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Examples of Money Laundering Investigations - Fiscal Year 2015

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Examples of Money Laundering Investigations - Fiscal Year 2015 The following examples of Money Laundering Investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted. Car Dealer Sentenced for Money Laundering On May 27, 2015, in Buffalo, New York, Jerry Robbins, of Cheektowaga, was sentenced to 63 months in prison. Robbins was previously convicted of money laundering and failure to report cash transactions of $10,000 or more. According to court documents, Robbins, owner of Finish Line Auto, in Buffalo, helped drug dealers launder proceeds of their illicit business by purchasing high end used cars. During these sales, the drug dealers would pay Robbins cash for cars ranging in price from $10,500 to $45,000. Robbins used the name of another person in sales and title paperwork to disguise the true purchaser and source of the money. In an effort to conceal the amount of money received for the sale of the car, Robbins listed that only a small deposit was received from the third party nominee, when in fact, the drug dealers had paid cash in full for the car. For each of these types of transactions, Robbins also failed to file the required forms with the Internal Revenue Service indicating the receipt of over $10,000 cash for the sale of the car. Louisiana Man Sentenced for Money Laundering On May 20, 2015, in New Orleans, Louisiana, Richard Zanco, of Slidell, Louisiana, was sentenced to 30 months in prison and three years of supervised release. Zanco previously pleaded guilty to money laundering. According to court documents, about May 2012, Zanco learned that someone had opened a brokerage account in his name and used that account to acquire collateralized mortgage obligations (CMOs), a type of bond, by fraudulent means. Even though he knew that the CMOs did not belong to him, Zanco gained control of the accounts and arranged for the interest proceeds of the CMOs to be diverted to other financial accounts under his control. Between March 11, 2013 and Sept. 19, 2013, Zanco illegally used the funds, in the amount of about $343,998 to engage in a variety of financial transactions, including the purchase of multiple automobiles and one or more boats. Man Sentenced for Swindling Millions from Persons in Golf Course Scheme On May 18, 2015, in Reno, Nevada, Scott H. Summerhays, formerly of the South Lake Tahoe, was sentenced to 234 months in prison, three years of supervised release and ordered to pay $1.4 million in restitution. Summerhays pleaded guilty in February 2014 to 14 counts of wire fraud, seven counts of money laundering, two counts of identity theft, and one count of aggravated identity theft. According to the court records, during 2008 to 2010, Summerhays represented to potential investors that he was purchasing the Genoa Lakes Golf Club located west of Gardnerville, Nev. for $17 million and needed a short term loan to complete the deal because his own money was tied up in a trust. Summerhays also represented to the potential investors that he solicited funds for oil and gas investments in Texas and owned over $30 million in Berkshire, Las Vegas Sands and MGM stocks. Summerhays showed some of the investors a fraudulent investment account statement. Summerhays also claimed that he was in partnership with Las Vegas Sands owner Sheldon Aldelson, and showed potential investors a partnership agreement containing the forged signature of Adelson. In reality, Summerhays had no investment portfolio, and Adelson had no any partnerships with him. Using this scheme, Summerhays was able to convince 11 persons to loan him money for the golf course, totaling approximately $3.6 million. None of the investors were repaid and they lost all of the money they loaned Summerhays. Final Defendant Sentenced in Decade Long Psychic Swindle Case On April 30, 2015, in Portland, Oregon, Blancey Lee, of Portland, was sentenced to 24 months in prison, three years of supervised release, and ordered to pay $2,599,809 in restitution to the victim, for his role in a conspiracy to commit money laundering and his filing of false personal income taxes for 2012. Co-defendants, Rachel Lee, of Canby, Oregon was previously sentenced to 100 months in prison and ordered to pay $15,490,978 in restitution. Porsha Lee, of Northern California, was previously sentenced to 33 months in prison and ordered to pay $12,822,262 in restitution. According to court records, the victim met Rachel Lee in 2004 when he visited her Psychic Shop. At the time, Blancey Lee and Rachel Lee lived together as a couple at the Psychic Shop and presented themselves as husband and wife. Between 2004 and 2006, Rachel Lee fostered a friendship with the victim for the purpose of extracting money from him. As a result of her lies and the trust she established with the victim, Rachel Lee assumed a role as paid care giver to the victim’s elderly father by 2007. Trusting her to act in his best interest, the victim also turned over all personal and business account control to Rachel Lee. While controlling the victim’s finances, Rachel Lee, Blancey Lee, and their families lived in a million-dollar home in the Portland West Hills purchased with the victim’s money. Rachel Lee recruited members of her family to play key roles in the fraud scheme. Between 2007 and 2011 Rachel Lee directed the victim to incrementally liquidate investments accounts totaling approximately $3.8 million dollars. After depleting the victim’s investment account, Rachel Lee convinced the victim he owed substantial taxes and needed to sell his family’s Tree Farm. At Rachel Lee’s direction, the Tree Farm properties were sold for a total of approximately $12.3 million dollars. Rachel Lee, Blancey Lee, and Lee family members spent the victim’s fortune on a luxury lifestyle. By the time of Rachel Lee’s arrest and indictment in May 2014, the victim held less than $250,000 in accounts under his control. Through the initiation of forfeiture proceedings, a Bentley, Ferrari, Bel-Air, and 10 real properties have already been returned to the victim, and efforts are underway to restore to the victim the $1.9 million in cash seized and forfeited from bank accounts. The government is initiating civil forfeiture proceedings to liquidate numerous Rolexes and other designer goods purchased by the defendants and will provide those proceeds to the victim.

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Former Foundation Chairman and Spouse Sentenced for Embezzling More Than $1.1 Million On April 28, 2015, in Louisville, Kentucky, Charles Muir was sentenced to 46 months in prison and one year of supervised release. Diana Muir was sentenced to six months in prison and one year of supervised release. Both previously pleaded guilty to interstate transportation of stolen property and money laundering. According to court documents, Charles Muir was the chairman of the Woodcock Foundation, a charitable organization associated with the Episcopal Church of Louisville, Kentucky. Diana Muir owned and controlled DBM-Dental Direct of Louisville. Between April 2007 and June 2011, the Muirs unlawfully transferred or caused to be transferred approximately $1,141,030 that had been stolen or taken by fraud from the Woodcock Foundation, a charitable trust providing college scholarships. The funds were transferred from a bank in Louisville, Kentucky, to locations outside of Kentucky. In addition, the Muirs conducted financial transactions involving the proceeds of the fraud by depositing checks from the Woodcock Foundation into a DBM Dental bank account to disguise the nature of the transactions. During the four year period, the couple withdrew approximately $262,000 by ATM at a casino in Indiana and in total withdrew more than $365,000 in cash. North Carolina Man Sentenced for Structuring Financial Transactions On April 27, 2015, in Raleigh, North Carolina, James Dino Wills, of Wilson, North Carolina, was sentenced to 102 months in prison, three years of supervised release and ordered to forfeit $733,882. Wills also agreed to file amended federal income tax returns for the tax years 2008 through 2013 and to pay any taxes owed. Wills pleaded guilty on May 7, 2014 to structuring financial transactions to evade the filing of currency transaction reports (CTRs). Federal law requires banks and other financial institutions to file CTRs with the U.S. Treasury Department for all cash transactions exceeding $10,000. According to court documents, Wills operated a business in the Rocky Mount and Wilson, North Carolina areas from 2008 to 2013 and received payments for services primarily in the form of checks. These checks were deposited into his business accounts at two financial institutions. Wills then structured cash withdrawals from these accounts in order to avoid the filing of CTRs. From 2008 to 2013, he structured $755,764 in cash transactions. Wills was prosecuted for the same offense in 1998. Law School Graduate Sentenced for Conspiring to Launder Drug Money On April 23, 2015, in Kansas City, Kansas, Mendy Read-Forbes, a law school graduate, was sentenced to 240 months in prison. Read-Forbes, of Platte City, Mo., was pleaded guilty to one count of conspiracy. According to court documents, in March 2012, Read-Forbes began meeting with an agent posing as a drug dealer. Read-Forbes, a law school graduate who was not licensed to practice law, operated Forbes & Newhard Credit Solutions, Inc., a nonprofit corporation registered in Missouri to provide educational and social welfare services. The agent told Read-Forbes he had assets to conceal from the sale of marijuana. She said she could use her legal training and her connections with federal attorneys and law enforcement officers to help him launder the money. She told the agent she would launder his cash by running it through her business. The plan also involved her listing the agent as an employee of her business and putting him on her company’s board of directors. As part of the scheme, she created a fictitious company called Maximus Lawn Care LLC. Over the course of the investigation, she laundered more than $200,000 in purported drug funds. She also agreed to invest $40,000 of her money with the agent for the purchase of marijuana. Tennessee Businesswoman Sentenced for Fraud and Money Laundering Violations On April 20, 2015, in Knoxville, Tennessee, Joyce Allen, of Louisville, Tennessee, was sentenced to 360 months in prison and three years of supervised probation. Allen was ordered to pay $20,711,371 in restitution as well as a court-ordered forfeiture of the same cash amount. In September 2014, Allen was found guilty by jury trial of charges contained in a superseding indictment against Allen and five other individuals associated with Benchmark Capital, Inc. (Benchmark). According to court documents, the purpose of Benchmark was to defraud investors by taking their funds in exchange for worthless and nonexistent investments, and paying a portion of the funds received to earlier investors under the guise of paying dividends, interest and mortgage payments, thereby encouraging new investors to entrust their funds to Benchmark. Allen was the president of J. Allen and Associates, Inc., based in Louisville. Through her business, Allen induced individuals to pay funds to her in exchange for annuity investments with Benchmark, knowing that these funds would not be placed with Benchmark or any other company for investments, but converted to personal use by Allen and her other co-conspirators. The other five individuals named in the superseding indictment pleaded guilty and have been previously sentenced. Prominent Businessman for Private Consulting Group Sentenced after Bilking Elderly Victim of $1.1 Million On March 31, 2015, in Portland, Oregon, Robert L. Keys was sentenced to 70 months in prison, three years of supervised release, and ordered to pay $1.1 million in restitution. Keys pleaded guilty on Sept. 9, 2014 to wire fraud, money laundering, and bankruptcy fraud. At the plea hearing, the government contended that in 2008, as Keys’ business ventures were failing, he turned to one of his long-term clients, a widow in her mid-80s, and persuaded her to loan $1.1 million to co-defendant William Kearney, now deceased. Keys lied to his client about the terms of the loan, such as the existence of treasury bonds as collateral for the loan, and he failed to disclose important facts to her in order to fraudulently obtain money for his benefit and that of Kearney. Keys also received over $100,000 in kickbacks as part of the scheme. Those kickbacks were wired to him by Kearney the day after Keys persuaded his client to loan Kearney the $1.1 million. In addition, Keys and his wife filed for bankruptcy in 2010, and Keys fraudulently attempted to discharge $148 million in debt by lying to the Bankruptcy Court, concealing assets and income, and filing false documents with the Court. Florida Man Sentenced For $100 Million Surety Bond Fraud Scheme On March 24, 2015, in Atlanta, Georgia, Eric Campbell, of Orange Park, Florida, was sentenced to 57 months in prison, three years of supervised release and ordered to pay $1,904,376 in restitution. Campbell pleaded guilty on Oct. 20, 2014 to operating a multi-million dollar surety bond fraud scheme. According to court documents, from August 2012 until July 2013, Campbell used several corporations to sell fraudulent surety bonds on construction projects. Surety bonds are three party bonding agreements in construction projects where a surety company assures the project owner that

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a contractor will perform a construction contract. Campbell fraudulently held himself out to contractors and government agencies as having the authority to execute or issue surety bonds on behalf of Federal Insurance Company and Pacific Indemnity Company, affiliates of the Chubb group. To perpetuate the scheme, Campbell created fraudulent surety bonds, embossed the bonds using a counterfeit seal and forged the signatures of Chubb group officials. Campbell and his associates issued bonds with a face value of more than $100 million and received premium payments of more than $2.2 million during the course of the fraud. Many of these funds were then deposited into bank accounts owned and under the control of Campbell. In addition to financial losses, Campbell’s fraud scheme caused delays in several construction projects and compromised the construction bidding process because contracts were sometimes awarded to unqualified construction companies. Former University Employee Sentenced On Fraud Charges On March 19, 2015, in Rochester, New York, Debra Bulter, of Penfield, was sentenced to 36 months in prison, three years of supervised release and ordered to pay restitution totaling $4,285,637. Bulter was previously convicted of conspiracy to commit mail fraud and money laundering. According to court documents, Bulter worked as the Program Administrator for the Department of Anesthesiology at the University of Rochester in Rochester (the Department). From 2001 through 2012, CGF Anesthesia Associates, P.C. (CGF), contracted with the Department to provide anesthesiologists at medical facilities served by the Department. From 2007 to 2009, Bulter deceived the Department into making fraudulent payments of $930,000 to two doctors from CGF and $530,000 to CGF. The two doctors each executed fraudulent contracts with the Department worth more than $3,000,000 with the assistance of Bulter. The scheme caused the Department to divert compensation of $2,410,015 actually earned by CGF to the two doctors. For the years 2010 through 2012, CGF was deceived into paying $1,169,606 to Bulter’s business, DJA Solutions, LLC. Bulter also caused the Department to make a fraudulent and unauthorized loan to a doctor working for the Department. Bulter disguised various payments to the doctor as extra compensation resulting in total fraudulent payments to the doctor of $510,726. From October 2012 to May 2012, Bulter also caused the Department to pay a former employee $7,168. Doron Feldman, of Williamsville, New York, one of the two doctors with CGF, was sentenced to 24 months in prison and ordered to pay $1,617,000 in restitution. Maine Man Sentenced for Drug Trafficking and Money Laundering On March 18, 2015, in Portland, Maine, David Jones, of Portland, was sentenced to 110 months in prison and three years of supervised release for distributing marijuana and money laundering. According to court documents, from August 2011 through October 2013, Jones obtained hundreds of pounds of marijuana from an out-of-state source and distributed it in Maine. In October 2013, agents seized $291,981 from a storage unit Jones rented, $92,104 from an associate’s apartment and $6,278 from Jones’ residence. Agents also seized two boats, a truck, several motorcycles, two trailers, numerous pieces of electronic recording equipment and jewelry. All the seized cash and items were forfeited. Jones also laundered $216,500 of his drug proceeds through other financial transactions. Ohio Couple Sentenced for $2.3 Million Student Loan Fraud On March 11, 2015, in Cleveland, Ohio, John “Richard” Ceroni, of Canton, was sentenced to 69 months in prison and Adale “Marie” Cernoni was sentenced to 55 months in prison. They were ordered to pay more than $2.3 million in restitution. The Ceronis previously pleaded guilty to conspiracy to commit mail fraud and conspiracy to launder money. Richard Ceroni also pleaded guilty to obstruction. According to court documents, the Ceronis were co-founders of Carnegie Career College. From at least 2003, Carnegie College held itself out to the public as a private notfor-profit college. From June 2007 through May 2012, the Ceronis fraudulently obtained approximately $2.3 million from the Department of Education by submitting applications for SFA funds that stated students at Carnegie College had obtained valid high school diplomas. They also falsely told prospective students they would earn a valid high school diploma at the same time they attended Carnegie College and that such a diploma would be paid for by a “scholarship from a church” in order to increase enrollment and access to SFA funds. The Ceronis recruited students who had not earned high school diplomas or G.E.D. certificates, and thus were not eligible for SFA funds. The couple also submitted fraudulent financial aid documents to the Department of Education. They used online high schools, including Australia-based Adison High School, to purchase fake high school diplomas and coursework transcripts for students who were not required to attend any classes or complete any coursework. The Ceronis comingled fraudulently obtained money in several accounts and used that money to fund personal expenditures and expand Carnegie College. Two Men Sentenced for Roles in Cross-Country Marijuana Distribution Ring On March 9, 2015, in Phoenix, Arizona, two defendants were sentenced for their roles in a crosscountry marijuana distribution ring. Darius Blackwell, of Mesa, Ariz., was sentenced to 110 months in prison and Grady Blackwell, of Lithonia, Ga., was sentenced to 60 months in prison. Both defendants previously pleaded guilty to conspiracy to possess marijuana with intent to distribute and conspiracy to commit money laundering. According to their plea agreements, the Blackwells participated in a conspiracy to distribute marijuana using the United States Postal Service. Their organization purchased marijuana in Arizona, mailed it throughout the United States, primarily to Georgia, and then arranged for the proceeds to be sent back to Arizona. Shipping records and seizures show that at least 50 kilograms of marijuana were mailed in this fashion. In addition, seven bank accounts were opened in March 2012 for the purpose of receiving and transferring the proceeds of the scheme. Nearly $410,000 was deposited into these accounts and over $395,000 was withdrawn. Suspended Attorney Sentenced for Using Law Firm to Launder Drug Money On March 9, 2015, in Minneapolis, Minnesota, Robert David Boedigheimer was sentenced to 60 months in prison and three years of supervised release. Boedigheimer was convicted by jury on June 17, 2014, of using his law firm to launder drug money, lying to investigators, and encouraging his brother-in-law to lie to federal investigators. As proven at trial, Boedigheimer had his own personal injury practice since 1995. The law firm and Boedigheimer began to experience financial problems in 2006. As proven at trial, Boedigheimer’s brother-in-law, Brandon Lusk, was a distributor of high-end marijuana in and around Rochester, Minn. Boedigheimer approached Lusk for a cash loan. Lusk agreed to provide many loans to Boedigheimer, on the condition that the Boedigheimer

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repay the loans, plus interest, in checks issued from his law firm. Ultimately, Boedigheimer created a “no-show” job for Lusk at the law firm, which paid Lusk $48,000 per year. Lusk’s no-show job was entirely paid for through drug proceeds that Lusk funneled to Boedigheimer, and which were laundered through the law firm. Between March 26, 2010 and Jan. 28, 2011, nine payroll cash advances were provided by Lusk, ranging from $5,000 to $10,000 each, and totaling approximately $55,000. In exchange, Lusk received payroll checks from the law firm. In March 2011, Lusk lost his source of income as a marijuana distributor when his supplier was under investigation. Lusk and a marijuana distribution associate approached the Boedigheimer for help in obtaining legal representation. Lusk was eventually interviewed by the US Attorney’s office, before which Boedigheimer advised Lusk not to tell investigators about the money laundering arrangement between the two of them. Lusk then withheld information from investigators about his employment and the disposition of the drug proceeds. Lusk was sentenced to 30 months in prison for distribution of marijuana and money laundering. Sham Church Director and Professed “Enforcer” Sentenced for Looting Church On March 6, 2015, in Boston, Massachusetts, Edward J. MacKenzie, Jr., of Weymouth, was sentenced to 144 months in prison, three years of supervised release, and ordered to pay $754,569 in restitution. In October 2014, MacKenzie pleaded guilty to 13 counts, including RICO conspiracy, racketeering, mail fraud, wire fraud and money laundering in connection with his decade-long scheme to siphon off considerable financial assets of a church located in the Beacon Hill area of Boston. According to court documents, in 2003, MacKenzie became the “Director of Operations” at the church, a position that had not previously existed and paid him a salary as high as $200,000 per year. In order to drain the church of its assets, he began voting himself and his associates into positions of authority within the church, and consolidated and fortified his control by, among other things, changing the church’s by-laws for his own benefit. MacKenzie was able to gain control over substantial church assets, including an 18-story apartment building in downtown Boston, because the church had a small number of voting members, many of whom were elderly. After obtaining control, MacKenzie stole church funds through a combination of fraud, deceit, theft, and bribery. Moreover, MacKenzie intimidated and threatened individuals who were employed by the church by, among other things, providing them with signed copies of his 2003 autobiography, Street Soldier: My Life as an Enforcer for Whitey Bulger and the Boston Irish Mob. In the autobiography, MacKenzie admitted to a lengthy criminal history, including burglary, robbery, armed assault, and narcotics trafficking. MacKenzie’s crimes cost the church millions of dollars and deprived the needy who relied on its charity. Arizona Man Sentenced on Drug and Money Laundering Charges On Feb. 10, 2015, in Phoenix, Arizona, Carlos Antonio Garcia-Hurtado was sentenced to 168 months in prison and five years of supervised release. Garcia-Hurtado pleaded guilty on Oct. 6, 2014 to conspiracy to possess with intent to distribute marijuana and conspiracy to launder monetary instruments. According to the plea agreement, around June 2010 to on or about Dec. 10, 2013, Garcia-Hurtado was in agreement with others to receive and distribute marijuana from Mexico. The marijuana was brought from Mexico through the desert into Arizona by backpackers and then Garcia-Hurtado coordinated the distribution of bulk quantities of marijuana within the United States and the return of the drug proceeds to Mexico. Garcia-Hurtado also admitted to paying for a property, which is titled in his wife’s name, with the proceeds from the drug trafficking and money laundering conspiracies. Texas Men Sentenced in Drug Distribution Conspiracy On Feb. 9, 2015, in Wichita Falls, Texas, Rodolfo Trevino, of Wichita Falls, was sentenced to 97 months in prison. In June 2014, Trevino pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine base and one count of money laundering. Trevino was also ordered to forfeit a residence, two vehicles, a firearm and assorted ammunition. In mid-December 2014, codefendant Rene Villastrigo, Jr., also of Wichita Falls, was sentenced to 30 months in prison. He pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine. According to court documents, beginning in 2012 and continuing to April 18, 2014, Trevino and Villastrigo conspired with others to possess with the intent to distribute cocaine and cocaine base. Trevino traveled frequently to McAllen, where he recruited another individual to transport drugs from McAllen to Wichita Falls. Trevino also recruited Villastrigo to rent a residence in Wichita Falls to store and repackage the drugs for distribution. Trevino deposited the drug proceeds he acquired into bank accounts in Wichita Falls and withdrew those deposits in the McAllen area, intending for these financial transactions to conceal his drug trafficking activity. Former Pharmacist Sentenced for Role in Drug Distribution Scheme and Money Laundering On Feb. 5, 2015, in Detroit, Michigan, Waleed Yaghmour, a Dearborn pharmacist, was sentenced to 72 months in prison and ordered to forfeit $973,177 for conspiracy to illegally distribute prescription pills and money laundering. In March 2013, Waleed Yaghmour was charged with 43 others in a health care fraud and drug distribution scheme. According to court documents, Sardar Ashrafkhan and others, who owned home health agencies, provided kickbacks, bribes and other illegal benefits to physicians in exchange for prescriptions for patients with Medicare, Medicaid and private insurance. The prescriptions were for controlled substances such as oxycodone (Oxycontin). Patient recruiters or “marketers” would pay kickbacks and bribes to patients in exchange for the patients’ permitting the pharmacies and physicians to bill their insurers for medications and services that were medically unnecessary and/or never provided. During the conspiracy, prescriptions were presented to the Sav-Mart Pharmacy in Detroit, which was owned and operated by Yaghmour, as well as several other pharmacies. Yaghmour knew that the controlled substances he dispensed for these fraudulent prescriptions had no legitimate medical purposes. Yaghmour dispensed at least 1,500 oxycodone 100,000 hydrocodone and 100,000 alprazolam doses as part of the scheme. Yaghmour received nearly $2 million in cash payments for illegally dispensing the controlled substances. Many of the defendants charged in the indictment have been convicted by pleas and have been sentenced already. South Carolina Man Sentenced for Money Laundering, Drug Trafficking On Feb. 5, 2015, in Charleston, South Carolina, Hadden Andre Smith was sentenced to 144 months in prison, four years of supervised release and ordered to forfeit over $248,000 that authorities

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seized from his residence. Smith pleaded guilty on July 31, 2012 to conspiracy to possess with intent to distribute cocaine and marijuana, possession of firearms in furtherance of a drug trafficking crime, and conspiracy to launder money. According to court documents, upon executing a search warrant at Smith's residence, law enforcement officers found approximately $248,000 cash, 1.8 kilograms of marijuana, two firearms and drug packaging paraphernalia. Further investigation revealed that Smith used the drug proceeds to purchase several vehicles and had the vehicle titles put in the name of third parties to disguise the true ownership of the property. Charity Fundraiser Sentenced for Fraud Against Veterans On Feb. 3, 2015, in Indianapolis, Indiana, Scott M. Gruber was sentenced to 48 months in prison and three years of supervised release. On Aug. 21, 2014, Gruber pleaded guilty to two counts of mail fraud and one count of structuring to evade reporting requirements. As part of his plea, Gruber agreed to pay $365,750 to a legitimate veterans’ charity and forfeit two vehicles. According to court documents, in late 2009, Scott Gruber changed his business, Independent Promotions, Inc., into a professional fundraiser/solicitor business for a specific charity - Purple Hearts Veterans Foundation, a charity owned and operated by his brother. Gruber would solicit funds and deposit the funds into Independent Promotion’s account and then convert the cash into an official check payable to Purple Hearts. Gruber’s brother then sent Gruber a Purple Hearts’ business check for 80% of the donations transmitted. Between January 2010 through August 2011, Gruber received approximately $437,669 in checks from Purple Hearts as his 80% fundraising fee. Additionally, Gruber retained approximately $116,192 in cash collections that were never forwarded to Purple Hearts. From the total amount of $553,861, Gruber paid 40% of the collections to his solicitors and used another 25% to run his fraudulent business. Gruber’s brother did not expend the 20% received in support of veteran’s causes but rather made minimal expenses in support of veteran’s causes. From Purple Heart’s account, less than 8% of the collected proceeds were expended in what might possibly be considered a benefit to a soldier or veteran. Gruber followed the same process to purportedly raise funds for Service Connected Disabled Veterans of America (SCDVA), a charity established in the name of a friend, retaining 85% of the fundraising proceeds. Gruber received approximately $491,791 as his 85% fee from SCDVA. From his 85%, Gruber paid 40% of the collections to his solicitors and used another 25% to run his fraudulent business. From SCDVA’s account, $4,500, which represents less than 1% of the collected proceeds, were expended to benefit soldiers or veterans. Connecticut Man Sentenced for Role in Coast-to-Coast Cocaine Trafficking Ring On Feb. 3, 2015, in Hartford, Connecticut, Jermaine Jenkins, formerly of Newington, was sentenced to 72 months in prison and four years of supervised release. On Oct. 14, 2014, Jenkins pleaded guilty to conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine, and conspiracy to commit money laundering. According to court documents, Jenkins participated in a drug trafficking organization that involved individuals in California using the U.S. Mail and commercial carriers to send large quantities of cocaine to co-conspirators in the Hartford area who sold the narcotics for profit. Joseph Miller of Los Angeles, formerly of East Hartford, sent kilogram parcels of cocaine from California to Jenkins, Luther Nance and their associates in Connecticut. Jenkins, Nance and others then distributed the cocaine, or converted the cocaine into crack for street sale. Certain co-conspirators traveled to California with a large amount of cash to finance the purchase of cocaine. Co-conspirators also made numerous cash deposits into local bank accounts, as well as wire transfers. The cash deposits were made at several branches of the same bank in the Hartford area in amounts of less than $10,000 in order to evade the bank’s currency transaction reporting requirements. Miller and Nance have pleaded guilty and await sentencing. Former Liberty Reserve IT Manager Sentenced for Operating an Unlicensed Money Transmitting Business On Jan. 30, 2015, in New York, New York, Maxim Chukharev, a citizen of Russia and resident of Costa Rica, was sentenced to 36 months in prison in connection with his work for Liberty Reserve, a company that operated one of the world’s most widely used digital currency services. Chukharev pleaded guilty in September 2014 to conspiring to operate an unlicensed money transmitting business. According to court documents, Chukharev was primarily responsible for maintaining Liberty Reserve’s technological infrastructure and for implementing systems designed to create the false appearance that Liberty Reserve had an effective anti-money laundering program. Chukharev created and implemented a system designed to hide information about Liberty Reserve’s users and the sources of its business from the company’s Costa Rican regulatory agency. By design, the system provided mostly “fake” statistics about Liberty Reserve’s business to the agency, in order to give the appearance that Liberty Reserve had an effective anti-money laundering program. Beginning in January 2012, Chukharev took over responsibilities in the day-to-day management of Liberty Reserve’s technical operations, including the maintenance and operation of its website. The fact that Liberty Reserve had not registered as a money transmitting business under U.S. law was a vital component of its success as a system used to launder funds derived from, or intended to promote, criminal activity. First of Two Massachusetts Brothers Sentenced for Oxycodone Trafficking Scheme On Jan. 22, 2015, in Boston Massachusetts, Joshua M. Gonsalves, of Dennisport, was sentenced to 240 months in prison, five years of supervised release and ordered to forfeit $1,522,372 and property. In October 2014, Gonsalves was convicted of oxycodone conspiracy, money laundering conspiracy and money laundering. According to court documents, Gonsalves and his brother, Stanley D. Gonsalves participated in a three-year conspiracy involving the distribution of hundreds of thousands of 30-milligram oxycodone pills generating over $5 million in proceeds. The conspiracy’s couriers transported multi-thousand-pill loads of 30-milligram oxycodone pills from South Florida up to New England, first by plane and later by car. The primary object of the related money laundering conspiracy was to use the millions of dollars in drug proceeds to purchase additional oxycodone pills and to pay the ongoing expenses of the oxycodone conspiracy. Stanley D. Gonsalves, of Sandwich, was convicted of oxycodone trafficking conspiracy, money laundering conspiracy and 17 substantive money laundering charges. Stanley Gonsalves’ sentencing has been scheduled.

