Month: November 2022

Source: United States Department of Justice News

Ex-Director of Food Services for Hempstead Public Schools Steered Contracts to Co-Defendant in Exchange for Kickbacks

Source: United States Department of Justice News

A California attorney and filer of thousands of disability discrimination lawsuits pleaded guilty today to filing a false tax return on which he underreported the income he earned from many of those lawsuits.

According to court documents and statements made in court, Scott Norris Johnson, 60, of Carmichael, owned and operated Disabled Access Prevents Injury Inc (DAPI), a legal services corporation. First using DAPI, and later a law firm, Johnson filed more than 4,000 lawsuits in the Eastern District of California and elsewhere under the Americans with Disabilities Act of 1990 and related California statutes, naming himself as the plaintiff.

Under the Small Business Job Protection Act of 1996, payments related to lawsuit settlements or awards are taxable unless paid on account of personal physical injury or physical sickness. Johnson, who worked as an attorney at the IRS earlier in his career, was required to report the taxable portion of the lawsuit settlements and awards he received. He nonetheless intentionally underreported this income on his 2012, 2013, and 2014 tax returns. By understating the lawsuit settlements and awards, Johnson and DAPI paid little to no income tax for tax years 2012, 2013 and 2014. Johnson caused a loss to the IRS of more than $250,000.

Johnson is scheduled to be sentenced on March 7, 2023, and faces a maximum penalty of three years in prison for filing a false tax return. He also faces also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Phillip A. Talbert for the Eastern District of California made the announcement.

IRS-Criminal Investigation is investigating the case.

Assistant Chief Matthew J. Kluge of the Tax Division and Assistant U.S. Attorney Katherine T. Lydon of the Eastern District of California are prosecuting the case.

Source: United States Department of Justice News

Damian Williams, the United States Attorney for the Southern District of New York, announced that CHET STOJANOVICH, a/k/a “Chester J. Stojanovich,” pled guilty today to wire fraud for defrauding more than a dozen victims of more than $2 million through fraudulent misrepresentations that he would provide the victims with specialized cryptocurrency-mining computers (“Miners”) and Miner hosting services that would provide the victims with a lucrative stream of “hash power” convertible into cryptocurrency.  Instead, STOJANOVICH misappropriated his victims’ money and failed to provide them with the Miners and Miner hosting services they had purchased from him.  STOJANOVICH is scheduled to be sentenced on March 2, 2023, before United States District Judge Denise Cote, who presided over today’s guilty plea hearing.

U.S. Attorney Damian Williams said: “Cryptocurrency mining has generated much media attention and public excitement in the past few years, but new forms of money and investment can also generate fresh opportunities for old-fashioned fraud.  Chet Stojanovich has pled guilty to using those time-worn fraud techniques on this new financial frontier as he stole millions of dollars from victims who thought they were investing in cryptocurrency mining.”

According to publicly filed documents in this case:

From at least 2019 until his arrest in April 2022, STOJANOVICH controlled various companies, including Chet Mining Co. LLC (“Chet Mining”).  Starting in or about March 2019, STOJANOVICH engaged in a scheme to defraud people who were seeking to purchase Miners and Miner hosting services through which they expected to obtain “hash power” convertible into cryptocurrency and money.  STOJANOVICH defrauded these victims by falsely telling them that he would purchase, and had purchased, Miners on their behalf and that he would provide them with Miner hosting services and had already obtained such Miner hosting services for them.  

In total, STOJANOVICH fraudulently induced more than a dozen customer-victims to pay a total of more than $2 million to STOJANOVICH and his companies, ostensibly in return for Miners and Miner hosting services.  Despite fraudulent representations to the contrary, STOJANOVICH: (1) failed to provide many of the Miners that he told customers he had acquired; (2) failed to provide the Miner hosting services and cryptocurrency hash power that he represented he would provide; (3) employed deceptive practices to create the illusion that such Miners had been acquired and were being used to provide hash power to those customers; and (4) misappropriated his customers’ funds and spent the funds on unrelated and personal expenditures, including chartered air flights, hotel rooms, limousines, and private parties.

