supervised release on each count.  In addition, Kropp was assessed a fine of $15,000.00.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia and Jeffery C. Mazanec, Special Agent in Charge of the Federal Bureau of Investigation’s Richmond Field Office, made the announcement after sentencing by United States District Judge Henry E. Hudson.

            Kropppled guilty on May 7, 2013, to coercion and enticement of a minor under the age of fifteen and receipt of child pornography.  According to court documents, in March 2013, Kropp began corresponding by email with an individual he believed to be a prostitute.  Kropp initially inquired of the prostitute whether she knew of any minors with whom he could engage in sexual activity.  Through these communications, Kropp was informed that the individual with whom he was corresponding knew a thirteen-year-old female.

Also in March 2013, Kropp used his cell phone to send text messages and make telephone calls to engage in sexually explicit conversations with an individual he believed to be a thirteen-year-old female.  Kropp discussed specific sex acts that he would like to engage in with her and directed the minor to a website where she could obtain pornography to prepare for the encounter.

            On March 7, 2013, Kropp arrived at a hotel where he believed he would be meeting the minor.  Kropp had $200.00 in his pocket, which he intended to use to pay for the sexual encounter with the minor.  Kropp was arrested by law enforcement after entering the hotel and proceeding to the floor where he believed the minor’s room to be.

            Kropp admitted to downloading child pornography on his computer.  A subsequent forensic search of his computer revealed numerous images of child erotica and child pornography.

This case was investigated by the Federal Bureau of Investigation.  Assistant United States Attorney Angela Mastandrea-Miller prosecuted the case on behalf of the United States.

NORFOLK, Va. – Somali nationals Ahmed Muse Salad, a/k/a “Afmagalo,” 25, Abukar Osman Beyle, 20, and Shani Nurani Shiekh Abrar, 29, who were previously found guilty, by jury, of all 26 counts charged, to include:  piracy, conspiracy to commit kidnapping, hostage taking resulting in death, kidnapping resulting in death, and multiple firearms offenses, were sentenced today by a federal jury.  The three defendants were sentenced to life-in-prison for their roles in the February 22, 2011, murder of four Americans aboard the sailing vessel Quest.  The victims included: Scott Underwood Adam, Jean Savage Adam, Phyllis Patricia Macay, and Robert Campbell Riggle.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, George Venizelos, Assistant Director in Charge (ADIC) of the FBI’s New York Field Office; Royce E. Curtin, Special Agent in Charge (SAC) of the FBI’s Norfolk Field Office, and Michael Monroe, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS), made the announcement after the sentence was accepted by Chief United States District Court Judge Rebecca Beach Smith.

            “Four Americans were taken hostage, terrorized and then murdered.  Life in prison is reserved for those who commit heinous crimes – and the jury today decided the execution of four innocent Americans on the high seas meets that high bar,” said United States Attorney Neil H. MacBride.  “Scott Adam, Jean Adam, Phyllis Macay, and Robert Riggle lost their lives and their families lost their loved ones.  Nothing can make this right; nothing can make their families whole again – but we hope today’s verdict and sentences will bring some closure to their nightmare that began two years ago on the Indian Ocean.”

            “This case exemplifies the ongoing, outstanding cooperation between federal law enforcement and federal prosecutors,” said Norfolk SAC Royce Curtin. “Today’s sentencings should send a clear message to anyone committing acts of criminal violence against American citizens at sea that they will be prosecuted to the fullest extent of the law.”

          Assistant Director-in-Charge Venizelos stated, “pirates armed with AK-47s and rocket-propelled grenades took four innocent Americans hostage aboard their own vessel. When negotiations reached an impasse, one pirate launched a grenade at a nearby U.S. Navy ship while others murdered four Americans aboard the Quest. Today’s life sentences provide a vigorous deterrent for armed bandits roaming our seas. The FBI's commitment to stopping this scourge of violence is unwavering.”

            The defendants were previously indicted on July 8, 2011, by a federal grand jury on 26 counts, which included conspiracy to commit hostage taking, conspiracy to commit kidnapping, kidnapping resulting in death, conspiracy to commit violence against maritime navigation resulting in death, piracy, and firearms offenses.  The defendants were convicted on all 26 counts on July 8, 2013.  According to court records and evidence at trial, Salad, Beyle, Abrar and others—armed with firearms and a rocket-propelled grenade (RPG)—boarded the Quest while the four Americans slept on February 18, 2011.  They gained control of the vessel and took the four American citizens as hostages.  Their plan was to take the hostages to Somalia, where they and their additional co-conspirators in Somalia could commence ransom negotiations.  While they sailed toward Somalia, the three defendants and their co-conspirators were taking turns standing armed guard over the hostages; at the same time, United States Navy ships headed towards the Quest to aid the hostages and prevent the Quest from proceeding to Somalia.

          Beginning on February 19, 2011, communications had been established and the United States Navy and the FBI began negotiating with the pirates to secure the safe release of the hostages.  On February 21, 2011, two co-conspirators representing the pirates onboard the Quest, were transferred to the USS Sterett to negotiate.  The negotiations reached an impasse when the co-conspirators were told that they were not going to be allowed to take the hostages ashore in Somalia.  The decision was made to detain the co-conspirators after they refused to release the hostages and threatened to kill them if they were not allowed to return to Somalia.

          Testimony revealed that Abrar fired a shot over the head of Scott Adam and instructed Adam to tell the Navy that if the military came any closer, the conspirators would kill the hostages.

          On February 22, 2011, without provocation and before the hostages could be rescued by members of the military, a co-conspirator fired an RPG in the general direction of the USS Sterett.  Witnesses testified that sustained firing came from the Quest and that glass could be seen breaking on the starboard side of the Quest.  Witnesses also testified that Salad, Beyle, and Abrar were the shooters and responsible for the deaths of Scott Adam, Jean Adam, Phyllis Macay, and Robert Riggle.  After the gun fire died down, the Navy dispatched SEALS to the Quest.  The pirates aboard the Quest began surrendering and some were seen throwing AK-47 rifles into the water. 

            This case was investigated by the FBI and the Naval Criminal Investigative Service. Assistant United States Attorneys Joseph DePadilla, Brian J. Samuels, and Benjamin L. Hatch prosecuted the case on behalf of the United States.  A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.

RICHMOND, Va. – Jose Armando Bran, aka “Pantro,” 30, of Richmond, Va., was sentenced today to 2 consecutive life sentences for his role in a gang related murder and maiming that he ordered while he was leader of a local clique of the transnational MS-13 gang.  On May 20, 2013, Bran was found guilty of two counts of conspiracy to commit murder, murder, maiming, and use of a firearm during a crime of violence resulting in death.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division; Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field Office; John P. Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Washington; Michael Herring, Richmond Commonwealth’s Attorney; Ray J. Tarasovic, Chief of Police for Richmond Police Department; Billy Davenport, Chesterfield Commonwealth’s Attorney; and Col. Thierry G. Dupuis, Chief of Police for Chesterfield County Police Department, made the announcement after the sentencing by Senior United States District Judge Robert E. Payne. 

 “Mara Salvatrucha has been a parasite upon the communities of the Eastern District of Virginia,” said U.S. Attorney Neil H. MacBride.  “The prosecution and incapacitation of MS-13 and its criminal membership is of the utmost importance to my office and our law enforcement colleagues.   We remain steadfast in both our pursuit and commitment to eradicate La Mara and will continue to use all available tools in our federal arsenal to achieve that goal.  Today’s life sentence and permanent incapacitation of a vicious and morally bankrupt MS-13 leader marks yet another powerful step toward dismantling MS-13 in the Eastern District of Virginia.”

