Month: April 2022

Source: United States Department of Justice News

PROVIDENCE, R.I. – A Providence man who admitted to being a prohibited person in possession of a firearm and with participating in a conspiracy to transport stolen recreation vehicles into Rhode Island was sentenced on Wednesday to thirty-seven months in federal prison, announced United States Attorney Zachary A. Cunha.

On December 21, 2020, Luis M. Morales, 39, pled guilty to being a prohibited person in possession of a firearm, and, in a separate case, to conspiracy to commit interstate transportation of stolen property and two counts of interstate transportation of stolen property.

According to charging documents and information presented to the court, Morales is one of nine individuals who participated in a conspiracy, stretching across several states, to steal and sell sport boats, jet skis, all-terrain vehicles, excavators, and trailers. Morales admitted that on July 17, 2020, he drove a pick-up truck to a Stafford, CT, recreational vehicle dealership where he and others stole a 2020 Yamaha watercraft, a 2019 Can-Am Maverick Sport off-road vehicle, and two trailers; all of these items were transported into Rhode Island. Morales similarly admitted that he and others stole three jet skis from a dealership an Easton, MA, on July 20, 202, and transported them to Rhode Island.

In a separately charged case, an Easton Police Detective encountered Morales while investigating the theft of the jet skis. During interviews police obtained his cell phone, which was turned over to the FBI and searched pursuant to a federal warrant. The FBI review discovered text messages indicating that Morales was also brokering the sale of fentanyl to a Massachusetts drug user in exchange for firearms. An analysis of these text messages established that Morales received or brokered the sale/trade of six firearms. Among the firearms obtained by Morales was an AR-15 assault rifle.

On Wednesday, U.S. District Judge Mary S. McElroy sentenced Morales to thirty-seven months in federal prison to be followed by three years of federal supervised release. In addition, Judge McElroy ordered Morales to pay a combined total of $55,455 in restitution to the owners of the stolen property and to insurance companies. Additionally, Judge McElroy ordered Morales to pay a $1,000 fine.

The cases were prosecuted by Assistant U.S. Attorneys William J. Ferland and Ly T. Chin.

An investigation by the Johnston and North Providence Police Departments, joined by the FBI Safe Streets Task Force and merged with a parallel investigation by Rhode Island and Connecticut State Police, and the Easton, MA, and the Hampstead, NH, Police Departments, determined that between November 2019 and July 2020, three Bobcat excavators, ten jet skis, four boats, eight all-terrain vehicles, and ten trailers valued at over $700,000 were stolen.

United States Attorney Cunha thanks the FBI and ATF for their assistance in investigating Morales’ firearms trading activity.

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Source: United States Department of Justice News

JOHNSTOWN, Pa. – A former resident of North Carolina has been sentenced in federal court to a total of 70 months’ in prison followed by 3 years of supervised release on his conviction of theft from a federal firearms licensee, United States Attorney Cindy K. Chung announced today.

Senior United States District Judge Kim R. Gibson imposed the sentence on David R. Shahriari, a/k/a ‘David Anderson,” 39, of North Carolina.

In connection with the guilty plea, on August 29, 2011, Shahriari did knowingly steal and unlawfully take, eight firearms from L.B. Toney’s Alamo Gun Shop in DuBois, PA, which is a business licensed to deal in firearms.

Assistant United States Attorney Arnold P. Bernard, Jr. prosecuted this case on behalf of the government.

Ms. Chung commended the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Pennsylvania State Police, and the DuBois City Police for the investigation that led to the successful prosecution of Shahriari.

Source: United States Department of Justice News

TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted defrauding lenders of approximately $50 million dollars in connection with an invoice factoring scheme perpetrated over nearly a decade, U.S. Attorney Philip R. Sellinger announced.

Vincent Galano, 59, of Oceanport, New Jersey, pleaded guilty by videoconference before U.S. District Judge Zahid N. Quraishi to an information charging him with one count of wire fraud.

