Western District of Virginia

LYNCHBURG, VIRGINIA – A former Colonel with the Virginia National Guard, who pled guilty in July to a federal child pornography charge, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.

Gary Williamson, 54, of Lynchburg, Va., previously waived his right to be indicted and pled guilty to a one-count Information charging him with knowingly receiving and distributing child pornography. This morning in District Court, Williamson was sentenced to 120 months of federal incarceration. The defendant was also ordered to pay $5,000 in restitution and will be required to register as a sex offender upon his release from prison.

“It is a sad day for all when we learn that a man like Mr. Williamson, who has had a distinguished military service career, has engaged in serious violations of federal criminal law by possessing and distributing child pornography,” United States Attorney Anthony P. Giorno said today. “Crimes like those committed by Mr. Williamson have the effect of re-victimizing the children in these images, and those who engage in such conduct will be held accountable in a court of law.”

"Every time a person shares an image of child pornography, the subject of that image is victimized all over again,” said Clark E. Settles, special agent in charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C., which oversees HSI Roanoke. “Let this sentence serve as a warning to other child predators who trade images of child pornography. You cannot hide behind your computer. We will find you, investigate you, and ensure you are prosecuted to the fullest extent of the law.”

According to evidence presented at the defendant’s guilty plea hearing by Assistant United States Attorney Daniel Bubar, the Roanoke office of Homeland Security Investigations became aware of Williamson’s distribution of child pornography on October 14, 2014, through information gathered during an unrelated investigation of a website located outside the United States.  In December 2014, Williamson was interviewed at his home and a search warrant was executed for various computers and media storage devices. During this search, Williamson admitted to controlling an email account and a username for the subject website that have been used to trade suspected child pornography.  Subsequent forensic analysis of the defendant’s computer and other media storage devices showed he possessed more than 2,000 images of child pornography, many of which he distributed via the subject website bulletin boards and email.

The investigation of the case was conducted by the HSI Roanoke Office, the Campbell County Sheriff’s Office, the Southern Virginia Internet Crimes Against Children Task Force and the Virginia Attorney General’s Office.  Assistant United States Attorney Daniel Bubar is prosecuting the case for the United States.

ABINGDON, VIRGINIA – A federal grand jury sitting in the United States District Court for the Western District of Virginia in Abingdon has charged the chief financial officer at Bristol Virginia Utilities [BVU] with a variety of tax and fraud charges in a 15-count federal indictment.

The grand jury has charged Stacey Pomrenke, a.k.a. Stacey Bright, 43, of Abingdon, Virginia, with one count of conspiracy to commit tax fraud, three counts of making false statements, three counts of extortion, one count of program theft, one count of conspiracy to commit wire fraud and six counts of wire fraud.

The indictment, returned October 26, 2015, alleges that Pomrenke, through her position as chief financial officer with BVU, used her power to obtain things of value from vendors who were engaged in business relationships with BVU. Those things of value included, allegedly, tickets to baseball and football games, alcohol and the funding of official BVU company functions. Pomrenke is also charged with conspiring to defraud the United States by falsely reporting wages and other financial benefits of BVU employees to the Internal Revenue Service.

If convicted, Pomrenke faces a maximum possible penalty of up to 20 years in prison and/or a fine of up to $250,000.

The investigation of the case, which remains ongoing, is being conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.  Assistant United States Attorney Zachary Lee will prosecute the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt.  The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

ABINGDON, VIRGINIA – The former Mayor of Bristol, Virginia and a former member of the Board of Directors of Bristol Utilities Authority (BVU), pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to charges related to the illegal sale of NASCAR tickets.

Paul Hurley, 74, of Bristol, Va., was a member of the Board of Directors for BVU from 2009-2014. Prior to that, the defendant was a member of the Bristol, Virginia Economic Development Committee and also served as both a member of the Bristol, Virginia City Council and as the city’s Mayor. Today in District Court, Hurley waived his right to be indicted and pled guilty to two-count Information charging him with one count of mail fraud and one count of lying to a Federal grand jury.

“Mr. Hurley abused his position of trust with the Bristol Virginia Utilities Authority for his own personal benefit and then lied to the grand jury to cover up his crimes,” United States Attorney Anthony P. Giorno said today. “This is a sad and tragic case where an individual with a history of public service has, by his actions, forfeited his job, his reputation, his standing in the community and potentially his freedom for a few thousand dollars. I commend the efforts of the investigating agencies that led to these convictions, which should serve as a warning to others that criminal conduct by white collar professionals will not be tolerated.”

“The oath pledged for committing oneself to public service and that of one sworn before a federal grand jury is no different; both expect behavior beyond reproach, integrity when faced with dilemmas and consequences when either is breached,” Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division said today. “Mr. Hurley will soon face consequences, not yet determined by the courts, for his repeated behavior of using property owned by BVU for his personal gain and then lying about it, while under oath, to a federal grand jury.  Public corruption remains the Bureau’s top criminal priority, and we encourage citizens to report unethical and illegal activity to law enforcement as soon as they become aware.”

According to evidence presented at today’s guilty plea hearing by Assistant United States Attorney Zachary Lee, and an agreed upon statement of facts filed with the court, between 2009 and 2014 the defendant served as the chairman of the City of Bristol’s Economic Development Committee. Acting in that role, Hurley obtained NASCAR tickets for two annual races held in Bristol, Va. Those tickets were purchased by BVU at Hurley’s request, for what he said would be used for “economic development” purposes.

Hurley claimed the tickets purchased for him by BVU would be given, free of charge, to representatives of business who showed an interest in re-locating businesses to Bristol, Virginia. However, Hurley admitted today that he lied when he claimed the tickets would be used for economic reasons and instead he sold those NASCAR tickets to friends, ticket scalpers and others, all for his own personal, financial benefit.

In all, Hurley sold at least 50 NASCAR tickets provided to him free of charge for economic purposes by BVU. The value of the tickets sold by Hurley was more than $5,000.

On July 20, 2015, Hurley appeared as a witness before a federal grand jury investigating practices at BVU. Hurley, being a former Chairman of the Board of the Directors of BVU, was called as a witness to determine if he had knowledge or involvement in corruption at BVU, specifically regarding the purchasing of NASCAR tickets by the utilities authority. After being placed under oath, Hurley made false declarations to the grand jury in response to questions regarding the practice of BVU purchasing and distributing NASCAR tickets, including his own actions relating to his use of tickets for economic development purposes. When specifically asked if he ever sold the tickets, Hurley said “I don’t recall that.”

At sentencing, Hurley faces a maximum possible penalty of up to 20 years in Federal prison on the mail fraud charge and a maximum possible penalty of up to five years in Federal prison on the perjury charge. The defendant has also agreed to pay $5,000 in restitution to Bristol Virginia Utilities Authority and to forfeit an additional $10,000.        

The investigation of the case, which remains ongoing, is being conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.  Assistant United States Attorney Zachary Lee will prosecute the case for the United States.

HARRISONBURG, VIRGINIA – A Winchester man, who previously worked in the IT department of a Winchester-based company, pled guilty yesterday in the United States District Court for the Western District of Virginia in Harrisonburg to a federal computer crime.

Christopher T. Wood, 41, of Winchester, Va., waived his right to be indicted and pled guilty yesterday to a one count Information charging him with intentionally accessing and exceeding authorized access to a computer.

“The prosecution of Mr. Wood should serve as notice to all that the United States Attorney’s Office and our partners in law enforcement will investigate and punish those individuals who access protected computers without authorization and with the intent to cause mischief,” United States Attorney Anthony P. Giorno said yesterday.

“The Richmond Division’s Computer Intrusion Squad has a talented team of experienced and technically trained agents who are motivated to aggressively pursue both national security and criminal intrusion matters,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division.

According to evidence presented at yesterday’s guilty plea hearing by Assistant United States Attorney Grayson Hoffman through a filed statement of facts, Wood worked for a company, “Victim Company,” that had offices and operations in Winchester, Virginia. Wood worked as a web developer in the IT department at Victim Company.

On or about January 8, 2014, the defendant was laid-off from Victim Company. As a result, Victim Company deactivated Wood’s electronic credentials which had given him access to the company’s internal computer network and file server systems. Shortly after being laid-off, Wood went home to his residence in the Winchester area, and through his home computer, remotely logged onto Victim Company’s computer system using another employee’s credentials, without that employee’s knowledge or consent.

Wood accessed Victim Company’s database, without their consent, and deleted many files from the company’s servers and disabled some of Victim Company’s accounts. When Victim Company noticed the damage they contacted law enforcement.

On February 4, 2015, law enforcement investigators interviewed Wood at his home, at which time he admitted to logging onto the company’s computer system, without their consent, and while using another employee’s credentials. He admitted that he deleted files and disabled accounts because he was upset about losing his job. IP information obtained by investigators corroborate that a computer in Wood’s home did in fact access Victim Company’s computer systems. It was later determined that Victim Company spent approximately $61,710 as a result of the damage caused by the defendant’s actions.

At sentencing, Wood faces a maximum possible penalty of up to one year in prison and/or a fine of up to $100,000. The defendant has also agreed to pay $61,710 in restitution to Victim Company for the damage caused by his actions.

The investigation of the case was conducted by the Federal Bureau of Investigation.  Assistant United States Attorney Grayson Hoffman is prosecuting the case for the United States.

ROANOKE, VIRGINIA – A former contract employee at the Radford Army Ammunition Plant, who pled guilty earlier this year to charges of sexually assaulting fellow employees at the plant, was sentenced today in the United States District Court for the Western District of Virginia in Roanoke.

Joshua Linkous, 39, of Dublin, Va., previously pled guilty to one count of aggravated sexual abuse by force against “Victim 1,” one count of abusive sexual contact of “Victim 2,” and one count of abusive sexual contact of “Victim 3.” Today in District Court, Linkous was sentenced to 168 months of federal incarceration and 15 years of supervised release thereafter. Linkous will also be required to register as a sex offender for the rest of his life. 

In a written statement of facts signed by Linkous and filed with the court during a previous hearing, Linkous admitted to working at the Radford Army Ammunition Plant (“Arsenal”) from approximately January 2001 until August 2014.  The Radford Army Ammunition Plant is a government-owned facility that is operated by defense contractor BAE Systems and manufactures, among other things, propellant for the country’s military ammunitions.  While employed at the Arsenal, Linkous, and the victims in this case, worked in or near an area of the Arsenal known as the Tub House, which is part of the manufacturing process.

Linkous admitted that on July 27, 2014, he coaxed Victim 1 into the Tub House, where no one else was working at the time. With Victim 1 standing near the lockers, Linkous admitted to grabbing and pushing her into a small, secluded break room area. The lights were off and he closed the door, pushed Victim 1 against a kitchen counter, pinning her there. Linkous then forcibly unbuttoned Victim 1’s coveralls, while she was attempting to prevent him from doing so. The defendant admitted that Victim 1 was crying and trying to make him stop. Linkous then forcibly turned Victim 1 around and pinned her stomach against the counter with his body behind her, he got his hands inside of her clothing, touched her bare breasts and penetrated her labia with his finger, over her objection and against her will.

In a second incident, Linkous admitted that, in June 2014, he saw Victim 2 at her locker near the break room in the Tub House. When Victim 2 began to exit the Tub House, Linkous grabbed her by the upper arm and dragged her into a circuit breaker room in the Tub House. Linkous closed the door and shut the lights off, pushed her against a control panel and pinned her down with his body. He then forcibly kissed her, unbuttoned her coveralls and kissed her breasts against her will. Linkous put his hands inside her coveralls and touched her vaginal area over her underwear with his hand, against her will.

Linkous also admitted that, sometime between August 2010 and December 2011, he approached Victim 3, who worked in a building near the Tub House. He admitted to putting his hand inside her coveralls near her vaginal area and asked her to go to the break room. Victim 3 said no and removed Linkous’ hand from her coveralls. Linkous then followed Victim 3 as she tried to walk away and forcibly put his hands inside her coveralls and under her underwear, against her will. Linkous removed his hand only when a co-worker approached.

 In determining the defendant’s sentence, the court also considered actions Linkous allegedly took against a fourth victim. In a statement submitted to the court during today’s sentencing hearing, without objection from the defendant, Victim 4, who also worked in the Tub House, claimed that Linkous held her against her will in the break room, forced his hands inside her coveralls and underwear and touched her vagina without her consent.

The investigation of the case was conducted by the United States Army’s Criminal Investigation Division, the Federal Bureau of Investigation, and the Defense Criminal Investigative Service.  Assistant United States Attorneys Erin Kulpa and Laura Rottenborn prosecuted the case for the United States.

ROANOKE, VIRGINIA – United States Attorney Anthony P. Giorno announced today that Assistant United States Attorney Donald R. Wolthuis has been inducted as a Fellow of the American College of Trial Lawyers, one of the premier legal associations in North America.

The induction ceremony at which AUSA Wolthuis became a Fellow took place during the recent Annual Meeting of the College in Chicago, Illinois.

Founded in 1950, the College is composed of the best of the trial bar from the United States and Canada. Fellowship in the College is extended by invitation only and only after careful investigation, to those experienced trial lawyers who have mastered the art of advocacy and whose professional careers have been marked by the highest standards of ethical conduct, professionalism, civility and collegiality. Lawyers must have a minimum of fifteen years trial experience before they can be considered for Fellowship.

Donald R. Wolthuis has been an Assistant United States Attorney for the Western District of Virginia in Roanoke since 1990, where he currently serves as the Senior Litigation Counsel and the lead attorney for the Organized Crime and Drug Enforcement Task Force. Prior to joining the USAO, Mr. Wolthuis was an associate and later a partner at the law firm of Martin, Hopkins, Lemon & Carter, P.C. from 1984-1990. From 1980-1984, Mr. Wolthuis served as an Assistant Commonwealth Attorney for the City of Roanoke. He earned a B.A. in Political Science from Mary Washington College where he graduated Phi Beta Kappa. He later earned a J.D. from the College of William and Mary, Marshall-Wythe School of Law.

