Category: USDJ National Center for Disaster Fraud

Source: United States Department of Justice (National Center for Disaster Fraud)

NORFOLK, Va. – A Virginia Beach woman was sentenced today to four years in prison for two counts of wire fraud after perpetrating embezzlement and COVID-19 program schemes resulting in over a million dollars in losses.

According to court documents, Maria Gene Reich, 45, was President of ASOC. Inc. d/b/a On Call Accountants (OCA), a Virginia Beach-based business which offered bookkeeping, accounting, and payroll services to small business clients. Beginning in February 2012, Reich and On Call Accountants performed bookkeeping for a family-owned company, identified in court records as Company A, that manufactures condiments. Reich would prepare checks and schedule electronic payments on behalf of Company A to pay the company’s bills.

For most of the period during which she performed services for Company A, Reich did not have signature authority over any of the company’s financial accounts, but possessed a stamp bearing the signature of the owner of Company A, which she used to draft checks for Company A’s business expenses. Reich also had online access to Company A’s financial accounts, which enabled her to view account balances, transfer funds, and initiate electronic payments as needed.

Based on the agreement between Reich and Company A, the maximum total compensation she should have received for services rendered to the company between January 2015 and December 2018 was $98,400. A financial analysis of activity during that time period revealed that Reich’s OCA business account received 270 payments totaling $596,418 from Company A accounts, including 138 checks and 132 electronic payments. Reich also used Company A’s money to pay off her credit cards, which she used for numerous personal expenses. The financial analysis showed that Reich made 366 payments totaling approximately $629,265 to her Capital One personal and business credit card accounts using funds from Company A’s business bank accounts. Reich used Company A’s money to pay for personal expenses such as dining, travel, entertainment, and retail purchases.

In total, Reich stole approximately $1,132,693 from Company A.

In March 2020, Reich applied to the Small Business Administration (SBA) for a $150,000 Economic Injury Disaster Loan (EIDL) on behalf of OCA and requested a $150,000 loan. The purpose of the EIDL program was to enable small businesses to meet financial obligations and operating expenses in light of the coronavirus pandemic. In the EIDL application, Reich certified that none of the EIDL funds would be used for non-business expenses. In May 2020, the SBA funded the loan.

In April 2021, Reich applied for a modification of the EIDL loan to increase the amount to $500,000. In July 2021, the SBA approved the modification and funded the loan for an additional $350,000. On Aug. 3, 2021, a wire deposit from the SBA for $350,000 was made to OCA’s bank account, and Reich immediately transferred $150,000 to her personal banking accounts. On Sept. 27, 2021, Reich withdrew approximately $93,416 from her savings account and used the money for a downpayment on the purchase of a home in Virginia Beach, where Reich and her family continue to reside.

In addition to the downpayment for the residence, Reich used the EIDL funds from that transfer to put money into her minor children’s bank accounts and to make payments for her mortgages, credit cards, personal loan, and life insurance policy.

Of the remaining EIDL funds from the $350,000 EIDL loan, Reich used them to pay for: personal, household, and family expenses; payments to her credit card and PayPal accounts; home improvement costs and automobile expenses; and dining, grocery, and entertainment expenses.

In total, Reich illegally spent $249,102 of the EIDL funds she received.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Elizabeth W. Hanes.

Assistant U.S. Attorney Elizabeth Yusi 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. 2:23-cr-135.

Source: United States Department of Justice (National Center for Disaster Fraud)

ALBANY, Ga. – The final codefendant convicted of a fraud scheme that illegally sought more than $1 million from pandemic relief funds was sentenced to federal prison.

Sharmaine Simpson, 37, of Pelham, Georgia, was sentenced to serve 30 months in prison to be followed by three years of supervised release on Aug. 15, after he previously pleaded guilty to one count of wire fraud. On March 13, co-defendants Jeremy Russell, 38, of Pelham, was sentenced to serve 30 months in prison to be followed by three years of supervised release after he previously pleaded guilty to one count of wire fraud; Travon Duhart, 40, of Montgomery, Alabama, was sentenced to serve 24 months in prison to be followed by three years of supervised release after he previously pleaded guilty to two counts of wire fraud; Mario Meadows, 46, of Albany, was sentenced to serve 24 months in prison to be followed by three years of supervised release after he previously pleaded guilty to one count of wire fraud; and Johnderrious Lovett, 31, of Dacula, Georgia, was sentenced to serve 12 months and one day in prison to be followed by three years of supervised release after he previously pleaded guilty to one count of conspiracy to commit wire fraud. Chief U.S. District Judge Leslie Gardner presided over the case. There is no parole in the federal system.

