Pascua Yaqui Teen Sentenced to 18 Months in Prison for Stabbing Another Man

TUCSON—On January 31, 2013, Michael A. Alvarez-Suarez, 19, of Tucson, Arizona, was sentenced by visiting U.S. District Judge Marvin Aspen to 18 months in a federal prison, followed by three years of supervised release. Alvarez-Suarez pleaded guilty on November 29, 2012, to one count of aggravated assault. Both the victim and the defendant are members of the Pascua Yaqui Tribe, where the altercation took place.
On August 1, 2011, one week after turning 18, Alvarez-Suarez got into a confrontation with a man. Alvarez-Suarez pulled out a pocket knife during the encounter and stabbed the victim twice, resulting in non-life-threatening injuries. Alvarez-Suarez was arrested by Pascua Yaqui police and was prosecuted through the Tribal Court, where he served a six-month prison sentence for assault. In the meantime, he was indicted by a federal grand jury for felony aggravated assault and was taken into federal custody on January 25, 2012, immediately after completing his tribal sentence.
The investigation in this case was conducted by the Pascua Yaqui Police Department and the Federal Bureau of Investigation, Tucson Resident Agency. The prosecution was handled by Micah Schmit, Assistant U.S. Attorney, District of Arizona, Tucson.

BP Exploration and Production Inc. Pleads Guilty, is Sentenced to Pay Record $4 Billion for Crimes Surrounding Deepwater Horizon Incident

WASHINGTON—BP Exploration and Production Inc. pleaded guilty today to 14 criminal counts for its illegal conduct leading to and after the 2010 Deepwater Horizon disaster and was sentenced to pay $4 billion in criminal fianes and penalties, the largest criminal resolution in U.S. history, Attorney General Holder announced today.
“Today’s guilty plea and sentencing represent a significant step forward in the Justice Department’s ongoing efforts to seek justice on behalf of those affected by one of the worst environmental disasters in American history,” said Attorney General Holder. “I’m pleased to note that more than half of this landmark resolution—which totals $4 billion in penalties and fines and represents the single largest criminal resolution ever—will help to provide direct support to Gulf Coast residents as communities throughout the region continue to recover and rebuild.”
“The Deepwater Horizon explosion was a national tragedy that resulted in the senseless deaths of 11 people and immense environmental damage,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “Through the tenacious work of the task force, BP has received just punishment for its crimes leading up to and following the explosion. The Justice Department will keep a watchful eye on BP’s compliance with the plea agreement’s terms, including the requirements of full cooperation with the department’s ongoing criminal investigation, implementation of enhanced safety protocols, and adherence to the recommendations of two newly installed monitors. Should BP fail to comply, we will act swiftly and firmly.”
BP’s guilty plea was accepted and the sentence was imposed by U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana. During the guilty plea and sentencing proceeding, Judge Vance found, among other things, that the consequential fines imposed under the plea agreement far exceed any imposed in U.S. history and are structured so that BP will feel the full brunt of the penalties. She also noted that the agreement provides just punishment and significant deterrence, requiring detailed drilling safeguards, monitors, and other stringent, special conditions of probation so that BP’s future conduct will be closely watched.
BP pleaded guilty to each count charged in an information filed in U.S. District Court in the Eastern District of Louisiana, including 11 counts of felony manslaughter, one count of felony obstruction of Congress, and violations of the Clean Water and Migratory Bird Treaty Acts. In its guilty plea today, BP admitted that, on April 20, 2010, the two highest-ranking BP supervisors onboard the Deepwater Horizon, known as BP’s “Well Site Leaders” or “company men,” negligently caused the deaths of 11 men and the resulting oil spill. The company also admitted that on that evening, the two well site leaders observed clear indications that the Macondo well was not secure and that oil and gas were flowing into the well but chose not to take obvious and appropriate steps to prevent the blowout. Additionally, BP admitted that as a result of the Well Site Leaders’ conduct, control of the Macondo well was lost, resulting in catastrophe.
BP also admitted during its guilty plea that the company, through a senior executive, obstructed an inquiry by the U.S. Congress into the amount of oil being discharged into the Gulf while the spill was ongoing. BP also admitted that the senior executive withheld documents, provided false and misleading information in response to the U.S. House of Representatives’ request for flow-rate information, manipulated internal estimates to understate the amount of oil flowing from the well and withheld data that contradicted BP’s public estimate of 5,000 barrels of oil per day. At the same time that the senior executive was preparing his manipulated estimates, BP admitted, the company’s internal engineering response teams were using sophisticated methods that generated significantly higher estimates. The Flow Rate Technical Group, consisting of government and independent scientists, later concluded that more than 60,000 barrels per day were leaking into the Gulf during the relevant time, contrary to BP’s representations to Congress.
According to the sentence imposed by Judge Vance pursuant to the plea agreement, more than $2 billion dollars will directly benefit the Gulf region. By order of the court, approximately $2.4 billion of the $4 billion criminal recovery is dedicated to acquiring, restoring, preserving, and conserving—in consultation with appropriate state and other resource managers—the marine and coastal environments, ecosystems, and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery is also to be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $350 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education, and training.
BP was also sentenced to five years of probation—the maximum term of probation permitted under law. The company is also required, according to the order entered by the court pursuant to the plea agreement, to retain a process safety and risk management monitor and an independent auditor, who will oversee BP’s process safety, risk management, and drilling equipment maintenance with respect to deepwater drilling in the Gulf of Mexico. BP is also required to retain an ethics monitor to improve its code of conduct to ensure BP’s future candor with the U.S. government.
The charges and allegations pending against individuals in related cases are merely accusations, and those individuals are considered innocent unless and until proven guilty.
The guilty plea and sentence announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force. The task force includes prosecutors from the Criminal Division and Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from the FBI; Environmental Protection Agency, Criminal Investigative Division; Environmental Protection Agency, Office of Inspector General; Department of Interior, Office of Inspector General; National Oceanic and Atmospheric Administration Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.
This case was prosecuted by Deepwater Horizon Task Force Director John D. Buretta, Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens, II, Scott M. Cullen, Colin Black, and Rohan Virginkar.