“The sentencing of Jose Bran should be an example of the commitment the FBI has against violent gangs in the Commonwealth,” said FBI SAC Jeffrey C. Mazanec.  “The FBI will continue to work closely with its law enforcement partners to combat violent gangs.”

According to evidence presented at trial, Bran was responsible for orchestrating a gangland-style execution of Osbin Hernandez-Gonzalez.  Bran, who served as the leader of MS-13’s Sailors Locos Salvatrucha clique in Richmond, suspected that Hernandez-Gonzalez had violated MS-13 rules by aiding a rival gang.  Based upon this suspicion, Bran created a ruse to lure Hernandez-Gonzalez to the “Pony Pasture” area on the banks of the James River.  Bran ordered MS-13 associate Karen San Jose to contact Hernandez-Gonzalez and convince him to gather with other MS-13 members.  Bran also enlisted the help of two juveniles, Luis Cabello and Jeremy Soto, who were tasked with actually carrying out the murder of Hernandez-Gonzalez.  Finally, to ensure the murder was carried out, Bran instructed MS-13 member Michael Arevalo, aka “Reptile,” to accompany the juveniles on the “mission,” and to ensure the juveniles completed the murder, which Arevalo did. 

Evidence at trial also established a separate conspiracy to commit murder that involved Bran.  The evidence revealed that in approximately January 2012, Bran was told that an individual with the initials F.A. was supplying information about the Richmond Sailors clique to a rival gang.  A plan was developed to have MS-13 associate Justin Amador kill F.A. to both punish the supposed informant and test Amador’s loyalty.

        On January 14, 2012, Bran directed that the plan be carried out.  Sometime that evening, Giovanny Torres, along with Justin Amador, Mario Molina, and Marvin De Leon, drove the victim to a nightclub in Richmond.  They left after forty-five minutes, telling the victim that they were all going to commit a burglary, then drove to the vicinity of the 3800 block of Terminal Avenue in Richmond.  After they arrived, the victim, De Leon and Justin Amador got out of the car.  At a signal from Torres, De Leon grabbed the victim, and pulled his sweatshirt over his head, holding him while Justin Amador stabbed the victim at least 14 times.  The victim escaped and fled to a nearby residence while the others drove away. As a result of the attack, the victim lost a portion of one lung.

The other members and associates of the MS-13’s Sailors Locos Salvatrucha clique in Richmond, Virginia that have been convicted include the following individuals:

•          On January 23, 2013, Michael Arevalo, a.k.a. “Reptile,” pleaded guilty in United States District Court to conspiracy to commit murder in aid of racketeering and use of a firearm in furtherance of a crime of violence resulting in murder.  On July 25, 2013, he was sentenced to serve life in prison plus 10 years. 

•          On March 15, 2013, Karen San Jose pleaded guilty in United States District Court to aiding and abetting the use of a firearm in furtherance of a crime of violence resulting in murder.  On July 23, 2013, she was sentenced to serve 20 years in prison.

•          Luis Cabello, a.k.a. “Destroyer,” was charged as an adult by the Richmond Commonwealth Attorney’s Office and on January 25, 2012, he was found guilty by a jury of first degree murder, use of a firearm in commission of a felony and gang participation.  On June 24, 2013, Cabello was sentenced to serve 34 years in prison.

•          Jeremy Soto, a.k.a. “Sneaky,” was charged as an adult by the Richmond Commonwealth Attorney’s Office and on July 31, 2013, pleaded guilty to second degree murder, use of a firearm in commission of a felony and gang participation.  On July 19, 2013, Soto was sentenced to serve 18 years in prison.

•          On August 15, 2012, Mario Molina, a.k.a. “Correcto,” pleaded guilty in United States District Court to maiming in aid of racketeering.  On December 12, 2013, he was sentenced to serve 293 months in prison.

•          On June 29, 2012, Giovanny Torres, a.k.a. “Gio,” pleaded guilty in United States District Court to maiming in aid of racketeering.  On March 14, 2013, he was sentenced to serve 235 months in prison.

•          On May 10, 2012, Marvin De Leon, a.k.a. “Bomba,” pleaded guilty in United States District Court to maiming in aid of racketeering.  On July 23, 2013, he was sentenced to serve 235 months in prison.

•          On June 18, 2012, Justin Amador, a.k.a. “Danger,” pleaded guilty in United States District Court to maiming in aid of racketeering.  On July 25, 2013, he was sentenced to serve 235 months in prison.

•          After Bran and others were arrested, Jose Mancia-Martinez, a.k.a “Ready” became the new leader of the MS-13’s Sailors Locos Salvatrucha clique in Richmond.  On August 18, 2012, Mancia-Martinez and a friend offered a young girl and ride and subsequently raped her while threatening her with a machete.  He was charged as an adult in Chesterfield County Circuit Court.  On January 9, 2013, he was found guilty by a jury of forcible rape, and on July 17, 2013, he was sentenced to serve 20 years in prison. 

This case was investigated by the FBI, HSI, the Richmond Police Department and the Chesterfield County Police Department.   Assistant United States Attorney Roderick C. Young and Trial Attorney Andrew L. Creighton of Criminal Division’s Organized Crime and Gang Section prosecuted the case on behalf of the United States.  Assistant Commonwealth’s Attorney Mike Holloman prosecuted the case on behalf of the Richmond Commonwealth’s Attorney’s Office, and Assistant Commonwealth’s Attorney B.J. McGee prosecuted the case on behalf of Chesterfield Commonwealth’s Attorney’s Office.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

ALEXANDRIA, Va. – Edgar Leonel Estrada Morales, 58, of Guatemala City, Guatemala, was sentenced today to 168 months in prison for conspiring to distribute pseudoephedrine for unlawful importation into the United States and to aid and abet the manufacture of methamphetamine. 

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Derek S. Maltz, Special Agent In Charge of the Drug Enforcement Administration’s (DEA) Special Operations Division made the announcement after the plea was accepted by United States District JudgeT.S. Ellis, III. 

            Estrada Morales, along with his nephew, Victor Estrada Paredes, were indicted on February 3, 2011, by a federal grand jury on a charge of conspiracy to distribute pseudoephedrine (a chemical used in the manufacture of methamphetamine) for unlawful importation into the United States and to aid and abet the manufacture of 500 grams or more of methamphetamine.  On July 19, 2013, Judge Ellis sentenced Estrada Paredes to serve 132 months in prison. 

            In a statement of facts filed with his plea agreement, Estrada Morales admitted to selling nearly 5,000 pseudoephedrine pills to an individual whom he believed was involved in a methamphetamine production operation based in Houston, Texas.  This individual was, in reality, a DEA cooperating witness.  Estrada Morales also introduced this individual to his nephew, Estrada Paredes, who were also involved in this pseudoephedrine trafficking operation.  Estrada Paredes entered a guilty plea to the same indictment before Judge Ellis on April 25, 2013.  Estrada Paredes negotiated the sale of equipment used to extract pseudoephedrine from pill form for use in the manufacture of methamphetamine, and discussed working for the DEA cooperator’s fictitious United States-based methamphetamine trafficking organization.  According to the indictment, Estrada Morales sold pseudoephedrine to groups, including the “La Familia” Mexican drug cartel that sold methamphetamine in the United States.

            This case was investigated by the Drug Enforcement Administration.  Assistant United States Attorney Michael P. Ben’Ary, of the Office’s National Security and International Crime Unit, is prosecuting the case on behalf of the United States.

