Month: April 2023

Source: United States Department of Justice News

A federal jury convicted three Nevada men yesterday for perpetrating a prize-notification scheme that stole more than $6 million from victims. The notices led victims to believe that they could claim a large cash prize if they paid a fee of $20 to $30. This was false; victims who paid the fees did not receive anything of value. Many of the schemes’ victims were retirees or other older adults.  

According to court documents and evidence presented at trial, Mario Castro, 55, and Miguel Castro, 58, of Las Vegas, and Jose Luis Mendez, 49, of Henderson, Nevada, produced the fraudulent prize notices at their business in Las Vegas. The three defendants also were partners in companies that sent the fraudulent prize notices. The defendants used money from victims to print and mail prize notices and also received a share of the profits.

“This verdict demonstrates the Department of Justice’s commitment to pursuing and holding accountable those who participate in scams that defraud consumers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to protecting consumers from deceptive mass-mailing schemes.”

“The defendants mailed fraudulent prize notices to prey upon and trick victims, many of them elderly, out of millions of dollars,” said U.S. Attorney Jason M. Frierson for the District of Nevada. “This guilty verdict should be a warning to individuals who commit fraudulent acts. We are committed to working together with the Civil Division’s Consumer Protection Branch and the U.S. Postal Inspection Service to identify and hold fraudsters accountable. We will continue to protect older Americans and prosecute individuals who seek to carry out fraudulent schemes targeting seniors.”

“Vulnerable and older Americans have been victimized for far too long by individuals who hide in the shadows to commit their crimes,” said Inspector in Charge Eric Shen of U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group. “This verdict unmasks these criminals and holds them to account for their conduct. The U.S. Postal Inspection Service is proud to have contributed to this result and will be relentless in protecting American consumers from fraud through the U.S. Mail.”

The defendants operated the scheme from 2010 to February 2018, when postal inspectors executed multiple search warrants and the Department of Justice obtained a court order shutting down the fraudulent mail operation. Mario Castro, Miguel Castro, and Jose Luis Mendez worked at the printing and mailing businesses that sent the fraudulent mail and shared the profits from the fraudulent prize notices. The defendants and their co-conspirators ignored multiple cease and desist orders from the U.S. Postal Service that prohibited their companies from sending fraudulent mail. The defendants responded by changing the names of their companies and using straw owners to hide their continuing fraud.

Mario Castro was convicted of conspiracy to commit mail fraud and seven counts of mail fraud. He was found not guilty of five counts of mail fraud.

Miguel Castro was convicted of conspiracy to commit mail fraud and five counts of mail fraud. He was found not guilty of seven counts of mail fraud.

Jose Luis Mendez was convicted of conspiracy to commit mail fraud and eleven counts of mail fraud. He was found not guilty of one count of mail fraud.

A fourth defendant, Salvador Castro, was acquitted by the jury on all charges.

The convicted defendants are scheduled to be sentenced on Aug. 23 and face a maximum penalty of 20 years in prison on each count of mail fraud and conspiracy to commit mail fraud. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Four other people previously pleaded guilty to conspiracy to commit mail fraud in connection with this prize notice scheme: Patti Kern, 65, of Henderson, Nevada; Andrea Burrow, 43, of Las Vegas; Edgar Del Rio, 45, of Las Vegas; and Sean O’Connor, 54, of Las Vegas.

The USPIS investigated the case.

Trial Attorneys Timothy Finley and Daniel Zytnick of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Mina Chang for the District of Nevada are prosecuting the case.

The Department urges individuals to be on the lookout for lottery, prize notification, and sweepstakes scams. If you receive a phone call, letter, or email promising a large prize in exchange for a fee, do not respond. Fraudsters often will use official-sounding names or the names of real lotteries or sweepstakes, or pretend to be a government agent purportedly helping to secure a prize.

If you or someone you know is age 60 or older and has experienced financial fraud, experienced professionals are standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, can provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 10:00 a.m. to 6:00 p.m. ET. English, Spanish and other languages are available. The Federal Trade Commission also provides a hotline at 877-FTC-HELP_and a website at www.ftccomplaintassistant.gov_to receive consumer complaints.

More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. The Department of Justice provides information about a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which are available at https://www.ovc.gov.

Source: United States Department of Justice News

BENTON, Ill. – A U.S. District Court judge sentenced a Cahokia man to 33 months in federal prison after he was caught with a firearm as a convicted felon.

Tyrone James, 47, pled guilty to one count of being a felon in possession of a firearm. In addition to imprisonment, he will serve three years of supervised release.