“Pandemic relief funds were intended to provide critical help to small businesses, not enrich fraudsters,” said U.S. Attorney Peter D. Leary. “We will pursue justice against those who criminally abused this taxpayer funded program.”

“So many businesses needed federal emergency assistance to stay afloat during the pandemic, and Simpson and his co-defendants misdirected that assistance money to line their own pockets,” said Rich Bilson, Supervisory Senior Resident Agent of FBI Atlanta’s Albany office. “Their greed affects every American taxpayer, and the FBI will continue to hold accountable those who abused taxpayer dollars and diverted them from citizens who desperately needed them.”  

According to court documents and statements referenced in court, from March 2020 to at least April 2021, the defendants joined a conspiracy to collectively submit at least 25 different fraudulent Economic Injury Disaster Loans (EIDLs) and Paycheck Protection Program (PPP) loans on behalf of companies they controlled individually or together, seeking a total of $1,079,233.02 plus unemployment benefits. In all, the defendants received and deposited $411,657.02 from the Small Business Administration (SBA) as a result of these falsified claims. The various loan applications were for corporations the defendants established, and included all manner of concocted information, including fabricated revenues, employees, payroll costs, rent, operational expenditures and fraudulent tax returns. The defendants continued to make false statements after several loans were denied due to fraud alerts and continued their attempts to gain funds through the SBA and other government entities.

One example of the pandemic fraud scheme was a $100,000 loan received for J.T.L.S. Music Group. Russell, Duhart, Lovett and Simpson were listed as 25% owners of the business on their EIDL application and claimed to have ten employees. However, the Georgia Department of Labor reported that J.T.L.S. Music Group did not pay any wages or unemployment insurance to any employees from 2017 to 2022. J.T.L.S. Music Group also reported gross revenues of $250,000 for the 12-months prior to the “date of disaster” on its EIDL application but did not report any income or paid taxes to the State of Georgia from 2017 to 2022, nor did they file taxes with the IRS. After the $100,000 loan was deposited, Russell recalled someone texting “y’all betta get y’all money out because I got mine,” in a group text with him, Duhart, Lovett and Simpson.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted by Congress in March 2020, to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic. As part of this effort, the SBA was able to provide EIDLs to individuals, households and businesses in federally declared disaster areas. The PPP was established as a forgivable loan to small businesses for eligible expenses, like payroll.

The case was investigated by FBI and the Department of Justice, Office of Inspector General (DOJ-OIG).

Criminal Chief Leah McEwen prosecuted the case for the Government.

Source: United States Department of Justice (National Center for Disaster Fraud)

RALEIGH, N.C. – Two additional defendants were sentenced this week in a national COVID-19 fraud, including, Toni A. Smith, who was sentenced to 15 months in prison; and Dontae Antonio Murphy, who was sentenced to 12 months in prison.  Collectively, these Defendants were also ordered to pay several hundred thousand dollars in restitution to the Small Business Administration, which included interest and processing fees, for fraudulently obtaining Paycheck Protection Act (“PPP”) COVID-19 loans.

Murphy, 40, of Charlotte, and Smith, 46, of New Jersey, had both obtained a fraudulent PPPs loan on behalf of their purported janitorial and cleaning services companies.  As of today, 22 defendants have now been sentenced to prison for their role in the scheme.  To date, an additional nine defendants have pled guilty to this scheme in the Eastern District of North Carolina and are awaiting sentencing.

“This is the latest in a series of defendants involved in a national conspiracy to steal taxpayer money meant to be a lifeline to our nation’s most vulnerable businesses during a global pandemic,” said U.S. Attorney Michael Easley.  “Even though the pandemic is behind us, we are working closely with our partners at the IRS to identify, investigate and prosecute cases of fraud to put cheats behind bars and recover taxpayer money.”

According to the filed charges and information summarized in court, Smith and Murphy had conspired with Edward Whitaker, Schunda Coleman, and others to obtain fraudulent PPP loans.  Whitaker and Coleman pled guilty on January 19, 2023 for their role in operating a nation-wide scheme to help people across the country commit millions of dollars of PPP fraud from their home in Texas.