ALEXANDRIA, Va. – Kwame Essel Djanson, a/k/a Samuel Kofi Essel, a/k/a Quarmey Gyanson Essel, age 47, of Worcester, Ma (previously of Alexandria, Va) was convicted today by a federal jury of providing false information to naturalize, obtain a passport, and to obtain a firearm.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after the verdict was accepted by United States District Judge Liam O’Grady.

Djanson faces a potential maximum penalty of 25 years when he is sentenced on November 1, 2013.
Djanson was indicted on April 18, 2013, by a federal grand jury sitting in Alexandria, Va. on charges that he had committed fraud to naturalize, obtain a passport and procure a firearm. According to court records and evidence at trial, Djanson created a false identity as “Samuel Kofi Essel” to win a diversity lottery visa that allowed him to enter the United States and adjust to lawful permanent resident status.  He applied for naturalization under the Immigration and Naturalization Act and an Executive Order that allowed for stream-lined provisions for military personnel; he also sought to change his name as part of the naturalization.  On his naturalization application, and in an interview, he provided false information about his legal name and his birthdate, did not provide his previous name, and did not admit that he had provided misleading information to a U.S. official to obtain an immigration benefit.  Pursuant to an order by U.S. District Court Judge Henry Coke Morgan, Jr., in Norfolk, Va., the defendant became a U.S. citizen and changed his name to Quarmey Gyanson Essel in September 2003.  In October 2003, the defendant provided false information about his date of birth in an application for a U.S. Passport and received a passport that month.  In 2010, the defendant attended the Nation’s Gun Show at the Dulles Expo Center in Chantilly, Va., where he filled out an ATF Form 4473 and included a false date of birth as part of a transaction to purchase a Smith & Wesson 9 millimeter pistol.

This case was investigated by the Department of State’s Diplomatic Security Service.  Special Assistant United States Attorney Dina Finkel, Special Assistant United States Attorney Jonathan Keim, and Assistant United States Attorney Gene Rossi are prosecuting the case on behalf of the United States.

NORFOLK, Va. – David Burrus, Jr., age 40, of Burns, TN, was sentenced today to 66 months in prison, followed by a five year term of supervised release, for conspiring to commit wire and mail fraud.  Burrus was also ordered to pay restitution of $241,779.26.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Royce Curtin, Special Agent in Charge of the FBI’s Norfolk Field Office, and Joseph Clarke, Special Agent in Charge of the Office of Inspector General, Department of Housing and Urban Development, Mid-Atlantic Region, made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.
Burrus pleaded guilty on March 18, 2013 to count one of the indictment pending against him.  According to court documents, Burrus managed and ran a Virginia Beach branch office of a mortgage brokerage firm headquartered in Tennessee from 2003 through 2007.  Burrus also co-owned a title and escrow company which conducted real estate closings for many of the loans originated by loan officers supervised by Burrus.  Burrus also owned another entity, Southern Living Properties, which he used to receive monies from fraudulent real estate transactions that he conducted.

            From 2005 through 2007, Burrus sought and obtained numerous mortgage loans in both his and his spouse's names.  In the course of these transactions, Burrus agreed to buy local properties for more than the sellers' listing price, provided that the transactions were structured to ensure that any extra sales proceeds were paid to Southern Living Properties at the real estate closings.  This ensured that, unbeknownst to the mortgage lenders, Burrus received a substantial portion of the loan proceeds when buying properties in his or his spouse's name.

            To induce lenders to approve various requests for mortgage loans, Burrus also submitted false loan applications, fictitious leases purporting to show his properties were generating rental income, and false Southern Living invoices billing property sellers for work and services that had never been performed.  Burrus also made material misrepresentations to mortgage lenders about his and his spouse's income and liabilities, his rental income, and about his spouse's intent to occupy properties purchased as her primary residence.

            Shortly before the crash of the real estate market, Burrus also sought to sell properties in his portfolio to his associates and offered to pay kickbacks to buyers to facilitate sales.  Rhonda Wyland, age 44, of Virginia Beach and then a loan officer working for Burrus, agreed to purchase one such property in Portsmouth, VA, in exchange for a kickback of $140,000.  Wyland also made false statements to obtain a mortgage loan to complete this transaction and, after receiving the $140,000 kickback, defaulted upon the loan.  On December 12, 2012, Wyland pled guilty to a criminal information charging her with conspiracy to commit wire fraud.  On April 5, 2013, Chief United States District Judge Rebecca Beach Smith sentenced Wyland to serve six months in jail and six months of home confinement.

            As a result of his activities, Burrus obtained mortgage loans to purchase seventeen properties in Hampton Roads and then defaulted upon those loans.  The known losses stemming from these loans are approximately $2,036,296.00. 

            This case was investigated by the FBI’s Norfolk Field Office and HUD's Office of Inspector General.  Assistant United States Attorney Robert Krask prosecuted the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

RICHMOND, Va. – Marion Carter, 58, of Richmond, Va., was convicted today by a federal jury on three counts of robbery interfering with commerce and two counts of possessing a firearm in furtherance of those robberies. 

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Carl Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, made the announcement after the verdict was accepted by United States District Judge James R. Spencer.  Carter faces a maximum term of 20 years for each of the three robberies and five years to life imprisonment on each of the three firearms charges when he is sentenced on October 28, 2013. 

According to the evidence presented at trial, Carter robbed three commercial businesses in less than three weeks.  The first robbery took place on November 2, 2012, at the Baskin Robbins ice cream store on Forest Hill Avenue in Richmond.  The second robbery occurred on November 8, 2012, at the Fast Auto Loans store on Midlothian Turnpike in Richmond.  Carter acquired approximately $900 from the first two robberies.  The third robbery took place on November 14, 2012 at the FasMart convenience store on Semmes Avenue.  During that robbery, the store clerks ran to the back of the store and locked themselves in the back room.  Carter left the store without any money.  Evidence at trial included surveillance videos from the robberies and a cell tower data analysis by the FBI.

This case was investigated by the ATF and the Richmond Police Department, with assistance from the FBI.  Assistant United States Attorney Peter Duffey and Special Assistant United States Attorney Heather Hart prosecuted this case on behalf of the United States.

ALEXANDRIA, Va. – Alex Ernesto Calderon Velasquez, 27, of Reston, Va., pleaded guilty today to two counts of production of child pornography and one count of failing to appear in court as required.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Lt. Colonel Edwin C. Roessler, Jr., Acting Fairfax County Chief of Police, made the announcement after the plea was accepted by United States District Judge Anthony J. Trenga.

Calderon Velasquez pleaded guilty to a two-count criminal information charging production of child pornography and faces a maximum penalty of 30 years in prison on each count when he is sentenced on October 25, 2013.  He also pleaded guilty to an indictment charging him with failure to appear while on pretrial release and faces a separate maximum of ten years of imprisonment on that charge.

“Defendant Velasquez is a cyber-predator-plain and simple,” said U.S. Attorney Neil H. MacBride.  “Using the internet, Velasquez targeted and victimized vulnerable juveniles.  The protection of our children is amongst our highest priorities and we will vigorously prosecute all those that endanger our youth.  I would also like to commend our law enforcement partners for apprehending Velasquez after he fled our jurisdiction during the pendency of his case.” 

“This case demonstrates the danger of an individual who grooms children online and lures them into sending images that can never be erased,” said Assistant Director in Charge Parlave. “Along with our partners, the FBI is committed to apprehending individuals who sexually exploit minors and we will continue to diligently work together to identify these predators and their victims.” 

Lt. Colonel Roessler stated, “protecting the greatest asset of our communities, our youth, is a priority and crimes such as these shall not be tolerated. We are grateful our law enforcement partnership has protected our community through the justice system."

