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June 13, 2008

WARREN COUNTY, VIRGINIA, MAN PLEADS GUILTY TO CHARGES
RELATED TO CHILD PORNOGRAPHY PRODUCTION RING

Acting United States Attorney Julia C. Dudley and Acting Assistant Attorney General Matthew Friedrich of the Criminal Division announced that Michael Anderson, 34, of Front Royal, Va., pleaded guilty today in Roanoke, Va., to numerous offenses concerning his involvement in a multi-state crime ring whose members produced, distributed and received child pornography over the Internet.

Anderson’s trial was scheduled to begin on June 16, 2008. He was charged in a multiple-count indictment on March 26, 2008, for conspiring with unnamed members of the crime ring between 2005 and 2007 to use instant messaging, video messaging, text messaging and video chat software to communicate and share sexual interests in children.

Anderson has now pleaded guilty to one count of conspiracy to produce child pornography. He admitted that, as part of the conspiracy, he and the other ring members produced child pornography showing themselves engaged in illegal sexual activity with minors. He further admitted that he and his co-conspirators would then transmit real-time images of their crimes to one another using webcam broadcasts.

In addition to pleading guilty to the conspiracy charge, Anderson also pleaded guilty to one count of producing child pornography, one count of receiving child pornography, one count of aiding and abetting the transportation of child pornography, and one count of aiding and abetting the receipt of child pornography. He also pleaded guilty to a count which sought the forfeiture of property used in these crimes.

Anderson faces a possible life sentence under federal law. A sentencing date has not been set.

The case is being prosecuted by Assistant U.S. Attorney Nancy Healey and Trial Attorney James Silver of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation is being conducted by the FBI, the Warren County Sheriff's Office, and CEOS’s High Tech Investigative Unit.

June 9, 2008

YORBA LINDA, CALIFORNIA MAN PLEADS GUILTY
TO MAIL FRAUD, FALSE TAX STATEMENTS

Acting United States Attorney Julia C. Dudley announced today that Roy Alonzo Dickinson, age 46, of Yorba Linda, California, has pled guilty in United States District Court for the Western District of Virginia in Roanoke to charges that he participated in a conspiracy to commit mail fraud and attempting to interfere with the administration of internal revenue service laws.

“This case establishes that despite the sophisticated manner and means to perpetuate fraud, this office, and its cooperating agencies, will unravel even the most complicated fraudulent scheme,” Acting United States Attorney Julia C. Dudley said today. “Those who are intent upon deceit should take notice that despite the complexity and sophistication of your endeavor, if it is fraudulent, it will be prosecuted to the fullest extent of the law”

Dickinson was charged in a ten-count superceding indictment on February 7, 2008. He was charged with one count of mail fraud, five counts of wire fraud, one count of conspiracy to commit mail fraud, one count of money laundering, one count of obstruction of justice and one count of attempting to interfere with the administration of internal revenue service laws.

Today in United States District Court in Roanoke, the defendant pled guilty to one count of conspiring to commit mail fraud and one count of attempting to interfere with the administration of internal revenue service laws.

The facts of the case are as follows:

From November 2001 to March 2005, Dickinson served as the chief financial officer for Courvette Building Systems [CBS], a full-service design, engineering and manufacturing company. CBS installed ATM kiosks and other enclosures, performed field construction work and serviced bank equipment. The company’s primary corporate offices and primary manufacturing offices were located in Salem, Virginia, however, Dickinson worked primarily out of a satellite office located in California.

During his time with CBS, Dickinson devised a scheme which involved setting up a corporation using key CBS employees, stealing CBS customers and driving CBS to financial ruin in order to gain personal wealth.

On approximately March 25, 2005, Dickinson, and others, formed a new company, which was to be used as the vehicle to employee CBS employees and take over CBS business. The new company never performed any work, due in part to a temporary restraining order filed on April 8, 2005 by the United States District Court for the Western District of Virginia.

Throughout these schemes, Dickinson ensured that he was enriched personally by causing CBS to pay for his personal items and provide start up capital for his new business. As part of the scheme, Dickinson knew that failing to pay employment taxes to the Internal Revenue Service would likely cause severe financial and business hardship to CBS. Such fiscal problems negatively impacted CBS.

The proceeds Dickinson obtained through his fraud and deception created the appearance that he was independently successful and could accomplish difficult tasks, despite the problems his employer was experiencing.