Whitaker and Coleman created fraudulent supporting documents and applications for each PPP loan in exchange for 25% of the total loan proceeds.  The fraudulent applications grossly inflated the number of employees and wages being paid prior to the COVID-19 pandemic by backdating fraudulent IRS forms.   Following the disbursement of the PPP loans, Whitaker gave each defendant, via text messages subsequently obtained by law enforcement, detailed instructions as to how to make it appear that the PPP loans were being paid out to employees.  In reality, most or all of the money was transferred back to the defendants.  The fraudulent payroll records were then submitted to the Small Business Administration (SBA) to obtain 100% loan forgiveness.

“The Paycheck Protection Program was designed to help small businesses facing financial difficulties during the COVID-19 pandemic,” said Donald “Trey” Eakins, Internal Revenue Service 

(IRS) Criminal Investigation Special Agent in Charge in the Charlotte Field Office. “Through our partnership with the U.S. Attorney’s Office and our federal law enforcement partners, IRS Criminal Investigation Special Agents will continue to aggressively pursue individuals who try to exploit federal relief programs for their personal gain.”

Defendants that have been sentenced so far include:

• Albert Eugene Miller, Jr. [Case No. 5-22-CR-00290-D]
• Jonathan Fleming [Case No. 5-22-CR-00337-D]
• Nekita Hooks [Case No. 5-23-CR-00025-D]
• Shakeerah Kaneisha Yvette Vinson [Case No. 5-23-CR-00027-D]
• Denise Coit Alston [Case No. 5-23-CR-00077-D]
• Terron Cortez Parker [Case No. 5-23-CR-00081-D]
• Monica Faye Barnes [Case No. 5:23-CR-00094-D]
• Dontrell Barnes [Case No. 5-23-CR-00094-D]
• Kami D. Woodard [Case No. 5-23-CR-00095-D]
• Isaac Lamont Dawson [Case No. 5:23-CR-0097-D]
• Irene Edwards [Case No. 5-23-CR-00098-D]
• Jackson Ndoyo [Case No. 5-23-CR-00118-D]
• Lenille Woodard [Case No. 5-23-CR-00138-D]
• Natosia Jerome Jenkins [Case No. 5:23-CR-00167-D]
• Teresa Ann McRae [Case No. 5:23-CR-00313-D]
• Delvin Dashavone Felder [Case No. 5:23-CR-00198]
• Shun Lamont Gibbs [Case No. 5:23-CR-00346-D]
• Karim Aziz Razzak [Case No. 5:23-CR-00324]
• Anthony S. Whitaker [Case No. 5:23-CR-00311-D]
• Darian Casteele Tyler [Case No. 5:23-CR-00338-D]

Defendants awaiting sentencing include:

• Quentin Jackson [Case No. 5-23-CR-180-D]
• Edward Whitaker [Case No. 5-22-CR-00257-D]
• Schunda Coleman [Case No. 5-22-CR-00257-D]
• Ayyub Abdur Rasheed [Case No. 5:23-CR-00314-D]
• Ronald L. Jones [Case No. 5:23-CR-00339-D]
• Everett M. McBride [Case No. 5:24-CR-00036-D]
• Hanif Abdul-Hakim [Case No. 5:24-CR-00109-D]
• James Elton Watson Case No. 5:23-CR-00323-D]
• Shara Monique Wells [Case No. 5:23-CR-00323-D]

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to the millions of Americans who were economically suffering from the COVID-19 pandemic.  The CARES Act and additional appropriations authorized up to $649 billion in forgivable loans to small businesses through the Paycheck Protection Program (PPP).  Financial institutions issued the PPP loans, which were guaranteed by the SBA.

Michael Easley, U.S. Attorney for the Eastern District of North Carolina, made the announcement after U.S. District Judge James C. Dever III announced the sentences. Internal Revenue Service Criminal Investigation (IRS-CI) is leading the investigation, and Assistant U.S. Attorney David G. Beraka is prosecuting the cases.

Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for case numbers 5:24-CR-00072 and 5:23-CR-00312-D.

###

Source: United States Department of Justice (National Center for Disaster Fraud)

ALEXANDRIA, Va. – A Washington man was sentenced today to five years and three months in prison for wire fraud.