According to a statement of facts filed with the plea agreement and other court documents, Calderon Velasquez used his computer to communicate with a 14-year-old girl in Texas, referred to as Minor A. In about September 2012, Calderon Velasquez sexually groomed and then extorted the victim to strip and engage in sexual activity over Skype chats, which Calderon Velasquez recorded and kept on his computer along with other child pornography.  Separately, from about September 2011 through about October 2011, Calderon Velasquez also persuaded and enticed another victim, Minor B, in Arizona to engage in sexually explicit conduct for the purposes of producing video recordings, which the defendant then stored on his laptop computer in the Eastern District of Virginia.

Originally, Calderon Velasquez was scheduled to plead guilty to production of child pornography on May 24, 2013.  On the morning of his guilty plea hearing, however, Calderon Velasquez fled.  That morning, law enforcement officers discovered the remains of his cut ankle bracelet in Vienna, Virginia.  He was later captured on June 7, 2013, in San Antonio, Texas.

This case was investigated by the FBI Washington Field Office’s Child Exploitation Task Force, the Fairfax County Police Department, and the Harris County Constable’s Office in Texas.  Assistant United States Attorneys Alexander T.H. Nguyen and Jay V. Prabhu are prosecuting the case on behalf of the United States.

NEWPORT NEWS, Va. – Jose Rivero-Garcia, 53, from Colombia, was sentenced today to thirty-seven months in prison for his participation in a violent and highly sophisticated jewelry theft ring that operated out of Richmond, Va. 

Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; and Carl J. Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division made the announcement following sentencing by District Court Judge Arenda L. Wright Allen.

            According to court documents, co-defendant Alexander Cuadros-Garcia, 37, from Colombia, led the organized criminal group that stole more than $4.6 million in jewelry from victims in Virginia and at least four other states, including New York, New Jersey, North Carolina, and Maryland.  In March 2012, Cuadros-Garcia and Rivero-Garcia were charged along with six other members of the Richmond-based ring that regularly conducted lengthy surveillance on jewelry stores to identify vulnerable individuals and then follow their targets back to the individuals’ hotel or home. 

In most of the robberies, several men would suddenly appear as the victims approached or entered their car, punch out the car’s windows, threaten the victims at knife-point and steal the victims’ merchandise.  In addition, the robbers would puncture the victims’ car tires and steal their cell phone to reduce the chance of pursuit or apprehension.  After a successful robbery, members of the ring would travel to New York to sell the merchandise to businessmen, who coordinated re-selling the stolen property or melting it down for future use.

Co-defendants Cuadros-Garcia, Leonardo Ortiz, Raul Antonio Escobar-Martinez, Luis Carlos Muchado, William Leandro Herrera-Bohorquez, Lucesita Argueta, and Juanita Diaz previously pleaded guilty for their roles in the theft ring.  Escobar-Martinez and Herrera-Bohorquez were sentenced on March 7 and March 14, 2013, respectively, to serve 87 months in prison.

            The investigation of this case was led by the ATF’s Washington Field Division, with the assistance of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the police departments in Williamsburg, Virginia Beach, Henrico County, Chesterfield, Prince William County and Fairfax County in Virginia, along with the Virginia State Police; the Baltimore County, Md., Police Department; the Port Authority of New York and New Jersey; the New York City Police Department; and the police departments in Rutherford, N.J., and Gwinnett County, Ga.; and the Morris County, N.J. Prosecutor’s Office. 

            Assistant U.S. Attorney Eric M. Hurt of the Eastern District of Virginia and Trial Attorney Jerome M. Maiatico of the Criminal Division’s Organized Crime and Gang Section prosecuted the case on behalf of the United States.

RICHMOND, Va. –Jayant Khare, 51, and Loveleen Khare, 56, both of Powhatan, Va., were each sentenced today to 24 months for conspiring to structure more than $10,000,000 in cash transactions for the purpose of preventing banking institutions from reporting those transactions to the Internal Revenue Service (IRS).   
            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; John P. Torres, Special Agent in Charge for ICE’s Homeland Security Investigations (HSI), Washington, D.C.; 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 sentencing by United States District Judge Henry E. Hudson.
            Jayant Khare and Loveleen Khare both pled guilty to the conspiracy charge on April 29, 2013, and April 17, 2013, respectively.              
            According to documents filed with the court, Jayant and Loveleen Khare owned and operated two cigarette retail stores known as Cigarettes America Plus and Cigarettes America at Westchester.  Jayant and Loveleen Khare admitted that from October 2011 to December 2012, they conspired to structure over $10,000,000 in U.S. currency by splitting up cash deposits into accounts maintained at six banks, all in an effort to prevent the banks from filing Currency Transaction Reports with the IRS, which must be filed on cash deposits of $10,000 or greater.  The structured cash was obtained by selling large quantities of cigarettes to out-of-state individuals who were known to be transporting the cigarettes to locations outside of the Commonwealth of Virginia for resale as contraband cigarettes because the appropriate state taxes were not paid on them.  The sales took place at Jayant and Loveleen Khare’s personal residence and from the back door of the retail stores.
            This case was investigated by HSI, the Internal Revenue Service - Criminal Investigation, and the Tobacco Enforcement Unit of the Office of the Attorney General of Virginia.  Assistant United States Attorneys Dominick S. Gerace and Laura Colombell Marshall prosecuted the case on behalf of the United States.
            A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

ALEXANDRIA, Va. – Abeselom Hailemariam, 33, of Alexandria, Va., was sentenced to 40 months in prison followed by 3 years of supervised release, and ordered to pay approximately $1.4 million in restitution, for his role in a conspiracy to steal approximately $1.4 million of visitor-parking fees from the Smithsonian Institution’s Steven F. Udvar-Hazy Center in Chantilly, Va. 
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Scott S. Dahl, Inspector General for the Smithsonian Institution; and Valerie Parlave, Assistant Director in Charge of the FBI Washington Field Office, made the announcement after sentencing by United States District Judge T.S. Ellis, III.   
Hailemariam pleaded guilty on April 19, 2013, to conspiracy to commit theft of public money, and he is the third person to be sentenced for participating in a multi-year scheme to steal parking fees at the museum.  
From March 2009 to August 2012, Hailemariam was a full-time location manager for Parking Management Inc. (“PMI”), a D.C. based firm which held a contract with the Smithsonian to manage its 2,000-vehicle parking lot.  During that time, Defendant participated in a conspiracy to steal parking revenues and began sharing in the stolen revenues taken by PMI booth attendants.  With Hailemariam’s knowledge and approval, the booth attendants withheld parking ticket stubs from paying customers and unplugged electronic vehicle counters in the entrance booths.  Hailemariam generated and submitted falsified operations reports to PMI, which were provided to the Smithsonian.  The co-conspiring booth attendants paid Hailemariam a share of the stolen revenues at the end of the day by bundling unreported cash with their shift summary reports.  Hailemariam also gave instructions to conspiring booth attendants to stop stealing at certain times when he believed the risk of detection of the conspiracy was high. The total loss due to the conspiracy is at least $1,383,195.  Based on the $15 entrance fee, it is estimated that Hailemariam participated in a conspiracy that stole from at least 92,213 museum visitors. 
Prior to today’s guilty plea, former PMI employees Meseret Terefe, 37, of Silver Spring, Md. and Freweyni Mebrahtu, 46, of Sterling, Va., have been sentenced to 20 months and 27 months in prison, respectively, for their roles in the thefts. 
The case was investigated by Smithsonian Office of the Inspector General and the Federal Bureau of Investigation.  Assistant United States Attorney Jasmine Yoon and Special Assistant United States Attorney James McDonald prosecuted the case on behalf of the United States
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

NEWPORT NEWS, Va. – Antonio J. Fuller, 23, and Kevin L. Ashby, 25, both of  Newport News, Va., were indicted by a federal grand jury on June 17, 2013, for participating in a criminal organization that engaged in acts of violence, including five murders, as well as narcotics distribution and weapons violations.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; FBI Special Agent in Charge Royce E. Curtin, and James D. Fox, Chief of Newport News Police, made the announcement after the court documents were filed.      

