Senior U.S. District Court Judge Pleads Guilty to Possession of Controlled Substances and Conversion of Government Property

Senior U.S. District Judge Jack T. Camp Jr., pleaded guilty today (November 19) in U.S. District Court in Atlanta to possession of controlled substances and conversion of government property, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division, Special Agent in Charge Brian D. Lamkin of the FBI’s Atlanta office and Director Vernon Keenan of the Georgia Bureau of Investigation.

Camp, 67, a Senior U.S. District Judge in the Northern District of Georgia, pleaded guilty to two counts of unlawful possession of controlled substances and one count of conversion of government property. Camp’s guilty plea was accepted by Senior U.S. District Judge Thomas J. Hogan for the District of Columbia, who was sitting by designation in the Northern District of Georgia. Sentencing has been scheduled for Mar. 4, 2011, at 11:00 a.m.

As part of his guilty plea, Camp admitted that between May 2010 and Oct. 1, 2010, he unlawfully possessed and used cocaine, marijuana, and Roxycodone, a Schedule II controlled substance. Camp also admitted to giving an individual, whom he knew had a prior felony drug conviction, money to purchase cocaine, Roxycodone, and marijuana. Camp admitted that he unlawfully gave the individual a U.S. District Court laptop computer for her personal use. Camp was arrested on Oct. 1, 2010, after attempting to purchase drugs from an undercover FBI agent posing as a drug dealer.

The case is being prosecuted by Trial Attorneys Deborah Sue Mayer and Tracee Joy Plowell of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI Atlanta’s Public Corruption Squad. The Georgia Bureau of Investigation provided substantial assistance in this case.

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Rome Man Pleads Guilty in Multi-Million-Dollar Timber Fraud Scheme

AARON WILBERT FREEMAN, 50, of Rome, Georgia, pleaded guilty before Senior United States District Judge Robert L. Vining in federal district court late yesterday (November 2) to multiple charges relating to a $4 million scheme involving timber that did not exist. A jury had been selected and FREEMAN’s trial was set to begin today when FREEMAN pleaded late yesterday.

United States Attorney Sally Quillian Yates said of yesterday’s guilty plea, “Paper is made from trees, but in this case, Freeman created trees out of paper. He did so by manipulating his employer’s computer system to create phony receipts for timber deliveries that never took place. He also recruited timber truck drivers to redeem the fake receipts for payment, then laundered the proceeds through multiple financial institutions.”

Brian D. Lamkin, Special Agent in Charge, FBI Atlanta, stated, “The level of fraud that Mr. Freeman conspired to commit against his former employer, the Temple-Inland Company, was significant. The FBI is pleased that, through its investigation and the resulting prosecution by the U.S. Attorney's Office, not only was any additional fraud stopped, but now Mr. Freeman will be held accountable for his actions.”

According to United States Attorney Yates, the charges, and other information presented in court: FREEMAN worked as a scale house operator at the Temple-Inland Co. paper mill in Floyd County, Georgia until June 2006. The scale house received and weighed approximately 350 timber trucks each day, providing a delivery receipt, known in the industry as a “scale ticket,” to each driver as proof of delivery. Between 2003 and 2006, FREEMAN worked primarily during the night shift, often alone, processing timber deliveries through the scale house computer system.

While working in the scale house during this time frame, FREEMAN manipulated the computer system to produce multiple weight readings when a single timber truck passed through the paper mill’s scale, making it appear as if there had been two or more deliveries when there had only been one. FREEMAN then caused the computer system to generate false scale tickets for the phantom loads, along with valid scale tickets for the legitimate deliveries. The Rome scale house computer system would simultaneously transmit the delivery information electronically to Temple-Inland’s headquarters in Austin, Texas, ultimately resulting in electronic funds transfers from Temple-Inland’s bank to timber suppliers’ bank accounts in Georgia and South Carolina.

After creating the false scale tickets, FREEMAN recruited multiple co-conspirators, including KEVIN A. FIELDS, 31, of Forsyth, Georgia; JASON S. JOSEPH, 32, of Macon, Georgia; ROGER G. CARTHERN, 63, and R. ANDREW CARTHERN, 40, both of Jefferson, Georgia; J. DAVID CARTHERN, 64, of Commerce, Georgia; ROBERT FRANK FERGUSON, JR., 56, of Maysville, Georgia; and GEORGE BONNER TATE, 40, of Hartwell, Georgia, to redeem the false scale tickets for payment by timber suppliers, launder the payments through multiple banks and credit unions, and return a share of the money to FREEMAN in cash.