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North Carolina Man Sentenced for Role in Federal Racketeering Conspiracy On Jan. 20, 2015, in Charlotte, North Carolina, Travis Bumpers, of Charlotte, was sentenced to 66 months in prison and three years of supervised release. Bumpers pleaded guilty in March 2013 to RICO conspiracy to commit securities fraud, bank fraud, wire fraud and money laundering conspiracy. According to court documents, Bumpers engaged in multiple mortgage fraud transactions, arranging for a straw buyer, providing down payment money, and receiving more than $800,000 in kickback money through a sham corporation. Bumpers also engaged in extensive investment fraud, defrauding approximately 70 victims out of more than $4.6 million. Four other defendants have received sentences ranging from an eight month split sentence to 46 months in prison. Bitcoin Exchanger Sentenced for Selling Nearly $1 Million in Bitcoins for Drug Buys on Silk Road On Jan. 20, 2015, in Manhattan, New York, Robert M. Faiella, of Fort Myers Beach, Florida, was sentenced to 48 months in prison, three years of supervised release and ordered to forfeit $950,000. Faiella, an underground Bitcoin exchanger, pleaded guilty in September 2014 to operating an unlicensed money transmitting business. According to court documents, from about December 2011 to October 2013, Faiella ran an underground Bitcoin exchange on Silk Road, a website that served as a sprawling and anonymous black market bazaar where illegal drugs of virtually every variety were bought and sold regularly by the site’s users. Operating under the username “BTCKing,” Faiella sold Bitcoins – the only form of payment accepted on Silk Road – to users seeking to buy illegal drugs on the site. Upon receiving orders for Bitcoins from Silk Road users, he filled the orders through BitInstant, a company based in New York. BitInstant was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and charged a fee for its service. Faiella obtained Bitcoins with BitInstant’s assistance, and then sold the Bitcoins to Silk Road users at a markup. With the knowledge and active assistance of Charles Shrem, the Chief Executive Officer of BitInstant, Faiella exchanged nearly $1 million in cash for Bitcoins for the benefit of Silk Road users, so that the users could, in turn, make illegal purchases on Silk Road. Faiella’s co-defendant, Shrem, was sentenced to two years in prison on Dec. 19, 2014. Pennsylvania Man Sentenced for Drug Distribution and Conspiracy to Commit Money Laundering On Jan. 20, 2015, in Harrisburg, Pennsylvania, Ronald Belciano, of Newtown Square, was sentenced to 63 months in prison and four years supervised release. In February 2014, Belciano pleaded guilty to conspiracy to distribute 100 kilograms of marijuana in and through central Pennsylvania and conspiracy to commit money laundering between December 2007 and November 2011. According to court documents, in 2011 Belciano rented a vehicle and paid a co-conspirator to drive the vehicle, containing $1,184,340 in U.S. currency, from Pennsylvania to California to pay for marijuana, some of which was grown on Belciano’s 190 acre property in Northern California. Agents obtained a search warrant for one of Belciano’s homes; during the search, agents located $2,582,920 in U.S. currency and 1.5 kilograms of marijuana. Law enforcement agents later located 68 kilograms of marijuana, $316,800 in U.S. currency and 59 paintings valued at over $600,000 in a storage locker and at a co-conspirator’s farm which was used to warehouse and distribute the marijuana transported from California to Pennsylvania. The assets seized and forfeited in this case included a residence, a 190-acre property in Laytonville, California, artwork appraised at over $619,000 and $4,084,060 in U.S. currency. Man Sentenced for Roles in Multi-Million Dollar Fraud Schemes On Jan. 15, 2015, in Columbus, Ohio, Haider Zafar, formerly of Dublin, Ohio, was sentenced to 72 months in prison, three years of supervised release and ordered to pay $15,723,034 in restitution, of which $2,083,565 is payable to the IRS. Zafar also agreed to a forfeiture money judgment of $10,115,000. Zafar previously pleaded guilty to wire fraud, money laundering, filing a false federal income tax return and failing to file federal income tax returns in connection with a $10.1 million fraud scheme involving false representations about investments in Pakistani real estate. According to court documents, Zafar, told the primary victim of his real estate scheme that his uncle was the Minister of Defence of Pakistan and was responsible for acquiring land on behalf of the Pakistani government. Zafar recruited the victim to be his partner in purchasing such land before the Pakistani government did, saying they would then sell the land to the government at a greatly inflated price. Between January 2008 and February 2010, Zafar prompted his victim to wire $10,115,000 into accounts controlled by Zafar. In another scheme, Zafar pleaded guilty to five counts of wire fraud for fraudulently obtaining $3,524,469 from seven victims associated with the Miami Heat professional basketball franchise. Zafar fraudulently obtained a Miami Heat premium three-season ticket package, which cost $1,055,000, approached several investors and promised various fraudulent investment opportunities. He ultimately obtained in excess of $3,500,000 from his Miami fraud scheme. Finally, Zafar reported a taxable income of zero on his 2007 federal income tax return, omitting $221,500 in taxable income. Zafar also earned more than $10 million from his fraud scheme between 2008 and 2010, but did not file income tax returns. CPA Hedge Fund Manager Sentenced for Role in $40 Million Ponzi Scheme On Jan. 15, 2015, in Charlotte, North Carolina, Jonathan D. Davey, of Newark, Ohio, was sentenced to 252 months in prison, three years of supervised release and ordered to pay $21,815,407 in restitution. In February 2013, a federal jury convicted Davey of securities fraud conspiracy, wire fraud conspiracy, money laundering conspiracy and tax evasion. According to court documents and today’s sentencing hearing, Davey, a certified public accountant and registered investment advisor, served as the “Administrator” for numerous hedge funds for the Black Diamond Ponzi Scheme, an investment fraud scheme that deprived 400 victims of more than $40 million. Davey collected over $11 million from victims with his own hedge fund, “Divine Circulation Services,” by falsely stating that he had done proper due diligence on Black Diamond and that he was operating a legitimate hedge fund with significant safeguards, when, in reality, neither claim was true. As the Black Diamond scheme began to collapse, Davey and his co-conspirators collected over $5 million from new victim investors for the cash account and used this money to make payments to old investors and to themselves. Davey controlled most funds and wires and published a website for victims that reflected fake high returns. By the end of the scheme, the website falsely reflected over $120 million

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in supposed value for victim-accounts, when in reality the funds were less than $1 million. Davey also used an elaborate network of shell companies to evade taxes and commit money laundering with the proceeds of the Ponzi scheme. Ten other defendants have been sentenced in this case to terms ranging from 40 years to six months in prison. In addition, in April 2011, a criminal bill of information and a Deferred Prosecution Agreement were filed against CommunityONE Bank, N.A., related to its failure to file a suspicious activity report about the Black Diamond scheme and failing maintain an effective anti-money laundering program. The bank agreed to pay $400,000 toward restitution to victims of the Ponzi scheme that operated through accounts maintained at the bank. Former CEO of Bitcoin Exchange Company Sentenced for Helping to Sell Nearly $1 Million in Bitcoins for Drug Buys on Silk Road On Dec. 19, 2014, in Manhattan, New York, Charlie Shrem, of New York, was sentenced to 24 months in prison, three years of supervised release and ordered to forfeit $950,000. Shrem pleaded guilty in September 2014 to knowingly transmitting nearly $1 million in Bitcoins intended to facilitate drug trafficking on the “Silk Road” website, a black-market international cyber business, designed to enable users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement. According to court documents, Shrem was the Chief Executive Officer of BitInstant, and from about August 2011 until about July 2013, when BitInstant ceased operating, he was also its Compliance Officer, in charge of ensuring BitInstant’s compliance with federal and other anti-money laundering (AML) laws. Shrem was also the Vice Chairman of the Bitcoin Foundation, a foundation dedicated to promoting the Bitcoin virtual currency system. Shrem’s co-defendant, Robert M. Faiella, ran the underground Bitcoin exchange on the Silk Road website. Shrem was fully aware that Silk Road was a drug-trafficking website and he also knew that Faiella was operating a Bitcoin exchange service for Silk Road users. Nevertheless, Shrem knowingly allowed Faiella to use BitInstant’s services to buy Bitcoins for his Silk Road customers; personally processed Faiella’s orders; gave Faiella discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about Faiella’s illicit activity and deliberately helped Faiella circumvent BitInstant’s AML restrictions. Faiella, pleaded guilty in September 2014, and his sentencing has been scheduled for a later date. Colorado Man Sentenced for Role in Mortgage Fraud Scheme On Dec. 16, 2014, in Denver, Colorado, Peter V. Capra, of Littleton, was sentenced to 144 months in prison, three years of supervised release and ordered to pay over $9 million in restitution. Capra was convicted on March 21, 2014, on fourteen counts of wire fraud, two counts of mail fraud, and ten counts of money laundering. According to court documents and evidence presented at trial, Capra was the President of Golden Design Group, Inc. (GDG), a company which built and sold houses. Capra was also the registered agent for Distinctive Mortgages, LLC, which provided mortgages to some of the customers buying houses from GDG. From January 2005 through July 2008, Capra and others executed a scheme to defraud several mortgage lenders through applications for residential mortgage loans and related documents associated with real estate purchases. Capra structured transactions involving GDG homes to allow buyers to receive substantial amounts of the lenders’ money at the time of closing without the knowledge of the lenders. He also sold a large volume of homes to otherwise unwilling or unqualified buyers. Capra netted over $11,000,000 as a result of his scheme. Loan applications for the buyers were submitted through several different mortgage brokers which contained materially false and fraudulent representations about the buyers’ income, liabilities, source of down payment, and intent to occupy the properties as their primary residences. At closing, funds ranging from $85,000 to over $200,000 were distributed to the buyers in ways that prevented the lenders from discovering that these funds were actually going to the buyers; these funds were not disclosed in the HUD-1 closing statements or were disguised in those statements. Virginia Attorney Sentenced for Mail Fraud and Unlawful Monetary Transactions On Dec. 16, 2014, in Norfolk, Virginia, David R. Flynn, of Norfolk, was sentenced to 71 months in prison, three years of supervised release and ordered to pay $2,296,657 in restitution. Flynn pleaded guilty on April 23, 2014 to mail fraud and unlawful monetary transactions. According to the plea agreement, Flynn, an attorney licensed to practice law in Virginia and owner of Assured Title of Virginia, LLC in Virginia Beach, stole over $2 million from real estate trust accounts in order to cover up problems with his escrow account that dated back to 2008. Flynn also used the stolen funds to pay a personal credit card, to travel to tropical destinations, sometimes paying for friends to join him, and on at least one occasion, to charter a private plane. Pennsylvania Attorney Sentenced for Defrauding Clients of Over $6 Million On Dec. 16, 2014, in Harrisburg, Pennsylvania, Wendy Weikal-Beauchat was sentenced to 180 months in prison and ordered to pay $6,365,913 in restitution and $6,341,451 in forfeiture. On Nov. 15, 2014, Weikal-Beauchat pleaded guilty to wire fraud and money laundering in connection with the misuse of her clients’ funds. According to court documents, Weikal-Beauchat, who has since been disbarred, was an attorney with the Gettysburg firm of Beauchat and Beauchat, concentrating on estate, trust, and long-term care planning. Beginning in 2007, Weikal-Beauchat diverted approximately $6 million from a trust account she maintained for her clients at a bank. WeikalBeauchat used the proceeds to operate her law firm, for vacations and other personal expenses. She falsely represented she could invest in certificates of deposit with high interest rates as a result of her “special relationship” with the bank. She generated bogus bank CDs and distributed them to her clients to further mislead them. Maine Attorney Sentenced for Money Laundering Conspiracy On Dec. 16, 2014, in Portland, Maine, Gary Prolman, Esq., of Saco, was sentenced to 24 months in prison and two years of supervised release for conspiracy to launder marijuana trafficking proceeds. Prolman pleaded guilty on April 29, 2014. According to court documents, between 2011 and October 2013, David Jones and others illegally distributed hundreds of pounds of marijuana in Maine and elsewhere. Between June and September 2012, Prolman laundered about $177,500 worth of those drug proceeds by: (1) taking cash from Jones to purchase an interest in Prolman’s sports agency business; (2) illegally structuring cash deposits and cashier’s check purchases to avoid federal currency reporting requirements; and (3) using structured cashier’s checks to jointly purchase real estate with Jones in a transaction where only Prolman’s name appeared on the deed as the owner.

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Real Estate Developer Sentenced for Defrauding His Business Partners On Dec. 15, 2014, in Santa Ana, California, William Warren Geary, a real estate developer, was sentenced to 18 months in prison and ordered to pay $891,791 in restitution to investors. In September 2014, Geary pleaded guilty to conspiracy to commit mail fraud and money laundering. According to court documents, between August 2009 and April 2010, Geary, along with his bookkeeper, devised a scheme to defraud his business partners in connection with two capital calls he requested for tenant improvements to their joint real estate development. Geary along with nine other limited partners, purchased Ocean Walk Shoppes (OWS), a shopping center in Daytona Beach, Florida. In August 2009, Geary sent a letter to the OWS limited partners seeking $900,000 in capital contributions to complete tenant improvements for two prospective new tenants of OWS. The partners sent Geary $616,791 in response. In October 2009, Geary sent another letter requesting an additional $350,000 for additional tenant improvements. The OWS limited partners sent Geary another $270,000. Instead of using the funds as promised, Geary and his bookkeeper caused almost $900,000 of OWS funds to be used for Geary’s personal benefit. Convicted Ponzi Schemer Sentenced on New Fraud and Money Laundering Charges On Dec. 15, 2014, in Trenton, New Jersey, Eliyahu Weinstein, of Lakewood, was sentenced to 135 months in prison, 111 months of which will be served concurrently with a previous sentence and 24 months to be served consecutively. His total sentence for the two schemes is 24 years in prison. In addition, Weinstein was ordered to pay $6.2 million restitution and forfeiture. Weinstein previously pleaded guilty to conspiracy to commit wire fraud, committing wire fraud while on pretrial release and money laundering. According to court documents, in February 2012, Weinstein and his fellow conspirators offered a pair of investors (the “Facebook victims”) the opportunity to purchase large blocks of Facebook shares prior to the company’s initial public offering, or IPO, in May 2012. The Facebook victims wired millions of dollars that the conspirators then misappropriated. Weinstein and his conspirators also persuaded the Facebook victims to invest $2.83 million in the purported purchase of an apartment complex, “Belle Glade Gardens,” in Florida. However, Weinstein and his conspirators redirected the money to accounts that they controlled, returned $1.8 million to the Facebook victims as a purported return on investment and used the remaining money for their own purposes. In July 2012, Weinstein approached another group of investor victims (the “Florida condominium victims”) and told them he had the opportunity to purchase the notes on seven condominiums in Florida. Weinstein did not use this money to purchase the notes on the Florida condominiums; instead, Weinstein and his conspirators converted the money to their own use. Throughout the scheme, Weinstein was already under indictment and on pretrial release. Weinstein pleaded guilty on Jan. 3, 2013, admitting he ran a Ponzi-style real estate investment fraud scheme that caused $200 million in losses and then laundered the proceeds of the scheme. Weinstein was previously sentenced on Feb. 25, 2014, to 264 months in prison and ordered to pay more than $200 million in restitution and forfeiture to the victims of his scheme. Chief Technology Officer of Liberty Reserve Sentenced for Fraud On Dec. 12, 2014, in Manhattan, New York, Mark Marmilev, of Brooklyn, was sentenced to 60 months in prison, three years of supervised release and fined $250,000. Marmilev pleaded guilty in September 2014 to conspiring to operate an unlicensed money transmitting business that he knew involved the transmission of funds derived from criminal activity. In conjunction with the sentencing, a civil forfeiture complaint was filed seeking the forfeiture of two businesses located in Brooklyn, and the forfeiture of his interest in a pizzeria located in the Coney Island area of Brooklyn. According to the complaint, Marmilev purchased these business interests using more than $1.6 million in Liberty Reserve proceeds. Marmilev was a longtime associate of Liberty Reserve founder Arthur Budovsky and served as Liberty Reserve's chief technology officer. In that role, Marmilev was principally responsible for designing and maintaining Liberty Reserve’s technological infrastructure. Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the Internet’s “largest payment processor and money transfer system.” Liberty Reserve was created, structured, and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes. It emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity. Marmilev worked for Liberty Reserve for years despite knowing that the business was used extensively to process criminal transactions. Marmilev even promoted Liberty Reserve to criminals on Internet discussion forums, where, using aliases, he touted Liberty Reserve’s lack of anti-money laundering policies and its tolerance for, as he put it, “shady businesses.” Before being shut down by the U.S. government in May 2013, Liberty Reserve had more than five million user accounts worldwide, including more than 600,000 accounts associated with users in the United States, and processed tens of millions of transactions through its system, totaling more than $16 billion in funds. These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking, and other crimes. Ohio Man Sentenced for Role in Cocaine Distribution Ring On Dec. 11, 2014, in Columbus, Ohio, Stephen A. Cagle was sentenced to 36 months in prison and ordered to forfeit $142,020 in cash and $14,800 in lieu of vehicles seized on his property, as well as at least 13 firearms. Cagle pleaded guilty on May 21, 2014 to conspiracy to distribute a controlled substance and money laundering. According to court documents, on about January 2010 through September 2011, Cagle and others were part of a large scale narcotics organization involved in importing, manufacturing and distributing cocaine. Specifically, Cagle was responsible for distributing multiple kilograms of cocaine. Cagle was also involved in operating an unlicensed money transmitting business, often transporting several hundreds of thousands of dollars from Ohio to Texas. While executing a search warrant at Cagle’s residence in September 2011, investigators discovered more than 5 kilograms of cocaine, several firearms, more than $142,000 in cash and several vehicles. South Dakota Woman Sentenced in Drug and Money Laundering Conspiracies On Dec. 8, 2014, Sioux Falls, South Dakota, Faith Ashely Rasmussen was sentenced to 80 months in prison and four years of supervised release. Rasmussen pleaded guilty on Sept. 2, 2014, to conspiracy to distribute marijuana and conspiracy to commit money laundering. According to court documents, from approximately January 2012 to December 2013, Rasmussen received marijuana through the mail in South Dakota from her source of supply in California. When the amounts of

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marijuana became too large to mail, Rasmussen had co-conspirators drive to California and back to South Dakota with large quantities of marijuana. In addition, Rasmussen deposited the proceeds of marijuana sales into her bank account in South Dakota. She also deposited drug sales proceeds into the account of her source of supply, and instructed a co-conspirator to deposit marijuana proceeds into her account. She never deposited more than $10,000 in cash per occasion to intentionally avoid bank reporting requirements. Defendant Sentenced for Money Laundering Charge Involving Tax Fraud On Dec. 8, 2014, in Miami, Florida, Price Jules was sentenced to 57 months in prison and three years of supervised release. Jules previously pleaded guilty to one count of money laundering. According to court documents, the IRS uncovered a pattern of approximately 1,285 attempted fraudulent tax claims seeking approximately $5.7 million in refunds. There were approximately $629,942 in cash withdrawals and approximately $34,000 in ATM withdrawals from the bank accounts that Jules controlled. Jules knew that the laundered money was the proceeds of tax fraud because he received approximately $180,000 of tax fraud directly into his personal E-Trade account and approximately $73,000 into his personal bank account. In addition, Jules spoke about engaging in tax fraud and offered to launder the proceeds of tax fraud for a fee. None of the individuals or estates of individuals listed on the tax returns received any money. New Jersey Man Sentenced for Role in Multi-Million Dollar Real Estate Investment Scheme On Dec. 8, 2014, in Trenton, New Jersey, Alex Schleider, of Lakewood, was sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay restitution of $613,200 and forfeiture of $363,200. Schleider previously pleaded guilty to wire fraud. According to court documents, Schleider, along with Eliyahu Weinstein, of Lakewood, and others persuaded victims to invest in the purported purchase of an apartment complex, “Belle Glade Gardens,” in Florida. They told the victims that Weinstein could purchase Belle Glade Gardens at a discounted price and immediately flip it at a substantial profit. Schleider and Weinstein further told the victims that Weinstein had already placed $2.5 million in the trust account of a Miami law firm for the transaction; if the victims contributed another $2.5 million toward the transaction, those funds would remain in escrow until the deal closed and the victims would be repaid within 60 days. The victims wired $2.83 million to complete the Belle Glades Gardens transaction, however, Schleider and Weinstein redirected the money to accounts that they controlled, returned $1.8 million to the victims as a purported return on a prior Facebook investment, and used the remaining money for their own purposes. Wisconsin Businessman Sentenced for Bank Fraud and Theft from Pension Fund On Dec. 3, 2014, in Madison, Wisconsin, Christian Peterson was sentenced to 84 months in prison and ordered to pay $816,168 in restitution to Greenwoods State Bank. Peterson was convicted by jury trial in May 2014 for bank fraud, money laundering and making false statements to banks. According to evidence given at the trial, between 2006 and 2007, Peterson committed two acts of bank fraud and made false statements to banks by lying to a bank about the purpose of a wire transfer of funds taken from Maverick, Inc.’s $6.25 million business line of credit to a casino in Las Vegas, and by lying to Greenwoods State Bank in Lake Mills, Wisconsin, about the purpose of a $1.1 million loan for real estate development in Fitchburg. In addition to his convictions for bank fraud, money laundering and making false statements to banks, Peterson was convicted of stealing his former employees’ 401(k) account funds and using the money to pay his former wife $7,500 in alimony and to lend himself $10,000. Former Attorney Sentenced for Money Laundering On Dec. 3, 2014, in Kansas City, Missouri, James C. Wirken, of Kansas City, was sentenced to 13 months in prison and ordered to pay a $4,000 fine. On May 12, 2014, Wirken pleaded guilty to one count of money laundering. Wirken was a lawyer and principal at The Wirken Law Group until he surrendered his law license in 2012 and was disbarred by the Missouri Supreme Court. According to court documents, Wirken withdrew money from his law firm’s trust account, which was being held for the benefit of a client, and deposited the funds into his law firm’s operating account. Wirken wrote six checks between December 2009 and Jan. 13, 2010, totaling $116,730 and used the funds for his personal benefit. All of the transactions were conducted without the client’s consent. Wirken’s law firm was engaged in a long-term, unethical Ponzi-type business model that spanned over many years. As early as 2007, Wirken began improperly borrowing substantial amounts of money from clients, and then he refused to pay his clients back. Wirken borrowed over $800,000 from at least seven clients from 2007 to 2012. Former Apple Executive Sentenced for Defrauding Apple in Kickback Scheme and Laundering the Proceeds On Dec. 1, 2014, in San Jose, California, Paul S. Devine was sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay $4,464,664 in restitution. Devine pleaded guilty on Feb. 28, 2011, to wire fraud, conspiracy to commit wire fraud, money laundering and engaging in transactions with criminally-derived property. According to the plea agreement, beginning in approximately February 2007, Devine engaged in a scheme to defraud Apple of money or property as well as to defraud Apple of its right to his honest services. Devine had been a Global Supply Manager at Apple from 2005 until August 2010. Devine’s job gave him access to confidential internal Apple information. In the course of the scheme, Devine transmitted confidential information, such as product forecasts, pricing targets, and product specifications, to suppliers and manufacturers of Apple parts. In return, the suppliers and manufacturers paid Devine kickbacks. The scheme enabled the suppliers and manufacturers to, among other things, negotiate more favorable contracts with Apple than they would have been able to obtain without the confidential information. Devine received kickbacks as wire transfers into bank accounts that he opened for that purpose in the U.S. and South Korea, including accounts in the name of a shell corporation, CPK Engineering. Devine knowingly transferred the proceeds of the wire fraud between his various accounts, including CPK Engineering accounts, in order to conceal and disguise the nature, location, source, ownership, and control of the proceeds. Devine agreed to forfeit $951,552 in proceeds of the fraud and a vehicle, all of which were seized by the FBI and IRS at the time of his arrest. Devine also agreed to forfeit $612,407 in proceeds of the fraud, which he transferred from overseas bank accounts and deposited with the clerk of the District Court following his arrest.

