Eastern District of Virginia

NORFOLK, Va. – Alano Christobo Blanco, 46, of Newport News, Va., was sentenced today to 235 months in prison, followed by 5 years of supervised release, for his participation in a complex drug trafficking organization operating between New York, California, and the Virginia Peninsula.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Mythili Raman, Acting Assistant Attorney General for the Criminal Division, made the announcement after sentencing by United States District Judge Mark S. Davis. 

            Blanco was found guilty by a federal jury on Nov. 7, 2012, and convicted of drug conspiracy, money laundering conspiracy, and interstate travel in aid of racketeering.

            Blanco was charged, along with several co-defendants, in a superseding indictment returned on Aug. 15, 2012.  According to court documents and evidence presented in court, suppliers of multi-kilogram quantities of illegal drugs in New York, California, Georgia, North Carolina and Texas distributed cocaine and marijuana to leaders of the long-running organization for further distribution on the Virginia Peninsula.  Blanco was part of a sophisticated drug network that supplied the Thug Relations street gang, which was located primarily in the Aqueduct Apartments and Warwick Lawn Apartments in the Denbigh area of Newport News.  From approximately 2004 until 2009, Blanco helped launder money from the drug sales in seemingly legitimate ventures, and served as one of several couriers who would transport kilograms of cocaine and large bulk cash payments between New York and the Virginia Peninsula. 

            This case was investigated by the FBI Safe Streets Task Force, the Virginia State Police, the Newport News Police Department, the Peninsula Narcotics Enforcement Task Force, and Homeland Security.  Assistant United States Attorney Eric Hurt and Trial Attorney Louis Crisostomo of the Organized Crime and Gang Section in the Justice Department’s Criminal Division 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. – On March 25, 2013, Hiram Granados Alvarez, 38, of Riverside, California, was sentenced to 324 months’ imprisonment for his role in a drug trafficking conspiracy involving several kilograms of cocaine.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Robert Brisolari, Acting Special Agent in Charge for the Drug Enforcement Administration (DEA)’s Washington Field Office, made the announcement after the sentencing was announced by United States District Judge Henry E. Hudson.

            According to court documents, Hiram Alvarez and others conspired together to broker a series of large cocaine transactions.  The first transaction they attempted, in January 2012, involved efforts to obtain 100 kilograms of cocaine for a potential buyer in Baltimore, Maryland.  The participants flew to Richmond, Virginia, and then traveled to Baltimore for a meeting scheduled to take place on January 27, 2012.  The conspirators met at an apartment and counted the funds gathered by the proposed buyers, totaling approximately $1,499,377.00 in United States currency.  Soon after the money was counted, three co-defendants (Dion Williams, Torry Zenon, and Vincent Williams) were arrested in possession of the cash, two Royal Sovereign money counters, two handguns, and other items.  As a result, the transaction was not consummated.

            Hiram Alvarez and others coordinated a second drug transaction to take place in March 2012.  Documents filed with the Court show that Alvarez contacted co-defendant Topeka Sam in February 2012, and advised that he (Alvarez) had a seller willing to supply approximately 50 kilograms of cocaine.  Sam, in turn, located two buyers who were willing to pay $26,000 per kilogram of cocaine.  To execute those transactions, Sam and another co-defendant travelled to Richmond, Virginia, on March 7, 2012, to meet with sellers at the Hooter’s Restaurant, located at 7912 West Broad Street, Richmond, Virginia.  At Hooter’s, Sam met with three individuals who she believed to be the sellers.  Sam and the proposed sellers travelled to a storage facility located at 9001 Brook Road, Glen Allen, Virginia, where she inspected an undercover “trap” vehicle designed to conceal and transport kilogram quantities of cocaine.  Sam viewed approximately 50 kilograms of cocaine that were concealed in the vehicle.  She agreed to purchase all 50 kilograms of cocaine, with 25 kilograms going to a buyer from Maryland, and another 25 kilograms going to a buyer from New York.

On March 8, 2012, Sam, co-defendant Percy Robinson, and another co-defendant met with the proposed sellers at an address in Randallstown, Maryland.  At that location, Robinson negotiated his proposed purchase of 25 kilograms of cocaine and presented approximately $250,000 in United States currency to serve as partial payment for the cocaine purchase.  Robinson agreed to meet with the sellers on the following day to present additional money to complete the drug transaction.  Robinson left the address and was intercepted by law enforcement during a traffic stop, at which time he was in possession of approximately $255,360.

            Later on March 8, 2012, Sam and co-defendant Reginald Marshall met with the proposed sellers at the Randallstown, Maryland address to discuss Marshall’s proposed cocaine purchase.  Marshall negotiated the transaction and presented approximately $80,000 in United States currency to serve as partial payment for the cocaine.  Marshall and Sam left soon thereafter with the understanding that Marshall would gather more funds to complete the purchase.  Later that same day, law enforcement officers intercepted Marshall and Sam during a traffic stop, at which time the two were in possession of approximately $89,074.

            Finally, on April 24, 2012, Sam and Robinson travelled to Richmond, Virginia to meet with proposed sellers about another drug transaction.  During that meeting, Robinson agreed to purchase another 30 kilograms of cocaine.  Soon thereafter, both Sam and Robinson were arrested by law enforcement for their alleged role in the drug trafficking conspiracy. 

            To date, all of the arrested defendants have been convicted:

• Topeka Kimberly Sam pleaded guilty and was sentenced to 130 months’ imprisonment on January 11, 2013.

• Percy Robinson pleaded guilty and was sentenced to 130 months’ imprisonment on November 13, 2012. 

• Reginald Marshall pleaded guilty and was sentenced to 120 months’ imprisonment on January 29, 2013. 

• Susan Smallwood pleaded guilty and was sentenced to 57 months’ imprisonment on November 20, 2012.

• Dion Levering Williams pleaded guilty and is scheduled for sentencing on April 19, 2013.

• Torry Von Zenon was convicted at trial and is scheduled for sentencing on May 31, 2013.

• Vincent A. Williams was convicted at trial and is scheduled for sentencing on April 26, 2013. 

            The investigation was coordinated by the Drug Enforcement Administration, which received assistance from the Chesterfield County Police Department, Hanover Sheriff’s Office, Richmond Police Department, Virginia State Police, Virginia Commonwealth University Police Department, Baltimore County Police Department, Baltimore City Police Department, Maryland State Police Department, Colton Police Department, Maryland Transportation Authority Police, Maryland Transit Administration Police, Maryland Natural Resources Police, Chino Police Department, Riverside Police Department, San Bernardino City Police Department, Pine Hill Police Department, Portsmouth Sheriff’s Office, and Department of Homeland Security – Homeland Security Investigations.  Assistant United States Attorneys Michael Gill, Jamie Mickelson, and Peter Duffey 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 http://pacer.uspci.uscourts.gov.

RICHMOND, Va. – Samad Jafari, 55, of Henrico, Va., pleaded guilty today to tax evasion as part of a multi-year scheme involving his used car sales business known as United Import Company, Ltd. (United Import).  In addition, United Import plead guilty 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 plea was accepted by United States District Judge Henry E. Hudson. 

            Jafari and United Import were charged by a criminal information filed on March 5, 2013.  Jafari faces a maximum penalty of five years in prison when he is sentenced on June 21, 2013.  The corporation faces a fine of up to $500,000, as well as imposition of a forfeiture monetary judgment for the amount of money involved in the illegal structuring activity.

            In a statement of facts filed with plea agreements for both defendants, 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.  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 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 – acting as President of United Import - 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 Attorneys Laura Colombell Marshall and David Maguire 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. – The owners of a Woodbridge, Va.-based home health care business were sentenced today to 121 months in prison, followed by three years of supervised release, for submitting more than $2.1 million in false claims to Virginia Medicaid and Anthem Blue Cross and Blue Shield (BCBS) for reimbursement of services they did not provide.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Ken Cuccinelli, Attorney General of Virginia; and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by United States District Judge Claude M. Hilton.

Irvine Johnston King, 46, and Aisha Rashidatu King, 40, of Woodbridge, were convicted at trial on Jan. 10, 2013, of conspiracy and multiple counts of health care fraud, in addition to two counts of aggravated identity theft. At sentencing today, they were also ordered by the court to pay $931,894 in restitution and to forfeit the same amount.

According to court records and evidence at trial, the Kings owned and operated Bright Beginnings Healthcare Services, a business that provided in-home personal and respite care and private duty nursing services to Medicaid-eligible individuals.  From at least January 2008 through June 2011, the Kings carried out a scheme to defraud the Virginia Medicaid program and Anthem Blue Cross and Blue Shield (BCBS) by submitting inflated claims for services. They submitted $2.1 million in fraudulent claims, of which Virginia Medicaid paid out $766,620 and BCBS paid out $165,273.

In May 2009, after learning that Virginia Medicaid had retained an outside firm to audit Bright Beginnings, the Kings began an extensive effort to cover up the fraud by creating false nursing documentation to support the claims, including timesheets and notes in the names of several nurses who had never worked at Bright Beginnings. They supervised an unlicensed employee who completed timesheets under the name of a licensed nurse and billed the employee’s time to Virginia Medicaid as licensed practical nursing services. They also directed the father of a patient to sign blank timesheets, which were then falsified to support fraudulent billing for services that had never been provided to that patient.

The investigation was conducted by FBI’s Washington Field Office and the Virginia Attorney General’s Medicaid Fraud Control Unit, with the assistance of the Virginia Department of Medical Assistance Services. Assistant U.S. Attorney Timothy D. Belevetz and Special Assistant U.S. Attorney Steven W. Grist of the Virginia Attorney General’s Office are prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the 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. – Reuben Thomas, 35, of Richmond, Virginia, was indicted today for the theft of 2 electrical generators from the American Victory Base Complex in Baghdad, Iraq. 

            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 the return of the indictment.  

            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 to assist in its mission at the Camp Victory Base Complex (VBC) in Bagdad, in the Republic of Iraq. 

            In addition to theft of government property, Thomas was also charged with making a false statement to the FBI.  If convicted, he is facing a maximum sentence of 10 years’ imprisonment on Count One and 5 years on Count Two.  He also faces a fine of up to $500,000.       

            According to the indictment, a shortage of reliable electricity was a chronic, widespread 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 a wide variety of electrical generators into Iraq.  Forces opposing the United States also had the same electrical problems, and, therefore, they needed generators as much as the DOD.  One such generator purchased by the DOD was a 1.1 Megawatt, approximately 20,000 pound, diesel generator manufactured by F. G. Wilson.  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.  DOD stored and maintained many of its generators in a yard on the west side of the VBC.

            On June 17, 2009, two of these generators were stolen from the VBC.  Count One of the indictment charges Thomas in the theft of those generators.

            He is also charged with making a false material statement in connection with the investigation of the thefts.  The investigation established that a rough terrain container handler, commonly referred to as a “retch,” was used to lift the generators from the sandy storage yard onto two flatbed trucks.  The investigation also determined that the particular retch used in the theft was borrowed from Supply Support Administration (SSA) facility on the east side of the VBC, with the permission of an SSA supervisor.  Accordingly, it was material to the investigation to determine the identity of the person who asked the supervisor for permission.

            According to the indictment, on September 15, 2010, Thomas falsely represented to an FBI Special Agent that on June 17, 2009 he had not spoken to anyone at the SSA yard on the east side of the VBC to ask for permission to use a retch.  In fact, the indictment alleges, Thomas did ask an SSA supervisor for permission to borrow the vehicle.

            This case was investigated by the Federal Bureau of Investigation and the Criminal Investigation Division of the United States Army.  Assistant United States Attorney David T. Maguire 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.

NEWPORT NEWS, Va. – Kevin Gerald Forde, aka “Miami Kev,” 38, of Newport News, Va., was sentenced today to 300 months in prison, followed by 10 years of supervised release, for his participation in a complex drug trafficking organization operating between New York, California, and the Virginia Peninsula.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Mythili Raman, Acting Assistant Attorney General for the Criminal Division, made the announcement after sentencing by United States District Judge Mark S. Davis. 

            Forde was found guilty by a federal jury on Nov. 7, 2012, and convicted of drug conspiracy, distribution of cocaine, and illegal use of a communication device. 

            Forde was charged, along with several co-defendants, in a superseding indictment returned on Aug. 15, 2012.  According to court documents and evidence presented in court, suppliers of multi-kilogram quantities of illegal drugs in New York, California, Georgia, North Carolina and Texas distributed cocaine and marijuana to leaders of the long-running organization for further distribution on the Virginia Peninsula.  Forde was part of a sophisticated drug network that supplied the Thug Relations street gang, which was located primarily in the Aqueduct Apartments and Warwick Lawn Apartments in the Denbigh area of Newport News.  Beginning in 1999 until his arrest in 2011, Forde was a buyer and seller of cocaine and crack cocaine who participated in hundreds of transactions with numerous individuals that involved a wide range of quantities.   

            This case was investigated by the FBI Safe Streets Task Force, the Virginia State Police, the Newport News Police Department, the Peninsula Narcotics Enforcement Task Force, and Homeland Security.  Assistant United States Attorney Eric Hurt and Trial Attorney Louis Crisostomo of the Organized Crime and Gang Section in the Justice Department’s Criminal Division 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. – Executives at two Arlington-based businesses have pleaded guilty to fraudulently obtaining more than $31 million in government contract payments that should have gone to disadvantaged small businesses.

            The guilty pleas were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and NASA Inspector General Paul K. Martin.