Man Who Threatented to Rob Bank with Explosives Sentenced

PHILADELPHIA—Dragos Ungurean, 30, of Wyomissing, Pennsylvania, was sentenced today to 63 months in prison for attempting to rob the Wyomissing branch of M&T Bank. He pleaded guilty to the charge on June 27, 2012. On March 19, 2012, Ungurean walked into the bank at 800 Penn Avenue in Wyomissing, threatened to blow up a bomb or explosive device attached to his person, and demanded money. Ungurean was subdued and handcuffed after a scuffle with an on-duty plain clothes investigator, George R. Bell, Jr., from the Wyomissing Police Department. The officer was utilizing the bank as a customer at the time of the attempted robbery. The bomb or explosive device was fake.
In addition to the prison term, U.S. District Court Judge Lawrence F. Stengel ordered three years of supervised release and a $1,000 fine. The judge also referred to the actions of investigator Bell as “heroic” for subduing the defendant on his own.
This case was investigated by the Federal Bureau of Investigation, Allentown, Pennsylvania Resident Agency; the Wyomissing, Berks County Police Department; and the Berks County District Attorney’s Office, and it is being prosecuted by Assistant United States Attorney Ewald Zittlau.

Lawyer Pleads Guilty to Stealing Money Intended for His Clients

WASHINGTON—Deairich R. Hunter, 47, an attorney from Washington, D.C., pled guilty today to a federal charge stemming from his theft of $109,830 in payments from insurance companies that were intended to settle some of his clients’ disability and personal injury claims.
The plea took place in the U.S. District Court for the District of Columbia and was announced by U.S. Attorney Ronald C. Machen, Jr.; Debra Evans Smith, Acting Assistant Director in Charge of the FBI’s Washington Field Office; and William P. White, Commissioner of the District of Columbia Department of Insurance, Securities, and Banking.
Hunter pled guilty to a charge of theft or embezzlement in connection with health care. He is to be sentenced April 26, 2013, by the Honorable Beryl A. Howell. The charge carries a maximum statutory sentence of 10 years in prison and a fine of up to $250,000. As part of his plea agreement, Hunter agreed to pay $109,830 in restitution to his clients and a medical provider whose bills were to be paid out of the settlement funds.
According to a statement of offense, signed by the defendant as well as the government, from August 1998 until April 2009, Hunter was a member of the Bar of the District of Columbia Court of Appeals and practiced law in the District of Columbia. Also during that time period, he was a member of the bar of the state of Maryland.
Between 2003 and 2009, Hunter was retained by various individuals in disability and personal injury claim disputes. Those clients generally agreed that Hunter was entitled to one-third of any recoveries regarding their settled claims. Hunter generally agreed to notify these clients of any offers of settlement and to inform clients of significant developments, among other things. In some cases, he agreed to pay his clients’ health care expenses directly from the proceeds of the recovery in their cases. However, on a number of occasions, Hunter settled such claims without notifying his clients and without authority to do so and then the defendant stole the settlement proceeds, resulting in a total loss amount from this scheme of $109,830.
In announcing the plea, U.S. Attorney Machen, Acting Assistant Director in Charge Smith, and Commissioner White commended the efforts of those who investigated the case from the FBI’s Washington Field Office and the District of Columbia Department of Insurance, Securities, and Banking. They also praised those who worked on the case from the U.S. Attorney’s Office, including Legal Assistant Donna Galindo, former Assistant U.S. Attorney Courtney G. Saleski, and Assistant U.S. Attorney Matt Graves, who is prosecuting the matter.

