Month: November 2022

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Security News: Somerset County Man Admits $850,000 Paycheck Protection Program Fraud Scheme

Source: United States Department of Justice News

TRENTON, N.J. – A Somerset County, New Jersey, man admitted fraudulently obtaining over $850,000 in federal Paycheck Protection Program (PPP) loans U.S. Attorney Philip R. Sellinger, announced today.

Butherde Darius, 50, of North Plainfield, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court on Nov. 21, 2022, to an information charging him with one count of conspiracy to commit bank fraud, and one count of money laundering.

According to documents filed in this case and statements made in court:

Darius conspired with at least one individual to submit a fraudulent PPP loan application to a lender on behalf of a purported business that he controlled, obtaining over $850,000. He engaged in various financial transactions with the fraudulently obtained loan proceeds. The application Darius and his conspirator submitted contained fraudulent representations to the lender – a Federal Home Loan Bank member – and the SBA, including bogus federal tax documents purportedly from the IRS. Darius also fabricated the existence of employees and wages paid through the purported businesses. According to IRS records, however, none of the purported tax documents that were submitted in support of the loan applications were ever filed with the IRS. Darius loan application for his purported business was approved for approximately $852,000 in federal COVID-19 emergency relief funds meant for distressed small businesses.  Darius then used a portion of the proceeds for various personal expenses.

The count of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. The count of money laundering carries a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for March 6, 2023.

U.S. Attorney Sellinger credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy L Tomlins; special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Acting Inspector in Charge Raimundo Marrero, Philadelphia Division; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Acting Special Agent in Charge Stephen Donnelly; special agents of the Federal Deposit Insurance Corporation – Office of Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Ricky J. Patel in Newark, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorneys David E. Dauenheimer and Katherine M. Romano of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.

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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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Security News: Owners Of Franklin Gun Shop Plead Guilty To Federal Charges

Source: United States Department of Justice News

NASHVILLE – The owners of Franklin Gun Shop pleaded guilty today in U.S. District Court to obstruction of justice and making false entries regarding the disposition of firearms, announced U.S. Attorney Mark H. Wildasin for the Middle District of Tennessee. 

Alan Hassler, 49, Brian Hassler, 52, and Michael Hassler, 45, all of Franklin, Tennessee, and co-  owners of Franklin Gun Shop, a Federal Firearms Licensee (FFL) in Williamson County, Tennessee, were charged in September following a federal regulatory inspection by the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).

“Proper record keeping is an essential requirement of all Federal Firearms Licensees,” said U.S. Attorney Wildasin.  “When the firearms record-keeping process breaks down, the resulting implications can be disastrous and hinder law enforcement’s ability to properly investigate gun crimes or keep firearms out of the hands of violent criminals and disqualified persons.  I commend the ATF for their vigorous attention to this matter.”

Court documents reflect that in 2016, the ATF performed a compliance inspection of the Franklin Gun Shop and numerous violations of applicable federal regulations regarding record keeping were found.   A follow-up inspection by the ATF in 2020 found that hundreds of firearms, out of the more than 10,000 firearms in Franklin Gun Shop’s inventory, were unaccounted for in the business’s internal records.  Over the course of the following year, hundreds of the previously unaccounted-for firearms were located within the business, but as of July 2021, approximately 144 firearms could not be located. 

The Hasslers later provided fraudulent documentation to the ATF in an attempt to account for the missing firearms.  In many cases, the Hasslers would take a completed, legitimate 4473 form —from a prior purchase — and would add one or more of the missing firearms to the form to make it appear to regulators that these firearms had been purchased as part of that original transaction.  The goal was to deceive the ATF into believing that the firearms were not missing but had been sold. Subsequent interviews by the ATF with multiple customers identified on these fraudulent forms established that these customers had not purchased the firearms attributed to them. Several of these customers produced original receipts showing that the missing firearms had not been purchased as the falsified forms indicated. 

“ATF’s core mission is to protect the public from violent crime, particularly crimes involving the use of firearms,” said Marcus Watson, Special Agent in Charge of ATF’s Nashville Division.  “An essential part of this mission is ensuring that federal firearms licensees comply with applicable federal laws and regulations, particularly the implementing regulations of the Gun Control Act.  This FFL committed numerous violations with the intentional disregard of their known legal duty and with plain indifference to their legal obligations. The ATF remains committed to ensuring public safety and compliance and enhancing the traceability of firearms.”

If the plea agreements are accepted by the Court, the Hasslers have agreed to a term of three months of home detention and two years of supervised release.  The Hasslers have also surrendered their Federal Firearms License and will complete the audit in progress by the ATF.

