MARQUETTE, MICHIGAN — Lorne Anthony Lyons, 51, of Brimley, Michigan and a member of the Bay Mills Indian Community, was sentenced to 14 months in federal prison for assault upon a federal officer, U.S. Attorney Patrick A. Miles, Jr. announced today. In addition to
the prison term, U.S. District Judge R. Allan Edgar ordered Lyons to serve two years of supervised release following his release from prison and to pay a $100 special assessment.
On December 4, 2012, after a two-day jury trial, Lyons was convicted of assault upon a federal officer with a dangerous weapon. The charge arose from an incident on May 7, 2012, during which Lyons sent text messages to his estranged wife claiming he had committed a
suicidal act. Bay Mills Tribal Police responded to an emergency call, and with the assistance of U.S. Border Protection agents, searched Lyons’ residence trying to locate him. Lyons, who was
hiding in a closet, refused to come out when asked by the officers, and instead produced a short sword, thrusting it at the Tribal Police officer, waving it around, and throwing it at the officer
after he was shot with a taser.
The Bay Mills Indian Community Tribal Police, U.S. Border Patrol and the FBI investigated the case. Assistant U.S. Attorney Paul D. Lochner prosecuted the case.
Drug Dealers Sold Cocaine in West Michiganand Crystal Methamphetamine in Minnesota; Leader Gets 25 Years In Federal Prison
GRAND RAPIDS, Mich. — Four men fromCalifornia and fivemen from West Michigan have been sentenced to federal prison for their involvement in a multi-state drug conspiracy, U.S. Attorney Patrick A. Miles, Jr. announced today. U.S. District Judge Robert J. Jonker sentenced the group’s leader, Lucio M. Nunez, 32, of Mecca, California, to 25 years’ imprisonment.
Court records show that Nunez and the California members of the conspiracy obtained 20-30 kilograms of cocaine from sources affiliated with the Sinaloa Cartel and shipped it to the Michigan members of the conspiracy, who wereled by Pablo G. Aguilera, 31, of Muskegon. The cocaine was typically hidden inside hollowed-out X-Box game consoles. The conspirators also concealed cocaine inside hidden vehicle compartments. Aguilera sold the cocaine in West Michigan and laundered the proceeds through various banks. Agents have identified $350,000 in drug proceeds, which they believe to be only a fraction of the total amount of money laundered by the conspiracy.
At the same time they were sending cocaine to Michigan, Nunez and the California members of the conspiracy distributed 20-30 pounds of crystal methamphetamine in Minnesota. The investigation began in February 2012, when officers with the West Michigan Enforcement Team (“WEMET”), a local narcotics team, caught Aguilera with a kilogram of cocaine. They worked closely with U.S. Homeland Security Investigations (“HSI”) and Drug Enforcement Administration (“DEA”) agents to build the case against the other members of the conspiracy, who were charged in August 2012 withconspiracy to distribute cocaine and money laundering.
In total, nine members of the conspiracy pled guilty and received sentences from Judge Jonker:
· Lucio M. Nunez, 32, of Mecca, California: 300 months’ imprisonment;
· Jesus Joel Rios, aka “Chuy,” 30, of Mecca, California: 132 months’ imprisonment;
· Pablo G. Aguilera, 31, of Muskegon, Michigan, 128 months’ imprisonment;
· Tyree A. Brown, 40, of Muskegon, Michigan: 60 months’ imprisonment;
· Bradley E. Hatcher, 39, of Muskegon, Michigan: 46 months’ imprisonment;
· Adan V. Chaidez, 32, of Mecca, California: 36 months’ imprisonment;
· Victor Aguilera, 23, of Muskegon, Michigan: 30 months’ imprisonment;
· Mark Barnes, 23, of Muskegon, Michigan: 30 months’ imprisonment;
· Mario Alberto Molina-Martinez,39, of Coachella, California: 36 months’ imprisonment.
Acting Special Agent in Charge William Hayes of the HSI Detroit Field Office said, “It’s this type of close, nationwide law enforcement liaison capability that gives Homeland Security Investigations unparalleled ability to dismantle drug trafficking organizations like the one involved in this case. The convictions and sentences in this casewere a direct result of law enforcement coordination and field efforts by HSI, WEMET, and the DEA.”