According to court documents, from at least June 2020 through at least June 2021, Clayton Rosenberg, aka Kenneth Clayton and Kobe, 31, and his co-conspirators submitted fraudulent applications to defraud multiple COVID-19 relief programs.  Rosenberg used these stolen funds to increase his typical lifestyle, including luxury vehicle purchases and $1,800 for beard care products.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided emergency financial assistance expeditiously to Americans suffering the economic effects caused by the pandemic. The Paycheck Protection Program (PPP) authorized forgivable loans to small businesses for such expenses as making payroll payments to remain afloat. Federal programs also expanded unemployment insurance (UI) eligibility and increased unemployment benefits during the pandemic to assist those who lost their jobs or were otherwise unable to work through no fault of their own.

Rosenberg and his co-conspirators prepared and submitted at least 16 fraudulent PPP loan applications for businesses or purported businesses. In the applications, Rosenberg and his co-conspirators grossly inflated employee numbers and monthly payroll costs. They also created and submitted false tax returns and fake bank statements in support of the applications.

After the financial institutions approved and funded the loan applications, the business owners would share the loan proceeds with Rosenberg and his co-conspirators. During this time, Rosenberg and a co-conspirator controlled various shell companies to which the business owners often would transfer a percentage of the PPP loan proceeds. The payout of these fraudulent PPP loans and the wire fraud conspiracy caused a total loss of at least $9.3 million, of which Rosenberg received at least $1,666,290.

Rosenberg and his co-conspirators also submitted fraudulent UI applications using other individuals’ personal identifying information (PII) that they obtained online. The benefits were issued on prepaid debit cards mailed to addresses the conspirators listed on the applications. Along with individuals’ PII, the conspirators included false information in the applications and certifications, including false employment and wage history as well as false contact information. Rosenberg applied for and received over $110,308 in UI and pandemic unemployment assistance benefits.

Rosenberg also possessed device-making equipment in his residence, including equipment to create fraudulent documents, black check paper, card stock for IDs, holograms used for passports and driver licenses, at least six fraudulent Social Security cards, and at least eight fake driver licenses. Rosenberg made at least two fake Burkina Faso passports and at least one unauthorized United States passport.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; David J. Scott, Special Agent in Charge of the FBI Washington Field Office’s Criminal and Cyber Division; Matt McCool, Special Agent in Charge of the U.S. Secret Service’s Washington Field Office; Special Agent in Charge Michael McGill of the Social Security Administration (SSA) – Office of Inspector General (OIG) Philadelphia Field Division; Charles “Andy” Penn, Arlington County Chief of Police; Troy W. Springer, Special Agent in Charge, National Capital Region, U.S. Department of Labor, Office of Inspector General; and Jason J. Scalzo, Special Agent in Charge of the Electronic Crimes Unit for the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), made the announcement after sentencing by Senior U.S. District Judge Claude M. Hilton.

Assistant U.S. Attorneys Kathleen Robeson and Zachary H. Ray 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. 1:24-cr-61.

Source: United States Department of Justice (National Center for Disaster Fraud)

NEWPORT NEWS, Va. – A Hampton man pled guilty today to wire fraud, aggravated identity theft, and race-based interference with housing and employment.

According to court documents, David L. Merryman, 59, owns 39 rental properties in Newport News and 23 more in Hampton.  Many of Merryman’s rental properties were in poor condition and located in low-income neighborhoods. He primarily rented the properties to underprivileged African American tenants with limited credit and housing options.

From 2019 through at least January 2024, Merryman engaged in a multifaceted scheme that included obtaining rent relief benefits to which he was not entitled, as well as fraudulently obtaining large initial payments in the form of security deposits, prepaid rent, and other fees for rental homes that were in poor repair. Merryman implied to prospective tenants that he would lease the rentals for longer tenancy terms but intended to evict them as quickly as possible to restart the cycle of fraud and collect more high initial payments from new tenants.

On several occasions, Merryman harassed his minority tenants with slurs, comments about slavery, mocking comments, death threats, and other assaultive conduct related to their race, all in violation of their right to occupy and lease a dwelling free from racially motivated harassment, threats, and force. He also interfered with at least one victim’s right to enjoy employment free from racial threats and assaultive conduct.

Merryman fabricated lease documents, often with incorrect information related to the tenants, and backdated documents before forging tenants’ signatures and falsely representing that he was authorized to act on their behalf.

