Month: September 2022

Source: United States Department of Justice News

PITTSBURGH – An Ohio resident pleaded guilty in federal court to violating federal narcotics laws, United States Attorney Cindy K. Chung announced today.

Bruce McKnight, 55, of Columbus, Ohio, pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine from March of 2019 through September of 2020 and one count of conspiracy to distribute and possess with intent to distribute 40 grams or more of fentanyl from March of 2020 through September of 2020 before United States District Judge J. Nicholas Ranjan. In addition, McKnight accepted responsibility for possessing a firearm in conjunction with his drug trafficking. McKnight is the lead Defendant of 13 defendants charged in the Indictment returned in this case.

In connection with the guilty plea, the court was advised that the Drug Enforcement Administration began investigating a cocaine and fentanyl trafficking organization that operated throughout the United States, including Florida, Ohio, Pennsylvania, and Puerto Rico. Beginning in December of 2019 and continuing through August of 2020, the DEA received authorization to conduct a Title III wiretap investigation into the organization. McKnight, as the leader of this multistate drug trafficking organization, was intercepted orchestrating and directing the movement of cocaine from various states into the Western District of Pennsylvania for distribution. McKnight was also intercepted communicating about acquiring fentanyl, distributing fentanyl, and cutting fentanyl to increase profits. In addition to the intercepted communications, agents seized cocaine, heroin, fentanyl, methamphetamine, ecstasy, marijuana, firearms, and bulk United States Currency from members of the organization, including McKnight.

Judge Ranjan scheduled sentencing for Feb. 23, 2023. The law provides for a total sentence of not less than 15 years to a maximum of life imprisonment, a fine not to exceed $20,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant. McKnight remains in custody pending sentencing.

Assistant United States Attorney Mark V. Gurzo is prosecuting this case on behalf of the
government.

The DEA in Pittsburgh, PA; the DEA, Columbus, OH; the DEA, Harrisburg, PA; Homeland Security Investigations (HSI), Pittsburgh, PA; HSI, Orlando, FL; Internal Revenue Service-Criminal Investigations; United States Postal Service, Columbus, Ohio; Pennsylvania Office of Attorney General; Lawrence County Drug Task Force – Special Investigations Unit; and New Castle Police Department conducted the investigation leading to the prosecution of McKnight.

This prosecution is a result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles high-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten communities throughout the United States. OCDETF uses a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

Source: United States Department of Justice News

A Massachusetts man and a Florida man pleaded guilty today for their roles in perpetrating a foreign exchange trading scheme to steal $30 million from their investor victims.

According to court documents, Patrick Gallagher, 44, of Middleborough, Massachusetts, and Michael Dion, 49, of Orlando, Florida, devised a scheme in which they would solicit victims to invest in their foreign exchange company, Global Forex Management, by promising them large returns based on previous trading results that they had fabricated. They told the victims that their funds would be traded using an online trading platform provided by a co-conspirator’s company, IB Capital. Instead, Gallagher and Dion were working with other co-conspirators in the Netherlands to steal the victim investors’ money. In May 2012, Gallagher and Dion executed their scheme by intentionally creating losing trades for the investors and effectively stole $30 million from their victims. After fabricating the massive trading loss, Gallagher and Dion routed the stolen money through shell companies they had set up all over the world.

Gallagher and Dion each pleaded guilty to one count of conspiracy to commit securities fraud, and each face a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division and Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group made the announcement.

The USPIS is investigating the case.

Trial Attorneys Brittain Shaw, Vasanth Sridharan, and Tian Huang of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. Individuals or entities who believe they may be a victim in this case should contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing victimassistance.fraud@usdoj.gov.

Source: United States Department of Justice News

AUGUSTA, GA:  A Richmond County man and his daughter have been sentenced after admitting they filed fraudulently inflated tax returns on behalf of clients.

Ezra Hatcher Sr., 67, of Hephzibah, Ga., was sentenced to 24 months in prison, followed by three years of supervised release, and ordered to pay $69,682 in restitution after previously pleading guilty to Conspiracy to Defraud the United States, said David H. Estes, U.S. Attorney for the Southern District of Georgia. Hatcher’s daughter, Sherry Hatcher, 42, of Augusta, was sentenced to five years’ probation and ordered to pay $4,141 in restitution after previously pleading guilty to Aiding and Assisting in the Filing of a False Tax Return.

In addition, each defendant is permanently prohibited from preparing or filing federal tax returns for anyone other than themselves.

“Family run small businesses are the backbone of American free enterprise, and the Hatchers could have established themselves as honorable participants in the tax preparation business,” said U.S. Attorney Estes. “Instead, serial scam artist Ezra Hatcher made a business of defrauding taxpayers, and he and his daughter are being held accountable for their crimes.”

As described in court documents and testimony, an IRS investigation of tax preparation services operated by Ezra Hatcher and Sherry Hatcher determined that from 2014 to 2018, their tax services filed 21 tax returns containing fraudulent information on behalf of seven individuals. The returns included false information relating to Schedule C expenses, income, and earned income credits, causing the IRS to issue excess refunds amounting to nearly $75,000.

Ezra Hatcher previously served a federal prison sentence for preparing false income tax returns after pleading guilty in 1998.

“The Hatchers abused their clients’ trust in an effort to fraudulently gain more funds,” said IRS-Criminal Investigation Special Agent in Charge James E. Dorsey. “The sentencing is proof we are holding return preparers accountable. To help detect these schemes and avoid getting a surprise IRS audit bill, it’s important to pick an honest, transparent return preparer and not the one who promises a big refund. Always review your return with your return preparer and ask questions.”

The case was investigated by IRS-Criminal Investigations, and prosecuted for the United States by Assistant U.S. Attorneys Henry W. Syms Jr. and Jennifer A Stanley.