Officers and agents from WEMET, HSI and DEA investigated this case. They received assistance from the U.S. Postal Service and the Muskegon County Prosecutor. Assistant U.S. Attorney Clay Stiffler handled the prosecution.
Nehemiah Muzamhindo Admits Bilking W.K. Kellogg Foundation of $800,000
GRAND RAPIDS MICHIGAN—Nehemiah Muzamhindo, a resident of Grand Rapids, Michigan and citizen of Zimbabwe, pled guilty to federal money laundering and income tax charges before U.S. Magistrate Judge Ellen Carmody, U.S. Attorney Patrick Miles announced today. Joining Miles in the announcement were Scott Collins, Special Agent in Charge of the Diplomatic Security Service (“DSS”) and Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation.
Muzamhindo faces a maximum sentence of 23 years in prison; an order of restitution and criminal fines, and deportation. Sentencing, which will be conducted by U.S. District Judge Janet T. Neff, has not yet been scheduled.
Muzamhindo was investigated by federal agents in 2008 for his role in a scheme to obtain fraudulent U.S. passports. While conducting a search warrant on his home, agents discovered evidence that Muzamhindo had received large wire transfers from bank accounts held by the W.K. Kellogg Foundation (“WKKF”) in the Republic of South Africa. WKKF has its headquarters in Battle Creek, Michigan and is one of the world’s largest children’s charities.
The investigation ultimately determined that Muzamhindo was part of a fraudulent scheme to submit bogus invoices for payment to WKKF, which paid members of the scheme approximately $800,000 between 2006 and 2008 before learning that it was being swindled.
By pleading guilty to a federal money laundering charge, Muzamhindo admitted to being part of the scheme, and to wiring roughly half of the fraudulent funds back to Africa, where one of his accomplices lived. He also admitted that he had filed false income tax returns during 2006 and 2008 because he did not report any of the money he received from WKKF during those years.
U.S. Attorney Miles commented that “The positive result in this case is directly attributable to the dedicated and coordinated efforts of federal law enforcement, beginning with the Diplomatic Security Service uncovering Muzamhindo’s scheme in the course of an unrelated
passport fraud investigation. Their diligence prevented the loss of even more money meant to help disadvantaged children. Then agents of the IRS worked to have Muzamhindo held accountable for his attempt to cheat on his taxes, reinforcing the message that swindlers will be held accountable for the full measure of their deceit in this district.”
“The worldwide presence and investigative capabilities of the Diplomatic Security Service enabled us to pull all of the pieces together – uncovering the connections to South Africa; allowing DS agents to compile the evidence that assisted the prosecution team to
accepting Muzamhindo’s guilty plea,” said Scott Collins, Assistant Special Agent in Charge of the Chicago Field Office of the Diplomatic Security Service. “Our Detroit Resident Office led
our investigation and worked collaboratively with the IRS and U.S. Attorney’s Office. DSS takes very seriously our charge to protect the integrity of the U.S. passport and visa. Those who fraudulently acquire U.S. travel documents often do so in order to commit other crimes.”
Special Agent in Charge Erick Martinez, Internal Revenue Service Criminal Investigation added that Muzamhindo’s crime was worse than many typical fraud cases: “He diverted money intended for children for his own greedy purposes.”
The case was prosecuted by Assistant U.S. Attorney Timothy VerHey and was
investigated by special agents of the IRS-Criminal Investigation and of the Diplomatic Security
Thirty-One Alleged Holland Latin Kings Gang Members And Associates Indicted For Racketeering Related Charges
Joint Federal and State Investigation Targets Gang Violence, Drug Dealing
GRAND RAPIDS, MICHIGAN — A federal grand jury indicted 31 alleged members and associates of the Holland Latin Kings gang for a range of offenses, including conspiring to engage in racketeering, committing violent crimes in aid of racketeering, possessing firearms and conspiring to distribute cocaine and marijuana. The grand jury alleges in the indictment that the Holland Latin Kings gang is an enterprise whose members and associates engaged in crimes of
violence and drug trafficking in order to promote the gang and enrich its members while insulating themselves from law enforcement, among other things. The charges are the result of a joint federal and state investigation targeting gang violence and drug trafficking in the Holland, Michigan, area.
