Month: May 2022

Source: United States Department of Justice News

A third member of a network that operated and facilitated a large-scale “grandparent scam” pleaded guilty to racketeering conspiracy.

According to charges announced in August 2021, Anajah Gifford, 23, of North Hollywood, California, was a member of a network of individuals who, through extortion and fraud, induced elderly Americans across the United States to pay thousands to tens of thousands of dollars each to purportedly help their grandchild or other close family relative. Members of the network contacted elderly Americans by telephone and impersonated a grandchild, other close relative or friend of the victim. They falsely convinced the victims that their relatives were in legal trouble and needed money to pay for bail, for medical expenses for car accident victims, or to prevent additional charges from being filed. The defendants and their co-conspirators then received money from victims via various means (including in-person pickup, mail and wire transfer) and laundered the proceeds, including through cryptocurrency.

“The Department of Justice’s Consumer Protection Branch will pursue and prosecute individuals who target older Americans by preying on their concern for loved ones,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “We are grateful to our partners at the U.S. Attorney’s Office for the Southern District of California and the FBI for their work in advancing the department’s efforts to combat organized elder fraud, and for the assistance the San Diego County District Attorney’s Office provided with this investigation.”

“This was a despicable scam that packed an emotional punch for its elderly victims,” said U.S. Attorney Randy Grossman of the Southern District of California. “It’s heartless to tell grandparents they must pay tens of thousands of dollars to rescue their beloved grandchildren from terrible trouble. These are serious crimes and there should be serious penalties.” Grossman thanked the prosecution team, state and federal law enforcement agency partners, and the Department of Justice’s Consumer Protection Branch for their excellent work on this case.

“These guilty pleas are a prime example of the collaboration and coordination among our local, state, and federal partners who make up San Diego’s Elder Justice Task Force, and the great work being done to protect our elderly population,” said Special Agent in Charge Suzanne Turner of the FBI San Diego Field Office. “The task force is committed to aggressively pursuing criminal organizations who prey on our senior citizens, and we will utilize all available investigative means to bring them to justice. I would also like to thank the FBI’s Los Angeles Field Office for their continued support in this case.”   

Gifford pleaded guilty to conspiracy under the Racketeer Influenced and Corrupt Organizations (RICO) Act. She is scheduled to be sentenced on August 5.  She faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Three co-defendants remain pending for trial. Two additional defendants have been charged but remain at large.

The case was investigated by the FBI’s San Diego Field Office, North County Resident Agency, with critical assistance from investigators of the San Diego County District Attorney’s Office.

Trial Attorneys Lauren M. Elfner and Wei Xiang with the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Oleksandra Johnson of the Southern District of California are prosecuting the case.

The department’s extensive and broad-based efforts to combat elder fraud seeks to halt the widespread losses seniors suffer from fraud schemes. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors and other seniors who can use that information to protect themselves.

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud, and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. ET. English, Spanish and other languages are available.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.

Source: United States Department of Justice News

TUCSON, Ariz. – Last week, a federal grand jury in Tucson returned an eight-count indictment against Mexican Nationals Olegario Lares-De La Rosa, 29, and Ivan Heriberto Borboa-Ruiz, 28, for Conspiracy to Commit Hostage Taking, Hostage Taking, Conspiracy to Commit Transportation of Illegal Aliens for Profit, Transportation of Illegal Aliens for Profit, and Prohibited Possessors of Firearms and Ammunition.

The indictment alleges that from a date unknown until April 8, 2022, Lares-De La Rosa and Borboa-Ruiz conspired together to detain two undocumented noncitizens in order to compel family members to pay money as a condition for their release. The initial complaint further alleges that a relative of the undocumented noncitizens was contacted by a male who said they would be held until $8,000 per person was paid in cash. The undocumented noncitizens were released after payment was made at a Home Depot parking lot. Lares-De La Rosa and Borboa-Ruiz were later arrested and found in possession of firearms.

A conviction for the crime of Conspiracy to Commit Hostage Taking carries a maximum penalty of life imprisonment, a $250,000 fine, or both. The remaining charges each carry a maximum penalty of 10 years, a $250,000 fine, or both.

An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

Homeland Security Investigations conducted the investigation in this case. Assistant U.S. Attorney Serra M. Tsethlikai, District of Arizona, Tucson, is handling the prosecution.

CASE NUMBER:            CR-22-00974-TUC-JGZ
RELEASE NUMBER:    2022-061_Lares-De La Rosa

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.

