Category: US Department of Justice

Source: United States Department of Justice 2

A grand jury in Denver returned an indictment, unsealed today, charging two Colorado men with wire fraud, conspiring to commit wire fraud and money laundering related to their operation of a multi-million-dollar investment fraud scheme called the “ROI Cash Flow Fund.”

According to the indictment, from about January 2023 to February 2024, Timothy McPhee, of Estes Park, Colorado, and Heath Posey, of Denver, caused more than 50 investors to send approximately $8 million to bank accounts they controlled based on the false representation that the investors’ money would be sent to a borrower and leveraged for foreign exchange or “forex” trading. McPhee and Posey also allegedly told ROI Cash Flow Fund investors that they would receive a 3% monthly return on their principal investment from the forex trading profits.

As the indictment further alleges, however, McPhee and Posey did not send the investors’ funds to a borrower to be leveraged for forex trading. Instead, they allegedly used investor funds to make monthly payouts to other investors and misappropriated millions of dollars in investor funds for their own financial gain. From about June 2023 to December 2023, McPhee and Posey allegedly transferred more than $2 million in investor funds to a bank account McPhee controlled. McPhee then spent those funds on personal expenses and investments. Likewise, in February, McPhee and Posey allegedly transferred nearly half a million dollars to a bank account they controlled and used for expenses related to their other mutual business endeavors, including to pay Posey’s salary.

If convicted, McPhee and Posey face a maximum penalty of 20 years in prison for each count of wire fraud, a maximum penalty of 20 years in prison for conspiring to commit wire fraud and a maximum penalty of 10 years in prison for each count of money laundering. 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 made the announcement.

The FBI is investigating the case.

Trial Attorneys Lauren K. Pope and Amanda R. Scott of the Tax Division are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice Criminal Division

A Washington, D.C. CPA pleaded guilty today to making a false statement on a mortgage loan application and failing to file an income tax return.

According to court documents and statements made in court, Timothy Trifilo worked in tax compliance for several large accounting and finance firms. In recent years, Trifilo was managing director at a tax firm where he specialized in transaction structuring and advisory service, tax compliance and tax due diligence. Nevertheless, for a decade, Trifilo did not file federal income tax returns or pay all the taxes that he owed despite earning more than $7.7 million during that time. He caused a tax loss to the IRS of $2,057,256.40.

In February 2023, Trifilo sought to obtain a $1.36 million bank-financed loan to purchase a home in D.C. and was working with a mortgage company to do so. After the mortgage company told Trifilo that the bank would not approve the loan without copies of Trifilo’s filed tax returns, Trifilo provided the mortgage company with fabricated documents to make it appear as if he had filed tax returns and provided copies of tax returns for 2020 and 2021 that Trifilo never filed with the IRS. On these returns and other documents that he submitted to the mortgage company, Trifilo listed a former colleague as the individual who prepared the returns and uploaded them for filing with the IRS. This individual did not prepare the returns, has never prepared tax returns for Trifilo and did not authorize Trifilo to use his name on the returns and other documents that Trifilo submitted to the mortgage company. Based on Trifilo’s false representation, the bank approved the loan and Trifilo purchased the home.

Sentencing is scheduled for May 19, 2025. Trifilo faces a maximum penalty of 30 years in prison on the charge of making a false statement on a loan application and a maximum penalty of one year in prison on the charge of failure to file a tax return. He also faces a period of supervised release, monetary penalties and restitution. 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 made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorneys Melissa S. Siskind and Alexis Fleszar of the Justice Department’s Tax Division are prosecuting the case.

Source: United States Department of Justice Criminal Division

Chen Jinping, 60, of New York, New York, pleaded guilty today to conspiring to act as an illegal agent of the government of the People’s Republic of China (PRC), in connection with opening and operating an undeclared overseas police station, located in lower Manhattan, for the PRC’s Ministry of Public Security (MPS).

“Today’s guilty plea holds the defendant accountable for his brazen efforts to operate an undeclared overseas police station on behalf of the PRC’s national police force — a clear affront to American sovereignty and danger to our community that will not be tolerated,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “The Department of Justice will continue to pursue anyone who attempts to aid the PRC’s efforts to extend their repressive reach into the United States.”