U.S. Attorney Patrick Miles was joined in the announcement of the charges by: Gil Salinas, Acting Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives; Ronald J. Frantz, Prosecuting Attorney, Ottawa County; D/F/Lt. Mike Harvitt, Michigan State Police; Gary Rosema, Sheriff, Ottawa County Sheriff’s Office; and Matt Messer, Chief of Public Safety, City of Holland Police Department.
The charges in the indictment are only allegations and are not evidence of guilt. The defendants are presumed innocent unless and until proven guilty, and the government has the burden of proving their guilt beyond a reasonable doubt.
Ken Hoesch also sentenced for federal tax offense.
GRAND RAPIDS, MICHIGAN — Kenneth Hoesch, age 59, formerly an attorney in Zeeland, Michigan, was sentenced to 78 months imprisonment and 3 years of supervised release for his embezzlement from trusts and trust accounts he controlled as an attorney on behalf of clients as well as his failure to report this ill-gotten income on his taxes, U.S. Attorney Patrick Miles announced today.
In addition, United States District Judge Robert Jonker also ordered Hoesch to
pay a special assessment of $200.00. Additionally, he was ordered to pay restitution to his victims in the amount of $1,295,518.19 and restitution to the Internal Revenue Service in the amount of $211,654.00.
“Kenneth Hoesch was an attorney who stole from his clients and preyed on seniors. His prosecution and sentence show justice will be served on those who do so whether that person uses a gun and a mask or a pen and a legal pad. Both harm society.” Miles stated. U.S. Attorney Patrick Miles was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service (IRS) Criminal Investigation Division. “Kenneth Hoesch’s sentence today is evidence that no one is above the law. Hoesch violated the trust of
vulnerable victims and now he will pay the price for that crime,” said Special Agent in Charge Erick Martinez.
In July of 2012, Hoesch pled guilty to one count of mail fraud and one count of filing afalse tax return. According to court records, during 2006 through 2010 tax years, Hoesch worked as an attorney specializing in trusts and estate law. During this time period, Hoesch stole over $800,000 from his clients and trust beneficiaries and purposely falsified his federal income tax return when reporting his income. Of the $800,000 Hoesch stole, over $300,000 was embezzled directly from trust accounts intended for beneficiaries such as the American Cancer Society.
His victim clients include the elderly and even the deceased. The remaining amount of over $600,000 was stolen through an Interest on Lawyers Trust Account (IOLTA) controlled by Hoesch. IOLTAs are a standard type of account where, for example, monies to be directed to clients or beneficiaries are held pending disbursement. Because he did not report to the IRS the income that he stole from his clients and beneficiaries, Hoesch knew his tax return was not
correct. In sum, Hoesch failed to pay over $200,000 in tax due and owing to the IRS. Hoesch’s former law partners had no knowledge or involvement in the criminal activity.
GRAND RAPIDS, MICHIGAN — Marcus Montell Thames, 32, of Ft. Lauderdale, Florida, was sentenced to serve nine years and seven months inFederal prison for his leading role in an interstate identity-theft conspiracy that was based out of Florida, but whose members traveled throughout the Southeast and Upper Midwest committing bank fraud and identity theft during 2010 and 2011.
The scheme involved eight charged defendants, all of whom have since been convicted of felonies including conspiracy to commit identity theft and bank fraud; bank fraud; and aggravated identity theft. The scheme involved the defendants, travelling in teams controlled by Thames, going to locations such as gyms, day-carecenters, and other places where they hoped to find purses that had been left in vehicles. After breaking into the vehicles and stealing purses to obtain check books, driver licenses, and other means of identification, the defendants would then forge high face-value checks from one victim’s bank account made payable to another victim, and then travel to branches of the payee victim’s bank that had drive-through teller lanes. There, female fraud-team members wearing basic disguises would cash the forged checks from the lane farthest from the teller window, presenting that victim’s stolen means of identification as proof of identity. The fast-moving and wide-ranging scheme, dubbed “Felony Lane” by the law-enforcement agencies that investigated it, victimized significant numbers of private citizens and federally-insured financial institutions in states that included Georgia, Ohio, Indiana, Illinois and Michigan.
