Month: March 2023

Source: United States Department of Justice News

GAINESVILLE, FLORIDA – Tzaddi Lamed D’Marcus Allen, 32, of Palm Beach County, Florida, was sentenced to twelve years in federal prison followed by five years’ supervised release for possession of a firearm and ammunition by a convicted felon. The sentence was announced by Jason R. Coody, United States Attorney for the Northern District of Florida.

“The collaborative efforts of our partners in the Gainesville Gun Violence Initiative continue to produce impactful results, and we will continue working tirelessly to make North Florida safer,” said U.S. Attorney Coody. “This sentence ensures that our community will be safer and sends a message that there are real and severe consequences for federal firearm offenses.”

“The Men and Women of the Alachua County Sheriff’s Office, in concert with our local, state and federal partners, will continue to pursue violent criminals who unlawfully possess firearms, to ensure that the citizens and visitors of this great county remain safe,” said Alachua County Sheriff Clovis Watson, Jr.

On the afternoon of January 31, 2022, a traffic stop was conducted by an Alachua County Sheriff’s Office deputy, on a vehicle that Allen was operating. During the traffic stop, deputies confirmed that Allen did not have a valid driver’s license and that the vehicle’s window tint was darker than the legal limit of twenty eight percent. Deputies further detected the odor of marijuana emanating from the vehicle’s interior. During a probable cause search of the vehicle, deputies located marijuana throughout the vehicle and noticed that a piece of center console paneling appeared to have been removed and put back into place. A deputy removed the piece of panel and discovered a bag containing approximately 8 grams of a powdery substance (which was later identified as a combination of fentanyl and synthetic cathinone) sitting on top of a Canik 9-millimeter pistol. The pistol had a live round in the chamber, seventeen additional rounds of ammunition in the magazine, and had previously been reported stolen. Deputies on scene determined that Allen was a multi-time convicted felon and arrested him for state charges of possession of a firearm by a convicted felon and possession of a controlled substance. Upon arrival at the Alachua County Jail, Allen alerted deputies that he had another small baggie of the powdery substance concealed on his person.

Following his arrest, the Bureau of Alcohol, Tobacco, and Firearms adopted the case for federal prosecution and conducted a follow-up investigation. That additional investigation included sending evidence to the Florida Department of Law Enforcement’s crime lab, which recovered DNA consistent with Allen from the firearm. Allen had prior felony convictions including Attempted Robbery, Aggravated Battery on Person 65 Years or Older, Fleeing and Eluding Law Enforcement, Sale of Cocaine, and Sale of Heroin within 1000 feet of a Convenience Business.  Allen had only been out of prison for approximately one month when the traffic-stop and arrest occurred.

This federal conviction resulted from the joint efforts of local, state, and federal law enforcement agencies that form the Gainesville Gun Violence Initiative (GVI). The Gainesville GVI was established in April 2019, by the United States Attorney’s Office for the Northern District of Florida in an effort to stem the escalating gun violence in Gainesville and the surrounding area.  As GVI partners, the State Attorney’s Office for the Eight Judicial Circuit, the Bureau of Alcohol, Tobacco and Firearms, the Federal Bureau of Investigation, the Florida Department of Law Enforcement, the Gainesville Police Department, the Alachua County Sheriff’s Office, the Alachua Police Department, the University of Florida Police Department, and the Florida Department of Corrections share this commitment to protecting public safety.   

The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.

Source: United States Department of Justice News

Baltimore – U.S. District Judge Deborah K. Chasanow today sentenced Jarvis Antonio Coleman-Fuller, age 35, of Hagerstown, Maryland and Eric Tyrell Johnson, a/k/a “E,” age 39, of Owings Mills, Maryland, to 156 months and 150 months in federal prison, respectively, each followed by five years of supervised release, on charges related to a conspiracy to distribute controlled substances, specifically fentanyl and heroin in Washington County, Maryland.  A federal jury convicted the defendants on November 17, 2022, after a two-week trial

The sentences were announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Jarod Forget of the Drug Enforcement Administration – Washington Division; Special Agent in Charge James C. Harris of Homeland Security Investigations (HSI) Baltimore; Washington County Sheriff Brian K. Albert; Chief Paul “Joey” Kifer of the Hagerstown Police Department; and Washington County States’ Attorney Gina Cirincion.

