Month: May 2022

Source: United States Department of Justice News

NASHVILLE – A Putnam County Commissioner was charged yesterday with possession, receipt, and distribution of child pornography, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee.

Jimmy Ray Neal, 57, of Baxter, Tennessee, was arrested at his home, after FBI and Homeland Security Investigations agents executed a search warrant.  Neal was transported to Nashville and appeared before a U.S. Magistrate Judge late yesterday. 

A criminal complaint obtained yesterday alleges that Neal was identified as an administrator of a group in the Kik app in which images of child pornography were viewed and shared with other users.  Specifically, the images depicted naked pre-pubescent females with the focus on the genital area.

This long-running investigation by the FBI began in July 2021, and after the arrest of an Oklahoma man on child pornography charges, other users in the Kik app group were identified, including “tennesseemaster,” later identified as Jimmy Ray Neal. 

A preliminary and detention hearing is set for Tuesday, May 31, 2022, at 2 p.m.

If convicted, Neal faces a mandatory minimum of five years, and up to 20 years in prison. 

This case is being investigated by the FBI and Homeland Security Investigations.  Assistant U.S. Attorney Monica Morrison is prosecuting the case.

The charges are merely accusations.  The defendant is presumed innocent until proven guilty in a court of law.

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Source: United States Department of Justice News

HARRISBURG—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Christopher Gambrill, age 46, of Windsor, Pennsylvania, was sentenced yesterday to 3 years of probation by United States District Court Judge Jennifer P. Wilson for concealing assets during a bankruptcy proceeding.  Gambrill was also ordered to pay a $7,200 fine.

According to United States Attorney John C. Gurganus, Gambrill previously admitted that in 2016 and 2017, while he was a petitioner in a bankruptcy proceeding, he fraudulently concealed a $125,000 inheritance from the bankruptcy trustee and creditors. Gambrill’s bankruptcy petition was ultimately dismissed, and none of his debts were discharged. 

The case was investigated by the Federal Bureau of Investigation.  Assistant U.S. Attorney Carlo D. Marchioli prosecuted the case.

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Source: United States Department of Justice News

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, today announced that CAREER TRAINING SPECIALISTS, LLC, doing business as STONE ACADEMY, and its owner, MARK SCHEINBERG, have paid more than $1 million to resolve allegations that they violated the federal False Claims Act by concealing a series of money order payments made by Scheinberg to prevent certain loans from being counted in Stone Academy’s student loan default rate, and for failing to disclose Stone Academy’s actual, higher default rate to the U.S. Department of Education.

Stone Academy is a for-profit school with campuses in East Hartford, Waterbury and West Haven that awards career diplomas in various medical fields, and it participates in federal student loan and grant programs under Title IV of the Higher Education Act of 1965.  One measure that determines an institution’s eligibility to participate in Title IV programs is the institution’s “cohort default rate” (“CDR”), which is the percentage of the institution’s federal student loan borrowers who default (or are deemed to default) within a specified time after entering repayment status.  If an institution’s CDR is too high – an indicator that too many of an institution’s graduates are unable to repay their student loans – the institution faces administrative consequences that may include termination of eligibility to participate in certain Title IV programs.  For purposes of calculating an institution’s CDR, a borrower is considered to be in default if an institution – or an institution’s owner, agent or affiliated individual – makes a payment to prevent a borrower’s default on a loan included in a cohort.

This settlement resolves allegations that, between February 2015 and March 2019, Scheinberg and Stone Academy mailed 154 small, direct payments to loan servicers on behalf of 102 students in attempts to prevent those students from defaulting on their loans and being counted in Stone Academy’s CDR.  The payments were made with money orders purchased and filled out by Scheinberg without the students’ knowledge or consent, and in a manner intended to conceal the fact that these payments were made by Scheinberg and Stone Academy.  Stone Academy then failed to disclose to the Department of Education its actual, higher CDR reflecting the deemed default of numerous borrowers given Scheinberg’s concealed payments.

In addition to making payment of $1,023,950, plus interest, under a civil settlement agreement, Stone Academy and Scheinberg also entered into an administrative agreement with the Department of Education in which Scheinberg agreed to cease involvement and participation in the operations, and divest direct ownership, of both Stone Academy and another for-profit school, Creative Workforce LLC, doing business as Paier College of Art.  The administrative agreement also governs Scheinberg’s agreed-to retirement from Goodwin University and the University of Bridgeport.

“The cohort default rate is an important metric that students can use to research whether a school provides a valuable education because it can show whether the degree they would earn will help them find employment that allows them to stay current on their student loans,” said U.S. Attorney Avery.  “Educational institutions – especially private, for-profit schools – that attempt to hide high student loan default rates from the Education Department and their students not only risk forfeiting their and their students’ eligibility to receive federal funds, but they risk federal enforcement by our office and our investigative agency partners.”

“Today’s settlement is a result of the work and effort of the Office of Inspector General and the Department of Justice to protect and maintain the integrity of federal student aid programs,” said Terry Harris, Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Eastern Regional Office.  “We will continue to work together to ensure that federal student aid funds are used as required by law.  America’s taxpayers and students deserve nothing less.”

This investigation was conducted by the U.S. Department of Education – Office of Inspector General and the U.S. Postal Inspection Service.  This matter was prosecuted by Assistant U.S. Attorney Sarah Gruber with the assistance of Auditor Susan N. Spiegel, along with assistance from the U.S. Department of Education’s Office of General Counsel and Federal Student Aid.

Source: United States Department of Justice

Three federal correctional officers — two officers and a lieutenant — have been indicted by a federal grand jury in London, Kentucky, for their respective roles in assaults against two inmates and subsequent cover-ups, announced Assistant Attorney General Kristen Clarke of the Department of Justice’s Civil Rights Division; U.S. Attorney Carlton S. Shier for the Eastern District of Kentucky; Special Agent in Charge William J. Hannah of the Department of Justice Office of the Inspector General’s Chicago Field Office; and Special Agent in Charge Jodi Cohen of FBI Louisville. 

Officers Samuel Patrick, 41, and Clinton Pauley, 40, were indicted for assaulting one inmate and attempting to cover it up, and Lieutenant Kevin Pearce, 37, was also indicted for helping cover up that assault. Officer Pauley was also charged with assaulting a second inmate and attempting to cover up that assault.

The indictment alleges that, on April 29, 2021, defendants Patrick and Pauley, who were officers at the U.S. Penitentiary-Big Sandy, physically assaulted an inmate, identified in the indictment as C.T., violating that inmate’s constitutional rights. The indictment also alleges that the assault resulted in bodily injury, and that defendants Patrick and Pauley, as well as a supervisory officer, Lieutenant Pearce, attempted to cover up the assault by writing false reports. The indictment also charges defendants Patrick and Pearce with witness tampering based on their efforts to pressure a fellow correctional officer to write an untruthful report that omitted the assault.

The indictment further alleges that, on March 26, 2021, defendant Pauley physically assaulted a different inmate, identified in the indictment as N.D., who was being escorted away from the prison’s lieutenants’ office at Big Sandy, and that the assault resulted in bodily injury. The indictment also charges that defendant Pauley attempted to cover up the assault of N.D. by writing a false report.

The maximum penalties for the charged crimes are 10 years of imprisonment for the assault offenses, and 20 years of imprisonment for each of the witness tampering and false report offenses.

The Office of the Inspector General and the FBI conducted the investigation. Assistant U.S. Attorney Zachary Dembo for the Eastern District of Kentucky is prosecuting the case in partnership with Trial Attorney Thomas Johnson of the Civil Rights Division. 

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.