Month: July 2022

Source: United States Department of Justice News

Tampa, Florida – U.S. District Judge Kathryn Kimball Mizelle has sentenced Guillermo Inamagua (57, Davenport) to 3 years and 10 months in federal prison for conspiracy to commit wire fraud and conspiracy to defraud the United States and the Internal Revenue Service. In addition, the court entered an order of forfeiture in the amount of $1,553,334 as well as an order for the forfeiture of two real properties in Polk County, proceeds of the wire fraud and tax conspiracies. Inamagua had pleaded guilty on March 9, 2022.

According to court documents, Inamagua owned and managed a construction company which purported to supply construction services and labor for construction contractors and subcontractors. In order to comply with Florida law, Inamagua’s company was required to secure and maintain adequate worker’s compensation insurance coverage. Inamagua’s company had agreements with contractors and subcontractors to use workers purported to be Inamagua’s employees at construction sites, and these workers were often undocumented aliens who were actually working for and under the daily supervision and direction of the contractors. Inamagua or others would then regularly receive “payroll checks” from contractors that were cashed at various financial institutions to pay Inamagua’s purported “employees” and other related expenses.

During the time period charged, Inamagua falsely and fraudulently represented in insurance applications that his company had a very limited payroll and a very limited number of employees who worked on construction jobsites. Inamagua also falsely and fraudulently sent wire communications to numerous contractors representing that his company’s employees had full worker’s compensation coverage.

In fact, Inamagua’s company received and cashed more than $19 million in checks from various construction contractors for these purported “employees.” This payroll figure far exceeded the very limited payroll figures that Inamagua had reported to his worker’s compensation insurance company. As a result, these employees—in reality, the employees of other entities—performed work on jobsites without adequate insurance coverage. In addition, the insurers lost premiums they would have charged had they been aware of the true number of workers their policies were thus being manipulated to appear to cover. The loss to those insurers was over $1,460,000 in insurance premiums that were not paid.

As a result of these misrepresentations, Inamagua’s company also disclaimed responsibility for ensuring that jobsite workers were legally authorized to work in the United States and evaded laws that required the payment of state and federal payroll taxes on behalf of these workers. Inamagua’s company did not collect or remit any such payroll taxes to the United States. Further, the contractors who actually paid these workers’ wages and used their services were able to avoid responsibility for those taxes as well. The amount of those un-paid payroll taxes totaled more than $4,670,000.

“Business owners who deliberately evade their tax and legal workforce requirements must be held accountable,” said IRS CI Special Agent in Charge Brian Payne. “Employers who intentionally deflect these obligations undermine what is owed to the U.S. government in payroll taxes and other fees, in addition to creating an unfair economic advantage over the law-abiding businesses who are operating above board.”

This case was investigated by the Internal Revenue Service – Criminal Investigation and the State of Florida Department of Financial Services. It is part of a lengthy investigation by those agencies into the use of shell companies and “ghost” employees in the construction industry. It was prosecuted by Assistant United States Attorney Jay L. Hoffer.

Source: United States Department of Justice News

PROVIDENCE – According to a signed plea agreement filed today in U.S. District Court in Providence, a Rhode Island woman who, it is alleged, falsely claimed to be a cancer-stricken U.S. Marine decorated with the Purple Heart and Bronze Star, and who allegedly used those claims to fraudulently gain hundreds of thousands of dollars in charitable benefits and services reserved for injured veterans, will plead guilty to charges of fraud, aggravated identity theft, forgery, and fraudulent use of medals, announced United States Attorney Zachary A. Cunha.

It is alleged that Sarah J. Cavanaugh, 31, of East Greenwich, who, a search of Defense Department records indicates never served in any branch of the U.S. military, used her position as a licensed social worker, employed by the Department of Veteran Affairs at the Rhode Island Veterans Affairs Medical Center, to gain access to documents, personal information, and medical records belonging to a Marine and an actual cancer-stricken Navy veteran. She allegedly used the information to create fraudulent documents and medical records in her name, claiming that she was an honorably-discharged Marine stricken with cancer. It is further alleged that Cavanaugh used the fraudulent documents in various schemes to obtain more than $250,000 in cash, charitable donations, and services reserved for injured veterans.

It is further alleged that Cavanaugh, who portrayed herself as a wounded veteran who served overseas, fraudulently held herself out to be a recipient of a Purple Heart and the Bronze Star, replicas of which she purchased and publicly displayed on a U.S. Marine uniform she wore at public events.

The matter is being prosecuted by Assistant U.S. Attorney Ronald R. Gendron and investigated by the U.S. Department of Veterans Affairs Office of Inspector General; U.S. Department of Veterans Affairs Police Service; and the FBI, with the assistance of the U.S. Defense Criminal Investigative Service; U.S. Naval Criminal Investigative Service; U.S. Postal Inspection Service; and Internal Revenue Service Criminal Investigations.

A defendant’s sentence is determined by a federal district judge after consideration of the U.S. Sentencing Guidelines and other statutory factors.