According to the evidence presented at trial, beginning in about April 2019 and continuing to about November 2019, the defendants and their co-conspirators conspired to distribute heroin and fentanyl in the Washington County area.  During the investigation, law enforcement seized narcotics, including at least 1.3 kilograms of fentanyl, five firearms, hundreds of rounds of ammunition, and more than $12,534 in cash.  Witnesses testified that Johnson and Coleman-Fuller distributed fentanyl and illegally possessed firearms.  Johnson and Coleman-Fuller both had previous felony convictions and were prohibited from possessing firearms and ammunition.  The trial evidence also proved that Coleman-Fuller possessed a firearm in furtherance of his drug trafficking crimes.

Eight co-defendants previously pleaded guilty to their roles in the conspiracy and were sentenced to between 10 years in prison and time served. 

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 Department 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.

This case is also part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

United States Attorney Erek L. Barron commended the DEA, HSI, the Washington County Sheriff’s Office, the Washington County Narcotics Task Force, and the Washington County State’s Attorney’s Office for their work in the investigation and prosecution  Mr. Barron also thanked the Baltimore County Police Department and the Baltimore County State’s Attorney’s Office for their assistance in the case.  Mr. Barron commended Assistant U.S. Attorneys Joan C. Mathias and Adeyemi Adenrele, who are prosecuting this case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md and https://www.justice.gov/usao-md/project-safe-neighborhoods-psn.

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Source: United States Department of Justice News

SAN ANTONIO – A San Antonio man was sentenced in a federal court in San Antonio Thursday to 12 months and one day in prison for preparing false tax returns.

According to court documents, Eden Garza, 43, prepared numerous false income tax returns for clients between tax years 2014 and 2019. IRS-Criminal Investigation agents determined that Garza aided and assisted in the preparation of 49 false income tax returns by falsifying filing statuses, itemized deductions, income and expenses, and residential energy credits.  The fraudulent refunds resulted in a criminal tax loss of $255,967.  The investigation also revealed that Garza had received a preparation fee from his clients, which was usually 10% of the refund received.

In addition to the prison sentence, Garza was ordered to serve one year of supervised release and pay restitution equal to the criminal tax loss of $255,967.

“This case serves as an important reminder—especially at this time of the year—to be aware of those who commit tax fraud,” said U.S. Attorney Jaime Esparza of the Western District of Texas. “The preparers of false income tax returns do untold damage to our nation, and hopefully this sentencing will serve to deter others from preparing false returns for financial gain.”

“Federal prison is a fitting home for this tax criminal who flaunted his criminal enterprise by placing advertising stickers on the false tax returns he prepared,” said Acting Special Agent-in-Charge Rodrick J. Benton of IRS-CI’s Houston Field Office. “Approximately 98% of investigated tax returns he prepared were egregiously false.  As we wind down tax season, know that criminals like him will go to prison for stealing from our nation.”

IRS-CI investigated the case.

Assistant U.S. Attorneys Bill Harris and Kelly Stephenson prosecuted the case.

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Source: United States Department of Justice News

Baltimore, Maryland – Alexander Barabash, age 52, of Baltimore, Maryland, pleaded guilty today to wire fraud, relating to the submission of fraudulent Coronavirus Aid, Relief, and Economic Security (“CARES”) Act loan applications.  The CARES Act was enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects caused by the COVID-19 pandemic.   

The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge Kareem A. Carter of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office; and Special Agent in Charge Ross Luciano of the United States Secret Service – Baltimore Field Office.

“Barabash fraudulently obtained more than $1.2 million in CARES Act loans intended to assist struggling businesses,” said Erek L. Barron, United States Attorney for Maryland.  “CARES Act fraud is a continuing priority for this office and fraudsters will be held accountable for their actions.”

“Investigating those who fraudulently acquired Coronavirus Aid, Relief, and Economic Security (CARES) Act relief funds will continue to be a focus of IRS-CI,” said Kareem A. Carter, Acting Special Agent in Charge, Washington, D.C. Field Office. “The CARES Act was put into place to assist those struggling financially due to the unprecedented COVID-19 pandemic, not for bad actors to buy cars and houses.”

Financial assistance offered through the CARES Act included forgivable loans to small businesses for job retention and certain other expenses, through the Paycheck Protection Program (“PPP”), administered through the Small Business Administration (“SBA”) and participating lenders. 

According to his plea agreement, between April 2020 and January 2021, Barabash submitted three fraudulent PPP loan applications on behalf of his construction company iDesignbuild LLC (“iDesignBuild”).  Barabash is the sole owner and CEO of iDesignBuild and was the sole authorized signer of the company’s business bank account.