            “These executives used their knowledge and experience to abuse a program created to ensure minority small business owners could compete for government contracts,” said U.S. Attorney MacBride. “They not only illegally obtained millions from the United States, they also victimized legitimate minority owners who didn’t get the bids.”

“Keith Hedman and his co-conspirators fraudulently obtained valuable government contracts intended for minority-owned small businesses, and pocketed millions of dollars for themselves,” said Acting Assistant Attorney General Raman.  “They abused an important government program, and will now face the consequences.”

“This investigation confirmed that these executives repeatedly took actions that gave them a fraudulent advantage in the contracting process,” said NASA Inspector General Martin.  “I commend the outstanding efforts of our agents and our law enforcement partners involved in this case in protecting the integrity of the 8(a) program.”

            According to court documents, Keith Hedman, 53, of Arlington, Va., formed an Arlington-based security service consulting company in approximately 2001.  Hedman formed the company, listed as Company A in court filings, with an African-American woman who was listed as its president and CEO to enable the company to participate in the Small Business Administration’s (SBA) Section 8(a) program, which enables certain small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.  In 2001, Hedman’s company received approval to participate in the 8(a) program on the basis of the African-American president and CEO’s listed role, but when she left the company in 2003, Hedman became its sole owner and the company was no longer 8(a)-eligible.

            Hedman admitted that in 2003 he created a shell company, listed as Company B in court records, to ensure he could continue to gain access to 8(a) contracting preferences for which Company A was not qualified.  Prior to applying for the shell company’s 8(a) status, Hedman selected an employee, Dawn Hamilton, 48, of Brownsville, Md., to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage, when in reality the new company would be managed by Hedman and senior leadership at Company A.  To deceive the SBA, they falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management.  They continued to mislead the SBA through 2012, even lying to the SBA to overcome a protest filed by another company accusing Hedman’s former company and the shell company of being inappropriately affiliated.

            From Company B’s creation through February 2012, Hedman – not Hamilton – exercised ultimate decision-making authority and control over the company by controlling its finances, allocation of personnel and government contracting activities.  Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures by Hamilton to documents she had not seen or drafted.  Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence.  In 2011, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other co-conspirators. In total, Hedman and Hamilton secured through the shell company more than $31 million in government contract payments, which generated more than $6 million in salary and payments for the conspirators that they were not entitled to receive.

            In addition, Hedman admitted that he agreed to pay a $50,000 bribe through the shell business to a U.S. government contracting official for the official’s help in securing contracts for Company B.

            Hedman and Hamilton pleaded guilty on March 13 and March 15, 2013, respectively, in U.S. District Court for the Eastern District of Virginia to major government fraud and face a maximum penalty of 10 years in prison and a multimillion-dollar fine for that charge. Hedman also pleaded guilty to conspiracy to commit bribery, which carries a maximum penalty of five years in prison.  Hedman agreed to forfeit more than $6.3 million, and Hamilton agreed to forfeit more than $1.2 million.  Hedman is scheduled to be sentenced on June 21, 2013, before U.S. District Judge Gerald Bruce Lee.  Hamilton’s sentencing is scheduled for June 21, 2013, before U.S. District Judge T. S. Ellis, III.

            In addition, the following individuals have also pleaded guilty to major fraud or conspiracy to commit major fraud:

• David George Lux, 66, of Springfield, Va., pleaded guilty today before U.S. District Judge Leonie M. Brinkema.  Lux served as the chief financial officer at Company A from 2007 through February 2012 and performed work for Company B throughout that time while officially on Company A’s payroll.  He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.

• Joseph Richards, 51, of Arlington, Va., pleaded guilty on March 14, 2013, before U.S. District Judge Brinkema in the Eastern District of Virginia.  Richards served as the chief operating officer and chief of staff for Company A from 2005 through 2008 and then vice president from 2010 through February 2012.  He also served as Company B’s chief of staff from 2008 through 2010.  According to court documents, Richards performed work for Company B throughout his time at both companies. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.

• David Sanborn, 60, of Lexington, S.C., pleaded guilty on March 13, 2013, before U.S. District Judge Claude M. Hilton in the Eastern District of Virginia.  Sanborn served as vice president at Company A from 2001 through 2009 and the company’s president from 2010 through February 2012.  According to court documents, Sanborn performed work for Company B from its inception while on Company A’s payroll.  He is scheduled to be sentenced on June 28, 2013, by Judge Hilton.

            This case was investigated by the NASA Office of the Inspector General (OIG), the SBA OIG, the Defense Criminal Investigative Service, the General Services Administration OIG and the Department of Homeland Security OIG.  Assistant U.S. 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.

NORFOLK, Va. – David Burrus, Jr., age 39, a former Virginia Beach resident now living in Burns, TN, pleaded guilty today in Norfolk federal court to conspiring to commit mail and wire fraud in conjunction with mortgage loans he obtained from 2005 through 2007.

               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 Burrus entered a guilty plea to count one of the seven count pending indictment before Senior United States District Judge Robert G. Doumar.  Burrus faces a maximum penalty of 30 years in prison when he is sentenced on July 8, 2013.

            According to court documents, David Burrus, Jr., 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 numerous 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 prices, 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, forged and 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.  Wyland faces a maximum penalty of 5 years in prison when she is sentenced by Chief United States District Judge Rebecca Beach Smith on April 5, 2013.

            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 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.

ALEXANDRIA, Va. – Joshua Jacquis Dumas, aka “Hitman,” 21, of Atlanta, Ga., pleaded guilty to running a commercial sex business that prostituted multiple juvenile girls in Herndon, Va., and other locations throughout Virginia, Maryland, North and South Carolina, Georgia, and Florida.  The leader of the venture, Edwin Barcus, Jr., pleaded guilty one week ago to founding and leading a child exploitation enterprise.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Virginia Attorney General Kenneth Cuccinelli, II; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Lt. Colonel James A. Morris, Acting Fairfax County Chief of Police, made the announcement after the plea was accepted by United States District Judge Leonie M. Brinkema.

            Dumas pleaded guilty to engaging in a child exploitation enterprise and faces a mandatory minimum of 20 years and a maximum of life in prison when he is sentenced on June 7, 2013.

            “Joshua Dumas was a leader in a prostitution ring that profited from selling the bodies of young girls,” said U.S. Attorney MacBride. “He’s facing at least 20 years in prison for these vile crimes, and we hope other pimps are getting the message that sex trafficking children is not good for business.”

“Dumas recruited, intimidated, and exploited these young girls, selling these children into a life of sexual slavery, keeping them drugged to make them compliant, and making money off it,” said Attorney General Cuccinelli. “We will do everything in our power to stop sex traffickers like Dumas and Barcus from victimizing the most vulnerable among us, and we will put them away for as long as we can.”

            “In today’s plea, Joshua Dumas admitted his role in a commercial sex business that preyed upon young girls and lured them into prostitution through deception and intimidation,” said Assistant Director in Charge Parlave. “Along with our law enforcement partners, the FBI is committed to apprehending these predators and ensuring they receive the justice they deserve.”

            Dumas admitted that he played an important role in Barcus’s enterprise, serving as a manager and helping recruit juvenile girls to prostitute for the venture.  He and others expressed a romantic interest in a particular girl, and then they tried to make prostituting seem glamorous.  Sometimes, if a girl refused to work for their enterprise, members of the enterprise would steal her money.  Members of the conspiracy carried a semi-automatic pistol for purposes of intimidation and protection.

            Dumas admitted that he came to Virginia at the behest of Barcus because of the substantial profits in Virginia.  Dumas had been prostituting two girls in Georgia, but he transported these girls via Greyhound bus so that they could prostitute in Herndon, Va.  The girls were given narcotics to keep them compliant.  Dumas admitted that the enterprise also used a juvenile boy to run errands and do counter-surveillance against the police.

            Daily, the enterprise posted multiple advertisements on Backpage.com, and sometimes within minutes customers would call.  Law enforcement recovered multiple “throwaway” cell phones that customers would call to arrange a “date” with the girls.  Customers were then told which hotel to visit but not the room number, which allowed the members of the conspiracy the opportunity to observe the customer and ensure he was not an undercover detective.  Once they believed the customer was not a policeman, they would call or text the customer with the room number.

            Customers were charged at least $80 for 15 minutes of sex, $100 for 30 minutes, and $200 for 60 minutes.  The girls were also instructed to charge more for “extras” and were encouraged to always try to get more money from the customers.  The girls generally made at least $500 per day and sometimes made $3,000 per day.  The girls were required to give all of their money to Barcus, Dumas, or other members of the enterprise.  Some of the money was used to purchase narcotics, such as marijuana, “Molly,” which were given to the girls to induce them to continue prostituting.

This case was investigated by the FBI’s Washington Field Office and the Fairfax County Police Department, with assistance from the Northern Virginia Human Trafficking Task Force. Assistant United States Attorney Michael J. Frank and Virginia Assistant Attorney General and Special Assistant United States Attorney Marc J. Birnbaum are prosecuting the case on behalf of the United States.

Founded in 2004, the Northern Virginia Human Trafficking Task Force is a collaboration of federal, state, and local law enforcement agencies – along with nongovernmental organizations – dedicated to combating human trafficking and related crimes.

            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. – Brett A. Amendola, 38, of Ashburn, Va., was sentenced to 84 months in prison today for carrying out a $5 million Ponzi scheme involving his purported purchase of a golf course in Loudoun County, Va. The scheme resulted in losses of at least $2.8 million to more than a dozen victims who had invested with Amendola.  

Amendola was immediately taken into the custody of the U.S. Marshals Service at sentencing, where he will remain until transferred to the Bureau of Prisons to serve his prison sentence.

            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 Michael L. Chapman, Loudoun County Sheriff, made the announcement after sentencing by United States District Judge Gerald Bruce Lee. 

Amendola pleaded guilty on April 4, 2012, to wire fraud. According to court records, during 2010 and 2011, Amendola persuaded various investors to provide him with short-term funding that would be held in escrow to fulfill a requirement by his lender to purchase the Beacon Hill Golf Course in Loudoun County. He promised that the money would be returned to the investors – with interest – in a matter of days. In reality, Amendola diverted the investors’ money to his own use, including funding his and family members’ trading accounts, making payments to investors in this and other schemes, and paying for personal expenses, including gambling.

To carry out his fraud, Amendola posed as the attorney representing the escrow account both over the phone and through various email messages, leading investors to believe that they were wiring funds to financial accounts controlled by the escrow attorney, when in reality the financial accounts were controlled by Amendola and quickly looted for his personal use.  In sentencing Amendola, the Court found that the fraud was sophisticated and that Amendola abused a position of trust when he impersonated the lawyer.

In a related case, Jerry J. Mckerac, 61, of Las Vegas, Nev., and Fond du Lac, Wis., was charged yesterday in an indictment with conspiracy to commit wire fraud and aggravated identify theft for his involvement in the scheme, which the indictment alleges included similarly impersonating the escrow attorney as well as Amendola’s father while dealing with the victims.

            This case was investigated by the FBI’s Washington Field Office and the Loudoun County Sheriff’s Office. Assistant United States Attorneys James P. Gillis and G. Zachary Terwilliger 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.

NEWPORT NEWS, Va. – William Leandro Herrera-Bohorquez, 33, of Colombia, was sentenced today to 87months in prison, followed by three years of supervised release, for his role in a highly sophisticated jewelry theft ring. He was also ordered to pay restitution in the amount of $891,441 and to forfeit $4,435,500.  

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General for the Criminal Division; and James Newman, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by United States District Judge Arenda Wright-Allen.

            Herrera-Bohorquez pleaded guilty on Dec. 6, 2012, to conspiring to commit robberies affecting interstate commerce. According to court records, Herrera-Bohorquez was a member of an organized criminal group that stole more than $4.6 million in jewelry from victims in Virginia and at least six other states.  He was charged along with seven other individuals who were 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 thieves 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 allegedly traveled to New York to sell the merchandise to businessmen, who acted as “fences” and coordinated re-selling the stolen property or melting it down for future use.

            Today’s sentencing follows the sentencing of Raul Antonio Escobar-Martinez, 37, aka “Tony,” of Richmond, Va., on March 7, 2013.  Escobar-Martinez was sentenced to 87 months in prison, followed by three years of supervised release. He was also ordered to pay restitution in the amount of $1,268,696and to forfeit $4,435,500.

            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 United States Attorney Eric M. Hurt and Trial Attorney Jerome Maiatico of the Organized Crime and Gang Section in the Justice Department’s Criminal Division 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. – Twenty-six alleged members of a major drug trafficking ring operating throughout the Virginia Peninsula were charged in federal court today following coordinated arrests that began early this morning as part of an Organized Crime Drug Enforcement Task Force (OCDETF) operation dubbed “Dragon’s Lair.”

               Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge for Drug Enforcement Administration’s (DEA) Washington Field Division; and James D. Fox, Chief of Newport News Police, made the announcement after the court documents were unsealed.      

            “After law enforcement dismantled the major heroin trafficking rings in Tidewater, this organization allegedly stepped in to fill the demand,” said U.S. Attorney MacBride. “Since last October, at least four more people have overdosed on heroin and died on the Peninsula. Today’s charges are part of an ongoing effort to go after those who traffic these highly addictive and dangerous drugs that threaten our communities.”

            “Operation Dragons Lair targeted what we allege to be an extremely violent cocaine and heroin drug trafficking organization operating in the Newport News and Hampton Roads areas of Virginia for more than a decade” stated DEA SAC Colder. “This investigation exemplifies how positive working relationships can result in removing violent offenders from our streets.”

