Eastern District of Wisconsin

United States Attorney James L. Santelle announced today that on Friday, April 12, 2013, a federal jury in the Eastern District of Wisconsin found Shakil Wamiq, (age: 32), of Elgin, Illinois, and Mazher Ali Khan, (age: 49), of Evergreen Park, Illinois, guilty of contraband cigarette trafficking, a violation of Title 18, United States Code, Section 2342(a).

Wamiq, who was operating as Good Deal Wholesale, Inc., in Streamwood, Illinois, was convicted of four counts, and Khan, who was operating as MAK Distributors, Inc., in Mokena, Illinois, was convicted of three counts. Each offense is punishable by up to five years in prison and a $250,000 fine.

Wamiq and Khan where charged in a federal indictment that included seven other defendants. They are Mohammad Uddin, (age: 30), of Naperville, Illinois; Mohammed Mazheruddin, (age: 41), formerly of Milwaukee, now residing in Texas; Adil Majid, (age: 54) of Bolingbrook, Illinois; Haroon Bheri, (age: 33), of Glendale Heights, Illinois; Maher Sunnakrot,  (age: 38), of Worth, Illinois; and Farrukh Aslam, (age: 28), of Glendale Heights, Illinois. All other defendants except Aslam, who is a fugitive, resolved their cases prior to trial.

The Bureau of Alcohol, Tobacco, Firearms and Explosives initiated the year-long investigation based upon a complaint from a local citizen who alleged that his business was being financially undercut by persons who were dealing in untaxed tobacco products.  The investigation included the use of an undercover warehouse in Milwaukee, and an undercover agent posing as a source of untaxed cigarettes. The defendants purchased untaxed cigarettes at the warehouse at a cost substantially below that of an authorized manufacturer, and they transported the cigarettes into Illinois, where they were further dispersed. 

Under federal law, only certain categories of persons may possess cigarettes which do not bear a State tax stamp.  Wamiq and Khan contended that their Illinois distributors’ licenses authorized them to purchase the cigarettes in Wisconsin and place them into commerce in Illinois.

Uddin, Mazharuddin, Majid, Bheri and Sunnakrot will be sentenced in June. Wamiq and Khan will be sentenced in July.

In announcing the guilty verdicts returned by the jury on Friday, United States Attorney Santelle commented:  “This prosecution and the investigation on which it was premised reflects the continuing, focused commitment of federal law enforcement to identify, pursue, and bring to justice those individuals who not only engage in the unlawful trafficking of contraband but do so in a manner that compromises the legitimate business operations of law-abiding entrepreneurs.  In concert with the prosecuting attorneys and professional staff of my office, the ATF Special Agents investigated, developed, and presented compelling evidence of criminal behavior here in Wisconsin and in Illinois, and Friday’s verdict—along with the previous convictions of the other co-defendants—should serve as a deterrent to others who may consider like conduct.”   

The case was prosecuted by Assistant United States Attorneys Carol L. Kraft and Laura S. Kwaterski and investigated by special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives.  

United States Attorney James L. Santelle announced that earlier today, Hua Jun Zhao (age 42) was arraigned in federal court on criminal charges that he: (1) had attempted to damage and had deleted information from a federally-protected computer at the Medical College of Wisconsin; and (2) had lied to the Federal Bureau of Investigation (FBI) in connection with an investigation into the alleged theft of an anti-cancer compound and related research data from the Medical College. 

According to court records, a federal grand jury returned the two-count indictment against Dr. Zhao on April 9, 2013.  If convicted, the defendant faces a maximum term of 10 years’ imprisonment, a fine of up to $250,000, and a maximum of 3 years’ supervised release for the charge of attempting to damage a protected computer, and a maximum term of 5 years’ imprisonment, a fine of up to $250,000, and a maximum of 3 years’ supervised release for the charge of making a false statement.

Court records indicate that Dr. Zhao, a research scientist formerly employed by the Medical College, previously had been charged in a criminal complaint with the theft of the anti-cancer compound, in violation of the Economic Espionage Act.  The United States moved to dismiss that complaint without prejudice in light of the indictment returned by the grand jury.  According to Court records, the indictment relates to efforts by Dr. Zhao to obstruct the investigation into the theft of the compound by lying to the FBI and by covertly accessing the Medical College’s computer server and attempting to delete proprietary information – including research data – related to the stolen compound.