“The East St. Louis community has suffered from years of heartache and devastation due to gun violence, and one less felon in possession of a firearm is a positive step for the city’s revival,” said U.S. Attorney Rachelle Aud Crowe. “Illinois State Police officers in the PSEG unit have made significant progress to improve public safety in East St. Louis, and I look forward to continuing our partnership to apprehend criminals.”

“The Public Safety Enforcement Group continues to get illegal guns off the streets and out of the hands of criminals who repeatedly break the law,” said ISP Director Brendan F. Kelly.  “The collaborative effort between ISP, local and federal law enforcement agencies, the public, and the justice system is helping create safer communities.”

According to court documents, law enforcement officers were investigating a shooting in East St. Louis in July 2021 and while reviewing surveillance video at a motel, James was observed exiting and returning to a room holding a handgun. PSEG investigators determined that James was not involved in the shooting, however, officers were given consent to search the motel room and recovered a .22 caliber pistol.

In an interview with police, James admitted he had a prior felony possession and was therefore not able to legally possess a firearm.

The Illinois State Police Public Safety Enforcement Group unit conducted the investigation, and Assistant U.S. Attorney John Trippi prosecuted the case.

Source: United States Department of Justice News

A former Arkansas state senator was sentenced yesterday to four years and two months in prison in the Western District of Missouri for accepting multiple bribes in connection with a multi-district investigation spanning the Eastern and Western Districts of Arkansas and the Western District of Missouri.

Pursuant to his global plea agreement, Jeremy Hutchinson, 48, of Little Rock, pleaded guilty on June 25, 2019, in the Eastern District of Arkansas to filing a false tax return; pleaded guilty on June 25, 2019, to an information filed in the Western District of Arkansas to conspiracy to commit federal program bribery; and pleaded guilty in the Western District of Missouri on July 8, 2019, to conspiracy to commit federal program bribery. On Feb. 3, Hutchison was sentenced to three years and 10 months in prison for his convictions in the Eastern District of Arkansas and Western District of Arkansas. His sentence in the Western District of Missouri will run consecutive to the previous sentence for a total of eight years in prison.

According to court documents in connection with his plea in the Western District of Missouri, Hutchinson was hired by then-chief operating officer Bontiea Goss as outside counsel for Preferred Family Healthcare Inc. (formerly known as Alternative Opportunities Inc.), a Springfield, Missouri-based healthcare charity. In exchange for payments and legal work, Hutchinson performed official acts on behalf of Preferred Family Healthcare, including holding up agency budgets and drafting and voting on legislation. Preferred Family Healthcare paid Hutchinson more than $350,000 in monthly retainer payments from May 2014 until 2017.

In 2022, Preferred Family Healthcare agreed to pay more than $8 million in forfeiture and restitution to the federal government and the state of Arkansas under the terms of a non-prosecution agreement, in which the company admitted to the criminal conduct of its former officers and employees.

Several former executives from the charity, former members of the Arkansas state legislature, and others have pleaded guilty in federal court as part of the long-running, multi-jurisdiction investigation, including the following:

• Former Chief Operating Officer Bontiea Goss, previously of Springfield, Missouri, pleaded guilty in September 2022 to her role in a conspiracy to commit bribery concerning programs receiving federal funds.
• Former Chief Financial Officer Tommy “Tom” Ray Goss, husband of Bontiea Goss, and also previously of Springfield, Missouri, pleaded guilty in September 2022 to participating in the conspiracy by embezzling funds from the charity, as well as by paying bribes and kickbacks to elected public officials in Arkansas. Tom Goss also pleaded guilty to one count of aiding and assisting in the preparation and presentation of a false tax return.
• Former Chief Executive Officer Marilyn Luann Nolan of Springfield, Missouri, pleaded guilty in November 2018 to her role in a conspiracy to embezzle and misapply the funds of a charitable organization that received federal funds.
• Former Director of Operations and Executive Vice President Robin Raveendran of Little Rock, Arkansas, pleaded guilty in June 2019 to conspiracy to commit bribery concerning programs receiving federal funds.
• Former executive and head of clinical operations Keith Fraser Noble of Rogersville, Missouri, pleaded guilty in September 2019 to concealment of a known felony.
• Former employee and head of operations and lobbying in Arkansas Milton Russell Cranford, aka Rusty, of Rogers, Arkansas, was sentenced to seven years in federal prison after pleading guilty to one count of federal program bribery.
• Political consultant Donald Andrew Jones, aka D.A. Jones, of Willingboro, New Jersey, pleaded guilty in December 2017 to his role in a conspiracy to steal from an organization that receives federal funds.
• Former Arkansas State Representative Eddie Wayne Cooper of Melbourne, Arkansas, pleaded guilty in February 2018 to conspiracy to embezzle more than $4 million from Preferred Family Healthcare.
• Former Arkansas State Senator and State Representative Henry “Hank” Wilkins IV was sentenced in January 2023 for his role in a conspiracy to commit federal program bribery and devising a scheme and artifice to defraud and deprive the citizens of the state of Arkansas of their right to honest services.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Jonathan D. Ross for the Eastern District of Arkansas, U.S. Attorney David Clay Fowlkes for the Western District of Arkansas, U.S. Attorney Teresa A. Moore for the Western District of Missouri, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division, Special Agent in Charge Charles Dayoub of the FBI Kansas City Field Office, Special Agent in Charge James A. Dawson of the FBI Little Rock Field Office, and Acting Special Agent in Charge Thomas F. Murdock of the IRS Criminal Investigation (IRS-CI) St. Louis Field Office made the announcement.