            “This is yet another example of local, state and federal law enforcement agencies and prosecutors working as a team to identify, arrest and prosecute those we allege are involved in the distribution of extremely dangerous illegal drugs” said Chief Fox. “While this operation seeks to put a large dent in the heroin distribution in this area, the good citizens of Hampton Roads can rest assured that this team of dedicated professionals will continue to identify and bring to justice those who are poisoning the community with illegal drugs.”

            Those arrested this morning will make their initial appearance at 3 p.m. in the Norfolk federal courthouse before United States Magistrate Judge Douglas E. Miller.

            The charges were unsealed today in two separate, but related, charging documents. Christopher Devon Barrett, 26, of Hampton, Va., and 12 alleged co-conspirators were charged by criminal complaint with conspiracy to distribute five kilograms or more of cocaine, 280 grams or more of crack cocaine and one kilogram or more of heroin. The criminal complaint alleges that the group originally trafficked crack cocaine and firearms since at least 2005, but recently branched out into selling heroin as a result of the successful arrest and prosecution of Peninsula groups involved in distributing heroin. 

            In September 2008, a prisoner at the Newport News City Farm died in a heroin overdose. That death spurred law enforcement to intensify their focus on the threat posed from heroin abuse within the Virginia Peninsula, which resulted in the federal prosecution of more than 70 defendants and the dismantling of three separate heroin drug trafficking organizations. The criminal complaint unsealed today states that as part of this ongoing investigation, agents are investigating at least four heroin overdose deaths that have occurred on the Virginia Peninsula since October 2012. 

            Barrett is alleged to be the leader of this violent drug trafficking organization, arranging for suppliers and running the day-to-day affairs of the conspiracy from the Colonial Landing Apartment complex in Hampton, Va. 

            Those charged today with Barrett include the following individuals:

• Wayne Dominique Barrett, 24, of Newport News, Va., and Demetrius Deangelo Askew, 31, of Hampton, Va. are alleged to be lieutenants in the criminal organization.

• Donald Lorenzo Smith, 29, Newport News, Va., Jetadia Sirica Cook, 35, of Newport News, Va., Stacy Ray Wise, 26, of Newport News, Va., Darryl Michael Elliott, 46, of Hampton, Va., Dominic Donte Walker, 26, of Hampton, Va., and Timothy Ray Alexander, 42, of Hampton, Va., are alleged to be mid-level distributors for the criminal organization.

• William Lewis Cofield, Sr., 58, of Hampton, Va., Larry Daniel Stokes, 55, of Hampton, Va., and Warren Lester Tribble, 62, of Hampton, Va. are alleged to be lower level distributors that sold narcotics and facilitated the activities of the criminal organization by transporting members of the conspiracy and narcotics from one location to another, and by allowing their residences to be used to package, store and distribute narcotics. 

• Andrea Lanell Barrett, 24, of Newport News, Va., is the sister of Christopher Barrett, and is alleged to broker sales of narcotics and store firearms for the criminal organization. She is also alleged to facilitate the activities of the organization by renting cars for members of the drug trafficking organization.

            Each individual charged by the criminal complaint faces a mandatory minimum of 10 years and a maximum of life in prison, if convicted.

            In addition to those charged as alleged members of the Barrett drug trafficking organization, in a related indictment also unsealed today Steven Lavonne Morris, 38, of Newport News, Va., is alleged to be the leader of a cocaine drug trafficking organization supplied by sources in New York City and Atlanta, Ga. The indictment alleges that Morris obtained kilogram quantities of cocaine in New York and Atlanta, and supervised the transport of the cocaine to the Virginia Peninsula. The criminal organization generally paid from $40,000 to $44,000 per kilogram for cocaine. According to the Barrett criminal complaint, Morris and Barrett conspired with each other to purchase cocaine through the same sources in New York and distribute it throughout Tidewater. On Feb. 23, 2013, Morris and three others were arrested in a parking lot on West Mercury Boulevard, Hampton, Va., allegedly in possession of approximately 900 grams of cocaine.  Agents allegedly located approximately $87,918 in U.S. currency at Morris’s residence later that evening.

            Those indicted with Morris and charged with conspiracy to distribute five kilograms or more of cocaine and 280 grams or more of crack cocaine include:

• Jonathan Holguin, 24, of New York, N.Y. and Edwin Fernandez, 28, of New York, N.Y., are alleged to be cocaine suppliers to Morris and the members of this conspiracy.

• Frederick Lavan Womack, 34, of Hampton, Va., is alleged to be a lieutenant in the Morris drug trafficking organization, traveling with Morris to New York City and converting cocaine powder into crack cocaine at Morris’s direction.

• Bradley Maurice Cephas, 38, of Newport News, Va.; James King Artis, II, 38, of Hampton, Va.; Aaron Evan Smith, 31, of Yorktown, Va.; Christopher Michael Flowers, 40, of Hampton, Va.; Leroy Cornelius Bugg, 33, of Hampton, Va.; and Arthur Gadsden, Jr., 41, of Newport News, Va., are alleged to be mid-level distributors who provided the drugs to street-level distributors and customers.

• James Vincent Taylor; 30, of Hampton, Va.; Alesha Dubrey Cousins; 30, of Hampton, Va.; and Tinesha Monica Dubrey, 31, of Hampton, Va., allegedly served as facilitators and couriers for Morris’s drug trafficking organization.

Each individual charged in the indictment faces a mandatory minimum of 10 years and a maximum of life in prison, if convicted.

            This OCDETF operation was led by the DEA Hampton Post of Duty. The investigative team included the Newport News Police Department, the Newport News Sheriff’s Department, the Virginia State Police, and the Hampton Police Division.  Assistant United States Attorney Laura Tayman is prosecuting the case on behalf of the United States.

The public is reminded that an indictment and a criminal complaint only contain charges and are 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. – Stanley Kyungjin Cho, 50, of Annandale, Va., pleaded guilty today to two counts of felony tax fraud in connection with his personal income taxes and his accounting and tax preparation business, “Kyung Jin Cho, C.P.A., P.C.”

            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 plea was accepted by United States District Judge Leonie M. Brinkema.

            Cho faces a maximum penalty of three years in prison on each count when he is sentenced on June 7, 2013.  

            In a statement of facts filed with his plea agreement, Cho admitted to knowingly making false statements in his personal income tax returns for tax years 2008 through 2011.  The false statements resulted in Cho underpaying his federal income taxes by approximately $262,000.  Cho also admitted that, during the same three year period, he knowingly falsified a significant number of tax returns for his clients, resulting in additional losses to the federal government of at least $157,000.

            This case was investigated by the Internal Revenue Service.  Assistant United States Attorney Kosta S. Stojilkovic 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.

ALEXANDRIA, Va. – Edwin Barcus Jr., aka “Boo,” 27, of Georgia, pleaded guilty to running a commercial sex business that prostituted at least seven juvenile girls in Herndon, Va., and other locations throughout Virginia, Maryland, North and South Carolina, Georgia, and Florida.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Virginia Attorney General Kenneth Cuccinelli, II; Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office; and Lt. Colonel James A. Morris, Acting Fairfax County Chief of Police, made the announcement after the plea was accepted by United States District Judge Gerald Bruce Lee.

            Barcus pleaded guilty to engaging in a child exploitation enterprise and faces a mandatory minimum of 20 years and a maximum of life in prison when he is sentenced on June 7, 2013.

            “Edwin Barcus made his living exploiting vulnerable young girls and luring them into prostitution,” said U.S. Attorney MacBride. “Barcus saw these girls as his property – even making them get tattoos with his nickname. Thanks to the FBI, Fairfax County Police Department and the members of our Northern Virginia Human Trafficking Task Force, his operation is shut down and can no longer victimize these girls.”   

            “Recruiting, exploiting and transporting juveniles for the purpose of underage prostitution is a cruel form of modern-day slavery,” said Assistant Director in Charge Parlave. “Prostitution is not a victimless crime.  The FBI is committed to apprehending individuals who sexually exploit juveniles, and we will continue to work to identify these predators and their victims.”

            According to a statement of facts filed with his plea agreement, since August 2007, Barcus has led and organized a commercial sex organization that has prostituted at least 23 women, including at least four of whom were 16 years old and at least three were 17 years old when Barcus began prostituting them. He targeted juveniles who had run away from home or lived in a broken home, sometimes making them believe that he or other members of the organization were romantically interested in them. Barcus also stated that he purchased clothing and shoes for girls he wanted to recruit as a means of luring them into the venture.

            Barcus admitted that he used Backpage.com and other erotic internet sites to advertise the girls’ services and to recruit girls to work for his organization. When the girls found it difficult to repeatedly have sex with strange men, Barcus and others provided them with alcohol and narcotics to make them more vulnerable and susceptible to prostitution.

            Barcus and other conspirators carried and, when necessary, brandished firearms while engaging in prostitution-related activities, and Barcus battered at least three of the females working for his commercial sex enterprise. At times, Barcus had the women and girls he prostituted tattooed with his nickname: “Boo.”

            In November 2012, Barcus was prostituting at least one juvenile in Herndon, Va., while another member of his organization was prostituting other females in Atlanta, Ga. Because the venture was yielding substantial profits in Herndon, Barcus instructed the conspirator to bring two 17-year-old girls to Herndon. When one of the girls objected, she was told that “under the rules of the game” she had to go to Virginia. Barcus admitted that each girl servicing clients in Herndon could obtain $500 or more per day. All of the money was turned over to Barcus or other members of the enterprise.      

This case was investigated by the FBI’s Washington Field Office and the Fairfax County Police Department, with assistance from the Northern Virginia Human Trafficking Task Force. Assistant United States Attorney Michael J. Frank and Virginia Assistant Attorney General and Special Assistant United States Attorney Marc J. Birnbaum are prosecuting the case on behalf of the United States.

Founded in 2004, the Northern Virginia Human Trafficking Task Force is a collaboration of federal, state, and local law enforcement agencies – along with nongovernmental organizations – dedicated to combating human trafficking and related crimes.

            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. – Two Maryland men have been sentenced for engaging in a scheme to steal nearly $16 million from Vienna-based Southern Management Corporation’s (SMC) employee pension plan.

            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. 

            Robert Fulton Rood IV, 44, of Potomac, Md., was sentenced to 120 months in prison and Nikolaos M. Hepler, 31, of Gaithersburg, Md., was sentenced to 30 months in prison by U.S. District Judge Claude M. Hilton in Alexandria, VA.  Both men pled guilty on Oct. 23, 2012.

            Rood conceived and led a scheme to defraud Southern Management Corporation Retirement Trust (SMCRT), a pension plan established by SMC for its employees.  As of Dec. 31, 2012, the plan’s assets were more than $30 million, and prior to April 2006 SMCRT generally managed its own investments, which included short-term, high-interest loans to real estate developers.

            In April 2006, Rood persuaded SMC’s President and CEO to let Rood locate borrowers, negotiate loans to them, prepare the loan agreements, promissory notes and trust deeds and present loan application packages to the SMCRT loan committee, which would decide whether to purchase the proposed loans.  If the committee decided to do so, it would wire the money to purchase the loan to a settlement company designated by Rood.  Rood would use the money from SMCRT to fund the loan and would obtain from the borrower an executed loan agreement, promissory note and trust deed, which he would assign to SMCRT.  In most cases, the borrowers were not aware of SMCRT’s involvement in the process.

            Rood represented to both SMCRT and the borrowers that he would set up escrow accounts for the payment of interest to SMCRT and for construction payments to the borrowers. Instead, the moneys from all the loans were co-mingled into Rood’s principal bank account.  When the project was finished and sold, the borrower was to pay back the amount borrowed to SMCRT.

            From April 2006 to around October 2007, Rood sold to SMCRT approximately 32 mortgage loans that he had originated, of which 24 went into default after they were funded by SMCRT.  One loan, referred to as the “K Street” loan, never closed because the title company was unable to clear title to the property, and Rood simply kept the money that SMCRT paid him to purchase the loan.  Two other loans – the “Eastern Shore” and “Accom” loans – involved SMCRT loans that the borrowers refinanced with different lenders and sent their payoffs to Rood, who kept the payoff monies.  In each case, Rood, assisted by Hepler, his employee, misrepresented to SMCRT that the loans were in place and performing satisfactorily, including Rood’s making of the monthly interest payments to SMCRT on the nonexistent loans.

            When SMCRT requested an independent review of Rood’s accounts, Rood engaged Lloyd M. Mallory, a Maryland certified public accountant, to perform a review of the loans, disbursements and escrows.  The accountant issued a report, which was actually prepared by Rood and Hepler, that falsely showed the status of the loans and the funds held by Rood.  Mallory was sentenced to 24 months in prison on Aug. 2, 2012, following his plea of guilty to the conspiracy.

            This case was investigated by the FBI’s Washington Field Office. Assistant United States Attorneys Michael E. Rich and Uzo E. Asonye 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. – Melvin Mooring, 54, of Gainesville, Va., pleaded guilty today to wire fraud and tax evasion in connection with the theft of approximately $3.3 million from a Chantilly, Va., company where Mooring had served as the chief financial officer.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division; 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 Liam O’Grady. 

            Mooring faces a maximum penalty of 20 years in prison on the wire fraud count and five years in prison on the tax evasion count when he is sentenced on June 7, 2013.