“Today’s acknowledgment of guilt is a stark reminder of the insidious efforts taken by the PRC government to threaten, harass, and intimidate those who speak against their Communist Party,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “These blatant violations will not be tolerated on U.S. soil. The FBI remains committed to preserving the rights and freedoms of all people in our country and will defend against transnational repression at every front.”

“A priority of my office has been to counteract the malign activities of foreign governments that violate our nation’s sovereignty by targeting local diaspora communities in the United States,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Today, a participant in a transnational repression scheme who worked to establish a secret police station in the middle of New York City on behalf of the national police force of the People’s Republic of China has pleaded guilty to conspiracy to act as an illegal agent. We will continue our efforts to protect the rights of vulnerable persons who come to this country to escape the repressive activities of authoritarian regimes.”

As alleged, Chen Jinping and co-defendant “Harry” Lu Jianwang conspired to act as illegal agents of the PRC government and also obstructed justice by destroying evidence of their communications with an MPS official. While acting under the direction and control of the MPS official, the defendants worked together to establish the first known overseas police station in the United States on behalf of the Fuzhou branch of the MPS. The police station — which closed in the fall of 2022 — occupied an entire floor in an office building in Manhattan’s Chinatown. Lu and Chen helped open and operate the clandestine police station. None of the participants in the scheme informed the U.S. government that they were helping the PRC government surreptitiously open and operate an undeclared MPS police station on U.S. soil.

In October 2022, the FBI conducted a judicially authorized search of the illegal police station. In connection with the search, FBI agents interviewed both defendants and seized their phones. In reviewing the contents of these phones, FBI agents observed that communications between the defendants and an MPS official appeared to have been deleted. In subsequent consensual interviews, the defendants admitted to the FBI that they had deleted their communications with the MPS official after learning about the ongoing FBI investigation, thus preventing the FBI from learning the full extent of the MPS’s directions for the overseas police station.

Chen faces a maximum penalty of five years in prison. Per Chen’s plea agreement, the government has agreed to dismiss the obstruction of justice charge against him. Lu has pleaded not guilty to both of the charges against him and is awaiting trial.

The FBI is investigating the case.

Assistant U.S. Attorneys Alexander A. Solomon and Antoinette N. Rangel for the Eastern District of New York and Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

The FBI has created a website for victims to report efforts by foreign governments to stalk, intimidate, or assault people in the United States. If you believe that you are or have been a victim of transnational repression, please visit www.fbi.gov/investigate/counterintelligence/transnational-repression.

Source: United States Department of Justice Criminal Division

Louisiana-based company Power Performance Enterprises Inc. (PPEI) and its president and owner, Kory B. Willis, were sentenced yesterday in federal court in Sacramento, California, for violating and conspiring to violate the Clean Air Act by tampering with the monitoring devices of emissions control systems of diesel trucks.

U.S. District Court Judge John A. Mendez for the Eastern District of California sentenced Willis to serve 10 months of home confinement as part of a three-year term of probation and ordered Willis and PPEI to jointly pay $1.55 million in criminal fines. PPEI was ordered to complete a five-year term of probation. Willis and PPEI pleaded guilty in March 2022. In total, Willis and PPEI have been ordered to pay $3.1 million in criminal fines and civil penalties related to Clean Air Act enforcement.

“The software that Mr. Willis and PPEI manufactured and sold reversed the effects of emissions control requirements for vehicles driven on our country’s roads, posing unacceptable risk to the health of our citizens,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD). “This sentencing shows that we will take strong action to enforce the Clean Air Act and ensure that mandated emissions controls remain operating on vehicles to protect public health and the environment.”

“Environmental laws that control diesel pollution safeguard the environment and the health of the public, and are especially important to protect sensitive populations such as the young, the elderly, and people who suffer from respiratory conditions,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “Those who would sell illegal defeat devices should stand warned: the U.S. Attorney’s Office will continue to vigorously prosecute those who place profit above the public’s health and the environment.”