            According to the indictment, both defendants were alleged to be part of a criminal organization known locally as “Thug Relations,” alternatively known as “the Duct,” “Warwick Lawnz,” “TR,” and “from the Duct to the Lawnz,” a neighborhood gang operating in the Aqueduct Apartments, St. Michael’s Apartments, Mariner’s Landing Apartments, Heritage Trace Apartments, as well as Warwick Lawns, Warwick Town Home,  Sharon Drive, and the Savage Drive areas of Newport News, Virginia. The alleged gang members are accused in the indictment of protecting their criminal enterprise and activities through murder, attempted murder, witness intimidation, robbery, and narcotics distribution. Specifically, both defendants are charged with operating a racketeering enterprise responsible for violent acts including the murders of Andre Horton and Andre Julius Johnson on May 17, 2009. In addition, Fuller is charged with the murder of Christian Hatch on November 4, 2009, and Kevin Ashby is charged with the murder and robbery of Lafayette Bailey on December 15, 2009, and the murder and robbery of Lloyd Robinson on January 8, 2010. The indictment also charges the two with the attempted murder of two other individuals injured during the murders of the named victims.

            To-date, the prosecution of  “Thug Relations” gang members has resulted in a total of forty-three (43) federal convictions for gang related violence and murder, including the recent plea by Aronte Jarvis for the murder of Jonte Terry in the Kmart parking lot in Newport News on February 3, 2008.

            This investigation was led by FBI and the Safe Streets Task Force, with assistance from the Newport News Police and the Virginia State Police.  Assistant United States Attorneys Howard J. Zlotnick and Lisa R. McKeel, and Special Assistant United States Attorney Jonathan A. Ophardt are prosecuting the case on behalf of the United States.

The public is reminded that an indictment only contains charges and is not evidence of guilt.  A defendant is presumed innocent unless and until proven guilty.

A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

ALEXANDRIA, Va. – Robert Edwin Steele, 38, of Alexandria, Va., was sentenced today to 48 months in prison for 14 counts of unauthorized access to a protected computer.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the Federal Bureau of Investigation’s Washington Field Office, made the announcement after United States District Judge Gerald Bruce Lee imposed the sentence.
“Cyber intrusions represent the greatest threat to corporate America in the 21st century,” said United States Attorney Neil H. MacBride. “This danger is omnipresent both from external hackers and criminal insiders.  Today’s sentence should put all on notice that that the U.S. Attorney’s Office, along with our law enforcement partners, is committed to prosecuting these technically complex crimes and will seek punishment commensurate with the offense.”

Steele was found guilty by a jury in Alexandria on May 3, 2013.  According to court documents and evidence at trial, Steele worked at multiple companies involved in government contracting.  On December 15, 2010, Steele resigned from one government contracting firm, described in court documents as Company A, due to a dispute about his compensation with Company A and Company B, another government contracting firm that was in the process of acquiring Company A.
When Steele left Company A on December 15, 2010, he gave verbal and written assurances to officials of Company A that he would not access its systems after his departure, and even urged them to shut down his existing accounts.  That same day, however, Steele began logging into Company A’s e-mail systems using a secret administrative account which he learned about during his work for Company A.  Steele immediately began downloading hundreds of proprietary documents using this administrative account.
Shortly after resigning, Steele joined another government contractor, Company C, that directly competed with Companies A and B for government contracts.  At Company C, Steele worked as “Director of Law Enforcement” and prepared bids for government contracts on law enforcement projects.  In that position, Steele undercut Company A’s bid on a government contract by approximately $100,000, while downloading Company A’s documents on the same contract.  Although his attempt to win the bid failed, Steele continued to methodically sift through thousands of valuable documents stored on computers for Company A.
From December 15, 2010 until September 2, 2011, when agents for the Federal Bureau of Investigation seized the equipment that Steele had used to access the administrative account, Steele had accessed the computer systems of his former employer more than 79,000 times.
In addition to his 48-month term of imprisonment, Judge Lee also ordered Steele to serve two years of supervised release, imposed a fine of $50,000, and required restitution $335,977.68.
This case was investigated by the Federal Bureau of Investigation’s Washington Field Office.  The Office of the Inspector General for the General Services Administration provided additional assistance.
Assistant United States Attorney Alexander T.H. Nguyen and Special Assistant United States Attorney Jonathan Keim prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

ALEXANDRIA, Va. – Stacey Lorenzo Reed, 44, of Manassas, Va., was sentenced today to 270 months in prison, followed by three years of supervised release, for conspiracy to commit robbery and aiding and abetting the discharge of a firearm during or in relation to a crime of violence.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Lieutenant Colonel Edwin C. Roessler Jr., Acting Fairfax County Chief of Police, made the announcement after sentencing by United States District Judge Anthony J. Trenga.

            “Nothing can bring back the life that was taken during this horrific crime, but today’s sentence sends a clear message that there are severe consequences for all those who conspire to commit crimes,” said U.S. Attorney Neil H. MacBride.  “Mr. Reed, while not physically present at the murder, put this tragic and terrifying sequence of events in motion.  He will now have over 20 years in federal prison to contemplate his greed fueled involvement in the crime.”

 Reed previously pleaded guilty on April 18, 2013.  According to court documents, Reed obtained information that a business owner, “D.B.,” kept substantial proceeds of his check cashing business at his home in Centreville, Virginia.  Armed with this “inside information,” Reed took coconspirator, Tasheik Ashanti Champean, to D.B.’s home to surveil the property for a future robbery.  On May 17, 2010, Reed drove Champean and Reynard Lazaro Prather, an individual Champean had recruited for the robbery, to Centreville and dropped off the two coconspirators in a wooded area near D.B.’s home.  Prather and Champean – both armed with semi-automatic pistols – entered D.B.’s garage to await his arrival. When D.B.’s son and an employee, Jose Cardona, arrived at the residence, they were confronted by Prather and Champean.  During the struggle, Cardona was shot and killed by one of the two men.  Following Cardona’s murder, Prather and Champean fled the area.  Eventually, Prather and Champean met up with Reed and Reed drove Prather and Champean out of Virginia and back to Maryland. 
Champean and Prather, both of whom pleaded guilty, were both previously sentenced to 360 months in prison for their role in the offense.
This case was investigated by the Fairfax County Police Department’s Homicide Unit.  Assistant United States Attorneys Michael E. Rich and Zachary Terwilliger prosecuted the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