            From 2000 to 2011, Mooring served as the chief financial officer, or CFO, of K&R Industries, a private company in Chantilly, Va.  In a statement of facts filed with his plea agreement, Mooring admitted that from 2004 to 2011, he stole approximately $3.3 million from the company via company checks and wire transfers, which he routed through the bank account of a company he controlled in order to conceal their fraudulent nature.  Mooring also admitted to altering company financial statements to conceal the fraud and to using the stolen funds for personal purposes, including for travel and to purchase real estate, automobiles, and jewelry.  Mooring also admitted to failing to report the stolen funds as income on his individual income tax returns for the years 2005 through 2010, resulting in approximately $865,000 in losses to the United States Treasury.

            This case was investigated by IRS-Criminal Investigation.  Assistant United States Attorney Paul J. Nathanson and Tax Division Trial Attorney Tracy L. Gostyla 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. – MacArthur Taylor, 40, of Dale City, Va., was sentenced to 220 months in prison, followed by 15 years of supervised release, for creating child pornography by himself engaging in sexual activity with a 14-year-old girl.

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 Stephan M. Hudson, Prince William County Chief of Police, made the announcement after sentencing by United States District Judge Anthony J. Trenga. 

            Taylor pleaded guilty on June 11, 2012, to producing child pornography. He was identified by law enforcement after he provided his Dell Streak Tablet to an acquaintance to repair.  While attempting to repair the tablet, the acquaintance saw still images of a female minor in various states of undress.  A video produced by Taylor was also later discovered on the tablet showing the victim engaging in sexually explicit conduct. When law enforcement interviewed the young girl, she admitted to engaging in sexually explicit conduct with Taylor for the past two years. 

The investigation was conducted by the Prince William County Police Department and FBI Washington Field Office’s Child Exploitation Task Force.  Assistant United States Attorney Jay V. Prabhu and Department of Justice Trial Attorney Maureen C. Cain 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.

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. – A man the U.S. government has identified as a narcotics kingpin and top lieutenant in the Sinaloa Cartel has been indicted by a federal grand jury in Alexandria, Va.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Mythili Raman, Acting Assistant Attorney General for the Criminal Division; and Karl Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Division Office, made the announcement after the indictment was unsealed.

            Damaso Lopez Nunez, aka “El Licensiado,” 47, of Mexico, was indicted on Nov. 23, 2011, and accused of conspiring to distribute cocaine and conspiring to commit money laundering. He faces a maximum penalty of life imprisonment, if convicted. The indictment was unsealed on March 7, 2013.

            On Jan. 9, 2013, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Lopez Nunez under the Foreign Narcotics Kingpin Designation Act, which prohibits U.S. persons from conducting financial or commercial transactions with the designated individual and freezes any assets they have under U.S. jurisdiction. According to OFAC, Lopez Nunez is a top lieutenant of Joaquin “Chapo” Guzman Loera of the Sinaloa Cartel. A chart of the Chapo Guzman organization can be viewed here: http://www.treasury.gov/resource-center/sanctions/Programs/Documents/20130109_sinaloa_operatives.pdf. 

            The indictment provides a forfeiture notice of $280 million representing the proceeds of the alleged offenses.

This ongoing investigation is being conducted by the DEA’s Washington Division Office and Mazatlan Resident Office.Assistant United States Attorney Daniel J. Grooms of the Eastern District of Virginia’s National Security and International Crime Unit and Trial Attorney Darrin L. McCullough of the Narcotic and Dangerous Drug Section of the Justice Department’s Criminal Division 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 and unless 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.

RICHMOND, Va. – Lenora Banks-Davis, aka “Jacqui Banks-Davis,” 58, of Richmond, Virginia, was sentenced today to 120 months in prison, to be followed by five years of supervised release for defrauding an elderly widow. 

            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.  In reaching the final sentence of 120 months, Judge Gibney levied a significant upward departure to address the defendant’s egregious, long-term conduct against the victim.

            According to evidence presented at trial, in 2009 Banks-Davis used an elderly victim’s BB&T credit card for the purpose of paying the defendant’s own personal expenses and obligations.  Banks-Davis obtained the victim’s credit card by falsely representing that she would use the credit card only to help the victim consolidate and pay off her financial obligations.  Instead of fulfilling that promise, Banks-Davis charged thousands of dollars of her own expenses onto the victim’s card without her knowledge or authorization.  From late May through November 2009, Banks-Davis charged over $13,000 at a number of establishments, ranging from mundane expenses to extravagant luxuries, including thousands of dollars in pet care and over $700 in high-end acai berry juice. 

At trial, the United States established that, in addition to the charged conduct, Banks-Davis had previously defrauded the victim over the course of a thirty-year relationship.  Additionally, just prior to that conduct, Banks-Davis accepted more than $6,000 in charity from members of the Bon Air Baptist Church.  As a condition of her sentence, the Court prohibited Banks-Davis from having any contact with the victim and members of the victim’s family.

            The case was investigated by the Federal Bureau of Investigation.  Assistant United States Attorneys Michael Gill and Dominick S. Gerace 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.

NORFOLK, Va. – Michael Lee Haddock, 32, of Portsmouth, Va., was sentenced to a statutory maximum of 240 months in prison and three years of supervised release for conspiring to distribute analogue drugs for over a year using the internet and the United States Postal Service. 

            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 Homeland Security Investigations (HSI) in Washington, D.C.; Keith A. Fixel, Inspector in Charge of the Charlotte Division of the United States Postal Inspection Service; and Chief Edward Hargis of the Portsmouth Police Department, made the announcement after the sentence was returned. 

Michael Haddock was charged under a criminal information and entered a guilty plea on December 5, 2012 to conspiring to distribute analogues of controlled substances, which Haddock had been importing from China for over a year. Analogue drugs, often called “research chemicals” or “bath salts,” typically have only slightly different chemical structures to a Schedule I or II drug and are created to attempt to avoid bans by state and federal governments.   In addition to a similar chemical structure, analogue drugs have a similar or greater effect on the human body than the scheduled drug when ingested.  Haddock was ordering analogues drugs, such as Methylone (now scheduled), 4-FMA, MXE, 2C-C, 2C-E, 2C-I, 4-MEC, Butylone, Ethylone, Pentylone, and multiple other substances.  The total amount of drugs attributed to Haddock, according to court documents, was over 27 kilograms of analogues or controlled substances in the year-long conspiracy. 

Haddock had used multiple websites and email addresses to receive orders for analogue drugs, which he would package in his Portsmouth home and send throughout the United States using the United States Postal Service. Multiple powders, scales, spoons, and packaging materials were located in Haddock’s home in February 2012.  In addition, there were two firearms stored with the drugs. 

            This case was investigated by HSI’s Hampton Roads Border Enforcement Security Task Force (HR-BEST), the Portsmouth Police Department and the United States Postal Inspection Service. Special Assistant United States Attorney Amy E. Cross 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.

United States Alleges Companies Provided Government Employees with Meals and Entertainment to Steer Contract Award

ALEXANDRIA, Va. – The Justice Department announced today that American Systems Corporation, Anixter International Inc., and Corning Cable Systems LLC have agreed to pay the United States $3 million to settle allegations that they violated the False Claims Act and the Anti-Kickback Act in bidding on a contract with the CIA. 

            The settlement announced today resolves claims against these contractors related to a CIA contract awarded to American Systems in early 2009 to provide supplies and services.  American Systems teamed with Anixter to bid on the contract with Corning as a supplier.  The United States alleged that American Systems, Anixter and Corning provided gratuities, including meals, entertainment, gifts and tickets to sporting and other events, to CIA employees and outside consultants in order to influence contract specifications that would favor the three companies in the award of the contract. The settlement also resolves allegations that the three companies improperly received source selection information from a CIA employee to whom they had provided gratuities, and that they had concealed the gratuities prior to award.  

           “Improper gifts and gratuities paid to government officials are a corrupting influence on government contracts. Combating this type of conduct is a high priority in the Eastern District of Virginia,”said U.S. Attorney for the Eastern District of VirginiaNeil MacBride.

“This settlement shows that the United States will protect the integrity of the federal procurement process from the wrongful activities of unscrupulous contractors,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice, Civil Division.  “Plying government officials with meals and entertainment to gain favorable treatment in the award of federal contracts corrupts the procurement process and will not be allowed.”

“This case clearly reflects that the CIA will respond effectively to allegations of fraud affecting agency programs,” said CIA Inspector General David B. Buckley. “My office treats contract fraud and related employee misconduct as one of our top investigative priorities, and we work closely with agency employees and the Department of Justice to ensure that illegal acts are addressed in an effective manner.”

The allegations resolved by the settlement were initiated by a lawsuit filed in the Eastern District of Virginia under the qui tam, or whistleblower, provisions of the False Claims Act by former Anixter sales representative, William Jones. Under the False Claims Act, private citizens may sue on behalf of the United States for false claims and share in any recovery obtained by the government. Jones will receive $585,000 as his share of the government’s recovery. 
           

This settlement was the result of a coordinated effort by Assistant U.S. Attorneys Gerard Mene, Peter Hyun and Stephen Obermeier of the United States Attorney's Office for the Eastern District of Virginia; the Department of Justice, Civil Division, Commercial Litigation Branch; and the CIA, Office of Inspector General. The claims settled by this agreement are allegations only; there has been no determination of liability.

ALEXANDRIA, Va. – A federal judge has ordered the landlord of a rental property in Manassas, Va., to return money owed a servicemember after he was penalized for breaking the rental lease because the military ordered him to move.

            Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, and Thomas E. Perez, Assistant Attorney General for the Civil Rights Division, made the announcement after a memorandum opinion was issued by United States District Judge Claude M. Hilton.

“Our military men and women put their lives on the line for us, and we must protect them both overseas and here at home,” said U.S. Attorney MacBride.

“Service members should never be penalized financially for their commitment to serve and protect our country,” said Assistant Attorney General Perez. “The Department of Justice will continue to use tools like the Servicemember Civil Relief Act to protect the rights of service members.”

            According to court records, Occoquan Forest Drive LLC and its registered agent, John Williams, of Alexandria, Va., leased a residential property in Manassas, Va., to a servicemember tenant and his wife. After receiving permanent change of station orders to move to Nevada, the tenants properly terminated the lease pursuant to the Servicemember Civil Relief Act (SCRA), which protects the rights of servicemembers while on active duty in the military by suspending or modifying certain civil obligations.

            The United States brought suit against Occoquan and Williams under the SCRA for refusing to return the tenants’ security deposit and charging early termination fees.  In a memorandum opinion issued on Feb. 15, 2013, Judge Hilton found both Occoquan and Williams liable under the statute, ordered them to return the tenants’ security deposit, and enjoined them from imposing early termination charges.

            This case was investigated by the Pentagon Army and Air Force Legal Assistance Office and the Civil Rights Division of the Department of Justice, Housing and Civil Enforcement Section.  Assistant United States Attorney Stephen J. Obermeier litigated the case on behalf of the United States.  The case name is United States v. Williams, 1:12cv551.

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. – Michael F. Harris, 49, of Luray, Virginia, was found guilty of defrauding investors of more than $700,000 from a project aimed at purportedly developing a treatment for Human Immunodeficiency Virus infection / Acquired Immunodeficiency Syndrome (HIV/AIDS). 

Following the five-day jury trial before United States District Judge Henry E. Hudson in which Harris was found guilty of securities fraud, wire fraud and mail fraud, he was immediately remanded into custody of the United States Marshal.  Harris faces a maximum sentence of 90 years’ imprisonment when he is sentenced on June 11, 2013. 

            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.  

            “Mr. Harris used hundreds of thousands of investor funds to travel the world and improve his home and farm,” said U.S. Attorney MacBride.  “Thanks to the ongoing efforts of the Virginia Financial and Securities Fraud Task Force, Mr. Harris is another fraudster who has been caught and held accountable for his crimes.”

"Mr. Harris' fraudulent misrepresentations to investors regarding his proposed HIV/AIDS treatment ended in substantial proceeds being misappropriated for his personal use,” said FBI SAC Mazanec.  “This multi-agency investigative effort and today's conviction demonstrates the zero-tolerance we have for this type of criminal behavior."

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 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 in order 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 investors’ 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 own personal use and 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 own personal use and benefit.  Between October 2005 and July 2011, Harris received over $880,000 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 $700,000 for his own use and benefit, unrelated to the MFH-related 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 the 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, international travel to competitive kayaking events, and other personal expenses.

            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.

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. – John Coston, 48, of Woodbridge, Va., pleaded guilty today to embezzling more than $400,000 from Diamond Transportation Services (DTS) and not reporting the additional income on his taxes.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office; 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 Liam O’Grady.

Coston, who worked out of DTS’s office in Springfield, Va., pleaded guilty to wire fraud, which carries a maximum penalty of 20 years in prison, and making and subscribing a false return, which carries a maximum penalty of three years in prison. Sentencing is scheduled for July 19, 2013.

            According to a statement of facts filed with his plea agreement, Coston was hired as an operations manager at DTS and was the primary employee that handled payroll disbursements through the company’s online payroll processing system. Coston admitted that from January 2010 through December 2011, he used former employees’ information to funnel payroll funds into bank accounts that Coston actually controlled, which he then accessed and used for his own financial benefit. When he filed his taxes for 2010 and 2011, he claimed that he received more than $63,000 in wages each year, when in reality he received an additional $120,000 in 2010 and $325,000 in 2011 as a result of his embezzlement scheme.    

            This case was investigated by IRS-CI and the FBI’s Washington Field Office.  Assistant United States Attorney Chad Golder 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.

