NewzIntel.com

Category: Intelligence

  • MIL-OSI Security: CEO of East Bay-Based Internet Companies Sentenced to More Than Seven Years in Prison for Committing Wire Fraud

    Source: US FBI

    Alan Anderson Sentenced In Connection With Scheme To Raise Money By Creating False Impression of Profitability and Viability for Companies Marketing Child-Friendly Services

    SAN FRANCISCO – Alan Anderson was sentenced today to 88 months in prison and ordered to pay restitution for defrauding investors by lying to them about the profitability of his internet companies, announced United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp. Anderson’s sentence was imposed by the Honorable Edward M. Chen, U.S. District Judge.

    Anderson, 61, of Walnut Creek, pleaded guilty on Jan. 4, 2024, to two counts of wire fraud.  In connection with pleading guilty, Anderson admitted that from Apr. 22, 2010, through May 2018, he was the majority shareholder and CEO of three companies: Imbee.com, a Delaware corporation based in Walnut Creek marketed as a child-friendly social media platform; Fanlala, a California corporation marketed as a service providing internet-based music streaming for children; and Fruit Punch, a California corporation marketed as providing music-streaming service for children.  Anderson further admitted that he falsely claimed that the companies were either being acquired or were expanding existing partnerships or contracts with large, well-established companies to induce individuals to invest in his businesses.  To further his falsehoods, and to create an appearance of legitimacy for his false claims, Anderson created false contracts, purchase orders, and other documentation that he sent to investors.  Anderson created and sent these false documents to investors with the intent to deceive or cheat them.

    At sentencing, Judge Chen found that Anderson began lying to investors in September 2011, that his long-running fraud spanned years, and that over the course of the scheme Anderson defrauded investors out of approximately $8.825 million.

    A federal grand jury indicted Anderson on October 13, 2021, charging him with four counts of wire fraud and one count of securities fraud.

    In addition to the prison term, Judge Chen also sentenced the defendant to a three-year period of supervised release and ordered that he pay restitution in an amount to be determined during a further hearing on October 10, 2024.  The defendant will begin serving the prison term on January 6, 2025.

    Assistant U.S. Attorneys Christiaan Highsmith and Sailaja Paidipaty are prosecuting the case with the assistance of Mark DiCenzo.  The prosecution is the result of a multi-year investigation by the FBI.
     

    MIL Security OSI –

  • MIL-OSI Security: Fort Washakie Man Sentenced for Murder in the Second Degree

    Source: US FBI

    Ezekiel Frank James Ute, 23, of Fort Washakie, Wyoming, was sentenced to 192 months’ imprisonment with five years of supervised release for second degree murder. U.S. District Court Judge Kelly H. Rankin imposed the sentence on Oct. 31.

    According to court documents, on Jan. 2, 2024, a group of five people, including Ezekiel Ute, were drinking alcohol and driving around the Wind River Indian Reservation when Ute began driving recklessly and saying he was going to intentionally wreck the car. When Ute stopped the car, one of the passengers (P1) got out and refused to get back in. The victim also got out to coax P1 back into the car. As they argued, Ute got out and stabbed the victim multiple times.

    After the stabbing, Ute forced P1 back into the car then drove away, leaving the victim by the side of the road. The passengers urged Ute to turn around so they could help the victim. Ute eventually drove back, but as soon as P1 and another passenger (P2) got out of the car Ute sped off with the remaining passenger in the back seat. Despite P1 and P2’s attempts to save the victim, he died from his injuries the following morning. In addition to the passengers’ statements, Ute acknowledged during an interview that he may have stabbed the victim while under the influence of alcohol.

    Ute was arrested on Jan. 4, indicted on March 13, and pleaded guilty on July 15. This crime was investigated by the FBI and the Bureau of Indian Affairs Wind River Police Department. The case was prosecuted by Assistant U.S. Attorney Timothy W. Gist.

    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. PSN is 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. For more information, please visit Justice.gov/PSN.

    Case No. 24-CR-00040

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  • MIL-OSI Security: Colorado Man Sentenced to Prison for Assaulting Law Enforcement During the January 6 Capitol Breach

    Source: US FBI

                WASHINGTON— A Colorado man was sentenced to prison today after he previously pleaded guilty to assaulting law enforcement during the Jan. 6, 2021, breach of the U.S. Capitol. His actions and the actions of others disrupted a joint session of the U.S. Congress convened to ascertain and count the electoral votes related to the 2020 presidential election.

                Patrick Montgomery, 51, of Littleton, Colorado, was sentenced to 37 months in prison and 36 months of supervised release by U.S. District Judge Randolph D. Moss.

                Montgomery was previously convicted of felony offenses of obstruction of an official proceeding and assaulting, resisting, or impeding certain officers. Following the Supreme Court’s decision in Fischer v. United States, the government voluntarily moved pre-sentencing to dismiss Montgomery’s conviction on obstruction of an official proceeding.

                According to court documents, on the morning of Jan. 6, 2021, Montgomery and co-defendants Brady Knowlton, and Gary Wilson met at the Yours Truly hotel in Washington, D.C., and walked to an area near the Washington Monument and the Ellipse to hear the speakers at the “Stop the Steal” rally. After the rally, the three men made their way to the West Front of the U.S. Capitol building, crossing over inside the restricted perimeter.

                At approximately 2:02 p.m., Montgomery grabbed a law enforcement officer’s baton and attempted to wrestle it away from the officer. The officer held onto the baton and fell to the ground with Montgomery. The two then attempted to wrestle control of the baton from each other while Knowlton and Wilson watched nearby. During the scuffle, Montgomery kicked the police officer in the chest.

                After this incident, the three men ascended the Upper West Terrace Stairs with a mass of individuals and approached the Upper West Terrace Door. As they approached, the exterior double doors were propped open, people were screaming, and a loud alarm sounded as people were streaming into the Capitol building. Inside the doors, signage stated, “EMERGENCY EXIT ONLY.” The three men entered the Capitol building via the Upper West Terrace Door at approximately 2:35 p.m.

                After entering the building, the three men climbed the stairs to the second floor, entered the Rotunda, and climbed the stairs to the third floor. At about 2:40 p.m., the three were walking together in the hallway on the third floor towards the Senate Gallery, at which point Knowlton stated, in substance, “We have a right to choose our electors. We’re not going to have communist China choose them for us. We’re not going to have the Democratic Party choose them for us.” Court documents say that Montgomery and Wilson were a few feet away from Knowlton when he made this statement.

                At approximately 2:43 p.m., the three men entered the Senate Gallery, where they saw another rioter jump down to the Senate Floor.

                The three men left the Senate Gallery and proceeded to the second floor to an area near the Senate Floor, where they confronted a U.S. Capitol Police officer. Knowlton yelled at the officer: “This is not about us. This is bigger than me, it’s bigger than you. It’s about this – everyone’s right to self-government . . . We’re with you guys. You think these people in this building would fight for you?” Montgomery yelled: “You gotta stop doing your job sometime and start being American. You gotta quit doing your job and be an American!” Wilson yelled: “We came all the way from our job to do your job, and the freaking Senators’ job!”

                After this confrontation, the defendants exited the Capitol building at approximately 2:53 p.m.

                The FBI arrested Montgomery on Jan. 17, 2021, in Colorado.

                Co-defendant Brady Knowlton is awaiting sentencing, and Gary Wilson was previously sentenced to 30 days incarceration followed by 12 months supervised release for his role in the events of the day.

                The U.S. Attorney’s Office for the District of Columbia and the Department of Justice National Security Division’s Counterterrorism Section are prosecuting this case. The U.S. Attorney’s Offices for the District of Colorado and Utah provided valuable assistance.

                The FBI’s Denver and Washington Field Offices investigated this case. The FBI listed Montgomery as BOLO (Be on the Lookout) #459 in its seeking information photographs. The U.S. Capitol Police and the Metropolitan Police Department provided valuable assistance.

                In the 45 months since Jan. 6, 2021, more than 1,532 individuals have been charged in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including more than 571 individuals charged with assaulting or impeding law enforcement, a felony. The investigation remains ongoing.

                Anyone with tips can call 1-800-CALL-FBI (800-225-5324) or visit tips.fbi.gov.

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  • MIL-OSI Security: Colorado Recidivist Sex Offender Sentenced to 35 Years in Prison for Crimes Against Children

    Source: US FBI

    DENVER – A Colorado man was sentenced yesterday to 35 years in prison and a lifetime term of supervised release for his distribution of child sexual abuse material (CSAM) and involvement with a dark-web website dedicated to CSAM.