Defrauding at Least 10 Victims in 2019

In the spring and early summer of 2019, STOJANOVICH fraudulently induced at least 10 customers to pay a total of more than $2 million to STOJANOVICH and Chet Mining in return for Miners and Miner hosting services.  Based on these and other misrepresentations, STOJANOVICH issued at least 15 invoices to these 10 victims with instructions to make payment to STOJANOVICH or one of his companies.  As directed by STOJANOVICH, these customers paid STOJANOVICH more than $2 million in bank wires and cryptocurrency transfers.  However, STOJANOVICH failed to provide the Miners and Miner hosting services that he had agreed to provide and for which he had been paid.

Defrauding Three More Victims in 2021

In or about August and September 2021, STOJANOVICH induced at least three additional customer-victims to pay him a total of approximately $179,880 as payment for a total of 127 Miners.  Ultimately, STOJANOVICH provided those customers with only three of the 127 Miners they had paid for and repaid those customers only approximately $61,000 of the $179,880 they had paid, mostly from funds misappropriated from another customer.

The March 2022 Deposition

Several of the victims of the scheme described in the Indictment brought lawsuits against STOJANOVICH in federal court in Manhattan.  In one such lawsuit, Holmes et al. v. Chet Mining, Chet Stojanovich, et ano., Case No. 20 Civ. 4448 (LJL) (S.D.N.Y.), STOJANOVICH was ordered by the court to appear for a deposition on March 4, 2022.  During that deposition, STOJANOVICH testified falsely on a number of subjects.  For example, in response to several questions, STOJANOVICH testified that he did not know the answers without looking in his personal cellphone and falsely testified that his phone was downstairs in his rental car or in storage.  The deposition was thereupon adjourned for a half-hour, and STOJANOVICH was instructed to retrieve his cellphone and return to the deposition.  Instead, STOJANOVICH left the deposition and loitered in the vicinity of his car until after everyone else participating in the deposition had left.  Shortly thereafter, he returned to Canada, where he resided until he was arrested on April 11, 2022, following his attempt to re-enter the United States.

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STOJANOVICH, 38, previously of New York, New York, but residing in California since his release on bail in this case, pled guilty to one count of wire fraud, which carries a maximum penalty of 20 years in prison. 

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the sentencing judge.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation in the investigation of this case

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney David Raymond Lewis is in charge of the prosecution.  

Source: United States Department of Justice News

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that JAVIER ACEVEDO, 42, of Hartford, was sentenced today by U.S. District Judge Kari A. Dooley in Bridgeport to 42 months of imprisonment, followed by three years of supervised release, for a cocaine trafficking offense.

According to court documents and statements made in court, the U.S. Postal Inspection Service’s Narcotics and Bulk Cash Trafficking Task Force has been investigating the shipment of parcels containing controlled substances from Puerto Rico to Connecticut.  In May 2021, investigators identified a suspicious package that was destined for an address on Giddings Street in Hartford.  On May 15, 2021, investigators made a controlled delivery of the package.  Approximately one hour after it was delivered, Acevedo picked up the package and then drove it to his residence on South Street, where he was encountered by law enforcement.  A subsequent court-authorized search of the package revealed approximately two kilograms of cocaine.

The investigation revealed that Acevedo regularly received packages of cocaine that were shipped from Puerto Rico to his home address or other addresses associated with him, and held the packages until they were picked up by another individual.  Acevedo received at least $500 for each package he received.

Acevedo was arrested on July 7, 2021.  On April 27, 2022, he pleaded guilty to one count of possession with intent to distribute 500 grams or more of cocaine.

Acevedo, who is released on a $200,000 bond, is required to report to prison on January 17.

The U.S. Postal Inspection Service’s Narcotics and Bulk Cash Trafficking Task Force includes members from the U.S. Postal Inspection Service, the U.S. Postal Service – Office of the Inspector General, the Connecticut Army National Guard, and the Hartford, New Britain, Meriden and Town of Groton Police Departments.

This case was prosecuted by Assistant U.S. Attorney Robert S. Ruff.

Source: United States Department of Justice News

FRESNO, Calif. — Marquis Hawkins, 30, of Fresno, was sentenced Monday to five years and 10 months in prison for being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.

According to court documents, on March 7, 2019, law enforcement officers conducted a traffic stop on a car that Hawkins was driving. During the traffic stop, the officers searched Hawkins and found a loaded .38‑caliber revolver inside his sweatshirt pocket. Hawkins is prohibited from possessing firearms because he has previously been convicted of two crimes of domestic violence.

This case was the result of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant U.S. Attorney Justin J. Gilio prosecuted the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the U.S. Department of Justice launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.