United States Attorney Santelle explained: “The professional work being done by institutions like the Medical College of Wisconsin is vital to the present care and treatment and the future health and welfare of individuals in Wisconsin, throughout the United States, and across the globe.  The United States Department of Justice, the Office of the United States Attorney, and the Federal Bureau of Investigation, in cooperation with our partners in the public and private sectors, are all committed to vigorously enforcing federal criminal law, to ensuring the safety of our community, to guarding against all threats to our economy, and to protecting our nation’s leadership in medical innovation and research.”  United States Attorney Santelle added that the investigation into the ultimate disposition of the stolen compound and the ultimate intended use of the proprietary information stolen from the Medical College and transported overseas is continuing.

"Proactive outreach through our Strategic Partnership Program was a key factor in this case, the arrest was a direct result of building awareness of insider threats with our public and private partners," said Teresa L. Carlson, Special Agent in Charge, "the FBI will aggressively pursue those who damage or delete information on protected computer systems to further their own interests."

The investigation in this matter is being conducted by the FBI, and the case is being prosecuted by Assistant U.S. Attorney Stephen A. Ingraham. 

Indictments and criminal complaints are merely the formal method of charging an individual and do not constitute inference of his or her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.

United States Attorney James L. Santelle for the Eastern District of Wisconsin announced today that the United States has reached a civil settlement with the Prevea Clinic, Inc., resolving allegations that Prevea submitted false claims to the Medicare Program.  The amount of the settlement is $94,000.00. 

Prevea provides health care services in northeastern Wisconsin through a group of clinics that employ physicians and other health care providers. The civil settlement resolves a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud to bring a civil action on behalf the United States and to share in any recovery. As part of the resolution, the whistleblowers will receive a share of the settlement.

The qui tam complaint, alleges that Prevea submitted false claims to the Medicare Program for the services of an assistant surgeon during neurosurgery procedures between January 1, 2005 to November 20, 2010.  The services of an assistant surgeon will be paid for by Medicare if the assistant surgeon has certain, specified credentials. It was alleged Prevea submitted claims for assistant surgeon services by an employee that did not have the credentials required by Medicare and submitted the claims for those services using another individual’s provider number and credentials. Prevea denied the allegations. 

This case was investigated by Special Agents from the Federal Bureau of Investigation and prosecuted by Deputy Civil Division Chief Stacy Gerber Ward.

United States Attorney James L. Santelle announced that a federal grand jury has indicted Jason B. Guidry, (age: 31) of Sheboygan on multiple counts of drug and sex trafficking crimes.  Guidry was initially indicted on January 18, 2013 and charged with a number of drug offenses including: Conspiracy to Distribute Heroin, Distribution of Heroin, and Possession with Intent to Distribute Controlled Substances.

On March 19, 2013, in a superseding indictment, Guidry was again charged with the original drug crimes and the following sex trafficking crimes:  Counts 2, 3, 4 and 9 of indictment charge Guidry with Sex Trafficking through Use of Force, Fraud or Coercion, involving four separate victims, and Counts 5, 6, 7, 8, 10, and 12 of the indictment charge Guidry with Interstate Transportation for the Purpose of Prostitution.  The superseding indictment also charges Guidry with Distribution of Heroin Causing Serious Bodily Harm, a crime that carries a mandatory sentence of life imprisonment.  If convicted of the below charges Guidry will face the following penalties.

1

Conspiracy to Distribute more than 100 grams of heroin and 28 grams of crack in violation of 21 U.S.C. § 846

5 - 40 years imprisonment; $4,000,000 fine.

Sex Trafficking Through Use of Force, Fraud,   or Coercion in violation of 18 U.S.C. § 1591

15 years to life imprisonment; $250,000 fine.

5-8, 10, & 12

Interstate Travel for the Purpose of Prostitution in violation of 18 U.S.C. § 2421

10 years imprisonment; $250,000 fine.

Distribution of Heroin Causing Serious Bodily Harm in violation of  21 U.S.C. § 841(a)(1) & (b)(1)(C)

Life imprisonment; $2,000,000 fine.

13

Distribution of Heroin  in violation of 21 U.S.C. § 841(a)(1) & (b)(1)(C)

30 years imprisonment; $1,000,000 fine.

14-16

Possession with intent to Distribute Heroin, Cocaine, Crack Cocaine, and Marijuana in violation of 21 U.S.C. § 841

30 years imprisonment; $1,000,000 fine.

The indictment alleges that beginning in March 2012, Guidry conspired with others to distribute and did distribute controlled substances, including heroin, crack cocaine, and powder cocaine.  The indictment also alleges that Guidry recruited four women into the sex trade and, on multiple occasions, transported several of them to Illinois and other cities in Wisconsin to engage in commercial sex acts. 