    According to court documents, while still on parole for a 2013 Colorado conviction for sexual exploitation of a child, registered sex offender Christopher Carl Meier, 41, of Denver, became a member of a dark-web website dedicated to CSAM depicting boys and the discussion of the sexual abuse of minor boys. On July 9, Meier pleaded guilty to conspiracy to distribute CSAM and five counts of distribution of CSAM. Meier was a member of the website for more than 18 months and made more than 600 posts on the website. On this website, Meier advertised and distributed images and videos depicting minor boys engaged in sexual conduct. He made statements on the website admitting that he produced this material by tricking the boys into thinking that they were interacting online with a girl their own age, and by enticing them to disrobe and engage in sex acts on webcam. The FBI is aware of at least 65 victims of Meier’s conduct.

    Principal Deputy Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division; Acting U.S. Attorney Matthew Kirsch for the District of Colorado; Assistant Director Chad Yarbrough of the FBI’s Criminal Investigative Division; and Special Agent in Charge Mark D. Michalek of the FBI Denver Field Office made the announcement.

    The FBI Child Exploitation Operational Unit and Denver Field Office investigated the case.

    Acting Deputy Chief Kyle Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Alecia L. Riewerts for the District of Colorado prosecuted the case.

    This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Justice Department. Led by U.S. Attorneys’ Offices and CEOS, 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, visit www.justice.gov/psc.

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  • MIL-OSI Security: Hamden Man Admits Trafficking Narcotics in Southwestern Connecticut

    Source: US FBI

    Marc H. Silverman, Acting United States Attorney for the District of Connecticut, today announced that CHRISTIAN PICHARDO, also known as “Swerve,” “Craig,” and “Bobby Shmurda,” 30, of Hamden, pleaded guilty yesterday in Bridgeport federal court to a narcotics trafficking offense.

    According to court documents and statements made in court, an investigation by the FBI Bridgeport Safe Streets Task Force and the Bridgeport Police Department identified Pichardo as a significant distributor of fentanyl, heroin, cocaine, crack, and narcotic pills in southwestern Connecticut.  During the investigation, investigators intercepted calls and text messages between Pichardo, his associates, and their drug customers over court-authorized wiretaps, and made controlled purchases of narcotics from Pichardo and his associates.

    On July 17, 2024, a grand jury in Bridgeport returned a superseding indictment charging Pichardo and seven alleged co-conspirators with controlled substances offenses.

    Pichardo pleaded guilty to conspiracy to distribute, and to possess with intent to distribute, 40 grams or more of fentanyl and quantities of cocaine, heroin, and other opioids, an offense that carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years.  He is scheduled to be sentenced on June 26. 

    Pichardo has been detained since his arrest on August 5, 2024.

    This matter is being investigated by the FBI’s Bridgeport Safe Streets Task Force and the Bridgeport Police Department.  The case is being prosecuted by Assistant U.S. Attorneys Karen L. Peck and Kenneth L. Gresham through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program.  OCDETF identifies, disrupts, and dismantles drug traffickers, money launderers, gangs, and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state, and local law enforcement agencies.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

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  • MIL-OSI Security: Nye County Resident Sentenced to Prison for Distribution and Receipt of More Than 250,000 Images of Child Sexual Abuse Material

    Source: US FBI

    LAS VEGAS – A Pahrump, Nye County, resident was sentenced today by United States District Judge James C. Mahan to 108 months in prison followed by a lifetime term of supervised release for distributing and receiving more than 250,000 images depicting the sexual abuse of children as young as infants on an online peer-to-peer file sharing network.

    David Michael Burak (41) pleaded guilty on February 24, 2023, to distribution or receipt of child pornography.

    According to court documents, investigators with the Internet Crimes Against Children Task Force were investigating the sharing of child sexual abuse material on a peer-to-peer file sharing network. During the investigation, it was observed that a device was distributing files depicting child sexual abuse material. On July 19, 2022, investigators executed a search warrant on Burak’s residence. Part of the residence was used for a daycare business catering to pre-school age children. Investigators seized multiple digital devices that were later found to contain more than 250,000 files of child sexual abuse material. Forensics also showed that Burak used these devices to receive and make available for download files of child sexual abuse material on the internet.

    United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.

    The FBI and the Las Vegas Metropolitan Police Department investigated the case. United States Attorney Supriya Prasad 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 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.

    Anyone with information on suspected child sexual exploitation can contact the National Center for Missing and Exploited Children at 1-800-THE-LOST (1-800-843-5678) or online at www.cybertipline.org.

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  • MIL-OSI Security: Las Vegas Resident Sentenced to 10 Years in Prison for Child Sex Trafficking

    Source: US FBI

    LAS VEGAS – A Las Vegas man was sentenced today by U.S. District Judge Richard F. Boulware II to 10 years in prison followed by 20 years of supervised release for attempted child sex trafficking and possession of child sexual abuse material.

    James Allen Wynhoff (41) pleaded guilty in September 2022 to attempted sex trafficking and possession of child pornography. In addition to the prison term, under the Sex Offender Registration and Notification Act, Wynhoff is required to register as a sex offender.

    According to court documents, on March 31, 2022, Wynhoff contacted a person he believed to be a 15-year-old child on the messaging application Kik. Through Kik messages, he solicited and agreed to pay $100 to the child to have sex with him. Furthermore, Wynhoff admitted to possessing 11 videos of child sexual abuse material depicting children as young as toddlers. He has a federal felony conviction in Utah for Interstate Travel with Intent to Engage in Illicit Sexual Contact.

    United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.

    The FBI and Las Vegas Metropolitan Police Department investigated the case. Assistant United States Attorney Supriya Prasad 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 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.

    If you suspect that you have information about possible child sexual exploitation, you are encouraged to contact the National Center for Missing and Exploited Children’s CyberTipline at 1-800-THE-LOST (1-800-843-5678).

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  • MIL-OSI Security: Las Vegas Man Sentenced to More Than 12 Years in Prison for Sex Trafficking Children While Visiting Metro-Detroit

    Source: US FBI

    DETROIT – A Las Vegas man who sex trafficked children in metro-Detroit while visiting the area in December 2020 was sentenced to 12 years and 6 months in prison, United States Attorney Dawn N. Ison announced today.

    Ison was joined in the announcement by Acting Special Agent in Charge Devin J. Kowalski, of the Federal Bureau of Investigation, Detroit Field Division.

    Jquon Wroten, 31, pled guilty to two counts of sex trafficking of a minor in April 2023. Wroten was sentenced today by United States District Judge Bernard A. Friedman.

    Law enforcement first began investigating Wroten while attempting to locate two minor females who had run away from the Lansing area in late 2020. A relative of one of the minors contacted law enforcement with information and expressed fears that the minors were being trafficked in the Detroit area. Law enforcement recovered the minors from a motel room in Southfield, Michigan in December 2020 and learned that Wroten had recruited the minors to work for him after meeting them in a local motel while he was in town. Wroten and an adult female associate took the minors to a local beauty supply store and bought items in an effort to make them look older. Wroten then set up a commercial sex date for the minors at a residence in metro-Detroit and drove the minors to the date, where they engaged in commercial sex with multiple men. Wroten took proceeds from the sex trafficking for his own use.

    “The sex trafficking of children is a hideous crime that preys on some of our district’s most vulnerable citizens,” said U.S. Attorney Ison. “The court’s sentence today is a just punishment and will prevent the defendant from further victimizing children here or anywhere else.”

    “Protecting young people from dangerous predators is a top priority for the FBI in Michigan and across the country,” said Devin J. Kowalski, Acting Special Agent in Charge of the FBI in Michigan. “Mr. Wroten in an example of how manipulative these criminals can be. I commend the work of the special agents, deputies, police officers, and prosecutors who worked to make our children safer by ensuring he remains behind bars for a significant period of time.”

    This case was investigated by the FBI Detroit Division, FBI Las Vegas Division, FBI San Francisco Division, SEMTEC (Southwest Michigan Trafficking and Exploitation Crimes), and State of Michigan Children’s Protective Services.

    The case was prosecuted by Assistant U.S. Attorneys Meghan Sweeney Bean and Eaton Brown.

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  • MIL-OSI Security: Nye County Captain Indicted for Federal Violations

    Source: US FBI

    LAS VEGAS – Captain David E. Boruchowitz (42), a deputy Sheriff with the Nye County Sheriff’s Office, appeared in federal court today following his arrest on federal wire fraud, perjury and civil rights violations, arising from the February 2019 false arrest of the former CEO of Valley Electric Association (VEA), a Pahrump-based utility cooperative.

    United States Magistrate Judge Brenda Weksler arraigned Boruchowitz on the charges contained in a federal indictment and set the date for trial to begin on October 16, 2023, before United States District Judge Andrew P. Gordon.

    According to the indictment, Boruchowitz falsely arrested the former CEO without probable cause on charges that she embezzled services from VEA. The indictment further alleges that the false arrest was part of a larger scheme to defraud the former CEO of her job by falsely alleging in various court documents that the CEO embezzled services from the VEA. According to the indictment, Boruchowitz made false statements and omitted material facts in order to obtain the court documents under false pretenses as part of a broader plan to get the CEO fired from her job at VEA. The indictment alleges that Boruchowitz committed federal wire fraud when he caused press releases to be issued from the Nye County Sheriff’s Office that falsely alleged that the investigation and arrest of the CEO was the result of court authorized process when, in truth and in fact, he obtained the process under false and fraudulent pretenses and without probable cause.

