Category: US Department of Justice

Source: United States Department of Justice News

CINCINNATI – Markeith Ford, 32, of Cincinnati, was sentenced in U.S. District Court to 66 months in prison for illegally possessing a firearm.

As a previously convicted felon, Ford is prohibited from possessing firearms or ammunition.

According to court documents, on March 4, 2022, plain clothes officers from the Crime Gun Information Center (CGIC) identified Ford at the rear of a property on Race Street. Ford was wearing a black outfit, camouflage mask and latex gloves.

When a patrol vehicle arrived, Ford immediately fled on foot, carrying a firearm in his left hand. He threw the gun toward a fire escape on a building. Ford was eventually caught and placed into custody, and the firearm – which was loaded with 15 rounds of ammunition – was recovered. Ford also had a black magazine with 10 rounds of ammunition in a front pants pocket.

Ford pleaded guilty in June 2022 to illegally possessing a firearm after being convicted of a felony crime.

Kenneth L. Parker, United States Attorney for the Southern District of Ohio; Daryl S. McCormick, Special Agent in Charge, U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF); and Cincinnati Police Chief Teresa A. Theetge announced the sentence imposed by Senior U.S. District Court Judge Susan J. Dlott. Assistant United States Attorney Anthony Springer is representing the United States in this case.

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Source: United States Department of Justice News

FAIRBANKS – A federal grand jury in Alaska returned an indictment charging a husband and wife from Delta Junction, Alaska, with conspiracy and wire fraud for perpetrating a years’ long scheme that defrauded nearly two-dozen investors out of over $700,000 dollars.

According to court documents, from 2017 until 2020, Brian Keith Corty, 52, and his wife Candy Corty, 47, used false and fraudulent claims to solicit investors to buy shares of stock in Ice Fog Holdings, LLC, a company purportedly established to grow, extract, develop, manufacture, and sell products in the medical and recreational marijuana markets in Alaska and other future markets. The defendants purchased the Midway Lodge along the Richardson Highway near Delta Junction, Alaska, and represented to investors that their money would be used to turn it into a “Bud and Breakfast” that would be a “marijuana theme park” and include glass ceilings so Ice Fog’s customers could lie in bed and watch the northern lights. Defendants also represented that they would grow, cultivate, and sell marijuana from the location.

The defendants and their co-conspirators made numerous material misrepresentations to Ice Fog investors, including that Ice Fog was already generating income via contracts for security services, that Ice Fog would make over $3.85 million in annual sales by year one; over $13.05 million in annual sales by year two; and over $23.24 million by year three with an expected return to investors of 30 times their initial investment. The defendants also represented that inspectors from the Alaska Marijuana Control Office had performed inspections on the Midway Lodge to create the impression that their application to become a licensed marijuana grow and dispensary was in the final stages of approval. Defendants made these representations while knowing that Ice Fog had no meaningful current or prospective revenue stream and little to no prospect to obtain a license from the Alaska Marijuana Control Office.

Over the course of the scheme, the defendants caused at least 22 individuals to invest in Ice Fog, and raised approximately $722,000 dollars through the sale of “shares” in Ice Fog Holdings, the majority of which the defendants misappropriated for their own personal use.

U.S. Attorney S. Lane Tucker of the District of Alaska made the announcement.

The Federal Bureau of Investigation is investigating this case with assistance from investigators at the Alaska Department of Law. Assistant U.S. Attorneys Ryan Tansey and Tom Bradley for the District of Alaska are prosecuting the case.

An indictment is merely an allegation and 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 former school teacher was sentenced today to life in prison for sexually abusing elementary school students on a U.S. military installation in Germany.

According to court documents and evidence presented at trial, Stefan Zappey sexually abused four of his former elementary school students between 2006 and 2010. At the time, Zappey was a teacher for first through third grade students at an elementary school in Germany. The school is part of the Department of Defense Education Activity, which serves dependents of U.S. military service members stationed overseas.

“The successful prosecution of Stefan Zappey demonstrates the Justice Department’s commitment to prosecuting U.S. citizens who prey on young and vulnerable children regardless of where and when the crimes occurred,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Zappey’s offenses are especially egregious because he was entrusted with teaching the children of our brave service members overseas. The courage of the victims and the perseverance of investigators and prosecutors ensured that Zappey’s offenses were exposed and will prevent him from abusing even more children.”

“Zappey abused a position of trust as an elementary school teacher and sexually abused multiple students,” said U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia. “His crimes were horrific, and the community is safer now that he no longer has access to children.”

In 2020, one of Zappey’s former students notified Army criminal investigators that Zappey touched her under her clothing when she was a student at the school in 2009 and 2010. Further investigation revealed that Zappey sexually abused four of his former students by placing his hand inside their underwear and directly touching them on multiple occasions. The victims were between six and eight-years-old at the time of the sexual abuse. Other students and faculty members reported that Zappey frequently hugged students, had them sit on his lap, and touched their backs and stomachs under their clothes.