The FBI, IRS-CI, the Offices of the Inspectors General from the Departments of Justice, Labor, and the Federal Deposit Insurance Corporation investigated the cases.

Senior Litigation Counsel Marco A. Palmieri, Director of Enforcement & Litigation for the Election Crimes Branch Sean F. Mulryne, and Trial Attorney Jacob Steiner of the Criminal Division’s Public Integrity Section; Assistant U.S. Attorney Stephanie Mazzanti for the Eastern District of Arkansas; Supervisory Assistant U.S. Attorney Randall Eggert and Assistant U.S. Attorney Shannon T. Kempf for the Western District of Missouri; and Assistant U.S. Attorneys Aaron L. Jennen and Steven M. Mohlhenrich for the Western District of Arkansas are prosecuting the separate criminal cases. Former Assistant U.S. Attorney Patrick Harris for the Eastern District of Arkansas and former Assistant U.S. Attorney Ben Wulff for the Western District of Arkansas provided significant assistance.

Source: United States Department of Justice News

Damian Williams, the United States Attorney for the Southern District of New York, announced that ESTEBAN CABRERA DA CORTE, a/k/a “Esteban Cabrera,” a/k/a “Esteban Da Corte,” a/k/a “Steban,” pled guilty today to participating in a scheme to steal millions of dollars’ worth of cryptocurrency and trick U.S. banks into refunding the millions used to purchase that cryptocurrency, in part by using personal identifying information stolen from other people. 

U.S. Attorney Damian Williams said: “Esteban Cabrera Da Corte orchestrated a scheme to steal millions of dollars by buying cryptocurrency using false and stolen identities and then deceiving U.S. banks regarding those transactions.  As a result of his guilty plea, Cabrera Da Corte is now being held to account.  Our Office will continue to work vigorously with our law enforcement partners to protect the integrity of U.S. banks and financial markets to the full extent of the law from those who seek to enrich themselves through fraud and deceit, including those who attempt to shroud themselves in the anonymity of digital transactions.”

According to the Indictment and statements made in court:

From at least in or about 2020 through at least in or about March 2020, CABRERA DA CORTE and his co-conspirators engaged in a scheme to deceive U.S. banks and a leading cryptocurrency exchange platform (the “Cryptocurrency Exchange”) by purchasing more than $4 million in cryptocurrency and then falsely claiming that the cryptocurrency purchase transactions were unauthorized, deceiving the U.S. banks and the Cryptocurrency Exchange into reversing those transactions and redepositing the money into the bank accounts that the Defendants controlled.  The Defendants then withdrew the money from the bank accounts.

To carry out this scheme, the Defendants opened accounts with the Cryptocurrency Exchange, frequently using photos of fake U.S. passports, fake drivers’ licenses, and stolen personal identifying information.  The Cryptocurrency Exchange accounts were linked to bank accounts that the Defendants controlled.  The Defendants used money that had been deposited into the linked bank accounts, frequently through a series of cash deposits made using ATMs, to purchase cryptocurrency.  That cryptocurrency was then quickly transferred to other cryptocurrency wallets outside of the Cryptocurrency Exchange that were controlled by the Defendants and their co-conspirators.  After the cryptocurrency was transferred, the Defendants made telephone calls to the U.S. banks during which they falsely represented that the cryptocurrency purchases were unauthorized, leading the banks to reverse the transactions. 

The operation of this scheme by the Defendants resulted in U.S. banks processing more than $4 million in fraudulent reversals and the Cryptocurrency Exchange losing more than $3.5 million worth of cryptocurrency. 

*                *                *

ESTEBAN CABRERA DA CORTE, 26, of Miami, Florida, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum term of 20 years in prison, and agreed to pay restitution of $3,578,786.69 and forfeiture of $1,200,000. 

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 a judge.

Mr. Williams praised the outstanding work of Homeland Security Investigations’ El Dorado Task Force. 

The matter is being handled by the Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Emily Deininger and Josiah Pertz are in charge of the prosecution.