ALEXANDRIA, Va. – Tobechi Enyinna Onwuhara, 33, formerly of Dallas, Texas, has been arrested in Australia after more than four years as a fugitive and brought to the United States to face charges accusing him of leading a home equity line of credit fraud scheme that attempted to steal more than $38 million and caused approximately $13 million in 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; David E. Beach, Special Agent in Charge of the United States Secret Service’s Washington Field Office; Earl L. Cook, Alexandria Chief of Police; and Robert W. Mathieson, United States Marshal for the Eastern District of Virginia, made the announcement after Onwuhara arrived in the Eastern District of Virginia.

            Onwuhara was charged with conspiracy to commit bank fraud and a federal warrant was issued for his arrest on Aug. 1, 2008. He was later indicted by a federal grand jury on April 21, 2011, and charged with 16 counts, including conspiracy, continuing financial crimes enterprises, bank fraud, aggravated identity theft, wire fraud, money laundering and computer fraud. If convicted, he faces a mandatory minimum of 10 years and a maximum penalty of life in prison, followed by a consecutive mandatory two years in prison for each count of aggravated identity theft.

            Information seeking Onwuhara’s arrest was made available through the FBI (see http://www.fbi.gov/wanted/cyber/tobechi-enyinna-onwuhara/view), and he was arrested by Australian Federal Police on Dec. 18, 2012, pursuant to a provisional arrest warrant issued by the United States.

            Onwuhara made an initial appearance before United States Magistrate Judge Ivan D. Davis today, March 1, 2013, at 2 p.m. at the federal courthouse in Alexandria.

            According to court records, Onwuhara is the alleged ringleader of a group of Nigerians who used fee-based web databases to search for potential victim account holders with large balances in home equity line of credit (HELOC) accounts.  This information included name, address, date of birth, and social security number.  Once the conspirators identified a victim, they allegedly used other online databases to obtain information commonly used in security questions, such as the victim’s mother’s maiden name.  The conspirators then allegedly obtained credit reports on the victims in order to verify personal information and account balances.

            Armed with a victim’s personal information, the conspirators allegedly called the victim’s financial institution, impersonated the victim, and transferred the majority of the available money from the HELOC account into an account from which a wire transfer could be sent.  The conspirators would then allegedly wire transfer hundreds of thousands of dollars to domestic or overseas accounts controlled by members of the conspiracy.  The conspirators allegedly used caller-ID spoofing services, prepaid cell phones and PC wireless Internet access cards, and transferred victims’ home telephone numbers in order to impersonate the victim and avoid identifying themselves. 

            Once the fraudulently-transferred funds arrived in the destination bank, a conspirator with access to the account would allegedly withdraw funds and transfer them to other members of the conspiracy after taking a portion of the proceeds for himself. 

            The following members of this alleged conspiracy have been convicted in the Eastern District of Virginia:

• Obinna Orji, from Arlington, Texas, who was a fugitive since being charged in August 2008, was arrested in December 2012 and pleaded guilty on Feb. 19, 2013. Sentencing scheduled on May 17, 2013.
• Henry “Uche” Obilo, of Miami, Fl., was sentenced to 88 months in prison on Sept. 11, 2009.
• Abel Nnabue, of Dallas, was sentenced to 54 months on Jan. 30, 2009.
• Precious Matthews, of Miami, was sentenced 51 months on Feb. 13, 2009.
• Brandy Anderson, of Dallas, was sentenced to 2 years of supervised probation and 40 days of community confinement on Feb. 20, 2009.
• Ezenwa Onyedebelu, of Dallas, was sentenced to 37 months on Feb. 27, 2009.
• Daniel Orjinta, of Nigeria, was sentenced to 42 months on March 6, 2009.
• Paula Gipson, of Dallas, Texas, was sentenced to 15 months on Sept. 4, 2009.

            This case was investigated by the FBI’s Washington Field Office, United States Secret Service, and the Alexandria Police Department, with assistance from the U.S. Marshals Service. Assistant United States Attorneys Alexander T.H. Nguyen and Lindsay Kelly 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 and unless 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. – Susan Lee Gross, aka Ju Me Lee Gross, 48, of Trinidad, Colo., was sentenced today to 30months in prison, followed by two years of supervised release, for transporting women to work as prostitutes at her Annandale-based massage parlor and laundering the proceeds from that illegal activity. Gross also agreed to forfeit $248,409.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, John P. Torres, Special Agent in Charge of Homeland Security Investigations (HSI) in Washington, D.C.; Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s (IRS-CI) Washington, D.C., Field Office; and Michael Monroe, Special Agent in Charge of the Naval Criminal Investigative Service’s (NCIS) Washington, D.C., Field Office, made the announcement after sentencing by United States District Judge Claude M. Hilton.

“Ms. Gross became rich by exploiting Korean women and then hiding her illicit gains from the government,” said U.S. Attorney MacBride. “Houses of prostitution like Peach Therapy are a blight on the community. This case is a result of an ongoing investigation into the sale of sexual services at northern Virginia massage parlors as part of my office’s crackdown on sex trafficking in the region.”

“Ms. Gross, through her business Peach Therapy, provided sexual services under the guise of operating a massage parlor” stated HSI SAC Torres, “HSI will work with our law enforcement partners to investigate those who seek to profit by providing services through illegal means.” 

“Individuals such as Ms. Gross, who use structuring and money laundering to conceal the true source of their money run the risk of federal prosecution and imprisonment,” said IRS SAC Kelly. “IRS Criminal Investigation is committed to unraveling money laundering schemes and assisting our law enforcement partners to ensure that the type of criminal conduct engaged in by Ms. Gross is not ignored. Today’s sentence is a reminder to criminals that money laundering schemes will be vigorously investigated and prosecuted.”

Gross pleaded guilty on Oct. 25, 2012, to conspiring to transport a person for purposes of prostitution and conspiring to commit money laundering. 

According to court documents, Gross owned and operated Peach Therapy, which was advertised as a massage parlor but was merely a front for prostitution.  Customers obtained sexual services from Gross and the women she employed at Peach Therapy.  Prices for various sex acts varied, but some women earned $800 per day in cash. 

Gross advertised the various sex acts performed at Peach Therapy erotic websites, and she recruited women to travel from such places as Georgia, North Carolina, New York and New Jersey to ensure the business was fully staffed and operational.  All of the women Gross recruited were originally from Korea, some of them were unlawfully present in the United States, and most were uneducated and lacked language and employment skills. Gross used security cameras at Peach Therapy and trained the women she employed to yell if they saw the police approaching the business.  Gross laundered the profits generated by Peach Therapy to hide the source and nature of the wealth she amassed through her illicit activities.
 
On Feb. 14, 2013, Gross’s co-conspirator, Jin Seob Oh, was sentenced to 24 months of imprisonment for his role in the offenses.  Oh drove many of the women to and from Peach Therapy and assisted in moving the prostitution proceeds.

This case was investigated by HSI, which participates in the Northern Virginia Human Trafficking Task Force, and IRS-CI and NCIS.  They were assisted in the investigation by the Fairfax County Police Department.  Assistant United States Attorney Michael J. Frank prosecuted the case on behalf of the United States.

Founded in 2004, the Northern Virginia Human Trafficking Task Force is a collaboration of federal, state, and local law enforcement agencies – along with nongovernmental organizations – dedicated to combating human trafficking and related crimes.

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. – Jonathan Adonay Fuentes, aka “Cheesy,” and “Crazy Boy,” 21, of Clinton, Md., was sentenced to 120 months in prison, followed by five years of supervised release, for sex trafficking a juvenile female as part of a prostitution enterprise operated by the violent street gang Mara Salvatrucha Thirteen (MS-13).

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 sentencing by United States District Judge Leonie M. Brinkema.   

Fuentes, an El Salvadoran-born U.S. citizen, pleaded guilty to sex trafficking a child on Nov. 27, 2012. 

“As the driver for MS-13, Fuentes transported a young girl to various hotels and apartments – helping the gang exploit her as a child prostitute,” said U.S. Attorney MacBride. “We have a zero-tolerance policy against anyone who makes it possible to profit from the sexual slavery of children.”

“Today’s sentence demonstrates that those who force young girls into prostitution, as well as those who allow it, will pay the price for their actions,” said Assistant Director in Charge Parlave.  “Along with our law enforcement partners, the FBI will continue to ensure that anyone who commits any form of child exploitation will be pursued and punished to the fullest extent of the law.”

According to court documents, Fuentes assisted his fellow MS-13 gang members from the fall of 2009 through the spring of 2010 run a prostitution ring that specialized in selling juvenile girls for commercial sex. Fuentes admitted in court that he transported a teen girl within Virginia and Maryland to engage in sex with clients. The large majority of appointments took place at an MS-13-controlled apartment in Maryland; however, Fuentes also prostituted the young girl at various hotels throughout Virginia, Maryland and Washington, D.C. Gang members supplied the victim with drugs and alcohol to keep her compliant.

This case was investigated by the FBI’s Washington Field Office, with assistance from the Fairfax County Police Department and HSI, all of whom participate in the Northern Virginia Human Trafficking Task Force.  Assistant United States Attorneys Zachary Terwilliger and Patricia T. Giles are prosecuting the case on behalf of the United States.

Founded in 2004, the Northern Virginia Human Trafficking Task Force is a collaboration of federal, state, and local law enforcement agencies – along with nongovernmental organizations – dedicated to combating human trafficking and related crimes.

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. – Sookyeong Kim Sebold, aka Sophia Kim, 52, a former resident of McLean, Va., was sentenced to 24 months in prison, three years of supervised release and ordered to pay $133,548 in restitution to the Internal Revenue Service for embezzling more than $800,000 from the Korean Cultural and Freedom Foundation (KCFF) and failing to report the income on her tax returns.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally; and Thomas J. Kelly, Special Agent in Charge of the IRS – Criminal Investigation’s Washington, D.C., Field Office, made the announcement after sentencing by United States District Judge Leonie M. Brinkema.

Sebold was convicted on Dec.14, 2012, of filing a false 2005 tax return and tax evasion for the year 2005. 

Sebold worked for the KCFF, a nonprofit organization dedicated to promoting cultural exchange through the sponsorship of the Universal Ballet Company (UBC) and other performing art events.  UBC was founded by the Unification Church International (UCI) and Reverend Sun Myung Moon, and KCFF was funded primarily by UCI.  

The evidence at trial proved that in 2005, Sebold embezzled more than $400,000 from KCFF’s bank accounts for her own benefit and used these funds for day trading, gambling and other personal expenses.  She did not report these funds on her 2005 individual income tax return, resulting in her failure to pay more than $130,000 in taxes.  In addition, the evidence at trial established that Sebold had also embezzled funds from KCFF in 2002, 2003, and 2004, for a total of more than $800,000 in unreported income.

This case was investigated by IRS – Criminal Investigation. Assistant United States Attorney Mark Lytle and Tax Division Trial Attorney Caryn Finley prosecuted the case on behalf of the United States.

More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax.

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. – Mohamed Ali Said,a/k/a Maxamad Cali Saciid; Mohamed Abdi Jama, a/k/a Mohammed Abdi Jamah; Abdicasiis Cabaase, a/k/a Ahmed Mahomood; Abdirazaq Abshir Osman, a/k/a Abdirasaq Abshir; and Mohamed Farah, a/k/a Mohamed Farraah Hassan, were found guilty by a federal jury of engaging in piracy and committing other offenses pertaining to the attack on the Navy ship, the USS Ashland.

Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, and George Venizelos, Assistant Director in Charge of the FBI's New York Field Office, made the announcement after the verdicts were accepted by United States District Judge Raymond A. Jackson.

The five men are scheduled to be sentenced on July 1st and July 2nd, 2013.  The maximum sentence for the convictions are as follows:  Conspiracy to commit hostage taking carries a maximum sentence of life in prison; Conspiracy to commit kidnapping, carries a maximum sentence of life in prison; Conspiracy to perform act of violence against persons on a vessel carries a maximum sentence of 20 years in prison; Conspiracy involving firearm and a crime of violence carries a  maximum sentence of 20 years in prison; Piracy under the Law of Nations carries a maximum sentence of life in prison; Attack to plunder vessel carries a maximum sentence of 10 years in prison; Assault with a dangerous weapon on federal officers and employees carries a maximum sentence of 20 years in prison; Act of violence against persons on a vessel carries a maximum sentence of 20 years in prison; and Use/Possession of firearm during crime of violence carries a mandatory minimum of 10 years in prison and a maximum of life in prison if convicted of one count.  A second or subsequent conviction adds an additional 25 years, making the prison term a minimum mandatory 35 years.

“These men were pirates – plain and simple,” said U.S. Attorney MacBride. “They attacked a ship hoping to hold it ransom for millions of dollars. Few crimes are older than piracy on the high seas, and today’s verdict shows that the United States takes it very seriously.”

Assistant Director Venizelos said, “These defendants are headed where they belong:  to federal prison.  Let this send a clear message of deterrence to anyone who threatens those who traverse the high seas.  I commend U.S. Attorney MacBride and the U.S. Navy for their diligence in the investigation and prosecution of this case.”

Said,Jama, Cabaase, Osman, and Farah were charged in a second superseding indictment that was filed on August 8, 2012.  According to court records and evidence at trial, they attacked the USS Ashland on April 10, 2010, and three of the defendants, Mohamed Ali Said, Mohamed Abdi Jama and Abdicasiis Cabaase, had previously gone to sea in February 2010 for purposes of capturing another vessel but were instead intercepted by the HMS Chatham of the Royal Navy.