ALEXANDRIA, Va. – Derek Matthews, 47, of Harwood, Md., was sentenced today to 15 months in prison, followed by a one year term of supervised release for accepting bribes from a government contracting company in exchange for using his position to help the company find and win contracts. 
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division, and Charles K. Edwards, U.S. Department of Homeland Security (DHS) Deputy Inspector General, made the announcement after the sentence was pronounced by United States District Judge Leonie M. Brinkema.  
Matthews previously pleaded guilty on April 11, 2013.  According to court documents, Matthews served as Deputy Assistant Director for Operations for the DHS’s Federal Protective Services (FPS) and was later promoted to FPS Regional Director for the National Capital Region.  In the fall of 2011, Matthews agreed with Keith Hedman, an executive at an Arlington, Va., security service consulting company referred to as Company B in court records, that in exchange for a monthly payment from Company B and a percentage of any new business obtained, Matthews would use his position to help Company B find and win U.S. government contracts, including with FPS.  Matthews engaged in a series of official acts, including lobbying of government officials and sharing of information with Hedman, in an effort to obtain business for Hedman and Company B. In turn, Hedman and Company B agreed to pay $50,000 in monthly installments over a year, as well as a percentage of any new business Matthews obtained for Company B.  Hedman and Company B actually paid Matthews three monthly payments totaling $12,500 before the scheme was interrupted. 
Hedman pleaded guilty on March 18, 2013, to conspiracy to commit bribery in connection with Matthews’ scheme, along with conspiracy to commit major government fraud as part of a separate scheme to fraudulently obtain more than $31 million in government contract payments that should have gone to disadvantaged small businesses.  On June 21, 2013, Hedman was sentenced to 72 months in prison for his role in the major government fraud and 24 months for his role in the bribery scheme.
This case was investigated by the Washington Field Office for the DHS Office of the Inspector General (OIG), the National Aeronautics and Space Administration OIG, the Small Business Administration OIG, the Defense Criminal Investigative Service, and the General Services Administration OIG. Assistant United States Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud 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 United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

ALEXANDRIA, Va. – Robert Mikail, 41, formerly of Ashburn, Va., pleaded guilty today to conspiring to commit bank fraud in connection with his role in fraudulent mortgage loan transactions involving approximately 36 properties in northern Virginia and nearly $20 million in fraudulently obtained loans.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by United States District Judge James C. Cacheris.
Mikail was indicted on April 4, 2013, by a federal grand jury on conspiracy and bank fraud charges.  Mikail faces a maximum penalty of 30 years in prison when he is sentenced on October 11, 2013.
In a statement of facts filed with the plea agreement, Mikail admitted to conspiring with loan officers, including Bing-Sing “Cindy” Wang, to defraud mortgage lenders as part of a scheme to profit from fraudulently obtained mortgage loans and the purchase of residential real estate in northern Virginia.  As part of the scheme, Mikail admitted to recruiting five individuals, known as “straw buyers,” to serve as nominal purchasers in these transactions, and to working with the loan officers to falsify critical information on the straw buyers’ loan applications in order to get the loans approved and the transactions closed.  In particular, virtually all of the fraudulent loan applications falsely identified Mikail’s Ashburn, Va., jewelry store, Opus Jewelry, as the borrower’s employer, which Mikail would then falsely verify to the lenders as part of the loan approval process. 
In total, Mikail admitted to engineering the purchase of approximately 36 homes in Ashburn, Va., from 2005 through 2007, and to obtaining from lenders approximately $19.9 million in loan proceeds on the basis of fraudulent loan applications.  While Mikail admitted to personally profiting by approximately $882,387 from these transactions, all of the loans ultimately defaulted, resulting in significant losses to the lenders.
Co-conspirator Wang, the owner of Lifetime Financial Services in Herndon, Va., pleaded guilty to related charges on November 20, 2012, and was sentenced to 24 months in prison on February 26, 2013. 
This case was investigated by the FBI’s Washington Field Office.  Assistant United States Attorney Paul J. Nathanson is prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

Alleged to Have Steered $6.9 Million in Proceeds from Defense Subcontracts in Afghanistan

ALEXANDRIA, Va. – Keith Johnson, 46, and Angela Johnson, 44, both of Maryville, Tn., were indicted by a federal grand jury today on charges of conspiracy to commit wire fraud and substantive wire fraud for their alleged role in a scheme to steer $6.9 million from Department of Defense (DoD) subcontracts in Afghanistan to shell entities through kickbacks and the use of assumed names.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; Robert E. Craig, Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office; John Sopko, Inspector General for Special Inspector General for Afghanistan Reconstruction (SIGAR); and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU), made the announcement following the grand jury’s return of the indictment.

Keith and Angela Johnson face a maximum penalty of 20 years in prison for conspiracy and up to 20 years in prison on each count of wire fraud if convicted.

According to the indictment, between July 2007 and June 2010, Keith and Angela Johnson engaged in a scheme to defraud Company #1, a DoD contractor, relating to two contracts worth more than $269 million.  The contracts at issue were to provide vehicle-fleet maintenance for the Afghan National Army (ANA). Keith Johnson worked for Company #1 in Kabul, Afghanistan, as its Project Manager and Procurement Manager for the ANA contracts. Johnson fielded requests for vehicle parts from Company #2, a Company #1 subcontractor. Company #1 would then issue purchase orders for those parts to subcontractors after receiving multiple bids.  In September 2007, Keith and Angela Johnson formed Company #4 as a Tennessee corporation, but they listed Angela Johnson’s mother and daughter on its corporate documents. Thereafter, Keith Johnson used his position in Company #1 to steer parts-supply purchase orders and other business on the ANA contracts to Company #4. To conceal Keith Johnson’s relationship to Company #4, Angela Johnson used her maiden name when interacting with Company #1 on Company #4’s behalf.

According to the indictment, the Johnsons also agreed with two other individuals at Company #2 to further the scheme. The two Company #2 employees helped steer Company #1 business to the Johnsons through Company #4, and Keith Johnson helped steer Company #1 business to Company #3, an entity operated by the two Company #2 employees using a fictional name. The Company #2 employees allegedly paid kickbacks to the Johnsons through a shell company.  As part of the scheme, the Johnsons also allegedly participated in a bid-rigging practice of coordinating inflated bids on behalf of Company #3 or Company #4 to ensure that the other company would receive particular contracts. The conspirators also caused Company #1 to order excess parts that were not yet needed on Company #1’s contracts, and Company #4 did not ultimately supply all parts in compliance with Company #1’s requirements.

According to the indictment, the conspirators obtained $6,933,179.31 in proceeds from the scheme, which they used in part to purchase, among other items, several luxury vehicles and more than $191,000 in jewelry.

This case is being investigated by the Defense Criminal Investigative Service, the Federal Bureau of Investigation, the Special Inspector General for Afghanistan Reconstruction, and the U.S. Army Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Ryan Faulconer of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section, who is also a Special Assistant U.S. Attorney in the Eastern District of Virginia. 
Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

NORFOLK, Va. – Muhaned Abbas Mohamed, 26, of Greensboro, N.C., was sentenced today to 24 months in prison, followed by three years of supervised release, for conspiracy to smuggle goods from the United States and to make a false and fictitious statement in connection with the acquisition of a firearm from a licensed dealer.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia and Carl J. Vasilko, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Washington Field Division, made the announcement after sentencing by Senior United States District Judge Robert G. Doumar.

Mohamed pled guilty on February 25, 2013.  According to court documents, on September 21, 2011, United States Customs inspectors in Norfolk received a tip from the Greensboro Police Department indicating that a shipping container sent from a business in Greensboro to the Port of Norfolk and destined for Port Said, Egypt contained hidden contraband.  U.S. Customs inspectors in Norfolk located a container sent from an auto parts business in Greensboro.  The bill of lading indicated that inside the container were auto parts consisting of four chopped cars and three motorcycles.  Upon further inspection, six Mossberg 12 gauge pistol grip pump action shotguns were found concealed in the rear seat of one of the cars.  Further investigation revealed that Mohamed had concealed the shotguns, failed to disclose the bill of lading, failed to obtain the required license from the Department of Commerce needed to export the shotguns, and that Mohamed had made a straw purchase of the six shotguns on August 18, 2011 at a Federal Firearms Licensee in Greensboro for a business partner in Egypt.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance of Homeland Security Investigations Border Enforcement Security Task Force, Customs and Border Protection and the Greensboro Police Department.  Assistant United States Attorney Darryl J. Mitchell prosecuted the case on behalf of the United States.