Membership in the College cannot exceed one percent of the total lawyer population of any state or province. There are currently approximately 5,800 members in the United States and Canada, including active Fellows, Emeritus Fellows, Judicial Fellows (whose who have ascended to the bench) and Honorary Fellows. The College strives to improve and elevate the standards of trial practice, the administration of justice and the ethics of the trial profession. Qualified lawyers are called to Fellowship in the College from all branches of practice. They are carefully selected from among those who customarily represent plaintiffs in civil cases and those who customarily represent defendants, those who prosecute individuals accused of crime and those who defend them. The College is thus able to speak with a balanced voice on important issues affecting the legal profession and the administration of justice.

HARRISONBURG, VIRGINIA – A former regional chief public information officer for the U.S. Army Corps of Engineers pled guilty today in the United States District Court for the Western District of Virginia in Harrisonburg to charges related to the possession and transportation of child pornography images and videos.

Michael Steven Beeman, 62, of Winchester, Va., waived his right to be indicted and pled guilty today to a Superseding Information charging him with one count of transportation of child pornography and four counts of possession of child pornography.

In and around the late 1980s, Beeman, who at the time was employed by the United States Air Force in a public affairs position at Patrick Air Force Base in Florida, video-recorded his sexual abuse of a boy who also lived on base. This abuse, and the video images produced by Beeman remained unknown to law enforcement until shortly before his arrest.

In 2014 Beeman’s dog walker discovered images of naked minors on one of Beeman’s i-Pads. The dog walker reported these observations to the Frederick County Sheriff’s Office.

On January 14, 2014, a search warrant was executed at Beeman’s Winchester home and more than 250 electronic devices, including VHS tapes, DVDs, desktop computers, laptop computers, electronic tablets, external hard drives and thumb drives were seized. More than 50 of the items seized contained depictions of child pornography. There were thousands of images of child pornography found on Beeman’s devices. Many of the victims depicted on the defendant’s devices were found by National Center for Missing and Exploited Children to be previously identified minors.

Forensic analysis of Beeman’s devices showed that many of the child pornography images were obtained by the defendant both prior to and following the defendant’s move to Virginia in 2010.

At sentencing, Beeman faces up to 20 years in prison on each of counts one through four and up to 10 years on count five.  He also faces a mandatory minimum of at least five years on count one. After his release from prison, the defendant faces a minimum of five years and as much as a lifetime of supervised release.

The investigation of the case was conducted by Mike Wagoner with the Page County Sheriff’s Office, the NOVA/DC Internet Crimes Against Children Task Force and Evidence Recovery Section, the Frederick County Sheriff’s Office, Department of Homeland Security- Homeland Security Investigations, The Virginia Attorney General’s Office- Computer Evidence Recovery Section, the Virginia State Police High Tech Crimes-Computer Recover Section, Air Force Office of Special Investigations, U.S. Army Corp of Engineers-Middle East District, U.S. Department of Justice’s Child Exploitation and Obscenity Section, High Tech Investigative Unit. Assistant United States Attorney Nancy S. Healey and Herbrina D. Sanders, a trial attorney with the U.S. Department of Justice’s Child Exploitation and Obscenity Section, will prosecute the case for the United States.

ROANOKE, VIRGINIA – A Roanoke man who willfully made a false statement to an agent with the Federal Bureau of Investigation, pled guilty today in the United States District Court for the Western District of Virginia in Roanoke.

Shane Giles Eaton, 21, of Roanoke, Va., waived his right to be indicted and pled guilty today to a one count Information charging him with willfully making a false statement in a matter within the jurisdiction of the executive branch of the Government of the United States.

“Mr. Eaton falsely accused an ex-girlfriend of making threats against the President of the United States and of her intentions to join a known terrorist organization,” United States Attorney Anthony P. Giorno said today. “We take the act of making false statements to law enforcement officials extremely seriously. Mr. Eaton’s false accusations wasted precious federal resources and unnecessarily subjected his former girlfriend to the trauma of a federal investigation. Today’s conviction should serve as a warning to others who may be contemplating making similar false statements.”

According to evidence presented at today’s guilty plea hearing by Assistant United States Attorney Daniel Bubar, on March 12, 2015, Eaton walked into the downtown Roanoke offices of the Federal Bureau of Investigation and made a statement to an agent that his ex-girlfriend made threats against the life of the President of the United States and her of intentions to join ISIS.

During interviews with Eaton’s ex-girlfriend and her mother, agents determined that Eaton’s original statements were false. In subsequent interviews with Eaton, conducted on March 16, 2015 by agents with the FBI and United States Secret Service, Eaton admitted that his prior statements were not truthful and that he lied about his ex-girlfriend to get her into trouble. In a Mirandized statement he wrote, “I lied to the agent,” and “Sorry for what I had done.”

The investigation of the case was conducted by the Federal Bureau of Investigation and the United States Secret Service. Assistant United States Attorney Daniel Bubar will prosecute the case for the United States.

ABINGDON, VIRGINIA – A mother and daughter who operated a business that provided oversight to personal care aides caring for elderly and disabled individuals, were sentenced earlier this week in the United States District Court for the Western District of Virginia in Abingdon on healthcare fraud charges.

Connie Robbins, 59, of Sugar Grove, Va. and Stephanie Dawn Robbins, 37, of Marion, Va., both previously waived their rights to be indicted and pled guilty to one-count Informations charging them each with conspiracy to commit healthcare fraud. On Monday, September 14, 2015, Connie Robbins was sentenced to one year and one day in prison. Stephanie Robbins was sentenced to two years of probation, 200 hours of community service and three months of home confinement. The defendants were ordered to repay Virginia Medicaid $137,106 in total restitution.

According to evidence presented at a previous guilty plea hearing by Virginia Assistant Attorney General and Special Assistant United States Attorney Janine Myatt, Stephanie and Connie Robbins operated Robbins CD Services, a Consumer Directed Service Facilitator (CDSF) service provider. A CDSF is paid by Virginia Medicaid to assist Medicaid recipients who are eligible for a waiver that allows them to avoid moving into a nursing home and instead receive critical care in their homes.

The only two employees at CD Robbins Services were Connie Robbins, a registered nurse, and her daughter, Stephanie Robbins, who served as the office manager. Between October 2008 and August 2013, Connie Robbins created false supporting paperwork that documented home face-to-face visits with patients that never occurred. In her role as office manager, Stephanie Robbins billed Virginia Medicaid for the face-to-face home assessments that she knew never occurred. Approximately 35 percent of the home assessments billed by Robbins CD Services and paid by Medicaid never occurred.

The investigation of the case was conducted by the Federal Bureau of Investigation and the Medicaid Fraud Control Unit for the Virginia Office of the Attorney General.  Virginia Assistant Attorney General and Special Assistant United States Attorney Janine Myatt is prosecuting the case for the United States.

CHARLOTTESVILLE, VIRGINIA – A former respiratory therapist, who practiced in both Free Union, Va. and Earlysville, Va., pled guilty on April 20, 2015, to committing health care fraud and was sentenced August 28, 2015, in the United States District Court for the Western District of Virginia in Charlottesville.

At his guilty plea hearing, Karsten, operating as PDK Oximetry, LLC, admitted that between 2006 and 2010 he fraudulently billed Medicare for his services by using false Current Procedural Terminology (CPT) codes.  Karsten admitted to using CPT codes that he knew would yield higher Medicare reimbursement payments for himself even though the service he was billing for was not provided and could not be provided by a home mail test practice, such as the one he owned and operated.

Between 2006 and 2010, Karsten fraudulently overbilled Medicare $2,499,276, and was overpaid $2,376,953 by Medicare.  Karsten was sentenced last Friday in United States District Court to 36 months of federal incarceration and was ordered to pay $2.3 million in restitution to Medicare.

In sentencing Karsten, the Court said that Karsten had committed a serious crime, that there was no doubt that Karsten stole money that did not belong to him, and that there was no justification for it, noting that Karsten committed the wrongful acts time and time and time again in small increments over a period of four years.  The Court also stated that the sentence of 36 months incarceration was imposed, in part, to promote respect for the law and to deter others from stealing from health care programs.  The court noted that laws are structures that hold us together as a society and that there must be just punishment for persons who break those laws.

The investigation of the case was conducted by the Federal Bureau of Investigation, the Department of Health and Human Services- Office of the Inspector General.  Assistant United States Attorney Jennie L.M. Waering is prosecuting the case for the United States.

ABINGDON, VIRGINIA – A Bristol, Virginia man, who stole more than $160,000 from his employer, was sentenced today in the United States District Court for the Western District of Virginia in Abingdon.

Tony Michael Hutchinson, 52, previously pled guilty to a one count Information charging him with wire fraud. Today in District Court, Hutchinson was sentenced to four months of federal incarceration and ordered to pay restitution in the amount of $160,647. He will serve two years of supervised released following his prison term.

Hutchinson, a bankruptcy attorney, worked for a law firm out of its Bristol, Virginia office and, after the Bristol office was closed, its Kingsport, Tennessee office.  Hutchinson was the only lawyer in the firm who actively practiced bankruptcy law and the bankruptcy practice was somewhat separate from other operations of the firm.

When clients retained the law firm for the purpose of filing bankruptcy petitions on their behalf, Hutchinson collected initial payments from them ranging from approximately $500 to $1,000.  Those payments were supposed to be used, among other things, to pay bankruptcy filing fees.  Hutchinson should have deposited those initial payments into the firm’s trust account and then used that money to pay bankruptcy filing fees.  From 2007 through 2012, Hutchinson charged an additional $50 fee per client to cover expenses and kept those fees, totaling over $60,000 for himself.

Beginning in approximately 2013, Hutchinson received the initial payments from clients as cash and blank money orders, did not deposit the funds into the trust account, did not record the payments on the firm’s books, and used most of the money for his personal purposes.  In 2013 and 2014, Hutchinson stole over $70,000 from those funds.  To keep the scheme going, Hutchinson used the firm’s credit card account to pay the client’s bankruptcy filing fees in the bankruptcy court for the Western District of Virginia.  Through the scheme, Hutchinson fraudulently used the firm’s credit card for more than $70,000 in bankruptcy filing fees that should have been paid from the initial payments collected from clients.

The investigation of the case was conducted by the United States Secret Service.  Assistant United States Attorney Randy Ramseyer prosecuted the case on behalf of the United States.

Memphis, TN – An Ohio man has been indicted for possessing a firearm and ammunition at St. Jude Children’s Research Hospital. The indictment was announced today by Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee.

An affidavit indicates that in March 2015, Memphis police officers responded to an aggravated assault call at St. Jude. The defendant, 29-year-old Aaron Cauley, had allegedly threatened the life of his child’s mother while they were inside of a patient room.

Cauley and his child’s mother were engaged in a heated argument when he pointed a pistol and threatened to kill her, according to the affidavit. Afraid for her life, the victim alerted St. Jude security of the occurrence. Security subsequently notified Memphis police officers, who arrived on the scene and detained Cauley. Officers reportedly located a knife in the defendant’s pants pocket while searching him.

The affidavit also indicates that security discovered a green backpack hidden under some children’s clothing in the patient room where the alleged incident occurred. A

Sig Sauer 9mm pistol and 56 rounds of 9mm ammunition were found in the backpack. Two hunting knives were also found, according to the affidavit.

Cauley is charged with being a felon in possession of a firearm and ammunition. If convicted, he faces up to life in federal prison. He also faces up to $250,000 in fines.

The case is being investigated by the Memphis Police Department and Project Safe Neighborhoods.

Special Assistant U.S. Attorney Dean DeCandia is prosecuting this case on behalf of the government.

The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.

ROANOKE, VIRGINIA – The owner of Thelma’s Chicken and Waffles, a restaurant located in downtown Roanoke, was sentenced today in the United States District Court for the Western District of Virginia in Roanoke for stealing disability benefits from the Railroad Retirement Board.

Christopher Mayo, 46, of Roanoke, previously pled guilty to one count of stealing government monies. The defendant admitted that beginning in 2007 he falsely applied for and received monthly disability annuity payments from the Railroad Retirement Board [RRB]. In all, Mayo received $228,556 in disability payments for which he was not entitled.

Today in District Court, Mayo was sentenced to 14 months of federal incarceration. He was also ordered to pay restitution to the RRB in the amount of $228,556.

An investigation into Mayo began in late 2014 after the RRB received a complaint from Norfolk Southern. The investigation revealed that after applying for disability benefits in 2007, Mayo worked to knowingly hide his employment and ownership of Thelma’s Chicken and Waffles from the RRB. When questioned by investigators in early 2015, the defendant initially stated that he was an investor in the restaurant, was waiting for a big pay day from it and did not make any money from his role in the downtown eatery. He did, later, admit to investigators that he knowingly hid his income in order to continue to receive disability benefits.

The investigation of the case was conducted by investigators with the Railroad Retirement Board- Office of the Inspector General, Office of Investigations.  Assistant United States Attorney Charlene R. Day prosecuted the case for the United States.

ROANOKE, VIRGINIA – A Franklin County man, who forced a local woman to engage in prostitution through the use of physical violence and threats, pled guilty today in the United States District Court for the Western District of Virginia in Roanoke, United States Attorney Anthony P. Giorno announced.

Tremayne Rontae Kirby, 25, of Franklin County, Virginia, pled guilty today to one count of recruiting, harboring and causing an individual listed as Victim One in the Indictment to engage in commercial sex through force, threats of force, fraud and coercion (Human Trafficking) and one count of using interstate commerce to promote an enterprise involving prostitution.