Between May 2004 and November 2004, Dickinson used his personal credit card to pay for personal expenses, including remodeling his residence and repairs to a property he owned. He submitted to CBS corporate headquarters in Salem, Virginia, documentation showing the amounts expended were CBS business related expenses, when in truth and fact corporate funds were being used to pay his personal obligations. Dickinson’s actions caused CBS to make false entries into its accounting records and corporate tax returns.

The personal products/services purchased by Dickinson and charged to CBS include but are not limited to:

Dickinson also used the CBS American Express Card to purchase items and services for his personal use. To avoid detection of and to perfect his scheme, Dickinson altered American Express expense reconciliations submitted to CBS showing business related expenses.

The personal expenses charged to the CBS American Express card by Dickinson include but are not limited to:

Additionally, Dickinson used checks drawn on a CBS account to pay his personal expenses. The defendant altered the checks and created false and fictitious documentation which he caused to be sent via mail to CBS headquarters. These false transactions caused CBS to incorrectly enter items on the corporate books and records and made it difficult for governmental agencies to accurately ascertain and assess amounts due from CBS and Dickinson.

According to court documents, in each of the above instances, Dickinson changed invoices or checks to show payment for business-related expenses when mailing documents to CBS headquarters.

Today in court, Dickinson admitted to: creating and submitting to corporate accounting departments, bogus invoices, receipts and records of payments which claimed Dickinson incurred legitimate business expenses, when in fact, documentation proves Dickinson’s receipt of funds for his personal benefit; using credit cards, intended for business uses, to purchase personal items and caused those purchases to be reflected on CBS books, records and tax returns as business related expenses; submitting expense ledgers which concealed the receipts of funds for his personal financial benefit; and creating a false audit trail which caused the preparation and filing of false corporate and personal tax returns.

Additionally, the defendant donated property to a “tax excepted” church, took a vow of poverty and created numerous trusts to disguise the receipt of income from the sale of the property and conceal ownership of tangible assets. Dickinson also caused false personal tax returns to be filed which understated income and falsely claimed charitable donations.

The maximum penalty faced by the defendant is 8 years imprisonment and/or a fine of $2.25 million.

The investigation of the case was conducted by the Internal Revenue Service, Criminal Investigation Divison and the Federal Bureau of Investigation for the United States Attorney’s Office, Western District of Virginia. Assistant United States Attorneys C. Patrick Hogeboom and Charlene R. Day are prosecuting the case.

May 22, 2008

NEVADA MAN INDICTED FOR E-MAILING THREATS TO FORMER VIRGINIA TECH STUDENTS ON EVE OF ONE-YEAR ANNIVERSARY OF MASSACRE

Acting United States Attorney Julia C. Dudley announced today that Johnmarlo Balasta Napa, age 27, of Las Vegas, Nevada, was indicted by a federal Grand Jury sitting in Roanoke, Virginia on charges that he sent threatening e-mails, via interstate commerce, to various persons via a computer server located at Virginia Tech University in Blacksburg, Virginia.

“In the wake of the tragedy that occurred at Virginia Tech just over one-year ago, we approach every potential threat of violence with extreme caution,” Acting United States Attorney Julia C. Dudley said today. “The law enforcement officials both in Nevada and here in the Western District did a fantastic job in diffusing this situation quickly.”

Napa was charged in a two count indictment with two counts of transmitting in interstate commerce, from Henderson, Nevada, an electronic mail communication to a computer server located at Virginia Tech University in Blacksburg.

According to the indictment, Napa sent the threatening e-mails to two former Virginia Tech students on the night of April 15, 2008. The defendant sent the messages from an e-mail account bearing the name “seunghuichorevenge@yahoo.com.” The recipients of the e-mails were not acquainted with Napa and are no longer students of the university.

If convicted on all counts, the maximum penalty faced by the defendant is 10 years imprisonment and/or a fine of $500,000.

The investigation of the case was conducted by Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Henderson, Nevada Police Department and the Federal Bureau of Investigation Office in Las Vegas, Nevada. Acting United States Attorney Julia C. Dudley will prosecute the case.