ALEXANDRIA, Va. – Mark R. Dain, 33, of Fairfax, Va., pleaded guilty today to conspiracy to commit bank fraud and admitted responsibility for fraudulent loan applications  involving 22 different properties, which resulted in more than $7 million in losses to various federally insured financial institutions.   Dain also agreed to the entry of a restitution order and personal money judgment for the full amount of the financial institutions’ losses.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Gary R. Barksdale, Postal Inspector in Charge of the U.S. Postal Inspection Service Washington Division, made the announcement after the plea was accepted late this afternoon by United States District Judge T.S. Ellis, III.

Dain pleaded guilty to a criminal information charging him with conspiracy to commit bank fraud.  Dain faces a maximum penalty of 30 years in prison when he is sentenced on October 4, 2013.

In a statement of facts filed with the plea agreement, Dain admitted that between 2006 and 2008, he was employed by, and part owner of, a Woodbridge, Virginia company which specialized in the marketing of undeveloped, sub-divided lots located in North and South Carolina.  The company marketed these lots to purchasers in Northern Virginia and assisted the buyers in their efforts to obtain financing.  Dain participated in a scheme to falsify loan applications by various means, to include: the inflation of gross monthly income, the value and/or the existence of real estate owned by the applicant, and the value of the liquid assets held by the loan applicant. 

This case was investigated by the FBI’s Washington Field Office and the United States Postal Inspection Service.  Assistant United States Attorney Mark D. Lytle is prosecuting the case on behalf of the United States.

NORFOLK, Va. – Michael Thomas Sechrist, 45, of Norfolk, Va., was sentenced today to 327months in prison, followed by 300 months of supervised release, for production of child pornography.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after sentencing by United States District Judge Arenda L. Wright Allen.

            Sechrist pleaded guilty to one count of production of child pornography on April 3, 2013. According to court documents and other public information, Sechrist was initially identified when a visitor to his home found a surreptitiously placed thumb drive that was found to contain images of minors engaging in sexually explicit conduct.  While some of those images came from the Internet, others were produced by Sechrist of a prepubescent female minor in the Tidewater area. 

            This case was investigated by the Department of Homeland Security Investigations and the Norfolk Police Department.  Assistant United States Attorney Elizabeth M. Yusi prosecuted the case on behalf of the United States.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov. 

RICHMOND, Va. – Michael F. Harris, 49, of Luray, Virginia, was sentenced to 108 month’s imprisonment today for his role in defrauding investors of more than $800,000 from a project aimed at purportedly developing a treatment for Human Immunodeficiency Virus infection/Acquired Immunodeficiency Syndrome (HIV/AIDS).  Earlier this year, Harris was found guilty of wire fraud and mail fraud following a five-day jury trial. 

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Jeffrey C. Mazanec, Special Agent in Charge of the FBI’s Richmond Field office, made the announcement following the sentencing.

            According to evidence presented at trial, Harris was the President and majority shareholder of M.F. Harris Research Inc. (MFH), a company incorporated under the laws of North Carolina in December 2003.  He formed MFH to develop a treatment for HIV/AIDS.  At various times in the past, Harris claimed to have discovered that the use of hyperbaric chambers to treat divers infected with HIV/AIDS for decompression sickness (also referred to as “the bends”) unexpectedly inhibited the virus.  Harris claimed that MFH was devoted to pursuing a potential treatment regimen for HIV/AIDS using the hyperbaric chambers.  

Evidence established that prior to October 2005 and continuing through at least July 2011, Harris solicited more than 80 investors for funds for MFH purportedly to use for: (a) obtaining MFH patents, both in the United States and abroad; (b) conducting human trials or assisting with advancing human trials using the treatment method; (c) continuing research on the treatment method; and (d) developing a treatment for HIV/AIDS.  In connection with those investments, the defendant sold equity shares of MFH original issue stock and represented that invested funds would largely be used to pursue those objectives.  From 2005 through 2011, Harris solicited most investors to pay $1 per share and, in many instances, he promised that MFH shares would be worth 10 to 20 times that amount once the patents were approved and clinical trials completed.  On several occasions, Harris solicited investors with a sense of urgency and immediate need for funds to meet deadlines associated with the United States or foreign patent applications. 

At trial, the United States established that Harris made material misrepresentations and omissions in connection with handling the investor funds, including: (a) misrepresentations regarding MFH’s actual and proposed ownership of the United States patent; (b) misrepresentations about the security of the investments; (c) affirmative acts of concealing financial information regarding MFH and the defendant’s use of MFH investment funds; and (d) omissions regarding Harris’s intended use of the MFH investment funds for his personal benefit.  In reality, the defendant retained the United States patent in his own name and diverted the overwhelming majority of MFH investment funds for his personal us.  Between October 2005 and July 2011, Harris received over $875,000 in funds from the investors for MFH.  A financial analyst from the National White Collar Crime Center (NW3C) testified at trial that of this money Harris misappropriated over $800,000 for his own use, unrelated to the MFH areas identified by the defendant to the investors.  He used those funds to, among other things: (a) spend more than $250,000 for the costs associated with the purchase, improvements, and utilities associated with the defendant’s primary residence in Luray, Virginia; (b) pay over $70,000 for his horse and farm expenses; (c) spend more than $25,000 at firearms stores; and (d) pay other personal expenses, including automobile, entertainment, restaurant, spa, and international travel to competitive kayaking events. 

            The investigation was led by the Fredericksburg office of the Federal Bureau of Investigation (FBI) and the Virginia State Corporation Commission (SCC).  Those agencies received assistance in the financial investigation from the National White Collar Crime Center (NW3C).  Assistant United States Attorney Michael Gill and Special Assistant United States Attorney and Counsel with the SCC Gauhar Naseem prosecuted the case on behalf of the United States.

This investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia.  The task force is comprised of several federal and state agencies, including the Virginia Attorney General’s Office.  The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force (FFETF), an interagency national task force.

The FFETF was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

NORFOLK, Va. – William Wellington Hooper, Jr., 46, of Virginia Beach, Virginia, and Harry Siegfried Rahn, Jr., 52, of San Francisco, California were indicted by a federal grand jury today on charges of conspiracy, providing and accepting kickbacks relating to government contracts, wire fraud, and false statements.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia made the announcement.

Hooper and Rahn face a maximum penalty of five years in prison for conspiracy, up to 10 years in prison on each count of illegal kickbacks, 20 years in prison on each count of wire fraud, and five years for false statements if convicted.

According to the indictment, between July 2010 and December 2012, William Hooper and Harry Rahn engaged in a contracting kickback scheme in which Rahn paid approximately $72,000 in monetary kickbacks to Hooper, much of which was related to military contracts.  Hooper had been employed as a manager at Oceaneering International, Inc. (OII) of Chesapeake, Virginia since April 2010.  In July 2010, the Naval Sea System Command (NAVSEA) awarded a cost-plus fixed fee contract to OII.  Two weeks after the Navy contract award to OII, Rahn, a long-time acquaintance of Hooper, registered Rahn Systems International, LLC (RSI) in San Francisco, California, with Rahn serving as the owner.  Shortly thereafter, Hooper began recommending purchase orders pertaining to the NAVSEA contract to the new subcontractor RSI.  Between August and December 2011, Rahn mailed 21 U.S. Postal money orders totaling over $18,000 to Hooper and to Hooper’s landlord in Virginia Beach.  By November 2011, Hooper left OII for unknown reasons and was hired as the as the Director of Fabrication for Steel America, a division of Colonna’s Shipyard, Inc. in Norfolk, Virginia.  Once hired, Hooper once again began recommending subcontracts to RSI, primarily on Colonna’s commercial contracts.  While at Steel America, RSI wired over $58,000 in 11 money wire transactions to a bank account Hooper opened in February 2012.