“Prosecuting those who engage in human trafficking accomplishes two very important goals. First and foremost, it rescues  women from an existence of abuse and degradation and affords them  the opportunity to work toward healing and making a better life for themselves, something I know the victims in this case are doing,” United States Attorney Anthony P. Giorno said today. “Second, it takes a man who preys on the vulnerabilities of others and puts him, justly, in federal prison.

“Domestic human trafficking is a violation of its victims’ civil rights.  It infringes upon the protected liberties guaranteed all Americans and is a high criminal investigative priority for the FBI,” Adam S. Lee, Special Agent in Charged for the FBI’s Richmond Division said today.  “The type of sex trafficking involved in this case demonstrates the very real risk the sex trade poses to our Virginia communities.  I would like to thank the U.S. Attorney’s Office for the Western District of Virginia for their expert administration of this case and the member agencies of the Western District of Virginia Human Trafficking Task Force for their partnership and collaboration.”

Kirby, who was indicted earlier this year, admitted today that he, along with other individuals, operated a prostitution enterprise involving multiple women in Virginia, North Carolina and New Jersey. Kirby used the money generated from the prostitution enterprise to pay for hotels, buy illegal drugs and provide food for himself and the women he used.  The defendant posted prostitution advertisements on internet websites, which included pictures of the women and prices for their services. Kirby secured hotel rooms and transportation for meetings with “Johns.”

From January 2014-May 2014, Kirby prostituted “Victim One.” Kirby admitted today that on many occasions, Victim One did not want to engage in sex acts but did so at the defendant’s insistence.  To gain Victim One’s compliance, Kirby hit, body-slammed, shook, and threatened her. Kirby also regularly carried a gun in his waistband. Victim One had a drug habit, which was fed by Kirby and the lifestyle in which she was forced to live.  At times Kirby withheld drugs until she performed prostitution services.  Kirby kept virtually all of the proceeds Victim One generated through the compelled prostitution activity.

At sentencing, Kirby faces a minimum penalty of fifteen years in prison and a maximum penalty of life in prison, and a fine of up to $250,000 on the human trafficking charge.  The other charge carries a maximum possible penalty of up to five years and/or a fine of up to $250,000.

The investigation of the case was conducted by Homeland Security Investigations, the Federal Bureau of Investigation, and the Pittsylvania County Sheriff’s Office. United States Attorney Anthony P. Giorno and Assistant United States Attorney Laura Day Rottenborn are prosecuting the case for the United States.

This prosecution highlights the benefits to law enforcement that come from cooperative participation in a regional task force that targets sex and labor trafficking offenders. The United States Attorney’s Office for the Western District of Virginia, along with partner agencies throughout the western portion of Virginia, formed the Western District of Virginia Human Trafficking Task Force, a group that is actively engaging in the education, investigation and prosecution of crimes involving human trafficking. This task force has educated local police departments throughout the state on investigative techniques to better prepare them to identify cases of human trafficking, victim/witness personnel, juvenile justice workers, and non-government organizations that assist trafficking victims. The task force also meets and shares information about ongoing cases.

Danville, VIRGINIA – A majority owner of Hayes & Iron Metal, a full service metal recycling and salvage operation founded in 1980, was indicted by a federal grand jury sitting in the United States District Court for the Western District of Virginia in Roanoke on a variety of fraud charges.

Douglas T. Alderson II, 44, of Danville, Virginia, was charged in a sealed indictment earlier this month. That indictment was unsealed today after the defendant made his initial court appearance in U.S. District Court in Roanoke.

The grand jury has charged Alderson with one count of bank fraud and two counts of making false statements to obtain bank funds.

According to the indictment, Alderson secured a $6 million loan, later increased to $7 million, from BB&T bank for what he claimed were “seasonal working needs” for Hayes & Iron Metal. The primary collateral was Hayes’ accounts receivables. One of the entities Alderson listed on his Loan Base Report to BB&T was a vendor, Virginia Wire and Processing. However, it was later revealed that Virginia Wire and Processing was not a vendor of Hayes Iron & Metal but was rather an entity owned and funded by Alderson.  Alderson purposefully misstated the amounts owed to Hayes Iron and Metal in order to secure the loan.

The indictment alleges that Alderson treated Virginia Wire and Processing as a wholly owned subsidiary of Hayes and was paying Virginia Wire and Processing’s bills, payroll and advancing money to run their operations. It is also alleged that Alderson used Virginia Wire and processing money for personal expenses, including but not limited to: in 2011, $329,390 in American Express charges that were personal in nature, including $92,534 for lodging at the Ritz-Carlton in New York City and $53,856 for charter jets. In 2013, Alderson alleged charged $260,093 in personal charges on the American Express account, including but not limited to, $34,585 for lodging at the Ritz-Carlton, $79,415 for personal shopping, $68,712 for event tickets and $22,210 for jet, bus and limousine charters.

If convicted, the defendant faces up to 30 years in prison and/or a fine of up to $1 million.

The investigation of the case was conducted by the United States Secret Service and the Internal Revenue Service.  Assistant United States Attorney C. Patrick Hogeboom III will prosecute the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt.  The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

CHARLOTTESVILLE, VIRGINIA – The former owner of  “Readings by Catherine,” a business in Charlottesville that offered palm readings, candles readings, tarot card readings, and other services, has been indicted by a federal grand jury sitting in the United States District Court for the Western District of Virginia in Charlottesville.

Sandra Marks, 40, of Charlottesville, Virginia, a.k.a. “Catherine Marks,” was charged in a sealed indictment returned April 22, 2015 in U.S. District Court in Charlottesville. That indictment was unsealed yesterday morning following the defendant’s arrest and initial court appearance in U.S. District Court for the Eastern District of New York. Marks was temporarily detained pending a bond hearing July 24, 2015 at 3 p.m.

The grand jury has charged Marks with 31 counts of wire fraud, two counts of mail fraud and one count of money laundering.

According to the indictment, Marks operated a business that offered palm readings, candle readings, tarot card readings, astrological readings and spiritual readings. The defendant offered walk-in services to customers, some of whom suffered from emotional distress and mental disorders, had recently gone through personal traumatic events in their lives, and/or who were emotionally vulnerable, fragile and/or gullible.

The indictment alleges that Marks unjustly enriched herself, and others, by obtaining money, jewelry and other things of value from her customers and clients of “Readings by Catherine” based upon false pretenses, representations, promises and omission of material facts. Marks claimed she was clairvoyant and able to see into the past and the future. She told clients she had a “gift from God” and was able to communicate with spirits and guides from God, including the “Prince of Illusion,” who would relay information to her about clients.

Marks, according to the indictment, would tell clients that she had learned from the spirits and guides that the client, and/or the client’s family, was suffering from a “curse” and a “dark cloud” that occurred in the past. The defendant would tell clients they would have to make a “sacrifice” of large amounts of money and valuables since “money was the root of all evil.”  Marks told clients she preferred cash and explained that the money or valuables would be buried in a box or otherwise hidden away and “cleansed” through prayer, rituals and meditation.

The indictment states that Marks told her clients that she could not and would not use the money and valuables furnished as “sacrifices” for her own personal benefit. Once cleansed, she assured her clients that the money and valuables would be returned to them. Contrary to those assurances, Marks, according to the indictment, kept and used the money and valuables provided by her clients for her and her family’s own personal use and economic benefit. In a few instances, Marks returned some money upon threat of legal action.

The investigation of the case was conducted by the Department of Homeland Security Investigations, the United States Postal Inspection Service, the United States Secret Service, the Virginia Attorney General’s Office and the Albemarle County Police Department. Special Assistant United States Attorney Elliot Casey will prosecute the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt.  The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno announced today that Joshua Austin and Latoya Austin, a husband and wife, pled guilty today in the United States District Court for the Western District of Virginia in Abingdon for conduct related to the accepting of bribes in exchange for introducing prohibited objects into a federal prison.     

Joshua Austin, 24, of North Tazewell, Virginia, pled guilty today to a one count Information charging him with accepting a bribe as a public official.  Latoya Austin, 22, also of North Tazewell, Virginia, pled guilty today to a one count Information charging her with aiding and abetting the introduction of a prohibited object into a federal prison.

According to evidence presented at the guilty plea hearing by Assistant United States Attorney Zachary T. Lee, Austin was employed as a correctional officer for the United States Bureau of Prisons at Federal Correctional Institution McDowell located in Welch, West Virginia.  Between January 1, 2015 and July 2, 2015, Austin received multiple monetary payments, totaling at least $10,000, from family members and associates of an inmate at the prison in return for Austin smuggling tobacco products into the prison.  These items were then provided to the inmate in violation of Bureau of Prisons regulations.   Many of the monetary payments were mailed to a post office box located in Bluefield, Virginia, which had been opened by Latoya Austin.  Additionally, Joshua Austin met with a family member of an inmate in Russell County, Virginia in order to receive one of the bribe payments.

Joshua Austin faces a potential maximum sentence of fifteen years imprisonment and a fine of $250,000.  He has also agreed to forfeit $10,700. Latoya Austin faces a potential maximum sentence of six months imprisonment and a $5,000 fine.

Both sentencing hearings are scheduled for October 14, 2015, at 10:30 a.m.

The investigation of this case was conducted by the Federal Bureau of Investigation, United States Bureau of Prisons Special Investigative Service at Federal Correctional Institution McDowell, United States Postal Inspection Service, and the United States Department of Justice Office of the Inspector General.  Assistant United States Attorney Zachary T. Lee is prosecuting the case for the United States.

ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno, along with representatives from the Federal Bureau of Investigation and the Internal Revenue Service- Criminal Investigations, announced today the latest conviction in the ongoing investigation into corruption at the Bristol Virginia Utilities Authority (BVU).

Today in the United States District Court for the Western District of Virginia, Wes Rosenbalm, 45, of Johnson City, Tennessee, the former CEO at BVU, waived his right to be indicted and pled guilty to a one count Information charging him with conspiracy to defraud the Internal Revenue Service and conspiracy to commit Federal Program Fraud.

“It’s unfortunate when we see people in positions of power abuse those positions for personal financial gains,” Acting United States Attorney Anthony P. Giorno said today. “Their abuses have consequences not only for them, but their families as well.  This case demonstrates that the US Attorney’s office and our law enforcement partners will be on the lookout for abuses of power and we will hold accountable those who violate the public trust.”

“Individuals such as Mr. Rosenbalm, that take advantage of the public to line their own pockets will be held accountable," said Assistant Special Agent in Charge Kathryn Montemorra on the Internal Revenue Service- Criminal Investigations.  “Abusing positions of trust, is a blight on any community and Mr. Rosenbalm's contributions to this scheme were extensive.  Today's plea should be a warning to those involved in criminal activities that they will be held accountable for their actions.”

“Mr. Rosenbalm's solicitation and acceptance of such extravagant "gifts" at the expense of clients demonstrates the unfortunate need for consumers to be aware of and report public corruption at any government level.  Public corruption remains our top criminal priority,” said Special Agent in Charge Adam S. Lee of the FBI’s Richmond Division.

According to evidence presented today by Assistant United States Attorney Zachary Lee, Rosenbalm was the CEO at BVU and between January 1, 2003 and January 1, 2014, he and others conspired to defraud the Internal Revenue Service by willfully evading income taxes and conspired to corruptly solicit things of value as a reward for the awarding of contracts to vendors of Bristol Virginia Utilities Authority.

In a statement of facts agreed to by both parties and filed with the court during today’s guilty plea hearing, Rosenbalm admitted to soliciting, and using others to solicit gifts and monetary payments from a variety of vendors that did business with BVU while BVU was receiving federal grant funds. These vendors felt the gifts and other payments they were being asked to provide to BVU had to be provided in order to continue to do business with BVU. Rosenbalm has admitted to soliciting gifts and monetary payments that include, but are not limited to: tickets to University of Kentucky basketball games; $663 for alcohol purchases at a BVU customer appreciation event; $2,850 for a Thanksgiving lunch for BVU employees; $15,000 for the BVU Christmas dinner; $5,500 for the BVU Children’s Christmas party; and $4,125 for a scorer’s table at the school one of Rosenbalm’s children attended.  Rosenbalm has agreed to pay $50,000 forfeiture to account for this conduct.                                                                                                      

In addition, Rosenbalm admitted to defrauding the IRS by failing to truthfully report income and benefits received by himself and other BVU employees.  This unreported compensation and benefits included country club memberships, personal use of BVU vehicles, bonuses paid in cash to employees, and bonuses paid to employees using gift cards.  Rosenbalm has agreed, as part of his plea agreement, to pay $150,000 in restitution to BVU for taxes and penalties owed by BVU as a result of his conduct. He also faces a maximum possible sentence of five years in prison and/or a fine of up to $250,000.

The investigation of the case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.  Assistant United States Attorney Zachary Lee will prosecute the case for the United States.

ABINGDON, VIRGINIA – A Laurel Bloomery, Tenn. man, who pled guilty to a pair of counts related to the theft of government equipment, was sentenced today in the United States District Court of the Western District of Virginia in Abingdon.

John Riley Morefield, 33, of Laurel Bloomery, Tenn., previously pled guilty to one count of aiding and abetting the possession, concealment and storage of a motor vehicle which had cross state lines after being stolen and one count of stealing two government license plates from a Department of Agriculture vehicle. Today in District Court, Morefield was sentenced to eight months imprisonment.

According to evidence presented at previous hearings by Assistant United States Attorney Jennifer Bockhorst, on August 25, 2014, a contractor’s backhoe, valued at $31,915, was stolen from the Virginia Creeper Trail in the Jefferson National Forest in Washington County. Approximately one month later the backhoe was recovered from property near Morefield’s residence in Tennessee. When approached, Morefield admitted to officers that the backhoe was there and he showed them where it had been hidden in the woods and covered with fresh cut pine trees. Morefield stated that the backhoe had been stolen by an acquaintance.