By manipulating the scale house computer system and creating false scale tickets, FREEMAN caused Temple-Inland to pay approximately $3.35 million for phantom timber that FIELDS claimed to have delivered; $910,000 for phantom timber that JOSEPH claimed to have delivered; $313,000 to ROGER and ANDREW CARTHERN; more than $112,000 to DAVID CARTHERN and ROBERT FRANK FERGUSON; and more than $160,000 to GEORGE TATE, all of whom shared their money with FREEMAN.

On November 2, 2009, a federal grand jury returned a 20-count indictment against FREEMAN, FIELDS, JOSEPH, ROGER CARTHERN, ANDREW CARTHERN, DAVID CARTHERN, FERGUSON, TATE, and CURTIS J. HART, 52, of Macon, Georgia. JOSEPH, ROGER CARTHERN, ANDREW CARTHERN, FERGUSON, and TATE all pleaded guilty to one count of conspiracy to commit wire fraud and agreed to cooperate in the case. FIELDS pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, and also agreed to cooperate. The government dismissed DAVID CARTHERN and HART from the case on May 20 and July 14, 2010, respectively.

FREEMAN pleaded guilty yesterday to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. FREEMAN could receive a maximum sentence of 20 years in federal prison and a fine of up to $250,000 for the wire fraud conspiracy, and a maximum sentence of 10 years in federal prison and a fine of up to approximately $3.6 million for the money laundering conspiracy. In determining FREEMAN’s actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Sentencing is scheduled for January 13, 2010, at 10:30 a.m., before Senior United States District Judge Robet L. Vining in Room 303 of the United States Courthouse in Rome, Georgia. Sentencing dates for the co-defendants have not yet been set.

This case is being investigated by special agents of the FBI.

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Waycross Woman Pleads Guilty to $2 Million Embezzlement and Identity Theft Scheme

SANDRA L. COOMBS, 39, from Waycross, Georgia pleaded guilty yesterday in federal district court before Chief United States District Judge Lisa Godbey Wood to one count of bank fraud and two counts of aggravated identity theft in connection with a scheme to steal over $2 million from her former employer.

United States Attorney Edward J. Tarver said, “This defendant betrayed her employer by using her position of trust to steal over $2 million. Ms. Coombs also stole names and identities of others to commit her fraud. This defendant’s unlawful conduct will send her to federal prison for a lengthy sentence.”

According to the evidence presented during Ms. Coombs’ guilty plea hearing, from 2005 through 2009 Coombs worked as the office manager for Ace Pole Company, a Blackshear business specializing in the production and sale of wooden utility poles. Coombs used her position as office manager to systematically steal over $2 million during a more than four-year time period. To accomplish her scheme, Coombs forged the names of Ace Pole Company officers on over 200 checks written from the company’s Patterson Bank account. To hide the scheme, Coombs falsified company records to make it appear that the forged checks she made payable to herself were instead payments made to vendors of the company. Coombs’ fraudulent activities came to light during an unrelated drug trafficking investigation, when Pierce County law enforcement uncovered the suspicious money transfers in and out of Ms. Coombs’ bank account.

Coombs now faces a 30 year maximum prison sentence for bank fraud, and two-year consecutive prison terms on her aggravated identity theft convictions. A sentencing date has not been set. Coombs was again remanded to U.S. Marshal custody following her guilty plea.

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Georgia Doctor Convicted of Making False Statements to a Federal Officer

G.F. Peterman, III, Acting United States Attorney for the Middle District of Georgia announces that on September 23, 2010, Bradford G. Brown, M.D., was convicted by a jury of his peers in federal court in Macon, Georgia.

Brown was convicted of one count of conspiracy to provide false information to a federal officer, in violation of Title 18, United States Code, Section 371 in connection with Section 1001. Brown was also convicted of four counts of providing false information to a federal officer, Title 18, United States Code, Section 1001.

Brown will be sentenced in approximately 60 days at a date to be determined by the court. Brown faces a maximum possible penalty of up to five years’ imprisonment on each count.

Brown’s co-defendant, former Hancock County Commissioner Adam Jackson, entered a plea of guilty to Count One of conspiracy to provide false statements and is scheduled to be sentenced on November 18, 2010.

The case was investigated by Federal Bureau of Investigation Special Agent Gregory McClendon. The prosecution was handled by Assistant United States Attorney Jennifer Kolman.