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Indiana Man Sentenced on Money Laundering Charges On Nov. 26, 2014, in South Bend, Indiana, Jeffrey Miller, of Osceola, was sentenced to 135 months in prison, two years of supervised release and ordered to pay $1,086,222 in restitution. Miller previously pleaded guilty to the interstate transportation of stolen goods and money laundering. According to court documents, from approximately June 2012 through January 2014, Miller stole copper wire from his former employer, an RV manufacturer located in Elkhart, Indiana. Miller then sold the copper to scrapyards after transporting the copper wire across the state line from Indiana to Michigan locations. He used these illegal funds to gamble at various casinos. Miller deposited cash into his bank account when he won at the casino because then he was able to justify to the bank where the cash came from. He avoided putting money from his sells of stolen copper wire directly into his bank accounts because he did not want to justify the source of the cash. In addition, Miller intentionally made bank deposits of cash below $10,000 to avoid the filing of currency transaction reports. Ohio Man Sentenced for Investment Fraud On Nov. 24, 2014, in Cleveland, Ohio, Anthony Davian was sentenced to 57 months in prison and ordered to pay $1,787,679 in restitution, as well as forfeit property. Previously, Davian pleaded guilty to one count of securities fraud, two counts of mail fraud, four counts of wire fraud, and seven counts of money laundering. According to court documents, Davian used his hedge fund, Davian Capital Advisers, LLC, to promote and sell securities to at least 20 investors between 2008 and 2013, resulting in $1.8 million in overall investor loss. Davian purported to sell securities in the form of shares in the various funds he created and controlled, including Davian Capital, Rubber City Gravity, Rubber City Pure Alpha, Cleveland Precious Metals Fund, and others. Instead, he used the investors’ monies to pay earlier investors, enrich himself and pay off personal expenses. Davian persuaded investors’ into giving him hundreds of thousands of dollars by claiming to manage hundreds of millions of dollars to make himself appear more sophisticated than he really was and by falsifying client account statements. Former Bank CEO Sentenced for Bank Fraud and Money Laundering On Nov. 24, 2014, in Wilmington, Delaware, James A. Ladio, was sentenced to 24 months in prison and ordered to pay restitution of $700,000. Ladio pleaded guilty on Dec. 17, 2013, to two counts of bank fraud and two counts of money laundering. According to court documents, Ladio was the founder and former CEO of Midcoast Community Bank, Inc. (“Midcoast”). On two occasions, Ladio convinced existing MidCoast customers to apply for commercial loans, ostensibly for valid business purposes. The true purpose of the loans, however, was to allow those MidCoast customers to loan money to Ladio. Ladio had been involved in a decade-long “loan-swap” arrangement with former Wilmington Trust Co. (“WTC”) Market Manager Brian Bailey, in which the two men provided more than twenty (20) loans to each other totaling in excess of $1.5 million. In June 2010, WTC called Ladio’s loans and required him to enter into a Global Restructuring Agreement (the “Agreement”). Ladio engaged in the nominee loan scheme in substantial part to make interest and principal payments under the Agreement. Convenience Store Owners Sentenced for Selling Synthetic Cannabinoids, Money Laundering On Nov. 21, 2014, in Tulsa, Oklahoma, Iqbal Makkar, of Bentonville, Arkansas, was sentenced to 97 months in prison, and Gaurav Sehgal, of Grove, Oklahoma, was sentenced to 84 months in prison. Additionally, both were ordered to forfeit their interests in two convenience stores, various property and currency valued at over $3,475,535. A joint and several criminal forfeiture money judgment of $2,584,981was also levied and restitution of more than $6,000 was ordered. Both were convicted of conspiracy to distribute controlled drug analogues, possession of Schedule 1 controlled substance analogue with intent to distribute, maintaining drug-involved premises, and money laundering. According to court documents, from November 2011 to January 2013, Makkar and Sehgal operated the “Gitter Done Station” convenience store in Grove, Oklahoma, for the purpose of storing and distributing the controlled substance analogue known as XLR11. The men were charged with depositing funds from the illegal sales and distributions of the controlled substance analogues into a checking account in Missouri. Ohio Man Sentenced for Criminal Schemes Centered Around IHOP Restaurants On Nov. 21, 2014, in Toledo, Ohio, Mazen Khdeer, of Sylvania, was sentenced to 57 months in prison and two years of supervised release. Khdeer was also ordered to pay $1.3 million in restitution and forfeit two properties. Khdeer previously pleaded guilty to 13 counts, including money laundering, malicious use of fire, conspiracy to harbor aliens, identity theft, conspiracy to commit health care fraud and filing false claims. According to court documents, Khdeer was the last of 18 people to be sentenced for their roles in a series of criminal schemes that centered around seven IHOP restaurants owned by Tarek “Terry” Elkafrawi in northwest Ohio and Indiana. The schemes resulted in losses of more than $3 million. In 2008, the Findlay IHOP burned as the result of arson started by a co-conspirator at the direction of Elkafrawi and Khdeer to facilitate an insurance fraud scheme. Additionally, Khdeer used two identities to split his salary from the restaurants between two paychecks, creating lower reportable income for both identities. Using those identities, he claimed approximately $140,000 in Medicaid payments and $35,000 in food stamps and welfare benefits from the state of Ohio. Khdeer and Elkafrawi created a false property company to which Khdeer paid “rent” to Elkafrawi to show a lower income. Elkafrawi was sentenced to eight years in prison. International Drug Dealer Sentenced to Prison On Nov. 19, 2014, in Raleigh, North Carolina, Andrew Wayne Landells, of Jamaica, was sentenced to 180 months in prison, three years of supervised release and ordered to pay a money judgment of $1,000,000 and forfeit his interest in several properties located in New Jersey and Florida. Landells previously pleaded guilty to conspiracy to launder monetary instruments. According to court documents, Landells directed the activities of his estranged wife, and at least seven co-conspirators to assist him in the trafficking marijuana from Mexico throughout, New York, Florida, Virginia, Arizona, and North Carolina. Landells then used the drug proceeds to purchase luxury vehicles and residences, and to rent residences in others’ names. In order to disguise the source of the proceeds from his illegal activities, Landells also operated sham companies purporting to be in the candle

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manufacturing business. Landells distributed up to 1,000 kilograms of marijuana and laundered money from drug proceeds through the straw purchase of at least seven pieces of real property, thirteen motor vehicles, and four businesses, all with a combined value of over $1,000,000. Missouri Man Sentenced for Stealing Money from ATMs On Nov. 18, 2014, in Kansas City, Missouri, Anthony T. Civella, Jr., was sentenced to 24 months in prison and ordered to pay $70,000 in restitution, in addition to the restitution that has already been paid. On Feb. 27, 2014, Civella pleaded guilty to bank larceny and money laundering. According to court documents, from 2011 through 2013, Civella owned and operated a company called C Management Group, LLC, which serviced 35 ATMs in the Kansas City, Missouri, metropolitan area. Civella stole $330,040 from the ATMs by obtaining a maintenance code to access the machines. Civella moved money between the ATM machines in order to conceal the theft from the bank. He then comingled the stolen money from the ATMs by depositing most of the cash into his personal checking account at a credit union. California Man Sentenced for Running Ponzi Scheme On Nov. 17, 2014, in Sacramento, California, James Berghuis was sentenced to 168 months in prison for orchestrating a Ponzi scheme in the Sacramento area that defrauded family members, friends, and other acquaintances of more than $2.7 million. On Oct. 18, 2013, a jury convicted Berghuis of four counts of mail fraud, four counts of wire fraud, and one count of money laundering. According to evidence presented at trial, between 2005 and 2008, Berghuis convinced certain investors to take out home equity loans to make investments. Berghuis promised these investors he would use their money to invest in hard-money loans, real estate transactions, or the purchase of real estate franchises. He also offered several victims a deed of trust on his commercial property, promising each that they would be in second position on the title. However, Berghuis used investors’ money to pay back other investors and to buy himself luxury goods, including several Mercedes Benz cars. Some victims lost their homes or continue to pay on mortgages they took out to make their investments with Berghuis. Colorado Man Sentenced on Charges Related To Stealing Telecommunications Equipment, Money Laundering On Nov. 14, 2014, in Tulsa, Oklahoma, Jesse Michael Greenwald, of Colorado, was sentenced to 84 months in prison, three years of supervised release and ordered to pay restitution of $4,419,125 on charges related to stealing and selling millions of dollars’ worth of Verizon Communications telecommunications equipment. Greenwald pleaded guilty on Aug. 13, 2014, to conspiring to commit money laundering. Scott Gollan, and Michael Greenwald, both of Bastrop, Texas, and James Pennoyer, of Tulsa have also pleaded guilty to charges arising from the thefts from Verizon and are awaiting sentencing. According to court documents, from July 2009 to May 2014, Pennoyer was a contract employee at the Verizon Communications warehouse in Tulsa, and aided the other defendants in stealing telecommunications equipment from the warehouse. The defendants transported the stolen equipment to Colorado Springs, Colorado, and stored it in a facility to be sold at a later date. Much of the equipment was sold to a company in North Carolina, which made substantial payments to Greenwald and his co-conspirators. The conspirators, including Greenwald, then used the funds to engage in illegal monetary transactions of more than $10,000 each. Illinois Man Sentenced on Drug and Money Laundering Offenses On Nov. 13, 2014, in East St. Louis, Illinois, Demarcus L. Freeman, of East Alton, was sentenced to 151 months in prison and ordered to forfeit $10,000. On Aug. 7, 2014, Freeman pleaded guilty to distribution of cocaine base (“crack cocaine”), possession with intent to distribute cocaine base and money laundering. According to court documents, Freeman sold crack cocaine in Wood River, Illinois, on May 13, 2013 and again on June 4, 2013. On July 8, 2013, Police seized nine ounces of crack cocaine from Freeman which he admitted owning. Freeman also opened a credit union account in the name of a relative. Freeman laundered the proceeds of his drug dealing through the account, in an attempt to disguise the source of the money. Freeman laundered over $60,000. Costa Rica Based Telemarketing Fraud Results in Prison Terms for Two On Oct. 30, 2014, in Charlotte, North Carolina, Glen Adkins Jr., of San Diego, California, was sentenced to 300 months in prison and Warren F. Tonsing Jr., of St. Paul, Minnesota, was sentenced to 144 months in prison. Both were ordered to pay $2.4 million in restitution, joint and several with their co-defendants. Adkins and Tonsing were convicted in August 2013 of wire fraud and money laundering. According to court documents, the defendants schemed to defraud United States residents, most over the age of 55, out of millions of dollars by deceiving them into believing that each had won a large monetary prize in a “sweepstakes contest.” Both defendants worked in a Costa Rica-based call center that used computers to make telephone calls over the internet to victims in the United States. This process allowed the defendants and their co-conspirators to disguise the originating location of the calls. Victims were informed that the callers were from a federal agency and that to receive their “prize” they had to wire thousands of dollars to Costa Rica for a purported “refundable insurance fee.” As long as the victims continued to pay, the coconspirators continued to solicit more money from them in the form of purported fees. To date, 46 defendants have been convicted for their participation in similar Costa Rican telemarketing schemes. Former Arkansas Business Developer Sentenced For Fraud On Oct. 28, 2014, in Fort Smith, Arkansas, Brandon Lynn Barber, of New York, New York, was sentenced to 65 months in prison and three years supervised release. On July 31, 2013, Barber pleaded guilty to conspiracy to commit bankruptcy fraud, conspiracy to commit bank fraud and money laundering. According to court documents, from approximately 2005 through 2009, Barber was involved in several schemes to defraud banks, creditors and the Federal Bankruptcy Court. Barber provided false financial information and statements to banks for loans to finance the Legacy Condominium building and the Bellafont project in Fayetteville. Barber also concealed assets and income from creditors and the bankruptcy court by transferring funds to other co-defendants or accounts controlled by them and using those funds for his own personal benefit and expenses.

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Former Boeing Procurement Officer and two Sub-Contractors Sentenced on Federal Fraud Charges On Oct. 27, 2014, in St. Louis, Missouri, Deon Anderson, a former Boeing Procurement Officer, was sentenced to 20 months in prison. William P. Boozer, of Hacienda Heights, California, was sentenced to 18 months in prison. Robert Diaz, Jr., of Alta Loma, California, was sentenced to 15 months in prison. Anderson pleaded guilty in June 2014 to three counts of mail fraud, one count of wire fraud and one count of currency structuring. Co-defendants Boozer and Diaz previously pleaded guilty to related charges in connection with a bribery/kickback scheme involving Boeing military aircraft parts. According to court documents, between November 2009 and February 2013, Boozer requested Anderson provide him with non-public competitor bid information and historical price information in connection with Boeing military aircraft part purchase order requests for quotes. Anderson gave the information to Boozer to be used in preparing and submitting bids on behalf of Globe Dynamics in response to approximately sixteen different Boeing requests for quotes, in exchange for cash payments. Of the sixteen bids Globe Dynamics was awarded seven purchase orders to supply United States military aircraft parts to Boeing totaling in excess of $1,500,000. The net benefit to Globe Dynamics on those seven purchase orders was approximately $116,339. Beginning in May 2011 and continuing through April 2013, Anderson provided Diaz and another individual with non-public competitor bid information and historical price information in connection with one and more Boeing military aircraft part purchase order requests for quotes. They used that information in preparing and submitting bids on behalf of J.L. Manufacturing to Boeing for approximately nine different Boeing requests for quotes. Of the those nine, J.L. Manufacturing was awarded seven purchase orders to supply United States military aircraft parts to Boeing totaling in excess of orders totaled approximately $2,052,746. In exchange for that information they made cash payments to Anderson. On more than one occasion, Anderson structured cash deposits into his personal checking account to conceal his bribe scheme. California Man Sentenced for Money Laundering On Oct. 24, 2014, in Muskogee, Oklahoma, David Lewis McDowell, of Riverside, California, was sentenced to 51 months in prison, ordered to pay approximately $2,500,000 in restitution and to forfeit $3,000,000. In March, 2014, McDowell pleaded guilty to money laundering. According to court documents, from about June 25, 2008 through Nov. 9, 2009, McDowell devised a scheme to defraud investors by fraudulently representing and promising that a company had a system that could produce ethanol at a commercial production rate sufficient to sell commercially. Based upon those fraudulent and material representations, his actions caused victims to send money to be invested in this company. In addition, McDowell caused money derived from wire fraud to be transferred from accounts at a bank. Three Chiropractors Sentenced in Staged Automobile Accident Scheme On Oct. 14, 2014, in West Palm Beach, Florida, three chiropractors were sentenced for their participation in a massive staged automobile accident scheme. Kenneth Karow, of West Palm Beach, was sentenced to 132 months in prison; Hermann J. Diehl, of Miami, was sentenced to 108 months in prison; and Hal Mark Kreitman, of Miami Beach, was sentenced to 96 months in prison. Karow was convicted of 48 counts of mail fraud and 11 counts of money laundering. Diehl was convicted of two counts of mail fraud and three counts of money laundering. Kreitman was convicted of 21 counts of mail fraud and two counts of money laundering. According to court documents, between October 2006 and December 2012, the defendants and their co-conspirators staged automobile accidents and caused the submission of false insurance claims through chiropractic clinics they controlled. Three Sentenced in Illegal Gambling Operation in Guam On Oct. 8, 2014, in Hagatna, Guam, three individuals were sentenced in a criminal conspiracy to conduct an illegal gambling business at the former MGM Spa in Tamuning. Jimmy Hsieh was sentenced to 24 months in prison and ordered to pay a $423,640 money judgment. In addition, Hsieh agreed to forfeit $178,113 from personal accounts and that three of his condos are subject to possible forfeiture proceedings. Hsieh pleaded guilty to gambling conspiracy and money laundering. William Perez, the manager and supervisor of the MGM poker operation in 2010, was sentenced to six months in prison, six months home confinement and three years of supervised release for conspiring to operate the illegal gambling business. Pauline Perez was sentenced to one year of probation and community service. According to court documents, from at least January 2006 until December 2010, the defendants conspired to offer card games of chance, including baccarat and poker, at the MGM Spa building. The defendants took a percentage of the winnings from each game. They knowingly conducted financial transactions involving the proceeds from the illegal gambling operation. Washington Man Sentenced for Operating Unlicensed Money Transmitting Business On Oct. 6, 2014, in Seattle, Washington, Pavel Rombakh was sentenced to 24 months in prison and ordered to forfeit cash and property worth $510,000. Rombakh, who immigrated to the United States from Ukraine in the 1990’s, pleaded guilty in May 2014 to operating an unlicensed money transmitting business. According to court documents, over a five year period, Rombakh received wires of more than $150 million from overseas and then wired the funds back out to other accounts. Many of the wires originated in Russia and Cyprus and were promptly re-wired to England, Latvia, the United Arab Emirates, and China. Rombakh kept a small percentage of the funds as his fee. Illinois Man Sentenced for Money Laundering and Wire Fraud On Oct. 3, 2014, in Springfield, Illinois, Brian J. Fields, of Belleville, was sentenced to 27 months in prison, three years of supervised release and ordered to pay $98,800 in restitution. Fields previously pleaded guilty to money laundering and wire fraud. According to court documents, Fields conspired with a person in Nigeria to defraud United States citizens by sending counterfeit checks and money orders to people in several schemes (such as a “Secret Shopper” scam). The schemes resulted in victims receiving the counterfeit check or money order, depositing it into their own bank account, and then at the direction of Fields, the victim would wire transfer legitimate funds to Fields. By the time the person learned the check or money order was worthless, they had already sent the money to Fields. When Fields received the victims’ money, he would keep a portion for himself. Then to further the scheme, Fields would send the remaining funds to a person located in Nigeria.

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Caribbean-Based Investment Advisor and Attorney Sentenced for Using Offshore Accounts to Launder and Conceal Funds On Oct. 3, 2014, in Washington, DC, Eric St-Cyr, an investment advisor, and Patrick Poulin, an attorney, were each sentenced to 14 months in prison and three years of supervised release for conspiring to launder monetary instruments. St-Cyr and Poulin, both Canadian citizens, along with Joshua Vandyk, a U.S. citizen, previously pleaded guilty. Vandyk was sentenced on Sept. 5, 2014, to 30 months in prison. According to court documents, Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million. Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as U.S. clients in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented that the funds would not be reported to the U.S. government. Poulin established an offshore corporation for the undercover agents. Upon request from the U.S. client, Vandyk and St-Cyr liquidated investments and transferred money, through Poulin, back to the United States. According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion. North Carolina Man Sentenced for Conspiracy, Mail Fraud, and Money Laundering On Oct. 2, 2014, in Raleigh, North Carolina, Thomas L. Kimmel was sentenced to 264 months in prison, three years of supervised release and ordered to pay over $16.5 million in restitution. On June 26, 2014, Kimmel was convicted of conspiracy, mail fraud, and money laundering. According to court documents, Kimmel solicited about $20 million for Sure Line Acceptance Corporation from investors. Most of these investors found out about Sure Line through financial conferences that Kimmel gave at churches relating to Biblical principles of finance and getting out of debt. Most of the victims never received any of their principal back. Kimmel would typically spend a few minutes of each conference telling investors about a 12% collateralized note program. Kimmel’s statements about Sure Line were false and that the collateralized note program was a Ponzi scheme. Former Sheriff’s Deputy Sentenced for Laundering $40 Million in Drug Proceeds On Oct. 1, 2014, in McAllen, Texas, Robert Ricardo Maldonado, of Weslaco, Texas, was sentenced to 144 months in prison and three years of supervised release. Maldonado, a former deputy with the Hidalgo County Sheriff’s Office, pleaded guilty on May 12, 2014, to conspiracy to commit money laundering. According to court documents, from 2001 to November 2013, Maldonado transported $40 million worth of drug proceeds. Maldonado was paid a percentage of the total amount of the currency transported. He then utilized these funds to purchase various properties and assets. Utah Resident Sentenced for Role in Investment Fraud Scheme On Oct. 1, 2014, in Salt Lake City, Utah, Armand R. Franquelin, of Liberty, Utah, was sentenced to 57 months in prison, three years of supervised release and ordered to pay $6,566,596 in restitution. In September 2014, Martin Pool was sentenced to 78 months in prison. Franquelin and Pool pleaded guilty in May 2014 to securities fraud and money laundering in connection with an investment fraud scheme related to a real estate project in Vernal, Utah. According to court documents, from 2006 to 2010, Franquelin and Pool persuaded investors to convert their traditional IRAs to self-directed IRA accounts and invest their funds in a residential real estate project known as Haven Estates. This was accomplished by inducing the investors to direct funds to their company, The Elva Group, in return for notes promising monthly interest payments at annual rates between 8 and 20 percent. In reality, investors’ funds were used for purposes other than the development of Haven Estates. Investors were not told of encumbrances already in place on Haven Estates. Eventually, Haven Estates was foreclosed. Investors’ funds were used by Pool and Franquelin and their associates for their personal benefit and to pay interest to earlier investors as Ponzi payments. The Ponzi payments had the effect of lulling the earlier investors, persuading them to leave their funds in the company and inducing them to renew their promissory notes from time to time. The payments also enticed new investors to invest. Fiscal Year 2014 - Money Laundering Investigations Fiscal Year 2013 - Money Laundering Investigations

Table of Contents - Money Laundering Investigations Criminal Enforcement Home Page Page Last Reviewed or Updated: 09-Jul-2015

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Examples of Narcotics-Related Investigations - Fiscal Year 2015 The following examples of Narcotics-Related Investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted. Former Ringleader of Albuquerque-Based Drug Trafficking Organization Sentenced On July 28, 2015, in Albuquerque, New Mexico, Christopher Roybal, the former leader of an Albuquerque-based drug trafficking organization, was sentenced to 168 months in prison, five years of supervised release and required to pay a $184,080 money judgment. On Feb. 25, 2015, Roybal pleaded guilty to five counts of a second superseding indictment, charging him with participating in a cocaine trafficking conspiracy, three money laundering conspiracies, and a substantive money laundering offense. In entering his guilty plea, Christopher Roybal admitted that between Aug. 2011 and Dec. 2012, he conspired with others to distribute kilogram quantities of cocaine in Albuquerque and Las Vegas, N.M. He also admitted participating in three conspiracies that laundered the proceeds of his drug trafficking organization. One conspiracy involved the transportation of drug proceeds from Albuquerque to California to pay for marijuana that was distributed by Christopher Roybal’s organization. The second and third conspiracies involved the laundering of Christopher Roybal’s drug proceeds through accounts at a bank and a credit union. As part of his plea agreement, Roybal agreed to forfeit his Albuquerque residence and a 1967 Chevrolet Camaro. The charges filed in the case were the result of a 16-month multi-agency investigation into a drug trafficking organization headed by Roybal. Roybal was one of the 19 defendants charged in Dec. 2012, with drug trafficking and money laundering charges in a 60-count indictment. The indictment was superseded twice; first in Feb. 2014, to add a 20th defendant and a witness tampering charge, and again in Sept. 2014, to add another witness tampering charge and a heroin trafficking charge. Three Sentenced for Distributing Marijuana and Money Laundering On July 28, 2015, in Springfield, Missouri, Sean Bond, of Republic, Missouri, was sentenced to 144 months prison. On Oct. 16, 2014, Bond pleaded guilty to participating in a conspiracy to distribute marijuana in Greene County, Mo., and elsewhere from April 1, 2010, to June 19, 2013. Also sentenced was Brian D. Hanson to12 months and one day in prison and Brenda Swearingin to five years of probation. According to court documents, Bond arranged for Hanson and others to pick up marijuana outside of Springfield and transported back to Springfield for Bond to distribute to other persons. Bond and Hanson also traveled together to Texas to obtain marijuana that had been smuggled into the United States from Mexico. In addition to the drug-trafficking conspiracy, Bond and Hanson each pleaded guilty to participating in a conspiracy to launder the proceeds of marijuana sales. For example, Hanson gave Bond a 2002 BMW 745i and a 1969 Chevrolet Chevelle to pay a drug debt. Hanson purchased a 2003 Ford Crown Victoria at an auto auction, using proceeds from the sale of marijuana. Hanson then used this vehicle to transport marijuana. Bond also used drug proceeds to purchase personal items that have been seized by law enforcement officers and is subject to be forfeited to the government. Two Missouri Men Sentenced for Cocaine Conspiracy On July 28, 2015, in Jefferson City, Missouri, Levi McLean Franklin Coolley and Jonathan Richard Gray, both of Columbia, were sentenced to 120 months in prison. The court also ordered Coolley to forfeit to the government $54,399, which constitutes the profits of illegal drug trafficking and which was seized from investment accounts. Coolley and Gray both pleaded guilty to participating in a conspiracy to distribute five kilograms or more of cocaine. Coolley also pleaded guilty to participating in a conspiracy to distribute less than 50 kilograms of marijuana and a conspiracy to commit money laundering by utilizing his business. According to court documents, Coolley’s role in the drugtrafficking conspiracies included supervising the distribution efforts of several people in Columbia. He sometimes weighed out and assisted in packaging cocaine and/or marijuana, distributed cocaine and/or marijuana and collected money from the sale of the cocaine and/or marijuana. In order to conceal the money generated by his unlawful conduct, Coolley established a business, Midwest Audio Visions, to launder the proceeds of his drug distribution. Coolley invested some of the profits from the sale of controlled substances into his business in order to mask and conceal the funds, and to give the illusion that the money was from a legitimate source rather than drug-trafficking. Mixing drug-trafficking proceeds with legitimate funds allowed Coolley to inflate his business’s success, and allowed him to withdraw money and invest it in real estate and investment accounts. Gray’s role in the drug-trafficking conspiracy included ordering cocaine from larger distributors so he could redistribute the cocaine to others, weighing out cocaine and cutting it, packaging it, distributing it to others and collecting money from the sale of the cocaine. Coolley and Gray are among 18 defendants who have pleaded guilty in this case. Drug Trafficker Sentenced for Drug Distribution and Money Laundering Conspiracies On July 23, 2015, in Greenbelt, Maryland, Anthony Torrell Tatum, of Arlington, Virginia, was sentenced to 324 months in prison for conspiracy to distribute cocaine and heroin, possession of a gun in furtherance of a drug trafficking offense and money laundering conspiracy. Tatum was ordered to pay a $108 million money judgment, as well as a forfeiture order for personal property seized during the investigation, including $328,700 in assorted jewelry, over $1 million in cash or deposited in bank accounts and a luxury vehicle. According to court documents, from at least January 2011 through his arrest on Sept. 6, 2013, Tatum conspired with Ishmael Ford-Bey and others to distribute cocaine and heroin. In May 2013, Tatum rented a storage unit in Maryland using an alias. Between August 2013 and October 2013, search warrants were executed at several locations and uncovered large quantities of cocaine, heroin, drug paraphernalia, weapons, cash, jewelry and heat sealers. Latent fingerprints recovered from the heat sealers were identified as belonging to Tatum and Ford-Bey. At one location, law enforcement discovered a fake driver’s

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license bearing Tatum’s picture. Tatum was present at the location and arrested. In an effort to disguise and hide their drug proceeds, Tatum and others created numerous business entities, including 1001 Solutions, Beauty International Supply, Inc. and Going Green Towing, which had little, if any, legitimate business. They set up bank accounts in the names of each business and deposited their drug proceeds into those business accounts. Tatum used the drug proceeds to purchases several vehicles and expensive jewelry. North Carolina Man Sentenced For Narcotics Distribution and Money Laundering On July 15, 2015, in Wilmington, North Carolina, James Rodrequias Pressley, of Dunn, North Carolina, was sentenced to life in prison and five years of supervised release. Pressley was convicted by a federal jury on July 30, 2014 for conspiracy to distribute and possess with intent to distribute cocaine base (Crack) and five kilograms or more of cocaine and conspiracy to commit money laundering. According to court documents, from at least 1999 to 2012, Pressley was a drug trafficker responsible for possessing and distributing crack cocaine and cocaine. Between Dec. 12, 2011, and Feb. 1, 2012, investigative agents used a confidential informant to conduct several controlled purchases of crack cocaine from Pressley. The IRS determined that Pressley had no verifiable employment history during the time of the offense; however, between June 12, 2009, and Aug. 17, 2010, Pressley purchased several properties for a total of $10,500. Pressley subsequently made additions and/or renovations to the properties valued at $12,000. Pressley used these properties to sell and store cocaine and crack cocaine, and store proceeds from his drug-trafficking activities. During the drug conspiracy, Pressley ostensibly operated a legitimate music business, Blackbird Entertainment (BE), as well as a landscaping business in Dunn. Pressley used drug proceeds to pay for concerts and production costs in an attempt to promote BE. He also used $7,860 in drug proceeds to purchase equipment for his landscaping business. In order to conceal the source of illegal proceeds, between Jan. 5, 2009, and Nov. 22, 2011, Pressley made deposits totaling $29,805 to the bank account of his girlfriend, deposits totaling $20,060, to his landscaping account, and deposits totaling $15,000 to his bank account. Investigators also determined that between Sept. 5, 2009, and Feb. 28, 2011, Pressley used $26,912 in drug proceeds to purchase at least three vehicles. Pennsylvania Man Sentenced for Violating Federal Drug, Gun and Money Laundering Laws On July 7, 2015, in Pittsburgh, Pennsylvania, Omali P. McKay, a citizen of Trinidad who formerly resided in Lower Burrell and in Arnold, was sentenced to 180 months in prison, five years of supervised release and ordered to forfeit vehicles, a residence and $272,000 in cash. McKay was previously convicted of violating federal narcotics, firearms and money laundering laws. According to court documents, McKay conspired with others from 2006 to Aug. 25, 2012, to distribute five to 15 kilograms of cocaine and 280 to 840 grams of crack cocaine. Also, McKay admitted possessing with intent to distribute one kilogram of cocaine seized from his Lower Burrell residence on Aug. 25, 2012, while simultaneously possessing an assault rifle in furtherance of the drug crime. Finally, McKay admitted to conspiring with three others to launder his drug trafficking proceeds. He used those laundered funds to purchase the Lower Burrell residence for $243,000 in cash in August 2011.