A Grand Jury indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

April 30, 2008

LAW ENFORCEMENT BREAKS UP MAJOR CRACK COCAINE DISTRIBUTION CONSPIRACY; GRAND JURY CHARGES 51 PEOPLE FROM VIRGINIA, TENNESSEE AND NORTH CAROLINA

United States Attorney John L. Brownlee announced today that local, state and federal law enforcement have taken down a major crack cocaine distribution ring. The investigation, which took over one and one-half years, culminated today with the unsealing of Criminal Complaint in United States District Court for the Western District of Virginia in Abingdon. The Complaint charged 51 individuals with being involved in a conspiracy to distribute and possession with the intent to distribute cocaine powder and crack cocaine.

“We will continue to fight the sale and distribution of crack and powder cocaine and hold those drug dealers responsible for their crimes,” United States Attorney John Brownlee said today. “I want to thank all the federal, state and local law enforcement officials who undertook this very difficult and very wide-ranging investigation,”

According to the criminal complaint, in January 2007 law enforcement agents from multiple agencies began targeting a large scale crack cocaine distribution organization operating in southwest Virginia, northeast Tennessee, and North Carolina. The drug-trafficking organization had been operating in the region for a number of years and was headed by the members of KANTSTOP RECORDS, Inc., a music production company based out of Burlington, North Carolina. Ultimately, the drug trafficking organization grew to actively involve at least 51 people in Virginia, Tennessee, and North Carolina, in the distribution of crack cocaine.

According to evidence discovered through the course of the investigation, KANTSTOP RECORDS, Inc., was a music production company incorporated in the state of Tennessee in 2003 by Derrick Lamont Evans (aka “Shank”), age 34, of Gray, Tennessee, and Bryant Kelly Pride (aka “Pride”), age 36, of Bristol, Virginia.

Evans was listed as the President of KANTSTOP RECORDS, Inc. and Pride was listed as the executive vice president/chief executive officer. The production company sponsored the musicians Marcus Andrew Watkins (aka “Sparkz”), age 30, Andre Lamont Watkins (“Huff da Author”), age 30, and Tyree Lamar Slade (“Ovious Mcfly”), age 26, all of Burlington, North Carolina, who made up the music group “Fam 1st.”

Charles Jermaine King, age 31, of Burlington, North Carolina, was also sponsored by KANTSTOP RECORDS, Inc., and performed under the name “Zig-Lah.” Based upon the investigation, it became clear to law enforcement officials that the musicians associated with KANTSTOP RECORDS, Inc. had been distributing crack cocaine in the Bristol, Virginia region since at least 2003. In addition, investigators determined that musicians sponsored by KANTSTOP RECORDS Inc. consistently recruited friends and associates from the Burlington, North Carolina area to transport and distribute large quantities of crack cocaine into a geographic region that ranged from Sullivan County, Tennessee north to Washington and Russell counties in Virginia.

Furthermore, many individuals from Virginia and Tennessee were recruited by Pride, Evans, and others associated with KANTSTOP RECORDS, Inc., to serve as street-level dealers of crack cocaine, to act as drivers used to transport crack cocaine throughout the organization’s distribution area and to provide locations at which powder cocaine was sold, stored, and transformed into crack cocaine and sold.

Information from numerous sources led law enforcement officials to conclude that KANTSTOP RECORDS, Inc., was used by members of the drug trafficking organization as a means to launder the proceeds earned from the distribution of more than 100 kilograms of crack cocaine in the Bristol region. Throughout the course of the investigation more than $25,000 in United States currency, numerous vehicles, firearms and multiple ounces of cocaine and crack cocaine have been seized by law enforcement agencies.

The investigation of this case was conducted by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Internal Revenue Service’s Criminal Investigative Division, the Tennessee Bureau of Investigation, the Bristol, Tennessee Police Department, the Bristol, Virginia Police Department, the Sullivan County Sheriff’s Department, the Abingdon Police Department, the Washington County, Virginia Sheriff’s Department, the Virginia State Police, and the 2nd Judicial District Drug Task Force. The investigation was assisted by the United States Marshal’s Service, the Sullivan County District Attorney’s Office, the Washington County Commonwealth’s Attorney’s Office, the City of Bristol Commonwealth’s Attorney’s Office, and the United States Attorney’s Office for the Eastern District of Tennessee. Assistant United States Attorney Zachary T. Lee of the United States Attorney’s Office in Abingdon will prosecute the case.

A criminal complaint is simply a charge and all defendants are presumed innocent until proven guilty.