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Atlanta Man Pleads Guilty in Investment Fraud Scheme

ROBERT L. DUNCAN, 49, of Atlanta, Georgia, pleaded guilty this afternoon (September 23) to a criminal information which charges that DUNCAN convinced several local investors to allow him to invest $3.5 million, falsely telling them that their funds were in individual capital accounts and invested through licensed securities brokers.

United States Attorney Sally Quillian Yates said: “This is another case of a financial predator who has defrauded individuals of millions in savings. As part of the president’s Financial Fraud Task Force, it will remain a focus of our mission to root out and address these crimes and to help instill a measure of confidence in our financial system.”

According to United States Attorney Yates, the charges and other information presented in court: The investors transferred their funds to DUNCAN’s investment program, known as “Seaside Partners Fund,” after he falsely represented that their principal would be held for their benefit in individual capital accounts and invested by licensed securities brokers. DUNCAN periodically furnished his investors with fraudulently altered account statements, which falsely showed that their investments were doing well, when in fact, DUNCAN was using their investment principal for his own business and personal expenses. The criminal information charges DUNCAN with wire fraud for causing the investors’ funds to be electronically transferred in interstate commerce to execute his scheme to defraud.

The charges carry a maximum sentence of 20 years in prison and a fine of up to $250,000. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

This case is being investigated by the Atlanta Field Office of the Federal Bureau of Investigation. The Atlanta District Office of the United States Securities and Exchange Commission has conducted a separate civil investigation and referred this case for prosecution.

Assistant United States Attorney David E. McClernan is prosecuting the case.

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Three Defendants Plead Guilty to Their Roles in $6.5 Million Medicare Fraud Scheme

Alfredo Rasco, 51, and Niurka Rasco, 49, both from Miami, Florida, and Iris Oswald, 54, from St. Simons Island, Georgia, pleaded guilty earlier this week before United States District Court Judge William T. Moore, Jr. to their roles in a scheme to defraud Medicare of $6.5 million. Seconds before the scheduled start of the government’s evidence in the trial, the defendants pled guilty.

United States Attorney Edward J. Tarver stated, "Health care fraud is one of our most urgent and widespread national challenges. Offenders who steal from Medicare will be caught, sentenced to long prison sentences and their ill-gotten gains will be forfeited. The United States Attorney’s Office is committed to strengthening the Medicare program through the vigorous prosecution of those who defraud the American people."

Evidence during the guilty pleas showed that from December of 2005 through March of 2008, Alfredo Rasco, Niurka Rasco, Iris Oswald, and others operated United Therapy, a phony medical clinic located in downtown Savannah. The defendants and others lured Medicare beneficiaries to United Therapy with free food, transportation, and gift cards. Many of the Medicare beneficiaries targeted by the scheme were afflicted with HIV or AIDS and lived in local homeless shelters and Section VIII housing. Once at United Therapy, the Defendants used the patients’ Medicare information to submit $6.5 million worth of phony bills to Medicare for infusion services that were not provided to those patients. Before law enforcement put a stop to this fraud, the defendants stole over $4 million from Medicare.

For his role in the scheme, Alfredo Rasco faces a maximum statutory penalty of up to 12 years in prison, fines up to $500,000, and three years of supervised release. Niurka Rasco faces a maximum statutory penalty of up to six months in prison, a fine up to $2,000, and one year of supervised release. The Rascos also forfeited proceeds of the scheme, including $1.3 million seized from their bank accounts and a 42' powerboat they named "Thank You, God." For her role in the scheme, Iris Oswald faces a maximum statutory penalty of five years in prison, a fine up to $250,000 and three years of supervised release. Ms. Oswald also agreed to forfeit a home she purchased on St. Simons Island with proceeds of the fraud scheme.

All three defendants remain on bond pending sentence, which will be held upon the completion of a pre-sentence investigation and report.

Mr. Tarver praised the hard work and dedication of Special Agents Tony Alig and Josh Hayes of the Federal Bureau of Investigation, along with Special Agent David Graupner of the Office of Inspector General for HHS, who led the investigation of this case. Tarver noted that the indictment against these defendants arose out of Operation Redex Infuscam, a major investigation led by the Federal Bureau of Investigation (FBI) and the Office of Health and Human Services (HHS) into fraudulent infusion billings to Medicare in and around the Southern District of Georgia. Tarver also recognized the extensive efforts provided by investigator Kim Reinken and auditor Karen Hartley of the United States Attorney’s Office for their contributions to a successful prosecution.