While on the property, officers also recovered two stolen US government license plates, which had been taken from a bulldozer owned by the United States Forest Service at the Mount Rogers Ranger District of the Jefferson National Forest in Virginia. Morefield admitted to taking the license plates.

The investigation of the case was conducted by the Washington County, Virginia Sheriff’s Office, the Johnson County, Tennessee Sheriff’s Office, and the United States Forest Service.  Assistant United States Attorney Jennifer Bockhorst prosecuted the case for the United States.

LYNCHBURG, VIRGINIA – A Colonel with the Virginia National Guard pled guilty this week in the United States District Court for the Western District of Virginia in Lynchburg to a federal child pornography charge.

Gary Williamson, 54, of Lynchburg, Va., waived his right to be indicted and pled guilty this week to a one-count Information charging him with knowingly receiving and distributing child pornography.

“Those who trade in this illicit material will continue to be held accountable,” Acting United States Attorney Anthony P. Giorno said today. “Protecting our children is Priority one for my office. Children are often the most vulnerable among us and we won’t hesitate to prosecute those whose actions are aimed at exploiting them.”

According to evidence presented at this week’s guilty plea hearing by Assistant United States Attorney Daniel Bubar, the Roanoke office of Homeland Security Investigations became aware of Williamson’s distribution of child pornography on October 14, 2014, through information gathered through an unrelated investigation of a website located outside the United States.  In December 2014, Williamson was interviewed at his home and a search warrant was executed for various computers and media storage devices. During this search, Williamson admitted to controlling an email account and a username for the subject website that have been used to trade suspected child pornography.  Subsequent forensic analysis of the defendant’s computer and other media storage devices showed he possessed more than 2,000 images of child pornography, many of which he distributed via the subject website bulletin boards and email.   

At sentencing, Williamson faces a mandatory minimum sentence of five years in prison and a maximum possible penalty of up to twenty years in prison.

The investigation of the case was conducted by the Homeland Security Investigations, Roanoke Office and the Virginia Attorney General’s Office.  Assistant United States Attorney Daniel Bubar is prosecuting the case for the United States.

ABINGDON, VIRGINIA – A Bristol, Va. man who failed to update his sex offender registration, after resisting arrest and fleeing from police officers in August 2014,  pled guilty today in the United States District Court for the Western District of Virginia in Abingdon.

Stevenson G. Harrison, Jr., 34, of Bristol, Va., pled guilty today to a one count indictment of failing to register and update his registration as required by the Sex Offender Registration and Notification Act [SORNA].  At sentencing, Harrison faces a maximum possible penalty of ten years in prison and/or a fine of up to $250,000.

Harrison admitted today that he was required to register under SORNA because of three 1996 convictions he received in Washington County, Virginia for aggravated sexual assault of a minor.  Harrison also admitted to failing to update his sex offender registration in August 2014 as required by SORNA.  At the guilty plea hearing, Special Assistant United States Attorney Kevin L. Jayne stated that had the government gone to trial, it would had been prepared to prove that in August 2014, Harrison resisted arrest and fled from Bristol, Virginia Police Department officers who attempted to serve Harrison with an arrest warrant.  Two officers were injured as a result of the struggle.  A manhunt ensued for Harrison, and he was arrested in November 2014 in Lakeland, Florida by the United States Marshals Service.

The investigation of the case was conducted by the United States Marshals Service, the Virginia State Police, and the Bristol, Virginia Police Department.  Special Assistant United States Attorney Kevin L. Jayne is prosecuting the case for the United States.

LYNCHBURG, VIRGINIA – The former manager of a local, federal credit union, who pled guilty in March to federal embezzlement charges, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.

Claudia Rawes, 61, of Forest, Va., previously waived her right to be indicted and pled guilty to a one-count Information charging her with theft and embezzlement from a federal credit union. Today in District Court, she was sentenced to 78 months in federal prison and five years of supervised release thereafter. In addition, Rawes was ordered to pay $1.97 million in restitution to Centra Health Credit Union.

According to information presented at a previous hearing by Assistant United States Attorney Daniel Bubar, Rawes was hired by the Centra Health Credit Union [CHCU] in 1990 and began managing the Lynchburg General Hospital branch of CHCU around 2005. Rawes admitted that beginning in the early 1990s she began embezzling and stealing funds from CHCU in a variety of ways.

Mostly commonly, Rawes wrote checks from CHCU corporate accounts in order to make payments on her personal credit cards. Rawes also took a variety of steps to hide her theft. The theft created an increasingly large deficit in CHCU’s corporate account. To avoid further scrutiny, Rawes began altering the credit union’s corporate account statements. She would then provide the altered statements to examiners.

Examiners found a variety of inconsistencies, including statements in Rawes’ possession that had differing amounts of corporate account balances written in tape on top of what appeared to be the original statements.  Investigators found that there was a shortfall of over $1 million between what CHCU was carrying on its books for its corporate account versus what was actually in the bank where CHCU kept its corporate deposits.

The investigation of the case was conducted by the Federal Bureau of Investigation and the United States Secret Service and the Virginia State Police.  Assistant United States Attorney Daniel Bubar is prosecuting the case for the United States.

LYNCHBURG, VIRGINIA – A Madison Heights woman, the former manager of the Lynrocten Federal Credit Union in Lynchburg who pled guilty in February to embezzlement, bank fraud and identify theft charges, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.

Linda Sue Newcomb, 64, of Madison Heights, previously pled guilty to one count of embezzlement from a Federal Credit Union, two counts of bank fraud and one count of aggravated identity theft. Today in District Court, Newcomb was sentenced to 120 months in federal prison. Newcomb was also ordered to pay $11,733,683 in restitution, $500,000 of which is due immediately. Teresa Humphries, the former head bank teller at Lynrocten, previously pled guilty to related charges.

“To cover expenses incurred by herself  and her family members and to support an extravagant lifestyle, over the course of 14 years Ms. Newcomb stole from her employer, caused untold financial hardship to members of the credit union and betrayed the trust of others who relied upon her,” said Acting United States Attorney Anthony Giorno.  “In doing so, she forfeited her integrity and her reputation.  The sentence imposed today will provide some measure of compensation to the victims and will send a message that fraudulent conduct will be investigated and punished.”

According to evidence presented at previous hearings by Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar, from as early as 2000, Newcomb and Humphries, who were the only two full-time employees of Lynrocten, carried out a scheme to defraud, embezzle and steal funds from the credit union’s accounts. The defendants carried out their scheme in a variety of manners.

Newcomb and Humphries originated loans in the names of credit union members without those members’ knowledge or consent, including forging the member’s name to fictitious loan documents. In order to make the loans look legitimate, they drafted the documents and Newcomb would approve them. They would then take the false loan proceeds and divert them to their personal accounts or use the money to pay off other fictitious loans.

In addition, Newcomb and Humphries transferred funds and wrote checks on certain credit union members’ accounts without their knowledge or consent, an act known as “Check Kiting.” At least three credit union members’ accounts were subject to check kiting. The two also attempted to hide their fraud by altering or withholding credit union member statements from delivery.

In all, the two caused more $12 Million in losses from the deposits of Lynrocten Federal Credit Union.

The investigation of the case was conducted by Federal Bureau of Investigation, the United States Secret Service and the Lynchburg Police Department.  Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar are prosecuting the case for the United States.

ROANOKE, VIRGINIA – Acting United States Attorney Anthony P. Giorno and Special Agent in Charge Clark Settles of ICE-HSI, announced today that the United States government extradited a wartime camp guard to Bosnia last week, following an extended investigation led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and legal proceedings that spanned multiple years.

Almaz Nezirovic, 54, formerly of Roanoke, Virginia, was extradited to Bosnia on July 1, where he is accused of perpetrating torture and inhumane treatment against Serbian civilians detained at the Rabic Prison Camp in Derventa Municipality. He was charged in Bosnia with committing war crimes against civilians between April and July 1992 during the Bosnian War.

In April 1992, Nezirovic joined a mixed Croatian-Muslim paramilitary group in northern Bosnia, and became a prison guard. Bosnian officials charge that while serving as a prison guard, Nezirovic committed war crimes by beating, humiliating and traumatizing unarmed civilian prisoners, causing severe personal injury. This included allegedly stripping victims naked, beating them severely with a club, and forcing them to eat grass on which others had urinated.

In 2009, ICE’s Human Rights Violators and War Crimes Center received information from the Bosnian Prosecutor’s Office in Sarajevo about suspected war criminals who had absconded. The center and HSI Washington, DC special agents initiated an investigation after identifying and locating Nezirovic in Roanoke, Virginia. In April 2010, HSI special agents identified and interviewed former prisoners of the Bosnian camp who had been severely beaten in 1992. That investigation led to a criminal indictment in the Western District of Virginia U.S. District Court.

On June 23, 2011, HSI Washington, DC special agents arrested Nezirovic at his residence pursuant to a two-count indictment charging him with naturalization fraud due to his omissions and false statements about his wartime activities and other conduct during his application for citizenship. On April 19, 2012, he was indicted on a superseding five-count indictment for unlawful possession of immigration documents and unlawful application for naturalization. In July 2012, the United States, on behalf of the government of Bosnia, filed a complaint to extradite Nezirovic pursuant to an extradition treaty between the two countries, which has been in place since 1901, and the United Nations Convention Against Torture.

Nezirovic was subsequently taken into custody July 17, 2012, on a provisional arrest warrant pending the outcome of the extradition matter. On September 16, 2013, after several hearings, a United States Magistrate Judge in Roanoke, Virginia, found sufficient evidence to sustain the allegation under the treaty and certified the request for extradition to the Secretary of State.

Nezirovic then filed a petition for review with the U.S. District Court in Roanoke, Virginia, and the District Court denied his petition on March 13, 2014. After hearing oral argument in December 2014, the U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s decision. The Fourth Circuit Court of Appeals rejected Nezirovic’s arguments that his extradition was untimely or precluded by an exception in the treaty for political offenses.

“This extradition marks the culmination of years of legal effort to have Mr. Nezirovic properly face trial for the horrible acts of abuse he is charged with committing against civilian victims while he was a prison guard in Bosnia, despite the fact that he later left that country,” Acting United States Attorney Anthony P. Giorno said. “The case marks a significant achievement in law enforcement’s important, ongoing efforts to help bring international fugitives such as Mr. Nezirovic to justice, consistently with the laws and treaty obligations of the United States.” 

“The investigation and extradition of individuals like Mr. Nezirovic are paramount to the mission of Homeland Security Investigations and to the safety and security of the United States,” said Special Agent in Charge Clark Settles. “War criminals will not be left to hide in our communities; they will be hunted down and made to face the consequences of their crimes.”

The investigation was conducted by HSI Washington, DC and ICE’s Human Rights Violators and War Crimes Center along with the United States Attorney’s Office for the Western District of Virginia and the U.S. Department of Justice’s Criminal Division’s Office of International Affairs. Former United States Attorney Timothy J. Heaphy and Assistant U.S. Attorney Elizabeth Wright represented the United States. The extradition was conducted by the U.S. Marshals Service in conjunction with Bosnian law enforcement partners and was facilitated by U.S. Customs and Border Protection.

ROANOKE, VIRGINIA – A former contract employee at the Radford Army Ammunition Plant, who was indicted in March 2015 on charges of sexually assaulting fellow employees at the plant, pled guilty today in the United States District Court for the Western District of Virginia in Roanoke to three charges related to those assaults. Joshua Linkous, 39, of Dublin, Virginia, pled guilty today to one count of aggravated sexual abuse by force against Victim 1, one count of abusive sexual contact of Victim 2, and one count of abusive sexual contact of Victim 3. “Today, the justice system compelled Mr. Linkous to take the first step to being held accountable for actions that can only be described as deplorable,” Acting United States Attorney Anthony P. Giorno said today. “He used his position and power to force the victims to submit to unwanted sexual contact and made them feel they were powerless to stop him. The courage of the victims in coming forth and being willing to testify against him, combined with the tenacious efforts of the investigators and prosecutors have put a stop to those abuses, and Mr. Linkous will have to serve at least 10 years behind bars for his acts.” “Mr. Linkous exploited his position and took advantage of victims who were vulnerable,” Special Agent in Charge Adam S. Lee, Federal Bureau of Investigation, stated. “The Federal Bureau of Investigation sincerely appreciates the efforts and cooperation of our law enforcement partners, particularly the United States Army’s Criminal Investigative Division, the Defense Criminal Investigative Service, and the United States Attorney’s Office, in investigating and prosecuting this case and getting justice for the victims. We will continue to work with our partners to ensure this type of criminal conduct does not go unpunished.” In a written statement of facts signed by Linkous and filed with the court during today’s guilty plea hearing, Linkous admitted to working at the Radford Army Ammunition Plant (“Arsenal”) from approximately January 2001 until August 2014. The Radford Army Ammunition Plant is a government-owned facility that is operated by defense contractor BAE Systems and manufactures, among other things, propellant for the country’s military ammunitions. While employed at the Arsenal, Linkous, and the victims in this case, worked in or near an area of the Arsenal known as the Tub House, which is part of the manufacturing process. Linkous admitted that on July 27, 2014, he coaxed Victim 1 into the Tub House, where no one else was working at the time. With Victim 1 standing near the lockers, Linkous admitted to grabbing her and pushing into a small, secluded break room area. The lights were off and he closed the door, pushed Victim 1 against a kitchen counter, pinning her there. Linkous then forcibly unbuttoned Victim 1’s coveralls, while she was attempting to prevent him from doing so. The defendant admitted that Victim 1 was crying and trying to make him stop. Linkous then forcibly turned Victim 1 around and pinned her stomach against the counter with his body behind her, he got his hands inside of her clothing, touched her bare breasts and penetrated her labia with his finger, over her objection and against her will. In a second incident, Linkous admitted that, in June 2014, he saw Victim 2 at her locker near the break room in the Tub House. When Victim 2 began to exit the Tub House, Linkous grabbed her by the upper arm and dragged her into a circuit breaker room in the Tub House. Linkous closed the door and shut the lights off, pushed her against a control panel and pinned her down with his body. He then forcibly kissed her, unbuttoned her coveralls and kissed her breasts against her will. Linkous put his hands inside her coveralls and touched her vaginal area over her underwear with his hand, against her will. Linkous also admitted that, sometime between August 2010 and December 2011, he approached Victim 3, who worked in a building near the Tub House. He admitted to putting his hand inside her coveralls near her vaginal area and asked her to go to the break room. Victim 3 said no and removed Linkous’ hand from her coveralls. Linkous then followed Victim 3 as she tried to walk away and forcibly put his hands inside her coveralls and under her underwear, against her will. Linkous removed his hand only when a co-worker approached. As part of the plea agreement, Linkous will be sentenced to between 10-15 years in federal prison, followed by at least 15 years of supervised release thereafter. He will also be required to register as a lifetime sex offender. The investigation of the case was conducted by the United States Army’s Criminal Investigation Division, the Federal Bureau of Investigation, and the Defense Criminal Investigative Service. Assistant United States Attorneys Erin Kulpa and Laura Rottenborn are prosecuting the case for the United States.