During the COVID-19 pandemic, state and federal governments made rent relief benefits available to those struggling during the national health crisis. Merryman filed fraudulent rent relief applications and used his tenants’ names and personal information without their consent and forged their signatures. In many cases, he obtained significant sums of rent relief without telling the tenants, even evicting, or seeking to evict, the very same tenants for unpaid rent. To obtain housing-assistance payments from the Department of Housing and Urban Development (HUD), Merryman also made false representations about the condition of his rental properties and whether he was receiving other payments that would be duplicative of federally funded rental assistance.

Merryman also defrauded tenants by obtaining money and property from them under false pretenses, primarily through false representations that he would repair his properties to induce tenants to pay significant upfront fees for neglected, even uninhabitable, properties that he never intended to improve.

For example, a tenant, identified as L.G., made requests for necessary repairs to the home she was renting, to which Merryman repeatedly made racially derogatory responses. In April 2019, Merryman threatened to turn L.G. and her children into “potting soil.” L.G. obtained a protective order against Merryman, who then responded by, among other things, parking his vehicle just outside the prohibited radius of the order and intimidating L.G. and her family. 

Another tenant, identified as E.P., regularly paid Merryman rent from 2015 until she was laid off from her job in 2021 during the pandemic after suffering medical problems resulting in her hospitalization. On May 10, 2021, Merryman applied to the Virginia Department of Housing and Community Development for approximately $15,100 in rent relief benefits for E.P. and forged her signature, all without her consent. Despite obtaining those benefits for E.P., Merryman evicted her, citing her unpaid rent. E.P. then lost all her belongings when Merryman sent a crew to remove them from her home and tow her car when she was hospitalized.

After Merryman failed to complete a driveway construction project, the customer hired a concrete construction business owner, identified as E.S., to finish the job. E.S. had worked in the concrete construction business for more than 40 years. On July 8, 2020, shortly after E.S. finished the project, he received a call from Merryman, who repeatedly threatened him. E.S. obtained a protective order against Merryman, after which, in March 2021, Merryman came to a different jobsite where E.S. was working and stared at him and his team. 

Merryman is scheduled to be sentenced on Dec. 18. He faces up to twenty years in prison for wire fraud, up to one year in prison on both the race-based interference with housing count and the race-based interference with employment count, and a mandatory minimum of two years in prison to be served consecutive to any other term of imprisonment imposed for aggravated identity theft. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Rae Oliver Davis, Department of Housing and Urban Development Inspector General; and Brian Dugan, Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after Senior U.S. District Judge Raymond A. Jackson accepted the plea.

Assistant U.S. Attorneys D. Mack Coleman, Julie D. Podlesni, and Brian J. Samuels are prosecuting 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. 4:24-cr-4.

Source: United States Department of Justice (National Center for Disaster Fraud)

BOSTON – A Nigerian national pleaded guilty on July 26, 2024 in federal court in Boston to his role in an expansive online fraud scheme targeting individuals in the United States, including pandemic relief fraud, romance scams and other online scams. 

Amowie Kelvin Imatitikua, 37, who previously lived in the Boston area, pleaded guilty to one count of bank fraud, one count of bank fraud conspiracy and one count of money laundering conspiracy. U.S. District Court Judge Patti B. Saris scheduled sentencing for Nov. 6, 2024.  Imatitikua was indicted on Dec. 12, 2023. 
 
Imatitikua opened multiple bank accounts in the names of fake people using fraudulent foreign passports and used those accounts to receive the proceeds from various frauds perpetrated by his alleged co-conspirators, including pandemic relief fraud, romance scams and other online scams. In total, between approximately 2019 and 2021, Imatitikua received more than $400,000 in fraud proceeds. 

The charges of bank fraud and conspiracy to commit bank provide for a sentence of up to 30 years in prison, five years of supervised release, a fine of up to $1 million or twice the gross gain or loss, whichever is greater, and forfeiture. The charge of money laundering conspiracy provides for a sentence of up to 20 years in prison, three years of supervised release, a fine of $500,000, or twice the value of the criminally derived property, whichever is greater, and forfeiture. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

Acting United States Attorney Joshua S. Levy; Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Jonathan Mellone, Special Agent in Charge of Department of Labor, Office of Inspector General; Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England; and Supervisory Special Agent Matthew O’Brien, Special Agent in Charge of U.S. Department of State’s Diplomatic Security Service, Boston Field Office made the announcement. Assistant U.S. Attorneys Christopher J. Markham and Benjamin A. Saltzman of the Securities, Financial & Cyber Fraud Unit are prosecuting the case.  