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Atlanta Man Pleads Guilty to Obtaining $315,000 Through “Advance Fee” Wire Fraud Scheme

A 59-year-old Atlanta man, Kenneth Lane Milstead, has pled guilty to one count of wire fraud for obtaining $315,080.25 through an “advance fee” scheme in which he promised—but never made—loans to potential borrowers across the United States from 2005 to 2008, U.S. Attorney Ronald C. Machen Jr. and Shawn Henry, Assistant Director of the FBI’s Washington Field Office, announced today.

Milstead entered his guilty plea July 22 before the Honorable Rosemary M. Collyer, in the U.S. District Court for the District of Columbia. When he is sentenced on September 24, 2010, he faces up to 20 years of imprisonment under the statute, and a likely sentencing range of 37 to 46 months in prison under the sentencing guidelines. As part of his plea agreement, Milstead agreed to make restitution, and to forfeit a money judgment, in the amount of $315,080.25. According to the government’s evidence, as part of the scheme to defraud, Milstead portrayed himself, at different times, as three different non-existent top corporate executives:

* as “Franklin Lane,” CEO of Franklin Investments, in Atlanta.
* as “Lance Edwards,” CEO of Edwards Capital Group, in Washington D.C.
* as “Kenneth Martin,” Chairman of the Board of KLMEEI, in Boston.

The evidence showed that these companies were “shell companies,” which had actual websites and bank accounts, but only “virtual” offices, and corporate staff who did not exist. The evidence showed that Milstead would approach potential borrowers on line (on venture capital websites), and offer to make substantial loans (usually $1 million) to them, but first requiring that they send him “earnest money” (usually $10,000, and sometimes a second payment). In all, 28 victims—small businessmen/women—made 40 payments, but Milstead never sent any individual borrower any investment capital loan, and instead provided a series of excuses as to why the loan was delayed, and refused to return the “earnest money.”

As a further part of the scheme, Milstead convinced one person to work as the purported Secretary-Treasurer of Edwards Capital Group, and to then take various actions that (unknown to the person) furthered the scheme, including opening a bank account and four credit cards using the person’s personal information (date of birth, social security number), resulting in credit card expenditures more than $100,000 in furtherance of the scheme and charged against the person individually and the credit card companies.

In a search warrant at the time of arrest, of a storage facility connected with Milstead’s residence in Atlanta, the FBI recovered a file, meticulously organized, containing materials relevant to all of the fraudulent loan transactions by “Franklin Lane,” “Lance Edwards,” and “Kenneth Martin.”

In announcing the guilty plea, U.S. Attorney Machen praised the work of the FBI agents on the case. He also acknowledged the efforts of several U.S. Attorney’s Office support staff personnel—Paralegal Specialist Diane Hayes, Legal Assistant Jamasee Lucas, SEEP Student Sierra Tate, and former auditor Robert Jodoin—as well as Assistant U.S. Attorneys Diane Lucas, who assisted with the forfeiture aspect of the case, and Daniel Friedman, who is handling this prosecution.

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Former Police Officer Convicted of Witness Tampering and Obstruction of Justice

A jury in federal district court has returned a guilty verdict against MARK HOWELL SPARKS, 40, of Felton, Georgia on charges of witness tampering, obstruction of justice, and possession of a motor vehicle with an altered vehicle identification number (VIN).

“The defendant was a police officer who encouraged a witness to withhold information about criminal activity from law enforcement authorities,” said United States Attorney Sally Quillian Yates. “He also obstructed a criminal investigation by tipping off targets of the investigation that the witness was wearing a recording device. The defendant was trying to protect friends who he knew were involved in criminal activity. But the citizens of Polk County employed the defendant as a police officer to protect them from the criminals, not for him to protect the criminals from the police. The defendant now faces time in federal prison for tampering with a witness and obstructing justice.”

According to United States Attorney Yates, the charges and other information presented in court, in June and July 2008, SPARKS was the supervisor of the detective squad at the Polk County Police Department when an investigation into chop shop activity in Polk County was opened by the FBI and the Polk County Police Department. SPARKS was directly involved in the investigation. SPARKS was personally acquainted with several of the potential targets of the investigation. Early on in the investigation SPARKS tipped off an individual that a search warrant was going to be executed at his residence and that detectives were looking for vehicles with altered vehicle identification numbers that the individual had sold to others. SPARKS later convinced the same individual to talk to FBI agents and Polk County detectives about the primary target of the investigation being involved in chop shop activity, but at the same time the individual was to withhold information he knew about SPARKS’ friends who were also operating chop shops. SPARKS did so in an effort to derail the investigation against his friends. Based upon Sparks’ encouragement, the individual told the FBI and Polk County detectives about chop shop activity committed by one specific target, but intentionally withheld information about other targets.