On Jan. 18, a jury convicted Zappey of four counts of aggravated sexual abuse of a child and four counts of abusive sexual contact.

“Cases like these demonstrate the FBI’s dedication to protecting children from those who seek to exploit their innocence,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our partners remain committed to pursuing justice for our most innocent victims and those who are unable to defend themselves.”

“Victimizing and preying on Department of Defense dependents is unacceptable,” said Special Agent in Charge Ryan Hall of the Department of the Army Criminal Investigation Division’s (Army CID) Europe Field Office. “Army CID will continue to work closely with our law enforcement partners to investigate these crimes and bring the perpetrators to justice.”

The FBI and Army CID investigated the case.

Trial Attorney Eduardo Palomo of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Leanne M. Marek for the Northern District of Georgia prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

Source: United States Department of Justice News

A New Jersey certified public accountant (“CPA”) pleaded guilty today to conspiring to defraud the United States by promoting fraudulent tax shelters to high-income clients.

According to court documents and statements made in court, James H. Benkoil of Avon-by-the-Sea, New Jersey, promoted fraudulent syndicated conservation easements in which several investors form a partnership or company to purchase or invest in land, then donate the property for a charitable deduction. The scheme facilitated false claims of inflated charitable contribution tax deductions in connection with the “donation” of the conservation easement over land, allowing Benkoil’s high-income clients to buy deductions to illegally shelter their income from taxation.

Between 2009 and 2020, while working as a CPA, Benkoil and others, promoted such fraudulent syndicated conservation easement tax shelters by obtaining falsely inflated land appraisals to achieve the desired amount of tax deductions. As a part of his guilty plea, Benkoil admitted his conduct resulted in a tax loss to the IRS of nearly $2.5 million and has agreed to pay full restitution.

Benkoil faces a maximum penalty of five years in prison, as well as 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 made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Christopher Magnani and Richard Rolwing of the Justice Department’s Tax Division are prosecuting the case.

Source: United States Department of Justice News

A Louisiana man was sentenced today to 10 years in prison for money laundering in connection with a fraudulent scheme to obtain more than $1.1 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) Program loans.

“The significant sentence handed down today demonstrates that those who steal from COVID-19 relief programs for personal gain will be prosecuted to the fullest extent of the law,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “We remain committed to rooting out bad actors who took advantage of federal programs meant to help those small businesses truly in need.”

“This defendant stole over $1 million through fraudulent means and used those funds to support his own personal lifestyle, taking from those whose legitimate businesses were suffering from losses due to the COVID-19 pandemic,” said U.S. Attorney Brandon B. Brown for the Western District of Louisiana. “Federal programs such as these are set up to help those in need, not to benefit fraudsters. It is a priority for our office to prosecute those who obtain these benefits illegally. We look forward to continued collaboration with the Criminal Division’s Fraud Section in aggressively investigating similar crimes related to the COVID-19 pandemic.”

According to court documents, Michael Ansezell Tolliver, 57, of Monroe, submitted nine fraudulent PPP and EIDL Program loan applications on behalf of several purported companies that Tolliver owned, including Tolliver Oil & Gas Corporation of Louisiana Inc. and Tolliver Petroleum Corporation of Louisiana. Tolliver falsified information in the loan applications and supporting documents, including falsely claiming that some of his businesses had over 100 employees. He also submitted falsified federal tax returns.

“Mr. Tolliver chose greed over compassion by fraudulently obtaining funds from the PPP and EIDL programs established to assist employers severely impacted by the pandemic,” said Special Agent in Charge James E. Dorsey of the IRS Criminal Investigation (IRS-CI) Atlanta Field Office. “Tolliver’s sentence today should stand as a warning to those who fraudulently received or may have attempted to fraudulently receive funds intended to help businesses during the COVID epidemic.”

“This result reveals the excellence achieved through the combined efforts of the Small Business Administration (SBA) and the U.S. Attorney’s Office to uncover and forcefully respond to PPP and EIDL fraud,” said Special Counsel Peggy Delinois Hamilton of the SBA. “SBA is strongly committed to identifying and aggressively pursuing instances of fraud perpetrated by those who took advantage of small business emergency relief programs. We applaud the work that our law enforcement partners have done to ensure fraudsters are held accountable.”

In total, Tolliver sought more than $7.6 million in PPP and EIDL Program loans and obtained more than $1.1 million. Tolliver then laundered and misused the loan proceeds, including by transferring the funds to personal bank accounts and purchasing luxury goods. Authorities seized approximately $128,500 from bank accounts, as well as a 2020 Cadillac CT5 sedan, a 2021 GMC Sierra 1500 truck, two Tissot watches, two Tag Heuer watches, and three Honda all-terrain vehicles.

The IRS-CI and SBA investigated the case.

Assistant Chief Justin M. Woodard of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Seth D. Reeg for the Western District of Louisiana prosecuted the case.

The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases and has seized over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at www.justice.gov/criminal-fraud/ppp-fraud.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit 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 www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.