As detailed in the plea agreement, on April 9, 2020, Barabash submitted a PPP loan application falsely stating that iDesignBuild had four employees and an average monthly payroll of $18,750.  In fact, the company did not have any employees, but engaged independent contractors for work-related matters.  Based on the representations made in the fraudulent application, on April 23, 2020, Barabash received $46,800 in PPP loan proceeds in the iDesignBuild bank account.  On April 25, 2020, Barabash submitted a second fraudulent PPP loan application on behalf of iDesignBuild, stating that the company had seven employees and an average monthly payroll of $38,777.60.  In support of the application, Barabash submitted IRS Forms 941 for each quarter of 2019 and a 2019 IRS Form 940 for iDesignBuild, signed by Barabash and his tax preparer, knowing that they had never been filed with IRS.

Barabash admitted that on January 20, 2021, he submitted a third fraudulent loan application on behalf of iDesignBuild, representing that the company had 37 employees and an average monthly payroll of $525,227.  In support of the application, Barabash again submitted fraudulent IRS Forms 941 for each quarter of 2019 and a fraudulent 2019 IRS Form 940.  Compared to the fraudulent forms submitted with the unsuccessful April 25, 2020 PPP loan application, the forms submitted in January 2021 reported more than six times the number of employees and nearly $1.5 million more in wages in each quarter.  The forms were again signed by Barabash and his tax preparer.  Barabash knew that the forms did not accurately reflect iDesignBuild’s wages or revenues, nor had they been filed with the IRS.  Based on Barabash’s false representations, the bank funded a PPP loan of $1,295,000, which was credited to iDesignBuild’s bank account on February 26, 2021.

Barabash used the fraudulently obtained loans to facilitate the purchase of two properties in Sparks Glencoe, Maryland, and to purchase a 2016 Chevrolet Corvette.  Barabash admitted that he knew those were not permissible uses of PPP funds and the transactions would not have been made

Barabash faces a maximum sentence of 30 years in federal prison for wire fraud.   As part of his plea agreement, Barabash will be required to pay a money judgment in the amount of $1,295,000 and forfeit $504,869.54 in funds seized from the iDesignBuild business bank account.  Barabash has also agreed to forfeit his interest in property located at 14044 Fox Hill Road in Sparks Glencoe, Maryland as a substitute asset, the net proceeds of which will be applied to the money judgment.  Chief U.S. District Judge James K. Bredar has scheduled sentencing for June 26, 2023 at 12:00 p.m.

The District of Maryland Strike Force is one of three strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including fraud relating to the CARES Act.  The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors.  The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.  

For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.  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 (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

United States Attorney Erek L. Barron commended the IRS-CI and U.S. Secret Service for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorney Darryl L. Tarver, who is prosecuting the case.  He also recognized the assistance of the Maryland COVID-19 Strike Force Paralegal Specialist Joanna B.N. Huber and Paralegal Specialist Juliette Frase. 

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao/md.

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Source: United States Department of Justice News

The CEO and founder of Titanium Blockchain Infrastructure Services Inc. (TBIS) was sentenced today to four years and three months in prison for his role in a cryptocurrency fraud scheme involving TBIS’s initial coin offering (ICO) that raised approximately $21 million from investors in the United States and overseas.

According to court documents, Michael Alan Stollery, 54, of Reseda, California, touted TBIS – a purported cryptocurrency investment platform – as a cryptocurrency investment opportunity, luring investors to purchase “BARs,” the cryptocurrency token or coin offered by TBIS’s ICO, through a series of false and misleading statements. Although he was required to do so, Stollery did not register the ICO regarding TBIS’s cryptocurrency investment offering with the U.S. Securities and Exchange Commission (SEC), nor did he have a valid exemption from the SEC’s registration requirements.

To entice investors, Stollery falsified aspects of TBIS’s white papers, which purportedly offered investors and prospective investors an explanation of the cryptocurrency investment offering, including the purpose and technology behind the offering, how the offering was different from other cryptocurrency opportunities, and the prospects for the offering’s profitability. Stollery also planted fake client testimonials on TBIS’s website and falsely claimed that he had business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy. Stollery did not use the invested money as promised but instead commingled the ICO investors’ funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments and the payment of bills for his Hawaii condominium. 

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Acting Special Agent in Charge Cory Nootnagel of the Office of Inspector General (OIG) for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau, Western Region, made the announcement.

The FBI Los Angeles Field Office and the Federal Reserve Board OIG Western Region, San Francisco Office investigated the case.

Trial Attorneys Tian Huang and Andrew Tyler of the Criminal Division’s Fraud Section prosecuted the case.