Abingdon, VIRGINIA – The former assistant town manager of Abingdon pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to one count of program fraud.

William Garrett Jackson, 37, of Abingdon, Virginia, waived his right to be indicted and pled guilty today to one count of theft from a program receiving federal funds.  At sentencing, Jackson faces a maximum possible penalty of ten years in prison and/or a fine of up to $250,000.

Jackson admitted today that from 2007 through 2014 he used his town-issued credit card, a card to be used only for official business, for personal expenses.  Jackson admitted to using the card for personal expenses such as purchasing a subscription to Netflix, buying groceries, paying his personal cell phone bills, purchasing electronics, and purchasing other unauthorized goods and services.  In all, Jackson spent $76,404 on the town’s credit card for personal expenses.

As part of his guilty plea, Jackson has agreed to pay back the full amount of the town’s loss, $76,404, by September 1, 2015.

The investigation of the case was conducted by the United States Secret Service, Virginia State Police, and Town of Abingdon Police Department.  Assistant United States Attorney Zachary Lee and Special Assistant United States Attorney Kevin Jayne are prosecuting the case for the United States.

 

Harrisonburg, VIRGINIA – A 65-year-old Winchester man, who previously pled guilty to exploiting two young girls, was sentenced yesterday in the United States District Court for the Western District of Virginia in Harrisonburg.

Phillip Daniel Rush, 65, of Winchester, Va., previously pled guilty to one count of production of child pornography. Yesterday in District Court, Rush was sentenced to 30 years in prison and a lifetime of supervised release thereafter.  Rush was also ordered to pay a $25,000 fine.

“Mr. Rush has admitted to sexually exploiting young girls. His actions earned him a lengthy stay in federal prison,” Acting United States Attorney Anthony P. Giorno said today. “Mr. Rush is a sexual predator and he and others who engage in such acts will be held criminally accountable for their acts. We will continue to use every legal tool available to us in order to protect the most vulnerable amongst us, our children.”

According to a factual summary filed during Rush’s guilty plea hearing, around July 2012, Rush exploited a seven-year-old girl and an eight-year-old girl while they were visiting him. The defendant filmed the two girls engaging in sexually explicit conduct.

Specifically, Rush turned on the webcam of his computer and provided a sexual device to one of the girls. He also later provided a jar of Vaseline. The defendant can be seen during various portions of the hour-long film. An adult pornography movie can be heard playing in the background.

The Winchester Police Department began the investigation into Rush after the mother of an older child notified police that her child had viewed the video of the two minor girls Rush’s computer.

The investigation of the case was conducted by the Winchester Police Department, the United States Secret Service and the Frederick County Sheriff’s Office.  Assistant United States Attorney Nancy S. Healey prosecuted the case for the United States.

ABINGDON, VIRGINIA – Three of the four defendants convicted in a kickback scheme at the Bristol Virginia Utilities Authority were sentenced today in the United States District Court for the Western District of Virginia in Abingdon.

Robert James Kelley, 61, of Lexington, Va., David Copeland, 44, of Bristol, Va., and Michael Clark, 63, of Colbert, Ga., were all sentenced today for their roles in the scheme.

“This is a sad day for these defendants and their families.  They have chosen to use their positions to enrich themselves at the expense of those who put their trust in them.  Identifying public corruption is a priority for my office and prosecuting the offenders is necessary to maintain the public’s trust in our government institutions,” Acting United States Attorney Anthony P. Giorno said today. “I am proud of the cooperative work done by the investigators in this case, and I believe justice has been served.”

“Public corruption erodes the foundation of trust and confidence of a government’s procurement system,” Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division said today. “The FBI, recognizing public corruption as our top criminal priority, pledges to continue to work with our law enforcement partners and community members to hold accountable those who circumvent and manipulate the system for personal gain.”

“It is unacceptable to help yourself to the American public’s money and violate their trust,” said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office.  “Today's sentencing’s stand as examples that IRS-CI, along with the United States Attorney and our law enforcement partners, will continue to investigate and prosecute crimes involving financial fraud and in particular fraud that erodes the public’s confidence.”

Kelley Jr., who is a former Vice President of Field Operations for BVU, previously pled guilty to one count of a multi-object conspiracy to commit mail fraud, money laundering and to defraud the United States. Today in District Court, Kelley was sentenced to 30 months in prison and ordered to pay $330,510 in restitution.  In addition, he will forfeit $165,375.

Copeland, who is also a former Vice President of Field Operations for BVU, previously pled guilty to one count of a multi-object conspiracy to commit wire fraud and money laundering. Today in District Court, he was sentenced to 24 months in prison and ordered to pay $144,000 in restitution. In addition, he will forfeit $50,000.

Clarke, who previously performed contract work for BVU and submitted false invoices to Kelley Jr., previously pled guilty to one count of engaging in a conspiracy to defraud the Internal Revenue Service. Today in District Court, he was sentenced to eight months of federal incarceration. Clark was also issued a $2,000 fine and ordered to pay $110,065 in restitution.

A fourth defendant, James Todd Edwards, has yet to be sentenced for his role in the conspiracy.

The investigation of the case, which remains ongoing, is being conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.  Assistant United States Attorney Zachary Lee will prosecute the case for the United States.

HARRISONBURG, VIRGINIA – Acting United States Attorney Anthony P. Giorno, along with officials from the Drug Enforcement Administration and the Northwest Virginia Regional Drug and Gang Task Force, announced today three significant case results in the ongoing effort to combat the rising use and abuse of heroin.

In separate hearings today in the United States District Court, two local defendants were sentenced for distributing heroin that led to fatal overdoses while a third defendant, a Baltimore man who authorities identified as a major source of heroin in the Winchester region, pled guilty to a drug trafficking conspiracy that led to at least six heroin overdoses, three of which were fatal.

“The positive outcomes in these cases highlight the tireless efforts by law enforcement in this area to combat the epidemic of heroin overdoses that continues to torment the region and that has been spreading across the country,” Acting United States Attorney Anthony P. Giorno said today.  “We will continue to pursue these important cases and will target the sources of this heroin both locally and elsewhere.  These efforts supplement our continuing support for education, prevention and treatment programs that are similarly necessary to the success of our endeavors to combat heroin use and abuse in the region.”

“Heroin is not just a “big city” problem as evident in today’s sentencing announcements. Mr. Giles led a complex heroin trafficking network, controlling numerous drug dealers and drug users. Mr. Giles brought this lethal drug into the community of peaceful Winchester, Virginia, robbing people of their lives,” said Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration. “I say to drug dealers like Mr. Giles, there are no winners in this life and death game you have chosen to play. You will lose and pay a severe price for your actions. The announcement today is the result of the partnership between DEA agents, the Northwest Virginia Regional Drug and Gang Task Force and the United States Attorney’s Office of the Western District of Virginia. We will continue our work with our law enforcement partners and the community, every day, combating these dangerous drug trafficking organizations.”

“These cases were investigated from overdoses in the Northern Shenandoah Valley Region that are continuing to lead to significant suppliers in Baltimore, Maryland, thanks to a cooperative effort with the DEA, the United States Attorney’s Office and the Northwest Virginia Regional Drug and Gang Task Force,” Virginia State Police Special Agent Jay Perry, Coordinator of the Task Force, said today.  “Our combined efforts are bringing and will continue to bring large scale dealers from Baltimore, Maryland, that are putting heroin on our local streets, to justice.  We want Baltimore heroin dealers to take notice; when you sell to Virginia registered vehicles, and our citizens, we will track you down.”

Today in District Court, Christopher Rojuan Giles a.k.a. “C” and “Charlie,” 27, of Randallstown, Maryland, pled guilty to a one count information charging him with conspiracy to distribute heroin which resulted in six overdoses. Giles admitted today that between February 2013 and October 2014, he and other members of the conspiracy conspired to distribute more than 1,000 grams of heroin, resulting in overdoses, more than 280 grams of cocaine base (“crack”), and powder cocaine.

Evidence presented at today’s hearing by Assistant United States Attorney Elizabeth G. Wright showed the Giles, who operated in various locations in and around Baltimore, was a major source of heroin for smaller dealers and heroin users in the Winchester area. Evidence presented also proved that the heroin Giles distributed led to at least six heroin overdoses, including three fatal overdoses. The overdoses include the death of T.R.C. on November 17, 2013, the death of R.F.L. on March 19-20, 2014, the overdose of J.H.H. on March 21, 2014, the overdose of B.D.W. on April 5, 2014, the overdose of G.R.F. on September 5, 2014, and the death of B.E.W. on October 10, 2014. At sentencing, Giles faces a statutory penalty of between 20 years and life in prison.

As part of this plea, Giles admitted he provided the heroin that led to the non-fatal overdoses of J.H.H. and B.D.W. in March and April 2014, respectively.  Three other defendants have previously been sentenced in federal court based upon the overdose of J.H.H.  Two defendants, Stephanie Diane Alkire, 23, of Winchester, Virginia, and Donna Jean Jenkins, 37, of Winchester, Virginia, have previously entered pleas of guilty to distribution of heroin in connection with the overdose of B.D.W.

In a separate hearing, Scott Matthew Pierce, 44, of Stephens City, Virginia, who previously pled guilty to distributing heroin that led to an overdose, was sentenced to 210 months in federal prison. Pierce, who routinely purchased heroin from Giles in Baltimore and transported it back to Winchester, previously admitted to distributing heroin to victim R.F.L. on March 19, 2014. R.F.L. subsequently used the heroin purchased from Pierce, overdosed and died.

In May 2015, Brandy Dawn Kelly, 36, of Winchester, Virginia, pled guilty to one count in an indictment charging her and Giles with conspiracy to distribute heroin which resulted in the overdose of R.F.L., based upon their distributions with Pierce.

In a third hearing today, Danielle Nicole Orndorff, 27, of Winchester, Virginia, who previously pled guilty to distributing heroin that led to two overdoses, was sentenced to 163 months in federal prison. Combined with time she is serving for a state sentence pertaining to the first of the two overdoses, the total sentence is 15 years.  Orndorff previously admitted to distributing heroin to victims B.M.B. and J.W.S., who both used the heroin and subsequently overdosed and died.

The investigation of these cases was conducted by the Drug Enforcement Administration and the Northwest Virginia Regional Drug Task Force. The Task Force includes law enforcement from the counties of Frederick, Clarke, Shenandoah, Warren and Page as well as the cities and towns of Winchester, Front Royal and Strasburg, and the Virginia State Police. Assistant United States Attorney Elizabeth G. Wright prosecuted the cases for the United States.

ABINGDON, VIRGINIA – A mother and daughter who operated a business that provided oversight to personal care aides caring for elderly and disabled individuals, pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to healthcare fraud.

Connie Robbins, 59, of Sugar Grove, Virginia and Stephanie Dawn Robbins, 37, of Marion, Virginia, both waived their rights to be indicted this morning and pled guilty to a one-count Information charging them with conspiracy to commit healthcare fraud.

“The Virginia Department of Medical Assistance Services offers services to Medicaid recipients to allow those with serious health issues to avoid entering a nursing home and to receive critical medical care in the comfort of their homes. These defendants succumbed to greed and took advantage of the elderly and the disabled for their own financial benefit,” Acting United States Attorney Anthony P. Giorno said today. “Protecting important social programs like Medicaid is a paramount concern to law enforcement and my office will continue to work with the state Attorney General and our federal and state law enforcement partners to investigate and prosecute individuals who defraud the system for their own selfish purposes.”

“Healthcare fraud of this kind wastes taxpayer money and weakens the safety net for our fellow Virginians who truly need assistance,” said Attorney General Mark R. Herring. “My nationally-renowned Medicaid Fraud Control Unit and our federal partners will continue to pursue these cases of fraud and abuse wherever we find them.”

“Having structured programs in place providing the elderly and sick options about their care is critical to effective healthcare in this country.  The defendants falsified documents and neglected the needs of their patients.  The FBI will continue to investigate allegations of healthcare fraud, to ensure patients who rely on Medicaid and other programs have confidence they will be taken care of and they will not incur additional expenses as a result of criminals defrauding the system,” said Adam S. Lee, Special Agent in Charge, FBI Richmond Division.

According to evidence presented at today’s guilty plea hearing by Virginia Assistant Attorney General and Special Assistant United States Attorney Janine Myatt, Stephanie and Connie Robbins operated Robbins CD Services, a Consumer Directed Service Facilitator (CDSF) service provider. CDSF service providers are hired by Medicaid recipients who are eligible for a waiver that allows them to avoid moving into a nursing home and instead receive critical care in their homes.