The individual agreed to wear a recording device in an effort to gather evidence against the one target about whom he provided information. Later SPARKS obstructed the investigation by telling other targets of the investigation that the individual was recording conversations and that they should not talk to him. When the individual learned that SPARKS was telling others that the individual was cooperating and wearing a recording device, the individual told FBI agents and Polk County detectives the truth about SPARKS’ efforts to obstruct the investigation.

Also evidence was presented that established that during the time that SPARKS was a police officer he knowingly drove a stolen Chevrolet pick up truck that had an altered VIN plate. When SPARKS was arrested on October 6, 2009, he confessed to driving the pick up truck knowing that it was stolen and knowing that it had an altered VIN. SPARKS resigned from the Polk County Police Department in October, 2009.

The jury acquitted SPARKS on charges that he maintained a chop shop and possessed motor vehicle parts with obliterated or removed VINs.

SPARKS was indicted on these charges on March 23, 2010.

SPARKS could receive a maximum sentence of 10 years in prison and a fine of up to $250,000 on each of the witness tampering and possession of a motor vehicle with an altered VIN charges and a maximum sentence of five years in prison and a $250,000 on the obstruction of justice charge. Sentencing is scheduled for Friday October 1, 2010 at 1:30 p.m. before United States District Judge Harold L. Murphy. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

This case was investigated by special agents of the Federal Bureau of Investigation, police officers with the Polk County Police Department, and law enforcement officers with the Northwest Georgia Criminal Enterprise Task Force.

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Former Fulton County Deputy Sheriff Pleads Guilty to Corruption and Drug Offenses

ANTHONY C. ATWATER, 33, of Atlanta, Georgia, pleaded guilty July 21 in United States District Court to corruption and drug offenses related to a scheme to provide protection to people identified to him as drug dealers.

United States Attorney Sally Quillian Yates said, “This former deputy took money to protect men he thought were drug dealers at the expense of the public he was sworn to protect. He even wore his sheriff’s uniform and weapon while witnessing and protecting what he believed to be a major cocaine deal. Today he admitted he is guilty of this reprehensible conduct.”

FBI Atlanta Special Agent in Charge Brian D. Lamkin said, “Maintaining the public trust is paramount for law enforcement and government entities in order to function as needed. As such, the FBI places a high priority on public corruption investigations. Rogue and corrupt conduct such as former Fulton County Deputy Sheriff Atwater’s, if left unchecked, undermines that much valued public trust and make the work of other law enforcement officers much more difficult. The FBI encourages anyone with information regarding public corruption to contact the Atlanta office FBI.”

Fulton County Sheriff Ted Jackson said, “Most law enforcement officers take pride in wearing the badge and have a clear sense of duty and honor. However, when one who has taken the oath to serve and protect violates the law, it tarnishes and damages the reputations of those who are committed to doing the right thing. The Fulton County Sheriff's Office has been aware of this investigation this since January and cooperated fully with the FBI. This collaboration between the Fulton County Sheriff's Office and the FBI will continue. The crimes of this individual should not reflect upon the many men and women who put their lives on the line for public safety on a daily basis.”

According to United States Attorney Yates, the charges and other information presented in court: Between January and March 2010, ATWATER, in exchange for $4,000 in cash payoffs, used his position as a sheriff's deputy to provide armed protection for alleged drug dealers. The alleged drug dealers were in fact undercover FBI special agents. ATWATER provided armed protection for alleged shipments of cocaine on January 23, 2010, and March 12, 2010. During the alleged drug deals, ATWATER, while wearing his Fulton County Sheriff's Department uniform, accompanied the alleged “drug dealers” to meetings with alleged drug suppliers and provided armed protection against robbery from outsiders or competing drug dealers. ATWATER also agreed to assist the alleged drug dealers in the event they were stopped by law enforcement officers.

ATWATER was indicted on the charges on April 6, 2010. Today he pleaded guilty to attempting to aid and abet the possession of cocaine with the intent to distribute, and accepting corrupt payments. ATWATER could receive a maximum sentence of up to 40 years in prison on the drug count and up to 20 years in prison on the corruption count, and a fine of up to $2,000,000 on the drug count and up to $250,000 on the corruption count. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for many offenders.

Sentencing is scheduled for October 20, 2010 at 10:30 a.m., before United States District Judge Owen B. Forrester.

The U.S. Attorney's Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.

This case is being investigated by Special Agents of the Federal Bureau of Investigation.