This case was investigated by the Defense Criminal Investigative Service (DCIS) and the Naval Criminal Investigative Service (NCIS).  Assistant United States Attorney Stephen W. Haynie 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.

ALEXANDRIA, Va. – David J. Rainsberger, 33, formerly a law enforcement officer with the State Department’s Diplomatic Security Service, was sentenced today to  366 days in prison, followed by 1 year of supervised release, for receiving unlawful gratuities while stationed at the U.S. embassy in Kingston, Jamaica, and making false statements to the United States government on a national security questionnaire required to maintain his security clearance.  Rainsberger was also ordered to forfeit to the government two Movado-brand watches as proceeds of his crimes. 

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Gregory B. Starr, Director of the Diplomatic Security Service for the U.S. Department of State, made the announcement after sentencing by United States District Judge Gerald Bruce Lee.  Rainsberger previously pleaded guilty to the two felonies on February 6, 2013

            According to court records, Rainsberger served as an assistant regional security officer for investigations at the U.S. embassy in Kingston, Jamaica, from 2009 to 2011.  While there, Rainsberger befriended a well-known Jamaican musician whose entry to the U.S. had been barred because of allegations of criminal conduct.  Rainsberger’s investigation of this individual resulted in the reinstatement of his visa, which allowed the individual to travel to the U.S. to take advantage of lucrative performance and recording opportunities.  On account of the assistance Rainsberger provided him with respect to his U.S. visa, the musician purchased for Rainsberger two luxury watches, clothes, and shoes worth approximately $3,000.  In addition, Rainsberger received free admission to nightclubs, backstage access to concerts, and a birthday party hosted by the musician. 

            At the same time, Rainsberger, who was already married, became engaged to a Jamaican national and intentionally withheld disclosure of the relationship from the U.S. government on Office of Personnel Management Standard Form 86, a national security questionnaire that requires disclosure of close and continuing contact with foreign nationals.  Rainsberger also repeatedly accessed, without authority, Department of State visa and passport databases for personal purposes. 
This case was investigated by the Diplomatic Security Service.  Assistant United States Attorneys Paul J. Nathanson and G. Zachary Terwilliger prosecuted the case on behalf of the United States.

            A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

ALEXANDRIA, Va. – Douglas Lee Payne, Jr., 31, of Fairfax County, Va., was sentenced today to 300 months in prison, followed by a lifetime period of supervised release, for charges of production of child pornography and attempted enticement of a minor.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Colonel Edwin C. Roessler, Jr., Acting Fairfax County Chief of Police, made the announcement after sentencing by United States District Judge Leonie M. Brinkema.
Payne pleaded guiltyon April 8, 2013.  According to court documents, during the investigation of a Fairfax County probation violation in December 2011, electronic communications between Payne and two minor females, one in Indiana and another in Pennsylvania, were discovered.  In these communications, Payne asked the minor victims for nude images and instructed them on how to pose.  Payne had a least one child pornography image of each minor victim, which, as he had requested, had been sent to him.  Payne and the minor victim in Indiana also had conversations about Payne going on a trip to Indiana to visit family and having sex with the minor on his trip home to Virginia.  On December 28, 2011, Payne was on his way to Indiana when he was instructed to come home for a meeting with his Fairfax County probation officer.
This case was investigated by the Fairfax County Police Department and the FBI Washington Field Office’s Child Exploitation Task Force.  Special Assistant United States Attorney Alicia J. Yass, a Trial Attorney with the Child Exploitation and Obscenity Section of the Justice Department’s Criminal Division, is prosecuting the case on behalf of the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

NORFOLK, Va. – Raymond Carroll Webb, 54, of White Stone, Va., and his company, Peak Enterprises, were both sentenced to a three-year term of probation and were ordered to pay a $3,000 fine and $1,000 in restitution to the National Oceanic and Atmospheric Administration (NOAA) for trafficking in illegally-harvested striped bass.  The $3,000 fine was directed to the Lacey Act reward account which provides rewards to persons who report wildlife crime to law enforcement.  Webb and Peake Enterprises were ordered to maintain a Vessel Monitoring System (VMS) unit on any vessel if used for charter fishing during the term of their probation.  The VMS unit will allow law enforcement officers to track the vessel in real-time.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, Robert G. Dreher, Acting Assistant Attorney General for the Environment & Natural Resources Division, and Logan Gregory, Special Agent in Charge for NOAA’s Office of Law Enforcement’s Northeast Division, made the announcement after sentencing by U. S. District Judge Arenda Wright Allen.

               On January 28, 2013, Webb and Peake Enterprises each pled guilty to violation of the Lacey Act in the United States District Court in Norfolk, Virginia.  The Lacey Act, among other things, makes it unlawful for any person to transport, sell, receive, acquire or purchase any fish or wildlife taken, possessed, transported or sold in violation of any law or regulation of the United States.  Since 1990, federal law has made it unlawful to fish for, catch, or possess striped bass in the Exclusive Economic Zone (EEZ).  The laws were passed in response to a decline in the striped bass populations in the late 1970’s and are designed to protect and preserve striped bass for future generations.

            According to the plea agreement, Webb and Peake Enterprises admitted that they sold a chartered Striped Bass fishing trip on February 12, 2011.  After departing from Rudee Inlet in Virginia Beach, Virginia, Webb knowingly took his charter clients into the EEZ to harvest striped bass, even though Webb knew that it was a violation of federal law to harvest striped bass inside the EEZ.  Webb’ clients illegally harvested striped bass within the EEZ.  At some point during the trip, Webb learned that there were Virginia Marine Police patrol boats in the area.  Upon learning this, Webb ordered his first-mate to throw the all of the striped bass overboard to avoid detection by law enforcement. 

This case was investigated by NOAA’s Office of Law Enforcement and the Virginia Marine Police with assistance from the Federal Communications Commission Enforcement Bureau, Norfolk Office.  Assistant U.S. Attorney Stephen W. Haynie of the United States Attorney’s Office for the Eastern District of Virginia and Trial Attorney James B. Nelson of the Department of Justice’s Environmental Crimes Section prosecuted the case on behalf of the United States.

             A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

ALEXANDRIA, Va. – Jerry Keith Cromer, Jr., 79, of Gainesville, Va., pleaded guilty today to theft from an organization receiving federal funds.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement after the plea was accepted by United States District Judge Gerald Bruce Lee.

Cromer faces a maximum penalty of ten years in prison, a $250,000 fine, and full restitution when he is sentenced on October 11, 2013. 

According to the statement of facts filed with the plea agreement, Cromer served as treasurer of the Aldie Volunteer Fire Department from 1995 through 2012.  The members of the fire department elected Cromer to this post.  In the statement of facts, Cromer admitted that from 2000 to 2012 he intentionally embezzled and converted to his own use approximately $645,000 that belonged to the Aldie Volunteer Fire Department.  He used these fire department funds to satisfy his personal mortgage payments, pay personal credit card bills, repair his automobile, and for other personal expenditures.  In addition to local community donations, the Aldie Volunteer Fire Department receives funding from Loudoun County and the federal government. 

This case was investigated by the Federal Bureau of Investigation’s Washington Field Office and the Virginia State Police.  Assistant United States Attorney Mark D. Lytle is prosecuting the case on behalf of the United States.

The FBI encourages anyone with information regarding similar allegations of fraud or corruption to call the FBI’s Northern Virginia Public Corruption tip line at (703) 686-6225.