This investigation was conducted by the FBI and the Naval Criminal Investigative Service. The prosecution is being handled by Assistant U.S. Attorneys Benjamin L. Hatch and Joseph DePadilla, from the U.S. Attorney’s Office for the Eastern District of Virginia, and Trial Attorney Jerome Teresinski of the National Security Division of the Department of Justice.

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.usdoj.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 http://pacer.uspci.uscourts.gov.

ALEXANDRIA, Va. – William P. Danielczyk Jr. and Eugene R. Biagi pleaded guilty today to reimbursing $186,600 in contributions to the Senate and Presidential campaign committees of a candidate for federal office, announced U.S. Attorney Neil H. MacBride of the Eastern District of Virginia, Assistant Attorney General Lanny A. Breuer of the Criminal Division, and Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office.

Danielczyk, 51, and Biagi, 78, both of Oakton, Va., pleaded guilty to making illegal conduit campaign contributions. The charge carries a maximum penalty of five years in prison. Danielczyk also faces a fine of not less than 300 percent of the amount involved and not more than the greater of $50,000 or 1,000 percent of the amount involved, and Biagi faces a potential fine of not more than $250,000 when they are sentenced on May 17, 2013.

“Today Mr. Danielczyk admitted that he tried to corrupt the electoral process by evading corporate contribution limits,” said U.S. Attorney MacBride. “Mr. Danielczyk abused his power as an employer and abused his power as a participant in a U.S. election. Direct contribution limits for corporations provide an important check in the integrity of our electoral process, and today’s convictions help ensure that those who illegally go beyond those limits are held accountable.”

“With today’s guilty pleas, Danielczyk and Biagi admit they used straw donors to circumvent the rules of the electoral process,” said AAG Breuer.  “Our democracy depends on voters honoring campaign contribution limits and other campaign finance laws, and the Justice Department will continue to pursue corrupt individuals whose illegal tricks threaten the legitimacy of elections and undermine public confidence in the democratic process.”

“With today’s guilty pleas, Mr. Danielczyk and Mr. Biagi admitted their roles in a scheme in which they evaded FEC law to donate money to a Senate and Presidential candidate.  By doing so, they funneled more than $186,600 through their company by creating fraudulent invoices for straw donors and falsely back-dating letters to those individual contributors,” said Assistant Director in Charge Parlave.  “The FBI will continue to work with the U.S. Attorney’s office to investigate allegations of campaign finance abuse, which are in place to ensure openness and fairness in our elections so the people’s interests are protected.”

According to court records, Danielczyk was the Chairman of Galen Capital Corporation, and Biagi served as the corporation’s secretary and treasurer. In September 2006, Danielczyk co-hosted a fundraiser for a candidate’s campaign for the U.S. Senate and in March 2007 he co-hosted a fundraiser for the same candidate’s 2008 campaign for the President of the United States.

Danielczyk admitted that he recruited individuals, including Biagi and other corporate employees, to serve as “straw donors” to the campaigns, assuring the donors that they would be reimbursed for their contributions. Danielczyk’s assistant collected the contributions, and Danielczyk and Biagi then reimbursed the straw donors for their contributions using Galen Capital Corporation’s corporate funds.

Biagi admitted that he disguised the nature of the reimbursement payments by writing “consulting fees” on the checks’ memorandum lines and by issuing the checks for amounts slightly larger than the campaign contributions. Danielczyk and Biagi also created falsely back-dated letters to the individual contributors, which characterized the reimbursement payments as “consulting fees” or that a contributor would receive money for certain work.

Danielczyk and Biagi admitted they used corporate funds to reimburse a total of $186,600 to the two campaigns. The campaigns unwittingly reported the straw donations as lawful contributions from the individual donors.

This case was investigated by the FBI’s Washington Field Office.  Assistant U.S. Attorneys Mark D. Lytle and Timothy D. Belevetz from the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Eric L. Gibson of the Criminal Division’s Public Integrity 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. – Matthew James Addy, 34, of Lancaster, Penn., pleaded guilty today to securities fraud charges for running a $3 million Ponzi scheme that involved the fake purchase and resale of wholesale jewelry and loose precious stones. 

            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. 

            Addy faces a maximum penalty of 20 years in prison when he is sentenced on May 10, 2013.

            According to court records, Addy owned Edward J. & Company, which operated a retail jewelry store in Lancaster called La Porte Jewelers.  In 2010, Addy began recruiting individuals to invest in promissory notes purportedly linked to transactions involving wholesale jewelry and loose precious stones, which would be purchased through Addy’s businesses and resold to retail jewelers for a profit.  Addy ultimately recruited more than 40 investors from throughout the United States, including within the Eastern District of Virginia, and Europe, and obtained more than $3 million in invested funds.  Addy recruited many of the victim investors from within religious groups with which he was associated and used the affiliations to gain their trust. 

            The investment scheme was a fraud. Addy never conducted any of the contemplated wholesale jewelry transactions, and Addy used the vast majority of the invested funds on unrelated business and personal expenses.  Approximately $670,000 was paid back out to investors during the course of the fraud as supposed profits on their investments and was designed to conceal the fraud and induce further investments in the scheme.  Much of these payouts came directly from funds contributed by new investors, known as “Ponzi” payments.  

            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.

ALEXANDRIA, Va. – Francisco Cirilio Vargas-Aquino, aka “Francisco C. Vargas,” and “Miguel,” 48, of Manassas, Va., and Ricardo Avelar Valdez, 47, of Gainesville, Va., have been arrested for their alleged roles in a marijuana smuggling operation based in Northern Virginia that has attempted to smuggle several multi-thousand pound loads of marijuana from Mexico to Prince William County, Va.

Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, and John P. Torres, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C. Field Office, made the announcement after the charges became public.

“These two men are accused of bringing tractor trailers full of marijuana – with a street value of tens of millions of dollars – across the Mexican border destined for northern Virginia,” said U.S. Attorney MacBride. “This case represents the goal of every Organized Crime Drug Enforcement Task Force operation – identify major drug trafficking organizations and then disrupt and ultimately dismantle their networks.” 

            “Special agents of ICE Homeland Security Investigations (HSI) and the Drug Enforcement Administration conducted enforcement operations yesterday at two residences and at two businesses in Northern Va.,” said Special Agent in Charge Torres. “The enforcement operations are part of an on-going investigation related to drug smuggling from Mexico to Northern Virginia. In coordination with our federal, state and local law enforcement partners, HSI will utilize its resources to dismantle international narcotics trafficking organizations who supply dangerous drugs to our communities.”

            Vargas and Valdez are charged with conspiring to import 1,000 kilograms or more of marijuana into the United States and face a mandatory minimum of 10 years and a maximum of life in prison, if convicted.

According to court records, in the past year and a half, HSI special agents and U.S. Customs and Border Protection officers have made three significant marijuana seizures at ports of entry in Texas have been allegedly tied to this operation.  The marijuana, which was concealed in frozen fruit pulp and furniture parts, was, in each case, being shipped within commercial tractor trailers to business addresses in Prince William County.  During this investigation, law enforcement in Texas has allegedly seized approximately 10,000 pounds of marijuana, all of which was being shipped to the Eastern District of Virginia.  

This ongoing Organized Crime Drug Enforcement Task Force investigation, dubbed “Operation Buena Vida,” is being led by HSI’s Washington D.C. Field Office, in partnership with the Drug Enforcement Administration and the Fairfax County Police Department.

The prosecution is being handled by Assistant U.S. Attorney Mary K. Daly and Special Assistant U.S. Attorney Elizabeth Eriksen.

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

A copy of this press release may be found on the website of the 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. – Four individuals – including two settlement agents in Annandale, Va. – have pleaded guilty to conspiring to fraudulently taking over the titles of homes in Washington, D.C., without the real property owners’ knowledge, selling those homes, and keeping the profit.

            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 pleas were accepted by United States District Judge Gerald Bruce Lee.

            According to court records, Jamaul Roberts, 25, College Park, Md., conspired with others to visit the D.C. tax courts to identify properties with overdue property tax bills. They would use sources such as Ancestry.com and the D.C. property tax database to locate vulnerable properties where they could take over the home’s title without the real owners’ knowledge. These homes included those left vacant, passed on to heirs after the owner’s death, or owned by the elderly in nursing homes who did not understand the transactions taking place.

            The fraudulent sales were facilitated by two settlement agents, Patricia Mantilla, 35, of Lorton, Va., and Melissa McWilliams, 35, Chantilly, Va., who worked at Ace Title & Escrow in Annandale. The agents knew the home sales were fraudulent and that the owners appearing at settlement were not the rightful owners. They also assisted the conspirators in hiding profits on the property sales from other parties involved in the sale through fictitious invoices to be paid at closing.

            The conspirators, including Michael Brown, 41, Hyattsville, Md., recruited straw sellers to sign documents and falsely represent themselves as the owners of the properties. Brown, for example, appointed himself the personal representative of the rightful owner of a property and prepared a fake death certificate for the owner, although the owner was still living. He attempted to sell the property to another member of the conspiracy for $350,000.

            During the course of the scheme, numerous properties were fraudulently sold, resulting in more than $1 million in actual and intended losses.

            Roberts and Brown pled guilty to conspiring to commit wire fraud and face a maximum penalty of 20 years in prison when they are sentenced on May 10, 2013, and May 3, 2013, respectively.

            Mantilla and McWilliams pled guilty to conspiring to commit wire fraud and face a maximum penalty of five years in prison when they are sentenced on April 26, 2013, and June 7, 2013.

            This ongoing investigation is being conducted by the FBI’s Washington Field Office. Assistant United States Attorney Chad Golder of the Office’s Financial Fraud and Public Corruption Unit 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.

ALEXANDRIA, Va. – Jonathan Propp, 48, of McLean, Va., pleaded guilty today to conspiring with others to steal more than $20 million from Host Hotels and Resorts L.P. (Host), one of the nation’s largest hotel owners, by executing a series of illegal sales of hotels.

            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 pleas were accepted by United States District Judge Liam O’Grady.

            According to court records, Propp was the chief operating officer of Molinaro-Koger, an international hotel real estate brokerage firm headquartered in Tysons Corner, Va. From 2009 through 2012, Propp conspired with others to illegally sell hotels owned by Host to straw buyers, who would then immediately sell the properties to a buyer at a higher price, with the conspirators pocketing the difference. Propp admitted that he posed as a straw buyer, forged signatures, and obtained a driver’s license for one of the straw buyers who had died before the fraudulent sale could be completed.

            Todd Lawyer, 53, of Fairfax, Va., also pleaded guilty today for his role as a straw buyer in the conspiracy. The conspirators earned more than $20 million by illegally flipping the hotels.

            In addition, Propp admitted that he participated in a scheme to steal and launder an additional $15 million from deposits provided by prospective buyers of hotels, which they purported to hold in escrow but instead used to pay for personal and business expenses. Propp used the money to pay Molinaro-Koger’s expenses and employee salaries, despite knowing the escrowed funds were obtained fraudulently.

            Propp and Lawyer pled guilty to conspiring to commit wire fraud and face a maximum penalty of 20 years in prison when they are sentenced on May 31, 2013, and May 24, 2013, respectively.

            This ongoing investigation is being conducted by the FBI’s Washington Field Office. Assistant United States Attorneys Chad Golder of the Office’s Financial Fraud and Public Corruption Unit and Michael Rich of the Office’s Major Crime’s Unit 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. – Gene Quarles, 47, of Spotsylvania, Va., pleaded guilty late yesterday to receiving thousands of dollars in bribes to use his position as a purchasing specialist for the United States Postal Service to obtain and facilitate contracts for a Maryland-based information technology firm.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Acting Special Agent in Charge Barry Grzechowiak of the U.S. Postal Service, Office of Inspector General, made the announcement after the plea was accepted by United States District Judge T. S. Ellis III. 

            Quarles pled guilty on Feb. 14, 2013, to bribery of a public official and faces a maximum penalty of 15 years in prison when he is sentenced on May 17, 2013. 

            According to a statement of facts filed with his plea agreement, Quarles worked for the United States Postal Service (USPS) since 2007.  During the time in which he was accepting bribes, he served as a purchasing specialist, where he oversaw, evaluated, and managed USPS contracts relating to business mail entry and payment technologies. 

            In April 2010, officials with AH Computer Consulting, Inc. (AHCC), an international information technology consulting firm based in Rockville, Md., approached Quarles and offered to pay him bribes in exchange for various impermissible contracting preferences and advantages.  Quarles accepted this offer, and from April 2010 through June 2012, AHCC employees paid Quarles numerous cash payments — totaling thousands of dollars — in exchange for Quarles’ providing advantages to AHCC during the USPS contracting process.

            For example, Quarles provided AHCC with confidential USPS contracting information, including other vendors’ proposals and labor rates, so that AHCC could tailor its bids to what other potential contractors were bidding.  Quarles also forwarded various private call-in numbers for conference calls between USPS officials, where official business was discussed, so that AHCC employees could anonymously listen in and get a leg-up on their competition.  Quarles also allowed AHCC employees to complete surveys, evaluations, and other review materials in Quarles’ own name so that AHCC could obtain additional government contracts. 

            Quarles admitted that he used the bribe payments to pay for bills, rent, and other living expenses.

            This case was investigated by the United States Postal Service, Office of Inspector General.  Assistant United States Attorney Chad Golder from the U.S. Attorney’s Office for the Eastern District of Virginia’s Financial Crimes and Public Corruption Unit 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.