The only two employees at CD Robbins Services were Connie Robbins, a registered nurse, and her daughter, Stephanie Robbins, who served as the office manager. Between October 2008 and August 2013, Connie Robbins created false supporting paperwork that documented home face-to-face visits with patients that never occurred. In her role as office manager, Stephanie Robbins billed Virginia Medicaid for the face-to-face home assessments that she knew never occurred. Approximately 35 percent of the home assessments billed by Robbins CD Services and paid by Medicaid never occurred.

At sentencing, each defendant faces a maximum possible penalty of up to 20 years in prison and/or a fine of up to $250,000. The defendants have also agreed to pay $137,106 in restitution.

The investigation of the case was conducted by the Federal Bureau of Investigation and the Medicaid Fraud Control Unit for the Virginia Office of the Attorney General with the assistance of the Department of Medical Assistance Services.  Virginia Assistant Attorney General and Special Assistant United States Attorney Janine Myatt is prosecuting the case for the United States.

Abingdon, VIRGINIA – A former law firm bookkeeper, who previously pled guilty to embezzlement charges, was sentenced last week in the United States District Court for the Western District of Virginia in Abingdon.

Patricia Ethel Chinault, 72, of Apopka, Florida, was sentenced last Friday to 24 months in federal prison.  Chinault previously pled guilty to embezzling approximately $1 million from a Carroll County law firm.   Chinault, who previously lived in Carroll County, worked as a bookkeeper for the law firm.  After she moved to Florida in 2009, she continued to provide bookkeeping services for the firm.

Chinault, who had electronic access to the law firm’s accounts, used that access to fraudulently divert money to herself from 2010 to 2014.  Using investigative means, federal law enforcement agents became aware of suspicious activity on one of Chinault’s credit card accounts.  Further investigation revealed the extent of Ms. Chinault’s criminal activity.

Chinault spent most of the stolen money on internet gambling.  The Court ordered Chinault to pay restitution of $960,809.

The investigation of the case was conducted by the United States Secret Service.  Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.

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Harrisonburg, VIRGINIA – A pair of Winchester, Virginia residents, who pled guilty to distributing heroin earlier this year, were sentenced today in the United States District Court for the Western District of Virginia in Harrisonburg.

Dennis Keith Getz, 38, and Brandi Nichole Marple, 29, both of Winchester, previously pled guilty to one count of distributing heroin in connection with a  fatal heroin overdose. Today in District Court, Getz was sentenced to 222 months of federal incarceration. In a separate hearing, Marple was sentenced to 114 months of federal incarceration.

“Heroin overdose deaths continue to plague areas of the Western District and my office will continue to work alongside our state and local law enforcement partners to investigate and prosecute those who sell this deadly substance,” Acting United States Attorney Anthony P. Giorno said today. “I want to emphasize the importance of continuing to work with our community partners to explore treatment and prevention options as part of the overall strategy to address the heroin abuse problem.”

Marple and Getz have admitted that on March 31, 2014 they traveled to Baltimore, Maryland and purchased heroin. They returned to Winchester and sold a portion of that heroin to A.B.L., who was found deceased the next morning. During the course of their investigation, members of the Northwest Virginia Regional Drug Task Force and the Drug Enforcement Administration located the victim’s cell phone which showed a text message conversation between the victim and Marple discussing the purchase of $100 of heroin. Heroin packaging that was found with the victim matched a description from Marple and the packaging of heroin recovered from Getz’s residence the next day.

When contacted by law enforcement, both Getz and Marple admitted to purchasing the heroin in Baltimore and later selling it to A.B.L.

The investigation of the case was conducted by the Northwest Virginia Regional Drug Task Force and the Drug Enforcement Administration. The Task Force includes law enforcement from the counties of Frederick, Clarke, Shenandoah, Warren and Page as well as the cities and towns of Winchester, Front Royal and Strasburg. Assistant United States Attorney Elizabeth G. Wright prosecuted the case for the United States.

LYNCHBURG, VIRGINIA – A Staunton, Va. woman, who worked as a financial advisor for a Staunton-based branch of a national bank chain, who previously pled guilty to wire fraud charges, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.

Kirsten Flynn Hawkins, 45, of Staunton, Va., previously waived her right to be indicted and pled guilty to a three count Information charging her with three separate counts of wire fraud. Today in District Court, Hawkins was sentenced to 41 months of federal incarceration. In addition, she was ordered to pay her victims approximately $472,000 in restitution.

According to evidence presented at the guilty plea hearing by Assistant United States Attorney Daniel Bubar, Hawkins worked as a financial advisor for an unnamed bank. During that time, between August 2011 and August 2014, the defendant devised a scheme to defraud and obtain money though false representations and promises.

Evidence showed that it was the purpose of the scheme for Hawkins to take control of “Victim One’s” various bank and investment accounts, which were located in the bank. At various times between 2011 and 2014 and on the three separate occasions charged, Hawkins caused money to be transferred from the accounts of Victim One to her personal banking accounts. The funds were used to pay various living expenses, utilities, rent, travel, jewelry, clothing, eating out and to provide other economic benefit for herself and her family.

The investigation of the case was conducted by United States Secret Service. Assistant United States Attorney Daniel Bubar is prosecuting the case for the United States.

ABINGDON, VIRGINIA – A Hillsville, Va. accountant and bookkeeper has been arrested on a Federal criminal complaint.

Robert Donald Morgan, III, 43, of Hillsville, Va., was arrested yesterday, April 22, 2015, on a federal criminal complaint charging him with one count of bank fraud, alleging that he knowingly executed a scheme to obtain money for which he was not entitled by fraudulent pretenses, representations or promises.

The investigation of the case was conducted by the United States Secret Service, the Virginia State Police, the Carroll County Sheriff’s Office and the United States Marshals Service. Assistant United States Attorney Jennifer Bockhorst will prosecute the case for the United States.

A criminal complaint is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

LYNCHBURG, VIRGINIA – Three local women are facing federal fraud charges following a grand jury indictment that charges them with mail fraud, wire fraud, student loan fraud, and other charges.

A federal grand jury sitting in Roanoke, Va. has charged Melinda Smith, 42, Catherine Pankey, 61 and Vernetta Johnson, 40, all of Lynchburg, Va., in connection with an alleged scheme to defraud insurance companies and the federal student loan program. Smith has been charged with one count of conspiracy to commit mail and wire fraud, 23 counts of student loan fraud, eight counts of mail fraud, four counts of wire fraud and four counts of aggravated identity theft. Pankey has been charged with one count of conspiracy to commit mail and wire fraud and four counts of student loan fraud. Johnson has been charged with one count of conspiracy to commit mail and wire fraud, nine counts of student loan fraud and eight counts of mail fraud.

According to the indictment, between 2011 and 2014, Smith, Pankey and Johnson allegedly engaged in a scheme to submit Free Applications for Federal Student Aid (FAFSA) in order to get Federal Student Aid (FSA) credit refunds for online classes for the purpose of obtaining money to which they were not entitled. It is alleged that as part of the scheme, Smith completed coursework for certain classes, which she at times shared with others, including Pankey, in order to complete a sufficient amount of courses to maintain enrollment. While enrolled at Liberty University, the indictment alleges that Smith helped Pankey with coursework in exchange for a portion of Pankey’s FSA credit refund.

To further support the scheme, Smith and Johnson allegedly submitted false insurance claims for car accidents that did not occur. In addition, Smith and Pankey submitted a false temporary rental agreement to obtain rental reimbursement in connection with a fire.

The indictment also alleges that Smith committed aggregated identity theft by submitting FAFSA forms and obtaining FSA credit refunds in the names of three other individuals without lawful authority.

As a result of these actions, Pankey was reimbursed for losses from a house fire in excess of the amount to which she was entitled; Smith and Johnson were reimbursed for losses caused by car accident that did not occur; and, all three, Smith, Pankey and Johnson, received Higher One debit cards containing credit refunds to which they were not entitled for online classes in which they never intended to participate.

If convicted, each defendant faces a maximum possible penalty of up to 20 years in prison on the conspiracy to commit mail and wire fraud charges, up to 20 years on each of the wire fraud charges, up to 20 years on each of the mail fraud charges and up to five years on each of the student loan fraud charges. Smith faces an additional consecutive term of two years imprisonment on each count of aggravated identity theft. Each charge in the indictment also carries significant fines and a period of supervised release. Restitution to the victims is mandatory in the event of conviction.

The investigation of the case was conducted by the United States Department of Education- Office of the Inspector General, the United States Secret Service, the Virginia State Police, the Campbell County Sheriff’s Office and the Lynchburg Police Department. Assistant United States Attorney Jennifer R. Bockhorst will prosecute the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

HARRISONBURG, VIRGINIA – A Cross Junction, Virginia man, who was responsible for selling heroin that caused the same man to overdose twice in seven days in March 2014, was sentenced today in the United States District Court for the Western District of Virginia in Harrisonburg.

Colin Patrick Butler, 30, of Cross Junction, Va., previously pled guilty to two counts of distribution of heroin. Today in District Court, Butler was sentenced to 150 months of federal incarceration and three years of supervised released after that. David Josueh Medina, 34, the man who sold the heroin to Butler before the first overdose, was previously sentenced to 14 years in federal prison for his role in the heroin overdoses.

“Heroin continues to pose a real and substantial danger to many communities throughout Virginia,” Acting United States Attorney Anthony P. Giorno said today. “I commend our law enforcement partners in the Northwest Region of the Western District who have made significant progress in identifying and interdicting organizations and individuals who are profiting from heroin trafficking. We will continue to fight this epidemic with the combination of enforcement, education and prevention.”

According to evidence presented at previous hearings by Assistant United States Attorney Elizabeth G. Wright, on March 15, 2014, Medina sold heroin to Butler. In turn, Butler then distributed that same heroin to a friend, J.H.H. The friend was injected with the heroin and overdosed inside a residence in Winchester, Va. Butler, and another resident at the home, attempted CPR on J.H.H. and soon called 911. Emergency medical personnel and law enforcement personnel responded to the scene, and after taking life-saving measures, administered Narcan to J.H.H., who ultimately survived the overdose.

One week later, on March 21, 2014, Butler again distributed heroin to J.H.H. and again J.H.H. suffered an overdose. Again, 911 was called and emergency personnel administered life-saving measures and Narcan to J.H.H. and were able to save J.H.H.’s life.

During both overdoses, Butler disposed of and cleaned up evidence of drug use after J.H.H. collapsed.

The investigation of this case was conducted by the Northwest Virginia Regional Drug Task Force, which includes the Virginia State Police, and the Drug Enforcement Administration. The Task Force includes law enforcement from the counties of Frederick, Clarke, Shenandoah, Warren and Page as well as the cities and towns of Winchester, Front Royal and Strasburg. Assistant United States Attorney Elizabeth Wright prosecuted the case for the United States.

CHARLOTTESVILLE, VIRGINIA – The Jefferson Area Victim Assistance Coalition will host a Community Day this Sunday, April 19 from 1 to 4 p.m. at the Ntelos Wireless Pavilion on the downtown mall in Charlottesville to commemorate National Crime Victims’ Rights Week (April 19-15).

The Community Day, which is free and open to the public, has been planned as a family-friendly event with demonstrations and information available from dozens of local agencies. There will be plenty for kids to see and do, including police motorcycles, fire trucks, police cars, and demonstrations by local K9 Officers and therapy dogs. Many of the local agencies will have plenty of giveaways for the kids, bags, cups, bike helmets, Frisbees, key chains and more.

In addition, there will information available for parents, including DNA and fingerprinting kits available, anti-bullying information, tips on home safeguarding, self-defense and how to avoid falling victim to a scam.

The Jefferson Area Victim Assistance Coalition consists of members form the Albemarle Co. Victim/Witness Program, Charlottesville Victim/Witness Program, Fluvanna County Victim/Witness Program, Greene County Victim/Witness Program, Homeland Security Victim/Witness Program, Louisa County Victim/Witness Program, Sexual Assault Resource Agency, University of Virginia Victim/Witness Program and the United States Attorney’s Office Victim/Witness Program.

Local Agencies participating in Sunday’s event include: Louisa Co. Sheriff’s Office, Albemarle Co. PD, Virginia State Police, Charlottesville Fire Department, Charlottesville PD, Jefferson Area Board for Aging, Legal Aid, Shelter for Help in Emergency, Sexual Assault Resource Agency, Jefferson Area Victim Witness Coalition, Offender Aid and Restoration, Foothills Child Advocacy Center, Readykids, Help Save the Next Girl, Fluvanna County Sheriff’s Office, Albemarle Co. Sheriff’s Office, Homeland Security, Women’s Initiative and the United States Attorney’s Office.

ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno announced today that two federal inmates have been sentenced to serve additional federal jail time after they possessed and attempted to possess cell phones and tobacco while housed at the United States Penitentiary Lee and the adjoining Satellite Prison Camp.

Fernando Glenn, 32, and Robert Wilson, 40, were sentenced in the United States District Court for the Western District of Virginia in Abingdon on March 24, 2015, for possession of contraband and attempt to possess contraband.

Glenn, who at the time he committed the offense was serving an aggregate 120-month term of imprisonment for possession with intent to distribute cocaine base and possession of a firearm in furtherance of a drug trafficking crime arising out of the United States District Court for the Eastern District of Missouri, was sentenced to 12 months and a day of federal incarceration for his possession of cell phones and tobacco at the United States Penitentiary Lee’s adjoining Satellite Prison Camp.

Wilson, who is currently serving a 240-month term of imprisonment for possession of a firearm by a convicted felon arising out of the United States District Court for the Eastern District of Texas, was sentenced to an additional 24 months of federal incarceration for his attempt to possess cell phones and tobacco at the United States Penitentiary Lee.

According to evidence provided by Special Assistant United States Attorney Debbie Stevens, in 2014, Glenn and Wilson arranged for cell phones and tobacco to be dropped off near the United States Penitentiary Lee’s Satellite Prison Camp. Glenn then retrieved the contraband and took steps to have the cell phones and tobacco introduced into the United States Penitentiary Lee for possession by Wilson.