Owner of Liberty Mortgage Company in Elk Grove Convicted in Multi-Million-Dollar Mortgage Fraud Scheme

SACRAMENTO, CA—After a 10-day trial, a federal jury found Hoda Samuel, 60, of Elk Grove, guilty of a conspiracy to commit mortgage fraud and of 30 individual counts of mail fraud.
According to evidence presented at trial, Samuel, a licensed real estate broker, was the owner and principal operator of Liberty Real Estate & Investment Company, a real estate agency, and Liberty Mortgage Company, a mortgage brokerage business. Between April 5, 2006 and February 26, 2007, Samuel’s companies facilitated 30 residential real estate transactions that defrauded the lending institutions that provided the financing. In all 30 of these transactions, Samuel served as the real estate broker for the purchaser. In at least 15 of them, she also represented the seller. In 29 of the transactions, Liberty Mortgage Company secured the financing for the purchaser. At least 28 of the properties went into foreclosure, resulting in a loss to lenders of more than $5.5 million.
As part of the scheme, Samuel’s co-conspirators and employees at Liberty Mortgage prepared loan applications containing false information that misrepresented the buyers’ ability to pay back loans and/or overstated or falsified their employment, income, assets, and liabilities. When a lender would attempt to verify the information by calling the purported employer, the phone number on the application led to a Liberty employee or associate who falsely verified the information.
The offers reflected in the purchase contracts prepared by Liberty Real Estate overstated the value of the properties, often exceeding the actual asking prices by $15,000 to $40,000. The excess amounts were paid back to the buyers out of escrow, disguised as payments for fictional repairs and remodeling to the properties. With respect to particular transactions, Samuel herself made misrepresentations to the effect that the property buyers had disabled family members and needed to remodel the properties to make them wheelchair accessible. The repairs and remodeling were seldom, if ever, done, and the lenders were unaware that the true purchase price for each property was below the total amount funded.
Eight of Samuel’s associates in the scheme pleaded guilty prior to trial and are awaiting sentencing.
“Mortgage fraud schemes of the sort perpetrated by Hoda Samuel and her co-defendants wreaked havoc in this region,” U.S. Attorney Wagner said. “As a result of this prosecution, she and her co-defendants are facing significant prison terms. Taking fraudsters out of the residential real estate industry and sending them to prison has been one of this office’s top priorities. Last year, we indicted more mortgage fraud defendants than any other U.S. Attorney’s Office in the country, and we are not done yet.”
This case is the product of an investigation by the FBI and IRS-Criminal Investigation. Assistant U.S. Attorneys Philip A. Ferrari and Todd A. Pickles are prosecuting the case.
Samuels is scheduled to be sentenced by United States District Judge John A. Mendez on April 30, 2013. She faces a maximum sentence of 20 years in prison for each count of mail fraud. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Former Xpress Flex Inc. and Payroll America Inc. Owner Sentenced to 51 Months for Fraud and Filing a False Tax Return