New York Man Sentenced for Cross-Country Drug Distribution Conspiracy On July 2, 2015, in Newark, New Jersey, Robert Crawford, of Long Island City, New York, was sentenced to 120 months in prison and five years of supervised release for his role in a scheme to transport more than 20 kilograms of cocaine from California to New Jersey. Crawford previously pleaded guilty to conspiracy to possess with the intent to distribute five kilograms or more of cocaine. According to court documents, from January 2011 through March 2014, Crawford, Melvin Feliz, of Englewood Cliffs, and Irving Olivero-Pena, of Edgewater, conspired to purchase narcotics for distribution in New Jersey. On Oct. 22, 2012, they met a courier in Bergen County and gave the courier $549,950 in currency to transport to California via tractor trailer, where it would be used to purchase approximately 20 kilograms of cocaine. Afterwards, the courier would transport the cocaine to New Jersey for distribution. The currency was ultimately seized by law enforcement officers in California. Feliz and Olivero-Pena also pleaded guilty to their roles in the scheme and await sentencing. Head of the Gulf Cartel Sentenced for Drug Trafficking, Money Laundering On June 30, 2015, in Beaumont, Texas, Juan Francisco Saenz-Tamez, of Camargo, Tamaulipas, Mexico, was sentenced to 360 months in prison and ordered to pay a money judgment of $100 million. Saenz-Tamez pleaded guilty on Jan. 13, 2015 to distribution and possession with intent to distribute cocaine, conspiracy to distribute and possession with intent to distribute marijuana, and conspiracy to commit money laundering. According to information presented in court, a federal investigation into the large-scale trafficking of illegal drugs from Mexico into the Eastern District of Texas revealed that Saenz-Tamez was responsible for the shipment of one-half ton of cocaine and 90 tons of marijuana into the Eastern District of Texas and then to locations across the nation, including Florida, Ohio, Michigan, Mississippi, Louisiana, Washington D.C., Pennsylvania, Tennessee, Maryland and Georgia. As a result of this scheme, $100 million was laundered by Saenz-Tamez and his drug trafficking organization. Missouri Man Sentenced for K2 Distribution and Money Laundering On June 29, 2015, in Springfield, Missouri, Stephen Brian Reynolds, owner of Lucky’s Novelties in Lebanon, was sentenced to 72 months in prison and ordered to forfeit $1,167,990, as well as real estate, funds in bank accounts, and other assets and cash seized. Reynolds pleaded guilty on Aug. 15, 2014, to participating in a conspiracy to commit mail fraud and to one count of money laundering. His brother, Eric Scott Reynolds, was employed at Lucky’s Novelties and also pleaded guilty to the mail fraud conspiracy and to participating in a money-laundering conspiracy. According to court documents, from March 1, 2011 to Dec. 11, 2012, the Reynolds defrauded the FDA and the public by using mail deliveries in a conspiracy to distribute several products that were labeled as “incense” or “potpourri” and “not for human consumption,” when in reality these substances were synthetic marijuana intended for human consumption as a drug. Stephen Reynolds was also part-owner of a Springfield, Missouri, head shop known as Doobies, which he supplied with wholesale quantities of

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synthetic marijuana for distribution and from which he received 40 percent of the profits. Between Sept. 15, 2011, and July 25, 2012, Stephen and Eric Reynolds deposited $1,245,761 in proceeds from the distribution of K2 into bank accounts and a safety deposit box. Second Brother Sentenced for Oxycodone Trafficking Scheme On June 12, 2015, in Boston, Massachusetts, Stanley D. Gonsalves, of Sandwich, was sentenced to 300 months in prison, six years of supervised release and ordered to forfeit $3,552,203 and property. In October 2014, Stanley Gonsalves was convicted of oxycodone conspiracy, money laundering conspiracy, 17 counts of money laundering, and possession of a firearm in furtherance of a drug trafficking conspiracy. According to court documents, the charges stemmed from a three-year conspiracy involving hundreds of thousands of 30-milligram oxycodone pills, which Gonsalves and his brother and co-defendant, Joshua M. Gonsalves, distributed on Cape Cod, generating over $5 million in proceeds. Couriers working for the Gonsalves brothers transported multi-thousand-pill loads of 30-milligram oxycodone pills from South Florida to New England by plane and by car. The Gonsalves would then split the pills into 100-pill packs for sale to Cape Cod dealers. Joshua Gonsalves was also convicted at trial of oxycodone trafficking conspiracy, money laundering conspiracy, and a money laundering charge. In January 2015, Joshua Gonsalves was sentenced to 20 years in prison, five years of supervised release and ordered to forfeit $1,522,372. Pennsylvania Man Sentenced for Violating Narcotics and Money Laundering Laws On June 11, 2015, in Pittsburgh, Pennsylvania, Robert Russell Spence, aka “Little Russ” and “Slick,” was sentenced to 240 months in prison and five years of supervised release. Spence was previously convicted of violating federal narcotics and money laundering laws. According to court documents, Spence was the main recipient of more than 1500 kilograms of cocaine that was shipped by the US mail or various common carriers from California to Pittsburgh through a major drug distribution conspiracy. Spence rented a warehouse in a Pittsburgh suburb under a false name where he kept a significant stash of drug-processing items. Spence conspired to launder his drug money in multiple ways including obtaining vehicles, prepaid credit cards, hotel reservations, houses, flights, drug processing materials and businesses in the names of other people. The staggering amounts of money involved were proven by financial documents obtained by federal agents and acknowledged by cooperating witnesses. One witness, for example, testified to being sent to count one million dollars in drug cash for Spence and a separate witness testified to possessing $750,000 in drug cash for Spence on another date. Ohio Man Sentenced for Role in Large Marijuana Distribution Ring On June 10, 2015, in Columbus, Ohio, Kevin Whitely, of Columbus, was sentenced to 84 months in prison and ordered to forfeit $65,255. On Oct. 28, 2014, Whitley pleaded guilty to conspiracy to possess with the intent to distribute more than 1,000 kilograms of marijuana and money laundering. According to court documents, from December 2009, through September 2013, Whitely was involved with a large scale narcotics organization responsible for importing and distributing multiple kilograms of marijuana throughout central Ohio. The organization utilized various Ohio residences, business fronts, commercial freight, semi tractor-trailers and vehicles to store and transport narcotics and currency. Specifically, Whitely and others received approximately 2,400 kilograms of marijuana that was transported from suppliers in Houston, Texas, to various fraudulent businesses in Columbus, Ohio. During the course of the drug conspiracy, Whitely earned substantial income from the sale of narcotics. Whitely used his drug proceeds to purchase assets and fund bank accounts through the use of nominees. Specifically, in March 2012, Whitley used a nominee to purchase a 2012 Infiniti G37 for approximately $44,000. Whitely also used a credit card obtained in a nominee name as his personal credit card. Some of the transactions made by Whitely with this credit card included renting vehicles used to facilitate his drug trafficking activities. Drug Trafficker Sentenced for Cocaine and Money Laundering Conspiracy On June 10, 2015, in New Bern, North Carolina, Fabio Hirochi Inoue, of Anaheim, California, was sentenced to 51 months in prison and five years of supervised release. Inoue pleaded guilty on May 13, 2014, to conspiracy to distribute and possess five kilograms or more of cocaine and conspiracy to launder monetary instruments. According to court documents, between April 2013 and Sept. 22, 2013, Inoue flew to North Carolina and Florida to deliver cocaine and collect drug proceeds for a drug trafficking organization operating out of Mexico and California. Inoue made several trips during this time period to meet with traffickers in the Johnston County, North Carolina area. During these trips he delivered multiple kilograms of cocaine and collected approximately $185,745 in drug proceeds. Inoue laundered some of the drug proceeds by depositing portions into a bank account in the name of a real estate business located in California. Tennessee Doctor Sentenced for Tax Evasion and Illegally Dispensing Controlled Substances On June 1, 2015, in Chattanooga, Tennessee, Ihsaan Al-Amin, of Smyrna, Georgia, was sentenced to 100 months in prison and two years of supervised release. In November 2013, Al-Amin, a doctor, pleaded guilty to one count of illegally dispensing controlled substances and two counts of tax evasion. According to court documents, Al-Amin operated the O’Neil Pain Clinic in Chattanooga until 2010. Al-Amin illegally prescribed thousands of pills containing opiates and, during 2005 and 2006, significantly under-reported his taxable income on his tax returns. Creator and Operator of the “Silk Road" Website Sentenced On May 29, 2015, in Manhattan, New York, Ross Ulbricht, aka “Dread Pirate Roberts,” of San Francisco, California, was sentenced to life in prison and ordered to forfeit $183,961,921. On Feb. 5, 2015, Ulbricht was found guilty of distributing narcotics, distributing narcotics by means of the Internet, conspiring to distribute narcotics, engaging in a continuing criminal enterprise, conspiring to commit computer hacking, conspiring to traffic in false identity documents, and conspiring to commit money laundering. According to court documents, Ulbricht created Silk Road in January 2011, and owned and operated the underground website until it was shut down by law enforcement authorities in October 2013. Silk Road served as a sophisticated and extensive criminal marketplace on the Internet where unlawful goods and services, including illegal drugs of virtually all varieties, were bought and sold regularly by the site’s users. While in operation, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to more than 100,000 buyers, and to launder hundreds of millions

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of dollars deriving from these unlawful transactions. Ulbricht sought to anonymize transactions on Silk Road by operating Silk Road on a special network of computers on the Internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the networks’ users. Ulbricht also designed Silk Road to include a Bitcoinbased payment system that concealed the identities and locations of the users transmitting and receiving funds through the site. California Drug Trafficker Sentenced for Distributing Meth in New England On May 29, 2015, in Boston, Massachusetts, Adolfo Castilleja, formerly of Pomona, California, was sentenced to 216 months in prison, five years of supervised release, and ordered to pay a $10,000 fine. In March 2015, Castilleja pleaded guilty to conspiring to distribute methamphetamine, conspiring to launder money, and three counts of money laundering. According to court documents, from January 2010 through January 2012, Castilleja, who was based in California, supplied methamphetamine to a co-defendant based in Stoneham, Mass. Specifically, Castilleja obtained methamphetamine from a California-based supplier and worked with his son to package and ship the narcotics in overnight packages to addresses on the East Coast. Five packages containing more than 1.3 kilograms of nearly 100% pure methamphetamine that were shipped by Castilleja from California to the East Coast were seized by law enforcement officials. Overall, Castilleja and his organization were involved in the shipment of more than 100 packages from addresses near Pomona, California, to locations on the East Coast affiliated with coconspirators. In addition, Castilleja provided instructions for structured cash deposits of more than $900,000 in drug proceeds into California-based bank accounts that he controlled. Owner of Pain Clinics Sentenced for Conspiracy to Distribute Prescription Drugs On May 28, 2015, in London, Kentucky, Joel Shumrak, was sentenced to 168 months in prison and ordered to forfeit $7 million for conspiracy to distribute oxycodone and alprazolam and laundering money. According to court documents, Shumrak was the owner of two pain clinics located in Tucker, Georgia, and Broward, Florida. Beginning around June 2008, and continuing until June 2014, thousands of Kentuckians travelled to Shumrak’s pain clinics almost daily to unlawfully obtain prescription pills without a legitimate medical need. Shumrak’s clinics catered to out-of-state patients and these individuals received little to no physical examinations or other medical treatment before obtaining the drugs. Shumrak was aware that many of these Kentucky patients distributed the drugs upon their return to Kentucky. California Woman Sentenced in Drug Trafficking and Money Laundering Case On May 18, 2015, in Pocatello, Idaho, Reynalda Estrada-Gutierrez, of Bakersfield, California, was sentenced to 192 months in prison, five years of supervised release, ordered to forfeit $92,880 in cash proceeds and her residence which was acquired with drug proceeds, as well as turn over a firearm she possessed in connection with her crimes. Estrada-Gutierrez is also subject to deportation to Mexico once she has completed her prison term. According to court records, EstradaGutierrez distributed just over 900 grams of methamphetamine in the Burley, Idaho, area between April and November 2013. During the same time period, she arranged to be paid for the methamphetamine through cash deposits and wire transfers into various bank accounts. Three codefendants have been sentenced for their roles in the drug trafficking and money laundering activities. Angelina Nava was sentenced on Jan. 15, 2015, to 28 months in prison and three years of supervised release. Porfirio Gutierrez was sentenced on March 10, 2015, to 90 months in prison and four years of supervised release. Raquel Rios was sentenced on Nov. 18, 2014, to 27 months in prison. Washington Man Sentenced in Drug and Money Laundering Conspiracy On May 15, 2015, in Fairbanks, Alaska, Peter M. Thornton was sentenced to 104 months’ in prison, five years of supervised release, and ordered to forfeit $24,300 representing property involved in the drug trafficking and money laundering conspiracies. According to court documents, as early as 2008, Thornton was distributing heroin in Fairbanks to make money and support his own habit. By 2011, Thornton, operating from his residence in Bellingham, WA, conducted the conspiracy to transport and distribute heroin by means of couriers from Washington State to Fairbanks for distribution. Couriers would either fly the drugs carried on their person to Alaska, or Thornton would send drugs through the mail. Thornton purchased airline tickets for some of the conspirators to transport heroin to Alaska. Once in Alaska, the heroin would be redistributed by the co-conspirators. Thornton instructed couriers and/or redistributors in Alaska to deposit the proceeds of the heroin sales into bank accounts controlled by him at various bank branches in Alaska. From September 2010 through December 2013, approximately $300,000 in cash was deposited into accounts controlled by Thornton. Texas Man Sentenced for Distributing Drugs and Money Laundering On May 14, 2015, in El Paso, Texas, Juan Manuel Flores, the leader of an El Paso-based cocaine trafficking and money laundering organization, was sentenced to 180 months in prison, five years of supervised release and ordered to forfeit five real properties in El Paso County, Texas, which were proceeds of the drug conspiracy. On Feb. 3, 2015, Flores pleaded guilty to one count of conspiracy to possess with intent to deliver cocaine and one count of conspiracy to launder monetary instruments. According to court records, between 2005 and July 2013, Flores conspired to distribute over 700 kilograms of cocaine in the El Paso area and conspired to launder more than $7.9 Million in drug proceeds. Arizona Cocaine Trafficker Sentenced on Drug and Money Laundering Charges On May 11, 2015, in Phoenix, Arizona, Terance Taylor Prigge, was sentenced to 318 months in prison and 10 years of supervised release. Prigge was convicted by a federal jury on Feb. 12, 2015, of five felony charges that included conspiracy to possess with intent to distribute cocaine, conspiracy to commit money laundering, international money laundering, promotional money laundering, and possession with intent to distribute cocaine. The trial evidence showed that Prigge’s drug trafficking organization transported at least 122 kilograms of cocaine from Latin America, into the American southwest, and then to Chicago from at least early 2010 to September 2013. The organization used private charter flights to transport the drugs from Phoenix and Southern California to Chicago. In September 2013, Prigge was arrested after he exited one of those flights with a co-

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conspirator in DeKalb, Ill. with 22 kilograms of cocaine in their luggage. Prigge had extensive contacts with sources of drug supply in at least two Latin American countries. He was convicted of international money laundering for organizing the transfer of $100,000 to an individual in Guatemala in support of a drug deal. He was also convicted of taking other steps to launder money in support of his drug trafficking. Prigge was convicted previously for trafficking cocaine from Panama into the United States and served seven years in prison. Leader of Large Scale Marijuana Trafficking Organization Sentenced On April 28, 2015, in Phoenix, Arizona, Luis Armando Cruz-Galvan was sentenced to 121 months in prison and 5 years of supervised release. Cruz-Galvan pleaded guilty on Feb. 12, 2015 to one count of conspiracy to possess with intent to distribute marijuana and conspiracy to launder monetary instruments. According to court documents, since Oct. 12, 2012, Cruz-Galvan was identified as the Phoenix-based transportation cell working for the Sinaloa Cartel responsible for coordinating importation of multi-thousand pounds of marijuana from Mexico (primarily through the Agua Prieta corridor) into New Mexico and Arizona and the smuggling of bulk drug proceeds back into Mexico. The Cruz-Galvan drug trafficking organization used multiple load drivers and backpackers to facilitate drug transportation operations in the remote desert area near San Simon and Willcox, Arizona for further delivery to Tucson and Phoenix. Since December 2012, multiple drug seizures totaling over 27,000 pounds of marijuana have been linked to the Cruz-Galvan drug trafficking organization. California Man Sentenced on Narcotics and Money Laundering Charges On April 24, 2015, in San Diego, California, Benjamin Farias Hodges was sentenced to 110 months in prison and five years of supervised release. Hodges pleaded guilty on Feb. 13, 2015 to one count of knowingly and intentionally conspiring to distribute methamphetamine and one count of knowingly and intentionally conspiring to launder monetary instruments. According to the plea agreement, around September 2011 up to on or about March 7, 2012, Hodges and others obtained more than 1.5 kilograms of methamphetamine which was delivered or mailed to others for further distribution. From on or about November 2011 to March 2012, Hodges and others made financial transactions by wire and other means with the proceeds from the sale of the drugs in order to continue the drug trafficking activity. Hodges also had money transferred to another person in an effort to conceal his identity as the recipient of the funds in order to promote illegal activity. Georgia Man Sentenced for Narcotics-Related Money Laundering On April 15, 2015, in Atlanta, Georgia, Mark Tomlinson was sentenced to 192 months in prison and five years of supervised release for his role in a drug trafficking organization. Tomlinson was convicted by jury trial in October 2014, of conspiring to traffic methylenedioxy-methamphetamine (MDMA); benzylpiperazine (BZP), a drug similar to ecstasy; and marijuana. According to court documents, beginning in February 2010, law enforcement officers started investigating a major drug trafficking organization operating in the Atlanta-metropolitan area and in other areas across the country that was led by Mark Tomlinson and other co-conspirators. Tomlinson distributed thousands of pills of MDMA and BZP while simultaneously running a nightclub in DeKalb County. In addition, in April 2010, Tomlinson brokered a major marijuana deal, which resulted in the seizure of over $100,000. After law enforcement seized the drug money, Tomlinson and others devised a scheme to make it appear that the money was actually to pay musicians for his nightclub. On Dec. 15, 2010, law enforcement officers searched Tomlinson’s home, where they recovered weapons and a drug ledger. Connecticut Man Sentenced for Trafficking Marijuana, Laundering Drug Proceeds On April 10, 2015, in Bridgeport, Connecticut, Sompatana Chanminaraj, aka “Johnny,” of East Hartford, was sentenced to 24 months in prison and three years of supervised release. On Jan. 16, 2015, Chanminaraj pleaded guilty to one count of conspiracy to engage in money laundering, and one count of conspiracy to manufacture, distribute and possess with intent to distribute marijuana. According to court documents, since at least 2009, associates of Chanminaraj were purchasing large quantities of marijuana from sources in Oregon and California and, by the end of 2010, members of the drug trafficking organization were growing marijuana at multiple properties they owned or rented in the area of Fresno, California. The organization routinely shipped east, primarily to Connecticut, parcels containing multiple kilograms of marijuana. At times in 2010 and 2011, Chanminaraj resided in California where he assisted in the purchasing, manufacturing, packaging and shipping of marijuana. Chanminaraj regularly returned to Connecticut where he received shipments of marijuana at his residence. While in Connecticut, Chanminaraj made at least four wire transfers of $9,000 each to associates in California and Oregon, and made at least 14 cash deposits totaling $320,540 into a bank account used by the organization. He also flew to California and Oregon with marijuana proceeds, and used marijuana proceeds to purchase and redeem gaming chips at casinos in Connecticut. Florida Resident Sentenced for Narcotics Distribution and Money Laundering On March 25, 2015, in Ocala, Florida, James Bryan Swoll, of Ocala, was sentenced to 120 months in prison and five years of supervised release. In addition, Swoll will forfeit his residence and a vehicle. Swoll pleaded guilty on Nov. 25, 2014 to charges of narcotics distribution and money laundering. According to court documents and evidence presented at the sentencing hearing, Swoll had a long-time source for large quantities of cocaine in South Texas and Matamoros, Mexico. For more than seven years, he obtained cocaine from Rolando Pinon and then redistributed the multikilogram amounts to other large-scale drug traffickers in the Ocala area. Pinon employed a series of drivers, including Jose Manuel Tovar, to drive the cocaine from south Texas to Ocala. Swoll received profits of approximately $5,000 per kilogram of cocaine sold. Swoll also distributed six kilograms of cocaine, via a broker, to another large-scale cocaine dealer in the Ocala area and received $211,500 in cash. Swoll laundered his drug proceeds to purchase a home in the Ocala area. The closing documents revealed that one of Swoll’s associates appeared at the closing and titled the home in his name. Swoll provided the cash for the closing. Pinon pleaded guilty for his role in this case and was sentenced to 222 months in prison. He was also ordered to forfeit more than $1.2 million in cash and property. Tovar also pleaded guilty and was sentenced to 72 months in prison.

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Texas Marijuana Traffickers Sentenced for Drug Conspiracy and Money Laundering On March 23, 2015, in McAllen, Texas, Alberto Alaniz and Jose Ramon Romo, both of McAllen, were sentenced to 262 months in prison and 120 months in prison, respectively. In addition, Alaniz will serve 10 years of supervised release, while Romo will serve five years of supervised release. On May 29, 2014, both men pleaded guilty to conspiring to possess, with the intent to distribute, marijuana and conspiring to launder the drug proceeds. According to court documents, an investigation revealed that from 2008 through 2013, Alaniz and Romo conspired to transport large amounts of marijuana from the Rio Grande Valley to various destinations via tractor-trailers. During the investigation, law enforcement seized several loads of marijuana, along with hundreds of thousands of dollars in currency from both defendants. Maine Man Sentenced for Drug Trafficking and Money Laundering On March 18, 2015, in Portland, Maine, David Jones, of Portland, was sentenced to 110 months in prison and three years of supervised release for distributing marijuana and money laundering. According to court documents, from August 2011 through October 2013, Jones obtained hundreds of pounds of marijuana from an out-of-state source and distributed it in Maine. In October 2013, agents seized $291,981 from a storage unit Jones rented, $92,104 from an associate’s apartment and $6,278 from Jones’ residence. Agents also seized two boats, a truck, several motorcycles, two trailers, numerous pieces of electronic recording equipment and jewelry. All the seized cash and items were forfeited. Jones also laundered $216,500 of his drug proceeds through other financial transactions. Doctor and Clinic Owner Sentenced for Drug Trafficking and Money Laundering Conspiracies On March 18, 2015, in New Orleans, Louisiana, Joseph J. Mogan III, M.D., formerly of New Orleans, and Tiffany Miller, of Metairie, Louisiana, were each sentenced to 97 months in prison and three years of supervised release. In addition, forfeiture was ordered on the criminal proceeds and property. Morgan and Miller were sentenced on charges of conspiring to dispense prescription drugs illegally through “pill mill” clinics operated as Omni Pain Management in Metairie, Louisiana, and Omni Pain Management Plus in Slidell, Louisiana, and related money laundering charges. According to court documents, Mogan and Miller owned and operated the two clinics and conspired to prescribe narcotics and other controlled substances without a legitimate medical purpose and outside the bounds of professional medical practice to drug seekers and drug abusers. To both promote the activities of the “pill mill” clinics and to disguise the nature of the proceeds, as wells as control the proceeds, Mogan used money orders to make investments and purchase other assets, while Miller used an attorney trust account and irrevocable trust to transfer funds and to protect real property and bank accounts from forfeiture and seizure. Two Men Sentenced for Roles in Cross-Country Marijuana Distribution Ring On March 9, 2015, in Phoenix, Arizona, two defendants were sentenced for their roles in a crosscountry marijuana distribution ring. Darius Blackwell, of Mesa, Ariz., was sentenced to 110 months in prison and Grady Blackwell, of Lithonia, Ga., was sentenced to 60 months in prison. Both defendants previously pleaded guilty to conspiracy to possess marijuana with intent to distribute and conspiracy to commit money laundering. According to their plea agreements, the Blackwells participated in a conspiracy to distribute marijuana using the United States Postal Service. Their organization purchased marijuana in Arizona, mailed it throughout the United States, primarily to Georgia, and then arranged for the proceeds to be sent back to Arizona. Shipping records and seizures show that at least 50 kilograms of marijuana were mailed in this fashion. In addition, seven bank accounts were opened in March 2012 for the purpose of receiving and transferring the proceeds of the scheme. Nearly $410,000 was deposited into these accounts and over $395,000 was withdrawn. Texas Cocaine Trafficker Sentenced for Conspiracy and Money Laundering On Feb. 20, 2015, in Ocala, Florida, Rolando Pinon, of San Benito, Texas, was sentenced to 222 months in prison for conspiracy to distribute five kilograms or more of cocaine. Pinon was also ordered to forfeit more than $1.2 million dollars in property and cash, which were determined to be traceable proceeds of the offense. Pinon pleaded guilty on Nov. 25, 2014. According to court documents, since 2007, Pinon used various modes of transportation to move drugs from Texas to Ocala, and employed a series of drivers, including Jose Manuel Tovar. On Aug. 29, 2014, the Ocala Police Department conducted a traffic stop of a truck Tovar was driving on his way from Texas. During the stop and ensuing search of the vehicle, officers located a cooler that, once disassembled, was found to contain cocaine. Agents subsequently arrested Pinon in Texas. Tovar was sentenced to 72 months in federal prison on Jan. 22, 2015. During the course of the conspiracy, Pinon laundered drug money by amassing rental properties in Texas, placing the properties in various nominee names, and renting them for profit. He also purchased a parcel of property and opened a vehicle sales business known as Elik Motors. Elik Motors bought cars at auction and resold them. As part of the plea agreement, Pinon forfeited the rental properties, Elik Motors, and cash. Ohio Man Sentenced for Cocaine Trafficking, Money Laundering and Firearms Possession On Feb. 20, 2015, in Cleveland, Ohio, Troy Williams, of Willoughby Hills, was sentenced to 198 months in prison. Williams previously pleaded guilty to conspiracy to possess with intent to distribute cocaine, possession with intent to distribute heroin, being a felon in possession of a firearm and three counts of money laundering. According to court documents, Williams was one of 12 people indicted for their roles in the conspiracy, which lasted between 2010 and 2013. All 12 have been found guilty. Williams supplied others with multi-kilogram shipments of cocaine. All the men charged then arranged for or assisted in the redistribution of the cocaine. Williams laundered approximately $72,730 in drug proceeds at the Horseshoe Cleveland Casino in July and November 2012. He did this by using cash from drug proceeds to purchase casino chips. Williams will forfeit 10 watches, $1,760 in cash as well as a pistol, ammunition and two loaded magazines. Vermont Man Sentenced in Cross-Border Marijuana Trafficking Conspiracy On Feb. 19, 2015, in Burlington, Vermont, Jeffrey Donna, of Richford, was sentenced to 32 months in prison and ordered to forfeit properties, vehicles, guns and $135,000 in drug money. In August 2014, Donna was convicted of conspiracy to distribute marijuana. According to court documents, Donna, and his co-conspirator, Roy “Opie” McAllister II, of Montgomery, were kingpins in a