RICHMOND, Va. – Allen Mead Ferguson, 75, of RichmondVa., was sentenced today to 14 months in prison, followed by 2 years of supervised release, for Mail Fraud and Money Laundering.   As part of his sentence, Ferguson was ordered to pay $5,652,555.75 in forfeiture and $2,943,776.53 in restitution.

            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; Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office; and Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service, made the announcement after sentencing by United States District Judge Henry E. Hudson.  Ferguson pled guilty to both counts on November 14, 2012. 

Mr. Ferguson was a prominent member of the Richmond community who chose to steal millions of dollars to maintain his social status,” said U.S. Attorney MacBride. “Today’s sentence sends a message that regardless of one’s position in life, no one is above the law.”

“Through fraud and deception Mr. Ferguson was able to obtain in excess of $5.6 million dollars from a number of financial institutions,” said FBI SAC Mazanec.  “The public should be reminded to completely and accurately file their information with financial institutions.  Today’s sentencing strongly demonstrates the penalty associated with lying to a financial institution.”

          “No matter what your position, it is unacceptable to submit false information to a financial institution in an effort to secure a loan,” said IRS-CI SAC Kelly.   “Today's sentencing is a reminder that status and prominence will not protect you from federal prosecution or imprisonment.”

            According to court documents, from about February 2006 through April 2010, Ferguson made material misrepresentations and omissions on personal financial statements submitted to various federally insured financial institutions.  On these financial statements, he knowingly and intentionally stated, among other things, that he had: (a) $1 million in deferred compensation, and/or (b) $2 million in Virginia tax-free bonds.  In fact, as Ferguson was aware, he had not had any deferred compensation since 1998 and had not owned $2 million in Virginia tax-free bonds since at least January 2009.  In reliance on these false financial statements, the federally insured financial institutions extended various promissory notes and loans to Ferguson.  In 2011, Ferguson filed for bankruptcy.  At that time, the federally insured financial institutions were owed $5,652,555.75.  As a result of the bankruptcy proceeding, the financial institutions received some compensation, but, at the time of sentencing, still had a loss totaling $2,943,766.53.

            This case was investigated by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, and the Internal Revenue Service.  Assistant United States Attorney Jessica Aber Brumberg 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. – Lorenzo Brooks, a.k.a. Tyrone Brown, 38, formerly of New York City, was sentenced today to 132months in prison, followed by a 5 year term of supervised release, for conspiring to distribute between 50 and 150 kilograms of cocaine.  A forfeiture order in the amount of $1,500,000.00 representing the proceeds of Brooks’ drug trafficking activities was also entered.   

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Robert Brisolari, Acting Special Agent in Charge for the Drug Enforcement Administration (DEA)’s Washington Field Office, made the announcement today after sentencing by United States District Judge Henry E. Hudson.

            Brooks was charged in early 2007; however, he remained a fugitive until his arrest in California in August, 2012.  He pled guilty on November 13, 2012, to Conspiring to Distribute and Possess with the Intent to Distribute Five Kilograms or More of Cocaine Hydrochloride. 

            According to court documents, beginning as early as 2004 Brooks was supplying numerous members of a large-scale drug trafficking organization based in Richmond, Virginia with cocaine hydrochloride.  All of the members of that organization were arrested and convicted in 2006 and 2007. 

            As part of his efforts to avoid detection by law enforcement, Brooks operated vehicles with concealed compartments or “traps” built into them.  He used these compartments to conceal the narcotics he was transporting from New York to Richmond, and to conceal his profit upon his return to New York. One of these vehicles was seized by law enforcement in 2007.

Brown admitted that he conspired to distribute between 50 kilograms and 150 kilograms of cocaine hydrochloride from approximately January 1, 2004, through December 30, 2006.

            This case was investigated by the Drug Enforcement Administration.  Assistant United States Attorney Angela Mastandrea-Miller 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. – Rachael Masingene, 21, of Charlotte, NC was sentenced yesterday to 36months in prison, followed by three years of supervised release, for conspiracy to transport an individual across state lines for prostitution. 

            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 D.A. Middleton, Chief of Police for the Henrico County Police Division, made the announcement after sentencing by United States District Judge Henry E. Hudson. 

“Rachael Masingene played an integral role in recruiting a 13-year-old girl into the vile world of sex trafficking,” said U.S. Attorney MacBride. “She taught the girl the business of online prostitution and lived with her in hotels for months while the victim’s family desperately searched for their child. Many people think human trafficking is a man’s business – but the recruiters are often women, and we hold them accountable.”

“It is reprehensible for an adult to recruit a vulnerable and defenseless child into the vile world of prostitution,” said FBI SAC Mazanec.  “Children deserve to be protected from the criminal world - not recruited into it.  Today’s sentence is a strong reflection that this criminal behavior will not be tolerated.  Our office will continue to work with the United States Attorney’s Office and our other law enforcement partners to interdict this kind of criminal activity that unfortunately plagues many states across the country.”

            Masingene pled guilty on September 27, 2012 to conspiracy to transport an individual across state lines for purpose of prostitution.  According to court documents, Masingne worked as a prostitute for Korey Reynolds in the Charlotte area from 2011 through 2012.  In a statement of facts filed with her plea agreement, Masingne admitted that in February or March 2012, she met a 13-year old female while she, Reynolds, and Whitney Hayes, another woman who was also working as a prostitute for Reynolds, were in Miami, Florida.  Masingene acknowledged that she and Hayes recruited the 13-year old to join the prostitution organization.  Once they were back in Charlotte, Masingene and Hayes taught the juvenile the business of prostitution, including posting internet advertisements, offering the female as a prostitute to prospective customers.  In May 2012, Reynolds, Masingene and Hayes transported the juvenile from Charlotte to Richmond, Virginia, with the intent that the juvenile engage in prostitution while in Virginia. 

            Reynolds was convicted of Transporting a Minor in Interstate Commerce for Purposes of Prostitution, and sentenced to 130 months of imprisonment.  Hayes was also convicted of Conspiracy to Transport an Individual across state lines for prostitution, and was sentenced to 57 months of imprisonment.    

            This case was investigated by the FBI and the Henrico County Police Division.  Assistant United States Attorney Jamie L. Mickelson 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. – Yanira del Carmen Guerrero Andrade, aka Yadira or Litsy, 28, an illegal alien from El Salvador formerly of Adelphi, Md., pleaded guilty today to recruiting a 15-year-old runaway to engage in commercial sex for a prostitution ring.

            Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia; Virginia Attorney General Kenneth Cuccinelli II; and John P. Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Washington, D.C., made the announcement after the plea was accepted by United States District Judge Liam O’Grady.

            “Ms. Guerrero Andrade’s actions show just how vile the world of human trafficking is – right here in our community,” said U.S. Attorney MacBride. “She lured a 15-year-old girl into her boyfriend’s commercial sex trade business so she could sell her off time and time again for profit. Many people think human trafficking is a man’s business – but the recruiters are often women, and we hold them accountable.”

“This case demonstrates that human trafficking knows no boundaries of sex, age, or ethnicity -- on either side of the crime,” said Attorney General Cuccinelli. “Ms. Guerrero Andrade exploited a 15-year-old girl for her own profit.  Tragedies like this are why we continue to investigate and prosecute the crime of human trafficking to the fullest extent of the law.”

            “HSI will continue to thwart those who prey on teenage victims for their own greed”, said Special Agent in Charge Torres. “We cannot allow anyone to traffic vulnerable victims and think they can get away with this.  We will continue to diligently work with our law enforcement partners to combat sex trafficking in our community.”

            Guerrero Andrade pled guilty to child sex trafficking, which carries a mandatory minimum of 10 years and a maximum of life in prison. Sentencing is scheduled for May 10, 2013.

            According a statement of facts filed with her plea agreement, Guerrero Andrade admitted that she met a 15-year-old runaway in January 2009 and encouraged her to work as a prostitute for an organization run by Julio Cesar Revolorio Ramos, whom Guerrero Andrade was dating. After the victim spoke to Revolorio Ramos by phone, Guerrero Andrade introduced the victim to him and the two of them transported the victim from Maryland into Virginia to work as a prostitute, even though they knew the victim was under 18 years of age.

            On the first day the victim was trafficked, she had sexual relations with approximately 17 customers, and on the third day she had sexual relations with 25 customers. In June 2010, Guerrero Andrade invited the victim to live in the basement of the home she shared with Revolorio Ramos. One week after moving in to the home, Revolorio Ramos again prostituted the victim, and the victim paid rent with the money she received from prostitution.

            Guerrero Andrade also admitted that in 2010, she provided the victim with contact information for other prostitution organizations so the victim could work for those organizations during the weeks she was not being prostituted by Revolorio Ramos.

            On Feb. 8, 2013, Revolorio Ramos was sentenced to 188 months in prison for his role in sex trafficking a child.

This case was investigated by ICE HSI, with assistance from the Northern Virginia Human Trafficking Task Force. Virginia Assistant Attorney General and Special Assistant United States Attorney Marc J. Birnbaum and Assistant United States Attorney Michael J. Frank are prosecuting the case on behalf of the United States.

Founded in 2004, the Northern Virginia Human Trafficking Task Force is a collaboration of federal, state, and local law enforcement agencies – along with nongovernmental organizations – dedicated to combating human trafficking and related crimes.

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.

WASHINGTON – Fairfax, Va.-based skilled nursing facility Fairfax Nursing Center (FNC) and its owners have agreed to pay $700,000 to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to Medicare of false claims for non-reimbursable rehabilitation therapy services, the Justice Department announced today.

The settlement resolves claims that FNC provided excessive, medically unnecessary, or otherwise non-reimbursable physical, occupational, and speech therapy services to 37 Medicare beneficiaries serviced by FNC between January 2007 and December 2010.  The United States alleged that the rehabilitation therapy services provided by FNC to these beneficiaries were not reasonable and necessary for the treatment of their condition.  Specifically, the United States alleged that the therapy services were often excessive, duplicative, performed without clear goals or direction, and, in some instances, performed primarily to capture higher reimbursement rates.

            “Medicare fraud takes many forms and arises in various segments of health care,” said U.S. Attorney Neil H. MacBride. “We continue to work toward recovery of money lost to overbillings to Medicare.”

“Today’s settlement is another example of the Department’s efforts to hold skilled nursing facilities accountable for the rehabilitation therapy services they deliver to some of the most vulnerable in our society,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice.  “The provision of excessive and medically unnecessary therapy services will not be tolerated.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $10.2 billion since January 2009 in cases involving fraud against federal health care programs.  The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.

The allegations settled today arose from a lawsuit filed by two former FNC therapists and one former contract therapist under the qui tam, or whistleblower provisions, of the False Claims Act.  Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery.  The whistleblowers in this case will receive, collectively, $122,500 of the recovery.  The lawsuit is captioned as United States of America & Commonwealth of Virginia ex rel. Christine Ribik, Nadine Kelly, & Stephanie Beauregard v. Fairfax Nursing Center, Inc., et al., No. 1:11-cv-496 (E.D. Va.). 

The case was handled by Assistant U.S. Attorneys Monika Moore and Gerard Mene of the U.S. Attorney’s Office for the Eastern District of Virginia, the Department of Justice’s Civil Division, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Medicaid Fraud Control Unit of the Commonwealth of Virginia Attorney General’s Office.  The claims settled by this agreement are allegations only; there has been no determination of liability. 

# # #

NORFOLK, Va. – A federal grand jury sitting in Norfolk, Va., has indicted Leroy Scott, Jr., 49, of Suffolk, on five offenses including conspiracy, witness tampering, retaliation against federal witnesses and the use of a firearm resulting in the murder of one of the witnesses.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after the indictment was unsealed this afternoon. 

            According to the fivecount indictment, the defendant is alleged to have conspired to prevent Junior Bivins, Jr. and other individuals, from testifying in a court proceeding that related to Scott’s and his associates’ drug distribution activities, weapons violations and other criminal offenses.  Scott also sought retaliation against Bivins and others for providing information to law enforcement officers, resulting in the first degree murder of Bivins on or about November 20, 2001 in Suffolk, Virginia.

            If convicted of the murder offense, Scott faces a maximum potential punishment of death.  Scott is scheduled to be arraigned on these offenses on February 15, 2013, in U.S. District Court, Norfolk.

            This case was investigated by the Drug Enforcement Administration and the Suffolk Police Department.  Assistant U.S. Laura Everhart is prosecuting the case on behalf of the United States.

            Criminal indictments are only charges and not evidence of guilt.  A defendant is presumed to be innocent until and unless proven guilty. 
A copy of this press release may be found on the website of the 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 http://pacer.uspci.uscourts.gov.

NEWPORT NEWS, Va. – Virgil Williams, Jr., 46, of Hampton was sentenced today to 34 months in prison for wire fraud. 

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after sentencing by United States District Judge Robert G. Doumar. 

            Williams pled guilty on September 18, 2012.  According to court documents, Williams owned Showcase Exclusive Imports, Inc., a retail auto sales business operating in Newport News. Williams obtained financing, known as “floor plans,” through various entities to finance the purchase of vehicles sold at his dealership.  In 2006, his line of credit collapsed and he was forced to seek alternative financing.  He sought and obtained financing from various lenders using fraudulent bank statements and earning reports causing extensive losses to those lenders. Williams also established a separate dealership through which to submit credit requests. At sentencing Williams was ordered to pay approximately $965,000 in restitution.