Public information filed in Sheboygan Circuit Court alleges that once Guidry hooked female customers on his heroin, he made the drug available to them so as to induce them into prostituting for him.  Once they were addicted to his heroin, Guidry was able to coerce these women to continuing prostituting for him under threat that he would no longer provide them with heroin.

This case was the result of an investigation by the Sheboygan Police Department.   The case has been assigned to Assistant United States Attorneys Melvin K. Washington and Joseph R. Wall.                     

An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.      

United States Attorney James L. Santelle announced that David Phillip Foley, (age: 51) formerly of Whitefish Bay, Wisconsin, was sentenced this morning to a term of imprisonment of 336 months, followed by ten years of supervised release. The 28-year term of imprisonment will run consecutively to and begin after Foley’s recently imposed Wisconsin State sentence of 10-years for theft by fraud, issuance of worthless checks and two counts of bail jumping. In November, 2012, a jury found Foley guilty of three counts of production of child pornography, transportation of a minor across state lines to engage in a sex act, distribution and possession of child pornography. 
                                                                                                                                                     
In August 2010, the Wisconsin Department of Justice, Division of Criminal Investigation (DCI) was contacted by Fox 6 News, who reported they had received a cardboard mailer, addressed to the television station. The DVD, which had been sent anonymously, contained numerous images of child pornography and a typed letter. The letter stated that the sender had discovered the disc in a dumpster in Whitefish Bay.

 DCI determined that the child pornography had been “burned” or copied to the disc on August 10, 2010, just a few days before its delivery to the TV station. Before the DVD was received at the TV station, Foley  told individuals that his landlord was “going to be in trouble,” and that they  should “watch the news.”

 In the months leading up to the receipt of the DVD, numerous persons who were acquainted with Foley heard him complain bitterly about his landlord, who Foley accused of harassing him and interfering with the operation of his business.

 In December of 2010, Foley claimed that he had found a Toshiba laptop computer bag behind the barbershop near where his landlord’s car had been parked. Foley told people that the laptop contained child pornography.  Foley’s business partner had a former private investigator turn the laptop over to authorities.

 The investigation revealed that until November 19, 2010, this Toshiba computer was owned by a man who posted it for sale on Craig’s list. The investigation further revealed that Foley purchased this computer and the child pornography was first uploaded after the purchase.  A search warrant was obtained for Foley’s apartment to seize his computers.  A forensic examination revealed that Foley had placed the images of child pornography on the disc mailed to the news station and also on the Toshiba laptop.  This was done in an attempt by Foley to set up his landlord and have him arrested for possession of child pornography.

Foley’s computers also revealed that he had sexually molested a 14-year old boy and had videotaped the molestation on 3 separate occasions.  Once the victim in these videos was identified, law enforcement learned that Foley had also taken the boy to a hotel near the Mall of America in March, 2011, where he sexually molested the boy.

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

 According to United States Attorney James L. Santelle, “the protection of our nation’s children is a top priority of the Department of Justice, and prosecutions such as this further this priority.”   Santelle also praised the work of the Wisconsin Department of Justice, Division of Criminal Investigation, Internet Crimes Against Children.

 The case was prosecuted by Assistant United States Attorneys Penelope L. Coblentz and Carol L. Kraft.

James L. Santelle, United States Attorney for the Eastern District of Wisconsin  announced today that John S. Williams (age: 33) of Fox Point, WI pled guilty to a single count information charging him with unlawfully purchasing and redeeming Supplemental Nutrition Assistance Program benefits, commonly referred to as food stamps.

 According to the charging document, Williams doing business as John Henry Distribution, LLC (JHD) became a licensed vendor of the United States Department of Agriculture Food and Nutrition Service (FNS), which enabled Williams to redeem QUEST cards.  QUEST cards are the Electronic Benefit Transfer cards that replaced food stamp coupon booklets. Williams was classified as a mobile vendor and operated out of his private vehicles. Between August 2010 and January 2013, Williams redeemed approximately $778,000 in QUEST benefits from food stamp benefit recipients who were not purchasing food, but instead receiving cash for providing access to their QUEST benefits.

The maximum penalty for this offense is 20 years imprisonment, $250,000 fine and 3 years of supervised release.  This case was investigated by the United States Department of Agriculture- Office of Inspector General and the Milwaukee County Sheriff’s Department.

United States Attorney James L. Santelle announced today that on February 13, 2013, a federal jury in Green Bay, Wisconsin found Kalmar Gronvall guilty of three counts of tax evasion.  Gronvall (age: 68) who previously resided in Shawano, Wisconsin, was convicted of attempting to evade more than $430,000 in federal taxes he owed for the years 2006 - 2008.