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marijuana trafficking business that began in the mid-2000s and continued until the two were arrested on May 29, 2013. The two defendants were responsible for bringing bulk quantities of marijuana across the Canadian border into northern Vermont. Donna and McAllister moved between 1,000 and 3,000 kilograms of marijuana as part of the conspiracy. McAllister has been convicted of conspiracy to distribute marijuana and filing false tax returns in 2010 and 2011. McAllister’s sentencing has been scheduled. As part of the marijuana trafficking conspiracy, the two defendants were assisted by Jesse Soule, also of Montgomery, Vermont. Soule was sentenced to 13 months in prison for his role in the marijuana trafficking conspiracy. Eight other individuals have also been convicted of federal crimes arising out of this drug trafficking conspiracy. California Man Sentenced on Drug and Money Laundering Charges On Feb. 11, 2015, in Columbus, Ohio, Samuel A. Flek, of Orangevale, Calif. was sentenced to 36 months in prison, three years of supervised release and ordered to forfeit $339,045 in currency. Flek pleaded guilty on Nov. 5, 2014, to one count of conspiracy to possess with the intent to distribute more than 100 kilograms of marijuana and one count of conspiracy to commit money laundering. According to court documents, beginning in April 2012, Flek was paid by a drug organization to make regular trips to Columbus, Ohio for the purpose of transporting narcotics proceeds from Ohio to California on behalf of co-conspirators. Flek often stored the money in his luggage and also began shipping the cash in FedEx boxes under an alias. Flek used a fraudulent Ohio driver’s license to rent a storage unit in Hilliard, Ohio to count, package, and prepare the drug proceeds for shipping. Flek transported and/or shipped more than $1.5 million in drug trafficking proceeds. Arizona Man Sentenced on Drug and Money Laundering Charges On Feb. 10, 2015, in Phoenix, Arizona, Carlos Antonio Garcia-Hurtado was sentenced to 168 months in prison and five years of supervised release. Garcia-Hurtado pleaded guilty on Oct. 6, 2014 to conspiracy to possess with intent to distribute marijuana and conspiracy to launder monetary instruments. According to the plea agreement, around June 2010 to on or about Dec. 10, 2013, Garcia-Hurtado was in agreement with others to receive and distribute marijuana from Mexico. The marijuana was brought from Mexico through the desert into Arizona by backpackers and then Garcia-Hurtado coordinated the distribution of bulk quantities of marijuana within the United States and the return of the drug proceeds to Mexico. Garcia-Hurtado also admitted to paying for a property, which is titled in his wife’s name, with the proceeds from the drug trafficking and money laundering conspiracies. Texas Men Sentenced in Drug Distribution Conspiracy On Feb. 9, 2015, in Wichita Falls, Texas, Rodolfo Trevino, of Wichita Falls, was sentenced to 97 months in prison. In June 2014, Trevino pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine base and one count of money laundering. Trevino was also ordered to forfeit a residence, two vehicles, a firearm and assorted ammunition. In mid-December 2014, codefendant Rene Villastrigo, Jr., also of Wichita Falls, was sentenced to 30 months in prison. He pleaded guilty to one count of conspiracy to possess with the intent to distribute cocaine. According to court documents, beginning in 2012 and continuing to April 18, 2014, Trevino and Villastrigo conspired with others to possess with the intent to distribute cocaine and cocaine base. Trevino traveled frequently to McAllen, where he recruited another individual to transport drugs from McAllen to Wichita Falls. Trevino also recruited Villastrigo to rent a residence in Wichita Falls to store and repackage the drugs for distribution. Trevino deposited the drug proceeds he acquired into bank accounts in Wichita Falls and withdrew those deposits in the McAllen area, intending for these financial transactions to conceal his drug trafficking activity. South Carolina Man Sentenced for Money Laundering, Drug Trafficking On Feb. 5, 2015, in Charleston, South Carolina, Hadden Andre Smith was sentenced to 144 months in prison, four years of supervised release and ordered to forfeit over $248,000 that authorities seized from his residence. Smith pleaded guilty on July 31, 2012 to conspiracy to possess with intent to distribute cocaine and marijuana, possession of firearms in furtherance of a drug trafficking crime, and conspiracy to launder money. According to court documents, upon executing a search warrant at Smith's residence, law enforcement officers found approximately $248,000 cash, 1.8 kilograms of marijuana, two firearms and drug packaging paraphernalia. Further investigation revealed that Smith used the drug proceeds to purchase several vehicles and had the vehicle titles put in the name of third parties to disguise the true ownership of the property. First of Two Massachusetts Brothers Sentenced for Oxycodone Trafficking Scheme On Jan. 22, 2015, in Boston Massachusetts, Joshua M. Gonsalves, of Dennisport, was sentenced to 240 months in prison, five years of supervised release and ordered to forfeit $1,522,372 and property. In October 2014, Gonsalves was convicted of oxycodone conspiracy, money laundering conspiracy and money laundering. According to court documents, Gonsalves and his brother, Stanley D. Gonsalves participated in a three-year conspiracy involving the distribution of hundreds of thousands of 30-milligram oxycodone pills generating over $5 million in proceeds. The conspiracy’s couriers transported multi-thousand-pill loads of 30-milligram oxycodone pills from South Florida up to New England, first by plane and later by car. The primary object of the related money laundering conspiracy was to use the millions of dollars in drug proceeds to purchase additional oxycodone pills and to pay the ongoing expenses of the oxycodone conspiracy. Stanley D. Gonsalves, of Sandwich, was convicted of oxycodone trafficking conspiracy, money laundering conspiracy and 17 substantive money laundering charges. Stanley Gonsalves’ sentencing has been scheduled. Pennsylvania Man Sentenced for Drug Distribution and Conspiracy to Commit Money Laundering On Jan. 20, 2015, in Harrisburg, Pennsylvania, Ronald Belciano, of Newtown Square, was sentenced to 63 months in prison and four years supervised release. In February 2014, Belciano pleaded guilty to conspiracy to distribute 100 kilograms of marijuana in and through central Pennsylvania and conspiracy to commit money laundering between December 2007 and November 2011. According to court documents, in 2011 Belciano rented a vehicle and paid a co-conspirator to drive the vehicle, containing $1,184,340 in U.S. currency, from Pennsylvania to California to pay for marijuana, some of which was grown on Belciano’s 190 acre property in Northern California. Agents obtained a search warrant for one of Belciano’s homes; during the search, agents located

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$2,582,920 in U.S. currency and 1.5 kilograms of marijuana. Law enforcement agents later located 68 kilograms of marijuana, $316,800 in U.S. currency and 59 paintings valued at over $600,000 in a storage locker and at a co-conspirator’s farm which was used to warehouse and distribute the marijuana transported from California to Pennsylvania. The assets seized and forfeited in this case included a residence, a 190-acre property in Laytonville, California, artwork appraised at over $619,000 and $4,084,060 in U.S. currency. Louisiana Attorney Sentenced for Drug Conspiracy and Money Laundering On Jan. 15, 2015, in Lafayette, Louisiana, Daniel James Stanford, an attorney, was sentenced to 121 months in prison and six years of supervised release. Stanford was convicted by a jury on Aug. 29, 2014 for conspiracy to distribute or possess with intent to distribute a controlled substance analogue, conspiracy to introduce or cause to be introduced misbranded drugs into interstate commerce, conspiracy to launder money and money laundering. Other defendants in this case were sentenced to terms ranging from 117 months to 42 months in prison. In addition, Curious Goods LLC was ordered to pay a $40,000 fine and ordered to forfeit $859,989 in illegal proceeds derived from the scheme, as well as two cars and a speed boat. According to court documents, Curious Goods LLC was a business based in Lafayette that marketed smoking and other products in stores throughout Acadiana. The stores sold a product called “Mr. Miyagi” that was infused with synthetic cannabinoids. Although mislabeled as a potpourri, “Mr. Miyagi” was sold to be smoked for the sole purpose of getting the consumer “high.” The synthetic cannabinoids infused into “Mr. Miyagi” are considered Schedule I controlled dangerous substances under federal law. From March 1, 2011 to Dec. 31, 2011, Curious Goods stores made approximately $5 million from the sale of “Mr. Miyagi.” Stanford was actively involved with the Curious Goods enterprise. Stanford knew the product was being consumed by humans. The intentional mislabeling and misbranding, spearheaded by Stanford, were part of a legal strategy to avoid law enforcement detection and to avoid civil and criminal liability. Florida Man Sentenced for Oxycodone Distribution and identity Theft On Jan. 9, 2015, in Boston, Massachusetts, Jose Perez, of Miami, Florida, was sentenced to 46 months in prison and three years of supervised release. In April 2014, Perez pleaded guilty to conspiracy to possess with intent to distribute and to distribute oxycodone, distribution of oxycodone, and identity theft. According to court documents, from at least 2011 through January 2013, Perez sold large quantities of oxycodone pills to co-conspirators in Massachusetts and Rhode Island who distributed the oxycodone pills in Massachusetts. Beginning in November 2011, Perez initiated an identity theft and tax refund scheme where he sold hundreds of legitimate names, dates of birth, and social security numbers of Puerto Rican residents to an undercover federal agent, intending that the identities be used to fraudulently obtain tax refunds. Ohio Man Sentenced for Role in Cocaine Distribution Ring On Dec. 11, 2014, in Columbus, Ohio, Stephen A. Cagle was sentenced to 36 months in prison and ordered to forfeit $142,020 in cash and $14,800 in lieu of vehicles seized on his property, as well as at least 13 firearms. Cagle pleaded guilty on May 21, 2014 to conspiracy to distribute a controlled substance and money laundering. According to court documents, on about January 2010 through September 2011, Cagle and others were part of a large scale narcotics organization involved in importing, manufacturing and distributing cocaine. Specifically, Cagle was responsible for distributing multiple kilograms of cocaine. Cagle was also involved in operating an unlicensed money transmitting business, often transporting several hundreds of thousands of dollars from Ohio to Texas. While executing a search warrant at Cagle’s residence in September 2011, investigators discovered more than 5 kilograms of cocaine, several firearms, more than $142,000 in cash and several vehicles. South Dakota Woman Sentenced in Drug and Money Laundering Conspiracies On Dec. 8, 2014, Sioux Falls, South Dakota, Faith Ashely Rasmussen was sentenced to 80 months in prison and four years of supervised release. Rasmussen pleaded guilty on Sept. 2, 2014, to conspiracy to distribute marijuana and conspiracy to commit money laundering. According to court documents, from approximately January 2012 to December 2013, Rasmussen received marijuana through the mail in South Dakota from her source of supply in California. When the amounts of marijuana became too large to mail, Rasmussen had co-conspirators drive to California and back to South Dakota with large quantities of marijuana. In addition, Rasmussen deposited the proceeds of marijuana sales into her bank account in South Dakota. She also deposited drug sales proceeds into the account of her source of supply, and instructed a co-conspirator to deposit marijuana proceeds into her account. She never deposited more than $10,000 in cash per occasion to intentionally avoid bank reporting requirements. International Drug Dealer Sentenced to Prison On Nov. 19, 2014, in Raleigh, North Carolina, Andrew Wayne Landells, of Jamaica, was sentenced to 180 months in prison, three years of supervised release and ordered to pay a money judgment of $1,000,000 and forfeit his interest in several properties located in New Jersey and Florida. Landells previously pleaded guilty to conspiracy to launder monetary instruments. According to court documents, Landells directed the activities of his estranged wife, and at least seven co-conspirators to assist him in the trafficking marijuana from Mexico throughout, New York, Florida, Virginia, Arizona, and North Carolina. Landells then used the drug proceeds to purchase luxury vehicles and residences, and to rent residences in others’ names. In order to disguise the source of the proceeds from his illegal activities, Landells also operated sham companies purporting to be in the candle manufacturing business. Landells distributed up to 1,000 kilograms of marijuana and laundered money from drug proceeds through the straw purchase of at least seven pieces of real property, thirteen motor vehicles, and four businesses, all with a combined value of over $1,000,000. Missouri Man Sentenced on Conspiracy Charges On Nov. 17, 2014, in Springfield, Missouri, Travis E. Butchee was sentenced to 84 months in prison and ordered to forfeit to the government $1,354,034. On Oct. 15, 2013, Butchee pleaded guilty to conspiracy to commit mail fraud and to conspiracy to commit money laundering for his role to distribute more than $1.3 million of synthetic marijuana, commonly referred to as K2. According to court documents, between March 1, 2011, and June 24, 2013, Butchee conspired with others to

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defraud the Food and Drug Administration and to defraud the public by falsely representing that a number of synthetic cannabinoid products were “incense” or “potpourri” and “not for human consumption.” In reality, these substances contained compounds that were intended for human consumption as a drug. In addition, Butchee and his co-defendant Michael J. Saguto admitted that they conducted financial transactions that involved the proceeds of the unlawful mail fraud conspiracy. They conspired to wire funds to the People’s Republic of China in order to carry out the conspiracy. Michael J. Saguto was previously sentenced to 84 months in prison. Illinois Man Sentenced on Drug and Money Laundering Offenses On Nov. 13, 2014, in East St. Louis, Illinois, Demarcus L. Freeman, of East Alton, was sentenced to 151 months in prison and ordered to forfeit $10,000. On Aug. 7, 2014, Freeman pleaded guilty to distribution of cocaine base (“crack cocaine”), possession with intent to distribute cocaine base and money laundering. According to court documents, Freeman sold crack cocaine in Wood River, Illinois, on May 13, 2013 and again on June 4, 2013. On July 8, 2013, Police seized nine ounces of crack cocaine from Freeman which he admitted owning. Freeman also opened a credit union account in the name of a relative. Freeman laundered the proceeds of his drug dealing through the account, in an attempt to disguise the source of the money. Freeman laundered over $60,000. Leaders of Large-Scale Drug Ring Sentenced to Life in Prison On Oct. 17, 2014, in Detroit, Michigan, Carlos Ellis Powell, of Washington Township, and Eric Jerome Powell, of Franklin Farms, were sentenced to life in prison. Carlos and Eric Powell were convicted of violating various federal drug laws in a massive drug ring. According to court documents, the Powells and eleven others operated a drug organization that dealt in multi-kilogram quantities of marijuana, heroin and cocaine in the Detroit metropolitan area. The members of the organization would arrange for large amounts of money derived from the sale of drugs to be transported to Phoenix, Arizona, Mexico and elsewhere for the purpose of purchasing more drugs. As part of the conspiracy, the members of the organization would use semi-trucks and vehicles equipped with traps and hidden compartments to transport marijuana, cocaine and heroin, as well as cash generated from the sale of these drugs. The drug ring, which was one of the largest in metroDetroit history, also laundered in excess of $21 million in U.S. currency. The members of the organization would deposit large amounts of cash from the sale of drugs into various bank accounts; purchase cashier's checks and money orders; and wire transfer these funds. These funds would then be used to purchase assets and pay personal expenses. Nevada Drug Dealer Sentenced on Federal Charges On Oct. 6, 2014, in Las Vegas, Nevada, Saul Candelorio Gastellum-Sanchez, a local drug dealer, was sentenced to 180 months in prison and five years of supervised release. Gastellum-Sanchez, aka Cervancio Perez-Zazueta, aka Bartolo Castillo, pleaded guilty in May 2014 to one count of conspiracy to distribute methamphetamine, one count of possession of methamphetamine with the intent to distribute, one count of possession of a firearm during and in relation to a drug trafficking crime, unlawful re-entry of a deported alien, and conspiracy to launder monetary instruments. According to his plea agreement, from about June 1, 2012 to June 20, 2013, Gastellum-Sanchez conspired with six co-defendants to distribute 464 grams of methamphetamine to an undercover officer. On May 20, 2013, Gastellum-Sanchez purchased an ATV for $11,000 in cash, which were proceeds from the sale of methamphetamine. On June19, 2013, a federal search warrant was executed at Gastellum-Sanchez’ residence in Las Vegas, and law enforcement agents recovered over two kilograms of methamphetamine and several firearms. At the time of the crime, GastellumSanchez was residing unlawfully in the United States and had been previously deported in January 2008. Fiscal Year 2014 - Narcotics-Related Investigations Fiscal Year 2013 - Narcotics-Related Investigations

Table of Contents - Narcotics-Related Investigations Criminal Enforcement Home Page Page Last Reviewed or Updated: 19-Aug-2015

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Department of the Treasury Financial Crimes Enforcement Network Advisory FIN-2011-A003 Issued: February 22, 2011 Subject: Advisory to Financial Institutions on Filing Suspicious Activity Reports Regarding Elder Financial Exploitation The Financial Crimes Enforcement Network (FinCEN) is issuing this advisory to assist the financial industry in reporting instances of financial exploitation of the elderly, a form of elder abuse. 1 Financial institutions can play a key role in addressing elder financial exploitation due to the nature of the client relationship. Often, financial institutions are quick to suspect elder financial exploitation based on bank personnel familiarity with their elderly customers. The valuable role financial institutions can play in alerting appropriate authorities to suspected elder financial exploitation has received increased attention at the state level; this focus is consistent with an upward trend at the federal level in Suspicious Activity Reports (SARs) describing instances of suspected elder financial exploitation. 2 Analysis of SARs reporting elder financial exploitation can provide critical information about specific frauds and potential trends, and can highlight abuses perpetrated against the elderly. This advisory contains examples of “red flags” based on activity identified by various state and federal agencies and provides a common narrative term that will assist law enforcement in better identifying suspected cases of financial exploitation of the elderly reported in SARs. Older Americans hold a high concentration of wealth as compared to the general population. In the instances where elderly individuals experience declining cognitive or physical abilities, they may find themselves more reliant on specific individuals for their physical well-being, financial management, and social interaction. While anyone can be a victim of a financial crime such as identity theft, embezzlement, and fraudulent schemes, certain elderly individuals may be particularly vulnerable. Potential Indicators of Elder Financial Exploitation The following red flags could indicate the existence of elder financial exploitation. This list of red flags identifies only possible signs of illicit activity. Financial institutions 1

Abuse and exploitation of the elderly is statutorily defined at the state level. The National Center on Elder Abuse offers the following definition of exploitation as a type of elder abuse: “the illegal taking, misuse, or concealment of funds, property, or assets of a vulnerable elder.” 2 Bank Secrecy Act data reflects increasing use of terms related to elder financial exploitation/abuse in SAR narratives.

1

should evaluate indicators of potential financial exploitation in combination with other red flags and expected transaction activity being conducted by or on behalf of the elder. Additional investigation and analysis may be necessary to determine if the activity is suspicious. Financial institutions may become aware of persons or entities perpetrating illicit activity against the elderly through monitoring transaction activity that is not consistent with expected behavior. In addition, financial institutions may become aware of such scams through their direct interactions with elderly customers who are being financially exploited. In many cases, branch personnel familiarity with specific victim customers may lead to identification of anomalous activity that could alert bank personnel to initiate a review of the customer activity. •



Erratic or unusual banking transactions, or changes in banking patterns: o

Frequent large withdrawals, including daily maximum currency withdrawals from an ATM;

o

Sudden Non-Sufficient Fund activity;

o

Uncharacteristic nonpayment for services, which may indicate a loss of funds or access to funds;

o

Debit transactions that are inconsistent for the elder;

o

Uncharacteristic attempts to wire large sums of money;

o

Closing of CDs or accounts without regard to penalties.

Interactions with customers or caregivers: o

A caregiver or other individual shows excessive interest in the elder’s finances or assets, does not allow the elder to speak for himself, or is reluctant to leave the elder’s side during conversations;

o

The elder shows an unusual degree of fear or submissiveness toward a caregiver, or expresses a fear of eviction or nursing home placement if money is not given to a caretaker;

o

The financial institution is unable to speak directly with the elder, despite repeated attempts to contact him or her;

o

A new caretaker, relative, or friend suddenly begins conducting financial transactions on behalf of the elder without proper documentation;

o

The customer moves away from existing relationships and toward new associations with other “friends” or strangers;

o

The elderly individual’s financial management changes suddenly, such as through a change of power of attorney to a different family member or a new individual;

2

o

The elderly customer lacks knowledge about his or her financial status, or shows a sudden reluctance to discuss financial matters.

Suspicious Activity Reporting SARs continue to be a valuable avenue for financial institutions to report elder financial exploitation. Consistent with the standard for reporting suspicious activity as provided for in 31 CFR Part 103 (future 31 CFR Chapter X), if a financial institution knows, suspects, or has reason to suspect that a transaction has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage, and the financial institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction, the financial institution should then file a Suspicious Activity Report. 3 In order to assist law enforcement in its effort to target instances of financial exploitation of the elderly, FinCEN requests that financial institutions select the appropriate characterization of suspicious activity in the Suspicious Activity Information section of the SAR form and include the term “elder financial exploitation” in the narrative portion of all relevant SARs filed. The narrative should also include an explanation of why the institution knows, suspects, or has reason to suspect that the activity is suspicious. It is important to note that the potential victim of elder financial exploitation should not be reported as the subject of the SAR. Rather, all available information on the victim should be included in the narrative portion of the SAR. Elder abuse, including financial exploitation, is generally reported and investigated at the local level, with Adult Protective Services, District Attorney’s offices, sheriff’s offices, and police departments taking key roles. We emphasize that filers should continue to report all forms of elder abuse according to institutional policies and the requirements of state and local laws and regulations, where applicable. Financial institutions may wish to consider how their AML programs can complement their policies on reporting elder financial exploitation at the local and state level. Financial institutions with questions or comments regarding this Advisory should contact FinCEN's Regulatory Helpline at 800-949-2732.

3

Financial institutions shall file with FinCEN to the extent and in the manner required a report of any suspicious transaction relevant to a possible violation of law or regulation. A financial institution may also file with FinCEN a Suspicious Activity Report with respect to any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by FinCEN regulations. See, e.g., 31 CFR § 103.18(a) (future 31 CFR § 1020.320(a)).

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Examples of Money Laundering Investigations - Fiscal Year 2013 The following examples of money laundering investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted. Dallas Lawyer Sentenced for Money Laundering On September 26, 2013, in Dallas, Texas, Patrick Robert Simon was sentenced to 24 months in prison. Simon pleaded guilty in January 2013 to money laundering charges. According to court documents, during Fall 2009, Simon met with an individual to discuss putting aside proceeds from the individual’s drug trafficking activities for his family’s use while he was in prison for drug trafficking. After numerous meetings, on March 16, 2010, the individual met with Simon at Simon’s law office to transfer the cash. Simon stated his scheme was that the individual was going to hire Simon’s firm to handle the appeal of his drug trafficking conviction. Simon stated that he would then use his attorney trust fund to write a check every month to the individual’s designee. Simon explained that because it was a legal transaction, he would not have to report it. It was agreed that the checks would be written for $7,500, unless a different amount was specified later. The individual gave $110,000 in cash to Simon. Simon accepted the cash and during the time Simon was counting the cash, the three repeatedly discussed the individual’s participation in the drug trade and that the money being counted was from his drug trafficking activities. Simon also instructed the individual on a code to use in all future communications to discuss the scheme. Texas Man Sentenced for Role in ‘Black Market Peso Exchange’ Scheme On September 11, 2013, in Houston, Texas, Willie Whitehurst was sentenced to 151 months in prison for his role as one of the leaders of a criminal conspiracy that laundered more than $20 million through “shell” business bank accounts. In January and February 2013, Whitehurst and coconspirators Enrique Morales, Fulton Smith and Anthony Foster pleaded guilty to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. Another co-conspirator, Sarah Combs, also pleaded guilty to conspiracy to operate an unlicensed money transmitting business. In August 2012, a federal grand jury in Houston indicted the five defendants for their parts in a large “Black Market Peso Exchange” scheme. From October 2009 to September 2011, the defendants placed United States currency gained through the sale of drugs into bank accounts held in the names of the organization’s “shell” companies. The money was then transferred to different accounts in the United States and in Mexico. In exchange, pesos were transferred back to accounts owned by the organization’s clients. Morales was previously sentenced to 188 months in prison, and Foster received a sentence of 121 months in prison. Smith was sentenced to 30 months, while Combs was sentenced to 24 months in prison. Los Zetas Cartel Members Sentenced for Drug Trafficking, Money Laundering On September 6, 2013, in Austin, Texas, Eusevio Maldonado Huitron, of Austin, was sentenced to 97 months in prison and three years of supervised release for his role in a complex conspiracy to launder millions of dollars in illicit Los Zetas drug trafficking proceeds. On May 9, 2013, a jury convicted Huitron of one count of conspiracy to commit money laundering. On September 5, 2013, Jose Trevino Morales, Francisco Colorado Cessa and Fernando Solis Garcia were sentenced for their roles in laundering millions of dollars. Morales, of Balch Springs, Texas and Cessa, of Veracruz, Mexico, were each sentenced to 240 months in prison and three years of supervised release. Garcia, of Ruidoso, New Mexico, was sentenced to 160 months in prison and three years of supervised release. Morales and Cessa were convicted by a federal jury on May 9, 2013 of one count of conspiracy to commit money laundering. Evidence presented during trial revealed that Los Zetas are a powerful drug cartel based in Mexico and generate multi-million dollar revenues from drug trafficking. Since 2008, Miguel and Oscar Trevino Morales would direct portions of the bulk cash generated from the sale of illegal narcotics to Jose Trevino and his wife, Zulema Trevino, for purchasing, training, breeding and racing American quarter horses in the United States. Testimony also revealed a shell game by the defendants involving straw purchasers and transactions worth millions of dollars in New Mexico, Oklahoma, California and Texas to disguise the source drug money and make the proceeds from the sale of quarter horses or their race winnings appear legitimate. Furthermore, the defendants implemented a scheme to structure cash deposits in amounts under $10,000 in order to circumvent mandatory bank reporting requirements. Over 400 quarter horses were seized by federal authorities and later auctioned for approximately $9 million. The Government also seeks the forfeiture of real property; farm and ranch equipment; and funds contained in multiple bank accounts allegedly used in the defendants’ scheme. The Government is also seeking a monetary judgment in the amount of $60 million representing property involved in, and derived from, the conspiracy. Oklahoma Man Sentenced for Drug, Firearm and Money Laundering Charges On September 5, 2013, in Tulsa, Okla., Brandon Royce Taylor was sentenced to 180 months in prison and three years of supervised release. Taylor pleaded guilty on June 3, 2013 to drug, firearm and money laundering violations. According to court documents, from 2006 through January 2009, Taylor maintained the Elgin Place property for the purpose of storing and distributing marijuana, cocaine and methamphetamine. He also possessed cocaine while intending to distribute it and had an unregistered "street sweeper" shotgun. He committed money laundering when he made a $13,000 cash payment to buy the Elgin Place property. Co-conspirator Thamous Eugene Taylor was sentenced on August 21, 2013, to 60 months in prison. On August 8, 2013, a joint $650,000 criminal forfeiture money judgment was made against the Taylors representing the currency, firearms, ammunition and substitute property that they obtained as a result of their drug crimes.

