Month: May 2022

Source: United States Department of Justice News

LONDON, Ky.- Three Bureau of Prisons employees of the United States Penitentiary Big Sandy, located in Inez, Ky., were indicted on Thursday, for federal civil rights violations.           

 A federal grand jury sitting in London, Ky., returned an indictment charging the following individuals:  Samuel J. Patrick, 41, of West Van Lear, Ky.; Clinton L. Pauley, 40, of Ironton, Ohio; and Kevin C. Pearce, Jr., 37, of Inez, Ky.  The defendants have been charged with violating an individual’s rights under the color of law and of falsifying records to impede an investigation.            

The indictment alleges that on April 29, 2021, Patrick and Pauley assaulted an inmate, in the lieutenant’s office of USP Big Sandy.  After Pearce and a subordinate BOP employee witnessed the assault, Pearce asked that employee to write an untruthful report, omitting the assault.  It is also alleged that Patrick pressured that employee to submit to Pearce’s demand.

The indictment also alleges that Pearce wrote a memorandum that documented the false account of the officers’ interactions with the inmate who was assaulted; that stated another employee was present in the office with the victim; and that stated the victim left the office without incident, omitting the assault. Patrick and Pauley are also alleged to have written memos to cover up the assault.

The indictment further alleges that Pauley previously assaulted another inmate on March 26, 2021, while the inmate was being escorted away from the lieutenants’ office of USP Big Sandy and that he subsequently wrote a false incident report to cover up that assault.           

Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; Kristen Clarke, Assistant Attorney General, Department of Justice’s Civil Rights Division; William J. Hannah, Special Agent in Charge, Department of Justice Office of the Inspector General, Chicago Field Office; and Jodi Cohen, Special Agent in Charge, FBI, Louisville Field Office, announced the indictment.

The investigation preceding the indictment was conducted by the DOJ OIG and the FBI.  The case is being handled by Assistant U.S. Attorney Zach Dembo and Trial Attorney Thomas Johnson of the Civil Rights Division.

A date for Patrick, Pauley, and Pearce to appear in court has not yet been scheduled yet. For the deprivation of rights charges, they each face a maximum of 10 years per, and for the falsification of records charges, they each face 20 years for each count.  However, any sentence following a conviction would be imposed by the Court, after its consideration of the U.S. Sentencing Guidelines and the federal sentencing 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.

                                                                                                         

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Source: United States Department of Justice News

BOSTON – A Lawrence woman was sentenced yesterday in federal court in Boston for her role in a cocaine distribution conspiracy.

Michel Saredi-Munoz Moronta, a/k/a “Michel Saredi-Munoz Morta,” 22, was sentenced by U.S. Senior District Court Judge Douglas P. Woodlock to time served (approximately 21 months in prison) and four years of supervised release. On Dec. 15, 2021, Munoz Moronta pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine.

In or about August 2020, law enforcement identified several Priority Mail packages sent to addresses in Lawrence as suspected to contain illegal narcotics. Officers surveilling the addresses saw a woman, later identified as Munoz Moronta, get out of a car and collect the packages shortly after delivery. Munoz Moronta was subsequently arrested. The packages were found to contain approximately four kilograms of cocaine.

United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement. The Lawrence Police Department provided valuable assistance in the investigation. Assistant U.S. Attorney Samuel R. Feldman of Rollins’ Narcotics & Money Laundering Unit prosecuted the case. 

Source: United States Department of Justice News

PORTLAND, Ore.—A former senior executive and chief financial officer of Aequitas Management, LLC, and several other entities formerly owned by Aequitas, pleaded guilty today to submitting a false statement to an Aequitas creditor to obtain a $4.2 million loan for the now-defunct company.

Nelson Scott Gillis, 69, of Lake Oswego, Oregon, pleaded guilty to one count of making a false statement to a bank.

According to court documents, Aequitas created and operated investment funds that purchased trade receivables in education, health care, transportation, and other consumer credit areas. Aequitas borrowed funds from other financial institutions, including Wells Fargo Bank, N.A., to purchase these trade receivables. On or about January 12, 2015, Aequitas entered into a loan agreement with Wells Fargo to establish a $100 million line of credit. Six months later, on or about June 30, 2015, Gillis signed an amended loan agreement with Wells Fargo on Aequitas’s behalf

By early January 2016, Aequitas’s general counsel advised Gillis and other executives that the company would soon default on payments due to Private Note investors, causing an “event of default” on Aequitas’s loan agreement with Wells Fargo. Despite that advice, on or about January 15, 2016, Gillis signed and, with others, submitted to Wells Fargo an “advance notice,” requesting that Wells Fargo advance $4.2 million to Aequitas with a false certification that Aequitas was not confronting a potential event of default.