Source: United States Department of Justice News

Tampa, Florida – United States Attorney Roger B. Handberg announces that Keaujay Hornsby, a/k/a “Plug,” (26, Tampa); Kareem Spann, a/k/a “Reem,” (27, Tampa); and Tywon Spann, a/k/a “Weez” (25, Tampa) have pleaded guilty to a racketeering conspiracy related to numerous violent, drug trafficking, and economic crimes that were committed in furtherance of a criminal enterprise called “Robles Park.” Hornsby and Kareem Spann have also pleaded guilty to committing violent crimes in aid of racketeering and discharging firearms in aid of crimes of violence. Eriaus Bentley (29, Tampa) and the three other defendants have each also pleaded guilty to conspiring to commit fraud and identity theft, and committing numerous substantive acts of fraud and identity theft. Bentley faces a maximum penalty of 5 years in federal prison. Tywon Spann faces up to 20 years’ imprisonment. Hornsby and Kareem Spann each face a maximum penalty of life in federal prison.

According to court documents, “Robles Park” is a criminal organization whose members and associates engaged in acts involving murder, assault, intimidation, narcotics trafficking, access device fraud, identity theft, obstruction of justice, and other crimes. Among other acts of violence, on July 19, 2020, Hornsby and Kareem Spann committed a shooting outside the Truth Lounge in Tampa, igniting a shootout in front of a crowd that left eight people injured, including minors. On the afternoon of July 25, 2020, in retaliation for the Truth Lounge shooting, in the parking lot of the International Plaza in Tampa and near several witnesses, West Tampa gang members initiated an armed confrontation with Hornsby and Kareem Spann. Hornsby and Kareem Spann exchanged fire with the gang members, leaving behind 25 spent shell casings and several damaged vehicles.

This enterprise also distributed controlled substances, with customers that would also cover sales for each other. Sales were arranged via text messages, phone calls, and in-person contacts. The defendants maintained and used various premises to store and distribute the narcotics. On January 5, 2021, law enforcement officers searched one of the residences and found 253.2 grams of cocaine, 298.4 grams of marijuana, and 174.2 grams of synthetic cannabinoids.

Additionally, members of the enterprise worked with each other and other persons to unlawfully obtain the personal identifying information (PII) of other persons. They used this PII to submit false applications for unemployment benefits to which they were not entitled. In total, the defendants submitted more than 200 fraudulent claims, in 20 different states, with an intended loss of over $3 million. For many of those claims, a bank card was issued from the state in which the claim was filed, loaded with Unemployment Insurance funds. The defendants then used each of the cards to withdraw cash from an ATM.

On August 12, 2020, law enforcement officers searched Tywon Spann’s home and seized firearms, several pounds of marijuana, and $200,000 in cash, which is traceable to proceeds of these offenses, and will be forfeited.

This case was investigated by the Federal Bureau of Investigation, the Tampa Police Department, the United States Secret Service, and the Department of Labor. It is being prosecuted by Assistant United States Attorney Diego F. Novaes.

Source: United States Department of Justice

Two Florida men were sentenced Friday for leading a nationwide scheme to defraud the Paycheck Protection Program (PPP) for millions of dollars in loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The U.S. District Court for the Northern District of Ohio sentenced James Stote, 56, of Hollywood, to 78 months in prison, and Phillip J. Augustin, 53, of Coral Springs, to 120 months in prison. Stote and Augustin each pleaded guilty to conspiracy to commit wire fraud on Dec. 14, 2021. 

According to court documents, Augustin and Stote obtained a fraudulent PPP loan for Augustin’s company, Clear Vision Music Group LLC, using falsified documents. After submitting that application, Stote and Augustin immediately began trying to illicitly obtain larger PPP loans for themselves and their associates. Stote and Augustin recruited additional PPP loan applicants and prepared and submitted fraudulent loan applications for them in exchange for a share of the loan proceeds. Augustin used his network of business contacts as a manager for professional football players to recruit loan applicants. The applications they submitted for these loans relied on fake payroll numbers, falsified IRS forms, and phony bank statements. Stote submitted or facilitated at least 79 fraudulent loan applications worth at least $35 million. Among those loans, Augustin was responsible for at least 34 fraudulent loan applications worth at least $15 million.

In addition to his prison sentence, Stote was ordered to serve three years of supervised released and pay more than $10.1 million in restitution and more than $1.1 million in forfeiture. Augustin was ordered to serve three years of supervised released and pay more than $5.9 million in restitution and more than $272,000 in forfeiture.

In total, 25 people have been charged for their participation in this scheme in the Northern District of Ohio, Southern District of Florida, and Middle District of North Carolina.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; Acting U.S. Attorney Michelle M. Baeppler for the Northern District of Ohio; Special Agent in Charge Bryant Jackson of the IRS-Criminal Investigation (IRS-CI) Cincinnati Field Office; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Interim Special Agent in Charge Philip E Frigm Jr. of the FBI’s Cleveland Field Office; and Special Agent in Charge Sharon Johnson of the SBA’s Office of Inspector General (SBA-OIG) Central Region made the announcement.

The IRS-CI, FBI, and SBA-OIG are investigating the cases.

Trial Attorney Philip Trout of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Elliot Morrison for the Northern District of Ohio prosecuted this case.

Since the inception of the CARES Act, the Fraud Section has prosecuted over 150 defendants in more than 95 criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.