According to documents filed in this case and statements made in court:

Accounts receivable factoring (factoring), also known as invoice financing, is a financial transaction through which a company obtains cash by selling its unpaid invoices, ordinarily at a discount, to a factor. Factoring clients send their debtors notices of assignment naming the factor as the assignee of the debt owed on the invoices. The factor, in turn, collects invoiced amounts owed by the clients’ debtors and, upon collection of the entire invoiced amount, pays its clients the balance of the invoice, deducting the factor’s fees.

Galano formed Prime Financial Funding LLC (PF Funding) in 1996 for the purpose of factoring accounts receivables for various corporate clients. In 2007, PF Funding entered into a secured lending relationship with a single-purpose entity created to finance PF Funding’s factoring business.  Shortly thereafter, the factoring lender established a line of credit as a means to provide PF Funding capital to grow its receivables portfolio. Over the next several years, PF Funding grew its factoring business by drawing from the line of credit while maintaining as current its loan obligations to the factoring lender. However, beginning in 2011, Galano, through PF Funding, purchased increasingly greater numbers of invoices for which he was unable to collect the debt owed on the receivables. To justify PF Funding’s continued draws from the line of credit, Galano concealed this bad debt from the factoring lender by misrepresenting the bad invoices as collectible on reports he routinely provided to the factoring lender. In other instances, Galano mischaracterized invoices that had already been paid and collected as outstanding and capable of being factored, in essence double-counting to drive up the outstanding receivables. In the reports provided to the factoring lender, Galano manipulated the overall value of PF Funding’s portfolio of outstanding invoices in an amount proportional to the funds he needed to draw from the unsecured line of credit to maintain as current the principal and interest payments on his outstanding loans.   

Engaging in this pattern of misrepresentation over nearly a decade, by 2020 PF Funding had ultimately defaulted under its loan obligations, owing approximately $50 million to its lenders by virtue of the scheme. During a May 2020 telephone call with his lenders, Galano admitted that he had concealed significant losses suffered by PF Funding over many years. He further admitted that he had routinely distributed to lenders over that prolonged period fabricated reports that overstated the number and value of outstanding invoices which the reports represented as payable.   

The wire fraud charge to which Galano pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross pecuniary gain/loss from the scheme, whichever is greatest. Sentencing is scheduled for July 14, 2022. 

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney’s Office’s Criminal Division in Trenton.

Source: United States Department of Justice News

Memphis, TN- Kalonji Warren, 26, has been sentenced to 70 months in federal prison for a carjacking. Joseph C. Murphy, Jr., United States Attorney, announced the sentence today.

According to information presented in court, on July 17, 2019, the victim was seated inside his vehicle at the Pump and Munch gas station on East Shelby Drive in Memphis, TN. Kristopher Harris and Kalonji Warren drove Warren’s tan Jeep SUV to the gas station and pulled alongside the victim’s vehicle.

Harris pointed a semi-automatic handgun at the victim, firing one shot into the front passenger-side window of the vehicle. After the victim fled, Warren entered the victim’s vehicle and drove away. One shell casing left at the scene was collected as evidence.

Video surveillance captured the suspect’s vehicle in the area and showed Warren enter the gas station prior to the carjacking. Part of the carjacking incident was also captured on video surveillance. During the investigation Kristopher Harris was positively identified.

Kristopher Harris and Kalonji Warren pled guilty to the carjacking charge on October 22, 2021.

On January 21, 2022, United States District Judge Thomas L. Parker sentenced Warren to 70 months in federal prison to be followed by three years’ supervised release. On April 1, 2022, United States District Judge Thomas L. Parker sentenced Harris to 97 months imprisonment and two years’ supervised release.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigated this case.

Assistant United States Attorneys Wendy K. Cornejo and Gregory A. Wagner prosecuted this case on behalf of the government.

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