The investigation of Thames and his accomplices began with a February 2011 arrest by the Blackmon Township Police Department of defendant Wendy S. Bailey, 44, of Saginaw, Michigan, after she attempted to cash a forged check while on a trip with Thames and others. After initial investigation by Blackmon Township developed evidence that Bailey was part of an interstate fraud ring, the Lansing office of the FBI joined the investigation. From there, the investigation grew to include participation by the Meridian Township Police Department, the Michigan State Police, and numerous other law-enforcement agencies in communities outside of Michigan through which the fraud teams had passed.
The sentence was imposed by U.S. DistrictJudge Janet T. Neff, who commented on the seriousness of identity theft in general, and on the aggravated character of this scheme in particular given its geographic reach, the number of victims over time, and the financial and psychic harms it caused.
Other defendants received the following sentences: Peter P. Simone, 50, of
Davie, Florida, who was convicted following a jurytrial in October 2011, received a sentence of six years in prison; Jarod L. Jackson, 29, of Ft. Lauderdale, Florida, was sentenced to 41 months in prison; Lucious L. Felder, 23, of Ft. Lauderdale, was sentenced to 30 months in prison; Carlton L. Brown, 24, of Ft. Lauderdale, was sentenced to 18 months in prison; Kimberly L,
Kirkby, 52, of Florence, Alabama, was sentenced to 12 months in prison; and Wendy S. Bailey, 44, of Saginaw, Michigan, received a sentence oftime-served, or approximately three months. Erica S. Robinson, 29, of Smyrna, Georgia, is pending sentencing on February 19, 2013. She is presently in the custody of the U.S. Marshals Service. All of the sentences were imposed by U.S. District Judge Neff, who also presided over the Simone trial.
Tax Preparers Doing Business As “Integrity Tax” Plead Guilty to Conspiracy to Defraud The United States
Defendants Agree To Permanent Ban On Preparing Federal Tax Returns For Others
GRAND RAPIDS, MICHIGAN — Chad Anthony Chertos, 37, of Ada, Michigan, and Gregory Edward VanDyke, 39, of White Cloud, Michigan, pled guilty to conspiring to defraud the U.S. Department of the Treasury, U.S. Attorney Patrick Miles announced today.
In a plea hearing before U.S. District Judge Robert J. Jonker, Chertos and VanDykeadmitted conspiring with one another in a scheme to obtain payment of income tax refunds from the U.S. Department of the Treasury by preparing and filing false federal income tax returns on behalf of certain clients.
Between April 2009 and August 2010, the defendants falsely asserted
to clients that they could obtain significant tax refunds even if they earned little or no earned income. In some cases, even if their clients actually earned income, the defendants ignored their
clients’ true income and prepared tax returns reflecting false and fraudulently-inflated income amounts to obtain a substantial refund.
Chertos and VanDyke admitted filing false returns in
order to generate higher fees, which were paid from U.S. Treasury refund checks delivered to the defendants.U.S. Attorney Miles said, “Tax preparation fraud robs the people of the United States of
money. Many hardworking and honest taxpayers depend on others to complete their tax forms in compliance with the law. Tax preparers who lie, cheat, and steal betray that trust. Taxpayersshould carefully select a tax preparer. If what the preparer is telling you sounds too good to be true, you may be dealing with an unscrupulous person who intends to file false and fraudulent tax returns on your behalf in order to claim substantial fees from your refund.”
The maximum penalty for conspiring to defraud the United States is 10 years in prison.
The charges also allow for the imposition of fines and mandatory restitution to the United States. Chertos and VanDyke have agreed that the total amount of restitution for the fraudulent tax
refunds is in excess of $225,000.00. The actual sentence will be determined at the discretion of the Court after consideration of any applicable statutory factors and the advisory U.S. Sentencing
Guidelines. Sentencing is scheduled for May 2, 2012.
In addition to the potential penalties for the felony offense, Chertos and VanDyke agreed to be permanently enjoined from preparing or filing, or assisting in or directing the preparation or filing, of any federal tax return or any other federal tax documents or forms for any other person or entity.
This case was investigated by the Internal Revenue Service-Criminal Investigation in Grand Rapids. Assistant U.S. Attorney Christopher O’Connor is prosecuting the case.
Washington — U.S. Customs and Border Protection (CBP), through its Centers of Excellence and Expertise (CEEs) is leading the Strategic Threats Operation, a national operation to target, interdict and investigate the importation of counterfeit, unapproved or otherwise illegal pharmaceuticals that pose health and safety risks to American consumers.