BOISE—Michael Wayne Davis, II, 46, of Raleigh, North Carolina, formerly of Eagle, Idaho, was sentenced yesterday to 51 months in prison for wire fraud and filing a false tax return, U.S. Attorney Wendy J. Olson and Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally announced. Chief U.S. District Judge B. Lynn Winmill also ordered Davis to serve three years of supervised release following his prison term and pay $999,930.90 in restitution—$954,640.90 to Xpress Flex victims and $45,290 to the IRS for the tax loss. Davis pleaded guilty to the charges on September 10, 2012.
According to court documents, in 2009 and 2010, Davis owned and operated Xpress Flex Inc., a Boise, Idaho company that administered, on behalf of employer-clients, flexible benefits plans for tax-free, qualified benefits, such as health care and dependent care. Pursuant to those plans, Xpress Flex received monetary contributions from its employer-clients of pre-tax withholdings from their employees’ paychecks. These funds were deposited into Xpress Flex bank accounts and set aside to pay the claims of employee-participants when they came due. According to court documents, Davis misappropriated $954,640.90 of Xpress Flex client funds and used them to pay personal credit card charges and the business expenses of his other company, Payroll America Inc. He did so without the knowledge or authorization of the employer-clients and their employees and contrary to representations in plan documents and contracts that he would safeguard the deposits and use them only to pay employee claims.
Court documents also showed that from 1994 through 2009, Davis owned and operated Payroll America in Boise, Idaho. Payroll America provided payroll administration and payroll tax filing services to its employer-clients. Pursuant to contract documents, employer-clients would deposit sufficient funds with Payroll America to meet their payroll and payroll tax obligations, which Payroll America would pay when they came due. According to court documents, in March and April 2007, Davis misappropriated $2 million of Payroll America employer-client funds, wired them into his E*Trade brokerage account, and then invested the funds in the stock market. Davis did so without the knowledge or authorization of the employer-clients of Payroll America, contrary to representations in contract documents that he would safeguard the funds and use them only to pay payroll and payroll taxes.
Davis’ E*Trade investments generated approximately $192,436 in capital gains income. According to court documents, Davis wired this money into his and his wife’s personal checking account. The wire transfer was annotated “E-Trade Gains.” However, Davis intentionally failed to report capital gains income from E*Trade investments on his 2007 or 2008 tax returns, causing a tax loss of $45,290. For this conduct, Davis pleaded guilty to one count of filing a false tax return.
“I’m very pleased that my office, with the assistance of the Justice Department’s Tax Division, and federal law enforcement partners were able to bring Mr. Davis to justice,” said Olson. “Those who are entrusted to manage others’ money must ensure that it is safe and available for its intended purpose, not diverted for personal gain.”
“This sentencing sends a clear message: businesses owners who misuse their positions of trust and divert funds for their own personal use will be held accountable,” said Lilia E. Ruiz, IRS-Criminal Investigation Acting Special Agent in Charge for the State of Idaho.
The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Labor, Employee Benefits Security Administration, and Internal Revenue Service-Criminal Investigation.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

Former Hedge Fund Principal Pleads Guilty to Manhattan Federal Court to Stealing Over $1 Million in Investor Funds

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Berton Hochfeld, the former Manager of Hochfeld Capital Management LLC (Hochfeld Capital), pled guilty today in Manhattan federal court to securities fraud and wire fraud charges in connection with an investment scheme in which he stole more than $1 million from investors. Hochfeld pled guilty before U.S. District Judge Paul A. Crotty.
Manhattan U.S. Attorney Preet Bharara said, “Berton Hochfeld may have had all the trappings of being a sophisticated investment adviser in control of a limited liability corporation, a partnership and a hedge fund, but at the end of the day, he was simply a thief who stole money from the investors who trusted him. Investment fraud is a serious offense that damages investor confidence and the markets, and we will continue to prosecute it aggressively.”
According to the charging instruments in this case and statements made in open court today at the plea proceeding:
Hochfeld was the manager and organizer of Hochfeld Capital, a limited liability company incorporated in Delaware that, at various times, maintained an office in New York, New York. Hochfeld Capital, in turn, served as the General Partner of the Heppelwhite Fund L.P. (the “Heppelwhite Fund”), a hedge fund that was formed to invest in publicly traded securities, mainly in the technology sector. In connection with the management of the Heppelwhite Fund, Hochfeld made false representations to investors regarding their investments, and misappropriated their money.
For example, by December 2010, Hochfeld was aware that Hochfeld Capital’s internal accounting for the Heppelwhite Fund reflected an inflated net asset value (NAV), as compared to the value reflected in the books of the prime broker where the fund’s assets were actually located. Despite his knowledge of the disparity, Hochfeld caused monthly statements to be sent to Heppelwhite Fund investors that reflected the inflated NAV calculated by internal accounting records.
From April 2011 through October 2012, Hochfeld also withdrew money from the Heppelwhite Fund for his own personal use, ultimately misappropriating more than $1 million. During this period, at Hochfeld’s direction, monthly account statements were provided to Heppelwhite Fund investors that falsely represented the fund’s value by failing to account for the money that he had withdrawn. At a meeting in October 2012, Hochfeld admitted to certain investors that he had taken more than $1 million from the Heppelwhite Fund and that he spent portions of that money on antiques and vacations.

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Hochfeld, 66, of Stamford, Connecticut, pled guilty to one count of securities fraud and one count of wire fraud. He faces a maximum sentence of 20 years in prison on each count. The defendant also faces a fine of the greater of $5 million or twice the gross gain or gross loss from the offense on the securities fraud charge, as well as a fine of a lesser amount on the wire fraud charge. In connection with his guilty plea, Hochfeld agreed to forfeit the illegal proceeds of his crimes and will be ordered to pay restitution to the victims of his offenses.
HOCHFELD is scheduled to be sentenced by Judge Crotty on June 27, 2013, at 3:00 p.m.
Mr. Bharara praised the investigative work of the FBI. He also thanked the U.S. Securities and Exchange Commission for their assistance.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Jillian Berman is in charge of the prosecution.