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

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The details contained in the charging documents are allegations. The remaining defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
 

Source: United States Department of Justice (National Center for Disaster Fraud)

FRESNO, Calif. — Two Bakersfield residents pleaded guilty today, U.S. Attorney Phillip A. Talbert announced.

Jorge Calderon-Campos, 43, pleaded guilty to conspiracy to distribute methamphetamine and heroin and also pleaded guilty to unlawful possession of animals for an animal fighting venture in violation of the Animal Welfare Act.

Jose Angel Beltran-Chaidez, 68, pleaded guilty to possession with intent to distribute heroin.

According to court documents, on March 30, 2021, Calderon-Campos, who goes by the name “Americano,” supplied 26 pounds of methamphetamine to co-defendants Mark Garcia, 24, of Lamont, and Alberto Gomez-Santiago, 38, a Mexican national. Between Jan. 16 and April 26, 2022, Calderon-Campos also possessed roosters for the purpose of having the roosters participate in an animal fighting venture, in and affecting interstate and foreign commerce. During a search of his residence on April 26, 2022, law enforcement officers found numerous hens and roosters, various cockfighting implements, to include razors and spurs, and six cockfighting trophies, including several with plates inscribed with “Team Amkno” (shorthand for “Team Americano”). At Calderon-Campos’s stash house, law enforcement officers found 14 hens and 77 roosters, cockfighting leashes, a cockfighting trophy, various types of syringes containing substances believed to be related to cockfighting supplements, and multiple pill bottles containing suspected cockfighting vitamins. The majority of the roosters at the property had been modified for cockfighting.

On Jan. 27, 2022, Jose Beltran-Chaidez, at the direction of his brother Antonio Beltran-Chaidez, 54, a Mexican national, delivered more than 2 pounds of heroin to Calderon-Campos for distribution to Calderon-Campos’s customers. However, when Calderon-Campos was unable to sell the drug, Beltran retrieved it from Calderon-Campos and was in possession of the heroin when stopped by a CHP officer for a traffic violation.

U.S. District Judge Jennifer L. Thurston is scheduled to sentence Calderon-Campos on Oct. 21, 2024, and Jose Beltran-Chaidez on Nov. 4, 2024. For the drug offenses, they face a mandatory statutory minimum penalty of 10 years and a maximum statutory penalty of life in prison, along with a $10 million fine. Calderon-Campos faces up to five years in prison for the Animal Welfare Act violation, a $250,000 fine, and forfeiture of the roosters and hens used to breed fighting roosters. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. 

Antonio Beltran-Chaidez previously entered a guilty plea and is scheduled for sentencing on Aug. 26, 2024. Gomez-Santiago pleaded guilty and was sentenced to four years and nine months in prison. The two remaining co-defendants have requested a jury trial, which is set for Jan. 28, 2025. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of an investigation by Homeland Security Investigations and the Drug Enforcement Administration, with assistance from the U.S. Department of Agriculture Office of Inspector General, the U.S. Marshals Service, the U.S. Customs and Border Protection, the U.S. Secret Service, the Bureau of Land Management, the Kern County High Intensity Drug Trafficking Area Task Force, the California Highway Patrol, the California Department of Corrections and Rehabilitation, the Kern County Sheriff’s Office, the Kern County Probation Department, and the Bakersfield Police Department. Assistant U.S. Attorney Karen Escobar is prosecuting the case.

The case was investigated under the Organized Crime Drug Enforcement Task Forces (OCDETF). OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. For more information about OCDETF, please visit Justice.gov/OCDETF.

Source: United States Department of Justice (National Center for Disaster Fraud)

ST. LOUIS – A Monroe County, Missouri church official was arrested Friday after having been indicted and accused of participating in a more than $1.2 million pandemic loan fraud scheme.

Kenneth C. Sparks III, 54, was arrested by the U.S. Marshals Service in Florida. A grand jury indicted Sparks on July 17 with one count of conspiracy to commit wire fraud, eight counts of wire fraud and two counts of aggravated identity theft. 