On August 11, 2020, the U.S. Attorney’s Office announced that Gillis had been charged in a 34-count indictment with conspiracy to commit mail and wire fraud, wire fraud, bank fraud, and money laundering. Gillis was charged alongside former Aequitas CEO Robert J. Jesenik, 62, of West Linn, Oregon, and former Aequitas executives Brian K. Rice, 55, of Portland, and Andrew N. MacRitchie, 56, formerly of Palm Harbor, Florida. Jesenik, Rice, and MacRitchie are all on pre-trial release pending a five-week jury trial scheduled to begin on April 3, 2023.

Gillis faces a maximum sentence of 30 years in prison, an $8.4 million fine, and five years’ supervised release. He will be sentenced on June 27, 2023 by U.S. District Court Judge Michael H. Simon.

As part of his plea agreement, Gillis has also agreed to pay restitution as determined by the government and ordered by the court.

This case is being investigated by the FBI, IRS Criminal Investigation, and the U.S. Department of Labor Employee Benefits Security Administration. It is being prosecuted by Ryan W. Bounds, Christopher Cardani and Siddharth Dadhich, Assistant U.S. Attorneys for the District of Oregon.

Source: United States Department of Justice News

PORTLAND, Ore.—A federal indictment was unsealed today charging a California real estate developer with using stolen identities to fraudulently obtain more than $1.5 million in loans intended to help small businesses during the COVID-19 pandemic.

Alfred E. Nevis, 52, of Arroyo Grande, California, has been charged with wire fraud, aggravated identity theft, and money laundering.

According to court documents, from April 1, 2020, through at least August 6, 2020, Nevis is alleged to have used the identities of multiple individuals known to him—including current and former employees, business associates, and their spouses—to illegally obtain Economic Injury Disaster Loans (EIDLs) administered by the Small Business Administration (SBA). The EIDL program was one of several economic relief programs originally authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES). It enabled SBA to issue low-interest loans to small businesses adversely impacted by the pandemic and associated mitigation measures.

To facilitate his scheme, Nevis used the stolen identities to register straw corporations, obtain Employer Identification Numbers (EINs) from the IRS, and submit loan applications to SBA on behalf of the newly-registered corporations. In one instance, Nevis claimed a straw corporation called Isley Farms, registered in Oregon, had 12 employees and generated more than $725,000 in revenue in a 12-month period ending in January 2020.

Between April 1, 2020 and July 23, 2020, Nevis submitted at least 12 EIDL applications using the identities of at least eight individuals without their knowledge or permission. Together, these applications generated nearly $1.4 million in fraudulent loan disbursements. SBA approved one final EIDL for $150,000 in August 2020, bringing Nevis’ total fraud proceeds to more than $1.5 million. Nevis is further alleged to have laundered at least $160,000 of his ill-gotten gains.

Nevis made his initial appearance in federal court today before U.S. Magistrate Judge Jolie A. Russo. He was arraigned, pleaded not guilty, and released pending a 3-day jury trial scheduled to begin on August 2.

Nevis faces a maximum sentence of 32 years in prison, fines of up to $500,000, and 3 years’ supervised release.

U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement.

This case was investigated by the FBI with assistance from the U.S. Treasury Inspector General for Tax Administration (TIGTA) and the SBA Office of Inspector General. Assistant U.S. Attorney Ryan W. Bounds is prosecuting the case.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law, enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Source: United States Department of Justice News

The Justice Department announced today that after careful re-review of evidence gathered in the investigation of two former FBI special agents in connection with their involvement in the FBI’s investigation of Lawrence G. Nassar, it is adhering to its prior decision not to bring federal criminal charges.

This decision comes after multiple reviews and analyses of evidence gathered in the investigation of the former agents, and reflects the recommendation of experienced prosecutors. This does not in any way reflect a view that the investigation of Nassar was handled as it should have been, nor in any way reflect approval or disregard of the conduct of the former agents.

While the Justice Department’s Office of Inspector General has outlined serious concerns about the former agents’ conduct during the Nassar investigation, and also described how evidence shows that during interviews in the years after the events in question both former agents appear to have provided inaccurate or incomplete information to investigators, the Principles of Federal Prosecution require more to bring a federal criminal case.

We will continue to learn from what occurred in this matter, and undertake efforts to keep victims at the center of our work and to ensure that they are heard, respected, and treated fairly throughout the process, as they deserve. To that end, the department has continued to assess gaps in the law to protect the most vulnerable among us from exploitation. Addressing those gaps could help prevent events like this from taking place in the future and hold perpetrators accountable. We stand ready to collaborate with Congress to do so.