Two Charged in Bribery Scheme Involving Orange County Company That Sold Components to Panasonic for Use in Personal Computers

SANTA ANA, CA—Federal prosecutors today filed criminal charges against the chief executive of an Irvine company who for years paid kickbacks to ensure contracts for his firm, as well as an official with Panasonic’s American subsidiary who accepted the bribes from the Californian supplier of electronic components.
The two men who were charged today with “honest services” wire fraud are

• William McMahon, 47, of Norco, California, the CEO and co-owner of Trustin Technology
• Sean Volin, 38, of Oakland, New Jersey, a manager with the Panasonic Corporation of North America in Secaucus, New Jersey

In addition to criminal informations filed in United States District Court, prosecutors filed plea agreements in which both men admit their criminal conduct and agree to cooperated with investigators in their ongoing probe.
According to the court documents, for the past decade Trustin sold random access memory modules and then hard drives to Panasonic for use in at least one line of laptop computers. Panasonic was Trustin’s largest and most important customer.
Approximately 10 years ago, Volin approached the then-CEO of Trustin to discuss a price reduction for hard drives Trustin was supplying to Panasonic. In response, the then-CEO proposed a kickback scheme in which Panasonic would continue to pay the same price for hard drives, but Trustin would give Volin half of the proposed price reduction for each unit sold. Volin “agreed with [the CEO’s] proposal, did not obtain a price reduction for Panasonic, and a stream of illicit payments between Trustin and [Volin] began,” according to Volin’s plea agreement.
McMahon became CEO of Trustin in 2005, and he learned of the kickback arrangement that had already brought more than $100,000 to Volin. The payments stopped under McMahon’s watch for a period of time, but the payments resumed as McMahon developed a relationship with Volin. Instead of paying a kickback for each hard drive sold to Panasonic, McMahon made regular payments in exchange for Volin “looking out for Trustin’s interests and [as] a reward for defendant’s prior assistance to Trustin,” according to Volin’s plea agreement.
From November 2005 through the end of 2011, McMahon oversaw payments of more than $555,000 that went to a company Volin had established to accept the illicit payments from Trustin. In total, Volin was paid more than $664,900 by Trustin. Volin and McMahon also admit in the court documents that the Panasonic employee received other benefits, including trips to the Kentucky Derby and Napa Valley.
“In exchange for this stream payments, and acting with the intent to defraud Panasonic of [Volin’s] duty of honest services, [Volin] continued to assist Trustin in obtaining additional business from Panasonic, including Panasonic’s designating Trustin a ‘master vendor,’” according to court documents, which say that as a result of the scheme, “Trustin was able to obtain tens of millions of dollars of business from Panasonic.”
The wire fraud charge alleged in the two cases filed today carries a statutory maximum penalty of 20 years in federal prison.
McMahon and Volin will be summoned to appear in federal court in Orange County in February.
The cases are the result of an ongoing investigation being conducted by U.S. Immigrations and Customs Enforcement’s Homeland Security Investigations and the Federal Bureau of Investigation.
Panasonic Corporation of North America fully cooperated with the government’s investigation

Former President of SEIU Local Found Guilty of Stealing Tens of Thousands of Dollars from Union and Failing to Report Income

LOS ANGELES—Tyrone Ricky Freeman, the former president of Service Employees International Union (SEIU) Locals 6434 and 434-B, was convicted late this afternoon of federal charges of embezzling tens of thousands of dollars from the union that represents home healthcare workers.
Freeman, 43, who is currently residing in Pittsburgh, Pennsylvania, was found guilty of four counts of mail fraud, seven counts of embezzlement and/or theft of labor union assets, one count of making a false statement to a federally insured financial institution, and two counts of subscribing to a false tax return.
The evidence presented during a 10-day jury trial showed that Freeman pilfered money from SEIU Locals 6434 and 434-B by diverting reimbursement payments from a public-sector union that had close ties to the SEIU locals. Freeman collected $2,500 per month from Local 6434 and the California United Homecare Workers (CUHW), which was established in 2005 by SEIU and the American Federation of State, County, and Municipal Employees to represent public sector employees working in the homecare industry in California. From the beginning of 2007 through the summer of 2008, Freeman concealed from the Local 6434 Executive Board and the CUHW Executive Board that he was receiving payments of $2,500 per month in addition to the regular salary that he received from Local 6434.
Freeman also used a Local 434-B credit card to pay $8,105 in personal expenses he incurred during a 2006 trip to Honolulu, Hawaii, which included expenses related to Freeman’s wedding ceremony.
Freeman also stole money from Local 6434 by routing funds through another entity closely aligned with the union—the Long Term Care Housing Corporation (LTCHC), which was a not-for-profit corporation organized in 2004 for the purpose of developing affordable housing for members of Locals 6434 and Local 434-B. The indictment alleges that Freeman took nearly $17,000 from Local 6434 in June 2008 by requesting the Local 6434 Executive Board to make payments to LTCHC without disclosing to the Executive Board that Freeman would then divert those funds to himself.
The false statement charges relate to lies that Freeman told to Countrywide Bank when he told a bank representative that Local 6434 paid for his personal American Express credit card debt and the monthly lease payments for his Land Rover.
Freeman was also found guilty of subscribing to false tax returns in 2006 and 2007 when he failed to report approximately $63,000 in income he received during those tax years.
“This was a case about abuse and betrayal,” said United States Attorney André Birotte, Jr. “Freeman abused his position as leader of the SEIU, and he betrayed the hardworking people whose interests he was supposed to represent.”
Each count of mail fraud carries a statutory maximum sentence of 20 years in federal prison. Each count of making a false statement to a federal insured financial institution carries a statutory maximum sentence of 30 years in federal prison. Each count of embezzlement and/or theft of labor union assets carries a statutory maximum penalty of 10 years in prison. The charge of subscribing to a false tax return carries a statutory maximum penalty of three years in prison.
Freeman is scheduled to be sentenced by United States District Judge Audrey B. Collins on April 22.
The case against Freeman was investigated by the U.S. Department of Labor, Office of Inspector General; the U.S. Department of Labor, Office of Labor Management Standards; the U.S. Department of Labor, Employee Benefits Security Administration; the Federal Bureau of Investigation; and IRS-Criminal Investigation.

Former Executive Convicted for Role in Price-Fixing Conspiracy Involving Coastal Freight Services Between the United States and Puerto Rico

WASHINGTON—Following a two-week trial, a federal jury in Puerto Rico today convicted a former executive of a Florida-based coastal water freight transportation company for his participation in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico, the Department of Justice announced.
Frank Peake, the former president of Sea Star Line LLC, was found guilty today in the U.S. District Court for the District of Puerto Rico of participating in a conspiracy to fix rates and surcharges for water transportation of freight between the continental United States and Puerto Rico from at least as early as late 2005 until at least April 2008.
“The coastal shipping price-fixing conspiracy affected the price of nearly every product that was shipped to and from Puerto Rico during the conspiracy,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “This successful prosecution shows that the division will hold accountable high-level executives who perpetuate these crimes.”
Sea Star pleaded guilty on December 20, 2011, and was sentenced by Judge Daniel R. Dominguez to pay a $14.2 million criminal fine for its role in the conspiracy from as early as May 2002 until at least April 2008. Sea Star transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines, and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.
According to evidence presented at trial, Sea Star, Peake and co-conspirators carried out the conspiracy by agreeing during meetings and communications to allocate customers of Puerto Rico freight services and to rig bids and fix the rates and surcharges to be charged to purchasers of water transportation of freight between the continental United States and Puerto Rico. The department said the conspirators also engaged in meetings for the purpose of monitoring and enforcing adherence to the agreed-upon rates and sold Puerto Rico freight services at collusive and noncompetitive rates.
Including today’s jury conviction, as a result of this ongoing investigation, three companies and six individuals have pleaded guilty or been convicted at trial. The five individuals and three companies that have been sentenced have been ordered to serve a total of more than 11 years in prison and to pay more than $46 million in criminal fines.
Peake was convicted of price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s conviction arose from an ongoing federal antitrust investigation into price-fixing, bid-rigging and other anticompetitive conduct in the coastal water freight transportation industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section; the Baltimore Resident Agency of the Department of Defense’s Office of the Inspector General, Defense Criminal Investigative Service (DCIS); the Miami Field Office of the Department of Transportation’s Office of Inspector General; and the Jacksonville Field Office of the FBI. Anyone with information concerning anticompetitive conduct in the coastal water freight transportation industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.htm, or contact DCIS’s Baltimore Resident Agency at 410-347-1620.

Stockton Woman Sentenced to Prison for Online Sales of More Than $1 Million in Stolen Merchandise

FRESNO, CA—Thuy Vi Thi Wagner, 34, of Stockton, was sentenced on Monday, January 28, 2013, by United States District Judge Anthony W. Ishii to four years and three months in federal prison for mail fraud and aiding and assisting in the filing of a false tax return, U.S. Attorney Benjamin B. Wagner announced today.
According to court documents, between 2002 and September 2010, Wagner personally shoplifted large amounts of women’s designer clothing from department stores. She then sold these stolen items at approximately one-third of the retail price to buyers in California and other states through an online auction website. Wagner did not disclose to unsuspecting buyers that the merchandise was stolen. Once buyers made payments to her Internet-based account, she mailed them the merchandise. Wagner obtained more than $400,000 from buyers of the stolen merchandise. The retail value of merchandise Wagner shoplifted from department stores in furtherance of the fraud scheme exceeded $1 million.
Wagner also aided and assisted in preparing and presenting a false tax return for tax year 2007 that did not disclose approximately $105,056 of net income from the sale of approximately 2,236 items of stolen clothing in 2007.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Henry Z. Carbajal, III prosecuted the case.

FBI Arrests Glendale Man in Sextortion Case

LOS ANGELES—A Glendale man accused of hacking into hundreds of Facebook, Skype, and e-mail accounts and extorting women into showing him their naked bodies was arrested today on federal computer hacking charges.
Karen “Gary” Kazaryan, 27, was arrested this morning without incident by special agents with the FBI. Kazaryan, who was named in a 30-count indictment returned last Friday by a federal grand jury, is being arraigned this afternoon in United States District Court.
According to the indictment, Kazaryan gained unauthorized access to—in other words, hacked into—the victims’ accounts and changed the passwords, which locked victims out of their own online accounts. Once he controlled the accounts, Kazaryan searched e-mails or other files for naked or semi-naked pictures of the victims, as well as other information, such as passwords and the names of their friends. Using that information, Kazaryan posed online as women, sent instant messages to their friends, and persuaded the friends to remove their clothing so that he could view and take pictures of them.
When the victims discovered that they were not speaking with their friends, Kazaryan often extorted them again, using the photos he had fraudulently obtained to again coerce the victims to remove their clothing on camera.
The indictment charges Kazaryan with 15 counts of computer intrusion and 15 counts of aggravated identity theft.
According to a search warrant executed in 2011 and unsealed today, Kazaryan repeatedly contacted victims to demand that they expose their breasts to him on Skype and used their e-mail and Facebook accounts to make contact with other victims. Kazaryan allegedly posted nude photos of some victims on their Facebook pages when they failed to comply with his demands.
Investigators estimate that Kazaryan victimized more than 350 women, but they have not identified all the victims whose accounts were hacked. Authorities found approximately 3,000 pictures of nude or semi-nude women—some of which were taken from their online accounts, and some of which were taken by Kazaryan on Skype—on Kazaryan’s computer. Anyone who believes they may have been a victim in this case should contact the FBI’s Los Angeles Field Office at (310) 477-6565.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted on all counts, Kazaryan faces a statutory maximum penalty of 105 years in federal prison.
The investigation was conducted by the Federal Bureau of Investigation.

Colorado Man Sentenced for Scheming Investors Out of $7 Million

MINNEAPOLIS—Earlier today in federal court, a 37-year-old Colorado man was sentenced for scheming investors out of more than $7 million. United States District Court Judge Patrick J. Schiltz sentenced Evan Matthew Flaxman, of Silverthorne, Colorado, to 52 months in prison on one count of mail fraud in connection to the crime. Flaxman was charged on June 14, 2012, and pleaded guilty on July 25, 2012.
In his plea agreement, Flaxman admitted that from December 2009 through March 2012, he induced investors to give him money, telling them he had extensive financial expertise and personal wealth and resources. That was not the case. He subsequently provided one investor with documents indicating investment gains. In reality, however, Flaxman had used investment funds for personal use, including the purchase of a Ferraris and Porsche automobiles and a Rolex watch. He also paid his taxes with the money.
This case was the result of an investigation by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.

Former Iraqi Terrorists Living in Kentucky Sentenced for Terrorist Activities

WASHINGTON—Two Iraqi citizens living in Bowling Green, Kentucky who admitted using improvised explosive devices (IEDs) against U.S. soldiers in Iraq and who attempted to send weapons and money to al Qaeda in Iraq (AQI) for the purpose of killing U.S. soldiers were sentenced today to serve federal prison terms by Senior Judge Thomas B. Russell in U.S. District Court for the Western District of Kentucky.
The sentences was announced Lisa Monaco, Assistant Attorney General for National Security; David J. Hale, U.S. Attorney for the Western District of Kentucky; and Perrye K. Turner, Special Agent in Charge of the FBI Louisville Division.
Mohanad Shareef Hammadi, 25, a former resident of Iraq, was sentenced to life in federal prison, and Waad Ramadan Alwan, 31, a former resident of Iraq, was sentenced to 40 years in federal prison, followed by a life term of supervised release. Both defendants had pleaded guilty to federal terrorism charges.
“These two former Iraqi insurgents participated in terrorist activities overseas and attempted to continue providing material support to terrorists while they lived here in the United States. With today’s sentences, both men are being held accountable,” said Assistant Attorney General Monaco. “I thank the dedicated professionals in the law enforcement and intelligence communities who were responsible for this successful outcome.”
“These are experienced terrorists who willingly and enthusiastically participated in what they believed were insurgent support operations designed to harm American soldiers in Iraq,” stated U.S. Attorney Hale. “The serious crimes of both men merit lengthy punishment, and only the value of Alwan’s immediate and extensive cooperation with law enforcement justifies our recommendation of a reduced sentence for him. Bringing these men to justice is the result of a comprehensive law enforcement effort. The FBI agents of the Louisville Division, along with the federal and local law enforcement members of the Joint Terrorism Task Forces here in Kentucky, including the Bowling Green Police Department, and our many other partners, are to be commended.”
“Protecting the United States from terrorist attacks remains the FBI’s top priority,” said FBI Special Agent in Charge Turner. “Using our growing suite of investigative and intelligence capabilities, FBI agents and analysts assigned to our Bowling Green Office were able to neutralize a potential threat. Our local Joint Terrorism Task Force, composed of FBI agents and other local, state, and federal agencies from across the Commonwealth, remains committed to dismantling extremist networks and cutting off financing and other forms of support provided by terrorist sympathizers, whether they are operating in Kentucky or worldwide.”
“Today, the sentencing of Alwan and Hammadi represents the culmination of the extensive, effective, and focused efforts of the U.S. Attorney’s Office and the Kentucky Division of the FBI for their roles in the investigation and prosecution of these would-be terrorists. I want to thank U.S. Attorney David Hale, the Kentucky Division of the FBI, and the members of the FBI Bowling Green local office for their individual and collective efforts in bringing Alwan and Hammadi to justice for their crimes against the people of Kentucky and the United States,” stated Chief Doug Hawkins, Bowling Green Police Department.
Alwan, whose fingerprints were found on an unexploded IED found in Iraq, pleaded guilty earlier in the case on December 16, 2011, to all counts of a 23-count federal indictment. He pleaded guilty to conspiring to kill U.S. nationals abroad; conspiring to use a weapon of mass destruction (explosives) against U.S. nationals abroad; distributing information on the manufacture and use of IEDs; attempting to provide material support to terrorists and to AQI; and conspiring to transfer, possess, and export Stinger missiles.
Hammadi pleaded guilty on August 21, 2012, to a 12-count superseding indictment. Charges against him included attempting to provide material support to terrorists and to AQI; conspiring to transfer, possess, and export Stinger missiles; and making a false statement in an immigration application. At today’s sentencing, at the request of the United States, Alwan received a reduced sentence due to his cooperation with federal law enforcement. The United States asked for no reduction of Hammadi’s sentence.
According to information presented by the United States in connection with today’s sentencings, Hammadi and Alwan both admitted, in FBI interviews that followed waiver of their Miranda rights, to participation in the purported material support operations in Kentucky, and both provided the FBI details of their prior involvement in insurgent activities while living in Iraq. Both men believed their activities in Kentucky were supporting AQI. Alwan admitted participating in IED attacks against U.S. soldiers in Iraq, and Hammadi admitted to participating in 10 to 11 IED attacks as well as shooting at a U.S. soldier in an observation tower.
Court documents filed in this case reveal that the Bowling Green Resident Agency of the FBI’s Louisville Division initiated an investigation of Alwan in which they used a confidential human source (CHS). The CHS met with Alwan and recorded their meetings and conversations beginning in August 2010. The CHS represented to Alwan that he was working with a group to ship money and weapons to Mujahadeen in Iraq. From September 2010 through May 2011, Alwan participated in 10 separate operations to send weapons and money that he believed were destined for terrorists in Iraq. Between October 2010 and January 2011, Alwan drew diagrams of multiple types of IEDs and instructed the CHS how to make them. In January 2011, Alwan recruited Hammadi, a fellow Iraqi national living in Bowling Green, to assist in these material support operations. Beginning in January 2011 and continuing until his arrest in late May 2011, Hammadi participated with Alwan in helping load money and weapons that he believed were destined for terrorists in Iraq.
Documents filed by the United States describe in detail the material support activities of the men in Bowling Green. Without Hammadi present, Alwan loaded money and weapons he believed were being sent to Iraq on five occasions from September 2010 through February 2011, handling five rocket-propelled grenade launchers, five machine guns, two sniper rifles, two cases of C4 explosive, and what he believed to be $375,000. After Hammadi joined Alwan in January 2011, the two men loaded money and weapons together on five occasions from January to May 2011. Together, on these five occasions, they loaded five rocket-propelled grenade launchers, five machine guns, five cases of C4 explosive, two sniper rifles, one box of 12 hand grenades, two Stinger surface-to-air missile launchers, and what they believed to be a total of $565,000. Alwan and Hammadi were recorded by video during these operations.
In speaking with the CHS, Alwan spoke of his efforts to kill U.S. soldiers in Iraq, stating “lunch and dinner would be an American.” Hammadi told the CHS that he had experience in Iraq with “Strelas” (a Russian-made, portable, shoulder-fired, surface-to-air missile launcher) and discussed shipping “Strelas” in future operations.
According to the charging documents, Hammadi entered the United States in July 2009, and, after first residing in Las Vegas, moved to Bowling Green. Hammadi and Alwan were arrested on May 25, 2011, in Bowling Green on criminal complaints. Both defendants were closely monitored by federal law enforcement authorities in the months leading up to their arrests. Neither was charged with plotting attacks within the United States. All the weapons, including Stinger missiles, had been rendered inert before being handled by Hammadi and Alwan. The weapons and money handled by the men in the United States were never provided to AQI but instead were carefully controlled by law enforcement as part of the undercover operation.
This case was investigated by the Louisville Division of the FBI. Assisting in the investigation were members of the Louisville and Lexington Joint Terrorism Task Forces, U.S. Immigration and Customs Enforcement, U.S. Marshals Service, U.S. Department of Defense, U.S. Citizenship and Immigration Services, and the Bowling Green Police Department.
The prosecution was handled by Assistant U.S. Attorneys Michael Bennett and Bryan Calhoun from the U.S. Attorney’s Office for the Western District of Kentucky and Trial Attorney Larry Schneider from the Counterterrorism Section of the Justice Department’s National Security Division.

Delaware Man Pleads Guilty to Extortion, Computer Intrusion

COLUMBUS—Donald Christopher Dailey, 37, of Delaware, Ohio, pleaded guilty in U.S. District Court today to extortion for demanding money from the company where he was the information technology administrator in exchange for not disclosing internal financial and other information. Dailey also admitted to hacking into an ex-girlfriend’s e-mail account.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the guilty pleas entered today before U.S. District Judge Michael Watson.
According to court documents, Dailey abruptly resigned from the engineering company where he worked on October 1, 2012. Employees found a laptop connected to the company network and streaming live e-mail of the company’s CEO. It was hidden in Dailey’s private and secure workroom. In a resignation letter he sent to the CEO, Dailey claimed he had knowledge of what he alleged was damaging financial and other information regarding internal company communications that he would disclose to authorities and certain customers unless the CEO and his business partner sat down and talked with him.
On October 13, Dailey called the CEO and made an opening demand of 75 percent of the $92,500 expected salary if he had stayed with the company. FBI agents arrested Dailey on October 16 and searched his residence. An analysis of Dailey’s computer revealed that he had gathered personal information about the company’s employees, including everyone’s names and salaries, and had stored the data on his personal computer. The alleged documents or information referenced by Dailey as part of the extortion were not found.
Dailey also admitted illegally accessing an ex-girlfriend’s e-mail and bank accounts from a computer at the engineering company where he worked before he resigned.
Dailey remains on house arrest pending sentencing on a date to be set by Judge Watson. Extortion is punishable by up to two years in prison and a fine of $250,000. Intentionally accessing a computer without authorization is punishable by up to one year in prison.
U.S. Attorney Stewart commended the FBI agents who investigated the case and Assistant U.S. Attorney Deborah A. Solove, who represented the United States in the case.

Andrew W. Vale Named Special Agent in Charge of Albany Division

Director Robert S. Mueller, III has named Andrew W. Vale special agent in charge of the FBI’s Albany Division. Mr. Vale most recently served as special assistant to the deputy director at FBI Headquarters in Washington, D.C.
Mr. Vale began his career as a special agent with the FBI in September 1991. He first reported to the Newark Division, where he investigated terrorism, background, and civil rights matters. In October 1998, Mr. Vale was promoted to supervisor of the Joint Terrorism Task Force to oversee domestic and international terrorism investigations.
In November 2001, he transferred to the Domestic Terrorism Operations Unit at FBI Headquarters and provided program management oversight for all domestic terrorism investigations in the Northeast region of the United States. He was promoted to chief of the unit in August 2003. In January 2005, Mr. Vale was appointed unit chief of the Director’s Research Group, where he reviewed, edited, and approved briefing materials for Director Mueller’s congressional testimony, domestic and international travel, and meetings.
Mr. Vale transferred to the Albany Division in August 2006 as the assistant special agent in charge of the National Security Branch. In this capacity, he provided program management oversight for the Counterterrorism, Counterintelligence, and Intelligence programs. Mr. Vale returned to FBI Headquarters in September 2011 as the special assistant to the deputy director.
Prior to his appointment with the FBI, Mr. Vale spent four years with the Buffalo District of the United States Immigration and Naturalization Service as an immigration inspector and immigration detention officer.

Mount Olive Inmate Pleads Guilty to Mailing Threatening Communications

CHARLESTON, WV—U.S. Attorney Booth Goodwin announced today that a Mt. Olive Correctional Complex inmate pleaded guilty in federal court for mailing threatening communications. Joseph Michael Pettaway, 38, admitted that beginning around 2000 and continuing until 2012, he wrote several letters that contained threats to harm a former acquaintance.
Specifically, Pettaway admitted that on approximately October 6, 2011, he mailed a letter to his former acquaintance. The defendant was incarcerated Mt. Olive Correctional Complex at the time the letter was mailed. Pettaway admitted that the letter contained descriptions of violent acts that he intended to commit, including beating and raping his former acquaintance, following his release from prison. The letter was mailed from Mount Olive Correctional Complex and delivered to the individual’s Huntington residence.
Pettaway admitted that along with the letter was an attached violation report containing information about an incident at the prison. The violation report provided details of an incident in which the defendant was reprimanded for throwing boiling water onto another inmate. The inmate suffered second degree burns as a result of the incident.
Pettaway faces up to five years in prison and a $250,000 fine when he is sentenced on May 1, 2013, by United States District Judge John T. Copenhaver, Jr.
The FBI conducted the investigation. Assistant United States Attorney Blaire Malkin is in charge of the prosecution.

Jacksonville Man Indicted for Operating Fraudulent Investment Scheme

JACKSONVILLE, FL—U.S. Attorney Robert E. O’Neill announces today the arrest and unsealing of a federal indictment charging Anderson Scott Hall (48, Jacksonville) with 10 counts of mail fraud and 10 counts of wire fraud in connection with his operation of a fraudulent investment scheme. If convicted, Hall faces a maximum penalty of 20 years in federal prison for each count of mail and wire fraud and fines up to $5 million. His initial appearance is scheduled today at 2:30 p.m. in Jacksonville before U.S. Magistrate Judge Thomas Morris.
According to the indictment, while working for a national investment services company, Hall operated a sham company (Abaco Securities International Ltd.), which he held out to be a legitimate international investment company. It is alleged that Hall was the mastermind behind a complex scheme to defraud numerous investors, including Duval County school teachers and administrators. Hall would allegedly induce victim investors into transferring their retirement savings from legitimate life insurance companies and investment companies over to his control. It is further alleged that instead of investing victim investors’ funds as promised, Hall would use the funds for his own personal use, including purchasing high value luxury items and commercial and residential real estate. On occasion, as part of the fraud scheme, Hall would use money taken from new investors to pay earlier investors. In total, Hall allegedly defrauded investors of more than $4 million.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the state of Florida’s Department of Financial Services and the Florida Office of Financial Regulation. The case is being prosecuted by Assistant United States Attorney Mark Devereaux.

Colorado River Man Pleads Guilty to Second-Degree Murder

PHOENIX—On January 23, 2013, Loren Kaysang Tahbo, 33, of Parker, Arizona, and a member of the Colorado River Indian Tribes, pleaded guilty in federal district court to second-degree murder.
On August 10, 2012, Tahbo stabbed and ultimately killed a man on the Colorado River Indian Tribes reservation. Tahbo left the scene of the murder and crashed the victim’s car into a canal. He later fled to a woman’s home where tribal police apprehended him. Tahbo is currently held in federal custody pending sentencing.
A conviction for second-degree murder carries a maximum penalty of life in prison, a $250,000 fine, or both. Sentencing is set before Judge Frederick J. Martone on April 2, 2013.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Colorado River Indian Tribes Police Department. The prosecution is being handled by Jennifer E. Green, Assistant U.S. Attorney, District of Arizona, Phoenix.

Baltimore Armed Robber Sentenced to More Than 15 Years in Prison for Robbing Two Stores

BALTIMORE—U.S. District Judge Catherine C. Blake sentenced Cedric Lamont Scott, age 39, of Baltimore, today to 183 months in prison, followed by three years of supervised release, for robbery and using a gun in relation to the robbery. Judge Blake also ordered Scott to pay restitution of $1,175.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Baltimore City State’s Attorney Gregg L. Bernstein; and Commissioner Anthony W. Batts of the Baltimore Police Department.
According to his plea agreement, on January 21, 2012, Scott entered a store in the 6700 block of Reisterstown Road in Baltimore and selected some items that he took to the cash register. The store owner’s 9-year-old son asked his mother if he could ring up the sale. As the boy rang up the sale, Scott pointed a handgun at the boy and his mother, and demanded all the cash. The boy and his mother handed Scott all the cash from the register. Scott also took an envelope filled with cash proceeds from the business, the coin drawer from beneath the register, and the mother’s cell phone, before fleeing.
On February 16, 2012, Scott robbed a business in the 4600 block of W. Northern Parkway in Baltimore by pretending to want to purchase an item and then demanding money from the cashier. The store manager approached the cash register and, realizing that a robbery was taking place, ran out the front door to get help. Scott chased the manager and during a struggle between the two, Scott fired his gun at least once. Scott reentered the store and fired a shot into the cash register drawer lock. When the register failed to open, Scott slammed it to the ground, which caused the cash drawer to open. Scott took all the bills and some coins and fled on foot.
Baltimore Police officers arrived, saw Scott running away, and ordered him to stop. Scott continued running, but the officers were eventually able to capture and arrest Scott. Officers seized from Scott a loaded .22 caliber revolver, $282 stolen in the second robbery, and the cell phone Scott took from the store owner during the first robbery.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in this investigation. Mr. Rosenstein thanked Assistant United States Attorney Debra L. Dwyer, who prosecuted the case.

Former Bank Director Charged with Securities and Wire Fraud

A former director of a Georgia bank who managed two private investment funds has been charged by a federal grand jury in the Eastern District of New York with securities fraud and wire fraud. According to court documents, defendant Aubrey Lee Price sent a letter to acquaintances in mid-June 2012 in which he admitted that he had lost a large amount of investor money through trading activities and that he planned to kill himself by jumping from a ferry boat in Florida. Price remains missing. Anyone with information regarding Price’s whereabouts or the alleged crime is urged to contact the Federal Bureau of Investigation office in New York at (212) 384-1000 or at ny1@ic.fbi.gov.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation (FBI), New York Field Office.
According to the indictment, Price managed investment funds PFG LLC (PFG) and the Montgomery Growth Fund (Montgomery Growth). Starting in or about June 2009, PFG raised approximately $40 million from approximately 115 investors from across the nation. Price unsuccessfully invested PFG funds in various equity securities, options, and real estate, including farms in South America. To cover up his losses, Price allegedly lied to his investors by posting fake account statements on a secure PFG website that fraudulently reflected fictitious assets and fabricated investment returns.
The indictment also states that, starting in or about January 2011, Price became a director of Montgomery Bank & Trust (MB&T), a financial institution in Ailey, Georgia. Price also invested some of the bank’s capital, which he told the bank’s management he would invest safely in U.S. Treasury securities. Instead, Price lost much of the bank’s money through risky investments in equity securities and options. Price also embezzled MB&T money to pay redemptions to some PFG investors. The indictment charges that Price covered up his embezzlement and losses of MB&T’s funds by giving the bank’s management fabricated documents falsely indicating that approximately $17 million was on deposit in the bank’s name at a large financial services firm in New York.
“As charged in the indictment, this defendant repeatedly abused the trust placed in him by his investors and MB&T by lying about his investment losses, fabricating documents, and embezzling bank funds. Through this web of deception, Price acted to create the image of a successful investor. When that image was shown to be a lie, he then orchestrated his confession and disappearance. We are using every resource available to locate him and recover the funds he stole,” said U.S. Attorney Lynch.
FBI Assistant Director in Charge Venizelos stated, “As alleged, Price lied to investors about where their money would be invested and lied to them about the solvency of his company. He lied to the bank on whose board he served about investment of bank capital and lied again to cover up that lie. It is therefore reasonable to assume that Price’s talk of suicide was also a lie. The FBI is actively looking for Aubrey Lee Price.”
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum prison sentence of 30 years for wire fraud and 25 years for securities fraud.
The government’s case is being prosecuted by Assistant United States Attorneys David C. Woll, Jr., James McMahon, and Brian Morris.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Defendant:Aubrey Lee Price
Age: 46

FBI Search for Remains in Linden Enters New Phase

LINDEN, CA—After completing nearly two weeks of detailed site preparations while mitigating challenges, FBI personnel and technical experts anticipate beginning excavating the interior of a well in Linden, California, on Thursday, January 24, 2013. The excavation operation—the first known well excavation by FBI teams—will take days, if not weeks.
Despite careful initial exploration of the site with a bore and camera, experts and engineers from both the FBI Technical Hazard Response Unit (THRU) and Drill Tech Drilling and Shoring Inc., the historic bottom of the well was not located with certainty. The effort attempted to further investigate the depths of the site in absence of conclusive evidence of where the bottom of the well was located more than two decades ago without damaging well contents. The bore and camera operation also intended to locate potential hazards that the team would encounter during this challenging operation.
Over the course of the past two weeks, a corrugated pipe that is 10 feet in diameter was installed and reinforced in place with concrete to protect the excavation site. The well site that is five feet in diameter is located to the side of the corrugated pipe.
Throughout the excavation operation, a large drill will excavate soil from the operational site outside of the well to facilitate safe access to the well site by Evidence Response Team (ERT) members. The ERT will then excavate the well site by hand. Excavated well dirt will then be conveyed to an area at grade for careful sifting, ensuring that all material is processed thoroughly. Due to the hazardous nature of excavating well below grade, safety personnel will constantly monitor the teams at work.
If any remains are encountered during sifting or excavation, the excavation process will stop to assess how to best recover the remains and ensure that as much material as possible is recovered.
The collaborative team of FBI personnel and technical experts began operations at the site of the old, filled-in well in Linden on January 7, 2013, after several months of investigative work and coordination in the effort of potentially returning victims of Wesley Shermantine and Loren Herzog to their loved ones.

Man Sentenced to 40 Months in Federal Prison for Bank Robbery and Attempted Bank Robbery of Two Banks in Coffee County

MONTGOMERY, AL—Benjamin Michael Smith, a resident of Coffee County, Alabama, was sentenced to 40 months in federal prison for federal felony charges for bank robbery and attempted bank robbery, United States Attorney George L. Beck, Jr. announced today.
In October 2012, the United States Attorney filed a felony information against Smith alleging the federal charges. During Smith’s guilty plea hearing, he admitted that on February 16, 2010, he attempted to rob Citizen’s Bank located in Coffee County. Smith also admitted that on December 5, 2011, he robbed CB&T Bank located in Coffee County.
United States District Judge Mark E. Fuller sentenced Smith to a total term of 10 months in federal prison and three years of supervised release following his release from prison. Smith remains in the custody of the United States Marshals Service pending placement by the Bureau of Prisons.
This case was investigated by the Federal Bureau of Investigation with the assistance of the Enterprise Police Department. Assistant United States Attorney Jerusha T. Adams prosecuted the case.

Defendant from Shirley Arrested for Aiming a Laser Beam at Aircraft Flying Over Long Island

Federal agents arrested a Shirley, Long Island man this morning on the charge of aiming a laser pointer at two aircraft in August 2012.
The arrest of Angel Rivas was announced today by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director in Charge of the Federal Bureau of Investigation, New York Field Office. The defendant is scheduled to be arraigned before the United States Magistrate Judge Arlene R. Lindsay at the United States Courthouse in Central Islip, New York, later today.
According to court filings, on August 21, 2012, the defendant used a laser pointer to direct a laser beam at a commercial aircraft and a Suffolk County Police Department helicopter sent up to investigate the initial incident. Investigators first determined that the beam of light came from the vicinity of the defendant’s residence on William Floyd Parkway in Shirley, New York, and then confirmed that the defendant himself had directed the laser beam at the aircraft and helicopter.
“Laser pointers aimed at aircraft pose many dangers, including disrupting the vision of pilots,” said United States Attorney Lynch. “Last February, President Obama signed the FAA Modernization and Reform Act of 2012, which specifically prohibited the conduct alleged in the complaint. The safety of American air travelers has been and will continue to be a priority for law enforcement.” Ms. Lynch expressed her grateful appreciation to the U.S. Department of Transportation, Office of Inspector General-Investigations, the FBI Joint Terrorism Task Force in New York, the Suffolk County Police Department, and the Port Authority Police Department for their participation in the investigation leading to today’s arrest.
FBI Assistant Director in Charge Venizelos stated, “On a night last summer, Rivas allegedly endangered the lives of passengers and crew of not one but two aircraft and, potentially, people on the ground. Pointing a laser at an aircraft is not a prank; it is a federal crime with penalties befitting its seriousness.”
If convicted of the charge, the defendant faces a maximum sentence of five years’ imprisonment and a maximum fine of $250,000.
The government’s case is being prosecuted by Assistant United States Attorney Charles N. Rose.
The charges contained in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Defendant
Angel M. Rivas
Age: 33

Federal Grand Jury Indicts Maverick County Commissioner Rodolfo Bainet Heredia in Connection with a Bribery, Kickback, and Bid-Rigging Scheme

In Del Rio this morning, a federal grand jury indicted Maverick County Precinct Two Commissioner Rodolfo Bainet Heredia, age 54, of Eagle Pass, Texas, in connection with an alleged bribery, kickback, and bid-rigging scheme, announced United States Attorney Robert Pitman and FBI Special Agent in Charge Armando Fernandez.
The federal grand jury indictment charges Heredia with six counts of receiving a bribe and one count of paying a bribe to an agent of an organization receiving federal funds. The indictment alleges that in 2010 and 2011, Heredia manipulated the bidding process to guarantee that contractors he chose would be awarded Maverick County construction contracts. Those contractors deposited the checks issued to them by Maverick County and then made cash payments to Heredia. According to the indictment, the private contractors submitted inflated bids to Maverick County in order to ensure the availability of sufficient funds to perform the construction work, make a profit, and also to pay the bribe to Heredia. The indictment further alleges that Heredia gave benefits to a county employee to guarantee that checks were issued to the contractors involved in this scheme.
Upon conviction, Heredia faces up to 10 years in federal prison on each count. Heredia remains in custody following his arrest in October of last year on federal money laundering and bulk cash smuggling charges. A trial on those charges is scheduled for April 16, 2013. No court dates have been scheduled in connection with today’s indictment.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the Texas Department of Public Safety. Individuals who have first-hand information about corruption, fraud, or bribery related to Maverick County are urged to contact the FBI at (210) 225-6741.
Assistant United States Attorney Michael Galdo is prosecuting this case on behalf of the government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.

Federal Inmate Sentenced for Assault Charge

LAKE CHARLES, LA—United States Attorney Stephanie A. Finley announced today that Edward Rodriguez, 39, an inmate at Pollock USP, was sentenced today to an additional two years in prison for assaulting a Bureau of Prisons employee.
Edward Rodriguez assaulted a USP Pollock officer while the officer was engaged in the performance of his duties. Rodriguez was standing in front of the officer’s station when he assaulted another inmate. The inmate ran into the officer’s station for protection. An officer went to his aid, and Rodriguez shoved the officer in the chest before turning around and fleeing from the officer’s station.
Rodriguez is currently serving a 154-month term of imprisonment for aiding and abetting armed bank robbery,and aiding and abetting the use of a firearm during a crime of violence.
The investigation was conducted by the Federal Bureau of Investigation and the Special Investigative Services for the Bureau of Prisons at Pollock. The case was prosecuted by Senior Litigation Counsel Joseph G. Jarzabek and Special United States Attorney Seiji Ohashi.

Knoxville Woman Sentenced to One Year in Prison for Lying to Court About Cancer Diagnosis

KNOXVILLE—Angela Elwood, 48, of Knoxville, Tennessee, was sentenced on January 17, 2013, by the Honorable Thomas W. Phillips, U.S. District Court Judge, to serve one year in federal prison.
On August 17, 2012, United States Attorney William C. Killian filed an information in U.S. District Court charging Elwood with obstructing justice by lying to the court about having cancer so that she could delay her reporting date to the federal Bureau of Prisons to begin a prison term imposed for a bank fraud conviction.
According to court documents, Elwood admitted that following her bank fraud conviction in 2009, and while awaiting designation and a reporting date to a federal prison facility, she obstructed the due administration of justice by having the court extend her reporting date to federal prison based on medical documents submitted to the court that she fabricated to falsely state that she had been diagnosed with breast cancer and needed immediate medical treatment. At the time Elwood submitted the false medical documents to the court, she already had been told by a medical professional that she did not have breast cancer.
This investigation was conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney F. M. (Trey) Hamilton, III represented the government.

Former Ohio State Representative Clayton R. Luckie, II Sentenced to Three Years in Prison

COLUMBUS, OH—Edward J. Hanko, Special Agent in Charge (SAC) of the Cincinnati Division of the Federal Bureau of Investigation (FBI), and Franklin County Prosecutor Ron O’Brien today announced that former Dayton-area State Representative Clayton R. Luckie, II pleaded guilty to eight felonies and one misdemeanor and was sentenced to three years in prison in relation to acts committed while serving in the Ohio General Assembly.
Special Agent in Charge Hanko stated, “When public officials betray the trust that has been given to them, it can have a devastating impact on our system of government. These officials are accountable for their actions and when they violate the law, there are very real consequences.” SAC Hanko went on to say, “I would like to thank Prosecutor Ron O’Brien and his staff for their hard work in this investigation and the plea negotiations. This is another example of federal, state, and county officials working together in pursuit of justice.”
Specifically, Luckie pleaded guilty to one count of money laundering, one count of grand theft, six counts of election falsification (one for each year he was in office), and one count of failure to disclose on state ethics disclosure statements. As a part of the plea agreement, Luckie will also have to make restitution in the amount of $11,893 to the State of Ohio Treasury for the salary he received as a state representative following his indictment on October 10, 2012.
Luckie was first appointed to the House of Representatives in 2006 and withdrew his name from the November 2012 ballot when he acknowledged the existence of this criminal investigation. However, he did not resign and served the remainder of his term until December 31, 2012.
The original 49-count indictment against Luckie alleged a pattern of intent to steal campaign funds, spend these funds for personal use, and falsify required financial disclosure forms to cover up these unlawful acts.
SAC Hanko noted that the sentence was the result of a lengthy investigation by FBI special agents with the support of FBI professional staff in the Columbus Resident Agency.

C. Ray Nagin, Former New Orleans Mayor, Indicted on Federal Bribery, Honest Services Wire Fraud, Money Laundering, Conspiracy, and Tax Charges

NEW ORLEANS—C. Ray Nagin, 56, a resident of Frisco, Texas, and formerly the mayor of New Orleans, was charged in a 21-count indictment with bribery, honest service wire fraud, money laundering, conspiracy, and filing false tax returns, announced U.S. Attorney Dana J. Boente, FBI Special Agent in Charge Michael Anderson, and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge James Lee.
According to today’s federal grand jury indictment, between December 2004 and the present, Nagin and several others participated in a conspiracy to commit bribery and honest services wire fraud. The indictment alleges that Nagin, in his role as chief executive, devised a scheme to defraud the city of New Orleans and its citizens of his honest services through bribery and a kickback scheme, whereby Nagin used his public office and official capacity to provide favorable treatment, including awarding contracts, that benefitted business and financial interest of individuals providing him with bribes and kickbacks in the form of checks, cash, granite inventory, wire transfers, personal services, and free travel. The indictment charges Nagin with accepting numerous bribes and payoffs from consultants and contractors, money laundering conspiracy, and filing false tax returns for the years 2005 to 2008.
“This office will continue its history of investigating and prosecuting public corruption,” said U.S. Attorney Dana J. Boente. “This is an important part of the office’s mission to serve the citizens of the Eastern District of Louisiana and make certain they have honest public officials.”
“This indictment should serve as a reminder to current and former public officials that, in the interest of full accountability, the FBI pursues corruption even after an official leaves office,” said Michael Anderson, Special Agent in Charge of the FBI’s New Orleans Field Office.
“IRS will continue to do our part to hold the elected officials of New Orleans accountable for their actions,” stated Damon Rowe, IRS-CI Acting Special Agent-in-Charge. “No one is excused from obeying the laws of this country.”
According to the indictment, in January 2005, Nagin created Stone Age LLC, a granite company based in New Orleans.
The indictment alleges, among other things, that Nagin accepted approximately $72,250 in bribes from Rodney Williams and his company, Three Fold Consultants LLC. The indictment also alleges Nagin accepted bribes from Frank Fradella, including $50,000, granite inventory, and nine payoffs in the form of wire transfers from Fradella totaling $112,500. In some cases, money was deposited into Nagin’s Stone Age corporate account, or free granite inventory was provided to Stone Age.
If convicted of conspiring with others to commit bribery and honest services wire fraud (count one), Nagin faces statutory penalties of up to five years in prison, a $250,000 fine, and three years of supervised release. If convicted of accepting a bribes (counts two through seven), Nagin faces statutory penalties of up to 10 years in prison, a $250,000 fine, and three years of supervised release on each count. If convicted of accepting payoffs that caused interstate wire communications to occur between Louisiana and other states (counts eight through 16), Nagin faces statutory penalties of up to 20 years in prison, a $250,000 fine, and three years of supervised release on each count. If convicted of conspiring to commit money laundering (count 17), Nagin faces statutory penalties of up to 10 years in prison, a $250,000 fine, and three years of supervised release. If convicted of filing false tax returns for years 2005 through 2008 (counts 18 through 21), Nagin faces statutory penalties of up to three years in prison, a $100,000 fine, and three years of supervised release on each count.
The indictment also contains notices of forfeiture which puts the defendant on notice that the government intends on forfeiting any and all property and profits concerned with and/or derived from any illegal activity referenced in the indictment.
U.S. Attorney Boente reiterated that today’s indictment describes allegations and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case was investigated by the FBI, the IRS-CI, and the New Orleans Office of Inspector General. U.S. Attorney Boente would also like to acknowledge the assistance provided by the New Orleans Inspector General’s Office and the Metropolitan Crime Commission. The case is being prosecuted by Assistant U.S. Attorneys Matthew M. Coman and Richard R. Pickens, II.

Chief Executive Officer of Superior Discount Coins Appears in Court in Colorado for Defrauding Gold Coin Investors of More Than $2.4 Million

DENVER—James P. Burg, age 61, formerly of Fairplay, Colorado, faces fraud charges related to a scheme to defraud gold coin investors, the U.S. Attorney’s Office, the FBI, the IRS-CI, and the U.S. Postal Inspection Service announced. Burg was indicted by a federal grand jury in Denver on November 6, 2012, for charges of wire fraud, mail fraud, money laundering, and failure to file tax returns. The indictment remained sealed until his arrest in California on November 29, 2012. Burg then appeared in U.S. District Court for the Southern District of California. In court there, Burg was ordered to be detained and transferred by U.S. Marshals from California to Colorado. Burg’s first Colorado court appearance occurred on January 2, 2013, where he was advised of his rights and the charges pending against him. He appeared in court on January 7, 2013, and again on January 14, 2013, for the purpose of a detention hearing. On January 14, 2013, U.S. Magistrate Judge Michael E. Hegarty ordered that Burg could be released prior to trial on a $50,000 secured property or cash bond. Once released on that pre-trial bond, Magistrate Judge Hegarty ordered Burg to a halfway house (once bed space is available), pending the resolution of the criminal case.
According to the indictment, beginning on or about October 1, 2007, and continuing through and including on or about January 12, 2012, in Colorado and elsewhere, James P. Burg devised and intended to devise a scheme to defraud customers that ordered coins from a business known as Superior Discount Coins and Gold Run Investments and for obtaining money from those customers by means of materially false and fraudulent pretenses, representations, and promises. Burg took and received $2,464,099 from customers that ordered coins, and he failed to deliver the coins as promised.
As part of the scheme, Burg represented that he was the chief executive officer of a company known as Superior Discount Coins (SDC) and that SDC was in the business of selling coins. Burg also conducted business using a company known as Gold Run Investments (GRI) and represented that GRI was in the business of selling coins. At times, Burg operated GRI using the alias “Tim Burke.” Burg advertised and solicited customers through radio advertisements and over the Internet using websites he controlled, including; www.superiordiscountcoins.com, www.yourcoinbroker.com, and www.goldruninvestments.net.
Burg misrepresented and promised customers that if they ordered coins from SDC or GRI and paid him for those coins, he would deliver the coins to them or to accounts designated by them. He sent and caused to be sent to customers that ordered coins from SDC or GRI invoices stating amounts of money owed for the coins and, in some cases, providing information about a bank account to which the customers should transfer their money to purchase the coins.
The money Burg received from customers was not used to purchase coins for such customers, but instead he converted the money to his own use and benefit. Burg refused to refund money to customers in several instances where the customers requested a return of their money after he failed to deliver coins as originally promised. To prevent the scheme’s detection, Burg sometimes filled customers’ orders for coins only after such customers threatened to take legal action or report him to law enforcement authorities. Burg used one customer’s payment for coins to refund funds to another customer.
For calendar years 2006, 2007, 2008, and 2009, Burg failed to file income tax returns with the Internal Revenue Service as required by law. These returns were required to be filed with the IRS on April 15 following the subsequent above mentioned years.
“A core mission of the U.S. Attorney’s Office is to protect victims from scam artists who try to trick them out of their hard earned money,” said U.S. Attorney John Walsh.
“The FBI has made protecting innocent investors a priority,” said FBI Special Agent in Charge James Yacone. “As such, we will vigorously investigate those who engage in schemes to swindle and defraud.”
“The U.S. Postal Inspection Service has no shortage of investment investigations and this is another example of greed overcoming honest business practices,” said Adam Behnen, Inspector in Charge, with the U.S. Postal Inspection Service. “These criminal charges illustrate the commitment of the U.S. Postal Inspection Service to protect the American public by investigating individuals who use the U.S. mail to further their schemes.”
“Fraud schemes are often described as a house of cards and will eventually fall apart exposing the individuals responsible,” said Stephen Boyd, Special Agent in Charge, IRS-Criminal Investigation, Denver Field Office. “This is a great example of federal agencies working together.”
Burg was charged with six counts of wire fraud, nine counts of mail fraud, four counts of money laundering, and four counts of willful failure to file tax returns. If convicted of the wire fraud and mail fraud counts, he faces not more than 20 years in federal prison, and a fine of up to $250,000 per count. If convicted of the money laundering counts, he faces not more than 10 years in federal prison and a fine of up to $250,000 per count. If convicted of failing to file tax returns, he faces not more than one year in federal prison and a fine of up to $25,000 per count.
This case was investigated by special agents with the Federal Bureau of Investigation (FBI), the IRS-Criminal Investigation, and the U.S. Postal Inspection Service.
Burg is being prosecuted by Assistant U.S. Attorney Timothy Neff.
The charges contained in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

Owner of Debt Consolidation and Repair Businesses Pleads Guilty to Defrauding Customers

FRESNO, CA—Sharanjit Kaur, 36, of Fresno, pleaded guilty today to conspiring to commit mail and wire fraud, United States Attorney Benjamin B. Wagner announced.
According to the plea agreement, from approximately July 2010 to June 2011, Kaur and co-defendant Baljit Singh owned and operated several companies based in Fresno for the sole purpose of defrauding hundreds of customers located throughout the United States. According to court documents, the defendants, through their companies Consumer Financial Services, Consumer Credit Repair, and Client Financial Services, touted to potential customers that these businesses could provide debt consolidation services. The defendants also falsely promised that they could obtain low-interest loans for customers, assist in avoiding lawsuits, lower car payments, replace high-interest credit cards with low-interest ones, and correct errors in credit reports. The defendants utilized a call center in India from which individuals would call customers under aliases such as “Neil McKenzie” or “Anthony Jones.”
After luring customers into using these purported services, Kaur and his agents instructed customers to send in monthly payments of $500 or more. Even though they collected regular payments from customers, no creditors were contacted on behalf of customers as promised. To mislead customers, forged letters from creditors were sent, indicating that loan modifications had been approved. When customers would contact the debt repair companies about late-payment or default notices they had received from their creditors, the defendant and his agents would either hang up on customers or request that customers continue to make service payments. The funds received from customers were used for their own benefit or wired to an individual located in Kolkata, India.
As part of the plea agreement, Kaur agreed to forfeit $26,943 from bank accounts and a residence owned by him. The U.S. Attorney’s Office has also initiated separate civil actions to recover funds wired by the defendants to India.
Kaur is scheduled to be sentenced on April 8, 2013, at 8:30 a.m. before U.S. District Judge Lawrence J. O’Neill. He faces a maximum sentence of 20 years in prison and a $500,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. Co-defendant Baljit Singh, 47, has a hearing before Judge O’Neill scheduled for February 4, 2013. The charges against him are only allegations, and he is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
This case is the product of an extensive investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant United States Attorney Grant B. Rabenn is prosecuting the case.

Hualapai Nation Tribal Member Sentenced to Prison for Assault on a Federal Officer

PHOENIX—On January 14, 2012, Jordan Reed Sumatzkuku, 25, of Peach Springs, Arizona, was sentenced by U.S. District Judge David G. Campbell to 36 months in prison. Sumatzkuku was also sentenced to 12 months in prison for violating his supervised release in another case. The sentences were ordered to run consecutively for a total sentence of 48 months in prison, followed by a term of three years of supervised release. Sumatzkuku, a member of the Hualapai Nation Indian Tribe, pleaded guilty on November 7, 2012, to assault on a federal officer. Sumatzkuku’s sister, co-defendant Raema Sumatzkuku, was sentenced to 12 months in prison for assault on a federal officer on December 17, 2012.
According to court records, on July 2, 2012, when a Hualapai Nation Police officer tried to arrest Sumatzkuku’s sister, Sumatzkuku grabbed the officer, knocked him to the ground, and wrestled with the officer. The victim sustained a fracture to his left foot as a result of the assault.
The investigation in this case was conducted by the Hualapai Nation Police Department and the Federal Bureau of Investigation. The prosecution was handled by Christina J. Reid-Moore, Assistant U.S. Attorney, District of Arizona, Phoenix.

Kodiak Woman Sentenced for Wire Fraud

ANCHORAGE—U.S. Attorney Karen L. Loeffler announced today that a Kodiak woman was sentenced in federal court in Anchorage for two counts of wire fraud. This is the first of five defendants to be sentenced for her role in a scheme to embezzle almost $500,000 from Trident Seafoods.
Jamie Fathke, 29, of Kodiak, Alaska, was sentenced today by Chief U.S. District Court Judge Ralph R. Beistline to four months in prison for her role in embezzling $30,000 from Trident Seafoods.
According to Assistant U.S. Attorney Aunnie Steward, who presented the case, between 2008 and 2010, the lead defendant Isairis Wolfe is alleged to have used her position as the bookkeeper for Trident Seafoods in Kodiak to write Trident checks to four of her personal associates; co-defendants Anne Wilson, Jeremy Smith, Valerie Olivares, and Jamie Fathke totaling almost $500,000. Specifically, Fathke worked with Wolfe to cash three fraudulent Trident checks drafted by Wolfe totaling $30,000 in March 2009. Wolfe and Fathke shared the proceeds of the fraudulent checks.
Defendant Anne Wilson has pled guilty to two counts of wire fraud for her role in working with Wolfe to embezzle almost $300,000 from Trident Seafoods. Wilson is scheduled to be sentenced on March 20, 2013. Smith, Olivares, and Wolfe are scheduled for trial on March 18, 2013.
Ms. Loeffler commends the FBI for the investigation of this case.

Indictment Charges Two Logan County Men with Central Illinois Bank Robberies

SPRINGFIELD, IL—A federal grand jury has returned an indictment that charges Joseph M. Allspach, 25, and Robert D. McKissic, 32, both of Lake Fork, Illinois, with two counts of armed bank robbery, one count of attempted armed bank robbery, and one count of carjacking related to robberies that took place in September and October 2012.
The indictment, returned late yesterday, alleges that the two men committed armed bank robberies of the Bank of Chestnut in Chestnut, Illinois, on September 17, 2012, when approximately $8,756 was taken; and at Kenney Bank and Trust, Kenney, Illinois, on October 24, 2012, when approximately $38,221 was taken. The indictment alleges the pair attempted an armed bank robbery of the Town and Country Bank in Buffalo, Illinois, on October 23, 2012. Allspach and McKissic are also charged with taking by force a bank employee’s car on October 24, following the alleged armed bank robbery.
The two men were previously charged in a federal criminal complaint filed on December 18, 2012, and they were taken into federal law enforcement custody. Following hearings before U.S. Magistrate Judge Byron G. Cudmore, both men were ordered to remain detained in the custody of the U.S. Marshals Service.
If convicted, each offense of armed bank robbery and attempted armed bank robbery carries a statutory penalty of up to 25 years in prison and a fine of up to $250,000. Carjacking carries a penalty of up to 15 years in prison and a fine of up to $250,000.
The investigation was conducted by the Federal Bureau of Investigation; Illinois State Police; the Logan County Sheriff’s Office; DeWitt County Sheriff’s Office; Sangamon County Sheriff’s Office; the Buffalo/Mechanicsburg Police Department; and the Office of the Illinois Secretary of State. Assistant U.S. Attorney Gregory K. Harris is prosecuting the case.
Members of the public are reminded that an indictment is merely an accusation; each defendant is presumed innocent unless proven guilty.

Former South Carolina State University Police Chief Pleads Guilty in Connection with Extortion Plot

CHARLESTON, SC—United States Attorney Bill Nettles stated today that Michael Bartley, age 48, of Orangeburg, South Carolina, pled guilty to an information charging him with conspiring to violate the Hobbs Act and other federal statutes, all in violation of Title 18, United States Code, Section 371. United States District Judge David C. Norton of Charleston accepted the plea and will impose sentence after he has reviewed the presentence report, which will be prepared by the U.S. Probation Office.
Evidence presented at the plea hearing established that Bartley, then the police chief of South Carolina State University (SCSU), agreed with another SCSU official to use their positions and relationships to arrange SCSU’s purchase of real property in Orangeburg County owned by Person A. Bartley and his conspirators agreed that Person A would pay Bartley approximately $30,000 in cash, buy Bartley an all-terrain vehicle (ATV), and also provide a separate kickback to the other SCSU official in return for Bartley and the other SCSU’s official’s assistance in arranging SCSU’s purchase of the real property at the price set by Person A.
Mr. Nettles stated that the maximum penalty Bartley can receive is a fine of $250,000 and imprisonment for five years, plus a special assessment of $100.
Mr. Nettles stated, “South Carolina State University and its students are the victims of the crime charged in this Information, not the target. This investigation does not target South Carolina State University. Rather, this information focuses on an individual who used his position and relationships in an effort to line his pockets at the university’s expense.”
The case was investigated by agents of the Federal Bureau of Investigation (FBI), the South Carolina Law Enforcement Division (SLED), the Department of Housing and Urban Development Office of Inspector General (HUD-OIG), and the Internal Revenue Service-Criminal Investigation (IRS-CI). This case and its companion cases are being prosecuted by Assistant United States Attorneys Mark C. Moore, Nancy C. Wicker, Jane B. Taylor, and DeWayne Pearson. Mr. Nettles stated that other charges are expected in connection with this ongoing investigation.

Eau Claire Man Found Guilty of Fraud

MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Bernard C. Seidling, 61, Eau Claire, Wisconsin, was found guilty of 50 counts of mail fraud by Judge Barbara B. Crabb on December 26, 2012. From 2003 through 2009, Seidling engaged in a fraud scheme in which he used the Wisconsin small claims court system to obtain small claims judgments against individuals and corporations based on false representations in lawsuits he filed. Judge Crabb scheduled sentencing for March 21, 2013, at 1:00 p.m. Seidling faces a maximum penalty of 20 years in prison on each of the 50 charges.
The defendant and the United States agreed that the criminal charges could be resolved without a jury trial. The parties stipulated to the facts and disputed only the law that applies to those facts. The defendant acknowledged that he deceived small claims courts, clerks of court, and process servers, but he maintained he did not deceive the actual victims of his scheme to defraud and therefore could not be found guilty. The court accepted the government’s arguments and found Seidling guilty of all 50 fraud charges.
In summary, Seidling filed suits in Wisconsin small claims courts against individuals and corporations in which he lied about their addresses and attempts to serve them. He submitted false documents to convince the small claims courts that he had process servers attempt to serve the defendants when, in fact, those attempts either had not been made or, as Seidling knew, would be unsuccessful because he knew the defendants did not live at the addresses he had provided.
In each of these lawsuits Seidling usually claimed the maximum allowed of $5,000 (as of the time in the indictment). He hid filings of the lawsuits from the victims of his scheme (the defendants in the lawsuits) and then obtained default judgments. Once he obtained these fraudulent default judgments, he filed them in the county where the victims actually lived or owned property and also used them to attempt to file wage garnishments against the victims and the victims’ property.
U.S. Attorney Vaudreuil stated that this successful prosecution is the result of an investigation conducted by the Federal Bureau of Investigation; U.S. Postal Inspection Service; Sheriffs’ Departments of Ashland, Barron, Bayfield, Burnett, Chippewa, Dane, Douglas, Dunn, Eau Claire, Iron, Jackson, Pierce, Polk, Sawyer, and Washburn Counties; and Wisconsin Department of Justice, Division of Criminal Investigation. The prosecution of the case has been handled by United States Attorney Vaudreuil.

Former Consultant Wesley Wang Sentenced in Manhattan Federal Court for Insider Trading

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Wesley Wang, a former consultant with Trellus Management, was sentenced today to two years’ probation for his participation in insider trading schemes in which Wang provided material, non-public information (“inside information”) about various publicly traded companies to several individuals, including Doug Whitman, the president and founder of Whitman Capital. Wang pled guilty in July 2012 to two counts of conspiracy to commit securities fraud pursuant to a cooperation agreement with the government. He was sentenced in Manhattan federal court by U.S. District Judge Jed S. Rakoff.
According to the information, statements made during Wang’s guilty plea proceeding, Wang’s testimony during the criminal trial of Doug Whitman, and the government’s sentencing submission in Wang’s case:
From 2005 through 2008, Wang provided Whitman, among others, inside information on Cisco with the understanding that Whitman would use the information to trade securities. In exchange for this inside information, Whitman provided Wang with inside information on other publicly traded companies, including Marvell and Polycom, which Wangin turn provided to others. In addition, from 2002 to 2005, Wang was involved in a separate conspiracy in which he exchanged inside information about various publicly traded companies with other individuals, with the expectation the information would be used to trade securities.

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In addition to his probation, Wang, 39, was ordered to pay a $200 special assessment fee.
Whitman was convicted in a jury trial on August 20, 2012 of four counts of conspiracy and securities fraud.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation. He also thanked the U.S. Securities and Exchange Commission. This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force.
Assistant U.S. Attorneys Christopher L. LaVigne and Jillian Berman are in charge of the prosecution.

Wabaunsee County Woman Pleads Guilty to Mortgage Fraud

TOPEKA, KS—A woman from Wabaunsee County, Kansas, has pleaded guilty to mortgage fraud, U.S. Attorney Barry Grissom said today.
Linda Kay Miller, 50, Alma, Kansas, pleaded guilty to one count of bank fraud. In her plea, she admitted fraudulently submitting false documents to New Century Bank of Manhattan, Kansas, in an effort to obtain a $200,000 mortgage loan. Miller admitted she created documents falsely stating that a $65,000 second mortgage in favor of Landmark National Bank in Manhattan on her home in Wabaunsee County had been paid in full. She filed the false documents with the Wabaunsee County Register of Deeds.
Sentencing is set for April 1. She faces a maximum penalty of 30 years and a fine up to $1 million. Grissom commended the Wabaunsee County Sheriff’s Department, the FBI, and Assistant U.S. Attorney Richard Hathaway for their work on the case.

El Paso Truck Driver Admits Committing Armed Bank Robbery of First Bank Texas in Abilene

ABILENE, TX—Frank Esparza, Sr., 40, of El Paso, Texas, appeared today before U.S. Magistrate Judge E. Scott Frost and admitted committing the September 27, 2012 armed robbery of First Bank Texas (FBT), SSB, in Abilene, Texas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Specifically, Esparza pleaded guilty to one count of armed bank robbery and one count of using and carrying a firearm during and in relation to a crime of violence. The armed bank robbery count carries a maximum statutory penalty of 25 years in federal prison and a $250,000 fine, and the firearm count requires imprisonment for a period of not less than seven years and up to life and a $250,000 fine. Esparza remains in federal custody; a sentencing date was not set.
According to plea papers filed in the case, at approximately 4:30 p.m. on September 27, 2012, a Hispanic male wearing a dark hooded jacket, sunglasses, and a ski mask, who was later identified as Esparza, entered FBT and approached the teller counter. Esparza pointed a .25 caliber pistol at the tellers and said, “You know what this is.” Esparza then walked behind the teller counter, held up a plastic grocery bag, and demanded money from the tellers. The tellers gave Esparza the money, and he said, “Thank you ladies, I did not want anyone to get hurt.” As he began to exit the bank, an FDIC auditor was also leaving the bank, and Esparza pointed the pistol at the auditor and told him not to say anything. Esparza then fled the scene.
The plea papers also state that Esparza was driving an 18-wheeled tractor-trailer to Lubbock when it broke down in Abilene and that his son and a friend picked him up. Esparza said he decided to rob a bank because he needed a quick way to obtain money. His son and the friend took him to a bank, but it was closed when Esparza tried to go inside and rob it. They then took him to FBT, where, after his son went inside the bank to get an idea of what was inside, Esparza entered the bank and robbed it, using a .25 caliber pistol he had acquired earlier in the day.
The investigation is being conducted by the FBI and the Abilene Police Department. Assistant U.S. Attorney Jeffrey R. Haag of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

Former President Pro Term of Oklahoma Senate Sentenced to Serve Five Years’ Probation for Bribery

OKLAHOMA CITY—Former Oklahoma Senate President Pro Tem Michael Steven Morgan, 57, of Stillwater, Oklahoma, was sentenced today by United States District Judge Robin J. Cauthron to serve five years’ probation for bribery, announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma.
“While this was not the sentence for which we advocated, the determination of sentencing in federal court is within the discretion of the Judge,” said U.S. Attorney Coats. “This is one of the most significant public corruption cases in this district in decades. Both the U.S. Attorney’s Office and the FBI remain committed as ever to the pursuit of public corruption cases and holding accountable any public officials who abuse their positions for personal gain. I commend the Assistant United States Attorneys and FBI special agents for their extraordinary work in this long and complex investigation and prosecution.”
The government alleged three different schemes. On March 5, 2012, the federal jury found Morgan guilty of bribery on one scheme, acquitted him on one scheme, and could not reach a unanimous verdict on a third scheme. According to evidence at trial on the scheme in which he was convicted, Morgan, an attorney, accepted payments from a business that owned assisted-living centers, disguised as legal fees, in exchange for favorable treatment in the legislature. Evidence at trial showed that Morgan took 12 $1,000 bribe payments in 2006 and 2007, disguised as legal fees, from Silver Oak Senior Living Center. Evidence showed that Silver Oak had been at odds with the Oklahoma Department of Health, which was attempting to impose regulations on assisted-living facilities. In exchange for the bribe payments, evidence showed that Morgan authored Senate Bill 738, which became law at the end of the 2007 session and helped Silver Oak by lifting some of its regulatory burdens.
In addition to serving five years of probation, Morgan was ordered to forfeit $12,000.
This case was the result of an investigation conducted by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorneys Scott E. Williams and Vicki Zemp Behenna.

Jal Accountant Arraigned on Federal Fraud and Identity Theft Charges

ALBUQUERQUE—This morning, Roger L. Baeza, 31, of Jal, New Mexico, was arraigned on an 81-count indictment charging him with 78 counts of securities fraud, one count of access device fraud, and two counts of aggravated identity theft. Baeza entered a not guilty plea to the indictment during his arraignment hearing.
U.S. Attorney Kenneth J. Gonzales said that Baeza is charged with defrauding two Jal-based businesses, Lea Energy Services LLC and Fulfer Oil & Cattle Company LCC, of approximately $572,000 between June 2010 and February 2012. During that period, Baeza was employed as the in-house accountant by the owners of the two businesses.
According to the indictment, from June 4, 2010 to February 27, 2012, Baeza forged checks belonging to Lea Energy Services LLC and the Fulfer Oil & Cattle Company LCC on 78 separate occasions and thus defrauded his employers of an aggregate of $311,960.08. Count 79 of the indictment alleges that, during that same period, Baeza unlawfully used a credit card issued to his employers to defraud his employers of an aggregate of $189,267.02. Counts 80 and 81 each charge Baeza with unlawfully using the identification of one of his employers to unlawfully withdraw money from his employers’ business accounts.
The maximum penalty for a conviction on each of the 78 securities fraud counts and the access device fraud count is 10 years of imprisonment and a $250,000 fine. The maximum penalty for a conviction on each of the two aggravated identity theft counts is a mandatory two-year term of imprisonment, to be served consecutive to any other prison sentence imposed and a $250,000 fine.
Following his arrest on a criminal complaint on November 6, 2012, Baeza is on conditions of release pending trial.
The case was investigated by the Roswell Resident Agency of the FBI and the New Mexico State Police and is being prosecuted by Assistant U.S. Attorney Norman Cairns.
Allegations in criminal complaints and indictments are only accusations. Criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.

Georgia Man Admits Interfering with Flight Crew During Flight from Atlanta to Pittsburgh

PITTSBURGH—A resident of Georgia pleaded guilty in federal court to a charge of violating federal laws, United States Attorney David J. Hickton announced today.
Marc Anthony Malone, 34, of 438 Hillcrest Road, Hogansville, Georgia, pleaded guilty to one count of interfering with a flight crew before United States District Senior Judge Gustave Diamond.
In connection with the guilty plea, the court was advised that on October 10, 2012, Malone was onboard an AirTran flight from Atlanta, Georgia to Pittsburgh, Pennsylvania. Approximately 30 minutes into the flight, Malone began acting erratically. At one point during the flight, Malone asked a flight crew member, “Where are we?” Upon hearing that the plane was on its way to Pittsburgh, Malone stated, “I need to get off now,” and attempted to get to the front of the aircraft. One of the flight attendants tried to calm Malone and asked him to sit in his seat, at which point Malone continued to leave his seat, stating, “Why are you mad at me?” Shortly thereafter, Malone attempted to force his way to the front of the plane, at which point two flight attendants physically stopped him, and Malone yelled “F— you!” over and over. As Malone refused to comply with commands to return to his seat, he attempted to get to the front of the plane by pushing a flight attendant with his hands, knocking the attendant backward. At that time two, flight attendants and five passengers wrestled Malone to the ground to restrain him and place flex cuffs on him. While Malone kicked and attempted to bite those that attempted to restrain him, Malone yelled, “I’m going to get you. When I get out of here, I can’t wait to get a hold of you.” As such, Malone had to be restrained by flight crew members for the duration of the plane’s landing instead of being able to attend to their normal duties.
Judge Diamond scheduled sentencing for May 8, 2013, at 10:00 a.m. The law provides for a total maximum sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.
Pending sentencing, the court continued Malone on bond.
Assistant United States Attorney James T. Kitchen is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation (FBI) conducted the investigation that led to the prosecution of Malone.

Fort Totten Man Sentenced for Assaulting the Bureau of Indian Affairs Chief of Police on the Spirit Lake Indian Reservation

FARGO—U.S. Attorney Timothy Q. Purdon announced that on January 2, 2013, Brandt Richard Yankton, a/k/a Brandt Richard Jetty, of Fort Totten, North Dakota, was sentenced before U.S. District Judge Ralph R. Erickson on a charge of assault on a federal officer resulting in bodily injury.
Judge Erickson sentenced Yankton to 27 months’ imprisonment, to be followed by three years of supervised release. Yankton was ordered to pay a $100 special assessment to the Crime Victim’s Fund.
Yankton, 24, pleaded guilty on August 27, 2012, to biting through the skin of the right forearm of Bureau of Indian Affairs Chief of Police Raymond Cavanaugh, while Chief Cavanaugh was arresting Yankton for a traffic violation. Chief Cavanaugh’s injury required medical attention and left a permanent scar. The incident occurred in April 2012 on the Spirit Lake Indian Reservation.
The case was investigated by the Federal Bureau of Investigation and the Fort Totten Police Department.
Assistant U.S. Attorney Janice M. Morley prosecuted the case.

Lower Brule Man Pleads Guilty to Assault

U.S. Attorney Brendan V. Johnson announced that Earl LaRoche, age 53, of Lower Brule, appeared before U.S. District Judge Roberto A. Lange on January 7, 2013, and pled guilty to the indictment that charged him with assault resulting in serious bodily injury. The maximum penalty upon conviction is 10 years of imprisonment, a $250,000 fine, or both.
The charge stems from an incident on October 9, 2011, when LaRoche unlawfully assaulted the victim by biting off a portion of her ear, requiring 25 stitches and resulting in permanent disfigurement.
The investigation was conducted by the Federal Bureau of Investigation, and Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case. LaRoche was released on bond pending sentencing. A sentencing date has been set for March 25, 2013.

FCI Danbury Prisoner Admits Assaulting Another Inmate

David B. Fein, United States Attorney for the District of Connecticut, announced that Patricia A. Brown, 22, a prisoner at the Federal Correctional Institution (FCI) in Danbury, pleaded guilty today before United States Magistrate Judge Donna F. Martinez in Hartford to one count of assault with a dangerous weapon.
According to court documents and statements made in court, on May 4, 2012, Brown assaulted another Danbury FCI inmate with two padlocks placed in a white athletic sock. The victim suffered a laceration close to her right ear that required three stitches to close the wound and also suffered from headaches.
Brown is scheduled to be sentenced by United States District Judge Robert N. Chatigny on April 4, 2013, at which time Brown faces a maximum term of imprisonment of 10 years and a fine of up to $250,000.
Brown is currently serving a 30-year sentence after having been convicted of murder in 2009 in the District of Minnesota.
This case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Neeraj N. Patel and Special Assistant United States Attorney Anjna R. Kapoor.

Eugene Woman Pleads Guilty to Selling More Than 5,000 Illegally Obtained Sprint Cell Phones Through the Internet

EUGENE, OR—On January 8, 2013, Tamara Diane Brown, 41, of Eugene, Oregon, entered a guilty plea in U.S. District Court in Eugene, admitting her involvement in a scheme to sell illegally obtained cell phones through the Internet.
In court papers, Brown admitted that while working as an employee of The Pape Group Inc. in Eugene, she used her corporate authority to order large quantities of Sprint cell phones, which she then diverted and had delivered to her home and the home of her friend. Brown then sold the devices on eBay. The scheme to defraud The Pape Group Inc. and Sprint took place between February 2010 and October 2011. Brown admitted that during the scheme, she improperly ordered 5,107 cell phones and obtained more than $305,000 from selling them. Brown admitted that she deposited the profits into her personal bank account and spent the proceeds by making a down payment on a residence, for vehicles, and for other expenses. The Pape Group Inc. and Sprint were unaware of the fraud during the time it was occurring.
Brown pleaded guilty to one count of mail fraud, which is a felony punishable by up to 20 years in prison. Brown also agreed to pay restitution and forfeit all of the money she made from her scheme.
Chief U.S. District Judge Ann Aiken presided over the case and will sentence Brown on March 20, 2013. The case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Chris Cardani.

Promoter of Cincinnati Grand Prix Pleads Guilty to Fraud, Money Laundering

CINCINNATI—Curtis Boggs, 54, formerly of Harrison, Ohio, pleaded guilty in U.S. District Court to wire fraud and money laundering in connection with a scheme he promoted to bring a Grand Prix race to Cincinnati in 2009.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI); and Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), announced the pleas entered today before Senior U.S. District Court Judge Susan J. Dlott.
According to court documents, Boggs was employed by an insurance company as a financial advisor in the Southern District of Ohio from 2000 to 2009. Beginning in approximately October 2008 and continuing through approximately August 2009, Boggs solicited his customers and others to invest in silver and gold, or in a grand prix race, through a corporation called Cincinnati Grand Prix (“CGP”). Today, Boggs admitted that, during that period, he fraudulently obtained investments of at least $352,745 for CGP in exchange for shares in the “stock” of CGP.
Boggs devised and intended to devise a scheme and artifice to defraud through fraudulent pretenses, representations, and promises. Specifically, he fraudulently obtained investment funds from individuals wherein the funds were not invested as represented and were diverted in part for his personal benefit. On or about October 27, 2008, in furtherance of his scheme, Boggs wired proceeds of a check from an investor to his personal account to pay property taxes on his house and pay down his personal mortgage debt. On or about October 21, 2008, Boggs laundered money derived from the fraud scheme by using $27,232.63 to buy a Lincoln MKX vehicle for his personal use.
A federal grand jury indicted Boggs in June. He was arrested on October 8, 2012, when he was stopped trying to enter the U.S. from Mexico.
The plea agreement calls for Boggs to serve a sentence of 27 months in prison, pay $352,745.21 in restitution, and forfeit any assets that he received as proceeds of the crimes. The court will conduct a presentence investigation before deciding whether or not to accept the terms of the plea agreement and schedule a date for sentencing.
Stewart commended the cooperative investigation by FBI and IRS agents, as well as Assistant U.S. Attorney Tim Mangan, who is prosecuting the case.