Gronvall operated an internet business known as The Gold and Silver Exchange through which he sold gold and silver coins, as well as other precious metals.  During the years 2006 - 2008, Gronvall had sales totaling more than $7 million and earned more than $1.3 million. Despite this, Gronvall failed to file federal income tax returns reporting his income or paying his associated taxes.

In an effort to evade his taxes, Gronvall withdrew most of his income from bank accounts he controlled, converted his profits to cash, and used a bank account set up in his son’s name to conduct business.

Special Agent in Charge Kelly R. Jackson, who heads the Internal Revenue Service Criminal Investigation office in Green Bay, said an IRS criminal investigator worked diligently to unravel Gronvall's scheme, adding "We are pleased the jury saw past the tricks and deceit Mr. Gronvall used to conceal his crimes and returned a verdict of guilt."

This case was prosecuted by Assistant United States Attorney Matthew L. Jacobs.  Gronvall, who is in custody, faces up to 5 years in prison and a fine of up to $250,000 on each count.  His sentencing is set for May 13, 2013.

United States Attorney James L. Santelle announced today that on February 12, 2013, two indictments were returned in federal court charging four defendants with possessing, selling, and passing counterfeit U.S. currency in violation of Title 18, United States Code, Section 472.  The defendants were passing and selling the counterfeit U.S. currency throughout the Eastern District of Wisconsin.
                                                                                                                                   
The defendants are identified as: Steven G. Luster (age: 49) and his son Stevon M. Luster (age: 20), Abraham T. Scull (age: 28), and Antonio L. Jenkins-Gates (age: 30), all of Milwaukee, WI.  To date, the defendants have possessed, sold, and passed over $25,000 of counterfeit U.S. currency. The defendants, if convicted, face a maximum term of 20 years’ imprisonment, a fine of up to $250,000 and a maximum of 3 years’ supervised release.
                                                                       
The defendants were charged after a long-term investigation by the United States Secret Service acting in concert with numerous local law enforcement agencies throughout Southeastern Wisconsin. This case is being prosecuted by Assistant U.S. Attorneys Bridget J. Domaszek and Laura S. Kwaterski. 
                                                                                   
An indictment is merely the formal method of charging an individual and does not constitute inference of his or her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.

Today, United States Attorney James L. Santelle of the Eastern District of Wisconsin announced the grand jury returned a three-count indictment against Jermaine L. Johnson (age: 36) formerly of Waukesha, Wisconsin.

Specifically, Johnson was indicted for two counts of production of child pornography and one count of possession of child pornography.  Count one of the indictment alleges that on or about July 20, 2009, Johnson knowingly produced child pornography which involved a minor female engaging in sexually explicit conduct.  Count two alleges that on or about August 2, 2011, Johnson again knowingly produced child pornography which involved a second minor female engaging in sexually explicit conduct.  Count three of the indictment alleges Johnson  possessed child pornography on or about March 15, 2012.

 If convicted of production of child pornography, as set forth in count one of the indictment, Johnson faces a minimum of 15 years and a maximum of 30 years’ imprisonment.  If convicted of production of child pornography, as set forth in count two of the indictment,  Johnson faces a minimum of 25 years and a maximum of 50 years’ imprisonment.  The charge of possession of child pornography carries a minimum term of imprisonment of 10 years and a maximum of 20 years’ imprisonment.  The higher minimum mandatory term of imprisonment for counts two and three is the result of Johnson’s prior conviction in 2009, for second degree sexual assault (State of Wisconsin v. Jermaine L. Johnson, Case No: 2009CF00966, Waukesha County)

This case was investigated by the Wisconsin Department of Justice, Division of Criminal Investigation, Internet Crimes Against Children Task Force.  Assistant United States Attorney Penelope L. Coblentz has been assigned to prosecute this case.

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

An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

United States Attorney James L. Santelle announced today that on January 31, 2013, Charles W. Adams (age:46), formerly of Spencer, Indiana, was sentenced in federal district court to 120 months imprisonment - the maximum sentence - for the crime of Failure to Register as a Sex Offender. Chief Judge William C. Griesbach also ordered that Adams serve a lifetime of supervised release following his release from federal prison and continue to register as a sex offender.

Adams was indicted in federal court for Failure to Register as a Sex Offender following his December 1, 2010 arrest in Winnebago County on sexual assault charges. Adams has entered a not guilty plea to the Winnebago County state sexual assault charge, case number 10CF754, and has a jury trial scheduled for March 25, 2013. Adams was also charged in Winnebago County case number 11CF563 with two felony counts of Capturing an Image of Nudity Without Consent. He proceeded to trial on the latter two offenses, was found guilty, and will be sentenced on February 28, 2013.

