Category: US Department of Justice

Source: United States Department of Justice Criminal Division

A grand jury in Salt Lake City returned an indictment today charging Special Agent David Cole of Homeland Security Investigations (HSI), 50, of South Jordan, Utah, with conspiring with another HSI special agent to sell alpha-PHP, a drug commonly referred to as “bath salts,” in Utah.

According to court documents, Cole and another HSI special agent used their status as federal law enforcement officers to acquire bath salts by representing to others in HSI and in other law enforcement agencies that they were going to use the bath salts to conduct legitimate HSI investigations. Cole and his co-conspirator then sold bath salts to HSI confidential human sources for thousands of dollars and allowed those sources to resell the bath salts on the streets of Utah for a profit. Cole and his co-conspirator profited hundreds of thousands of dollars through their illegal drug sales.

“The indictment alleges that David Cole abused his position as a federal law enforcement agent to obtain and sell dangerous drugs for profit,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “A drug dealer who carries a badge is still a drug dealer — and one who has violated an oath to uphold the law and protect the public. Today’s indictment reflects the department’s commitment to holding accountable law enforcement officers who engage in criminal conduct, because no one is above the law.”

“David Cole took an oath to protect and serve. Instead, he allegedly distributed dangerous drugs in our communities for profit,” said Special Agent in Charge Shohini Sinha of the FBI Salt Lake City Field Office. “Cole’s alleged actions not only helped fuel an already devastating drug crisis but also undermines the public’s trust in law enforcement. The FBI remains committed to holding accountable those who violate the law, regardless of their position.”

“Today’s arrest sends a clear message that federal employees who violate the trust of the public and break the law will be prosecuted,” said Inspector General Joseph V. Cuffari of the Department of Homeland Security Office of Inspector General (DHS-OIG). “DHS OIG is grateful for our continued partnership with our law enforcement partners as we continue fighting corruption.”

Cole is charged with one count of conspiracy to distribute and possess with intent to distribute a controlled substance. If convicted, he faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI and DHS-OIG are investigating the case, with support from HSI Executive Management.

Trial Attorneys Jordan Dickson, Alexander Gottfried, and Blake Ellison of the Criminal Division’s Public Integrity 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.

Source: United States Department of Justice Criminal Division

The Justice Department announced today that two directors of Epic Games Inc. (Epic), who had been appointed by Tencent Holdings Ltd. (Tencent), resigned from the Epic board after the Antitrust Division expressed concerns that their positions on both the Epic and Tencent boards violated Section 8 of the Clayton Act. Tencent owns a minority interest in Epic. The interlock was created because Tencent also is the parent company of a gaming competitor to Epic, Riot Games Inc. Tencent also decided to amend its shareholder agreement with Epic to relinquish its unilateral right to appoint directors or observers to the Epic board in the future. This is the latest of the division’s ongoing Section 8 enforcement efforts, which to date have unwound or prevented interlocks involving at least two dozen companies.

“Scrutiny around interlocking directorates continues to be an enforcement priority for the Antitrust Division,” said Deputy Director of Civil Enforcement Miriam R. Vishio of the Justice Department’s Antitrust Division. “Due to the hard work of our tremendous staff, our increased enforcement around Section 8 over the last few years has achieved substantial results and become part of our fabric.”

Section 8, which Congress made a per se violation of the antitrust laws, prohibits directors and officers from serving simultaneously on the boards of competitors, subject to limited exceptions. No company or individual has admitted to liability in connection with this investigation. The division will continue to monitor the industry, and other industries, for violations of the antitrust laws, including Section 8.

Tencent is one of the largest multimedia and video game companies in the world. It is incorporated and domiciled in the Cayman Islands and has its headquarters in Shenzhen, China. Tencent owns Riot, is a minority shareholder in Epic and has equity investments in other video game and media companies.

Epic is a privately held video game and software developer and publisher based in Cary, North Carolina.

Riot is an American video game developer, publisher, and esports tournament organizer with headquarters in Los Angeles.

Anyone with information about potential interlocking directorates or any other potential violations of the antitrust laws is encouraged to contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or antitrust.complaints@usdoj.gov.

Source: United States Department of Justice Criminal Division

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 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.