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Two Defendants Sentenced in Tax Rebate Scam On August 30, 2013, in Roanoke, Va., Khaldoun Khalil Khawaja, of Wesley Chapel, Fla., was sentenced to 70 months in prison, three years of supervised release and ordered to pay $17,333,246 in restitution. Khawaja pleaded guilty to one count of conspiracy to defraud the United States for buying, selling or exchanging treasury checks bearing forged endorsements and one count of conspiracy to commit money laundering. A second defendant, Muawua Khalil Abdeljalil, of Roanoke, Va., was sentenced to 57 months in prison, three years of supervised release, ordered to pay $1,702,123 in restitution and a money judgment of $2,243,731. Abdeljalil pleaded guilty to the same two charges as Khawaja, plus an additional count of structuring. According to court documents, the defendants admitted to purchasing fraudulent income tax refund checks and then presenting those fraudulent checks for payment at financial institutions in Virginia, Florida and elsewhere. In all, the defendants fraudulently deposited more than $17.5 million as a result of the scheme. Minnesota Coin Dealer Sentenced For Mail Fraud, Wire Fraud and Money Laundering On August 29, 2013, in Minneapolis, Minn., David Laurence Marion, of Excelsior, Minn., was sentenced to 60 months in prison. Marion pleaded guilty on February 21, 2013 to one count of conspiracy to commit mail and wire fraud and one count of money laundering. According to court documents, Marion owned International Rarities Corporation (IRC), a business that bought, sold, and traded gold coins and precious metals, among other things. Between December 2010 and August 2011, IRC received over $2 million in coins, precious metals, and money from customers who intended to make purchases or trades. In August 2011, IRC purportedly had over $2 million in unfulfilled customer orders. When customers inquired about the status of their orders, they were ignored by Marion and the IRC sales staff, or they were falsely advised that their orders were being processed or their money, coins, and precious metals could not be returned at that time. In the meantime, Marion used the customers’ money, coins, and precious metals to support his gambling and lavish lifestyle as well as to pay commissions and salaries, fulfill other customer orders, and support his family. Customers lost approximately $1.7 million in money, coins, and precious metals as a result of this scheme. As president of International Rarities Holdings (IRH), Marion directed his sales staff to sell securities in the form of ownership shares in the company. However, Marion was not registered with the Securities and Exchange Commission (SEC) as a broker or dealer at that time, nor was he associated with a registered SEC broker or dealer. In fact, in April 2009, the SEC rejected Marion’s attempt to register the IRH offering as a security, yet, from at least November 2008 through July 2009, Marion and his sales staff raised approximately $1 million from at least 26 investors who believed they were purchasing ownership shares in the company. Marion used approximately $200,000 of those investor funds for his own personal use. Man Sentenced on Drug and Money Laundering Conspiracy Charges On August 29, 2013, in Buffalo, N.Y., Will Johnson, of League City, Texas, was sentenced to 120 months in prison, five years of supervised release and ordered to forfeit $203,000 in cash. Johnson was convicted of conspiracy to distribute kilograms of cocaine and conspiracy to commit money laundering. According to court records, Johnson distributed kilograms of cocaine from the Houston area to other individuals who thereafter distributed that cocaine in Buffalo and elsewhere in the Western New York. In July 2010, law enforcement officers executed search warrants at locations including an apartment leased by the defendant in Missouri City, Texas, and his residence in League City, Texas. Officers seized cocaine and plastic wrappers consistent with packaging for multiple kilograms of cocaine, $55,000 in United States currency, a loaded handgun, and boxes of assorted ammunition. Johnson also deposited and transferred funds generated as a result of his drug trafficking to financial institutions. Johnson also paid approximately $13,000 to a used car lot to purchase a 2004 Escalade motor vehicle. He arranged to have cash deposits of $20,000 made into bank accounts which he used as a down payment for his residence. Ohio Jewelry Store Owner Sentenced for Tax Evasion On August 28, 2013, in Columbus, Ohio, Elie J. Hannoush, of Westerville, Ohio was sentenced to 12 months and one day in prison, followed by eight months of home confinement, and ordered to pay $91,140 in restitution to the IRS. Hannoush pleaded guilty in November 2012 to one count of tax evasion and one count of failure to report cash payments greater than $10,000 received in a business. According to court documents, Hannoush failed to report almost $300,000 in cash he received from the jewelry stores he owns, Farah Jewelers, from 2005 through 2008. Hannoush often accepted large cash payments from his customers, but failed to report the cash he received as income. He also kept a separate accounting system for the cash receivables. In addition, Hannoush structured cash receipts by breaking receipts greater than $10,000 into small receipts in order to evade federal cash reporting requirements. When he filed his federal income tax return for 2006, he reported an income of $27,054 and claimed he was due a $30 refund. His real taxable income for 2006 was $194,817 and he owed $35,188 in taxes for that year. Ohio Business Owner Sentenced for Tax Evasion and Structuring Currency Deposits On August 22, 2013, in Columbus, Ohio, Jon Scott Diamond, of Westerville, Ohio, was sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay $177,183 in restitution to the IRS. Prior to sentencing, Diamond paid $57,873 to the IRS. In addition, Diamond agreed to forfeit his interest in a 2005 BMW 645ci. Diamond pleaded guilty on March 22, 2013, to income tax evasion and to knowingly engaging in a structured currency transaction. According to court documents, Diamond owned and operated Gem Ventures, LLC, dba Gem Skill Games, which was established in December 2005. During the years 2006 through 2008, Gem Ventures distributed computerized gaming machines in various bars and clubs in or around Columbus, Ohio. In order to play the gaming machines, bar patron’s had to insert cash into them. Diamond and/or his assistant visited each establishment weekly to collect the funds and print off the weekly receipt tickets on each gaming machine. They counted the cash at the bar, compared it to the receipt printout, and reimbursed the bars for the Jack Pot prize awards. Diamond split the remaining funds with the bar owners on a 60/40 basis. They gave the bar owners receipts for their share of the split, and left the bars with the cash. Generally, Diamond deposited the cash collections each week into a business account in the name of Gem Ventures, LLC. Between 2006 and 2008, Diamond structured the cash deposits exceeding $1 million by making numerous cash deposits in amounts just under $10,000. Diamond knew that financial institutions were legally required to report transactions exceeding

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$10,000 and he knowingly structured the currency transactions. In addition, for the 2006 tax year, Diamond willfully attempted to evade and defeat approximately $97,044 of income taxes due and owing to the IRS by concealing income and failing to file a federal income tax return. Las Vegas Attorney Sentenced for Structuring Bank Deposits and Tax Crimes On August 22, 2013, in Las Vegas, Nev., Paul Wommer, an attorney, was sentenced to 41 months in prison, three years of supervised release, ordered to pay a $7,500 fine and to forfeit any proceeds of his crimes. Wommer was found guilty in April following a bench trial for making structured bank deposits to hide money from the IRS, evading income taxes and filing a false tax return. According to the court records and evidence introduced at trial, between June 30 and July 15, 2010, Wommer made or assisted in 15 structured deposits totaling $138,700 for the purpose of evading bank reporting requirements. These deposits were made as part of a pattern of illegal activity involving more than $100,000 during a 12-month time period. During that same time period, Wommer willfully attempted to evade federal income taxes in the amount of $13,020 by concealing and attempting to conceal his assets, by making false statements to the IRS, and by placing funds and property in the names of nominees. The judge found that Wommer’s testimony at trial was not credible and increased his prison sentence for obstruction of justice. Ohio Business Owner Sentenced in Mortgage Fraud Scheme On August 22, 2013, in Cincinnati, Ohio, Antonio Weathers was sentenced to 17 months in prison, three years of supervised release and ordered to pay $242,340 in restitution to the victim lenders. Weathers pleaded guilty on April 8, 2013 to mail fraud and money laundering. According to court documents, Weathers formed a real estate business in which he arranged for the purchase and resale of mostly low income properties. Weathers committed mail fraud by securing mortgage closing funds for the purchase of a property located in Cincinnati, which resulted in a U.S. Postal Service Express Mail package to be sent from Strongtower Title Agency to the lender, Preferred Capital. Weathers then transferred $42,532 in mail fraud proceeds from one bank account to another bank account in the name of Antonio Weathers, dba, KI Enterprises. Former New Mexico Fireman Sentenced for Structuring Drug Trafficking Proceeds On August 21, 2013, in Albuquerque, N.M., Steve Chavez was sentenced to 30 months in prison, three years of supervised release and ordered to forfeit $182,000 to the United States. In April 2013, Chavez, a fireman, pleaded guilty to a currency structuring charge. According to court documents, between July 2011 and August 2011, Chavez structured 37 cash deposits and withdrawals over a 55-day period as part of a pattern of illegal activity. He structured deposits and withdrawals to avoid reporting requirements and thus conceal his support of drug trafficking organization led by Homer Varela. In addition, Chavez brokered cocaine transactions for the drug organization and “cleaning” its drug money. In January 2013, Varela pleaded guilty to conspiracy to distribute controlled substances, conspiracy to launder money and money laundering. Varela was sentenced in July 2013 to 135 months in prison and five years of supervised release. Nebraska Businessman Sentenced for Racketeering and Money Laundering On August 19, 2013 in Omaha, Neb., William Knox was sentenced to 12 months and one day in prison, two years of supervised release and fined $100,000. Knox also forfeited a 2005 Ford Expedition, a 2004 Nissan Roadster and three bank accounts totaling $4,641, as well as pay a $225,000 money judgment. Knox pleaded guilty to charges of conspiracy to use facilities in interstate commerce in aid of a racketeering enterprise and money laundering. According to court documents, starting in the late 1990’s and continuing to 2012, Knox owned and managed a “spa” in Omaha. The spa was frequently referred to as the Ninety Third Street Spa and was, in fact, a front for prostitution. Knox, and others acting at his direction, deposited revenue generated by the operation of Ninety Third Street Spa into a bank account which Knox opened and controlled, under the name NTS Spa, Ltd. dba Ninety Third Street Spa (“Spa Bank Account”). Knox wrote checks drawn on the Spa Bank Account for “management fees” and deposited them into another account he had opened, under the name Knox Contracting & Development, William R. Knox (“KCD Bank Account”). Knox then wrote checks drawn on the KCD Bank Account for particular “pay periods” and deposited them into a personal checking account he had opened under his name. Couple Sentenced on Oxycodone Distribution and Money Laundering Charges On August 14, 2013, in Beckley, W.Va., Christopher Brooks, of Glen Fork, Wyoming County, was sentenced to 120 months in prison for conspiracy to distribute oxycodone and money laundering charges. Brooks’ co-defendant and wife Jennifer Brooks, also of Glen Fork, was sentenced to 84 months in prison. Both defendants previously pleaded guilty in February 2013. According to court documents, from at least March 2010 until April 27, 2012, the Brooks received packages by mail containing oxycodone from a known individual located in Tampa, Fla. They received at least 130 express mail packages containing approximately 17,000 30-milligram oxycodone tablets between October 15, 2010 and April 27, 2012. The Brooks deposited at least $300,000 cash into bank accounts that were owned and controlled by a known individual in exchange for the oxycodone tablets. Louisiana Man Sentenced on Structuring Charges On August 8, 2013, in New Orleans, La., Christopher Benson was sentenced to 21 months in prison and one year of supervised release. Benson pleaded guilty in December 2012 to structuring financial transactions to evade reporting requirements. According to court documents, Benson was the sole owner of Louisiana Home Elevations, a home elevation and shoring company. Benson maintained a business bank account in the name of Louisiana Home Elevations. Benson issued two checks payable to his co-defendant in dollar amounts below $10,000 in ordered to avoid the financial institution from issuing a currency transaction report. Virginia Car Dealer Sentenced for Evading Taxes On August 6, 2013, in Richmond, Va., Samad Jafari, of Henrico, Va., was sentenced to 30 months in prison and ordered to pay $668,791 in restitution for a tax evasion scheme involving his used car sales business known as United Import Company, Ltd. On March 25, 2013, United Import was ordered to pay forfeiture of $735,225 as a result of its guilty plea to structuring cash deposits to prevent banking institutions from reporting currency transactions to the IRS. Jafari and United Import

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pleaded guilty on March 25, 2013. According to court documents, Jafari was the sole signatory and owner of a business account in the name of United Import. Beginning in 2006, Jafari developed a scheme to receive cash payments for the financing of used cars, and subsequently structured cash deposits into the business account, as well as other personal bank accounts. Jafari also created a second set of figures to provide to his accountant in preparing his 2006 and 2007 federal income tax returns, which significantly understated the amount of cash payments he received for vehicle financing. The total tax loss identified in the investigation was in excess of $698,000. In addition, Jafari acknowledged that, acting as the president of United Import, he structured or caused to be structured, over $735,000 in cash deposits during a 24-month time period in an effort to prevent banking institutions from filing a currency transaction report (CTR). Georgia Woman Sentenced for Health Care Fraud and Money Laundering On July 31, 2013, in Macon, Ga., Christine Rahl, of Social Circle, Ga., was sentenced to 57 months in prison, three years of supervised release and ordered to pay $1,586,847 in restitution. Rahl pleaded guilty on May 9, 2012 to embezzlement in connection with health care and money laundering. According to court documents, Rahl was an employee in charge of payroll at a hospice in Social Circle, Georgia. The payroll and expense information was electronically submitted to an external payroll company who would then make electronic deposits into the accounts of employees. In order to receive extra pay, Rahl gave herself unauthorized raises and submitted false expenses for herself. Rahl continued this activity during a five and a half year time period. Rahl admitted that she illegally appropriated for her own use and benefit $1,586,847 from the hospice. The money she received was deposited into a bank, where she would then write checks and use credit cards to purchase items for her personal use. Utah Man Sentenced in Connection with Real Estate Investment Scheme On July 25, 2013, in Salt Lake City, Utah, Patrick Merrill Brody was sentenced to 41 months in prison, three years of supervised release and ordered to pay $1,331,075 to the victims. Brody pleaded guilty in May 2013 to wire fraud and money laundering in connection with a real estate investment scheme. According to court documents, Brody and his wife, Laura Ann Roser, operated Art Intellect, Inc., a Utah corporation doing business as Mason Hill. It offered potential clients an option for investing in rental residential properties in several states. Mason Hill offered to sell investors rental properties at a low price, repair and rehabilitate them if necessary, find renters for the properties, collect rent, and maintain and manage the properties for the benefit of the investors. Once received, investors’ funds were co-mingled with other investors’ money, used to purchase properties for earlier investors, and used to pay operating expenses of Mason Hill as well as personal expenses for the defendants. In some instances, investors’ money was used to make Ponzi payments to earlier investors. As a part of a plea agreement, Brody admitted that from April 2009 through early 2011 he made important business decisions for the company, hired and instructed employees, and directed the use of company proceeds. Brody admitted that the company ultimately began operating a scheme that obtained money or property through fraudulent representations or promises. The fraudulent representations were made with the intent to induce clients to make investment payments to Mason Hill. Funds invested through the scheme were converted to personal use by Brody, which deprived the company of the capital necessary to complete real estate transactions as promised. Many of the clients, who invested in the scheme, did not receive any property or any other thing of value in return for their investment payments, and did not receive a refund of their payments. North Carolina Businesswoman Sentenced for Participation in a Drug Conspiracy and Money Laundering On July 22, 2013, in New Bern, N.C., Cynthia Marquez, of Grifton, N.C., was sentenced to 120 months in prison and five years of supervised release. Marquez pleaded guilty on October 24, 2011 to conspiracy to distribute and possess with the intent to distribute 5 kilograms of cocaine and money laundering. According to court documents, Marquez distributed approximately 67 kilograms of cocaine from 2010 through January 18, 2012. Marquez laundered drug proceeds through her businesses including Joyeria Perez Jewelry Incorporated in Greenville and her real estate business. Marquez previously agreed to forfeit over $146,000 in U.S. currency and 18 pieces of real property. Additionally, Marquez previously entered into agreements to settle a state-level drug tax lien of approximately $100,000 and forfeit a Hummer motor vehicle. Store Owners Sentenced for Conspiring to Structure Funds Obtained from Illicit Cigarette Sales On July 19, 2013, in Richmond, Va., Jayant Khare and Loveleen Khare, both of Powhatan, Va., were each sentenced to 24 months in prison. Jayant Khare and Loveleen Khare both pleaded guilty in April 2013 to conspiring to structure more than $10,000,000 in cash transactions. According to court documents, Jayant and Loveleen Khare owned and operated two cigarette retail stores known as Cigarettes America Plus and Cigarettes America at Westchester. From October 2011 to December 2012, they conspired to structure over $10,000,000 by splitting up cash deposits into accounts maintained at six banks, all in an effort to prevent the banks from filing Currency Transaction Reports with the IRS, which must be filed on cash deposits of $10,000 or greater. The structured cash was obtained by selling large quantities of cigarettes to out-of-state individuals who were known to be transporting the cigarettes to locations outside of the Commonwealth of Virginia for resale as contraband cigarettes because the appropriate state taxes were not paid on them. The sales took place at Jayant and Loveleen Khare’s personal residence and from the back door of the retail stores. North Carolina Woman Sentenced for Role in Drug and Money Laundering Conspiracy On July 18, 2013, in Raleigh, N.C., Claudette Petrina Griffin was sentenced to 42 months in prison and three years of supervised release for her participation in a cocaine distribution and money laundering conspiracy. According to court documents, Griffin conspired with Thomas Alston to deliver more than 500 grams of cocaine. In 2007, while Alston was on house arrest for a state drug conviction, and in 2009, while Alston was serving a state prison sentence, Alston paid Griffin to make multiple deliveries of cocaine. Griffin also conspired with Alston to use her name as the owner and purchaser of a 2006 Mercedes in order to conceal the true ownership of the vehicle and the illegal source of the currency paid to purchase the vehicle. Alston was sentenced on February 8, 2012, to 324 months in prison and five years of supervised release for his role in the conspiracy.

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Texas Man Sentenced for Failing to File IRS Form 8300 On July 18, 2013, in Dallas, Texas, William Luck II, of Fort Worth, was sentenced to 37 months in prison and agreed to pay $17,000 in restitution to the IRS. Luck pleaded guilty in February 2013 to one count of failure to file IRS Form 8300. According to court documents, Luck owned a business called Hydro Expo. Law enforcement learned that Hydro Expo was facilitating indoor marijuana cultivating operations by supplying growing equipment and supplies to persons who were illegally growing marijuana. During an undercover operation, law enforcement arranged the purchase of approximately $20,000 worth of growing equipment and supplies from Hydro Expo. Luck was clearly informed that the equipment and supplies were going to be used in an illegal indoor hydroponic marijuana cultivation operation. In October 2009, Luck accepted $17,000 in cash from an undercover who then took delivery of the marijuana growing equipment. During that meeting, Luck stated that he would break up the $17,000 cash into smaller amounts and that he would not identify the purchasers in any paperwork. Luck never filed the required IRS Form 8300, as required by law and regulations. Oklahoma Man Sentenced for Narcotics-Related Money Laundering On July 9, 2013, in Oklahoma City, Okla., Johnnie Ray Bragg Jr. was sentenced to 480 months in prison, four years of supervised release and ordered to forfeit $260,752. Bragg pleaded guilty in August 2012 to drug and money laundering conspiracies. According to court documents, from about September 21, 2010 to about April 20, 2011, Bragg and others received currency from the sale of narcotics and deposited the proceeds into bank accounts at branches of a bank in Oklahoma, which were controlled by others in the conspiracy. Bragg and others also wire transferred drug proceeds from Oklahoma to California and purchased “money packs” that were then used to load funds from the drug proceeds onto Bragg’s prepaid Visa card. Bragg used the Visa card to pay for his travel between Oklahoma and California in furtherance of the drug-trafficking conspiracy. Former U.S. Army Corps of Engineers Manager Sentenced for $30 Million Bribery and Kickback Scheme On July 11, 2013, in Washington, D.C., Kerry F. Khan, formerly of Alexandria, Va., was sentenced to 235 months in prison on charges of bribery and conspiracy to commit money laundering. Khan was also ordered to pay $32.5 million in restitution to the U.S. Army Corps of Engineers, forfeit $11,082,687 in a money judgment and forfeit more than $1.3 million in bank account funds, properties and a vehicle. Khan previously forfeited over $700,000 in bank account funds and four luxury automobiles. Khan, a former program manager for the Army Corps of Engineers, pleaded guilty in May 2012 to charges stemming from his leadership of a ring of corrupt public officials and government contractors that engaged in bribery and kickbacks and stole over $30 million through inflated and fictitious invoices. According to court documents, Khan was paid, directly and indirectly, over $12 million through the bribery scheme. The government contracts were awarded from 2007 until 2011 through the U.S. Army Corps of Engineers and the Department of the Army. Khan and others attempted to obtain more than $30 million through the submission of fraudulently inflated invoices to the government. In most cases, the corrupt companies provided the equipment and services legitimately included in the contracts, but also billed for inflated and fictitious equipment and services. Khan referred to the fraudulently inflated amounts as “overhead.” Khan and others agreed to split the “overhead.” In the overall investigation, to date, the United States has seized for forfeiture or recovered approximately $7.5 million in bank account funds, cash, and repayments, 20 real properties, eight luxury cars, and multiple pieces of fine jewelry. Former Ohio School District Employee Sentenced for Money Laundering, Wire and Mail Fraud On July 9, 2013, in Cleveland, Ohio, Joseph M. Palazzo, of Independence, Ohio, was sentenced to 136 months in prison and ordered to pay $3.4 million in restitution. Palazzo pleaded guilty to conspiracy to commit mail fraud, conspiracy to commit money laundering and wire fraud. According to court documents, Palazzo was employed by the Cuyahoga Heights School District as its Information Technology Director until February 2011. His duties included purchasing hardware and software and making other IT expenditures. Palazzo diverted millions of dollars through submission of false invoices to the district that purported to be for IT-related goods and services purchased from legitimate companies. Palazzo approved the false invoices himself or forged the signature of another in the approval section. However, these invoices were for services never performed, fictitious software and hardware, software and hardware never received or already purchased by the district from another source. The companies named on the invoices were nothing more than “shells” companies established and owned by others working with Palazzo. As a result of the conduct of Palazzo and his co-conspirators, the district was defrauded and sustained a total loss of at least $3,333,448. In a second scheme to defraud the school district, Palazzo purchased various personal electronic items, such as I-Pads, cameras and televisions, from legitimate district vendors. He then altered the invoices from the purchases to falsely reflect that classroom items, such as digital microscopes, projectors and laptops, had been purchased for the district and submitted those invoices to the district for payment. Upon receipt of these personal electronic items, Palazzo sold them to third-parties at a discounted price and kept the money from such sales for his own personal use. As a result of the Palazzo’s conduct in the second scheme, the district was defrauded and sustained an additional loss of at least $76,214. Arizona Man Sentenced on Drug and Money Laundering Charges On July 8, 2013, in Phoenix, Ariz., Nadunt Chibeast, of Tempe, Ariz., was sentenced to 120 months in prison and five years of supervised release. Chibeast was convicted in April 2013 of conspiracy to possess with intent to distribute more than 1,000 kilograms of marijuana and less than 500 grams of cocaine, and conspiracy to commit money laundering. According to evidence presented at trial, Chibeast assisted a drug trafficking organization by driving a suspected drug load, assisting with marijuana packaging and conspiring to launder money. Chibeast allowed the organization to direct its drug buyers to deposit money into his bank accounts in their home states and then he would transfer the money to the drug trafficking organization member's bank accounts or withdraw cash to physically provide it to other members. Woman Sentenced for Role in Drug Trafficking and Money Laundering Conspiracy On June 26, 2013, in Anchorage, Alaska, Jennifer McGrath, of Sacramento, Calif., was sentenced to 38 months in prison for her role in a drug trafficking and money laundering conspiracy. According to court documents, between January 2009 and continuing through July 2010, McGrath was involved in

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a large scale drug trafficking conspiracy transporting oxycodone from California for later sale in Juneau, Alaska. As part of the conspiracy, McGrath made multiple airline trips from California to Juneau carrying the oxycodone pills on her person. McGrath distributed the pills to local dealers and collected the drug proceeds. McGrath either laundered the drug proceeds using commercial wire transfers or body carried drug proceeds back to California for members of the conspiracy. During the course of the conspiracy, McGrath transported approximately 1500 pills of oxycodone and laundered over $14,000 in drug proceeds. Four Sentenced for Operating Black Market Peso Exchange Scheme On June 26, 2013, in Houston, Texas, the leader and several members of an organization that laundered more than $20 million through "shell" business bank accounts were sentenced to the following terms: Enrique Morales was sentenced to 188 months in prison; Anthony Foster was sentenced to 121 months in prison; Fulton Smith was sentenced to 30 months in prison; and Sarah Combs was sentenced to 24 months in prison. Morales, Foster and Smith all pleaded guilty to conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. Combs pleaded guilty to conspiracy to operate an unlicensed money transmitting business. According to court documents, the four defendants were part of the “Black Market Peso Exchange” scheme. From October 2009 to September 2011, the defendants placed United States currency gained through the sale of drugs into bank accounts held in the name of the organization’s “shell” companies. The money then was transferred to different accounts in the United States and in Mexico. In exchange, pesos were transferred back to accounts owned by the organization’s clients. Minnesota Man Sentenced for Operating a Continuing Criminal Enterprise and Money Laundering On June 24, 2013, in Fargo, N.D., Noah R. Bergland, of Roseau, Minn., was sentenced 120 months in prison and three years of supervised release. Bergland was also ordered to pay a $200 special assessment to the Crime Victim’s Fund and to forfeit $250,000 to the United States. Bergland pleaded guilty on July 10, 2012 to charges of operating a continuing criminal enterprise and money laundering conspiracy. According to court documents, Bergland was part of an organization that brought cocaine, heroin, marijuana and ecstasy from the Twin Cities to various cities in North Dakota and Minnesota. Bergland and others were responsible for depositing and withdrawing funds into bank accounts in North Dakota, Minnesota and other states that were derived from the sale of controlled substances. These funds were then stored on value cards as well as transferred through wire transfers to various places in North Dakota, Minnesota and elsewhere. To date, an additional 25 defendants have been sentenced to terms ranging from 180 months in prison to 2 years’ probation as part of this investigation. Missouri Man Sentenced for Structuring Financial Transactions On June 21, 2013, in Springfield, Mo., Jesse Arnold, of Sarcoxie, Mo., was sentenced to 12 months and a day in prison and ordered to forfeit $207,817. Arnold pleaded guilty on December 18, 2012, to structuring financial transactions in order to evade federal reporting requirements. According to court documents, Arnold operated 4 States Grease Company, a collection facility for spent cooking oil. Arnold had reason to believe he was buying spent cooking oil that had been stolen by various drivers. These drivers obtained the stolen cooking oil from businesses in Missouri, Kansas, Oklahoma, and Arkansas. The drivers sold the spent cooking oil to Arnold who then sold the oil to another company for processing. In order to avoid federal reporting requirements, Arnold deliberately and knowingly structured withdrawals from his business checking account. Arnold made numerous withdrawals on consecutive days that were individually less than $10,000, but which totaled more than $10,000 when added together. All of the cash withdrawals from January 1, 2009 to September 30, 2011, were done by checks written to “Cash” and signed by Arnold. Many of the cash withdrawals were done on successive banking days and were for $9,000 for each withdrawal. Longtime Fugitive Who Ran Telemarketing Fraud Scheme Sentenced On June 10, 2013, in Los Angeles, Calif., Matthew Craig Rubin was sentenced to 78 months in prison and ordered to pay a $16 million judgment obtained for his fraud victims by the Federal Trade Commission. In September 2005, Rubin pleaded guilty to two counts of money laundering and one count of witness tampering. According to court documents, Rubin admitted that he laundered the proceeds of a telemarketing fraud scheme through foreign bank accounts. Matthew Rubin also admitted that he persuaded the former controller of his company to lie in the Federal Trade Commission case against him and his company. Rubin and his brother, Andrew Rubin, ran Medicor, LLC, a Van Nuys-based marketing company that deceived customers into believing that the customers could set up home-based medical billing businesses. Matthew Rubin and his brother executed a scheme to defraud consumers who purchased medical billing software, in part by making false claims about customers receiving a list of doctors who needed medical billing services. Between July 1999 and March 2001, Medicor sold more than 30,000 Kwic-Claim Medical Billing Software packages for approximately $400 each, but only 65 people were actually able to successfully bill using Medicor software. Matthew Rubin also set up National Business Information Systems (NBIS). Following a script provided by Matthew Rubin, Medicor employees referred potential Medicor customers to NBIS, which existed solely to provide positive references for Medicor. In 2006, just before he was to be sentenced in this case, Matthew Rubin fled to Mexico, where he remained a fugitive for over five years. With the assistance of the U.S. Postal Inspection Service and the Mexican government, Rubin was returned to the United States last year. Money Courier for Large Guatemalan Drug Ring Sentenced On May 31, 2013, in Greenbelt, Md., Nery Gustavo Ramos-Duarte, of Chiquimula, Guatemala, was sentenced to 160 months in prison and five years of supervised release for conspiring to distribute and import five kilograms or more of cocaine, commit money laundering, and smuggle bulk cash. According to court documents, Duarte was a money courier for a large international organization that imported cocaine into the United States from Guatemala and smuggled the proceeds back to Guatemala. Duarte was a trusted member of the organization who could speak directly with its leader in Guatemala, and helped the leader collect drug debts. On September 25, 2003, Duarte was stopped while driving in Arkansas. Law enforcement seized $1,168,000 in cash wrapped in bundles from a secret compartment in his vehicle. In 2005, Duarte picked up drug money from a co-