“For decades, EPA has prioritized efforts to halt the illegal sale of aftermarket defeat devices, which cause dangerous air pollution from trucks and cars,” said Assistant Administrator David M. Uhlmann of Environmental Protection Agency (EPA)’s Office of Enforcement and Compliance Assurance. “Today’s criminal sentencing punishes the defendants for their deliberate attempts to evade the requirements of the Clean Air Act and follows an earlier 2022 civil enforcement action addressing their misconduct. EPA will continue to leverage all of its enforcement tools and authorities to stop illegal behavior that puts our communities at risk.”

According to court documents, from PPEI’s incorporation in 2009 until 2019, PPEI and Willis were among the nation’s most prominent developers of custom software known as “tunes,” and in particular, “delete tunes.” Generally, tunes can alter a diesel truck’s fuel delivery, power parameters and emissions. Delete tunes allow vehicles to remove or disable emissions controls, while appearing to run normally, resulting in vastly increased emissions of air pollution. PPEI and Willis were well known for their custom delete tunes.

Willis and PPEI reached the top of the illegal delete tuning market, tuning over 175,000 vehicles according to Willis. Willis also stated that PPEI was the biggest custom tuning company in the world, servicing over 100,000 customers and tuning more than 500 vehicles a week. According to internal PPEI records, PPEI typically sold well over $1 million dollars of product per month. According to calculations by the EPA, the estimated emissions impact of PPEI’s sales of delete tunes between 2013 and 2018 alone are expected to cause over 100 million excess pounds of nitrogen oxides (NOx) emissions over the life of the diesel trucks equipped with those products.  

Deleting a diesel truck causes its emissions to increase dramatically. For example, for a fully deleted truck, which has had all emissions equipment removed or disabled, EPA testing quantified the increased emissions as follows: NOx increased 310 times, non-methane hydrocarbons increased 1,400 times, carbon monoxide increased 120 times and particulate matter increased 40 times. EPA’s Air Enforcement Division released a report in November 2020 finding that more than half a million diesel pickup trucks in the United States — approximately 15% of U.S. diesel trucks that were originally certified with emissions controls — have been illegally deleted.

Diesel emissions include multiple hazardous compounds and harm human health and the environment. Diesel emissions have been found to cause and worsen respiratory ailments such as asthma and lung cancer. One study indicated that 21,000 American deaths annually are attributable to diesel particulate matter. Exposure to polluted air in utero has also been associated with a host of problems with lifelong ramifications including low birth weight, preterm birth, autism, brain/memory disorders and asthma.

Stopping aftermarket defeat devices for vehicles and engines is a top priority for EPA. Visit EPA’s website to learn more about its efforts to stop the sale of illegal defeat devices.

EPA’s Criminal Investigation Division investigated the case.

Senior Counsel Krishna S. Dighe and Trial Attorney Stephen J. Foster of ENRD’s Environmental Crimes Section and Assistant U.S. Attorney Katherine T. Lydon for the Eastern District of California and are prosecuting the criminal case.

Source: United States Department of Justice

Note: View the indictment here.

A grand jury in the District of Columbia returned an indictment yesterday charging David Rivera, 59, of Miami, with a scheme to violate the Foreign Agents Registration Act (FARA) and to launder funds to conceal and promote his criminal conduct.

As alleged in the indictment, from in or about June 2019 through in or about April 2020, Rivera carried out a scheme to provide consulting and lobbying services to sanctioned Venezuelan businessman Raul Gorrín, who was added to the Specially Designated Nationals and Blocked Persons List (SDN List) on Jan. 8, 2019, by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

On Gorrín’s behalf, Rivera sought to lobby U.S. government officials, including a senior official in the Executive Branch of the U.S. government (Government Official-1), to have Gorrín removed from the SDN List. Rivera received over $5.5 million for these activities and willfully failed to register under FARA, as required by law.

To conceal and promote his criminal activities, Rivera created fraudulent shell companies using names associated with a law firm and with Government Official-1 to give the false appearance that the shell companies were legitimate. In reality, these entities were not affiliated with the law firm or Government Official-1, and neither the law firm nor Government Official-1 were aware that Rivera had created shell companies in their names. Rivera used the money he received from his criminal activities to pay individuals who assisted him in his efforts to lobby senior government officials on Gorrín’s behalf, including by making payments through one of the shell companies.

The FBI Miami Field Office is investigating the case.

Trial Attorneys Sean O’Dowd and Monica Svetoslavov of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.