    Lastly, the indictment charges that Boruchowitz perjured himself when he falsely testified during a federal civil deposition about his knowledge and level of involvement in the circumstances surrounding the arrest.

    A conviction on the civil rights charge carries a maximum term of imprisonment of one year. The wire fraud and perjury violations each carry a 20-year and five-year term of imprisonment, respectively, for each count.  

    United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.

    The FBI investigated the case. Assistant United States Attorneys Steven Myhre and Bianca Pucci are prosecuting the case.

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

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  • MIL-OSI Security: Nevada Resident Pleads Guilty to COVID-19 Fraud Scheme

    Source: US FBI

    LAS VEGAS – A Nevada woman pleaded guilty Monday to fraudulently seeking over $1 million in COVID-19 Paycheck Protection Program (PPP) loans.

    According to court documents, Karen Chapon, aka Karen Hannafious, 53, submitted six fraudulent PPP loan applications to three financial institutions for her companies. From April 2020 to July 2020, Chapon made multiple false statements about her companies’ respective business operations and payroll expenses, and submitted false documents to support the loan applications, including false federal tax filings. As part of the loan applications, Chapon falsely stated that she had not been convicted of a felony in the past five years, but in fact, she pleaded guilty to felony fraud offenses in 2016. She received four loans totaling approximately $596,931. Chapon used fraudulently obtained funds for her own benefit, including the purchase of a Mercedes Benz SUV.    

    Chapon pleaded guilty to one count of bank fraud. U.S. District Judge James C. Mahan scheduled sentencing for November 29, 2023. She faces a maximum statutory penalty of 30 years in prison, a five-year term of supervised release, restitution, and a fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29, 2020. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

    The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

    Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division; U.S. Attorney Jason M. Frierson for the District of Nevada; Special Agent in Charge Spencer L. Evans for the FBI; Inspector General J. Russell George for the Treasury Inspector General for Tax Administration (TIGTA); and Special Agent in Charge Weston King for the U.S. Small Business Administration Office of Inspector General (SBA-OIG), Western Region, made the announcement.

    This case was investigated by the FBI, TIGTA, and SBA-OIG. Trial Attorneys Lucy Jennings and Jennifer Bilinkas of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jessica Oliva of the District of Nevada are prosecuting the case.

    In May 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 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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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  • MIL-OSI Security: Former Owner of Collapsed Nursing Home Empire Admits $38 Million Tax Fraud Scheme

    Source: US FBI

    NEWARK, N.J. – A New York man today admitted his role in a $38 million employment tax fraud scheme involving nursing homes he owned across the country, U.S. Attorney Philip R. Sellinger announced.

    Joseph Schwartz, 64, of Suffern, New York, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to two counts of an indictment charging him with willfully failing to pay over employment taxes withheld from employees of his company, and willfully failing to file an annual financial report (Form 5500) with the Department of Labor for the employee 401K Benefit Plan Schwartz sponsored.

    “Schwartz ran a vast, multistate nursing home empire, but cheated taxpayers out of more than $38 million so he could line his own pockets. Having admitted his crime, he will now be held accountable. My office will continue to work with our law enforcement partners to prosecute those who willfully participate in tax fraud schemes.”

    U.S. Attorney Philip R. Sellinger

    According to documents filed in this case and statements made in court:

    Schwartz, an insurance broker and operator of Skyline Management Group LLC (Skyline), with headquarters in New Jersey, willfully failed to pay employment taxes relating to numerous health care and rehabilitation facilities that Skyline operated in 11 states.

    According to the indictment, Schwartz was required to collect, truthfully account for, and pay over to the IRS trust fund taxes withheld from the pay of employees of Skyline and related companies. From October 2017 through May 2018, Schwartz caused taxes to be withheld from employees’ pay but failed to then pay over more than $38 million in employment taxes to the IRS. As an administrator of the Skyline 401K plan, Schwartz further had an obligation to file an annual Form 5500 financial report with the Secretary of Labor for calendar year 2018, but knowingly and willfully failed to file the report.

    The employment tax fraud count is punishable by a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The failure to file a Form 5500 related to the retirement plan count carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for April 10, 2025.

    U.S. Attorney Sellinger credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jenifer L. Piovesan in Newark; and investigators with the Department of Labor-Employee Benefits Security Administration, under the direction of Regional Director Thomas Licetti in the New York Regional Office; and special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado, with the investigation leading to today’s guilty plea.

    The government is represented by Assistant U.S. Attorneys Kendall Randolph and Daniel H. Rosenblum of the Criminal Division in Newark and Trial Attorney Shawn Noud of the Justice Department’s Tax Division.

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  • MIL-OSI Security: West New York Financial Advisor Sentenced to 41 Months in Prison for Role in Multimillion-Dollar Health Care Fraud Conspiracy

    Source: US FBI

    CAMDEN, N.J. – A West New York financial advisor was sentenced today to 41 months in prison for 11 counts of defrauding public health insurance plans out of more than $4 million and transacting in the criminal proceeds, U.S. Attorney Philip R. Sellinger announced.

    Kaival Patel, 55, of West New York, New Jersey, was convicted on Dec. 7, 2023, of one count of conspiracy to commit wire fraud and health care fraud, four counts of health care fraud, one count of conspiracy to commit money laundering by transacting in criminal proceeds, and five counts of money laundering by transacting in criminal proceeds following an 11-day trial before U.S. District Judge Robert B. Kugler. U.S. District Judge Edward S. Kiel imposed the sentence today in Camden federal court.

    “This defendant lined his own pockets by taking advantage of health insurance plans for New Jersey state and local government employees, defrauding them of millions of dollars by conspiring to obtain reimbursements for medically unnecessary compound prescription medications. Together with our law enforcement partners, we will continue to investigate and prosecute those who abuse and defraud the health care system.”

    U.S. Attorney Philip R. Sellinger

    According to documents filed in this case and the evidence at trial:

    Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Compounded medications require a prescription from a physician.

    Patel created and operated a company called ABC Healthy Living LLC to market compound prescription medications. Patel and his conspirators learned that certain state and local government employees had insurance that would reimburse up to thousands of dollars for a one-month supply of certain compound medications such as vitamins, scar creams, pain creams, libido creams, and acid reflux medications. Patel and a conspirator approached Patel’s family member, a medical doctor who owns and operates a clinic in Newark, New Jersey, and convinced him to authorize prescriptions for the compound medications for patients who had no medical need for the prescriptions. Patel received commissions for the compound medication prescriptions.

    Patel and his conspirators paid a group of corrections officers to go to Patel’s family member’s medical practice for the purpose of receiving fraudulent prescriptions. Patel conspired with a compounding pharmacist to add unnecessary ingredients to the compound medications to further increase their cost and augment his illicit profits. Patel engaged in a series of financial transactions to receive proceeds from the health care fraud and wire fraud conspiracy.

    To date, approximately 48 people have been convicted or pleaded guilty in the overarching conspiracy.

    In addition to the prison term, Judge Kiel sentenced Patel to three years of supervised release and ordered him to pay restitution of $4.72 million.

    U.S. Attorney Sellinger credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jenifer L. Piovesan in Newark; and the U.S. Department of Labor, Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the sentencing.

    The government is represented by Assistant U.S. Attorneys Daniel A. Friedman of the Criminal Division and R. David Walk Jr., Deputy Chief of the Criminal Division.

    MIL Security OSI –

  • MIL-OSI Security: Bergen County Investment Advisor Admits Stealing Millions of Dollars from Clients

    Source: US FBI

    TRENTON, N.J. – A former broker and investment advisor today admitted stealing more than $3 million from five clients, U.S. Attorney Philip R. Sellinger announced.

    Kenneth A. Welsh, 42, of River Edge, New Jersey, pleaded guilty before U.S. District Judge Robert Kirsch in Trenton federal court to and indictment charging him with four counts of wire fraud and one count of investment advisor fraud.

    According to documents filed in this case:

    From July 2017 through March 2021, Welsh, while serving in his capacity as an investment advisor employed by a large brokerage firm, misappropriated at least $3 million from five clients. Welsh, who had been entrusted to manage client funds responsibly, instead perpetrated a scheme to defraud the five clients by diverting money from their brokerage accounts to accounts under his control. Welsh then used the unlawfully obtained money to fund his gambling and to purchase high-end, luxury items for himself.

    Each of the wire fraud counts carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The investment advisor fraud count carries a maximum potential penalty of five years in prison and a $10,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 26, 2025.

    U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado, with the investigation leading to the guilty plea.