The indictment says at the time of the allegations, Sparks worked as a visiting minister at Faith Walk Ministry, a church in Paris, Missouri. Harold G. Long was the lead minister and chief executive officer of the church, Mya M. McClain was administrative assistant and Javonte D. Long was a member. Jeffrey C. Oboite lived in Maryland, and operated businesses called Angel’s Management Group LLC, Emerald Score LLC and O&S Construction LLC.

Oboite and McClain were indicted on one count of conspiracy to commit wire fraud and seven counts of wire fraud. Harold Long faces one count of conspiracy to commit wire fraud and two counts of wire fraud. Javonte Long faces one count of conspiracy to commit wire fraud and one count of wire fraud.

The indictment says Oboite taught Sparks and McClain how to submit fraudulent applications for Paycheck Protection Program (PPP) loans. Oboite and Sparks both submitted or caused to be submitted fraudulent loan applications in their own names, and received at least $200,000, the indictment says. Included among those fraudulently-obtained loans was $147,900 from the Economic Injury Disaster Loan Program, the indictment says. The EIDL program was another Small Business Administration program intended to help struggling business owners during the pandemic.

The conspirators also obtained more than $1 million in PPP loans in the names of others, the indictment says. Sparks abused his position of authority as a minister by obtaining the trust of church members, and then obtained their personal and financial information so he could seek loans in their name, the indictment says. Harold Long assured church members that Sparks could be trusted with that information, the indictment says. Sparks also claimed that he was an “Apostle” of God, whose decisions and decrees could not be questioned, it says. Sparks sometimes told church members that they needed to provide their personal and financial information so he and others could fix their credit scores, the indictment says, or that their information would be used to secure funding for the church. Sparks told McClain to create email addresses in the name of church members and told parishioners to open new accounts at a credit union, it says. Sparks also commissioned the creation of false and fraudulent tax documents, the indictment says.

Sparks and Oboite also told McClain and Harold Long to submit fraudulent PPP loan applications for businesses purportedly owned by Long, the indictment says.

When suspicious credit union officials froze some of the parishioners’ accounts, Sparks and Oboite coached church members on the lies they should tell bank officials to free the funds, the indictment says.

Sparks reaped hundreds of thousands of dollars from the scheme, the indictment says, and used the money for luxury vehicles, clothing and merchandise.

Charges set forth in an indictment are merely accusations and do not constitute proof of guilt.  Every defendant is presumed to be innocent unless and until proven guilty.

Wire fraud is punishable by up to 20 years in prison. Each aggravated identity theft count carries a mandatory, consecutive two-year prison sentence.

The U.S. Postal Inspection Service and Internal Revenue Service Criminal Investigation investigated the case. Assistant U.S. Attorney Derek Wiseman is prosecuting the case.

“This arrest proves the U.S. Postal Inspection Service’s commitment to stopping those who perpetrate mail fraud schemes,” said Acting Inspector in Charge, John Jackman, who leads the United States Postal Inspection Service, St. Louis Field Office. “The Postal Inspection Service and its law enforcement partners will continue to aggressively pursue fraudsters who are driven by greed.”

“We all know the pandemic relief loan programs were created for those whose businesses were negatively impacted by the COVID-19 pandemic.  The American public is tired of hearing about fraudsters using the programs to enrich themselves and they want to know that those responsible are being investigated and held accountable,” said IRS Criminal Investigation Special Agent in Charge Thomas F. Murdock, St. Louis Field Office. “IRS CI is committed to investigating these crimes and doing our part to achieve justice for all victims and taxpayers.”

Anyone with information about pandemic fraud should call the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or report via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Source: United States Department of Justice (National Center for Disaster Fraud)

NORFOLK, Va. – A Portsmouth man was sentenced yesterday to four years and nine months in prison for aggravated identity theft, being a felon in possession of a firearm, and defrauding a COVID relief program.

According to court documents, in May 2021, Marquell Lamont Moon, 31, who is a member of the Crips gang, fired approximately 27 rounds at a victim while the victim’s 3-year-old child was with him. At least one of the rounds struck the victim’s left hand. Law enforcement in Chesapeake later pursued Moon, who attempted to flee in a vehicle at high speed but crashed into a residence, fled the vehicle, and discarded a black backpack and other objects as he ran. Law enforcement recovered $8,275.66 and a stolen .45 semiautomatic handgun from Moon’s vehicle.