Sentencing is scheduled for May 25, 2023.

This case is being investigated by the ATF and prosecuted by Assistant U.S. Attorney Robert E. McGuire.

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Security News: Philadelphia Man Sentenced to 10 Years in Prison for Methamphetamine Conspiracy

Source: United States Department of Justice News

CAMDEN, N.J. – A Philadelphia man was sentenced to 120 months in prison for conspiring to distribute 50 grams or more of methamphetamine, U.S. Attorney Philip R Sellinger announced today.

Nasir White, 30, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of knowingly and intentionally conspiring to distribute and to possess with intent to distribute 50 grams or more of methamphetamine. Judge Kugler imposed the sentence on Nov. 21, 2022, in Camden federal court.

According to documents filed in this case and statements made in court:

On Oct. 9, 2019, White and Shawn McGuriman were arrested with 204 grams of methamphetamine, which they planned to sell to another person. McGuriman previously pleaded guilty to his role in the conspiracy and was sentenced in August 2021 to 10 years in prison.

In addition to the prison term, Judge Kugler sentenced White to five years of supervised release. 

U.S. Attorney Philip R. Sellinger credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Susan A. Gibson, with the investigation leading to today’s sentencing.

The government is represented by Deputy U.S. Attorney Andrew Carey of the U.S. Attorney’s Office.

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Security News: Carlsbad duo sentenced to 40 years in prison for carjacking resulting in death

Source: United States Department of Justice News

ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, announced that Stetson Shane Barnes, 30, of Loving, New Mexico, and Donald Alfred Busch, 34, of Carlsbad, New Mexico, were each sentenced to 40 years in prison following a conviction for their parts in a carjacking resulting in death.

On Nov. 12, 2021, after a nearly two-week trial, a federal jury convicted Barnes and Busch of conspiracy to commit carjacking, carjacking resulting in death, and being felons in possession of firearms and ammunition. Busch was also found guilty of using and carrying a firearm during and in relation to a crime of violence.

On the night of May 27, 2019, Barnes, Busch and Tyson Lee Terrell traveled to the victim’s home in Loving with an accomplice, Jehra Lynn Hedgecock, 33, of Carlsbad. The group had conspired to steal a motorcycle from the victim, identified in court records as J.S.

Upon the group arriving at the victim’s residence in Hedgecock’s truck, Hedgecock knocked at the front door in an attempt to lure J.S. outside. Meanwhile, Busch located the motorcycle he wanted to steal under the victim’s carport and began pushing it away. As the victim emerged from his home, Barnes, Busch and Hedgecock all pointed firearms at him. Jurors heard testimony that Busch ordered J.S. back into his home while holding him at gunpoint.

While Busch continued to push the motorcycle off the victim’s property, Hedgecock and Barnes got into Hedgecock’s truck. As they began to drive away, Barnes fired twelve shots from the truck into the residence, the last of which struck and killed J.S.  The victim’s father testified that J.S. called him to ask for help, and that he was on the phone with J.S. when he heard gunshots ring out.  According to courtroom testimony, J.S. was taking cover in the back room of his home when he was struck by the last bullet fired by Barnes.

After the shooting, Hedgecock stopped the truck on the side of the road where Barnes helped Busch to load the motorcycle in the back of the truck, and the conspirators fled.  Hedgecock’s truck was found burning in a ravine outside Carlsbad the following day and J.S.’s motorcycle was later recovered from Barnes’ property.

Hedgecock pleaded guilty on July 22, 2021, to one count of conspiracy, one count of carjacking resulting in death and one count of using, brandishing and carrying a firearm during and in relation to a crime of violence and possessing and brandishing a firearm in furtherance of such crime. Sentencing for Hedgecock is scheduled for Jan. 10, 2023.

Terrell pleaded guilty on Jan. 20 to one count of conspiracy. On July 22, Terrell was sentenced to four years in prison.

The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case with assistance from New Mexico State Police and the Eddy County Sheriff’s Office. Assistant United States Attorneys Maria Y. Armijo and Ry Ellison are prosecuting this case.