    The government is represented by Assistant U.S. Attorney Shontae D. Gray of the Economic Crimes Unit in Newark.

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  • MIL-OSI Security: Monmouth County Man Charged with Armed Bank Robbery

    Source: US FBI

    TRENTON, N.J. – A Monmouth County, New Jersey, man made his initial court appearance today for an alleged armed bank robbery, U.S. Attorney Philip R. Sellinger announced today.

    Jeffrey L. Kniffin, 50, of Wall Township, is charged by complaint with one count of armed bank robbery. He appeared before U.S. Magistrate Judge Rukhsanah L. Singh in Trenton federal court and was detained. A detention hearing is scheduled for November 25, 2024.

    According to documents filed in this case and statements made in court:

    On Oct. 23, 2024, Kniffin entered a bank in Wall Township, New Jersey, and demanded cash from a bank teller before grabbing and displaying for the teller a firearm. On several occasions during the robbery, Kniffin instructed the teller and other bank employees who were present, “Don’t do anything stupid.” After taking by force and intimidation cash from the teller, Kniffin fled the bank. He was apprehended and arrested by law enforcement several minutes later. At the time of his arrest, law enforcement recovered from Kniffin and his immediate surroundings a loaded firearm and more than $17,000 in cash.

    The count of armed bank robbery carries a maximum penalty of 25 years in prison and a fine of $250,000.

    U.S. Attorney Sellinger credited officer of FBI Newark’s Jersey Shore Safe Streets Task Force, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation leading to the charges. He also thanked the Wall Township Police Department, under the direction of Chief Sean O’Halloran, and the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Raymond S. Santiago, for their assistance.

    The government is represented by Special Assistant U.S. Attorney Jonathan S. Garelick of the U.S. Attorney’s Office’s Criminal Division in Trenton.

    The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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  • MIL-OSI Security: Essex County Man Sentenced to 70 Months in Prison for Defrauding Victims in Car Theft and Fraudulent Resale Scheme

    Source: US FBI

    NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 70 months in prison for defrauding victims by orchestrating a multistate car theft and fraud ring, U.S. Attorney Philip R. Sellinger announced.

    Warren Guerrier, 47, of Newark, previously pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an indictment charging him with conspiracy to commit wire fraud.

    According to documents filed in this case and statements made in court:

    From November 2016 to June 2020, Guerrier and several conspirators acting at his direction orchestrated a scheme to steal and then fraudulently sell vehicles to unsuspecting buyers. Guerrier and his conspirators identified vehicles to steal, then photographed, tracked, and advertised them for sale on the internet. The buyer victims were provided with electronically programmed keys and falsified certificates of title for the stolen vehicles in exchange for a negotiated purchase price in cash. Buyer victims also were provided with fraudulent identity documents utilized by conspirators to obscure their true identities.

    The scheme involved the theft of at least 40 stolen vehicles, approximately 30 of which were sold by Guerrier and his conspirators to buyer victims. As a result of the scheme, Guerrier and his conspirators collected approximately $285,000.

    In addition to the prison term, Judge Martini sentenced Guerrier to three years of supervised release and ordered restitution of $291,637.

    U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark and Special Agent in Charge Lyonel Myrthil in New Orleans, with the investigation leading to the sentencing.

    The government is represented by Assistant U.S. Attorney Jessica R. Ecker of the Criminal Division in Newark.

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  • MIL-OSI Security: Former High School Teacher Found Guilty of Possessing Child Pornography

    Source: US FBI

    ABERDEEN, MS – A federal jury convicted a Booneville man for possessing child sexual abuse materials after hearing evidence for three days in a trial before Senior District Judge Glen H. Davidson in Aberdeen, Mississippi.

    According to court documents and evidence presented at trial, Andrew Murphy, 36, a former high school science teacher, was found guilty today for possessing child pornography. Sentencing has been scheduled for July 28, 2025, at the U.S. Courthouse in Aberdeen, Mississippi.

    Over two days of testimony, the government presented evidence to establish that Murphy collected images of child exploitation material, child nudity, child erotica, and images of children engaged in sexual activity, using a peer-to-peer network online.

    The statutory penalties are up to ten years imprisonment, five years to life on supervised release, and registration on the sex offender registration.

    “The case presented to the jury by AUSAs Parker King and John Herzog clearly established the guilt of this teacher who possessed images that demonstrated his sexual interest in children,” said U.S. Attorney Clay Joyner. “I cannot overstate the importance of our partnership with the Mississippi Attorney General’s Office, the FBI, and our local law enforcement partners, such as the Prentiss County Sheriff’s Department, in protecting children, and this partnership will continue to do just that.”

    “For every image of child pornography there is a child who is a victim and who will relive his or her abuse over and over again while that image circulates. We are committed to holding all predators who exploit Mississippi children accountable, and particularly those that hold positions of trust and care for our children,” said Attorney General Lynn Fitch. “I appreciate the strong partnership our office has with the U.S. Attorney’s Office and the FBI.  Together, we are dedicated to serving justice for the victims in this case and all others.”

    “Safeguarding our society’s future begins with protecting children in our community from predatory individuals like, Andrew Murphy,” said Special Agent in Charge Robert Eikhoff of the FBI Jackson Field Office. “Murphy held a position of trust and violated that trust that our communities had in him with these heinous crimes against our youth; it will not be tolerated. The FBI maintains a steadfast commitment, in working alongside our federal, state, and local partners, to protect the innocence of our minors, and aggressively investigate predators, like Murphy, to hold them accountable and make sure they are brought to justice.”

    The case was investigated and conducted by the Mississippi Attorney General’s Office and the FBI.

    Assistant U.S. Attorneys Parker S. King and John Herzog are prosecuting the case.

    The case against Andrew Murphy was brought as part of the Project Safe Childhood nationwide initiative by the Department of Justice to combat the epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), 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.projectsafechildhood.gov. 

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  • MIL-OSI Security: Arkansas Woman Sentenced to 36 Months in Federal Prison for Stealing Over $300,000 From Elderly Customers at a New Hampshire Credit Union

    Source: US FBI

    CONCORD – An Arkansas woman was sentenced today in federal court for stealing over $300,000 from elderly customers at a New Hampshire credit union, Acting U.S. Attorney Jay McCormack and U.S. Attorney Jonathan D. Ross announce.

    Tyra Brown, 27, of Benton Arkansas, was sentenced by U.S. District Judge Brian S. Miller of the U.S. District Court for the Eastern District of Arkansas to 36 months in prison and three years of supervised release.  On January 23, 2025, Brown pleaded guilty in the Eastern District of Arkansas to one count of wire fraud.

    “The defendant deliberately abused her position of trust and chose to target elderly account holders, knowing some of whom were unfamiliar with electronic banking,” said Acting U.S. Attorney McCormack.  “The U.S. Attorney’s Office and our law enforcement partners are vigilantly working to protect Granite Staters from fraudsters like the defendant.”

    “Tyra Brown had no compunction about swindling elderly victims out of their hard-earned money. What she did isn’t just cowardly, it’s cruel,” said James Crowley, Acting Special Agent in Charge of the FBI Boston Division.  “The FBI will never stop working to shut down elder fraud schemes like this one.”

    Brown was a customer service representative for a New Hampshire credit union.  Because of her job, Brown could access customers’ personal identifying information, security questions and answers, and account balances. She was only permitted to access customer account information for business purposes, such as to answer customer questions on calls. Brown used that access to steal $301,674.89 from at least 10 elderly victims and attempted to steal $428,526.85 in total. Brown used wires, electronic debits, and Zelle to transfer victim funds to other accounts.

    The Federal Bureau of Investigation in New Hampshire led the investigation.  Assistant U.S. Attorneys Alexander S. Chen of the District of New Hampshire and Katie Hinojosa of the Eastern District of Arkansas prosecuted the case.

     

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  • MIL-OSI Security: Reno Man Sentenced to 10 Years in Prison for Receiving Thousands of Images and Videos of Child Sexual Abuse Material

    Source: US FBI

    RENO, Nev. – A Reno resident was sentenced yesterday by United States District Judge Larry R. Hicks to 10 years in prison followed by lifetime supervised release for receiving more than 3,000 sexually explicit images and videos of children. Judge Hicks ordered $108,000 in total restitution: $68,000 in restitution to the 10 known victims, $5,000 in restitution under the Justice for Victims Trafficking Act of 2015, and $35,000 in restitution under the Amy, Vicky, and Andy Child Pornography Victim Assistance Act of 2018.

    Ryan Thomas Eley (26) pleaded guilty in March of 2023 to one count of receipt of child pornography. In addition to imprisonment, Eley will be required under the Sex Offender Registration and Notification Act to register as a sex offender.

    According to court documents, the National Center for Missing and Exploited Children forwarded at least 12 CyberTips to law enforcement. Law enforcement determined the IP address was being used by Eley. On August 4, 2020, law enforcement executed a search warrant at Eley’s residence and seized USB flash drives, an external hard drive, and a cell phone belonging to him. Forensic analysis of the seized devices revealed that some of the images and videos depicted prepubescent children — including children under 12 years old — engaged in sexually explicit conduct and intercourse with adults. In total, over 2,700 images and over 400 videos of child sexual abuse material were recovered from electronic devices seized from Eley.

    United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.

    This case was investigated by the FBI, Washoe County Sheriff’s Office, Sparks Police Department, Homeland Security Investigations, and the Nevada Attorney General’s Office. Assistant United States Attorney Randolph J. St. Clair prosecuted the case.

    The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s 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 and for information about internet safety education, please visit www.justice.gov/psc.

    Anyone with information on suspected child sexual exploitation can contact the National Center for Missing and Exploited Children at 1-800-THE-LOST (1-800-843-5678) or https://report.cybertip.org.

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  • MIL-OSI Security: Northern Nevada Resident Convicted of Murdering Pregnant Indigenous Woman on Reservation

    Source: US FBI

    RENO, Nev. — A jury convicted a Northern Nevada man yesterday for murdering a pregnant indigenous woman on the Pyramid Lake Indian Reservation in December 2020.

    According to court documents and evidence presented at trial, Michael Burciaga (36) stabbed his pregnant girlfriend, a registered member of the Pyramid Lake Paiute Tribe, multiple times, causing her death and the death of their unborn child. Shortly after midnight on December 15, 2020, Pyramid Lake Police Department officers responded to an emergency call from the victim’s 15-year old daughter at the victim’s home located on the Pyramid Lake reservation in Nixon, located in Washoe County.

    Burciaga was convicted of Murder in the First Degree within Indian Country, a violation of the Protection of Unborn Children Act, and Domestic Assault by a Habitual Offender Within Indian Country. He is scheduled to be sentenced by Chief United States District Judge Miranda M. Du on September 25, 2023, and he faces a statutory minimum sentence of life imprisonment. The sentencing will be determined by the Court based on the advisory Sentencing Guidelines and other statutory factors.

    United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.

    The FBI and Pyramid Lake Police Department investigated the case. Assistant United States Attorneys Penelope Brady, Megan Rachow, and Richard Casper are prosecuting the case.

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  • MIL-OSI Security: Las Vegas Felon Sentenced to Nearly 12 Years in Prison for Possession of Child Sexual Abuse Material

    Source: US FBI

    LAS VEGAS – A Las Vegas man who was serving his prison sentence for a prior conviction for possession of child pornography was sentenced today by United States District Judge Anne R. Traum to 140 months in prison followed by 10 years of supervised release for possession of child sexual abuse material.

    Ronald William Dougherty (52) pleaded guilty on March 30, 2023, to one count of possession of child pornography. In addition to imprisonment, under the Sex Offender Registration and Notification Act, Dougherty must register as a sex offender after completion of his prison term.

    According to court documents, on January 7, 2015, Dougherty was convicted of possession of child pornography, and he was permitted to complete his sentence at the Las Vegas Community Corrections Center. Staff at the residential re-entry center located an iPhone belonging to Dougherty. A forensic search of the iPhone found 179 images and 35 videos of child sexual abuse material, including depictions of children as young as toddlers. Dougherty also admitted to distributing child sexual abuse material using his personal email address.

    United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.

    The FBI and Las Vegas Metropolitan Police Department investigated the case. Assistant United States Attorney Supriya Prasad prosecuted the case.

    This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Department of Justice’s 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.

    Anyone with information on suspected child sexual exploitation can contact the National Center for Missing and Exploited Children at 1-800-THE-LOST (1-800-843-5678) or online at www.cybertipline.org.

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  • MIL-OSI Security: Three Darknet Fentanyl Vendors Sentenced to More Than 20 Years in Prison

    Source: US FBI

    ALEXANDRIA, Va. – A Tempe, Arizona, woman was sentenced today to 5 years in prison for her role in operating multiple darknet pages selling illicit drugs alongside two previously sentenced co-conspirators.

    According to court documents, from at least in and around January of 2022 through August 2022, Veronica Dittman, 28, along with co-conspirators Rick Schiffner, 31, and Devin Langer, 30, both based in Phoenix, Arizona, ran the darknet monikers “TrustedTraphouse,” “GoldenTrails,” “PopcornPlug,” and others across at least dozen different darknet markets. On these markets, the co-conspirators advertised various controlled substances, including crystal methamphetamine, cocaine, heroin, and fentanyl-laced counterfeit pills that the conspirators advertised as oxycodone. During the course of the conspiracy, the conspirators made over 1,300 sales of controlled substances over the darknet using these accounts, distributing at least 800 grams of counterfeit pills containing fentanyl, 500 grams of methamphetamine, 16 grams of heroin, and 7 grams of cocaine. The conspirators described the pressed pills containing fentanyl on one marketplace as “Not normal OxyCodone”, informing potential customers “These are MUCH stronger than pharmaceutical OxyCodone… These were NOT made by a pharmacy,” and warning customers to “BE CAREFUL.” Dittman worked primarily with Schiffner to process orders over the darknet and then package and ship them. Dittman also operated her own vendor accounts on the darknet using the monikers “VirtualPeddler” and “Darkette”. By the time of her arrest, she had made at least 74 sales of controlled substances through those accounts, the majority of which were fentanyl.

    The darknet, also called the darkweb, is a portion of the Internet that hosts darknet markets, or hidden commercial websites. A darknet market operates as a black market, selling or brokering transactions involving legal products, as well as drugs, weapons, counterfeit currency, stolen credit card details, forged documents, unlicensed pharmaceuticals, steroids, and other illicit goods.

    Co-conspirators Schiffner was sentenced on April 14, 2023, to 150 months imprisonment. Co-conspirator Langer was sentenced on April 17, 2023, to 84 months imprisonment.

    Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division; Damon E. Wood, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service (USPIS); and George A. Scavdis, Special Agent in Charge of the FDA Office of Criminal Investigations Metro Washington Field Office, made the announcement after sentencing by Senior U.S. District Judge T.S. Ellis, III.

    The U.S. Attorney’s Office for the Eastern District of Virginia expresses its appreciation to the FBI Phoenix Field Office, USPIS Phoenix Division, Homeland Security Investigations Phoenix, the Pinal County Sheriff’s Office, the Arizona Department of Public Safety, FBI Las Vegas Field Office, and the Las Vegas Metropolitan Police Department for their significant assistance in this case.

    Assistant U.S. Attorney Heather Call prosecuted the case.

    A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:23-cr-31.

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  • MIL-OSI Security: Las Vegas Police Officer Convicted of Committing Three Casino Robberies

    Source: US FBI

    LAS VEGAS – A federal jury today convicted a Las Vegas Metropolitan Police Department (LVMPD) officer of robbing three casinos and stealing approximately $164,000 in total.

    Caleb Mitchell Rogers (33) was found guilty of three counts of interference with commerce by robbery and one count of brandishing a firearm during and in relation to a crime of violence. United States District Judge Andrew P. Gordon presided over the trial. A sentencing date has been scheduled for October 12, 2023.

    According to court documents and evidence presented during the four-day trial, Rogers stole approximately $73,810 from a casino in the western part of Las Vegas on November 12, 2021. A few months later, on January 6, 2022, he robbed a casino in North Las Vegas of approximately $11,500. In both robberies, he walked directly to the casino’s cashier cage and demanded money from the cashiers.

    The third robbery occurred on February 27, 2022, in which Rogers ran toward two casino employees in the sportsbook area and yelled: “Get away from the money. I’ve got a gun. I will shoot you!” Rogers climbed over the counter and shoved one of the employees to the floor, before grabbing approximately $78,898 and placing it into a bag. Rogers fled when the employees triggered an alarm. As Rogers ran toward the parking garage, a casino security officer tackled him. Rogers drew a .357 caliber revolver and, with his finger on the trigger, threatened: “I’m going to shoot you!” Security officers were able to disarm Rogers and restrain him until LVMPD officers arrived. The officers arrested Rogers and seized his firearm. Checking the revolver’s serial number, officers learned that it belonged to the LVMPD.

    The statutory maximum penalty is 20 years in prison for each count of interference with commerce by robbery, and life imprisonment for brandishing a firearm during and in relation to a crime of violence.

    United States Attorney Jason M. Frierson for the District of Nevada and Special Agent in Charge Spencer L. Evans for the FBI made the announcement.

    This case was investigated by the FBI and the LVMPD. Assistant United States Attorneys Dan Cowhig and David Kiebler are prosecuting the case.

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  • MIL-OSI Security: Two Former Employees of New Jersey Mortgage Lending Business Indicted for Roles in Mortgage Fraud Scheme

    Source: US FBI

    NEWARK, N.J. – Two men were arraigned today on charges related to their roles in a large-scale mortgage fraud scheme, U.S. Attorney Philip R. Sellinger announced today.

    Christopher J. Gallo, 44, of Old Tappan, New Jersey, and Mehmet Ali Elmas, 32, a U.S. citizen who resided in Turkey until the time of his arrest, were indicted by a federal grand jury on Oct. 24, 2024, on one count of conspiracy to commit bank fraud, eight counts of bank fraud, eight counts of false statements to a financial institution; and one count of aggravated identity theft. They appeared today before U.S. District Judge Brian R. Martinotti in Newark federal court and each pleaded not guilty.

    According to documents filed in this case and statements made in court:

    Gallo and Elmas were previously employed by a New Jersey-based, privately owned licensed residential mortgage lending business. Gallo was a senior loan officer and Elmas was a mortgage loan officer and Gallo’s assistant. From 2018 through October 2023, Gallo and Elmas used their positions to conspire and engage in a fraudulent scheme to falsify loan origination documents sent to mortgage lenders in New Jersey and elsewhere, including their former employer, to fraudulently obtain mortgage loans. Gallo and Elmas routinely mislead mortgage lenders about the intended use of properties to fraudulently secure lower mortgage interest rates.  Gallo and Elmas often submitted loan applications falsely stating that the listed borrowers were the primary residents of certain proprieties when, in fact, those properties were intended to be used as rental or investment properties. By fraudulently misleading lenders about the true intended use of the properties, Gallo and Elmas secured and profited from mortgage loans that were approved at lower interest rates.

    The conspiracy also included falsifying property records, including building safety and financial information of prospective borrowers to facilitate mortgage loan approval. Between 2018 through October 2023, Gallo originated more than approximately $3 billion in loans.

    The charges of conspiracy to commit bank fraud, bank fraud, and false statements to a financial institution each carry a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest. The aggravated identity theft charge carries an additional consecutive mandatory minimum term of two years in prison and a maximum fine of up to $250,000, or twice the gross gain or loss from the offense, whichever is greatest.

    U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to the indictment.

    The government is represented by Assistant U.S. Attorney Shontae D. Gray of the Economic Crimes Unit in Newark.

    The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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  • MIL-OSI Security: Executive of Louisiana Compounding Pharmacy Admits Defrauding State Health Benefits Programs

    Source: US FBI

    CAMDEN, N.J. – The former vice president of sales of a Louisiana compounding pharmacy today admitted conspiring to use the Louisiana pharmacy to defraud New Jersey and military health benefits programs, Attorney for the United States Vikas Khanna announced.

    Christopher Casseri, 56, of Baton Rouge, Louisiana, pleaded guilty before U.S. District Judge Edward S. Kiel to one count of conspiring to commit health care fraud. Casseri was previously charged with Christopher Kyle Johnston, 45, of Mandeville, Louisiana, Trent Brockmeier, 62, of Pigeon Forge, Tennessee, in a 24-count indictment with conspiracy to commit health care fraud and wire fraud and a second conspiracy to commit identity theft by using individuals’ personal identifying information without their consent. Johnston and Brockmeier were charged with additional charges of conspiring to commit money laundering and substantive counts of money laundering for transactions involving the over $43 million in illicit profits they realized from the scheme. The charges against Johnston and Brockmeier remain pending and they are scheduled to proceed to trial in January 2025.

    According to court documents and statements made in Court:

    Central Rexall was a retail pharmacy in Louisiana that prepared compounded medications, which are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. In 2013, Johnston and Brockmeier entered into an agreement with Central Rexall Chief Executive Officer Hayley Taff, who pleaded guilty on Aug. 12, 2020, to conspiracy to commit health care fraud, to take over the management of the pharmacy and expand the compounding business in exchange for 90 percent of the profits.  Brockmeier became chief operating officer of Central Rexall and Johnston became general counsel. They hired Casseri as vice president of sales to manage Central Rexall’s outside sales force.

    Johnston, Brockmeier, and Casseri learned that certain insurance plans administered by an entity referred to in the indictment as the “Pharmacy Benefits Administrator” would reimburse thousands of dollars for a one-month supply of certain compounded medications – including pain, scar, and antifungal creams, as well as vitamin combinations. The health plans for New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had this insurance coverage, as did TRICARE, which insures current and former members of the armed forces and their families.

    The three conspirators designed compounded medications and manipulated the ingredients in the medications in order to obtain high insurance reimbursements rather than serve the medical needs of patients. To determine which ingredients and combinations resulted in the highest insurance reimbursements, Johnston, Brockmeier, and Casseri had Central Rexall employees send the Pharmacy Benefits Administrator false prescription claims to test out different combinations of ingredients, but the prescriptions did not exist. By trial and error, Johnston, Brockmeier, and Casseri designed compounded medications with combinations of ingredients that were chosen solely based on the amount of money that insurance would pay rather than on the medications’ ability to serve the medical needs of patients. At their direction, Central Rexall sent compounded medications to patients based solely on financial gain, without any research or testing showing that the combination of ingredients was effective.

    When the Pharmacy Benefits Administrator would stop covering one combination, the conspirators would develop a compounded medication with a different combination of ingredients based solely on the insurance reimbursement and without considering the medical necessity or effectiveness of the new combination. Central Rexall then would send that new compounded medication to patients, even though the new combination of ingredients was not medically equivalent to the combination originally prescribed for the patients and without telling the patients or their doctor about the differences.

    The outside sales force retained and directed by Johnston, Brockmeier, and Casseri used various methods to get doctors to prescribe these medications and patients to accept them, including having prescriptions signed without the patient seeing a doctor or knowing about the medications, having medications or refills ordered with the patients’ knowledge, and paying patients to accept the medications and paying doctors to prescribe them.

    Casseri and his conspirators caused over $46 million in fraudulent insurance claims for compounded medications that were not medically necessary.

    Casseri faces a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for March 18, 2025.

    Attorney for the United States Khanna credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jenifer L. Piovesan in Newark; and the U.S. Department of Labor Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the guilty plea.

    The charges and allegations against Johnston and Brockmeier are merely accusations, and they are presumed innocent unless and until proven guilty.

    The government is represented by R. David Walk Jr., Deputy Chief of the Criminal Division and Assistant U.S. Attorney Daniel A. Friedman of the Criminal Division in Camden.

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  • MIL-OSI Security: Former Vice President of Product Development Admits Theft of Trade Secrets From New Jersey-Based Producer of Oil Products and Proprietary Flavors

    Source: US FBI

    NEWARK, N.J. – A former vice president of product development at a New Jersey-based producer of oil products and proprietary flavors admitted possessing and conspiring to possess stolen trade secrets, U.S. Attorney Philip R. Sellinger announced today.

    Andrew Blum, 63, of North Brunswick, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court on Nov. 12, 2024, to an information charging him conspiracy to possess stolen trade secrets and possession of stolen trade secrets.

    “A company’s intellectual property – its proprietary materials and trade secrets –  have enormous value to the companies that develop them, sometimes constituting their most valuable assets. Stealing them is a crime. This defendant admitted stealing trade secrets, including a secret formula used in one of the most recognizable names in the global soft drink industry. Our office will prosecute cases like this with the same vigor as any other theft.”

    U.S. Attorney Philip R. Sellinger

    “Blum admits he stole his employer’s trade secrets and hoped to use the information so he could get a job across the street,” FBI – Newark Acting Special Agent in Charge Nelson I. Delgado said. “Protecting the proverbial keys to the castle is essential for companies to remain in business and stay competitive. It’s even common for corporations to house formulas and recipes in literal vaults to keep them from being stolen. One of the FBI’s priorities is protecting companies from these types of crimes and holding accountable anyone who tries to sneak out the back door.”

    According to documents filed in this case and statements made in court:

    From 2013 to Dec. 12, 2018, Blum was the vice president of product development for a company that is a subsidiary of a New Jersey-based corporation that maintained its principal place of business in Northern New Jersey. The company’s parent corporation was one of the world’s largest producers of oils, juices, peel and byproducts, as well as a leading manufacturer of proprietary flavors sold to, among others, the world’s largest beverage companies. The company’s entire business was predicated on the development of formulas used in the production of flavors and as such, the intellectual property represented in formulas is one of the company’s most important assets.

    In December 2018, the company’s information technology team discovered that another employee from company used a personal email account to forward 82 files, each of which contained proprietary and trade secret information, to Blum on his personal email account. The list of 82 files included virtually all of the formulas used in the department where Blum worked. The company later learned that Blum and the other employee accessed other sensitive formulas belonging to the company that Blum and the employee were not working on and should not have accessed, including a secret formula used in one of the most recognizable names in the global soft drink industry. Other email communication between non-company accounts showed that Blum and the other employee were planning to leave the company to work for competitor companies. Law enforcement later recovered other trade secret information from Blum’s residence and from one of Blum’s cloud-based storage accounts, including handwritten notes for a product that the company produces that is sold by one of the world’s largest soda companies in a country in Asia.

    The counts of conspiracy to possess stolen trade secrets and possession of stolen trade secrets each carry a maximum potential penalty of 10 years in prison and a fine of up to $250,000 fine, or twice the gain or loss from the offense, whichever is greatest. Sentencing is scheduled for March 20, 2025.

    U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation leading to the  guilty plea.

    The government is represented by Assistant U.S. Attorney Benjamin Levin, Chief of the U.S. Attorney’s Office General Crimes Unit in Newark, with assistance from the National Security Unit.

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  • MIL-OSI Security: Somerset County Man Sentenced to 87 Months in Prison for Defrauding New Jersey Traumatic Brain Injury Fund of Millions of Dollars and Committing Tax Evasion

    Source: US FBI

    TRENTON, N.J. – A Somerset County, New Jersey, man was sentenced today to 87 months in prison for conspiracy to commit healthcare fraud, five acts of healthcare fraud, and four counts of tax evasion, U.S. Attorney Philip R. Sellinger announced.

    C.R. Kraus, 58, of Manville, New Jersey was convicted in April 2024 of all 10 counts of an indictment following a trial before U.S. District Judge Zahid N. Quraishi in Trenton federal court. In January 2023, Kraus’s conspirators, Harry Pizutelli and Maritza Flores, pleaded guilty to conspiracy to commit healthcare fraud and tax evasion relating to defrauding the New Jersey Traumatic Brain Injury Fund (TBI Fund) of millions of dollars for their own personal benefit. Both are awaiting sentencing.

    “This defendant stole millions of dollars earmarked for victims of traumatic brain injuries. Stealing resources intended to help New Jersey residents who are already coping with serious challenges is especially egregious. This office will never relent in holding such criminals accountable. Today, this defendant learned the price of his criminal acts.”

    U.S. Attorney Philip R. Sellinger

    “C.R. Kraus was intent on defrauding the Traumatic Brain Injury Fund by making false claims that he treated patients who suffer from such maladies,” FBI – Newark Acting Special Agent in Charge Nelson I. Delgado said. “This not only took away valuable resources from other deserving patients but enabled Kraus and his co-conspirators to benefit substantial monetary gain, to the tune of more than $4 million. The FBI investigative team worked to put a stop to their fraudulent behavior, and bring to justice criminals who use the healthcare system as a personal piggy bank.”

    “Motivated entirely by greed, C.R. Kraus and his co-conspirators stole millions of dollars from a government program meant to aid individuals with life-altering injuries,” Special Agent in Charge Jenifer L. Piovesan, IRS Criminal Investigation, Newark Field Office, said. “Today’s sentence reinforces IRS-CI’s dedication to investigating financial crimes and ensuring bad actors are held accountable for their misconduct.”

    According to documents filed in this case and the evidence at trial:

    The TBI Fund is a publicly funded program run by the New Jersey Division of Disability Services, a component of the New Jersey Department of Human Services. The TBI Fund’s purpose is to provide New Jersey residents who have suffered a traumatic brain injury with services and support in order to maximize their quality of life when funding from insurance, personal resources, or other programs is unavailable to meet their needs. Services funded by the TBI Fund include physical, occupational, and speech therapy; service coordination; assistive technology; cognitive therapy; neuropsychological services; pharmaceuticals; wheelchair ramp installation and other home modifications; and general home management and maintenance.

    After a prospective patient applies for services, TBI Fund personnel review the application and, if approved, the patient is authorized to secure designated services from a third-party vendor. Once a patient receives services approved by the TBI Fund, the vendor or service provider submits an invoice to the TBI Fund for payment. When an invoice is received, TBI Fund personnel review the invoice to ensure that the patient had been approved to receive the services. If the invoice is approved, an internal payment voucher is generated, authorized by TBI Fund personnel, and then submitted to the New Jersey Department of the Treasury for payment, which issues a check directly to the vendor.

    Pizutelli was the manager of the TBI Fund and was responsible for its day-to-day operation. He supervised, managed, and oversaw the process by which third-party vendors were paid for services rendered to eligible TBI Fund beneficiaries. From 2009 through June 2019, Pizutelli, Kraus, and Flores conspired to defraud the TBI Fund by misappropriating more than $4 million in fraudulent vendor payments for purported services that were never actually provided. Pizutelli orchestrated the distribution of fraudulent vendor payments to Flores and Kraus by generating and processing false invoices and internal payment vouchers. Pizutelli generated these invoices and vouchers to give the appearance that Flores and Kraus had provided approved services to eligible patients when, in fact, they had not provided any services. Pizutelli then approved and transmitted the internal payment vouchers so that his conspirators received vendor payments.

    Pizutelli orchestrated these fraudulent payments to maintain and further romantic and/or sexual relationships with Flores, including more than $940,000 in fraudulent distributions to Flores and more than $3.245 million in fraudulent distributions to Kraus. To obscure their fraudulent conduct, Flores and Kraus also evaded the payment of substantial amount of income taxes by making material misstatements and omissions on their federal income tax returns and significantly underreporting the income they had derived from the fraudulent scheme.

    In addition to the prison term, Judge Quraishi sentenced Kraus to three years of supervised release and ordered restitution of $4.19 million.

    U.S. Attorney Sellinger credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Acting Special Agent in Charge Delgado, and special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Jenifer L. Piovesan, with the investigation leading to the guilty verdict. He also thanked the New Jersey Attorney General’s Office, Division of Law, and the New Jersey Department of Human Services, for its assistance.

    The government is represented by Eric A. Boden, Attorney-in-Charge in Trenton, and Assistant U.S. Attorney Eric Suggs of the U.S. Attorney’s Office Trenton Branch Office.

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  • MIL-OSI Security: Former CEO of 500.Com (now Bit Mining Ltd.) Indicted for Role in Bribing Japanese Officials and Bit Mining Ltd. Resolves Foreign Bribery Investigation

    Source: US FBI

    NEWARK, N.J. – An indictment was unsealed today charging the former CEO of 500.com (now BIT Mining Ltd.), Zhengming Pan, a Chinese national, with violations of the Foreign Corrupt Practices Act (FCPA). BIT Mining Ltd. has agreed to resolve investigations by the Justice Department and the Securities and Exchange Commission (SEC) into related FCPA violations arising from the company’s participation in a corrupt scheme to pay bribes to Japanese government officials.

    BIT Mining entered into a three-year deferred prosecution agreement (DPA) in connection with a criminal information filed in the District of New Jersey charging BIT Mining with one count of conspiracy to violate the anti-bribery and books and records provisions of the FCPA and one count of violating the books and records provisions of the FCPA.

    A federal grand jury in the District of New Jersey returned an indictment against Pan on June 18. Pan is charged with one count of conspiracy to violate the anti-bribery and books and records provisions of the FCPA, one count of violating the anti-bribery provisions of the FCPA, and two counts of violating the books and records provisions of the FCPA.

    “Paying bribes to foreign government officials is a serious crime. The top leadership of BIT Mining, then known as 500.com, directed consultants to pay bribes to Japanese government officials to win a bid to open a large resort in Japan. The illegal scheme started at the top, with the company’s CEO allegedly fully involved in directing the illicit payments and the subsequent efforts to conceal them. The company has admitted its crimes and agreed to pay a $10 million penalty, and its then-CEO has been charged for his role in the scheme. This agreement and indictment hold both the corporation as an entity and its top leadership accountable.”

    U.S. Attorney Philip R. Sellinger

    “BIT Mining, under the alleged direction of then-CEO Zhengming Pan, agreed to pay nearly $2 million in bribes to Japanese government officials to win a contract to open a lucrative resort and casino in Japan,” Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said. “Pan has been indicted for his alleged role in directing company consultants to pay the bribes and to conceal the illicit payments through sham consulting contracts. Today’s resolution and the charges against Pan demonstrate the department’s continued commitment to holding both corporate and individual wrongdoers accountable for their crimes.”

    “Today’s indictment against the former CEO of BIT Mining for bribing Japanese officials highlights the FBI’s commitment to holding individuals accountable for illegal conduct,” Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division said. “This type of criminal activity undermines the integrity of business practices. The FBI will relentlessly pursue those involved in illegal schemes creating unfair advantages and ensure they face the full consequences of the law.”

    According to court documents, between 2017 and 2019, BIT Mining, then known as 500.com, admitted that its -CEO Pan, employees, and agents, agreed to pay approximately $1.9 million in bribes and payments to intermediaries, knowing the money would be used to make bribe payments to Japanese government officials. The purpose of the bribes was to try to help 500.com win a bid to open an integrated resort (a large resort that includes hotels, casinos, retail, dining, convention facilities, and entertainment venues) in Japan. On behalf of 500.com, Pan allegedly engaged third-party consultants to assist 500.com in paying and concealing these bribes. 500.com, through these consultants, paid bribes in the form of cash, travel, entertainment, and gifts. Pan and others allegedly covered up the payment of these bribes by, among other things, entering into sham contracts with the consultants and falsely recording the payments as legitimate expenses, including as management advisory fees. Ultimately, despite carrying out this bribery scheme, 500.com did not win an integrated resort bid in Japan.