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Former Officers of Failed Atlanta Bank Plead Guilty to Fraud

Douglas Ballard, 40, pleaded guilty July 6 in federal district court to one count of conspiracy to commit bank fraud and to receive bribes, and to one count of tax evasion; and Joseph Todd Foster, 42, pleaded guilty to securities fraud. Ballard and Foster, both of Atlanta, were senior vice presidents of Integrity Bank, a $1 billion financial institution that failed and was taken over by the Federal Deposit Insurance Corporation (FDIC) in August 2008.

“Among the roots of our nation’s financial crisis were criminal acts by bank insiders and major borrowers that contributed to the failures or bailouts of financial institutions previously believed to be secure,” said U.S. Attorney Sally Quillian Yates. “Today we announce that two of these corrupt insiders here in Atlanta will be trading in their corporate offices for federal prison.”

“Those who line their pockets with profits of bank fraud schemes should know they will not go undetected and they will be held accountable,” said Internal Revenue Service (IRS)-Criminal Investigation Special Agent in Charge Reginael McDaniel. “IRS-Criminal Investigation is proud to be part of the law enforcement dragnet bringing these individuals to justice.”

According to U.S. Attorney Yates, the charges and other information presented in court: Ballard, Integrity Bank’s former executive vice president in charge of lending, admitted that he conspired with the bank’s major customer, co-defendant Guy Mitchell, to receive bribes from Mitchell and to assist Mitchell in receiving millions in loan draws under false pretenses. Ballard admitted in court to receiving over $200,000 in cash and other corrupt payments from Mitchell in exchange for Ballard’s assistance in distributing millions of loan draws. During this same time, Ballard caused Integrity Bank to distribute nearly $20 million in loan proceeds to Mitchell’s personal account, much of which was allegedly used for Mitchell’s personal consumption (including the purchase of a private island in the Bahamas). Mitchell requested and Ballard paid nearly $7 million of these draws out of a construction loan relating specifically to supposed construction and renovation at the “Casa Madrona,” a luxury hotel owned by Mitchell in Sausalito, Calif. The indictment alleges that none of this money was used for construction, and in fact no renovations had occurred.

Foster, Integrity’s former vice president in charge of risk management, pleaded guilty to charges that he committed securities fraud by way of what is commonly referred to as “insider trading.” Specifically, he admitted to having sold nearly all his shares of Integrity’s stock on the basis of material adverse information about the company of which Foster was aware by virtue of his inside position, but of which the public was generally unaware. Specifically, Foster dumped his shares of Integrity stock based on his knowledge that the bank was facing an increasingly substantial but undisclosed risk that its major customer, Mitchell, would default on over $80 million in outstanding loans.

Ballard was indicted in April 2010 on more than 20 counts of bank fraud, receipt of bribes, securities fraud, evasion of currency reporting requirements, and conspiracy. He pleaded guilty to conspiracy and one additional new count of tax evasion. He could receive a maximum sentence of up to 10 years in prison and a fine of up to $500,000. Foster, also indicted in April 2010, was indicted on two counts of securities fraud and today pleaded guilty to one count. He could receive up to 20 years in prison and a fine of up to $5 million. A date for sentencing has not yet been set before U.S. District Judge Julie E. Carnes.

This case is being investigated by Special Agents of the FBI, FDIC-Office of the Inspector General, and the IRS as part of President Barack Obama’s Financial Fraud Enforcement Task Force. The investigation remains ongoing as to other potential misconduct relating to the failure of this major Atlanta bank. Both defendants have agreed to cooperate in that ongoing investigation.

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.

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Former Dodge County Sheriff and Deputy Sentenced for 2004 Election Fraud

MICHAEL LAWTON DOUGLAS, JR., 38, the former Sheriff of Dodge County, and OLIN NORMAN GIBSON, 44, a former Dodge County Deputy Sheriff, were sentenced June 28 before The Honorable Dudley H. Bowen, Jr., United States District Judge, at the federal courthouse in Dublin, Georgia.

At an earlier change-of-plea hearing, Douglas pled guilty to conspiring to buy votes and to vote more than once in connection with his election in 2004 as Dodge County Sheriff. Gibson pled guilty to buying votes for Douglas during that election. Evidence at the hearing established that Douglas provided money to various supporters, including Gibson, to be used to pay hundreds of voters to vote for him in the election. Douglas’s supporters also paid voters for absentee ballots, and in particular blank absentee ballots, in order to fill those ballots out for Douglas and cast them improperly in the election. Douglas was elected as Dodge County Sheriff in 2004 and served as Sheriff until his re-election campaign was defeated in 2008.