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Security News: Brooklyn Woman Pleads Guilty To Multifaceted COVID-19 Fraud Scheme

Source: United States Department of Justice News

TATIANA DANIEL Conspired to Commit Pandemic Fraud by Defrauding New York City’s COVID-19 Hotel Room Isolation Program, Selling Fabricated COVID-19 Test Results, Committing Unemployment Benefits Fraud, and Obtaining Fraudulent COVID-19 Loans

Damian Williams, the United States Attorney for the Southern District of New York, announced that TATIANA DANIEL pled guilty today to conspiracy to commit wire fraud.  DANIEL participated in a scheme to commit COVID-19 pandemic fraud by (1) defrauding New York City’s COVID-19 Hotel Room Isolation Program; (2) selling fabricated COVID-19 test results, both positive and negative; (3) committing unemployment benefits fraud; and (4) obtaining fraudulent COVID-19 loans from both the United States Small Business Administration’s Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loan (“EIDL”) program.  DANIEL pled guilty before United States Magistrate Judge Ona T. Wang.  DANIEL’s case is assigned to United States District Judge Lewis A. Kaplan.

U.S. Attorney Damian Williams said: “As she admitted today, Tatiana Daniel repeatedly took advantage of resources offered to aid people and businesses in crisis.  Daniel’s misconduct included selling fabricated COVID-19 test results, which likely put members of the public at risk of contracting the deadly virus from one of Daniel’s customers.  Daniel now faces possible prison time for her illegal and dangerous actions.”

According to the allegations contained in the Superseding Information, court filings, and statements made during plea proceedings:

From March 2020 through September 2021, DANIEL conspired to commit COVID-19 pandemic fraud through a variety of different means.

First, DANIEL defrauded the COVID-19 Hotel Room Isolation Program (the “Program”).  In response to the COVID-19 pandemic, New York City created the Program.  Funded by New York City and the Federal Emergency Management Agency, the Program provided free hotel rooms for qualifying individuals throughout New York City.  The Program was open to (a) healthcare workers who needed to isolate because of exposure to COVID-19; (b) patients who had tested positive for COVID-19; (c) individuals who believed, based on their symptoms, that they were infected with COVID-19; and (d) individuals who lived with someone who had COVID-19.  As stated on the City’s website describing the Program, such individuals “may qualify to self-isolate in a hotel, free of charge, for up to 14 days if you do not have a safe place to self-isolate.”  Those who wished to book a hotel room through the Program could either call a phone number or use an online hotel booking platform. 

DANIEL defrauded the Program in at least two respects.  First, she secured free Program hotel rooms for herself by falsely claiming to be a healthcare worker — specifically, a respiratory therapist.  Second, she sold at least approximately 144 nights’ worth of fraudulently obtained hotel rooms to customers who were ineligible for the Program.  In connection with this scheme, DANIEL used Facebook to advertise the sale of Program hotel rooms, to communicate directly with potential purchasers of Program hotel rooms, and to communicate with a co-defendant who worked at a call center that handled phone calls and certain reservations for the Program for several months in 2020.  For instance, at one point, DANIEL wrote to her co-defendant, “We gotta relocate that bitch they keep asking for employee ID.”

Second, DANIEL operated a fraudulent document mill, through which DANIEL sold, among other things, fabricated COVID-19 test results, both positive and negative, in July and August 2021.  These fabricated test results included the names of purported medical personnel, and contained misspellings (e.g., “postive”).

Third, between May 2021 and September 2021, DANIEL submitted fraudulent applications for COVID-19 loans, through both the PPP and EIDL programs, resulting in the disbursement of thousands of dollars in pandemic loan funding to DANIEL and a co-conspirator.

Fourth, between March 2020 and September 2021, DANIEL conspired to fraudulently obtain more than approximately $97,000 in unemployment benefits in New York State for both herself and others.  She did so by making misrepresentations about herself, and by stealing the identities of more than 10 individuals and collecting unemployment benefits issued for the benefit of those individuals.  In addition, DANIEL filed unsuccessful unemployment benefits applications in other states.

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DANIEL, 28, of Brooklyn, New York, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of five years in prison.  Under the terms of her plea agreement, DANIEL has agreed to forfeit $109,655 and to pay restitution of $401,206. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  DANIEL is scheduled to be sentenced by Judge Kaplan on March 29, 2023, at 2:30 p.m.

DANIEL’s three co-defendants are currently scheduled to proceed to trial before Judge Kaplan on January 17, 2023.

Mr. Williams praised the outstanding efforts of agents, investigators, and analysts from the New York City Department of Investigation, the New York Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), and the U.S. Attorney’s Office for the Southern District of New York.  Mr. Williams also thanked the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this investigation.  He also expressed gratitude to the New York City Police Department, the New York State Department of Labor, and the DOL-OIG Atlanta Regional Office for their assistance.

This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Michael D. Neff is in charge of the prosecution.