In filings with the federal court, the government argued the pending sexual assault charge served to enhance the seriousness of Adams’ failure to register as a sex offender offense, as did his prior convictions for sexual offenses. Chief Judge Griesbach agreed and ultimately sentenced Adams to the statutory maximum sentence of 10 years imprisonment. The failure to register as a sex offender statute requires qualifying sex offenders to advise law enforcement of any location where they reside, work, or attend school. The indictment filed against Adams alleged that between October 2010 and the time of his arrest in December 2010, he traveled interstate and knowingly failed to register and update his registration.

The investigation was conducted by the United States Marshal Service with the assistance of the Neenah Police Department The case was prosecuted by Assistant United States Attorney William J. Roach.

United States Attorney James L. Santelle announced that on February 1, 2013, Sara Livingston (age: 42) of Beaver Dam was sentenced to serve 3 months of incarceration and ordered to pay $67, 683 in restitution to the Social Security Administration.  Livingston had previously pled guilty to theft of government funds and making false statements to the Social Security Administration (SSA).

In February 2008, Livingston applied for and received Social Security Disability benefits based on false information. Livingston failed to inform the SSA that she was employed by a Beaver Dam chiropractic clinic and earning income above allowable limits. Additionally, in September 2008, Livingston started a home childcare business and earned substantial income while still collecting Social Security disability benefits.

The Inspector General’s Office for the Social Security Administration began their investigation in September 2011 after they received an anonymous tip. The case was prosecuted by Assistant United States Attorney Karine Moreno-Taxman.

The Office of the United States Attorney announced that on January 29, 2013 Federal District Judge Lynn Adelman sentenced  Paul Zaleski, (age: 64), formerly of Twin Lakes, Wisconsin, now living in Ojai, California, to fourteen months in federal prison for his part in a mortgage fraud scheme that spanned 2004 to 2006. Zaleski, who pled guilty to one count of wire fraud and one count of money laundering, faced a total of 30 years in prison for these offenses.

According to the indictment, Zaleski, acting as a mortgage broker, orchestrated a scheme which involved straw buyers, fraudulent loan applications, and inflated appraisals. At the result, he was able to arrange in excess of $14 million in loans for the purchase of approximately 51 properties located in southeastern Wisconsin and northern Illinois. More than $2 million of the loan proceeds wired by the various lenders were funneled to shell companies that Zalesk established.  

In connection with the scheme, Zaleski represented himself as a person involved in the purchase and improvement of real estate for profit and the coordinator of a group of investors engaged in that activity. All but a few of the properties ultimately went into foreclosure resulting in a loss of more than $5 million.

The money laundering counts alleged that ill-gotten loan proceeds were used, in part, for the purchase of additional properties, and for personal expenses, including Zaleski’s purchase of a new Chevrolet Corvette.

Adelman previously sentenced Zaleski’s co-conspirators for their roles in the fraud scheme. Appraiser John Hochrek, 51, of Ingleside, Illinois, was sentenced to one year in prison for wire fraud. Remodeling contractor Michael Pembroke, 48, of Twin Lakes, Wisconsin, was sentenced to one year in prison for wire fraud and money laundering. Investor Patricia Kay, 60, of Kenosha, Wisconsin, was sentenced to three years probation for misprision of a felony. Loan processor, Robert Farrell, 33, of Mundelein, Illinois, was sentenced to three years probation for conspiracy. Restitution has yet to be determined.

 According to First Assistant United States Attorney Gregory Haanstad “This prosecution reflects the Department of Justice’s commitment to protecting homeowners, lenders, and the economy from the serious damage that flows from mortgage fraud.  As was the case in this prosecution, our office will continue to work collaboratively with the FBI, the IRS, and our other law enforcement partners to hold accountable those who engage in these frauds and who, by doing so, undermine the integrity of our housing and credit markets.”

"Mortgage fraud has had a devastating impact on our society" said Teresa L. Carlson, Special Agent in Charge of the FBI Milwaukee Division.  "However, through the great collaboration of our law enforcement partnerships we will continue to dedicate resources to combat the threat of mortgage fraud here in Wisconsin and across the nation."

“Mr. Zaleski held a position of trust not only in First Security Financial, but also in the eyes of the public and the Kenosha community as a whole, and unfortunately chose to violate that trust and abuse his position” said Kelly Jackson, Special Agent in Charge of the IRS Criminal Investigation office who investigated Zaleski.  Jackson added that federal authorities will continue their efforts to diligently investigate and prosecute crimes which financially victimize others.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation.