Mortgage Broker Pleads Guilty to $100 Million Loan Origination Fraud

United States Attorney Laura E. Duffy and Federal Housing Finance Agency Inspector General Steve A. Linick announced today that Mary Armstrong, an unlicensed mortgage broker who operated a nationwide loan origination fraud and kickback scheme from San Diego, pled guilty today before United States District Judge John A. Houston to all five counts of an indictment charging her with wire fraud, money laundering, and conspiracy. Armstrong was indicted on May 10, 2012, and apprehended in Las Vegas, Nevada, in July 2012; she has been held in custody since her arrest.
As part of today’s guilty plea, Armstrong admitted that she defrauded mortgage lenders by arranging for the sale of $100 million worth of real estate at inflated prices and then siphoned the overpayments to bank accounts she controlled. She created false loan applications on behalf of straw buyers and then arranged for her co-conspirators to create fake documents in support of those applications, including W-2 forms, paystubs, bank statements, and other records. According to Armstrong’s accountant and tax preparer, Audrey Yeboah, who pled guilty in October 2012 to participating in the same scheme, Armstrong collected over $14.5 million in kickbacks from the fraudulently obtained mortgage loans.
Armstrong joins defendants Teresa Rose, a Ramona real estate agent; Seattle businessman Justin Mensen; and Yeboah, each of whom has pled guilty to participating in the scheme. These defendants admitted that they carried out their scheme by recruiting investors through the Internet and advertisements in The LA Times and offering them the opportunity to purchase homes located in Southern California, Washington state, and elsewhere. In reality, these so-called investors were nothing more than straw buyers who were promised $10,000 for each property purchased as part of the scheme. The defendants were able to secure mortgages for the properties by falsifying loan applications for the straw buyers, falsely claiming exorbitant income from fake employers and using fake W-2s and paystubs to support the claims. The defendants submitted these fraudulent loan applications to mortgage lenders to obtain 100 percent financing and thus avoided having to make any down payment on the properties.
According to the defendants’ plea agreements, they profited on these fraudulently acquired mortgage loans by inflating the purchase price of the properties by $100,000 (or more) and having the straw borrowers kick-back to them the illicit proceeds. Although the conspirators claimed to lenders that the extra money would be used for construction improvements; in fact, the conspirators funneled the money to sham construction companies that they controlled, thereby concealing their kickbacks.
Armstrong admitted that after the conspirators collected the overpayments, the strawbuyers defaulted on the mortgage loans, resulting in mortgage lenders and secondary purchasers, including Fannie Mae and Freddie Mac, suffering losses of up to $20 million.
Two additional defendants charged as part of the scheme, John Allen and William Fountain, are scheduled to begin trial on November 5, 2013.
The public is reminded that an indictment is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
United States Attorney Duffy commented, “Armstrong’s fraudulent conspiracy endangered not only the particular lenders ensnared in her scheme, but every American who subsequently suffered from the destabilization of the housing and financial sectors. And the country’s taxpayers were ultimately left holding the bag when forced to bail out Fannie Mae and Freddie Mac. Today’s guilty plea is another important step in this office’s aggressive prosecution of such financial frauds and the vindication of all Americans who have suffered in the recent financial crisis.”
FBI Special Agent in Charge Daphne Hearn commented, “Mortgage fraud losses cost taxpayers billions of dollars every year and is a threat to our national economy. The FBI will continue to dedicate substantial amount of expert resources to investigate these crimes.”
United States Attorney Duffy reminded the community that anyone with information relating to these charges should contact the San Diego branch of the Federal Bureau of Investigation at (858) 565-1255 or the Federal Housing Finance Agency-Office of Inspector General hotline at (800) 793-7724.
A sentencing hearing is scheduled for Armstrong before Judge Houston on August 12, 2013, at 8:30 a.m.
Defendants in Criminal Case No. 12CR1848-JAH
Mary Armstrong
Teresa Rose
William Fountain
John Allen
Summary of Charges
Count one: Title 18, U.S.C., Section 371-conspiracy to commit wire fraud and to launder money
Maximum penalty: five years’ custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Count two (all defendants): Title 18, U.S.C., Section 1343-wire fraud
Maximum penalty: 20 years’ custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Counts three through five (Mary Armstrong): Title 18, U.S.C., Section 1956 (a)(1)(B)(I)-money laundering
Maximum penalty: 15 years’ custody, a maximum fine of $500,000 or twice the value of the property involved in the transaction, and $100 special assessment (Mary Armstrong).
Defendant in Criminal Case No. 12CR1458-JAH
Justin Mensen
Summary of Charges
Title 18, U.S.C., Section 371-conspiracy to commit wire fraud and to launder money
Maximum penalty: five years’ custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Defendant in Criminal Case No. 12CR4322-JAH
Audrey Yeboah
Summary of Charges
Title 18, U.S.C., Section 1343-wire fraud
Maximum penalty: 20 years custody, a maximum fine of $250,000 or twice the gain derived from or loss caused by the offense, and $100 special assessment.
Investigating AgenciesFederal Bureau of Investigation
Federal Housing Finance Agency-Office of Inspector General

Former Executive Director of Indian Human Resource Center Indicted for Embezzling Non-Profit’s Money

SAN DIEGO, CA—United States Attorney Laura E. Duffy announced that David Hedley, a former executive director of the Indian Human Resource Center (IHRC), was arraigned yesterday on an indictment charging him with eight felony counts of theft from the San Diego-based non-profit that received federal funds. The defendant was arrested by Federal Bureau of Investigation (FBI) agents on April 25, 2013, in Riverside, California.
According to the indictment, Hedley served as the executive director of IHRC between approximately September 10 and December 11, 2012. During that time, Hedley is believed to have stolen approximately $140,000 from the non-profit.
According to information disclosed at Hedley’s arraignment, on numerous days when Hedley was improperly withdrawing money from IHRC’s bank account, he was spending comparable sums gambling at a local Indian casino. For example, on October 9, 2012, Hedley withdrew $15,000 in cash from the IHRC bank account at the North Island Credit Union (NICU) located in La Mesa, California. On that same day, Hedley purchased $15,000 worth of chips, tokens, or gaming instruments at the Viejas Casino. Similarly, on the October 12, 2012, Hedley improperly withdrew $20,000 in cash from IHRC’s bank account at the NICU branch in Imperial Beach, California, and purchased over $20,000 in chips, tokens, or gaming instruments the same day from Pala Casino.
The IHRC was established to train and assist Native Americans with finding employment outside the tribal setting and was awarded over a half million dollars in federal funding from the U.S. Department of Labor over the past two years as part of the Workforce Investment Act (WIA). The Workforce Investment Act of 1998 established a national workforce preparation and employment system to meet the needs of persons seeking employment, including new entrants to the workforce, in order to increase the employment, job retention, earnings, and occupational skills of participants; improve the quality of the workforce, reduce welfare dependency; and improve the productivity and competitiveness of the United States.
United States Attorney Laura E. Duffy commented, “The taxpayer resources provided to IHRC were intended to help create jobs by assisting the Native American community. I commend the FBI for its investigative work leading to these charges.”
FBI Special Agent in Charge Daphne Hearn commented, “At the most basic level, this case is about one individual’s greed and the abuse of trust. The FBI will hold those accountable who line their own pockets at the expense of the American taxpayer.”
Hedley was arraigned on the indictment in the Central District of California before Magistrate Judge David Bristow; Hedley pleaded not guilty. Magistrate Judge Bristow set bail at $100,000 and ordered the defendant to appear in the Southern District of California on May 9, 2013.
The public is reminded that an indictment is not evidence that the defendant committed the crime charged. The defendant is presumed innocent until the United States meets its burden in court of proving guilt beyond a reasonable doubt.
Defendant in Criminal Case No. 13CR1129-WQH
David M. Hedley
Age: 38
San Diego
Summary of Charges
Counts 1-8: Title 18, United States Code, Section 666(a)(1)(A)-theft from program receiving federal funds forfeiture: Title 18, United States Code, Sections 981(a)(1)(C) and Title 28, United States Code, Section 2461(c)
Investigating Agencies
Federal Bureau of Investigation
California Department of Justice, Bureau of Gambling Control

Former Town Creek Police Officer Pleads Guilty to Assaulting an Arrestee

WASHINGTON—Brandon Shane Mundy, a former police officer of numerous law enforcement agencies, the most recent being the Town Creek, Alabama Police Department, pleaded guilty today to violating the civil rights of a man during the course of an arrest. According to information presented to the court, on November 22, 2009, Mundy was involved in a vehicle pursuit and fired shots at a man’s vehicle before later ramming it and causing it to wreck in a ditch. While another police officer reached the man and placed him under arrest without resistance, Mundy ran up and unjustifiably and repeatedly beat the man in the head with an object that was either a baton or a flashlight causing the man to suffer physical injury. After Mundy lost control of the object, Mundy continued to strike the man in the head with his fist.
“The use of excessive force cannot be tolerated,” said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division. “The vast majority of police officers do an outstanding job in protecting both the community and the rights of the accused, even in stressful situations. But when police officers use excessive force to punish arrestees, they will be held accountable.”
“Police officers who abuse their power in order to assault citizens undermine the system of constitutional government they are sworn to uphold,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama. “As the plea in this case shows, my office will work closely with the Justice Department’s Civil Rights Division to aggressively enforce the laws that prohibit police misconduct.”
Mundy faces a statutory maximum sentence of 10 years in prison. A sentencing date has not yet been set.
This case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney Elizabeth Holt of the Northern District of Alabama and Civil Rights Division Trial Attorney Daniel H. Weiss.

Birmingham Man Sentenced to 20 Years in Prison for Ensley Pharmacy Armed Robbery

BIRMINGHAM—A federal judge today sentenced a Birmingham man to 20 years and one month in prison for a 2011 armed robbery of an Ensley pharmacy, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein, Jr.
U.S. District Judge Abdul K. Kallon sentenced Willie Edwards, 39, for robbing Moore’s Pharmacy on Ensley Avenue in Birmingham on July 30, 2011, and brandishing a gun during the robbery. Edwards pleaded guilty in January to the armed robbery involving controlled substances charge and to the charge of brandishing a gun during a crime of violence. The brandishing charge carries a mandatory seven-year prison sentence that must be served consecutively to any other sentence imposed for the crime.
“This defendant and the co-defendants in this case all endangered innocent people in their violent quest to steal one of the most commonly abused prescription substances in our communities—hydrocodone,” Vance said. This type of violent criminal must be taken off the streets.”
Edwards was charged in the armed robbery along with Anthony Young, 21, of Hueytown. Young’s case has been continued.
According to court documents, Edwards entered Moore’s Pharmacy with the other robber and ordered employees to lie down on the floor after a gun was brandished. Edwards and his accomplice took pills and cough syrup containing hydrocodone, a narcotic pain killer.
Edwards and Young were indicted in November, along with Edwards’ cousin, Sterling Edwards, 20, also of Birmingham. Sterling Edwards pleaded guilty in February to the October 13, 2011 armed robbery of Campbell’s Pharmacy in Adamsville and the March 13, 2012 armed robbery of Helena Hometown Pharmacy in Helena. Controlled substances were taken and guns were used in both robberies. Sterling Edwards pleaded guilty to brandishing a gun in the Helena robbery.
Sterling Edwards is scheduled for sentencing May 30.
The FBI and Birmingham Police Department investigated the case. Assistant U.S. Attorney Joseph P. Montminy and Robin B. Mark are prosecuting the case.

Maylene Man Sentenced to 14 Years in Prison for Two Suburban Bank Robberies

BIRMINGHAM—A federal judge today sentenced a Maylene man to 14 years in prison for two 2012 bank robberies in suburban Birmingham cities, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein.
U.S. District Judge R. David Proctor sentenced Tony Joe White, 42, for the August 22 robbery of a Wells Fargo bank in Homewood and the August 23 robbery of a Regions Bank in Mountain Brook. White pleaded guilty to both bank robberies in January.
According to court records, White walked into the Wells Fargo Bank, approached a teller, demanded money, and then reached over the counter and grabbed about $600 before fleeing the bank and leaving in a waiting car driven by another man. The next morning, White entered the Regions Bank, presented a note demanding money, and took about $1,500. He left the Mountain Brook bank on a bicycle and was arrested a few minutes later.
The FBI, in conjunction with the Homewood and Mountain Brook Police Departments, investigated the case, which Assistant U.S. Attorney Joseph P. Montminy prosecuted.

FBI Arrests Century City Man for Allegedly Running Ponzi Scheme and Bilking Additional Victim After Being Sued by SEC

LOS ANGELES—A Century City man was arrested this morning by FBI special agents after he was charged with running a Ponzi scheme and then bilking another victim out of millions of dollars that he used to pay back earlier victims after the SEC took him to court.
Shervin Neman, whose given name is Shervin Davatgarzadeh, 31, was arrested without incident this morning at his residence. Neman was arrested pursuant to a three-count fraud indictment that alleges he caused victims to suffer losses of more than $3 million.
The indictment alleges that Neman claimed to be a successful investor who made significant profits, but he in fact operated a Ponzi scheme from the summer of 2010 through last June by soliciting funds from investors with false claims that their money would be used to purchase foreclosed real estate and stocks, including pre-initial public offering shares. Instead of using investor funds to make these investments, the indictment alleges that Neman was spending most of the victims’ investment funds on personal expenditures and to repay other victims.
The Securities and Exchange Commission filed a civil complaint against Neman and his company, the Century City-based Neman Financial Inc., on April 11, 2012, in United States District Court in Los Angeles. The lawsuit alleged that Neman was operating a multi-million-dollar Ponzi scheme that was targeting primarily members of the Persian-Jewish community in Los Angeles. Subsequently, a federal judge issued orders prohibiting Neman from committing securities fraud (see, for example: https://www.sec.gov/litigation/litreleases/2012/lr22331.htm).
The month after the SEC filed its lawsuit, Neman solicited $2 million from another victim with false promises that Neman could obtain pre-IPO shares in Facebook, according to the indictment. Neman allegedly used the funds obtained from the new victim to pay, among other things, most of his earlier victims and the law firm representing him in the SEC action. Neman then had victims who had been “paid back” write e-mails saying that Neman did not owe them money, according to the indictment, which goes on to say that Neman used these e-mails as part of his defense in the SEC case. In June 2012, Neman sent to the later victim a $2,235,800 check that purported to be the return on the Facebook investment, but that check bounced, according to the indictment.
Neman was charged in an indictment returned under seal Wednesday by a federal grand. That indictment, which was unsealed this morning after Neman’s arrest, charges him with two counts of wire fraud and one count of mail fraud.
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.
The three fraud charges in the indictment each carry a statutory maximum sentence of 20 years in federal prison.
Neman is expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.
This case is the result of an investigation by the Federal Bureau of Investigation.

Coto de Caza Man Indicted for Operating Investment Schemes That Targeted Physicians and Dentists

SANTA ANA—An Orange County man has been indicted by a federal grand jury on charges alleging he defrauded dozens of victims in separate schemes that promised large returns on investments in the medical field, announced Bill Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office, and André Birotte, Jr., the United States Attorney in Los Angeles.
David Rose, 56, of Coto de Caza, was charged in an indictment filed Wednesday afternoon in United States District Court in Santa Ana with multiple counts of mail and wire fraud. The indictment outlines two schemes Rose allegedly operated beginning in or about March 2005 to the present. During this time, Rose owned and operated companies in Irvine, California, including M.D. Venture Partners LP (MDVP) and Technology Innovation Partners LP (TIP).
The indictment alleges that beginning in at least March 2005 and continuing through May 2011, Rose solicited physicians to invest in MDVP and falsely represented lucrative investment opportunities in emerging medical technologies. The defendant is alleged to have prepared a “private placement memorandum” that described MDVP and set forth how investor funds would be used. The agreement stated that a 2.5 percent management fee would be paid to the defendant.
In promotional materials and in conversations and e-mails with prospective investors, the defendant claimed that investor money would be pooled and used to invest in companies developing new medical technology, according to the indictment.
In fact, investor funds were not used in the manner set forth in the memorandum signed by investors; instead, the defendant used investor funds for personal expenses, including $7,500 a month to rent a house in Coto de Caza; tuition and other college fees for his children; $65,000 for vehicles used by himself and his family; jewelry; attorney fees; and other expenses. The investigation revealed that no money was ever invested in companies developing new medical technology. In the MDVP scheme, the defendant caused approximately 32 victims to lose more than $800,000, according to the indictment. The indictment further alleges that in a subsequent scheme, the defendant solicited dentists and orthodontists to invest money in TIP, claiming the money would be pooled and invested in a company developing ablation technology for the removal of wisdom teeth in children without surgery. The indictment alleges the defendant prepared a private offering memorandum describing TIP and how investor funds would be used. The agreement stated that a 10 percent management fee would be paid to the defendant. The investigation revealed that victim funds were not used for investments but, instead, for the defendant’s personal expenses, including $5,000 a month to rent a house in Coto de Caza; tuition and other college fees for his children; $80,000 for a Sea Ray boat; $40,000 for a GMC Acadia; a stock offering in the Green Bay Packers; and other personal expenses. No money was ever invested in a company developing ablation technology. The indictment alleges that the defendant caused approximately 45 victims to lose more than $1 million in the TIP scheme.
On Monday, FBI agents executed warrants and seized multiple bank accounts, vehicles, and the above-mentioned boat purchased by Rose with the proceeds of the alleged schemes.
A federal warrant for Rose’s arrest is outstanding.
This case is a continuing investigation by the FBI. Rose is being prosecuted by the United States Attorney’s Office in Orange County.
Media Contact
FBI Media Relations: 310 996-3343
United States Attorney’s Office: 213 894-6947

Member of LulzSec Hacking Group Sentenced to More Than One Year in Federal Prison for 2011 Intrusion into Sony Pictures Computer Systems

LOS ANGELES—A member of the LulzSec hacking group was sentenced today to one year and one day in federal prison for his conviction on federal computer hacking charges related to an extensive computer attack that compromised the computer systems of Sony Pictures Entertainment.
Cody Andrew Kretsinger, who used the online moniker “recursion,” 25, who formerly lived in Phoenix, Arizona, and currently resides in Decatur, Illinois, was sentenced this morning by United States District Judge John A. Kronstadt.
In addition to the prison term, Judge Kronstadt ordered Kretsinger to serve one year of home detention following the completion of his prison sentence, to perform 1,000 hours of community service, and to pay $605,663 in restitution.
Kretsinger pleaded guilty in April 2012 to conspiracy and the unauthorized impairment of a protected computer. According to court documents, during a one-week period in late May and early June 2011, the computer systems of Sony Pictures were compromised by a computer hacking group known as “LulzSec” or “Lulz Security,” whose members anonymously took responsibility for the attack.
Kretsinger and others involved in the intrusion obtained confidential information from Sony Pictures’ computer systems by using an SQL injection attack against Sony Pictures’ website. Kretsinger and the other attackers distributed the stolen data on the Internet, information that included names, addresses, phone numbers, and e-mail addresses for tens of thousands of Sony customers.
LulzSec is known for its affiliation with the international group of hackers known as “Anonymous,” which is a loose collective of computer hackers and others around the world who conduct cyber attacks and disseminate confidential information stolen from victims’ computers.
Another member of LulzSec, Raynaldo Rivera, known by the online moniker “neuron,” of Chandler, Arizona, 20, pleaded guilty last October to conspiracy charges in connection with his participation in the Sony Pictures attack. Rivera is currently scheduled to be sentenced by Judge Kronstadt on May 16.
This investigation into the attack on Sony Pictures’ computer systems was conducted by the Electronic Crimes Task Force (ECTF) in Los Angeles. The ECTF is composed of agents and officers from the FBI, the United States Secret Service, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the United States Attorney’s Office, the Los Angeles County District Attorney’s Office, and the California Highway Patrol.

Dallas-Area Lawyer Pleads Guilty to Felony Offense of Covering up Bank Fraud

DALLAS—Jerry Goh, 50, a resident of Allen, Texas, appeared in federal court this morning before U.S. Magistrate Judge Irma C. Ramirez and pleaded guilty to a superseding information charging him with one count of misprision of a felony, stemming from his involvement in a loan fraud scheme in 2007. Goh, a lawyer with offices in the Dallas-Fort Worth metroplex, faces a maximum statutory penalty of three years in federal prison, a $250,000 fine, and restitution. Sentencing is set for August 12, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
Two defendants also charged in the case, Plano, Texas residents Vathany Theng and Lina Ma, have pleaded guilty to their roles in the fraud and are awaiting sentencing. According to documents filed in the case, Goh, acting in his capacity as the escrow officer on the loan, and thus with control of the loan proceeds, concealed from the lender, Prosper Bank, the fraudulent release of $498,720 of loan proceeds to provide funds for a $431,000 down payment. Goh wired $498,720 of lender Prosper Bank’s funds from an escrow account, knowing that these seller proceeds funds would later be used as the source of borrower Lina Ma’s down payment on her loan from Prosper Bank.
This case was prosecuted in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
The case was investigated by the U.S. Small Business Administration-Office of the Inspector General and the FBI. Assistant U.S. Attorney David L. Jarvis is in charge of the prosecution.

Lubbock Man Charged in Federal Complaint with Robbing Credit Union

LUBBOCK, TX—Jeffrey Hensley, 42, of Lubbock, Texas, was arrested and charged in a federal criminal complaint with robbing the Alliance Federal Credit Union in Lubbock. Hensley is set for an initial appearance tomorrow morning in Amarillo, Texas, before United States Magistrate Judge Clinton Averitte. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.
According to the complaint filed, on September 14, 2012, Hensley entered the First United Bank in Lubbock and presented a note to the teller that stated, “Don’t make me show my weapon.” The teller gave the money to Hensley, who put the money in a black bank bag, and he exited the bank.
On December 8, 2012, Hensley entered the Plains Capital Bank in Lubbock and walked up to the teller carrying a dark-colored bank bag. He handed the teller a note that stated, “Fill the bag with all the money in the drawer—if I have to show my weapon I will use it—you have 15 seconds.” The teller handed Hensley a stack of bills, and he took the cash and exited the bank.
On February 13, 2013, Hensley entered the Alliance Federal Credit Union in Lubbock, walked up to the teller, and handed the teller a note and a pink-colored, small cosmetic bag. The teller handed the bills to Hensley, and he exited the bank. He was observed by a witness driving out of the bank parking lot in a small to mid-sized white sport utility vehicle.
On February 14, 2013, law enforcement authorities received a tip that an individual matching the description of the bank robber was named Jeff and that he lived in an apartment at 1907 66th Street in Lubbock and drove a white sport utility vehicle. Another tip was received on March 6, 2013, from an individual that stated the bank robbery suspect was named Jeffrey and that he drove a white, four-door older model Toyota 4-Runner and lived in a house at 8608 Avenue X. A subsequent investigation revealed that Hensley resided in an apartment at 1907 66th Street before moving to 8608 Avenue X. On April 22, 2013, a federal search warrant was executed at Hensley’s residence, and he was arrested. Afterwards, according to the complaint, Hensley admitted to robbing the three banks in Lubbock.
A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. If convicted of this offense, however, Hensley faces a maximum statutory penalty of not more than 20 years in federal prison and a $250,000 fine. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment.
This case is being investigated by the Federal Bureau of Investigation, the Texas Department of Public Safety, the Lubbock Police Department, and the Lubbock County Sheriff’s Office. Assistant U.S. Attorney Jeffrey Haag, of the U.S. Attorney’s Office in Lubbock, Texas, is in charge of the prosecution.

FBI Dallas Division Hosts Executive Law Enforcement Training and Related Exercise

In January 2013, the Investigative Assistance for Violent Crimes Act of 2012 was signed into law. This law grants federal law enforcement agencies the authority to assist in responding to violent acts and shootings in public places and in mass or attempted mass killings. Furthermore, Executive Order 3365-2013 assigned responsibility to the Department of Justice, Department of Homeland Security, and Department of Education to lead law enforcement training and develop model emergency management plans (EMPs) for schools, institutions of higher learning, and houses of worship. As a result of violent shooting incidents in Aurora, Colorado, and Newtown, Connecticut, the White House enacted a new initiative that called for the FBI to implement training to law enforcement agencies nationwide.
On April 17-18, 2013, the FBI Dallas Division hosted its first conference that focused on active shooter situations and conducted the public safety tabletop exercise developed under this initiative. The exercise was designed to increase the collaboration and coordination among the area’s local, state, and federal law enforcement partners in the planning and preparation for responding to an active shooter incident. This event was attended by 41 local, state, and federal law enforcement agencies, fire departments, and other emergency/public safety agencies from the Dallas/Fort Worth metroplex.
“We have incredible law enforcement and public safety leadership in the Dallas/Fort Worth area,” stated FBI Dallas Division Special Agent in Charge Diego Rodriguez. “By working and training together, we can support and leverage all available assets and capabilities to more effectively respond to and resolve a critical event such as an active shooter incident. The goal is to work together as a team to save lives.”

White Center Bank Robber Sentenced to More Than Eight Years in Prison

A 31-year-old man who robbed a Chase Bank branch in the White Center neighborhood of southwest Seattle at gunpoint last year was sentenced today in U.S. District Court in Seattle to 102 months (eight-and-a-half years) in prison and three years of supervised release, announced U.S. Attorney Jenny A. Durkan. Bryan Allen Hill, was convicted of armed bank robbery and brandishing a firearm during a crime of violence following a jury trial in January 2013. Hill was arrested a few blocks from the bank on July 25, 2012, with the gun and cash that had been taken in the robbery. At sentencing U.S. District Judge Ricardo S. Martinez said this is “a very, very serious offense...basically terrorizing the individuals in the bank.”
According to records filed in the case and testimony at trial, Hill entered the bank with a blue bandana pulled over his face. He pointed a handgun at the teller’s head and ordered the teller to put all the cash in the bag. While stuffing money into his bag, the bandana fell off Hill’s face, and the teller was able to see his face. Other workers in the bank were able to alert law enforcement, and one wrote down a description of the robber. Within minutes of the robber leaving the bank, Seattle Police had a description and were searching the area around the bank for the suspect.
A Seattle Police officer spotted someone who was similar in appearance to the suspected robber walking quickly from the area. The officer ordered the man to stop and kneel on the ground. Witnesses from the bank were brought to the scene and identified the man, Hill, as the bank robber. When police searched the bag he was carrying they found the gun, cash, and some of the clothing Hill had removed following the bank robbery.
Hill was prosecuted as part of the Project Safe Neighborhoods program. Unveiled in May 2001, Project Safe Neighborhoods (PSN) is a comprehensive and strategic approach to gun law enforcement. PSN is a nationwide commitment to reduce gun crime in America by networking both new and existing local programs that target gun crime and then providing them with the resources and tools they need to succeed. Implementation at the local level—in this case, in King County— has fostered close partnerships between federal, state, and local prosecutors and law enforcement.
The case was investigated by the Seattle Police Department, the King County Sheriff’s Office, and the FBI. The case was prosecuted by Special Assistant United States Attorney Stephen Hobbs and Assistant United States Attorney Ehren Reynolds. Mr. Hobbs is a Senior King County Deputy Prosecutor specially designated to prosecute gun cases in federal court.

Federal Grand Jury Returns Indictments

MADISON, WI—A federal grand jury in the Western District of Wisconsin, sitting in Madison, returned the following indictments today. A charge is merely an accusation, and a defendant is presumed innocent until and unless proven guilty.
Delavan Man Charged with Nine Pharmacy Robberies
Tony D. Taylor, 35, Delavan, Wisconsin, is charged with nine pharmacy robberies. The indictment alleges that at each robbery he took a quantity of oxycodone. The date and location of the robberies are:
1. January 10, 2013—Walgreens Pharmacy, 2931 South Fish Hatchery Road, Madison, Wisconsin
2. January 15, 2013—Walgreens Pharmacy, 401 West Main Street, Waunakee, Wisconsin
3. January 23, 2013—Walgreens Pharmacy, 7810 Mineral Point Road, Madison
4. January 28, 2013—Walgreens Pharmacy, 5300 Monona Drive, Monona, Wisconsin
5. February 6, 2013—Walgreens Pharmacy, 2121 South Park Street, Madison
6. February 22, 2013—Walgreens Pharmacy, 8203 Old Sauk Road, Madison
7. March 19, 2013—Hometown Pharmacy, 202 South Main Street, Verona, Wisconsin
8. March 25, 2013—Mallatt’s Pharmacy, 3506 Monroe Street, Madison
9. March 29, 2013—McFarland Pharmacy, 4880 Larson Beach Road, McFarland, Wisconsin
If convicted, Taylor faces a maximum penalty of 20 years in federal prison on each count. The charges against him are the result of an investigation by the Federal Bureau of Investigation and the DeForest, Waunakee, Monona, Madison, Verona, McFarland, Janesville, and Beloit Police Departments. The prosecution of this case has been assigned to Assistant U.S. Attorney Rita M. Rumbelow.
Wisconsin Rapids Woman Charged with Threatening Judge
Norma Prince, 51, Wisconsin Rapids, Wisconsin, is charged with threatening to murder a U.S. administrative law judge. The indictment alleges that she made the threat on January 31, 2013.
If convicted, Prince faces a maximum penalty of 10 years in federal prison. The charge against her is the result of an investigation by the Department of Homeland Security, Federal Protective Service. The prosecution of this case has been assigned to Assistant U.S. Attorney David J. Reinhard.
New Lisbon Man Charged with Filing False Tax Returns
John Glavin, 43, New Lisbon, Wisconsin, is charged with two counts of filing false income tax returns. The indictment alleges that he filed a 2005 tax return claiming an income tax refund of $255,958 and a 2008 tax return claiming an income tax refund of $700,704, knowing such claims were false.
If convicted, Glavin faces a maximum penalty of five years in federal prison on each count. The charges against him are the result of an investigation by IRS Criminal Investigation. The prosecution of this case has been assigned to Assistant U.S. Attorney Daniel J. Graber.
Beloit Man Charged with Gun Crime
Robert C. Jackson, 25, Beloit, Wisconsin, is charged with being a felon in possession of firearms. The indictment alleges that on January 25, 2013, he possessed a shotgun, two handguns, and a rifle.
If convicted, Jackson faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by the Rock County Safe Streets Task Force. The prosecution of this case has been assigned to Assistant U.S. Attorney Paul W. Connell.
La Crosse Man Charged with Drug Crimes
Eugene E. Shields, 32, La Crosse, Wisconsin, is charged with three counts of distributing heroin and cocaine and one count of possessing heroin and crack cocaine with intent to distribute. The indictment alleges that he distributed heroin and cocaine on April 5, 6, and 8, 2013, and that he possessed heroin and crack cocaine on April 8, 2013.
If convicted, Shields faces a maximum penalty of 20 years in federal prison on each of the distribution counts and a mandatory minimum penalty of five years and a maximum penalty of 40 years on the possession with intent to distribute count. The charges against him are the result of an investigation by the La Crosse Police Department and Federal Bureau of Investigation. The prosecution of this case has been assigned to Assistant U.S. Attorney Paul W. Connell.
Madison Man Charged with Gun Crime
Rayshawn Jackson, 19, Madison, Wisconsin, is charged with possessing a firearm while being an unlawful user of marijuana. The indictment alleges that on March 31, 2013, he possessed a handgun.
If convicted, Jackson faces a maximum penalty of 10 years in federal prison. The charge against him is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and Madison Police Department. The prosecution of this case has been assigned to Assistant U.S. Attorney Rita M. Rumbelow.

Minnesota Woman Sentenced for Bank Robbery

MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Tanya Kay Anderson, 39, of Staunchfield, Minnesota, was sentenced today by U.S. District Judge Barbara B. Crabb to 46 months in federal prison for bank robbery. Anderson pleaded guilty to this charge on February 5, 2013.
On September 7, 2012, Tanya Kay Anderson robbed the Eagle Valley Bank in St. Croix Falls, Wisconsin. Anderson drove from Staunchfield to St. Croix Falls and entered the Eagle Valley Bank wearing heavy makeup, dark glasses, a hat, and a brightly colored construction vest. She handed a note to the teller that said, “This is a robbery. I have a gun. Put large untraceable bills on counter, do it now or die.”
Anderson left the bank and drove away but was promptly stopped by police. Anderson was not armed but was found with the stolen money and the robbery note.
The charge against Anderson was the result of an investigation by the Polk County Sheriff’s Department, St. Croix Falls Police Department, and Federal Bureau of Investigation. The prosecution of this case has been handled by Assistant U.S. Attorney Kevin F. Burke.

Catonsville Real Estate Appraiser Sentenced to Prison in Scheme to Obtain More Than $4 Million in Fraudulent Mortgage Loans

BALTIMORE—U.S. District Judge James K. Bredar sentenced real estate appraiser David C. Christian, age 63, of Catonsville, Maryland today, to 15 months in prison, followed by three years of supervised release, for conspiracy to commit wire fraud. Judge Bredar also ordered Christian to pay restitution of $2,440,804.
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; Inspector General Steve A. Linick of the Federal Housing Finance Agency; and Postal Inspector in Charge Gary R. Barksdale of the U.S. Postal Inspection Service-Washington Division.
According to his guilty plea, Christian appraised a number of properties on behalf of purchasers who were seeking financing through Worthington Mortgage Group LLC, a mortgage brokerage company controlled by Joshua Goldberg, operating out of an office on Gough Street in Baltimore. Christian admitted that from April 2004 to April 2008, at Goldberg’s request, he prepared at least 16 fraudulent appraisals for $4,001,950 in loans originated at the mortgage company. Christian falsified the appraisals by using fake photos and descriptions of the properties, misrepresenting the condition of the properties, and used inappropriate comparable properties. The total loss for the 16 loans amounted to $2,440,804, including $814,730, to the Federal Home Loan Mortgage Corporation (Freddie Mac) and $757,293 to the Federal National Mortgage Association (Fannie Mae). Fannie Mae and Freddie Mac are government sponsored federally chartered corporations that either buy mortgages on the secondary market for their own accounts or arrange to pool the mortgages and sell them as mortgage backed securities to investors on the open market.
In March and June 2007, Christian used Goldberg as the mortgage broker to refinance property that he and his wife owned in Catonsville. Christian submitted false appraisals that inflated the property value and caused another appraiser to sign the documents to avoid the obvious conflict of performing an appraisal on his own property. With Christian’s knowledge, Goldberg processed the loan in Christian’s wife’s name, falsifying her income and employment, as well as the balance in the couple’s bank account and misrepresented other information. The loans were funded by another mortgage company, and Christian and his wife eventually defaulted on the loan, resulting in a loss of nearly $140,000.
Joshua S. Goldberg was indicted on related charges earlier this year. He is believed to be a fugitive.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the task force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage-Fraud/index.html.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. 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.
United States Attorney Rod J. Rosenstein commended the FBI, Federal Housing Finance Agency-Office of Inspector General, and U.S. Postal Inspection Service. Mr. Rosenstein thanked Assistant U.S. Attorney Gregory R. Bockin, who prosecuted the case.

Richard P. Molenaar Charged with Conspiracy to Commit Bribery

Richard P. Molenaar, III, 47, a resident of Las Cruces, New Mexico, was charged today in a one-count bill of information with conspiracy to commit bribery, announced U.S. Attorney Dana J. Boente.
According to court records, Molenaar was the owner of several maintenance/construction companies, including Ricky’s A/C Inc., Landmark Mechanical Contractors LLC, and Custom Carpentry Renovations LLC. From in or around 2008 through in or around 2011, Molenaar used these companies to bid on maintenance jobs at the Orleans Parish Sheriff’s Office (OPSO). Molenaar’s primary point of contact at the OPSO was its former director of purchasing, John Sens. According to the bill of information, Molenaar, among others, including Sens, engaged in a rigged bidding process for various OPSO maintenance jobs. In particular, from 2007 through 2011, Molenaar, among others, would submit bids for OPSO work in the names of his respective companies but, with the knowledge and participation of, among others, Sens, he would also submit phony or fake bids for these same projects in the names of other local companies, in an effort to give the appearance of a competitive bidding process. In many cases, the phony bids would intentionally be higher than the bids from Molenaar and, consequently, Sens would award the work to Molenaar.
In exchange for this rigged bidding process, according to court documents, Molenaar provided Sens with various things of value. For example, from 2007 through 2011, Molenaar provided approximately $30,000 in cash to Sens, as well as the digging and installation of a pool at a residence owned by Sens, at no cost to him.
If convicted, Molenaar faces a maximum penalty of five years’ imprisonment, three years’ supervised release, a $250,000 fine, and a $100 special assessment.
U.S. Attorney Boente reiterated that a bill of information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case is being investigated by special agents of the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Matt Chester and Jon Maestri.

Melody Huie Sentenced for Tax Evasion and Wire Fraud after Embezzling $1.37 Million from Employer

Melody Huie, age 56, of Mandeville, Louisiana, was sentenced today by U.S. District Judge Kurt D. Engelhardt to 18 months in prison after previously pleading guilty to wire fraud and tax evasion, announced United States Attorney Dana J. Boente. Huie was also ordered to pay full restitution, plus $446,983. to the IRS. Huie was further sentenced to three years of supervised release after she is released from jail, the first six months of which are to be spent on home confinement.
According to court documents, Huie was employed by a transportation company in New Orleans, Louisiana, where she served as a general manager for Accounting. In that capacity, Huie was responsible for overseeing the company’s finances and accounts. Huie was one of three individuals at the company who was authorized to conduct wire transfers from the company’s bank accounts. Wire transfers from the company’s Chase bank account had to be authorized by two of the three employees with such authorization. As part of its security protocol, after one of the three authorized individuals initiated a transfer, Chase called one of the other employees to verify the legitimacy of the transfer.
When Huie wanted to steal money from her employer, she would make a phone call to Chase’s customer service department and direct them to transfer money to a separate bank account under her control. When initiating a wire transfer by phone (whether legitimate or not), Huie had to identify herself, specify the account from which she wished to draw the money, and provide a password created by Chase. When Chase called to verify one of Huie’S transfers, Huie answered the other phone and fraudulently identified herself as the second individual authorized to conduct wire transfers. Huie knew where this individual stored his/her password and security information, which Huie provided to the Chase representative to verify the unauthorized wire transfer. To disguise her actions further, Huie added fictitious reference notes such as “Fund Redemption,” “401K Distribution,” or “Consulting Fee” to the transfer or used variations of the nameholder on the account to which she sent the money to make the transfers appear legitimate.
Huie stole money in this manner at least 114 times between November 2006 and September 2011, totaling $1,370,814.09.
Huie then failed to report as taxable income the money she stole on her tax returns. As a result, she failed to pay income tax between tax years 2006 and 2011 in the amount of approximately $446,983.00.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations Division. It was prosecuted by Assistant United States Attorney Jordan Ginsberg.

Man Arrested in Paducah Sentenced to 16 Months in Prison for Impersonating a United States Army Chief Warrant Officer and Fraud

PADUCAH, KY—A convicted felon living in McCracken County, Kentucky, was sentenced yesterday in United States District Court, by Senior Judge Thomas B. Russell to 16 months in prison, followed by a one year term of supervised release, for impersonating an officer of the U.S. Army and defrauding a victim of sums of money, announced David J. Hale, United States Attorney for the Western District of Kentucky. Senior Judge Russell also ordered defendant Kyle Christopher Barwan to pay restitution in the amount of $1,640.
Barwan, age 23, was charged in a two-count indictment by a grand jury meeting in Paducah, Kentucky, on September 11, 2012. According to the indictment, on or about April 14, 2012, in Christian County, Kentucky, the defendant falsely assumed and pretended to be an officer and employee of the United States, that is, a United States Army chief warrant officer, and in such pretended character, falsely stated that he was a United States Army chief warrant officer and conducted a military promotion ceremony for military personnel. Further, between April 1, 2012 and May 7, 2012, in McCracken County, Kentucky, the defendant falsely pretended to be an officer and employee of the United States, that is, a United States Army Cchief warrant officer and in such pretended character, with intent to defraud, did falsely demand and obtain a thing of value from another person in that he obtained sums of money over $1,000. According to court records, Barwan asked at least one individual for money while impersonating an officer of the U.S. Army. Barwan pleaded guilty to both charges on December 12, 2012, before Senior Judge Russell.
Barwan was previously arrested in Vincennes, Indiana, in November 2010 and was charged with impersonating an officer and possession of cocaine. He was convicted of both offenses and sentenced in June 2011 to one year imprisonment for impersonating an officer and 18 months, to run concurrently, for the felony possession of cocaine.
This case was prosecuted by Assistant United States Attorney David Sparks and Special Assistant United States Attorney Captain John Vrettand and was investigated by Ft. Campbell Military Police, the McCracken County Sheriff’s Department, and the Federal Bureau of Investigation (FBI).

Former Agriculture Commissioner Indicted for Misappropriating Department Funds

LEXINGTON, KY—A federal indictment was unsealed today charging former Kentucky Agriculture Commissioner Richard Dwight Farmer, Jr. with misusing and misappropriating money and property belonging to the Kentucky Department of Agriculture (KDA) during his tenure.
The indictment, filed Friday, April 19, charges Farmer, 43, with four counts of misappropriating property and funds of the KDA, a state agency that receives more than $10,000 annually in federal funds. Each of the four counts covers alleged misconduct occurring in separate calendar years beginning with 2008 and ending with 2011.
Farmer is also charged with one count of soliciting property of value in exchange for intending to be influenced in KDA matters.
According to the indictment, Farmer abused his authority throughout his tenure, using KDA funds to obtain rifles, clothes, hotel rooms, computer equipment, and home appliances, all for himself, friends, and family.
One example of Farmer’s alleged misuse of funds occurred in 2008, at the Southern Association of State Departments of Agricultural Conference held in Kentucky. The indictment alleges Farmer bought a surplus of gifts for participants and conference workers, such as rifles, watches, case knives, and personalized cigar boxes, and then kept the excess gifts for his personal use.
The indictment also alleges that Farmer misused his position to secure jobs for his friends. According to the indictment, Farmer directed the KDA to create several paid “special assistant” positions. He hired friends for these positions, and he ensured that they operated with little oversight and performed minimal official work. Some of these special assistants received state government salaries in exchange for performing home improvement projects and other personal services for Farmer.
Additionally, on multiple occasions, Farmer allegedly bought hotel rooms at the Kentucky State Fair for extended family using KDA’s money.
Another count in the indictment alleges that Farmer solicited and accepted property from an eastern Kentucky motor vehicle dealership, intending to be influenced in the decision in which he attempted to award KDA grant money to the dealership.
The U.S. government is seeking the forfeiture of $450,000, which represents the approximate total amount of KDA money that Farmer allegedly misused.
The KDA is a state government agency that is funded, in part, with money provided by the federal government. The indictment alleges that the KDA receives millions of dollars annually in federal money.
Farmer was elected to two terms as commissioner of Agriculture and was responsible for the supervision and administration of the KDA from January 2004 until January 2012.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Perrye Turner, Special Agent in Charge, FBI; and Jack Conway, Kentucky Attorney General, jointly announced the indictment today.
The investigation preceding the indictment was conducted by the Kentucky Attorney General’s Office and the FBI. The indictment was presented to the grand jury by Assistant U.S. Attorneys Kenneth R. Taylor and Andrew T. Boone and trial attorney Sean Mulryne with the Public Integrity Section of the United States Department of Justice.
A date for Farmer to appear in court has not yet been scheduled. Each count carries a maximum penalty of 10 years in prison and up to a $250,000 fine. However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.

Former Pontiac Schools Associate Superintendent and Chief Financial Officer Sentenced to 12 Months in Federal Prison

A former associate superintendent and acting CFO of Pontiac Schools was sentenced today to 12 months in federal prison followed by one year home confinement, three years of supervised release, and ordered to pay restitution to Pontiac Schools in the amount of $336,000 after having been convicted of one count of defrauding a program receiving federal funding, announced United States Attorney Barbara McQuade.
McQuade was joined in the announcement by Special Agent in Charge Robert D. Foley, III, Federal Bureau of Investigation.
Jumanne Sledge, 41, was sentenced by U.S. District Judge Denise Page Hood in Detroit, Michigan.
In February 2010, Sledge directed a subordinate at Pontiac Schools to issue a check payable to his “International Leadership Academy” in the amount of $236,000. Sledge cashed the check and deposited it into his bank account. When later asked for an invoice and purchase order, Sledge created a false invoice to make it appear a payment for a legitimate service. Sledge used the money to finance luxury vehicles, travel and other personal items.
“Among all of the corruption defendants we charge, school officials who steal money are particularly culpable because they are robbing children of their education,” McQuade said.
This case was investigated by the FBI and the U.S. Department of Education, Office of Inspector General.
AUSA J. Michael Buckley investigated and prosecuted the case for the United States.

Former Employee of New Jersey Timeshare Consulting Firm Pleads Guilty to Separate Mortgage and Unemployment Scams

CAMDEN, NJ—A former employee in the New Jersey offices of the Vacation Ownership Group LLC admitted today to conspiring to defraud owners of timeshare properties by offering phony consulting services while also illegally collecting unemployment benefits, U.S. Attorney Paul J. Fishman announced.
Brian Corley, a/k/a “John Corley,” 28, of Little River, South Carolina, and formerly of Egg Harbor, New Jersey, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to commit mail and wire fraud and one count of mail fraud.
According to documents filed in this case and statements made in court:
The Vacation Ownership Group, a/k/a VO Group LLC, had offices in Mays Landing and Egg Harbor Township, New Jersey, and claimed to offer consulting services to owners of timeshares, including canceling, purchasing, and upgrading the timeshares.
Corley started working at the VO Group in March 2010, where he was trained by a co-owner of the group, Adam Lacerda, to call customers using prepared scripts. Corley admitted that he would call customers and give them the false impression that he was working for a bank or lending institution, claiming he had the customer’s “complaint file” from a timeshare resort developer in front of him. Corley admitted that he regularly lied to customers in order to perpetrate the scam. Some of those customers then sent checks to the VO Group. The scheme caused more than $200,000 in losses.
Among other things, Corley admitted that he falsely told a customer that if the customer paid $25,000 to the VO Group and exchanged timeshare points, the group would eliminate the customer’s approximately $95,000 mortgage debt with a timeshare developer.
Corley also devised a separate scheme to defraud the New Jersey Department of Labor by collecting unemployment compensation benefits while working at the VO Group. He admitted to applying for and collecting unemployment compensation benefits to which he was not entitled.
Court documents show Corley illegally received $16,936 as a result.
On January 23, 2013, co-owners Adam Lacerda and Ashley Lacerda and other members of the VO Group were variously charged in a superseding indictment with conspiracy to commit mail and wire fraud and other charges. Additional members of the VO Group were also charged by criminal complaint in April 2012. As for the Lacerdas and other defendants who have not been convicted in this case, the charges and allegations against them are merely accusations, and they are considered innocent unless and until proven guilty.
Each of the two counts to which Corley pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss caused by the offense. Sentencing is currently scheduled for July 29, 2013.
U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Robert Panella, New York Region, for their roles in the investigation leading to the guilty plea. He also thanked the New Jersey Department of Labor, Benefit Payment Control Unit, for its assistance.
The government is represented by Assistant U.S. Attorneys Alyson M. Oswald and R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.

Two Essex County Men Admit Roles in Armed Robbery of Jewelry Store

NEWARK, N.J. – Two Essex County, N.J., men today admitted their roles in the armed robbery of the Golden Palace jewelry store in Orange, New Jersey, U.S. Attorney Paul J. Fishman announced.
Antonio Moore, 44, of Newark, pleaded guilty to an indictment charging him with one count of Hobbs Act robbery and one count of using a firearm in furtherance of that robbery.
Charles Madison, 41, also of Newark, pleaded guilty to an information charging him with aiding and abetting the Hobbs Act robbery and for being a felon in possession of a firearm. Both pleaded before U.S. District Judge William J. Martini in Newark federal court. A third defendant, David Williams, pleaded guilty in January 2013.
According to documents filed in this case and statements made in court:
On August 6, 2012, Moore and Williams robbed the store at gunpoint, while Madison served as the getaway driver. During the robbery, Moore punched a 22-year-old employee of the Golden Palace in the head, restrained her and a co-worker with duct tape and telephone cord, and then took approximately $120,000 in jewelry from the store’s display cases. The three defendants were pulled over in Madison’s pick-up truck approximately an hour after the robbery, at which time law enforcement found dozens of pieces of gold jewelry scattered across the back seat of the truck.
Moore faces a maximum potential punishment of life imprisonment. Madison faces a maximum potential punishment of 20 years in prison on the robbery charge and 10 years in prison on the gun charge. Both defendants are subject to fines of up to $250,000. Sentencing is scheduled for July 31, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, with the investigation leading to today’s guilty pleas. Mr. Fishman also thanked the Orange Police Department and the New Jersey State Police for their investigation and assistance on this case.
The government is represented by Assistant U.S. Attorney Andrew J. Bruck of the U.S. Attorney’s Office General Crimes Unit and David E. Malagold, Chief of the Office’s Organized Crime/Gangs Unit, in Newark.

Robbery of Wells Fargo Bank Branch in West Orange

On April 18, 2013, at approximately 5:00 p.m., a black male, thin build, 5’6”-5’8” tall, approximately 140 lbs., attempted to rob the Wells Fargo Bank at 412 Pleasant Valley Way in West Orange, New Jersey. The subject entered the branch and demanded money. He fled the bank without any cash.
On April 18, 2013, at approximately 6:00 p.m., it is believed that this same individual as described above, robbed the PNC Bank at 423 Bloomfield Avenue in Caldwell, New Jersey. The subject entered the branch and demanded money. He fled the bank with an undisclosed amount of cash.
The subject is further described as follows: late 20s, clean-shaven, wore sunglasses and gloves, and wore the same hat and shoes for both bank robberies.
Anyone with information on either of the bank robberies is urged to contact West Orange Police Department, the Caldwell Police Department, or the FBI at 973-792-3000.
Citizens are reminded they should never attempt to apprehend a fugitive; in an emergency, call 911.

Former Jersey City Council Candidate Admits Mishandling Contributions

NEWARK—Former Jersey City Council candidate Lori Serrano today admitted to converting federal funds illegally for her own use, U.S. Attorney Paul J. Fishman announced.
Serrano, 41, of Jersey City, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares to a superseding information charging her with converting to her own use and the use of another up to $1,000 in money of the United States to which she was not entitled.
According to documents filed in this case and statements made in court:
Serrano, as a 2009 candidate for city council for Jersey City, had a duty truthfully to account to her campaign committee for contributions received and not to use committee funds for any improper purpose, such as for personal use. On March 30, 2009 and April 23, 2009, in Bayonne, New Jersey, Serrano accepted cash contributions from Solomon Dwek, who was cooperating with federal law enforcement agents. Serrano accepted those contributions with the intent to convert a portion of the money without the authority of the campaign committee. She applied up to $1,000 of that money to pay her own campaign expenses. The funds that Serrano admitted converting were federal funds given to Dwek by the FBI as part of the investigation.
The misdemeanor charge to which Serrano pleaded guilty carries a maximum potential penalty of one year in prison and a $100,000 fine. Serrano had been facing a mail fraud charge, which, according to the plea agreement, will be dismissed at the time of her sentencing. Sentencing is scheduled for August 1, 2013.
Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Eric W. Moran of the U.S. Attorney’s Office Special Prosecutions Division.

Pinson Man Convicted for Mailing Fictitious Financial Instrument

FLORENCE—A federal jury late Tuesday convicted a Pinson man and member of an anti-government Sovereign Citizens group for mailing a fictitious financial instrument to pay off his home mortgage, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein, Jr.
The jury convicted Donald Joe Barber, 64, of mailing a fictitious “bonded promissory note” to his mortgage servicing company on March 10, 2008, in a fraudulent effort to satisfy his mortgage. Barber presented the fraudulent $10 million note as if it were a valid financial instrument drawn on a secret U.S. government account. U.S. District Judge Inge P. Johnson scheduled Barber’s sentencing for July 31.
“Self-appointed ‘sovereign citizens’ preach an extremist, anti-government ideology to their followers and teach a myth about American history that is untrue,” Vance said. “They often use this mythical ideology to justify crime. Sovereign citizens may disavow the authority of the U.S. government, but it exists and my office will use it to prosecute those who break the law,” she said.
“The guilty verdict handed down in this case should serve as a deterrent to others who claim to be ‘sovereign citizens’ and attempt to use a redemption scheme to fail to pay just debts,” Schwein said. “All citizens should be wary of individuals or groups that claim they can inform you on secret bank accounts and should report that activity to the FBI,” he said.
The FBI describes members of the sovereign citizen movement in the U.S. as U.S. citizens who openly reject their citizenship status and claim to exist beyond the realm of government authority. Affiliates may use their self-appointed status to justify threats, violence, or crime, including theft and fraud.
The maximum sentence for this crime is 25 years in prison and a $250,000 fine.
The FBI investigated the case, which is being prosecuted by Assistant U.S. Attorneys Ryan K. Buchanan and Michael W. Whisonant, Sr.

Third Adams Produce Official Pleads Guilty in Federal Court

BIRMINGHAM—Former Adams Produce Chief Executive Officer Scott David Grinstead pleaded guilty today in federal court to fraud against the company, failure to report a felony against the government, and failure to file federal income tax returns, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Richard D. Schwein, Jr., and IRS-Criminal Investigation Division Special Agent in Charge Veronica Hyman-Pillot.
Grinstead, 45, of Birmingham, entered his plea before U.S. District Judge Karon O. Bowdre. His sentencing is scheduled August 21.
Federal prosecutors charged Grinstead in January, and he entered a plea agreement with the government at that time. As part of that agreement, Grinstead must pay $450,000 in restitution to the bankruptcy estate of Adams Produce for the benefit of the company’s employees who were not fully paid because of Adams’ abrupt closing and its filing for bankruptcy last year.
Grinstead is the third Adams Produce official to plead guilty to federal charges in connection with fraud at the Birmingham-based company that had been a leading distributor of fresh fruits and vegetables across the Southeast for many years.
David Andrew Kirkland, 44, formerly of Birmingham and now living in Texas, pleaded guilty in March before U.S. District Judge Abdul Kallon to conspiracy to defraud the federal government of several hundred thousand dollars through a scheme to create false invoices and purchase orders. Kirkland is scheduled for sentencing June 27.
Kirkland, director of purchasing for Adams Produce, was charged in the same purchasing fraud scheme as Christopher Alan Pfahl, a purchasing program specialist for Adams. Kirkland was Pfahl’s supervisor. Pfahl, 41, of Birmingham, pleaded guilty in January to conspiracy to defraud the government of $481,000 on produce contracts.
Pfahl and Kirkland engaged in a scheme to create false records that reflected a higher purchasing cost for fruits and vegetables than the company actually paid. The inflated costs were then presented to the U.S. government, which had agreed to pay a certain amount over Adams’ cost for produce.
The federal government, through the Defense Supply Center Philadelphia, was one of Adams’ customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges, and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records.
Grinstead pleaded guilty to misprision of a felony for knowing of the fraud Pfahl and Kirkland were engaged in and allowing it to continue and end slowly, so as to avoid raising red flags with the government, rather than stopping it immediately and reporting it to authorities.
Grinstead also pleaded guilty to wire fraud for wiring hundreds of thousands of dollars from an Adams Produce account to American Express to pay for clothing, jewelry, personal travel for himself and his family, lawn care at his home, and items for a house on Lake Martin. He pleaded guilty to two counts of failure to file a federal tax return, one for 2009 and one for 2010. According to court records, Grinstead had a gross income of about $748,801 for the 2009 calendar year and willfully failed to file an income tax return with the Internal Revenue Service. In 2010, he received about $1,878,700 in gross income and willfully did not file a return with the IRS.
The FBI and the IRS investigated the cases, which are being prosecuted by Assistant U.S. Attorney George A. Martin, Jr.

Former Tuscaloosa Police Sergeant Pleads Guilty to Civil Rights Violation for Sexually Assaulting a Woman

WASHINGTON—Jason Glenn Thomas, 34, a former sergeant with the city of Tuscaloosa, Alabama Police Department, pleaded guilty today to a criminal civil rights charge for using his authority as a law enforcement officer to sexually assault a woman.
According to court documents filed in connection with his guilty plea, Thomas admitted that while on duty shortly after midnight on March 27, 2011, he stopped and detained a female pedestrian without placing her under arrest. Thomas then transported the woman in his department issued patrol vehicle to a remote area and sexually assaulted her.
“This former officer did the unimaginable when he used his police powers to sexually assault this victim,” said Roy L. Austin, Jr., Deputy Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously prosecute those who abuse their position and authority to harm those individuals whom they have sworn to protect.”
“Most police officers work diligently every day to protect the citizens,” said U.S. Attorney for the Northern District of Alabama Joyce White Vance. “A community must be able to trust its police officers. My office is committed to prosecuting any officers who abuse the authority of the badge to commit a crime. This abuse of the public’s trust will not be permitted.”
“Mr. Thomas dishonored his badge and his fellow officers when he violated the civil rights of a female pedestrian while on duty, in uniform, and in a marked patrol car,” said FBI Special Agent in Charge of the FBI Birmingham, Alabama Field Office Richard D. Schwein, Jr. “Citizens have a right and should expect ethical and proper treatment from all law enforcement officers and we, as civil servants, must never forget that we have sworn an oath to serve and protect them. The public can be assured the FBI will continue to aggressively pursue those rogue officers who violate that trust.”
Thomas faces a maximum sentence of 10 years in prison and a fine of $250,000. Sentencing is scheduled for July 18, 2013, before U.S. District Judge C. Lynwood Smith.
This case was investigated by the Tuscaloosa Resident Agency of the FBI’s Birmingham Field Office and was prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney George Martin for the Northern District of Alabama.

FBI Seeks Public’s Help in Identifying Alleged Victims of Convicted Killer

The FBI is seeking the public’s assistance in identifying alleged victims of convicted killer Curtis Dean Anderson, who died while serving his prison term on December 9, 2007.
Anderson was convicted and sentenced to over 300 years in prison for the 1999 kidnapping and murder of 7-year-old Xiana Fairchild in Vallejo, California, and other crimes. He was captured after one of his kidnap victims, then 9-year-old Midsi Sanchez, was able to escape.
Anderson was interviewed by FBI agents in November 2007, and he confessed to murdering eight victims in the United States, which includes Fairchild and 7-year-old Amber Swartz-Garcia of Pinole, California, in 1988. Anderson also confessed to two murders in Mexico but did not provide any information on those victims.
The following is a list of the stateside victims’ descriptions by Anderson in chronological order:
Late 1984
Victim #1 was described as a female in her late teens/early 20s. Anderson allegedly met and killed her and disposed of her body near a local swimming hole in Marysville, California. She was a “runaway.”
Victim #2 was a young female hitchhiker in her late teens, whom Anderson claimed he picked up on a road near the northeast side of Clearlake a few days after the death of Victim #1.
Early 1985
Victim #3 was a female who was in her late teens. She was also residing in the Marysville area and was possibly a runaway from Oregon. Anderson claimed to have killed her in early 1985. Anderson allegedly disposed of Victims #2 and #3 near the Ballard’s Bar Dam close to Dobbins, California.
November 1986
Victim #4 was approximately 21 years old. She was a light-skinned black female whom Anderson met in a bar frequented by African-Americans located in the East Bay, off Interstate-80 on San Pablo Avenue. He claims this occurred about 10 days after he was paroled from San Quentin State Prison. Anderson allegedly killed the victim and disposed of her body in the Oakland hills.
June 1988
Victim #5 was Amber Swartz-Garcia. Anderson said Swartz-Garcia was standing on a street in Pinole, California, when he drove up to where she was standing, opened his car door, and physically forced her into his car. He eventually murdered her in Arizona and disposed of her body around Benson, Arizona, in the desert off of Interstate-10 sometime in mid-1988.
1988/1989
Victim #6 was allegedly a Navajo Indian woman who was approximately 23 to 24 years old. Anderson claimed he picked her up near 5th or 6th Street in Benicia, California, coming out of a bar in either 1988 or 1989. He said that he killed his victim in the desert somewhere near Benson, Arizona.
Early 1997
Victim #7 was in her early 20s. She was a black and Hispanic female whom Anderson described as going by the name “Rosie.” Anderson allegedly met the victim at The Bears bar, which he described as being frequented by Hispanics. This bar was located under Highway 87 in San Jose, California, near a bowling alley.
Anderson claimed this victim had noticeable “junkie tracks” on her arms, and he killed her by strangulation. He allegedly disposed of her body less than five miles off the Ben Lomand turnoff near Santa Cruz, California, approximately 300 yards past a water retention pond behind a locked gate.
During this incident, Anderson stated he had been driving a black Toyota truck from his “Parts Company.” He claimed this occurred around February or March 1997.
December 1999
Victim #8 was Xiana Fairchild, who disappeared on December 9, 1999. Her skull was found in early 2001 in an unincorporated area of Los Gatos in Santa Clara County.
If the public has any information regarding the identity of the alleged victims, please call the FBI San Francisco tip line at 1-800-CALL-FBI (1-800-225-5324). All calls are confidential and tips can be left anonymously.
Photos of Curtis Dean Anderson:

Photo taken in 1983	Photo taken in 1999

Examples of vehicles Curtis Dean Anderson may have driven:

Example of a two-door 1977 Chevy sedan (Anderson allegedly drove a vehicle similar to the one seen above in the late 1980s. He received a ticket in 1989 and was driving a vehicle similar the one shown.)
Example of a 1997 black Toyota truck (Anderson allegedly drove a truck similar to the one see above in 1997.)

Members of the media should call Public Affairs Specialist Julianne Sohn at 415-553-7450.
- FBI poster seeking information concerning Anderson

Former Investment Banker and His Associate Plead Guilty in San Francisco to Insider Trading Scheme

SAN FRANCISCO—A former San Francisco investment banker and his college friend both pleaded guilty today for their roles in an insider trading scheme involving two impending corporate mergers, announced U.S. Attorney Melinda Haag and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Jauyo Lee, aka “Jason Lee,” 29, of New York, and Victor Chen, 29, of Sunnyvale, California, both pleaded guilty before U.S. District Judge Richard Seeborg in the Northern District of California to one count of conspiracy to commit securities fraud and one count of securities fraud. Lee and Chen were charged in a criminal information on March 21, 2013.
“Securities professionals cannot exploit their positions of trust to enrich themselves and their friends,” said U.S. Attorney Haag. “Those tempted to corrupt our markets in this manner should know the government will get to the bottom of suspicious trading and prosecute securities fraud vigorously.”
“Insider trading undermines ordinary investors’ faith in our financial markets, and the Justice Department has zero tolerance for it,” said Acting Assistant Attorney General Raman. “Today’s guilty pleas show that you cannot trade on inside information, pocket the profit, and expect to escape responsibility. Having now admitted their conduct, Mr. Lee and Mr. Chen must face the consequences.”
According to the plea agreements, Lee, who worked as an investment banker in the San Francisco office of Leerink Swann LLC, disclosed inside information to Chen, a friend from college, about two impending mergers involving Leerink clients. Between August 26, 2009 and September 5, 2009, Lee disclosed inside information to Chen about the merger of Leerink’s client, Syneron Medical Ltd., and Candela Corporation, a medical device company publicly traded on the NASDAQ stock market. Chen used the inside information to buy shares of Candela. After the merger was announced, Candela’s stock price increased more than 40 percent, and Chen sold his shares for a gain of approximately $62,589.
Between June 1 and 13, 2010, Lee also provided Chen with inside information about the impending merger of Somanetics Corporation and a subsidiary of Covidien plc. Leerink was the lead financial advisor to Somanetics, which also was publicly traded on the NASDAQ. Chen used the inside information to buy shares and options of Somanetics. Following the merger announcement, the price of Somanetics stock increased more than 30 percent, and Chen ultimately realized a profit of approximately $547,510.
Lee and Chen are scheduled for sentencing on July 23, 2013, before Judge Seeborg. The maximum penalty for conspiracy to commit securities fraud is five years in prison, and the maximum penalty for securities fraud is 20 years in prison.
This case is being prosecuted by Assistant U.S. Attorney Robert S. Leach and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section with the assistance of Rayneisha Booth and Mary Mallory. The prosecution is the result of a one-year investigation by the FBI with substantial assistance from the Chicago Regional Office of the U.S. Securities and Exchange Commission.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure Auctions

WASHINGTON—A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco against Mohammed Rezaian, of Novato, California. Rezaian is the 30th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Rezaian conspired with others not to bid against one another but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco and San Mateo counties, California. Rezaian was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others. According to court documents, a forfeiture allegation was also included in the charges against Rezaian.
The department said Rezaian conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Francisco and San Mateo counties beginning as early as July 2008 and continuing until about January 2011.
“As a result of this investigation, the Antitrust Division has thus far filed charges against 30 real estate investors in Northern California for their illegal activity at foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will vigorously pursue the perpetrators of these fraudulent and anticompetitive schemes.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco and San Mateo County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
“Not only is bid rigging at public foreclosure auctions illegal, it also severely undermines the integrity of a fair and competitive marketplace,” said David J. Johnson, FBI Special Agent in charge of the San Francisco Field Office. “The FBI will continue to investigate and pursue those who commit fraudulent anticompetitive practices at foreclosure auctions and work with those who have fallen victim to such selfish crimes.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda Counties, California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI tip line at 415-553-7400.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.

Laguna Niguel Man Pleads Guilty to Defrauding eBay

SAN JOSE—Brian Andrew Dunning pleaded guilty in federal court in San Jose on April 15, 2013, to wire fraud, United States Attorney Melinda Haag announced.
In pleading guilty, Dunning admitted that, between approximately May 2006 and June 2007, he engaged in a scheme to defraud eBay through so-called “cookie stuffing.” According to the plea agreement, commissions paid to Dunning’s company, Kessler’s Flying Circus (KFC), which Dunning owned jointly with his brother, totaled approximately $5.2 million during that period from eBay’s domestic Affiliate Program.
According to the plea agreement, in approximately April 2005, Dunning and his brother formed KFC, through which they participated in the eBay Affiliate Program. The Affiliate Program was a means by which eBay worked with KFC and other affiliates to drive Internet traffic to eBay’s websites. Under the program, an affiliate was supposed to send visitors to eBay’s website by displaying an eBay advertisement, or link, on the affiliate’s website. If a visitor clicked on the eBay link or ad, he or she was redirected to eBay’s website. If that user subsequently conducted a “revenue action” on eBay’s website within a designated period of time, eBay paid the affiliate a commission for the referral.
Dunning admitted that he carried out his scheme by providing free applications at two of his websites that users could download and use on their own websites: ProfileMaps.info, which showed the physical location of visitors to a MySpace profile, and WhoLinked.com, which showed who was linking to the user’s website or blog. Both applications contained code Dunning had written that operated so that, when a user visited a website that had installed the application, the code would cause the user’s browser to receive a cookie with KFC’s ID number, even though the user did not click on an eBay ad or link, did not see any content from eBay’s website, and did not realize that his or her browser had been re-directed to eBay’s tracking server. As a result, KFC would be paid if that user subsequently conducted an eBay revenue action within a certain period of time.
Dunning, 47, of Laguna Niguel, California, was indicted by a federal grand jury on June 24, 2010, and charged with five counts of wire fraud, in violation of Title 18, United States Code, Section 1343. Under the plea agreement, Dunning pleaded guilty to a superseding information, filed on April 15, 2013, that alleged a separate violation of the same statute. In his plea agreement, Dunning admitted that he received payments for revenue actions for which he was not entitled to be compensated but reserved the right to dispute how much of those payments were attributable to the cookie stuffing scheme.
An evidentiary hearing to determine the loss amount will be held on August 8, 2013, before United States District Judge Edward J. Davila, in San Jose. The maximum statutory penalty for a violation of 18 U.S.C. § 1343 is 20 years’ imprisonment and a fine of $250,000, or twice the gross gain or gross loss from the offense, whichever is greater, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
David R. Callaway and Kyle F. Waldinger are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elise Etter, Rawaty Yim, and Elizabeth Garcia. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.

San Diego College Pays $700,000 and Former Financial Aid Director Pleads Guilty to Resolve Allegations of Financial Aid Fraud

United States Attorney Laura E. Duffy announced today that United States University, a for-profit college located in San Diego, has agreed to pay a civil settlement in the amount of $686,720 and the school’s former Financial Aid director has pled guilty, resolving allegations that between December 2008 and February 2011, the school submitted falsified financial aid applications to the U.S. Department of Education in order to obtain Pell Grant funds for which students were not eligible.
The civil settlement was paid by Educacion Significativa LLC, and IAC Funding LLC, doing business as United States University. The school, which has campuses in Chula Vista and Cypress, California, was known as InterAmerican University from 1997 to 2010, when it changed its name to United States University. United States University offers courses of study in nursing and other programs.
The school’s former Financial Aid director, Christina Miller, pled guilty in federal court (Case Number 13cr1157MMA) to criminal financial aid fraud, in violation of Title 20, United States Code, Section 1097(b), admitting that she knowingly and willfully falsified student financial aid applications, resulting in the improper awarding of federal Pell Grants to ineligible students. Under federal law, students already holding bachelor’s degrees are generally not eligible for Pell Grant funds, but Miller admitted changing student degree status in order to allow the school to improperly receive Pell Grant funds from the U.S. Department of Education. Miller is scheduled to be sentenced on June 27, 2013.
“We all benefit from successful students’ economic and professional contributions to our country,” said United States Attorney Duffy. “Financial aid fraud not only harms the American taxpayer but robs our community of that investment. This resolution should send a strong message to those who would choose to fraudulently obtain monies from taxpayer-funded financial aid programs. We will continue to work closely with our investigative partners in taking both criminal and civil measures to combat fraud against government programs.”
“Federal student aid exists so that individuals can pursue and make their dream of a higher education a reality. As the law enforcement arm of the U.S. Department of Education, the Office of Inspector General is committed to fighting student aid fraud, and we will continue to aggressively pursue those that participate in these types of crimes,” said Natalie Forbort, Special Agent in Charge of the U.S. Department of Education Office of Inspector General Western Regional Office.
FBI Special Agent in Charge Daphne Hearn stated, “Fraud and abuse of educational taxpayer-funded programs deprives those who are eligible and most deserving of this financial aid. The FBI and our partners will pursue those who would seek to undermine these programs, so that this important block of financial aid is available for those who need it most.”
The investigation arises from a lawsuit that was brought under the qui tam, or whistleblower, provisions of the federal False Claims Act, which permit private citizens with knowledge of fraud against the government to bring an action on behalf of the United States. As provided by the False Claims Act, the whistleblower in this case, Veronica Glaser, a former student and employee at the school, will receive a share of the recovery.
The investigation and prosecution of this matter was the result of the collaborative effort of the United States Attorney’s Office for the Southern District of California; the Department of Education, Office of Inspector General; and the Federal Bureau of Investigation. Assistant U.S. Attorney Christopher Tenorio is handling the criminal prosecution of Christina Miller. Assistant U.S. Attorneys Joseph Price and Douglas Keehn handled the civil False Claims Act matter brought against United States University.
Defendant in Criminal Case Number: 13CR1157-MMA
Christina Miller
Summary of Charges
Financial aid fraud, Title 20, United States Code, Section 1097(b)
Investigating Agencies
Department of Education, Office of Inspector General
Federal Bureau of Investigation