    Pursuant to the DPA, BIT Mining agreed, based on the application of the U.S. Sentencing Guidelines, that the appropriate criminal penalty is $54 million. However, due to BIT Mining’s financial condition and demonstrated inability to pay the penalty calculated under the U.S. Sentencing Guidelines, BIT Mining and the Justice Department agreed, consistent with the department’s inability to pay guidance, that BIT Mining will pay a total criminal penalty of $10 million. The Justice Department has agreed to credit up to $4 million against the civil penalty BIT Mining has agreed to pay to the SEC to resolve a parallel investigation.

    BIT Mining has also agreed to continue to cooperate with the Fraud Section and the U.S. Attorney’s Office for the District of New Jersey in any ongoing or future criminal investigations. In addition, BIT Mining has agreed to continue to enhance its compliance programs and provide reports to the Justice Department regarding remediation and the implementation of compliance measures for the three-year term of the DPA.

    The Justice Department reached this resolution with BIT Mining based on a number of factors, including, among others, the nature and seriousness of the offense. BIT Mining received credit for its cooperation with the department’s investigation, which included (i) voluntarily producing relevant documents, financial data, and other information, including from foreign countries, while navigating some foreign data privacy and related criminal laws, accompanied by translations of a limited number of documents; and (ii) providing the government with facts learned during its internal investigation. The cooperation was, however, reactive and limited in degree and impact.

    BIT Mining engaged in certain timely remedial measures, which included, among other things, (i) increasing governance and oversight of compliance risks and audit findings by the Board of Directors, (ii) promoting compliance and ethics through company-wide communications, (iii) incorporating compliance criteria in performance evaluations for senior management, (iv) conducting annual risk assessments, (v) creating an anti-corruption policy and engaging in company-wide training and communications to promote it, and (vi) transitioning its business model to an industry that presents a lower corruption risk and reducing its presence in high risk regions. In light of these considerations, BIT Mining’s criminal penalty calculated under the U.S. Sentencing Guidelines reflects a 10% reduction off the bottom of the applicable guidelines fine range.

    The FBI’s International Corruption Unit is investigating the case.

    Assistant U.S. Attorney Jennifer Kozar for the District of New Jersey and Trial Attorneys Jil Simon and Ligia Markman of the Criminal Division’s Fraud Section are prosecuting the cases.

    The Justice Department’s Office of International Affairs and authorities in Japan provided assistance in this matter.

    The Fraud Section is responsible for investigating and prosecuting FCPA and Foreign Extortion Prevention Act matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.

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

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  • MIL-OSI Security: Central New York Man Sentenced to 10 Years for Possession of Child Pornography

    Source: US FBI

    David Hughes, aka Danielle Starr, Obtained a Sexually Explicit Video from a Minor He was Communicating with Over the Internet

    SYRACUSE, NEW YORK – David Hughes, aka Danielle Starr, 50, of Syracuse, and formerly of Oneida County, was sentenced today to serve 10 years in federal prison for possession of a sexually explicit video of a 13-year-old boy he received from the child over the internet.

    United States Attorney Carla B. Freedman and Craig L. Tremaroli, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI) made the announcement. 

    In his earlier guilty plea, Hughes, who previously served 210 months in federal prison for a prior conviction for receipt and possession of child pornography, admitted that while on federal supervised release he used his monitored smart phone to communicate with a person he knew to be a 13-year-old boy.  Hughes identified himself as, “Danielle Starr.” In communications captured by the monitoring program, Hughes discussed engaging in sexual conduct with the child, and knowingly received a sexually explicit video the child produced for and sent to Hughes. Law enforcement identified the child as a minor from out of state, and notified the child’s parents of the online activity.

    In addition to the 10-year sentence, Hughes was sentenced to a concurrent 2-year term of imprisonment for violating the conditions of supervised release from his prior offense.  He will be placed on supervision for 20 years when released from prison, and will continue to be required to register as a sex offender.

    This case was investigated by the Federal Bureau of Investigation’s (FBI) Albany Division Child Exploitation and Human Trafficking Task Force and the United States Probation Department.  Assistant U.S. Attorney Lisa M. Fletcher, Project Safe Childhood Coordinator for the Northern District of New York, prosecuted the case.

    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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

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  • MIL-OSI Security: Schenectady Man Sentenced to 20 Years in Federal Prison for Receiving Child Pornography

    Source: US FBI

    ALBANY, NEW YORK – Richard Nejame, age 29, of Schenectady, New York, was sentenced today to serve 240 months (20 years) in federal prison, to be followed by 25 years of supervised release, for receiving and attempting to receive child pornography.

    United States Attorney Carla B. Freedman and Craig L. Tremaroli, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.

    As part of his guilty plea, Nejame admitted that between about October 2022 and May 1, 2023, he communicated with several different minor females over various social media applications to include Snapchat.  Nejame further admitted that his online personas on social media claimed that he was a teenage boy.  During Nejame’s online communications with the minor females, he encouraged them to take nude pictures and videos of themselves, and to then send the pictures and videos to him.  Once in receipt of the nude picture and videos of the minor females, Nejame directed the females to take more sexually explicit pictures and videos of themselves, to send those sexually explicit pictures and videos of themselves to him, and that if the females did not comply with his demands, Nejame would threaten to embarrass and expose the females by publishing their pictures and videos on the Internet. 

    In addition to the imprisonment and supervised release terms, Nejame will be required to register as a sex offender upon release from imprisonment. 

    The FBI’s Albany Division Child Exploitation and Human Trafficking Task Force investigated this case.  The Task Force includes members of federal, state, and local law enforcement agencies. Assistant United States Attorneys Rick Belliss and Benjamin S. Clark prosecuted the case as part of Project Safe Childhood.

    Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).  Project Safe Childhood marshals federal, state, and local resources to better locates, 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 https://www.justice.gov/psc.

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  • MIL-OSI Security: Kris Roglieri Indicted on Five Counts of Wire Fraud

    Source: US FBI

    ALBANY, NEW YORK – Kris Roglieri, age 44, of Queensbury, New York, has been indicted on wire fraud charges.

    United States Attorney Carla B. Freedman and Craig L. Tremaroli, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI), made the announcement.

    Roglieri operated Prime Capital Ventures, LLC (“Prime Capital”) and Prime Commercial Lending, LLC (“Prime Commercial”), among other companies, that were based in Albany.

    The indictment and an earlier-filed criminal complaint allege that Prime Capital held itself out as a commercial lending business. As part of contractual arrangements with its borrower clients situated across the country, Prime Capital obtained upfront interest payments from prospective borrowers while it sought to secure loans for those borrowers; these upfront interest payments were characterized by Prime Capital as the “Interest Credit Account Payment,” or “ICA” payment for short. ICA payments did not represent fees to Prime Capital. Instead, each borrower’s upfront ICA payment would be debited over time as the loan was funded and accrued more interest. An ICA payment would also be refundable if Prime Capital failed to secure a loan for the borrower client.

    Roglieri is alleged to have defrauded a Minnesota company in December 2023, by committing to fund, through Prime Capital, an approximately $100 million commercial project, even though, at the time, Prime Capital had failed to fund numerous loans promised to earlier clients; failed to return tens of millions of dollars in ICA payments to earlier clients once those loans did not materialize; and had been sued multiple times by clients alleging fraud and seeking the return of ICA payments.

    On December 22, 2023, Roglieri, on behalf of Prime Commercial, signed a Deposit Agreement by which he agreed to keep the Minnesota company’s ICA payment in a “separate and distinct” bank account, and to hold it as a “trust fund.”  That same day, the Minnesota company wire transferred a $5 million ICA payment to a Prime Capital account controlled by Roglieri. Roglieri then transferred and spent these funds, including by transferring $950,000 in order to meet a financial obligation to another Prime Capital client; paying $84,000 for his purchase of a Rolex day-date 36 mm yellow gold diamond bezel watch; paying $101,000 to a private jet services company, for round-trip, private air travel between Albany International Airport and Anguilla, for a family vacation that Roglieri took from about December 29, 2023 to January 5, 2024; and paying $400,000 to a law firm that represented Prime Capital in court proceedings.   

    The charges in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.

    If convicted, Roglieri faces up to 20 years in prison and a maximum $250,000 fine per count, as well as up to 3 years of supervised release. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.

    United States Magistrate Judge Christian F. Hummel ordered Roglieri detained after Roglieri’s May 31, 2024 arrest on the criminal complaint.

    The FBI is conducting this ongoing investigation. Assistant U.S. Attorneys Joshua R. Rosenthal and Michael Barnett are prosecuting this case.

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