            This case was investigated by FBI.  Assistant United States Attorney Brian J. Samuels prosecuted this 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. – Larren Wade, 55, of Venice, Fl., a former doctor who had a medical practice in Alexandria, Va., pleaded guilty today to conspiring to distribute oxycodone. 

            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; Robert Brisolari, Acting Special Agent in Charge for Drug Enforcement Administration (DEA)’s Washington Field Division; Earl Cook, Alexandria Chief of Police; and Colonel W. Steven Flaherty, Virginia State Police Superintendent, made the announcement after the plea was accepted by United States District Judge Claude M. Hilton. 

“Larren Wade not only violated his oath as a doctor, he violated the law when he provided a highly addictive drug to individuals for no legitimate medical reason,” said U.S. Attorney MacBride. “The abuse of prescription pills has had a devastating impact on our community, and we will continue to pursue unethical doctors who sell the drugs for their own profit.”

“Larren Wade selfishly exploited his profession by operating a drug distribution business that supplied dangerous prescription pain killers to individuals with no valid medical need,” said Assistant Director in Charge Parlave.  “As demonstrated by over 200 convictions and guilty pleas in Operation Cotton Candy, the Organized Crime and Drug Enforcement Task Force is committed to the pursuit of prescription drug abuse and the FBI will continue to work with our law enforcement partners to protect our community from the dangers of these crimes.”

            Wade faces a maximum penalty of 20 years in prisonwhen he is sentenced on May 17, 2013. 

            In a statement of facts filed with his plea agreement, Wade admitted that between March and July 2010, he issued thousands of prescriptions for pain medications, sometimes exceeding 2,000 pills per patient each month. Wade frequently issued these prescriptions without conducting a physical examination, without reviewing prior medical records, and without establishing a treatment plan. During this time, Wade also operated an almost strictly cash business and would typically see between 30 and 50 patients per day, but in at least one instance saw more than 100 patients in a single day and collected nearly $10,000 in cash. 

            Court records indicate that Wade was the subject of an undercover operation by law enforcement officials, and he issued numerous prescriptions for oxycodone to two undercover officers for no legitimate medical purpose. In addition, the undercover officers asked if they could obtain a prescription for a “friend” who did not exist.  Wade provided two prescriptions for oxycodone for the fictitious patient after an $85 office visit fee was paid.  After the transaction was completed, Wade created a patient file for the fictitious patient.

            Oxycodone is the active ingredient in brand name pills such as OxyContin, Roxicodone and Percocet.  It is a Schedule II controlled substance and can be useful in assisting with pain management issues; however, it has a high potential for abuse and abuse of the drug can lead to severe psychological or physical dependence.

            This case was investigated by the DEA’s Washington Field Division, FBI’s Washington Field Office, Virginia State Police, and the Alexandria Police Department.  Special Assistant United States Attorneys Stacey Luck and Elizabeth N. Eriksen are prosecuting the case on behalf of the United States.

This case is part of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation dubbed Operation Cotton Candy, which has been focusing on the illegal distribution by numerous doctors, pharmacists, nurses, and patients of pain medication. This OCDETF matter has secured more than 200 drug-trafficking convictions and guilty pleas.

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. – Julio Cesar Revolorio Ramos, 29, of Adelphi, Md., was sentenced today to 188 months in prison, followed by five years of supervised release, for sex trafficking a 15-year-old runaway as part of a multi-state conspiracy that prostituted hundreds of women and girls since at least 2008. Revolorio Ramos paid a portion of his profits to MS-13 gang members who extorted “rent” under threats of violence to Ramos and other co-conspirators involved in prostitution in northern Virginia.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Virginia Attorney General Kenneth Cuccinelli, II; and John P. Torres, Special Agent in Charge for U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Washington, D.C., made the announcement after sentencing by United States District Judge Claude M. Hilton.

Revolorio Ramos pled guilty on Nov. 7, 2012, to sex trafficking a child. A native of Guatemala illegally present in the U.S., Revolorio Ramos will be transferred to the custody of U.S. immigration authorities for removal proceedings following his prison term.

            “Revolorio Ramos exploited a vulnerable 15-year-old girl and then discarded her when she was no longer needed,” said U.S. Attorney MacBride. “He was one member of a multi-state conspiracy that prostituted hundreds of women and girls for profit. Today’s sentence assures victims that once sex traffickers are caught in the Eastern District of Virginia, justice is served.”

            “Today’s sentencing sends a message to child sex traffickers that their heinous criminal behavior will not be tolerated,” said HSI SAC Torres.  “HSI DC will continue to aggressively investigate those involved in child sex trafficking and is committed to protecting the vulnerable victims of this outrageous crime.” 

“Revolorio Ramos’s crimes exploited a young girl for sex and robbed her of her innocence. He also prostituted hundreds of women and girls over the last several years,” said Virginia Attorney General Cuccinelli. “Today’s sentence speaks loud and clear that the despicable crime of sex trafficking will be punished to the full extent of the law.”

            According to court records, Revolorio Ramos was part of a conspiracy that prostituted Hispanic women and girls in Delaware, Maryland, Virginia and the District of Columbia. He advertised the prostitution business by handing out business cards purporting to be for plumbing, landscaping or snow removal business, but which contained a telephone number a customer could call to obtain sexual services from a prostitute. Revolorio Ramos and others would hand out these cards to those congregating at sites for day laborers, restaurants, and check cashing stores in Virginia.

            In January 2009, Revolorio Ramos encouraged a 15-year-old runaway to work as a prostitute. On the first day that Revolorio Ramos prostituted the girl, she had sexual relations with 17 customers, and on the third day she had sexual relations with 25 customers. Revolorio Ramos knew that she was less than 18 years old, describing her as “young” to potential customers on the phone. Several customers repeatedly requested her specifically because of her young age.

            Revolorio Ramos typically prostituted a woman or girl for a six-day period. To ensure that customers had new women for sex, at the end of the six-day period, he would prostitute a different woman or girl than the one he had prostituted the week before. From June 2010 through December 2010, during weeks that Revolorio Ramos was prostituting other women and not prostituting the 15-year-old girl, his co-conspirators prostituted her in Virginia, Maryland and the District of Columbia.

             After receiving a portion of the proceeds from the women providing sexual services to his customers, Revolorio Ramos paid “rent” to MS-13 gang members under threats of violence, and he also sent some proceeds to co-conspirators living in Mexico.

This case was investigated by ICE HSI, with assistance from the Northern Virginia Human Trafficking Task Force. Virginia Assistant Attorney General and Special Assistant United States Attorney Marc J. Birnbaum and Assistant United States Attorney Michael J. Frank are prosecuting the case on behalf of the United States.

Founded in 2004, the Northern Virginia Human Trafficking Task Force is a collaboration of federal, state, and local law enforcement agencies – along with nongovernmental organizations – dedicated to combating human trafficking and related crimes.

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. –Melvin O. Rushing, Jr., 24, of Hampton, Va., has been convicted by a federal jury of attempting to rob a McDonald’s, forcing the restaurant’s employees into a freezer at gunpoint before fleeing the scene.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia; James Newman, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; and Thomas Townsend, Chief of the Hampton Police Division, made the announcement after the verdict was accepted by United States District Judge Arenda Wright Allen.

            Rushing was convicted on Feb. 7, 2013, of conspiracy and robbery, which both carry a maximum penalty of 20 years in prison, as well as possession of a firearm in connection with a crime of violence, which carries a mandatory minimum of seven years and a maximum of life in prison. Sentencing is scheduled for May 10, 2013.

            According to court records and evidence at trial, Rushing and an accomplice robbed the Hampton McDonald’s restaurant on May 6, 2009. Rushing brandished a firearm before forcing the employees into a refrigerator freezer, and he and his accomplice fled on foot, shedding identifying clothing as they ran.     

            This case was investigated by the ATF’s Washington Field Division and the Hampton Police Division.  Assistant United States Attorney Robert E. Bradenham, II and Special Assistant United States Attorney Teresa A. Wallbaum from the Criminal Division’s Human Rights and Special Prosecutions 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.

RICHMOND, Va. – Michelle Matney, 38, of Greensboro, North Carolina, pleaded guilty today to conspiracy to persuade others to travel in interstate commerce to engage in prostitution for her role as the leader of an interstate prostitution organization.   

            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 Homeland Security Investigations (HSI) in Washington, D.C.and D.A. Middleton, Chief of Police for the Henrico County Police Divisionmade the announcement after the plea was accepted by United States District Judge Henry E. Hudson.  Matney faces a maximum penalty of five years of incarceration when she is sentenced on May 10, 20013. 

            In a statement of facts filed with her plea agreement, Matney admitted to recruiting and supervising numerous prostitutes from 2010 through 2012.  She acknowledged that she would recruit prostitutes to work for her, encourage them to travel to various states other than North Carolina, where she was based, to work as prostitutes, post prostitution advertisements online for them, and set up prostitution appointments with clients.  In exchange, Matney received a portion of the earnings that the women made from prostitution.  Matney came to the attention of law enforcement after the Henrico County Police Department arrested several women for prostitution who stated that they were working for Matney. 

            This case was investigated by Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), and Henrico County Police Division.  Assistant United States Attorney Jamie L. Mickelson and Roderick C. Young 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. – Kimberly Yvette Dinkins, 44, of Manassas, Va., pled guilty today to purchasing 31 handguns from three Virginia gun shows to resell for profit.

            Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia, and James Newman, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after the plea was accepted by United States District Judge Claude M. Hilton.

Dinkins pled guilty to dealing firearms without a license and faces a maximum penalty of five years in prison when she is sentenced on May 3, 2013.

            According to a statement of facts filed in court, Dinkins purchased 31 firearms – all handguns – on three consecutive weekends from Nov. 17 through Dec. 1, 2012. She purchased 13 handguns at a gun show in Chantilly, Va., nine at a gun show in Richmond, Va., and nine at a gun show in Hampton, Va. Dinkins was not a federally licensed dealer of firearms; however, Dinkins was unemployed and purchased the handguns with the intention of selling them for profit.

This investigation is being conducted by ATF’s Washington Field Division.  Special Assistant United States Attorney L. Rush Atkinson and Virginia Assistant Attorney General and Special Assistant United States Attorney Marc J. Birnbaum 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. – Douglas Lee Payne Jr., 31, of Fairfax, Va., has been indicted by a federal grand jury on child exploitation related charges.

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 James A. Morris, Acting Fairfax County Chief of Police made the announcement after the indictment was returned.

Payne was indicted on Feb. 6, 2013, on one count of production of child pornography, which carries a mandatory minimum penalty of 15 years and a maximum penalty of 30 years in prison; one count of possession of child pornography, which carries a maximum penalty of 10 years in prison; one count of attempted enticement of a minor, which carries a mandatory minimum of 10 years and a maximum of life; and one count of attempted travel to engage in illicit sexual conduct, which carries a maximum of 30 years in prison, if convicted.

            According to the indictment and other court documents, during the investigation of a Fairfax County probation violation in December 2011, evidence was discovered of communications between Payne and a minor victim in Indiana. These communications involved both text messages and Skype chats.  In these communications Payne asked the minor victim for nude images and instructed her on how to pose.  Payne had at least one child pornography image of the minor victim, which she had sent to him.  Payne and the minor victim also had conversations about Payne going to Indiana to visit a cousin and that he would stop to see the minor victim and have sex with her on his way home.  In addition, Payne had other child pornography images in his possession.  On Dec. 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 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.

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

A copy of this press release may be found on the website of the 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. – Robert E. Herring, 69, of Newport News, Va., has been sentenced to 36months in prison, followed by one year of supervised release, for preparing false federal income tax returns for clients to submit to the IRS or to mortgage lenders.

            Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Sheila Olander, Acting Special Agent in Charge, IRS Criminal Investigation, Washington, D.C., Field Office, made the announcement after sentencing by United States District Judge Robert E. Doumar on Feb. 5, 2013.

“Return preparer fraud is a priority for IRS Criminal Investigation, said IRS Acting SAC Olander. “We have committed to working with our law enforcement partners to investigate and prosecute cases just like these.  Fraud schemes, such as Mr. Herring’s, cause tremendous financial damage to everyone, especially those which defraud the IRS and other financial institutions.  This sentence demonstrates our collective efforts to enforce the law and ensure public trust.”

            Herring pled guilty on May 5, 2012, to aiding in the preparation of false tax returns and making a false statement to HUD/FHA. According to court documents, Herring operated Have Taxes Financial Service and GL&JS Tax Service, both of which performed tax preparation services. From 2006 through 2009, Herring would file returns – in many instances without the client’s knowledge or consent – that understated income and overstated expenses for a client’s federal tax return, and then file an amended return reporting increased income for certain clients who needed to obtain real estate financing. He prepared at least 19 false returns with a resulting tax loss of $174,845, and he deposited certain tax refunds into his own account without providing them to the taxpayer to whom the refund was owed. His mortgage fraud resulted in losses to the mortgage lender of $917,287.

            This case was investigated by IRS Criminal Investigation.  Assistant United States Attorney Brian Samuelsprosecuted 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. – David J. Rainsberger, 32, a law enforcement officer with the State Department’s Diplomatic Security Service, pleaded guilty today to 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. 

            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 the plea was accepted by United States District Judge Gerald Bruce Lee. 

            Rainsberger faces a maximum penalty of two years in prison on the gratuities charge and five years in prison on the false statements charge when he is sentenced on April 19, 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 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 worth approximately $2,500.  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 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.