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Source: United States Department of Justice News

A former South Carolina sheriff and two deputies were sentenced yesterday for various charges relating to their conspiracy to violate federal law, deprivation of civil rights during an unlawful arrest, obstruction of justice, and misuse of public funds and personnel.

Former Chester County Sheriff George Alexander Underwood, 59, of Chester; Chief Deputy Robert Andrew Sprouse, 47, of Ridgeway; and former Chester County Sheriff’s Office Lieutenant Johnny Ricardo Neal Jr., 42, of Lancaster, were convicted of conspiracy to violate federal law and to commit federal program theft in April 2021 following a 10-day jury trial. Underwood and Neal were additionally convicted of deprivation of rights and wire fraud. Sprouse and Neal were additionally convicted of falsifying records, and Sprouse was found guilty of making false statements.

Underwood and Neal were both sentenced to 46 months, and Sprouse was sentenced to 24 months in prison.

According to court documents and evidence presented at trial, Underwood, Sprouse, and Neal conspired to use their positions to enrich themselves by obtaining money to which they were not entitled; to cover up their misconduct; and to obstruct investigations into their misconduct. Evidence showed Underwood and Neal violated the rights of a Chester County resident, K.S., who was filming the Sheriff’s Office’s response to a crash scene on Nov. 20, 2018, by arresting and detaining him without probable cause. When the FBI began investigating these civil rights violations, Sprouse and Neal created false incident reports and Sprouse made false statements to the FBI to cover up their misconduct.

Additionally, court documents and evidence presented at trial showed the three defendants directed on-duty Sheriff’s Office employees to provide manual labor or other services that personally benefited Underwood and Sprouse, including requiring them to help with extensive renovations of a barn on Underwood’s property to add a bar, a television viewing area, and other amenities. Separately, Underwood and Sprouse took family members on a trip to a conference in Reno, Nevada, and charged the costs to the Sheriff’s Office. Underwood and Neal also engaged in a scheme in which they skimmed money from payments owed to other Sheriff’s Office employees for off-duty work at public safety checkpoints.

Underwood, Sprouse, and Neal were removed from their positions with the Chester County Sheriff’s Office in approximately May 2019, after they were initially indicted by a federal grand jury.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and Special Agent in Charge Susan Ferensic of the FBI’s Columbia Field Office made the announcement.

The FBI investigated the case.

Trial Attorneys William M. Miller and Rebecca M. Schuman of the Criminal Division’s Public Integrity Section prosecuted the case.

Source: United States Department of Justice

Attorney General Merrick B. Garland today announced that he has selected Colette S. Peters to serve as Director of the Federal Bureau of Prisons (BOP) at the Department of Justice.

“The Justice Department’s mission to uphold the rule of law, keep our country safe, and protect civil rights depends on an effective, safe, and humane correctional system,” said Attorney General Merrick B. Garland. “Director Peters is uniquely qualified to lead BOP in its efforts to ensure the rehabilitation, health, and safety of incarcerated individuals, a safe and secure work environment for correctional staff, and transparency and accountability across federal detention facilities.”

BOP is one of the largest components of the Department of Justice and the nation’s largest correctional agency, with approximately 150,000 federal offenders housed in 122 federal prisons, and 178 community-based facilities worldwide. The Director of BOP is responsible for leading over 36,000 employees in the implementation of BOP’s core mission.

Ms. Peters has 30 years of experience in public safety and has been the Director of the Oregon Department of Corrections (ODOC) since 2012. She is the first woman to serve as ODOC Director and is also the Chair of the National Institute of Corrections Advisory Board and a past Vice President of the Association of State Correctional Administrators.

“Colette Peters has a proven track record as a visionary leader in the field of corrections and public safety,” said Deputy Attorney General Lisa O. Monaco. “With her experience and judgment, she is the right leader for BOP and its dual mission of providing both safe detention and meaningful preparation for those in custody reentering society. I look forward to working with her.”

Ms. Peters has demonstrated an ability to lead change by establishing a vision for reform, and using creativity, innovation, external awareness, and strategic thinking to achieve her vision. Under her leadership, ODOC developed the “Oregon Way,” a visionary approach to improving employee health and wellness and reducing the use of segregation for adults in custody to transform environments inside correctional facilities to be more humane and reflective of the outside community.

She began her career in public safety as a Victim Advocate and Crisis Mediator with the Denver Police Department. She was Director of Public Affairs for ODOC from 2004-2006, and the ODOC Assistant Director for Public Services and Inspector General from 2006-2008. From 2009-2012, she was Director of the Oregon Youth Authority, the state agency responsible for providing custody, rehabilitation, and treatment services to youth ages 12-24 who committed crimes prior to their 18th birthday.

Ms. Peters earned her Bachelor of Arts in Psychology from the College of St. Benedict in Saint Joseph, Minnesota, and her master’s in criminal justice from the Graduate School of Public Affairs at the University of Colorado in Denver.

She will assume her duties on Tuesday, August 2.