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conspirator in Connecticut to take to the ringleader in Guatemala. Later in 2005, Duarte took a Mercedes-Benz from another member of the conspiracy as payment for a drug debt to the ringleader. Texas Money Launderer and Former Fugitive Sentenced On May 23, 2013, in Corpus Christi, Texas, Leonel de La Torre, of Brownsville, Texas, was sentenced to 165 months in prison and three years supervised release. De La Torre was charged in an indictment in July 2006 and had been a fugitive until his capture earlier this year. De la Torre pleaded guilty on February 27, 2013, to conspiracy to launder funds generated by narcotics trafficking. According to court documents, De La Torre admitted he helped lead a group of individuals who transported cocaine from South Texas for distribution in Houston, as well as in Ohio and Michigan. He further acknowledged he helped lead the “laundering” of those funds generated by the cocaine business. The funds were moved through the banking system using both domestic and international means. The group invested in real estate to help conceal the illegal source of the funds. Former Dallas Securities Broker Sentenced for Money Laundering On May 16, 2013, in Tulsa, Okla., Joshua Wayne Lankford, of Dallas, Texas, was sentenced to 84 months and ordered to forfeit $250,000. Lankford pleaded guilty on December 10, 2012 to money laundering. According to court documents, Lankford and his co-defendants manipulated the stocks of three companies. The defendants devised and engaged in a scheme to defraud investors known as a “pump and dump,” in which they manipulated publicly traded penny stocks. According to court records, Lankford and his co-defendants obtained a majority of the free-trading shares of stock of the company they intended to manipulate. Lankford and others “parked” their shares with various nominees, such as friends, relatives or other entities that they owned and controlled. Subsequently, they engaged in coordinated trading in order to create the appearance of an emerging market for these stocks. The defendants and their nominees obtained significant profits by selling large amounts of shares after they had artificially inflated the stock price. For each of the three manipulated stocks, the conspirators’ sell-off caused declines of the stock price and left legitimate investors holding stock of significantly reduced value. According to Lankford’s guilty plea, he laundered $250,000 in proceeds derived from the stock manipulation scheme. Evidence presented in the 2010 trial showed that the overall scheme resulted in illegal proceeds of more than $43 million from more than 17,000 investor victims. Other defendants sentenced in this scheme include George David Gordon and Richard Clark who were sentenced to 188 months and 151 months in prison, respectively; James Reskin was sentenced to serve five years of probation; and Dean Sheptycki remains a fugitive. Pecan Farm Owners Sentenced on Drug and Money Laundering Charges On May 15, 2013, in Albuquerque, N.M., Sandra L. Portillo was sentenced to 15 months in prison and three years of supervised release. On May 8, 2013, Oscar L. Portillo, Sr., was sentenced to 98 months in prison and four years of supervised release. Also on May 8, 2013, Matthew Portillo was sentenced to 60 months in prison and four years of supervised release. Oscar Portillo, Sr. and Sandra Portillo also were ordered to forfeit $135,735, the value of their ownership interest in the pecan farm which was sold after they were arrested. In addition, the court entered a $17,900 money judgment against the Portillos and their son, Matthew Portillo. According to court documents, Oscar Portillo, Sr., and his wife Sandra Portillo were part owners and operators of “Pettit Farms and Nursery,” a pecan farm and nursery in Anthony, N. M. The Portillos used the pecan farm as a place to store and sell drugs. They laundered the proceeds from some of these drug deals by asking an undercover agent to pay for the drugs with money orders which they subsequently cashed and deposited into bank accounts in the name of the pecan farm, and by providing the agent with invoices that falsely asserted that the agent purchased pecan trees. Six other co-defendants have been sentenced in this investigation. • Ruben Ortiz-Rivera was sentenced on April 17, 2013, to 15 months in prison. Ortiz-Rivera is a Mexican national and will be deported after he completes his prison sentence. • Cesar Ramos was sentenced on March 26, 2013, to 120 months in prison. Ramos is a Mexican national and will be deported after he completes his prison sentence. • April Garcia was sentenced on February 12, 2013, to one year of probation. • Fernando Ramos was sentenced on January 30, 2013, to 30 months in prison and three years of supervised release. • Oscar Portillo, Jr., was sentenced on September 26, 2012, to 15 months in prison and three years of supervised release. • Natasha N. Coronado was sentenced on August 24, 2012, to time served (212 days) and three years of supervised release. Missouri Trucking Company Owners Sentenced for Fraud and Money Laundering On May 10, 2013, in Springfield, Mo., James Keith Ivey and his wife, Melinda Kay Ivey, both of Lebanon, Mo., were sentenced for their roles in a conspiracy to defraud Tracker Marine, a manufacturer of boats and trailers. James Ivey was sentenced to 70 months in prison. Melinda Ivey was sentenced to 30 months in prison. The Iveys were ordered to pay $797,325 in restitution. According to court documents, the Iveys owned and operated J&M Trucking, Inc., which contracted with Tracker to transport boats and trailers. From January 2006 to April 2009, the Iveys and codefendant Paul Ray Hunting, of Paso Robles, Calif., devised a scheme to defraud Tracker Marine by inflating purchase orders and shipping invoices. Hunting was transportation manager for Tracker. During that time, the Iveys and Hunting caused more than 2,550 fraudulent invoices to be submitted to Tracker, which created a total loss of at least $797,325 to Tracker. J&M’s compensation from Tracker was determined primarily by the distance its trucks traveled. Hunting caused Tracker to pay J&M excessive fees by listing an inflated and false number of billable miles on purchase orders. In exchange, James Ivey paid Hunting in cash a portion of the revenue generated by the fraudulently increased billable miles. From 2006 to 2008, James Ivey paid Hunting a total of $265,775. Hunting claimed some of those payments on his federal income tax return as income from a catering business, which was false. The Iveys claimed the payments represented a percentage of revenue generated by two trucks they claimed Hunting owned and was leasing to J&M, which was also false. Hunting was sentenced in December 2012 to 12 months and one day in prison and ordered to pay $294,496 in restitution.

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Michigan Arson Ringleader Sentenced for Arson, Money Laundering and Other Federal Charges On May 8, 2013, in Detroit, Mich., Ali Darwich, of Beverly Hills, Mich., was sentenced to 137 years in prison for arson and other charges related to wire fraud, mail fraud, and money laundering. According to trial evidence, beginning in 2005, Darwich, along with eight co-defendants, ran an arson-for-profit ring in the greater Detroit metropolitan area. Specifically, Darwich, along with his coconspirators, would purchase insurance for various dwellings, businesses and vehicles. After purchasing the insurance, Darwich and others would intentionally burn, vandalize, or flood the various properties or vehicles and then file false insurance claims seeking reimbursement for such things as structural repair, contents replacement, loss of profits and alternative living costs. Seven insurance companies were defrauded for over $5 million. President of Car Dealership Sentenced for Laundering Money for the Gulf Cartel On May 8, 2013, in Orlando, Fla., Joel Torres, of Apopka, was sentenced to 40 months in prison for money laundering and failing to file IRS Forms 8300 (a report required for cash purchases over $10,000). Torres was found guilty on December 3, 2012. According to court documents, Torres, the President of JM2 Auto Sales, Inc., laundered narcotics proceeds for the Gulf Cartel, a drug trafficking organization based in Mexico. Torres received cash, and then sent vehicles back to members of the Cartel in Texas. He also sold vehicles to local Cartel members. During this joint investigative effort, law enforcement seized more than 6,000 pounds of marijuana, more than 70 firearms, bullet proof vests, and nearly $1 million. Co-Owner of Los Angeles County Toy Company Sentenced in Money Laundering Case On May 6, 2013, in Los Angeles, Calif., Dan “Daisy” Xin Li, co-owner of the Woody Toys, Inc., was sentenced to eight months in prison, followed by six months of home detention. Li’s husband, Jia “Gary” Hui Zhou, will be sentenced at a later date. Li and Zhou pleaded guilty in September 2012 to conspiring to structure currency transactions with a U.S. financial institution to avoid the filing of a Currency Transaction Report. As part of their agreements, the couple forfeited to the federal government $2 million in proceeds that were derived from their money laundering scheme. According to court documents, Li and Zhou participated in an elaborate scheme known as a Black Market Peso Exchange, which is an underground money transfer system that enables international drug trafficking organizations to launder narcotics proceeds. The scheme used “structured” cash deposits in the United States to launder illicit proceeds generated by drug trafficking organizations based in Mexico and Colombia. From 2005 through 2011, approximately $3 million in structured, outof-state cash was deposited into Woody Toys’ bank accounts. During that same time, Woody Toys took in approximately $3 million in cash without filing the required federal documents. As part of the Black Market Peso Exchange scheme alleged in this case, foreign toy retailers with Colombian and Mexican pesos would contact currency brokers to buy discounted United States dollars, which they used to purchase merchandise from Woody Toys. The dollars being “sold” were allegedly proceeds from illegal drug sales that had been deposited in the toy company’s accounts or delivered to the business. The Colombian or Mexican pesos that the currency broker received from the foreign toy retailer were remitted to the drug trafficking organizations. Previously in this case, Woody Toys, Inc. was sentenced in November 2012 to five years of probation after pleading guilty to money laundering conspiracy charges. The sentence prohibits the company from receiving payments of more than $2,000 in cash and the business may not receive cash from anyone who is not a customer. The company must also report the identity and contact information of all its customers. Finally, the business will be subject to unannounced examinations of its books and records. Cincinnati Grand Prix Promoter Sentenced for Wire Fraud and Money Laundering On May 1, 2013, in Cincinnati, Ohio, Curtis Boggs, formerly of Harrison, Ohio, was sentenced to 27 months in prison and ordered to pay $352,745 in restitution. In addition, Boggs was ordered to forfeit any assets that he received as proceeds of the fraudulent scheme he promoted to bring a Grand Prix race to Cincinnati in 2009. Boggs pleaded guilty on January 3, 2013 to one count each of wire fraud and money laundering. According to court documents, Boggs was employed by an insurance company as an investment advisor from 2000 to 2009. Beginning in approximately October 2008 and continuing through approximately August 2009, Boggs solicited his customers and others to invest in silver and gold or in a grand prix race, through a corporation called Cincinnati Grand Prix (CGP). Boggs admitted that, during that period, he fraudulently obtained investments of at least $352,745 for CGP in exchange for shares in the "stock" of CGP. On or about October 21, 2008, Boggs laundered money derived from the fraud scheme by using $27,232 to buy a Lincoln MKX vehicle for his personal use. Arizona Businessman Sentenced to Prison On April 30, 2013, in Phoenix, Ariz., Jere Loy Parkhurst was sentenced to 13 months in prison and three years of supervised release. Parkhurst pleaded guilty in January 2013 to conspiracy to commit wire fraud. According to the plea agreement, starting in 2006, Parkhurst was in the business of remodeling and reselling homes in the Phoenix metropolitan area. Parkhurst and others would raise capital for the purchase or remodel of homes by telling investors they would make 25 percent or more interest on their investment. By the end of 2006, with the housing market in decline, Parkhurst began using investor money to fund other areas of his business instead of repaying or making interest payments to investors as promised. In March 2007, one investor wired $100,000 to an escrow account for the purchase and remodel of a Phoenix home. On that same day, Parkhurst directed the title group to wire $55,821 to a bank account under Parkhurst's control. Parkurst falsely represented to the investor that he would pay 20 percent annual interest on his money with a full repayment by March 8, 2008. As of January 2013, none of the $100,000 had been paid back. Ohio Man Sentenced for Conspiring to Distribute Oxycodone and Money Laundering On April 29, 2013, in Cincinnati, Ohio, Kevin Huff, of Portsmouth, Ohio, was sentenced to 262 months in prison and ordered to forfeit six properties in Ohio, three vehicles, three ATV’s, a boat, $20,000 in currency, and the contents of two bank accounts totaling approximately $118,875. Huff, owner of Primary Health Care clinic, pleaded guilty on June 27, 2012 to one count of unlawfully conspiring to distribute oxycodone and one count of money laundering. According to court documents, Primary Health Care charged each “patient” $200 in cash in return for prescriptions for Oxycodone and other narcotics without the benefit of a legitimate medical examination by a

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physician. Huff received between $5,000 and $8,000 in U.S. currency three times a month for his share of the clinic's proceeds. In 2009, Huff received approximately $245,000 in U.S. currency from the operation of the clinic. Huff did not deposit this cash into a bank. Instead he used the money to pay day-to-day expenses, purchase assets, and take vacations. According to court documents, Huff also used $40,000 in drug proceeds to pay for a house in Lucasville, Ohio and concealed the purchase of the house by deeding the house in the name of another individual. The proceeds generated from the operation of Primary Health Care clinic represented the proceeds of illegal narcotics trafficking. Kansas City Lawyer Sentenced for Money Laundering On April 29, 2013, in Kansas City, Kan., Ronald E. Partee, of Kansas City, Mo., was sentenced to 60 months in prison. Partee pleaded guilty on January 30, 2013 to one count of conspiracy to commit money laundering and one count of money laundering. In his plea, Partee admitted that he conspired with Mendy Read-Forbes to launder money from a drug dealer. The investigation began in March 2012 when an undercover Kansas Bureau of Investigation agent, posing as a marijuana dealer, met Read-Forbes. According to court documents, Read-Forbes presented herself as the owner of Forbes & Newhard Credit Solutions, Inc., a nonprofit organization established to provide credit counseling to people who were in bankruptcy proceedings. In fact, she was not the legal owner but exercised control of the company's bank account along with Partee. As part of the scheme, money from the undercover agent was deposited into the bank accounts of Forbes & Newhard Credit Solutions or related companies and then the money was returned to the dealer via checks, money orders or wire transfers. To make it appear that the drug dealer was engaged in business as a certified credit counselor with Forbes & Newhard Credit Solutions, the drug dealer was given a certificate saying he had completed training as a bankruptcy specialist. Partee was at various times a member of the board of directors for Forbes & Newhard and a signator on FCP's bank accounts. On April 20, 2012, Partee approved two wire transfers from the FCP account that he believed were drug funds. In addition, to make transactions appear legitimate, Read-Forbes gave the drug dealer a contract titled “Purchase and Sale of Business Agreement.” The contract, bearing the signature of Partee and the drug dealer, made it appear that the marijuana dealer was purchasing assets of FCP, Inc., a corporation controlled by Read-Forbes and Partee. Read-Forbes and another defendant are awaiting trial. Pennsylvania Man Sentenced for Money Laundering On April 24, 2013, in Pittsburgh, Pa., Adrian M. Taylor, aka Tate, of Beaver Falls, Pa., was sentenced to 131 months in prison and three years of supervised release. Taylor pleaded guilty to money laundering. According to court documents, from on or about December 4, 2009, and continuing to on or about September 29, 2011, in Pennsylvania and elsewhere, Taylor, with the help of others, conspired to knowingly launder money derived from illegal drug trafficking. Pennsylvania Man Sentenced on Drug and Money Laundering Charges On April 22, 2013, in Pittsburgh, Pa., Eric Michael Mason, of New Brighton, Pa., was sentenced to 131 months in prison and five years of supervised release. On November 29, 2012, Mason pleaded guilty to violating federal narcotics and money laundering laws. According to court documents, from on or about December 4, 2009, and continuing to on or about September 29, 2011, in Pennsylvania and elsewhere, Mason conspired with others to possess with the intent to distribute and distribute four kilograms of cocaine. During the same time period, Mason purchased real estate and vehicles with drug proceeds and conspired with others to launder the proceeds of the illegal drug trafficking. California Man Sentenced on Structuring Charges On April 22, 2013, in Fresno, Calif., Joseph Edwin Gable Jr., aka Mike Jones, of Fresno, Calif., was sentenced to 57 months in prison and three years of supervised release. Gable pleaded guilty on January 18, 2013. According to court documents, Gable structured $693,905 in cash derived from the sales of marijuana in order to evade currency transaction reporting requirements. Financial institutions are required to file currency transaction reports for cash transactions involving more than $10,000. To accomplish the scheme, Gable used multiple bank accounts held by friends and relatives. According to court documents, some of the marijuana was grown on property leased in Fresno County. People were recruited to obtain California medical marijuana recommendations from a local physician for the purpose of growing marijuana, which was in fact shipped to other states. New York Man Sentenced for Money Laundering On April 18, 2013, in Rochester, N.Y., Michael Kardonick, of Brooklyn, N.Y., was sentenced to 120 months in prison and ordered to pay $2,164,059 in restitution for conspiracy to commit money laundering. According to court documents, between January 2004 and July 2008, Kardonick defrauded investors who had invested approximately $2.5 million in international currency trading investments through the company Atwood & James S.A. During the course of the scheme, Kardonick used the mail and wire communications to facilitate the execution of the fraud, using the illegally obtained investor proceeds to promote the scheme, in violation of the federal money laundering provisions. Two Men Sentenced in Cigarette Trafficking Operation On April 12, 2013, in Florence, S.C., two men were sentenced for their roles in an illegal cigarette trafficking ring believed to have smuggled over three million dollars worth of cigarettes between South Carolina and New York. Nathaniel Elmore, of Newark, N.J., was sentenced to 32 months in prison and Charley Antonio Davis Jr, of Bishopville, S.C., was sentenced to six months probation. Elmore used a front business called “The Cigar Room” in Florence, S.C. to purchase cigarettes so he could avoid paying the significantly higher taxes levied in his home state of New Jersey. He then used a series of specially modified vans to transport millions of cigarettes from Florence to New York City. Elmore, the leader of the smuggling ring, pleaded guilty to one count of money laundering. Davis, a driver and purchaser for the organization, pleaded guilty to one count of failure to keep tobacco records. Final Defendant of Drug Trafficking Organization Sentenced on Drug and Money Laundering Charges On March 27, 2013, in Columbus, Ohio, Antwane J. Rhodes, aka “Rho”, formerly of Springfield,

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Ohio, was sentenced to 120 months in prison, fined $5,000 and ordered to forfeit cash, vehicles and jewelry. Rhodes pleaded guilty on September 25, 2012 to conspiracy to possession with intent to distribute more than 1,000 kilograms of marijuana and money laundering. According to court documents, the investigation into the organization began in 2007. Sources identified Rhodes as one of the leaders of a drug trafficking organization. Loads of marijuana were received from a variety of sources. Evidence shows Rhodes laundered the money he was receiving from the sale of the marijuana by buying vehicles and custom jewelry, making deposits into bank accounts of a small company called T & J Investments of Ohio LTD and other means. Rhodes also made trips to Las Vegas with his co-conspirators and gave each of them just under $10,000 cash to carry with them. Five other defendants in the case were sentenced as follows: •Marc Clark - Sentenced on January 7, 2013 to 100 months in prison •Steve Blackmon - Sentenced on November 29, 2012 to 15 months in prison •Jayson Reed - Sentenced on February 27, 2013 to 12 months and a day in prison •Shawnte M. Lynn - Sentenced on January 25, 2013 to 15 months in prison •Erik Neely - Sentenced on January 25, 2013 to 18 months in prison. Los Zetas Money Launderers Sentenced On March 25, 2013, in Laredo, Texas, Laredoans Laurencio Montes and Jose Luis Gonzales were sentenced for their roles in laundering millions of dollars in drug proceeds from the Los Zetas drug trafficking organization. Montes was sentenced to 120 months in prison and ordered to forfeit $6 million. Gonzales was sentenced to 60 months in prison, three years of supervised release and ordered to forfeit $2,999,319. Montes and Gonzales pleaded guilty on October 30, 2012 to conspiracy to launder drug proceeds. According to court documents, the organization shipped multiple loads of cocaine from Mexico to major distribution centers in the United States such as Chicago, Philadelphia and Dallas. During the course of the investigation, approximately $21 million was seized from various tractor trailer drivers, couriers and stash homes in Texas and Illinois which was destined to be transported into Mexico for delivery to the Zeta drug trafficking organization. Korean National Sentenced for Structuring Over $1.5 Million Using Fraudulent Passports On March 21, 2013, in Honolulu, Hawaii, Young Mo Sung, a citizen of South Korea, was sentenced to 31 months in prison. Sung pleaded guilty on November 9, 2012 for to passport fraud and structuring transactions to evade reporting requirements of the IRS. According to court documents, Sung had structured approximately 254 transactions totaling $1,538,385 with domestic financial institutions through multiple bank accounts he had opened using passports under fraudulent identities. He structured the financial transactions to move currency he received from females employed at bars and/or clubs in Honolulu, Hawaii and Los Angeles, California. Sung was paid a commission to deposit and transfer the female workers’ cash proceeds. North Carolina Tobacco Broker Sentenced On March 21, 2013, in Raleigh, N.C., Jesse Ray “Tommy” Faulkner, II, was sentenced to 66 months in prison, three years of supervised release and ordered to pay $13,261,662 in restitution. On December 10, 2012, Faulkner pleaded guilty to conspiring to make false statements, making material false statements, committing mail and wire fraud, structuring financial transactions and conspiracy to commit money laundering. According to court documents, Faulkner was an agent for a cigarette manufacturer, and operated as an independent tobacco broker. Faulkner also operated independent tobacco receiving stations in Wilson, N.C. Through his tobacco receiving stations, Faulkner bought and sold tobacco from farmers with cash or in nominee names to facilitate the farmers in hiding their production. The conspiring farmers would not report the sales of the “hidden” tobacco in connection with their federal crop insurance claims, thereby being paid for losses they did not suffer. Faulkner then resold the “hidden” tobacco to the cigarette manufacturer. During the course of the conspiracy, Faulkner sold or caused to be sold $5,181,816 worth of “hidden” flue-cured tobacco and $8,097,429 worth of “hidden” burley tobacco. Defendant Sentenced for Conspiracy and Money Laundering Crimes On March 20, 2013, in Las Vegas, Nev., Shawn Rice, of Seligman, Ariz., was sentenced to 98 months in prison, three years of supervised release and ordered to forfeit $1.29 million in assets and pay $95,782 in restitution. Rice, a member of an anti-government movement known as the “Sovereign Movement,” was convicted by a jury in July 2012 of one count of conspiracy to commit money laundering, thirteen counts of money laundering, and four counts of failure to appear. According to court records, from about March 2008 to March 2009, Rice and co-defendant Samuel Davis, of Council, Idaho, laundered approximately $1.3 million of monies that they thought were from the theft and forgery of stolen official bank checks. Rice and Davis laundered the monies through a nominee trust account controlled by Davis and through an account of a purported religious organization controlled by Rice. Davis and Rice took approximately $74,000 and $22,000, respectively, in fees for their money laundering services. Davis was sentenced in October 2011 to 57 months in prison. Davis and Rice are heavily involved in the “Sovereign Movement,” whose members believe they do not have to pay taxes and believe the federal government deceived Americans into obtaining social security cards, driver’s licenses, car registrations, etc., and that if these contracts are revoked; persons are “sovereign citizens.” Members of the sovereign movement also believe that U.S. currency is invalid. They widely use fictitious financial instruments such as fraudulent money orders, personal checks, and sight drafts, and participate in “redemption” schemes where the fictitious financial instruments are used to pay creditors. Davis is a national leader of the movement, traveling nationwide to teach different theories and ideologies of the movement. Rice allegedly claims that he is a lawyer and Rabbi, and uses his law school education and businesses to promote his sovereign ideas and to gain credibility in the community. Minnesota Man Sentenced for Money Laundering and Wire Fraud On March 18, 2013, in Minneapolis, Minn., Jason Michael Meyer, of Rochester, Minn., was sentenced to 60 months in prison and three years of supervised release. Meyer pleaded guilty on September 18, 2012, to money laundering and wire fraud. In his plea agreement, he admitted to starting an investment company, 3 Hooligans Investment Properties, LLC, in 2007. Meyer represented himself as an experienced investor and began soliciting people to invest their money with 3 Hooligans. He promised his clients both significant and rapid returns for their investments, with little or no risk. Meyer deposited their money into a bank account he controlled. Instead of