Judge Bowen today sentenced Douglas to 18 months in prison to be followed by a three year term of supervised release. Douglas was additionally ordered to pay a $2,000 fine and complete 150 hours of community service. Gibson received four months in prison, a three year term of supervised release, a $1,000 fine, and 150 hours of community service.

United States Attorney Edward J. Tarver said, “Election fraud strikes at the very heart of our democracy. This office and our law enforcement partners will exercise zero tolerance in our efforts to apprehend and prosecute those who seek to steal or dilute the constitutional rights of citizens in the electoral process.”

U.S. Attorney Tarver recognized the efforts of the Georgia Bureau of Investigation and Federal Bureau of Investigation, and particularly GBI Special Agent Eve Rodgers and FBI Special Agent Ed Sutcliff.

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Hall County School Bus Driver Pleads Guilty to Distribution and Receipt of Child Pornography

JOHN COOPER SPINKS, 41, of Oakwood, Georgia, a bus driver for the Hall County (Georgia) school system, pleaded guilty June 18 in federal court in Gainesville to the distribution, receipt and possession of child pornography.

United States Attorney Sally Quillian Yates said, “As a school bus driver, this defendant assumed a position of trust with respect to the parents and children of Hall County. He betrayed that trust by distributing sexually exploitative images of children using his home computer. Thanks to the work of undercover FBI agents, the defendant has now pleaded guilty to the charges and faces serious consequences for his conduct.”

According to United States Attorney Yates and information presented during today’s guilty plea hearing: SPINKS distributed images of child pornography over the Internet to an undercover law enforcement officer who he encountered in a chat room named “#baby&toddlerlove.” In January 2010, SPINKS was again found in a chat room known for trading images of child pornography. On March 25, 2010, federal agents executed a search warrant at SPINKS’ home and seized a laptop computer and several other pieces of electronic media. SPINKS admitted to agents that he had searched for, downloaded, and viewed images of child pornography and that he had distributed child pornographic images over the Internet. On his computer, the FBI found numerous images of child pornography.

SPINKS faces a maximum sentence of up to 40 years in prison and a maximum fine of up to $500,000. No sentencing date has yet been set by the court. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

This case is being investigated by special agents of the Federal Bureau of Investigation.

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Augusta Financial Advisor Pleads Guilty to Stealing More Than $400,000 from Client

ALVIN CHARLES RAMSEY, 44, a financial advisor from Martinez, Georgia pleaded guilty before United States District Court Judge J. Randal Hall to defrauding a client out of more than $400,000.

United States Attorney Edward J. Tarver said, “The United States Attorney's Office will continue to aggressively prosecute those within the financial services industry who abuse the trust placed in them by stealing their clients’ money.”

Evidence presented during the guilty plea hearing revealed that Ramsey obtained a power of attorney over his client’s investments and then, without that client’s knowledge or permission, stole more than $400,000 out of her investments for his personal use.

Ramsey faces a maximum penalty of 20 years' imprisonment, a $250,000 fine, and three years of supervised release. He remains on bond pending his sentencing hearing, which has not yet been scheduled.

U.S. Attorney Tarver applauded the efforts of the FBI, and particularly FBI Special Agent Paul Kubala, in investigating this case.

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Bibb County Sheriff’s Deputy Sentenced for Seeking Sex with 7-Year-Old Girl

Having been found guilty of attempting to entice a minor to engage in sex, GREGORY TODD BOWDEN, 44, of Byron, Georgia, was sentenced June 11 to 20 years in federal prison.

“Defendant Bowden sought to have sex with a 7-year-old girl. Seven years old. At the time of his crime, Bowden was a sheriff’s deputy—someone who had sworn to enforce the law and protect the public. He failed on both counts. With today’s sentence, the law has been enforced and the public will be protected from Bowden’s predations for 20 years,” said Sally Quillian Yates, United States Attorney for the Northern District of Georgia.

According to United States Attorney Yates and the evidence presented during the trial: BOWDEN, an eight-year veteran of the Bibb County Sheriff’s Department, frequented online chat rooms in which he engaged in fantasy role-playing about incest and other child sex acts. In October 2008, he befriended a woman online whom he believed to have a 7-year-old daughter. This woman—actually an undercover FBI task force agent—told BOWDEN she was willing to make her daughter available to him for sex. In February 2009, BOWDEN and the mother, through additional chats, e-mails, and phone calls, agreed to meet for the purpose of having three-way sex: BOWDEN, the mother, and the 7-year-old daughter. On February 11, 2009, BOWDEN drove 110 miles from his home in Byron to Sandy Springs, where he expected to meet the mother and her daughter. He was arrested at the scene. Agents later recovered a computer from his home on which they found child pornography and other evidence of interest in incest and sex with minors.