The investigation was handled by the Federal Bureau of Investigation and the Special Investigative Unit of the Bureau of Prisons. Special Assistant United States Attorney Debbie Stevens prosecuted the case for the United States.

ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno announced today that two federal inmates currently serving federal prison sentences have been sentenced to serve additional federal time after they conspired to possess with the intent to distribute heroin while housed at the United States Penitentiary Lee.

Rafaiel Ivey, 38, and Trent Antwine, 50, were sentenced in the United States District Court for the Western District of Virginia in Abingdon on February 20, 2015, for conspiracy to possess with intent to distribute heroin.

Ivey, who is currently serving a 188-month term of imprisonment for possession of a firearm by a convicted felon arising out of the United States District Court for the Northern District of Georgia, was sentenced to an additional 84 months of federal incarceration for his role in the conspiracy to have heroin introduced into the United States Penitentiary Lee for distribution within the prison.

Antwine, who is currently serving a 188-month term of imprisonment for drug conspiracy arising out of the United States District Court for the District of Alaska, was sentenced to an additional 48 months of federal incarceration for his role in the conspiracy.

According to evidence provided by Special Assistant United States Attorney Debbie Stevens, in October 2011, Ivey and Antwine arranged for a visitor to bring heroin into the visiting room of the United States Penitentiary Lee for further distribution within the prison.

The investigation was handled by the Federal Bureau of Investigation and the Special Investigative Unit of the Bureau of Prisons. Special Assistant United States Attorney Debbie Stevens prosecuted the case for the United States.

ROANOKE, VIRGINIA – The former President of Cherokee Tobacco and Firebird Manufacturing, was indicted last week by a federal grand jury sitting in the United States District Court for the Western District of Virginia in Roanoke on tax and contraband cigarette charges.

Kathryn Crabtree Farley, 46, of Halifax, Va., was charged in an indictment returned under seal on Thursday, April 2, 2015 and unsealed yesterday afternoon after the defendant’s initial court appearance.

The grand jury has charged Farley with 22 counts of fraudulent refusal to pay or evasion of over $13,000,000 in federal cigarette excise tax, seven counts of violating the contraband cigarette trafficking act, seven counts of wire fraud, six counts of money laundering and five counts of engage in monetary transaction with funds from specified unlawful activity.   The indictment also seeks the forfeiture of a number of assets purchased with proceeds of the offenses.

The investigation of the case was conducted by the Internal Revenue Service, the Alcohol and Tobacco, Tax and Trade Bureau, the Virginia State Police, the United States Department of Agriculture.  Assistant United States Attorney Joseph Mott will prosecute the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt.  The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

ABINGDON, VIRGINIA – As part of its ongoing probe into corruption at the Bristol Virginia Utilities Authority (BVU), the United States Attorney’s Office for the Western District of Virginia, along with investigative partners at the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation, announced today that a pair of former contractors who supplied BVU with false invoices have pled guilty.

During separate hearings today in District Court, Michael Albert Clark and James Todd Edwards pled guilty to federal crimes associated with their individual roles in schemes to provide fake invoices and pay kickbacks to BVU officials.

Edwards, 45, of Columbia, S.C., waived his right to be indicted today and pled guilty to a one count Information charging him with engaging in a multi-object conspiracy to commit wire fraud, mail fraud, tax fraud and money laundering.

Clark, 63, of Colbert, Ga., also waived his right to be indicted and pled guilty today to one count of engaging in a conspiracy to defraud the Internal Revenue Service.

According to evidence presented at today’s hearing by Assistant United States Attorney Zachary Lee, Edwards was the CEO of Edwards Telecommunications Inc. (ETI), a privately held corporation that worked as a contractor for BVU. In early 2006, Edwards, and Robert James Kelley Jr., then Vice President of Field Operations for BVU, embarked on a scheme to defraud BVU when Kelley Jr. requested that Edwards begin making kickback payments.

On or about and between January 2006 and February 2009, Edwards caused a number of false invoices to be submitted to Kelley Jr. for work not actually completed by ETI. Kelley Jr., approved these false invoices for payment knowing they contained false information. Kelley Jr. did this in order to receive kickback payments from Edwards. Edwards paid Kelley Jr. at least $160,000 in kickbacks. In addition, Edwards paid $40,000 in kickbacks to David Copeland, another former VP of Field Operations for BVU.

At sentencing, Edwards faces a maximum possible penalty of up to five years in prison and/or a fine of up to $250,000

Evidence presented in court today also showed that Clark, who performed contract work for BVU from January 2000 to March 2015, submitted false invoices to Kelley Jr. for work not actually completed. Specifically, Clark submitted invoices in regards to his consulting business, R&M Consulting. These false invoices resulted in at least $110,065 in fraudulent billing by Clark to the BVU. Kelley Jr. approved these invoices knowing that the invoices contained false information. He approved these invoices because he was being paid kickbacks by Clark.

In addition, Kelley Jr. prepared false invoices that he sent to Clark that falsely claimed that he had done consulting work for Clark through Kelley Jr.’s company, RJK Consulting. Both Kelley Jr. and Clark knew these invoices were fraudulent and that Kelley Jr. had not done any work for Clark. Clark wrote checks to Kelley Jr. in the amount of $106,025 in order to pay kickbacks to Kelley Jr.

Clark filed tax returns with the IRS for tax years 2006, 2007, 2008 and 2009 and falsely claimed and deducted the payments to Kelley Jr. as business expenses with the intention of defrauding the IRS.

At sentencing, Clark faces a maximum possible penalty of up to five years in prison and/or a fine of up to $250,000.

The investigation of the case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.  Assistant United States Attorney Zachary Lee will prosecute the case for the United States.

Inmate Michael Vaught Assaulted With the Intent to Commit Murder a Federal Officer at the United States Penitentiary Lee

ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno announced today that a federal inmate currently serving a prison sentence at United States Penitentiary Lee has been sentenced to serve additional federal time after he assaulted a federal correctional officer.

Michael Vaught, age 43, was sentenced in the United States District Court for the Western District of Virginia in Abingdon on March 31, 2015, for assault with the intent to commit murder.  Vaught, who is currently serving a 368 month aggregate term of imprisonment for felon in possession of a firearm and assault with intent to commit murder for convictions arising out of the United States District Court for the Southern District of Indiana, was sentenced to serve an additional 240 months of federal incarceration for his assault on the officer.

According to evidence provided by Special United States Attorney Debbie Stevens, on August 17, 2014, Vaught threw scalding hot liquid on the federal correctional officer and stabbed the officer multiple times with a prison made ice pick style weapon that was approximately 9 inches long and sharpened to a point. 

The investigation was handled by the Federal Bureau of Investigation and Special Investigative Unit of the Bureau of Prisons.  Special Assistant United States Attorney Debbie Stevens prosecuted the case for the United States.

ABINGDON, VIRGINIA – During separate hearings today in the United States District Court for the Western District of Virginia in Abingdon, two former Vice Presidents of Field Operations for the Bristol Virginia Utilities Authority pled guilty to federal conspiracy charges related to their individual receipt of kickbacks.

Robert James Kelley, Jr., 61, of Lexington, Va., waived his right to be indicted and pled guilty today to a one-count Information charging him with a multi-object conspiracy to commit mail fraud, money laundering and to the defraud the United States.

In a separate hearing today, David Copeland, 44, of Bristol, Va., also waived his right to be indicted and pled guilty to a one-count Information charging him with a multi-object conspiracy to commit wire fraud and money laundering.

“The investigation and prosecution of public corruption on all levels continues to be one of our top priorities,” Acting United States Attorney Anthony P. Giorno said today. “In addition to the economic consequences, kickback schemes such as the one carried out by Mr. Kelley and Mr. Copeland compromise the public’s trust in the individuals and companies that are supposed to be serving the best interests of their customers and the taxpayers.”

“Public corruption is the FBI’s top criminal investigative priority. Corruption in the governmental contracting process deprives taxpayers of the essential services they are owed by their government and shakes their faith in the system,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division. “The conspiracy between Mr. Kelly and Mr. Copeland caused harm, not simply by stealing taxpayer money through illegal kickbacks; their scheme caused harm to the community by subverting a process it should be able to rely upon to serve its members.”

“Kelley’s and Copeland’s conduct in this fraud scheme is egregious, not just because of the dollars involved but because of their abuse of power. By exploiting their positions, they were able to line their pockets using fraud and deceit,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. “The message to lawbreakers should be clear, we will continue to aggressively investigate crimes involving financial fraud and in particular fraud that erodes the public’s confidence.”

According to information presented at today’s guilty plea hearings by Assistant United States Attorney Zachary Lee, Kelley Jr. was the Vice President of Field Operations for the Bristol Virginia Utilities Authority [BVU] from January 2006-February 2009. During his tenure, Kelley Jr. was responsible for approving billing invoices submitted to the utility authority, including invoices provided by Company #1, which performed contract work for BVU.

Kelley Jr. admitted today that between January 2006 and February 2009 he approved false invoices submitted by Company #1 for work not actually completed. These false invoices resulted in at least $330,510 in fraudulent billing by Company #1 to the BVU. Kelley Jr. approved these invoices knowing they contained false information. In addition, Kelley Jr. also prepared false invoices that he sent to Company #1 that falsely claimed he had done consulting work for Company #1 through his own RJK Consulting business. Kelley admitted today that he took these actions because he was paid at least $160,000 in kickbacks as proceeds from the fraudulent billings by Company #1. Additionally, he failed to report his $160,000 kickback income on his 2006, 2007, 2008, and 2009 tax returns.

During a separate hearing, David Copeland, who was the Vice President of Field Operations for BVU from March 2009-February 26, 2015, admitted that on or about and between January 1, 2010 and December 31, 2013, Company #1 submitted false invoices to Copeland for work not actually completed by Company #1 on behalf of BVU pursuant to a Virginia Tobacco Commission grant provided to the utilities authority. These false invoices reflected fraudulent amounts of rock drilling adder relating to the boring through of rock in order to lay fiber optic cable. These false invoices resulted in at least $143,000 in fraudulent billing by Company #1 to BVU. After receiving payment from BVU, Company #1 conducted financial transactions to convert portions of the funds it received from BVU as a result of the fraudulent billings to cash in order to disguise its origins. In this case, $40,000, was then paid to Copeland.

At sentencing, each defendant faces a maximum possible penalty of five years in prison and/or a fine of up to $250,000. In addition, Kelley, Jr. has agreed to pay a forfeiture money judgment in the amount of $165,000, and also has agreed to pay restitution in the amount of $330,510. Copeland has also agreed to pay a forfeiture money judgment in the amount of $50,000, and has agreed to pay restitution in an amount of at least $144,000.

The investigation of the case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Zachary Lee will prosecute the case for the United States.

LYNCHBURG, VIRGINIA – The former manager of a local, federal credit union pled guilty today in the United States District Court for the Western District of Virginia in Lynchburg to embezzlement charges.

Claudia Rawes, 61, of Forest, Va., waived her right to be indicted and pled guilty today to one-count Information charging her with theft and embezzlement from a Federal Credit Union.

According to information presented at today’s guilty plea hearing by Assistant United States Attorney Daniel Bubar, Rawes was hired by the Centra Health Credit Union [CHCU] in 1990 and began managing the Lynchburg General Hospital branch of CHCU around 2005. Rawes admitted today that beginning in the early 1990s she began embezzling and stealing funds from CHCU in a variety of ways.

Mostly commonly, Rawes wrote checks from CHCU corporate accounts in order to make payments on her personal credit cards. Rawes also took a variety of steps to hide her theft. The theft created an increasingly large deficit in CHCU’s corporate account. To avoid further scrutiny, Rawes began altering the credit union’s corporate account statements. She would then provide the altered statements to examiners.

Examiners found a variety of inconsistencies, including statements in Rawes’ possession that had differing amounts of corporate account balances written in tape on top of what appeared to be the original statements.  Investigators found that there was a shortfall of over $1 million between what CHCU was carrying on its books for its corporate account versus what was actually in the bank where CHCU kept its corporate deposits.

At sentencing, Rawes faces a maximum possible penalty of up to 30 years in prison and/or a fine of up to $1 million.

The investigation of the case was conducted by the Federal Bureau of Investigation and the United States Secret Service.  Assistant United States Attorney Daniel Bubar is prosecuting the case for the United States.

LYNCHBURG, VIRGINIA – The former head teller of the Lynrocten Credit Union in Lynchburg was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg on federal embezzlement charges.

Teresa Wieringo Humphries, 60, of Madison Heights, Va., previously waived her right to be indicted and pled guilty a one-count Information charging her with embezzlement from a Federal Credit Union. Today in District Court, Humphries was sentenced to 40 months of federal incarceration.

According to evidence presented at previous hearings by Assistant United States Attorney Daniel Bubar, Humphries had been the head teller at the Lynrocten Credit Union since the mid-1980s. Beginning in 2000, and continuing until the credit union’s liquidation, Humphries, and Linda Sue Newcomb, the manager of the credit union, carried out a scheme to embezzle and steal funds from the credit union’s deposits through the unauthorized and fraudulent origination of loans in the names of credit union members. An additional portion of the scheme involved Humphries and Newcomb using check kiting to obtain additional monies of the credit union and conceal and facilitate the fraudulent loan scheme.

The funds created through both the loan and check writing portions of the scheme were eventually funneled to the Lynrocten Credit Union accounts of Humphries, Newcomb and their family members. Between 2007 and the liquidation of the Lynrocten Federal Credit Union in 2013, Humphries personally stole approximately $3,000-$4,000 per month that she deposited into the accounts belonging to her family members. In total, Humphries stole in excess of $1 million from the Lynrocten Federal Credit Union.  The overall loss to the credit union, however, was in excess of $10 million, and contributed to the ultimate collapse of that financial institution.