“CBP is on the forefront in the battle against these illegal imports,” said Acting Assistant Commissioner Kevin McAleenan. “The creation of the Centers of Excellence and Expertise allows us to utilize the knowledge of our specialists to target, identify, and interdict counterfeit imports, while assisting in the facilitation of legitimate shipments.”
Because the importation of substandard, tainted or counterfeit pharmaceutical products violates U.S. laws and regulations and threatens both public safety and the economic well-being of the United States, the Strategic Threats Operation mandates the direction of enforcement efforts against counterfeit and substandard goods.
CBP’s Pharmaceutical, Health and Chemical Center of Excellence and Expertise in New York City has coordinated seizures in several cities for the operation. CEEs bring all of CBP’s trade expertise to bear on a single industry in a strategic location. They are staffed with numerous trade positions using account management principles that are able to authoritatively facilitate trade issues. The CEEs also serve as resources to the broader trade community and to CBP’s U.S. government partners.
- In Los Angeles, CBP coordinated with Homeland Security Investigations (HSI) agents to locate and seize 4,920 suspected counterfeit Viagra tablets; 2,821 suspected counterfeit Cialis tablets; 1,171 suspected counterfeit Levitra tablets; 88 counterfeit Viagra labels for pill bottles; various counterfeit packaging materials relating to Viagra, Cialis and Levitra; various computers and smartphones and $41,080 in U.S. currency. The suspected counterfeit pharmaceuticals seized have an approximate Manufacturer’s Suggested Retail Price (MSRP) of $222,800.
- In another major seizure in Chicago, CBP handed over packages of Cialis to HSI for a controlled delivery. During the course of the investigation other assorted counterfeit medications including injectable steroids, counterfeit Cialis, counterfeit Viagra, hundreds of syringes, numerous unknown prescription medications, and a small amount of U.S. currency were seized. The subject in that case will be charged with multiple felony and misdemeanor counts.
The Centers of Excellence and Expertise are coordinated from strategic industry locations, but are national programs manned by CBP personnel across the country. The Centers represent CBP’s expanded focus on “Trade in the 21st Century,” transforming customs procedures to align with modern business. By having the Centers focus on industry-specific issues, CBP is able to provide tailored support to unique trading environments.
U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation’s borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.
Ottawa County Man Sentenced to Four Years in Prison for Committing Internet Advertising Fraud Scheme
GRAND RAPIDS, MICHIGAN — Jeffrey Curtis Folkert, 42, of Holland, Michigan, was sentenced to 48 months in prison for committing mail fraud in connection with an Internet investment scheme, U.S. Attorney Patrick Miles announced today. In addition to the prison sentence, U.S. District Judge Robert J. Jonker ordered Folkert to pay $1,313,786.88 million in restitution to victims of the fraud and a $7,500 fine. Folkert also forfeited $1.5 million to the United States, reflecting proceeds traceable to his scheme to defraud, in the form of a money judgment. Folkert was taken into custody by the U.S. Marshal Service.
Earlier this year, Folkert pled guilty to one count of mail fraud. He admitted using the U.S. mail to commit a scheme to defraud investors in his computer business, iStorm Solutions, by claiming that he was earning substantial profits through Google advertising. Although Folkert brought in more than $1.5 million in investor deposits using his scheme, he used very little money on Google advertising and admitted earning less than $100 in revenue from Google in 2006 and 2007. Nevertheless, Defendant mailed monthly statements to investors reporting substantial monthly “dividends,” giving investors the false impression that their investment in Google advertising was safe, earning substantial profits, and available for withdrawal by investors. Folkert admitted using investor funds to pay for his personal expenses, to transfer money to foreign accounts located outside the United States to use for Internet gambling, to purchase new vehicles, make bogus “dividend” payments to certain investors, and to cover withdrawals requested by investors.
Noting that the investigation and prosecution of financial fraud, and “Ponzi” schemes in particular, remains a high priority in West Michigan, U.S. Attorney Patrick Miles applauded the efforts of both federal and state law enforcement in their investigation of the fraud. The investigation required substantial efforts to trace the transfer of over $1 million of investor funds to foreign countries from which, unfortunately, the money could not be recovered.
This case was investigated by the Federal Bureau of Investigation and the Michigan State Police, and prosecuted by Assistant U.S. Attorney Christopher O’Connor.