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investing their money, however, Meyer often used the funds to pay for personal expenses, including house payments and family vacations. To continue the scheme, Meyer found new clients and used their money to pay previous clients. Until the fraudulent scheme was discovered in 2010, Meyer participated in approximately 30 transactions of money laundering and 30 transactions of wire fraud, which together, resulted in losses exceeding $11 million. Four Co-Conspirators Sentenced in Idaho Drug Case On March 8, 2013, in Pocatello, Idaho, four co-conspirators were sentenced for their roles in a largescale methamphetamine trafficking organization. Antonio Javier Mendoza, of Shelley, Idaho, was sentenced to 96 months in prison, five years of supervised release and ordered to pay a $1,000 fine. Fabiola Esmerelda Marin Castro, a Mexican national formerly living in Rexburg, Idaho, was sentenced to 36 months in prison, fined $300 and ordered to forfeit $83,575 and two vehicles. Daniel Quiroz, a Mexican national formerly residing in Rexburg, was sentenced to 78 months in prison and five years of supervised release. Quiroz will be subject to deportation following his release from prison. Abel Garcia, of Idaho Falls, Idaho, was sentenced to one month in prison, two years of supervised release and fined $750. According to the plea agreements, from June 2005 through January 2012, these individuals and others entered into a conspiracy to possess and distribute in excess of 50 grams of actual methamphetamine in the Idaho Falls area. In addition to distributing methamphetamine, several defendants laundered proceeds from the sale of the methamphetamine, and made false loan application to local banks to further the laundering of money. During the course of the conspiracy, the defendants obtained in excess of $500,000 from the distribution of methamphetamine. Nine other defendants have pleaded guilty and are awaiting sentencing. One defendant is a fugitive. Arizona Woman Sentenced on Mail Fraud and Illegal Monetary Transaction Charges On March 8, 2013, in Tucson, Ariz., Mayra Jeannette Angulo was sentenced to 22 months in prison, three years of supervised release and ordered to pay $953,176 in restitution. Angulo pleaded guilty on October 30, 2012 to mail fraud and engaging in an illegal monetary transaction. According to the plea agreement, Angulo was employed as a representative of Woodbury Financial Services selling life insurance and brokerage services to clients in the Republic of Mexico and the United States. Beginning in 2002, Angulo and her ex-husband Mark Ophelia Islas embezzled clients' insurance premium payments for their personal use by creating a corporation, International Financial Services Group. They opened a bank account in the corporation's name to deposit the money they embezzled. They then transferred the money to personal bank accounts for their own personal benefit. To cover their actions, Angulo and Islas opened numerous postal boxes in the names of clients and changed the clients' addresses in the system so the statements would be sent to the postal boxes not the true clients. Additionally, Angulo and Islas created false account statements for the victim clients which were hand-delivered. They also made minimal payments to the clients' life insurance policies to keep them from lapsing. Man Sentenced for Narcotics and Money Laundering Conspiracies On March 6, 2013, in Waco, Texas, Eliseo Montes, Jr. was sentenced to 240 months in prison, five years of supervised release and fined $2,000. On December 20, 2012, Montes was convicted of conspiracy to possess with intent to distribute at least 1,000 kilograms of marijuana and conspiracy to commit money laundering. According to court documents, beginning in October 2004, Montes and others began to acquire quantities of controlled substances for distribution. Once the controlled substances were sold and the currency collected, Montes, and other members of the organization, used the banking system or the bulk transportation of currency to transfer the currency. The proceeds were used to further the ongoing illegal activity and purchase assets, some of which were placed in nominee names to conceal their true ownership. Alabama Man Sentenced for Laundering Money On February 28, 2013, in Birmingham, Ala., Paul Haskell Lane, Jr., of Pelham, was sentenced to 37 months in prison his role in a scheme that collected more than $400,000 for expenses of a lawsuit that never existed. Paul Lane was also ordered to pay $343,900 in restitution to 20 victims and forfeit $10,500 to the government as proceeds of the illegal activity. Paul Lane pleaded guilty in August 2012 to the money laundering charge. According to court documents, in late 2009, Lane and his daughter were separately indicted for their roles in a plan to get people in other states to wire money to Lane’s bank account. Those who sent money were led to believe it would go toward costs for a personal-injury lawsuit filed by the Lane family after Katherine Lane suffered a brutal assault at work. The Lanes represented that proceeds from the lawsuit would be used to repay people who donated. Most who provided money also believed that they would get back from the Lanes more money than they sent. Katherine Lane, however, had not been assaulted and the Lanes had no lawsuit. Over the course of several years, Lane took the money that was wired into his account and gave it to his daughter. Katherine Lane pleaded guilty in 2010 to wire fraud, aggravated identity theft, and money laundering. She was sentenced in 2011 to 87 months in prison. Professional Counselor Sentenced for Illegal Distribution of Prescription Drugs On February 25, 2013, in Springfield, Mo., Tammy L. Neil, of Carthage, Mo., was sentenced to 12 months and one day in prison for her role in conspiracies to illegally distribute more than $1.5 million in prescription drugs and to engage in money laundering. Neil was also ordered to pay a $10,000 fine and forfeit cash and property representing the proceeds of her criminal conduct. According to court documents, Neil pleaded guilty on July 18, 2012 to her role in a conspiracy to illegally distribute phentermine from January 1, 2005, through March 26, 2008. Neil also admitted that she participated in a conspiracy to engage in money laundering during the same timeframe by aiding and abetting others to conduct financial transactions that involved the proceeds of the illegal distribution of prescription drugs. Two Outlaws Motorcycle Club Members Sentenced on Federal Charges On February 21, 2013, in Indianapolis, Ind., Kent D. Whitinger was sentenced to 87 months in prison and five years of supervised release under the federal Racketeer Influenced and Corrupt Organization (RICO) statute for his role in the operation of the Outlaws Motorcycle Club (OMC). Steve A. Reynolds, of Fort Wayne, was sentenced to 70 months in prison and five years of supervised release for his role. According to court documents, members of the Indianapolis OMC

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were charged with engaging in organized criminal activity in Indianapolis and across the state. Whitinger and Reynolds both pleaded guilty to a variety of crimes in furtherance of the OMC. Whitinger, a member of the Indianapolis chapter of the club, engaged in money laundering, gambling, extortion, witness tampering and cocaine distribution. Reynolds, a member of the Fort Wayne chapter, engaged in extortion and the distribution of prescription drugs. Ohio Man Sentenced for Fraud and Money Laundering On February 21, 2013, in Dayton, Ohio, Omar Yahya, formerly known as Darnell Bernard Watts, was sentenced to 12 months and one day in prison and three years of supervised release. Yahya along with three co-defendants was ordered to repay $3.8 million, forfeit their interests in approximately $80,209 in bank accounts and cash. Yahya pleaded guilty on October 11, 2012, to conspiracy and conspiracy to launder money. Between 2009 and 2011, Yahya and others conspired to traffic in electronic benefit cards in order to defraud the USDA’s Supplemental Nutrition Assistance Program (SNAP). The conspiracy caused more than $3.8 million in criminal proceeds in the form of USDA SNAP wire transfers to be deposited into various bank accounts and more than $1.2 million in criminal proceeds in the form of currency withdrawals to be made from the store’s accounts. The other three defendants were also sentenced to twelve months and one day in prison on charges of conspiracy and conspiracy to launder money. Illinois Man Sentenced for Money Laundering On February 14, 2013, in Benton Ill., Kerry L. Smith, of Carbondale, Ill., was sentenced 150 months in prison, five years of supervised release and ordered to pay $41,802 restitution. In addition, Smith was ordered to pay a monetary forfeiture judgment in the amount of $790,020, as well as forfeit eight homes, two vehicles, $10,576 in cash and other personal property. Smith pleaded guilty to conspiracy to distribute marijuana, engaging in an unlawful monetary transaction, concealment of material information from the Social Security Administration (SSA), and making a false statement. According to evidence at the hearings, from at least May 2001 through February 2007, Smith and others were involved in the distribution of marijuana. On December 6, 2007, Smith used over $12,000 of marijuana proceeds to purchase a vehicle. During this time, Smith also concealed information from the SSA and the U.S. Department of Agriculture that he was working and acquiring real estate and other assets. This concealment allowed Smith to fraudulently collect Supplemental Security Income and food stamps. Vice-President of Car Dealership Sentenced for Money Laundering and Drug Trafficking for the Gulf Cartel On February 4, 2013, in Orlando, Fla., Eladio Marroquin-Medina, of Apopka, Fla., was sentenced to 72 months in prison for conspiracy to possess with the intent to distribute 1,000 kilograms or more of marijuana and conspiracy to engage in money laundering. Medina was the vice-president of JM2 Auto Sales located in Apopka, Florida. According to court documents, Medina and Joel Torres, the president of JM2, laundered narcotics proceeds for the Gulf Cartel at their car dealership. The Gulf Cartel was a drug trafficking organization based out of Mexico. As payment for vehicles, Medina and Torres received money that was derived from narcotics sales. These vehicles were sent back to members of the Cartel in Texas and also used by local Cartel members in Florida. From October 26, 2010 to November 16, 2010, one Cartel member brought more than $115,000 in cash into JM2 for the purchase of vehicles. Joel Torres was previously convicted of money laundering and failure to file IRS Form 8300 and awaits sentencing. Former Convenience Store Owner Sentenced for Food Stamp Fraud, Wire Fraud and Unlicensed Money Transmitting On January 25, 2013, in Fort Worth, Texas, Ali Mohamud, of Arlington, Texas, was sentenced to 57 months in prison and ordered to pay $1,418,027 in restitution. Mohamud pleaded guilty in October 2012 to seven counts of food stamp fraud, five counts of wire fraud and one count of conducting an unlicensed money transmitting business. According to court documents, Mohamud owned a grocery store in Arlington, and participated in the United States Supplemental Nutrition Assistance Program (SNAP), formerly known as the “Food Stamp Program.” Beginning in 2009, Mohamud exchanged food stamp benefits for cash or wired money to other individuals in Somalia using food stamp benefits. From September 2008 through February 2010, Mohamud wired thousands of dollars from an EBT management for retailers, to his bank in Arlington. San Diego Man Sentenced for Money Laundering and Other Charges On January 24, 2013, in San Diego, Calif., Joshua John Hester, of San Diego, Calif., was sentenced to 100 months in prison for conspiracy to launder money, conspiracy to maintain drug-related premises and other charges. According to court documents, Hester admitted that he was the silent owner of two marijuana dispensaries where he made millions of dollars in the retail sale of marijuana. Hester originally used a supplier to distribute over 1,000 kilograms of high-quality marijuana and laundered millions of dollars of profits. When his supplier was arrested, Hester opened dispensaries and started selling and manufacturing his own marijuana and purchased bulk quantity from others. Hester also admitted that he laundered over $2 million in connection with the purchase of a residence in Rancho Santa Fe, California, where he also manufactured marijuana. Hester also agreed to forfeit over $575,000 in assets, including cash, vehicles, and jewelry. California Man Sentenced on Drug Charges and Structuring Financial Transactions On January 23, 2013, in Sacramento, Calif., Charles Miller Hilkey Jr., of the Nevada City area, was sentenced 49 months in prison and ordered to forfeit 25 different pieces of property in Oregon and California worth more than $2.4 million. Hilkey pleaded guilty on February 21, 2012 in connection with the cultivation of marijuana and structuring cash transactions to avoid reporting requirements. According to court documents, Hilkey and others were involved in a four-year conspiracy to cultivate and sell marijuana. Between 2006 and 2009, Hilkey structured more than $850,000 in cash deposits with the intent of evading reporting requirements. He admitted that the funds he structured either were proceeds of marijuana cultivation or were intended to promote marijuana cultivation. By 2009, Hilkey was the organizer of a well-concealed and well-funded marijuana operation. He had several marijuana grow sites under his control, he used straw owners to separate himself from a number of those grows, and he regularly used underlings to sell his marijuana, bringing in tens-of-thousands of

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dollars with each sale. In September 2009, investigators seized evidence of more than 200 marijuana plants, several pounds of processed marijuana, marijuana growing equipment, a firearm and ammunition, and more than $143,000 in cash on properties controlled by Hilkey. Pain Clinic Owner and Physician Sentenced for Prescription Drug and Money Laundering Conspiracies On January 18, 2013, in Pensacola, Fla., Dennis M. Caroni, of Los Angeles, Calif., and Dr. Gerard M. DiLeo, of Bradenton, Fla., were sentenced for their roles in running illegal pill mill pain clinics and conspiring to unlawfully launder the proceeds of their prescription drug distribution violations. Caroni was sentenced to 240 months in prison. DiLeo was sentenced to 24 months in prison and one year of home confinement. Following a six-week trial in October and November 2011, the defendants were found guilty of conspiring to unlawfully distribute prescription painkillers and conspiring to launder the proceeds. According to court documents, Caroni was the owner and operator of Global pain management clinics in Pensacola and the New Orleans area between 2004 and 2008. Dileo was the part-owner of one of the clinics and full-time prescribing physician. Ohio Auto Dealer Sentenced for Money Laundering and Falsifying Tax Returns On January 11, 2013, in Dayton, Ohio, Earl Clark, of Franklin, Ohio, was sentenced to 12 months and one day in prison, three years of supervised release and ordered to pay a $10,000 fine. In addition, Clark was ordered to forfeit two bank accounts containing $353,211 and $33,388, plus $21,524 in U.S. currency, nine automobiles, and a trailer, and to pay $80,000 in restitution to the IRS. According to court documents, Clark owned and operated Clark’s Auto Sales and assisted several individuals in concealing their assets, which represented the proceeds of illegal drug sales. Between 2007 and October 2010, Clark sold cars to drug dealers, but titled the cars in the names of individuals other than the drug dealers in order to help conceal ownership of the vehicles. He also placed false liens of the vehicles to prevent law enforcement from trying to seize the property as proceeds of drug trafficking. Clark laundered the proceeds from the illegal auto sales by depositing cash, totaling between $120,000 and $200,000, into his bank account. Additionally, Clark earned significant income between 2004 and 2009 from the sale of fireworks and explosive materials. Clark willfully failed to report at least $80,000 in income per year during each of these tax periods. Cleveland Man Sentenced for Bank Fraud and Money Laundering On January 10, 2013, Zrino Jukic, of Cleveland, Ohio, was sentenced to 37 months in prison and ordered to pay nearly $1.7 million in restitution on charges of bank fraud and money laundering. Sccording to court documents, Jukic, co-owner of the Zlato Group, engaged in a scheme to defraud the St. Paul Croatian Federal Credit Union by providing false information in connection with approximately 11 loan applications. The proceeds of these fraudulent loans were used to allow Jukic and others, through the Zlato Group, to invest in certain business ventures. Jukic also engaged in a money laundering transaction by transferring fraudulently obtained funds from a Zlato Group bank account to his own bank account, according to court documents. Leader of Nevada–Alaska Oxycodone Ring Sentenced on Drug and Money Laundering Charges On January 3, 2013, in Las Vegas, Nev., Nicholas Ghafouria was sentenced to 180 months in prison, three years of supervised release and ordered to forfeit $1.2 million in cash and property. Ghafouria pleaded guilty on October 12, 2012 to conspiracy, drug and money laundering charges. According to court documents, between May 2009 and October 2010, Ghafouria organized and led a group of individuals who distributed over 4,000 oxycodone pills in Alaska and laundered at least $1.2 million in cash proceeds. Ghafouria and his co-conspirators used various ways to get the drugs to Alaska, including sending them in packages and transporting them on airplane flights. Ghafouria sold the pills for approximately $65 each in Alaska. Co-conspirators in Alaska either provided money directly to couriers who delivered it to Ghafouria in Las Vegas, or they deposited money into bank accounts in Alaska which was withdrawn in Las Vegas by individuals under Ghafouria’s direction. Rabbi and Brooklyn Man Sentenced in Money Laundering Conspiracy On December 27, 2012, in Trenton, N.J., Lavel Schwartz, a rabbi based in Brooklyn, N.Y., was sentenced to 12 months and one day in prison and three years of supervised release. On January 3, 2013, in Trenton, N.J., David S. Goldhirsh, of Brooklyn, N.Y., was sentenced to 12 months and one day in prison, three years of supervised release and ordered to forfeit $154,289. According to court documents and statements made in court, beginning in May 2008, Schwartz and his brother, Rabbi Mordchai Fish, met with Solomon Dwek. For a fee of approximately 10 percent, Fish and Schwartz agreed to launder and conceal Dwek’s funds through a series of purported charities, also known as “gemachs.” Fish would instruct Dwek to make checks payable to various “gemachs” including Boyoner Gemilas Chesed (BGC), which was operated by Goldhirsh, who provided cash directly to Fish and Dwek. Schwartz admitted that prior to laundering Dwek’s funds, Dwek informed him that the funds that he sought to launder were the proceeds of Dwek’s purported illegal businesses, which included the trafficking in counterfeit goods. Schwartz admitted that, despite knowing the illicit nature of the funds, he engaged in approximately 10 money laundering transactions with Dwek. Defendant Sentenced for Role in Investment Fraud Scheme On December 20, 2012, in Missoula, Mont., Shanna Krista Raymond, of Oregon, was sentenced to 24 months in prison, three years of supervised release and ordered to pay $1,500,000 in restitution. Raymond pleaded guilty to wire fraud and money laundering. According to court documents, in early 2008, Raymond learned of a purported high-yield investment through an associate. The investment was to return a large amount of money over a relatively short amount of time and involved Dan Two Feathers, who would invest the funds. Raymond was interested in promoting the investment and met with several investors or potential investors. Raymond received in her bank account a total of $900,000. She sent $500,000 from her bank account in Portland, Oregon, to Two Feathers’ bank account and used the remaining $400,000 for other purposes. New Jersey Man Sentenced for Money Laundering On December 19, 2012, in Newark, N.J., Juan Carlos Done, of Morristown, N.J., was sentenced to 92 months in prison and three years of supervised release for his involvement in a conspiracy to launder narcotics proceeds from 2007 through June 2009. According to court documents and

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statements made in court, Done agreed to conduct financial transactions with drug proceeds in a manner intended to conceal the source of the funds. He and others made anonymous cash deposits of drug proceeds into various bank accounts in New Jersey, Pennsylvania, and North Carolina. The amount of these deposits was intended to avoid federal transaction reporting requirements. Done’s brother, Enrique Done, was previously sentenced to 75 months in prison for his role in a conspiracy to possess heroin with intent to distribute in New Jersey and elsewhere. Former President of CORF Licensing Services Sentenced on Conspiracy and Money Laundering Charges On December 11, 2012, in Phoenix, Ariz., David Steven Goldfarb, of Scottsdale, Ariz., was sentenced to 36 months in prison and ordered to pay $19,567,512 in restitution. Goldfarb pleaded guilty on September 19, 2012, to conspiracy to commit mail fraud and transactional money laundering for his role in a multi-million dollar investment fraud scheme. Goldfarb, along with codefendants, owned and operated CORF Licensing Services, LP (CLS) and CORF Management Services, LP (CMS) from 1999 until May 2003, when the companies declared bankruptcy. Goldfarb served as the president of both companies. During the life of CLS and CMS, the defendants convinced hundreds of investors to contract with CLS to establish a for-profit Comprehensive Outpatient Rehabilitation Facility, which they claimed would provide an alternative to hospitals for rehab services. For an investment fee of $100,000 to $165,000, CLS was supposed to establish a profitable, Medicare-certified, business for the investor. The defendants entered into 338 contracts and collected over $40,000,000. However, CLS was unable to establish medical businesses for over two thirds of its clients. In addition, at the facilities CLS did establish, its clients were losing substantial sums of money. Despite these problems, Goldfarb and his partners convinced hundreds of investors to pay CLS through an elaborate fraudulent scheme. Goldfarb and his co-defendants placed ads in newspapers and magazines that falsely represented that an investor could expect to make $450,000 in net profit during the first year. Goldfarb and his co-defendants held sales seminars at an upscale and exclusive country club in Scottsdale, Ariz., to convey the impression that CLS and its existing clients/investors were financially successful. Goldfarb and his co-defendants gave prospective investors a false impression that CLS clients were successful and were collecting more than $1,000,000 a year. As part of the fraud scheme, investors were directed to speak to owners who were identified as “independent” references. Goldfarb and his co-defendants paid the “independent” references approximately $2,000,000 to provide misleading information. When speaking to prospective investors, the “independent” references falsely confirmed the financial representations Goldfarb and his co-defendants had made. Goldfarb received over $3,000,000 from CLS during the life of the company. West Virginia Man Sentenced on Wire Fraud and Money Laundering Charges On December 3, 2012, in Martinsburg, W.Va., David F. Brackett, Jr., of Shepherdstown, West Virginia, was sentenced to 282 months in prison and three years of supervised release. Brackett pleaded guilty on August 27, 2012, to wire fraud and money laundering. According to court documents, Brackett obtained “loan” money from victims and falsely promising to repay the victims with substantial lottery winnings that he had never won. Brackett also fraudulently obtained money by making materially false statements about his assets and expected profitability of his business ventures. In total, Brackett fraudulently obtained over $5.5 million from his victims and laundered his money through a variety of bank transactions involving different banks and accounts. Former Penn State Professor Sentenced for Misappropriation of Federal Grant Funds On November 30, 2012, in Harrisburg, Pa., Craig Grimes, a former Pennsylvania State University professor, was sentenced to 41 months in prison and ordered to pay $640,660 in restitution. On January 31, 2012, Grimes was charged in a three-count Information with wire fraud, false statements, and money laundering. During the time period contained in the Information, Grimes was a Professor of Electrical Engineering at Pennsylvania State University. According to court documents, between June 30, 2006 and February 1, 2011, Grimes defrauded the National Institutes of Health (NIH) of federal grant monies. The NIH provides funding for medical research through grants. Grimes, acting through his solely-owned company, SentechBiomed, requested a $1,196,359 grant from NIH. The NIH funded the clinical trial. In the application, Grimes specifically represented to the NIH that he would direct approximately $509,274 to a Medical Center to conduct clinical research. However, the money was never paid. Instead, the grant funds were misappropriated, in part, by Grimes for his own personal use. The clinical studies/trials were not performed. Grimes also made false statements to the United States Department of Energy in connection with a second federal grant. In August 2009, Grimes completed a grant application seeking a $1,908,732 from the Advanced Research Projects Agency - Energy (ARPA-E). Due to the limited amount of funds available for research, ARPA-E seeks to avoid funding research already funded by other government and private entities. It requires applicants for grants to disclose other funding sources. In the application Grimes completed and submitted to ARPA-E, he stated there was no other funding, when, in fact, he had received a grant for the same research from the National Science Foundation. Former Executive Director of Alaska Eskimo Whaling Commission Sentenced on Federal Charges On November 29, 2012, in Anchorage, Alaska, Maggie Ahmaogak was sentenced to 41 months in prison and ordered to pay $393,000 in restitution. Ahmaogak was sentence on two counts of intentional misapplication of funds from an organization receiving federal grant money and one count of money laundering. According to court documents, Ahmaogak was the executive director for the Alaska Eskimo Whaling Commission (AEWC) from 1990 until April 2007. AEWC receives funding from several sources, with the majority of its budget coming from grants issued by the U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA). Between 2004 and April 2007, AEWC received federal grant funds from NOAA totaling approximately $2.3 million. Ahmaogak intentionally misapplied $393,000 of AEWC funds, including federal grant money, to purchase luxury items and for gambling. Former Kentucky Fire Chief Sentenced for Embezzlement and Money Laundering On November 19, 2012, in Louisville, Ky., Paul Barth was sentenced to 41 months in prison, three years of supervised release and ordered to pay $190,000 in restitution to the Crusade for Children and $8,277 in restitution to the McMahan Fire Protection District (MFPD). Barth pleaded guilty on

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June 21, 2012 to mail fraud, wire fraud, and money laundering. According to court documents, from January 2001 through November 2009, Barth, while employed as the Chief of the MFPD, used money donated to MFPD and the Crusade for Children for his own personal use. Barth deposited approximately $218,995 into a bank account that he solely controlled in the name of the Crusade. He then used the majority of these funds to pay for personal expenses that included Disney World vacations, Corvette Club expenses, and vehicle property taxes. Barth also used the MFPD credit card to pay for more than $36,000 in expenses. Missouri Man Sentenced on Money Laundering Charge On November 15 ,2012, in Springfield, Mo., Richard B. Gillette, of Springfield, was sentenced to 24 months in prison and ordered to pay $1,292,256 in restitution. On May 23, 2012, Gillette pleaded guilty to money laundering, which was related to a mortgage fraud scheme. According to court documents, in May 2006, Gillette obtained two loans totaling $1,125,000 from Homecomings Financial to refinance existing loans on his residence. In the loan applications, Gillette claimed that his monthly income was $35,000; in reality, it was substantially less than that amount. Two Texas Men Sentenced for Money Laundering On October 30, 2012, in Laredo, Texas, Nelson Casarez and Miguel Santos were sentenced their roles in laundering millions of drug proceeds for the Los Zetas organization. Casarez was sentenced to 108 months in prison and ordered to forfeit $$2,999,310. Santos was sentenced to 72 months in prison and ordered to forfeit $4 million. According to court documents, Casarez provided a tractor trailer yard in Laredo for use by Los Zetas as a receiving station for other co-conspirators who transported bulk cash drug proceeds from the Chicago, Ill., area to Laredo. Casarez then coordinated the receipt and transfer of bulk cash drug proceeds to other co-conspirators who would transport it to Nuevo Laredo, Mexico. Casarez was involved in the laundering of approximately $5 million. Santos was a commercial truck driver who transported drug proceeds from the Chicago area to Laredo. Santos transported drug proceeds on at least two occasions in 2010 with each bulk shipment totaling approximately $2 million. Former General Manager of West Coast Car Company Sentenced On October 16, 2012, in Boise, Idaho, Kurt Bates, of Nampa, Idaho, was sentenced to 12 months in prison, three years of supervised release and ordered to pay a fine of $1,000 for misprision of a felony. Bates, former general manager of West Coast Car Company, pleaded guilty to a superseding information on June 5, 2012. According to the plea agreement, Bates admitted that on September 16, 2008, he became aware that one or more persons committed the felony crime of money laundering. These individuals conspired to conduct a sale of two automobiles for cash represented to be the proceeds of drug dealing activities. Bates admitted that he failed to notify law enforcement officers or other authorities that this crime had been committed. Bates was interviewed by law enforcement personnel about the money laundering activities on January 22, 2009, and failed to answer their questions truthfully. Bates’ co-defendant, Joseph Monte Johnson, formerly of Idaho Falls, pleaded guilty in August 2011 to conspiracy to launder monetary instruments. Johnson, the former finance manager of West Coast Car Company, is currently serving 40 months in federal prison. Operator of Illegal Gambling Business Sentenced On October 10, 2012, in Urbana, Ill., Jimmy A. LaCost, of Kankakee, Ill., was sentenced to 12 months and one day in prison. LaCost was convicted in April 2012 for structuring financial transactions and laundering the proceeds of his illegal gambling business. LaCost’s son, Michael, was sentenced to 12 months of home confinement with electronic monitoring. LaCost Amusements, Inc., was sentenced to three years of probation. The court also ordered Jimmy LaCost, Michael LaCost and LaCost Amusements, Inc., to jointly forfeit $4,285,829 in illegal gambling proceeds, 300 illegal video gambling machines, and nine separate properties. In April 2012, a jury found Jimmy LaCost guilty of 54 counts of structuring financial transactions and one count of money laundering. The jury found that Jimmy LaCost structured approximately $6.4 million in cash deposits over four years, from January 2005 to July 2009, to evade Currency Transaction Reporting requirements. In addition, the jury found Jimmy LaCost guilty of money laundering related to the bank deposits of proceeds from the operation of the illegal gambling business. North Carolina Man Sentenced in Illegal Credit Scheme On October 4, 2012, in Raleigh, N.C., James Walter Goddard, aka Walter James Karbley, Jr., was sentenced to 224 months in prison and five years of supervised release. Goddard was also ordered to pay $1,112,132 in restitution and a $900 special assessment. On May 5, 2011, Goddard pleaded guilty to one count of bank fraud, three counts of wire fraud, three counts of money laundering, one count of obstruction of justice, and one count of aggravated identity theft. According to the indictment, from 2005 to 2009, Goddard submitted hundreds of false credit card and lines of credit applications in the names of multiple individuals or businesses to various banks. Goddard, who called himself the Credit Doctor of North Carolina, met with individuals/business owners during which time they provided him some personal information. Goddard touted his specialized skills included obtaining credit for newly formed businesses as well as credit repair charging a 15 percent fee on each credit line he obtained. The individuals believed they were only going to get one or two credit cards. However, Goddard submitted falsified applications and was approved for between 10-20 cards on the individuals’ behalf. Through the use of a return preparer, fictitious tax returns were also created. Goddard, collecting his 15 percent by charging the credit cards under the merchant name, Goddard, Inc., laundered over $950,000 in merchant payments to his bank accounts from 20062009. In addition, from 2005 to 2011, Goddard has caused over $4,000,000 in credit application and wire fraud. Also, the indictment alleged Goddard applied for and was approved for 14 business credit cards in which he overstated his income and/or falsified his date of business establishment.

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Table of Contents - Money Laundering Investigations Criminal Enforcement Home Page Page Last Reviewed or Updated: 14-Oct-2014

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