Linda Sue Newcomb is scheduled to be sentenced for her role in the scheme on May 26, 2015 in U.S. District Court in Lynchburg.

The investigation of the case was conducted by the Federal Bureau of Investigation, the United States Secret Service and the Lynchburg Police Department. Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar are prosecuting the case for the United States.

ROANOKE, VIRGINIA – A former contract employee at the Radford Army Ammunition Plant has been indicted by a federal grand jury sitting in the Western District of Virginia in Roanoke on sexual assault charges.

Joshua Linkous, 39, of Dublin, Va., has been charged with one count of aggravated sexual abuse by force, three counts of abusive sexual contact and five counts of attempted aggravated sexual abuse by force.

According to the indictment, Linkous is alleged to have sexually assaulted AV1 [Adult Victim #1] on July 27, 2014 through the penetration of the genital opening by hand or finger. Linkous is also accused of attempting to sexually assault AV1 in March or April of 2014 and again in early 2013. All of these actions took place within the boundaries of the Radford Army Ammunition Plant.

In addition, Linkous is charged with attempting to sexually assault AV2 [Adult Victim #2] in or around May 2014 and again in or around June 2014. Linkous is also charged with abusive sexual contact against AV2 for the June 2014 incident. All of these actions took place within the boundaries of the Radford Army Ammunition Plant.

The indictment also alleges that between August 2010 and December 2011, Linkous attempted to sexually assault AV3 [Adult Victim #3]. The defendant is also charged with abusive sexual contact for the incident between August 2010 and December 2011.

If convicted, Linkous faces a maximum possible penalty of life in prison.

The investigation of the case was conducted by the United States Army’s Criminal Investigation Division, the Federal Bureau of Investigation, and the Defense Criminal Investigative Service. Assistant United States Attorneys Erin Kulpa and Laura Rottenborn will prosecute the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

HARRISONBURG, VIRGINIA – Three individuals, including two operators of a Harrisonburg restaurant, have been indicted by a federal grand jury in the Western District of Virginia in Harrisonburg on charges related to labor trafficking and witness tampering.

Maria Rosalba Alvarado McTague, [Alvarado], 47, Felix Adriano Chujoy, 26, and Gladys Georgette Chujoy, 32, all of Harrisonburg, Va., were charged in a superseding indictment filed under seal on Thursday, March 12, 2015 and unsealed today following the arrest and initial appearances of all three defendants.

According to the superseding indictment, Alvarado and F. Chujoy, who are originally from Peru but have become naturalized United States citizens, managed Inca’s Secret, a restaurant in Harrisonburg, Va. As part of the alleged labor trafficking conspiracy, Alvarado is accused of making regular trips to Peru where she attempted to recruit victims to immigrate illegally to the United States for the purpose of working unlawfully at Inca’s Secret. According to the indictment, Alvarado promised to help smuggle the victims into the United States, told victims they would be paid for working at the restaurant, and agreed to provide the victims a place to live in the basement of her and F. Chujoy’s home. In exchange, the victims had to work for Alvarado and F. Chujoy at Inca’s Secret for six months to work off the “debt” owed for smuggling and housing the victims.

According to the indictment, when a victim in Peru refused to cross the Mexican border and enter into the United States illegally, Alvarado arranged to have a visa application submitted to the U.S. Embassy in Peru on behalf of the victim. The application contained a variety of false and fraudulent information.

Upon arriving in the United States, the indictment alleges, the victims were generally forced to work 12-hours per day, seven days per week, and provide services outside of their work at the restaurant. The victims were paid approximately $450 per month, effectively resulting in an hourly wage of less than $1.50 per hour. Other documents unsealed at a previous court hearing reflect that Alvarado and F. Chujoy controlled the victims through isolation, threats, and harassment.

In addition, to the trafficking allegations, the indictment also alleges that Alvarado and F. Chujoy employed illegal aliens at the restaurant and housed others in their home.

G. Chujoy, along with the other two defendants, are also accused of attempting to influence, delay, or prevent victims in this case from testifying at official proceedings. The indictment alleges that Alvarado, F. Chujoy, and G. Chujoy conspired to tamper with witnesses. Alvarado and F. Chujoy were previously indicted, arrested and appeared in federal court on related charges on December 12, 2014. The court released both defendants on bond at that time. The witness tampering is alleged to have occurred while the defendants were on supervised release pending trial on the previous charges in this case.

The investigation of the case was conducted by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Federal Bureau of Investigation, and the Commonwealth of Virginia Attorney General’s Office. Assistant United States Attorney Heather Carlton is prosecuting the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

ABINGDON, VIRGINIA – Patricia Ethel Chinault, 72, of Apopka, Florida, pled guilty today to embezzling approximately $1 million from a Carroll County law firm. Chinault previously lived in Carroll County and worked as a bookkeeper for the law firm. After she moved to Florida in 2009, Chinault continued to provide bookkeeping services for the firm.

Chinault had electronic access to the law firm’s accounts. Investigation revealed that she used that access to fraudulently divert money to herself from 2010 to 2014. Federal law enforcement agents became aware of suspicious activity on one of Chinault’s credit card accounts and subsequent investigation revealed the extent of Ms. Chinault’s criminal activity.

According to information provided to the Court at the guilty plea hearing, Chinault spent most of the stolen money on internet gambling. The government has asserted that Chinault will be responsible for more than $1.1 million in restitution. Chinault has admitted to stealing at least $960,809.

United States District Judge James P. Jones scheduled sentencing for June 4, 2015, at 2:00 p.m. Chinault faces a maximum possible penalty of up to twenty years in prison and/or a fine of up to $250,000.

The investigation of the case was conducted by the United States Secret Service. Assistant United States Attorney Randy Ramseyer is prosecuting the case for the United States.

 

ABINGDON, VIRGINIA – Acting United States Attorney Anthony P. Giorno announced today that William Hunt, Jr., 55, Abingdon, Virginia, entered a plea of guilty today in the United States District Court for the Western District of Virginia in Abingdon.  Hunt pleaded guilty to one count of use of a communications facility in furtherance of a drug trafficking offense.  Hunt’s guilty plea brings the total number of defendants found guilty to twenty-eight as a result of “Operation Saltvegas”, a multi-agency investigation into methamphetamine trafficking in Southwest Virginia and Northeast Tennessee.
           
According to evidence presented at multiple hearings by Assistant United States Attorney Zachary T. Lee, the drug trafficking organization led by Richard Shaw, Mountain City, Tennessee, was a supplier of large quantities of methamphetamine to more than twenty-seven sub-distributors in both Northeast Tennessee and Southwest Virginia.   The drug trafficking organization was uncovered as part of a multi-agency investigation involving federal, state and local law enforcement in both Virginia and Tennessee.  As a result of the investigation twenty-eight individuals have pleaded guilty and agreed to forfeit more than $200,000.  To date, twenty-five individuals have been sentenced as a result of the investigation.  The defendants that have been sentenced are:

1. Richard Shaw 59, Mountain City, TN – 210 months imprisonment
2. Jeramiah Yates, 34, Vilas, NC – 37 months imprisonment
3. Melvin Campbell, 45, Mountain City, TN – 7 months imprisonment
4. Daniel Reece, 46, Mountain City, TN – 72 months imprisonment
5. Linda Walters, 46, Mountain City, TN – 12 months and 1 day imprisonment
6. Russell Wayne Cassell a/k/a “Rusty”, 44, Glade Spring, VA – 41 months imprisonment
7. Kenneth Craig Buchanan a/k/a “Bubba”, 50, Glade Spring, VA – 24 months imprisonment
8. Stephanie Patrick, 40, Glade Spring, VA – 24 months imprisonment
9. Roger Lawson, 65, Glade Spring, VA – 46 months imprisonment
10. Toby Mock, 44, Glade Spring, VA – 6 months imprisonment
11. Rachel Peake, 44, Atkins, VA – 6 months imprisonment
12. Jason Mullinax, 37, Chilhowie, VA – 36 months imprisonment
13. Roger Austin, Jr. a/k/a “Fat Rog”, 52, Glade Spring, VA – 121 months imprisonment
14. Angela Surber, 40, Chilhowie, VA – 37 months imprisonment
15. Timothy Nickolas Rabara, 26, Marion, VA – 5 years probation
16. Albert Hague, 56, Mountain City, TN – 30 months imprisonment
17. Kimberly Ann Bradley, 44, Johnson City, TN – 12 months and 1 day imprisonment
18. James Poore a/k/a “Danny”, 48, Glade Spring, VA – 18 months imprisonment
19. Tony Delp, Glade Spring, VA – 6 months imprisonment
20. Katherine Mitchell, 55, Saltville, VA – 78 months imprisonment
21. Gary Lee Howell, 53, Saltville, VA – 121 months imprisonment
22. Angeline Delp, 53, Saltville, VA – 6 months imprisonment
23. Tony Delp, 63, Saltville, VA – 6 months imprisonment
24. Angela Surber, 40, Glade Spring, VA – 37 months imprisonment
25. Brandi Dunford, 34, Abingdon, VA – 60 months imprisonment

 
The investigation of this case was conducted by the Washington County Sheriff’s Office, Russell County Sheriff’s Office, Smyth County Sheriff’s Office, Abingdon Police Department, Virginia State Police, Johnson County, Tennessee Sheriff’s Office, Tennessee Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Drug Enforcement Administration, and the United States Marshals Service.  The Smyth County Commonwealth’s Attorney’s Office and the Washington County Commonwealth’s Attorney’s Office also assisted in the investigation and prosecution of this case.  Assistant United States Attorney Zachary T. Lee is prosecuting the case for the United States.

LYNCHBURG, VIRGINIA – The former majority owner of a local construction company, who recruited a number of strawbuyers to defraud financial institutions of millions of dollars through an intricate mortgage fraud conspiracy, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.

Susanne Helbig, 50, a former resident of Roanoke, Va. and majority owner of Genesis Mansions, previously pled guilty to one count of mortgage fraud conspiracy and one count of tax fraud. Today in District Court, Helbig was sentenced to 96 months in federal prison. The defendant has also agreed to pay $10,582,188 in restitution to the financial institutions that were defrauded and $179,593 to the Internal Revenue Service.

“These individuals executed a complex scheme that defrauded a number of local and national financial institutions,” Acting United States Attorney Anthony P. Giorno said today. “Ms. Helbig’s repeated acts of fraud and making false statements to banks allowed her to fraudulently obtain about $17 million in loans, the majority of which was lost. We continue to be committed to prosecuting those who commit mortgage and other financial frauds as a way of protecting our housing and credit markets.”

“The FBI is committed to investigating those who scheme to personally profit by defrauding the nation’s mortgage industry. The FBI and our law enforcement partners conduct these investigations to minimize the impact on the honest borrower who oftentimes has to absorb the costs of these illegal activities, and we will use every tool in our investigative toolbox to ensure solid financial markets for lenders and borrowers alike,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division.

“Helbig’s reckless conduct, and others like her, contributed to the financial crisis in 2008. Her greed and self-serving actions caused serious harm to financial institutions and U.S. taxpayers,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “IRS Criminal Investigation, together with our law enforcement partners, will continue to pursue those who engage in criminal actions that damage the integrity of our financial system.”

Helbig previously admitted that between March 2006 and December 2007 she, and others, conspired to defraud financial institutions through the submission of false and fraudulent mortgage loan applications and settlement statements in the name of strawbuyers. Helbig, and others, took these actions to induce financial institutions to finance the purchase and construction of approximately 30 properties near Smith Mountain Lake. The fraudulent actions of Helbig, and others, caused nearly $11 million in losses.

According to evidence presented at previous hearings by Assistant United States Attorney Laura Day Rottenborn, Helbig was the leader of a conspiracy who, along with her co-conspirators, recruited strawbuyers to pose as purchasers for properties Helbig owned near Smith Mountain Lake. Helbig paid the strawbuyers between $5,000 and $20,000 to pretend that they had purchased property from Helbig and needed a loan to build a primary residence on the land. In reality, however, the strawbuyers had no intention of owning or living in the house and instead Helbig took the loan disbursements for herself. She used some of the money to build homes on the land, which she intended to flip and sell for substantial profit but never did. She also used the loan money to pay herself; gave some of the money to her co-conspirators to incentivize their participation in the scheme; and took money from one loan institution to pay off debts she owed to other financial institutions.

To induce lenders to make the loans, Helbig and her co-conspirators helped the strawbuyers falsify their loan applications. The loan applications stated an artificially inflated value for the land, inflated the strawbuyer’s income and assets, misrepresented the strawbuyer’s employment, misrepresented that the property would be the strawbuyer’s primary residence, and misrepresented the true source of funds provided to the strawbuyer for closing. Helbig personally gave strawbuyers substantial sums of money to help them qualify for loans that they could not otherwise afford, as well as kickbacks to the strawbuyers for their services– without disclosing either such gifts to the lenders. In many instances, Helbig then took back the “gifts” used to inflate the strawbuyer’s assets as soon as the loan closed. Helbig further signed settlement statements and loan applications even though she knew they contained materially false information designed to trick the banks into making the substantial loans. She then filed false tax returns claiming improper deductions, resulting in a grossly underestimated tax liability.

When Helbig could no longer obtain additional financing, due in part to her supply of strawbuyers drying up and the tightening of the extension of credit in connection with the mortgage crisis of 2008, she stopped making payments on the loans, causing the properties to go into foreclosure and causing the lenders substantial loss. The strawbuyers were also put into financial ruin when the defaults and foreclosures were reported negatively on their accounts with the credit bureaus.

The investigation of the case was conducted by the Internal Revenue Service-Criminal Investigations, the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant United States Attorneys Laura Day Rottenborn and Heather Carlton prosecuted the case for the United States.