Moon was previously convicted of carrying a concealed weapon, reckless driving, resisting arrest, and forging credit cards. As a previously convicted felon, Moon cannot legally possess a firearm or ammunition.

Law enforcement also recovered evidence that Moon was engaged in a financial fraud scheme. Among the items recovered from Moon’s vehicle and backpack were credit and bank cards, a card embossing machine, a notebook detailing the fraudulent scheme, and correspondence with the Virginia Employment Commission (VEC). A total of 34 cards were either in another person’s name or there was no name associated with the card. There were also 28 blank debit/credit cards with no identifying information on the magnetic strip.

Moon fraudulently obtained unemployment benefits that had been expanded and initiated due to the COVID-19 pandemic. Moon unlawfully obtained the personally identifiable information (PII) of 10 individuals and used that information to fraudulently apply to VEC for unemployment insurance benefits totaling $112,633. The notebook detailed the steps for committing fraudulent requests and documenting the PII of the individuals whose identities Moon used to apply for the funds. Federal agents across several states located and interviewed the PII victims and determined that they did not know Moon and had not filed for unemployment insurance in Virginia.  One victim was deceased.  Another victim was too apprehensive to even comply with law enforcement.

In addition to applying for benefits in the victims’ names, Moon used VEC’s online portal to enter weekly re-certifications attesting that the applicants were ready and willing to work during the week and actively seeking employment. One of the identity theft victims could not have been willing to work during the week and actively seeking employment because he was deceased. Another victim was not willing to work during the week and actively seeking employment because he was retired.

Moon is currently incarcerated for malicious wounding.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Craig Kailimai, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives Washington Field Division; and Derek W. Gordon, Special Agent in Charge of Homeland Security Investigations (HSI) Washington, D.C., made the announcement after sentencing by U.S. District Judge Arenda Wright Allen.

Assistant U.S. Attorneys Clayton D. LaForge and Amanda L. Cheney 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. 2:22-cr-35.

Source: United States Department of Justice (National Center for Disaster Fraud)

BOSTON – A Florida man was sentenced yesterday in federal court in Boston in connection with his role in conspiring to use stolen identities to fraudulently obtain disaster loans from the Small Business Administration (SBA) and to launder the funds.  

Hector Garcia, 52, of Ocala, Fla., was sentenced by U.S. District Court Judge Denise J. Casper to time served and three years of supervised release. Garcia was also ordered to pay $25,104.33 in restitution to the Small Business Administration. In April 2024, Garcia pleaded guilty to one count of conspiracy to commit wire fraud and three counts of wire fraud. 

Garcia conspired with Ramon Cruz, Darwyn Joseph, Edwin Acevedo, and others, to use stolen identity information of United States citizens to apply for SBA Economic Injury Disaster Loans. Garcia used stolen identity information of a United States citizen to open a fraudulent bank account, which was then linked to other fraudulent bank accounts set up to receive the SBA funds. Garcia and his co-conspirators used debit cards associated with those accounts to launder the funds by purchasing iPhones for re-sale. Garcia and other co-conspirators wired a portion of the funds to the Dominican Republic.

Over $452,000 in SBA funds were fraudulently obtained in connection with the scheme. Approximately $250,000 of this money was used to purchase iPhones in Massachusetts and New Hampshire.

Cruz and Joseph pleaded guilty and were each sentenced in August 2023 and October 2023, respectively, to two years and one day in prison and three years of supervised release. Acevedo pleaded guilty and was sentenced in August 2023 to 33 months in prison and three years of supervised release.

Acting United States Attorney Joshua S. Levy and Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England, made the announcement today. Valuable assistance was also provided by Homeland Security Investigations in Orlando, Fla.; Small Business Administration, Office of the Inspector General; Department of Housing and Urban Development, Office of the Inspector General; Social Security Administration, Office of the Inspector General; Department of Labor, Office of the Inspector General; Department of State; U.S. Postal Inspection Service; Massachusetts State Police; New Hampshire State Police; and the Acton, Nashua (N.H.), Manchester (N.H.) and Ocala (Fla.) Police Departments. Assistant U.S. Attorneys Elianna J. Nuzum and Adam W. Deitch of the Criminal Division prosecuted the case. 

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

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.