District Court Judge William S. Duffey, Jr., sentenced BOWDEN to 20 years in custody in the Bureau of Prisons, to be followed by five years of supervised release.

This case was investigated by agents and officers of the Atlanta Safe Child Task Force, which is led by the Federal Bureau of Investigation, Atlanta Division.

Assistant United States Attorneys Robert McBurney and Corey Steinberg prosecuted the case.

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"Limping Bandit" Pleads Guilty to 23 Bank Robberies

United States Attorney William N. Nettles stated today that Cecil Stephen Haire, age 52, of Douglas, Georgia, pled guilty June 7 in federal court in Charleston, to 23 counts of bank robbery. United States District Judge Sol Blatt of Charleston accepted the plea and will impose sentence at a later date after he has reviewed a presentence report.

Evidence presented at the guilty plea hearing established that Haire traveled across the Southeast committing robberies beginning in June of 2006. The first banks that he robbed were in three small towns in Georgia. Over the next three years, he robbed eight more banks in Florida and Alabama. During that time, he also committed 13 bank robberies throughout South Carolina in Summerville, Orangeburg, Aiken, Sumter, Edgefield, Camden, Charleston, and Mount Pleasant.

His robbing spree came to an end on July 17, 2009. Haire entered the National Bank of South Carolina on Highway 17 North in Mount Pleasant. He handed the teller a brown paper bag, pointed a gun at her and demanded that she put money in the bag. After Haire fled the bank, he was followed by an individual who gave a description of his vehicle to the Mount Pleasant Police Department. Approximately 20 minutes later, the police located Haire sitting in his vehicle in the parking lot of a retirement home. The police found the clothing that he wore in a nearby dumpster, as well as a BB gun pistol that he used to commit the robbery.

While he was still a suspect, Haire acquired the nickname “The Limping Bandit” because many of the bank tellers described a noticeable limp in his walk. After his arrest, the FBI confirmed that Haire’s limp is a result of childhood polio.

In 1986, Haire was convicted in Georgia for seven counts of armed robbery and one count of bank robbery. He was released on parole in 2006.

Mr. Nettles stated the maximum penalty Haire can receive is a fine of $250,000 and/or imprisonment for 25 years for each count.

The case was investigated by agents of the FBI. Assistant United States Attorney Alston C. Badger of the Charleston office handled the case.

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Mableton Man Pleads Guilty to Multi-Million-Dollar Cargo Theft Conspiracy

JOHN RAYMOND SMITH, JR., a/k/a “Johnny Ray Smith,” 50, of Mableton, Georgia, pleaded guilty June 2 in federal district court to conspiring to buy, receive, and possess goods stolen from multiple interstate tractor trailer and container shipments throughout Georgia and the southeastern United States between May 2005 and July 2009. Smith also pleaded guilty to related cargo theft and money laundering charges.

United States Attorney Sally Quillian Yates said of today’s plea, “Metro Atlanta is a major transportation hub, which makes it an attractive target for cargo thieves. By creating a market in this area for stolen goods, dealers like SMITH encourage others to steal interstate shipments, knowing that they will have a safe haven to unload and sell their truckloads of stolen goods. Consumers who buy these products should suspect they are stolen if they seem to be first-quality, name-brand products at unrealistically low prices.”

IRS Criminal Investigation Special Agent In Charge Reginael D. McDaniel said, “Money laundering is not a victimless crime. This case is a prime example of how a criminal enterprise creates an underground, untaxed economy that harms our country's overall economic strength.”

Georgia Bureau of Investigation Director Vernon Kennan said, “Cargo theft is an under-reported criminal phenomenon that has disastrous cascading economic consequences to Georgians. This annual estimated five billion dollar criminal activity negatively impacts transportation providers, retailers and consumers through higher shipping, insurance premiums and retail costs. These modern-day pirates cruise the nation's asphalt interstate corridors and parking lots, much like their predecessors who sailed the open seas for unsuspecting targets of opportunity. These pirates have been stopped.”

According to United States Attorney Yates, the charges, and other information presented in court: Between May 2005 and July 2009, SMITH, who operated “Smith Sales Company”out of warehouses in Mableton and Hiram, Georgia, conspired with ROBIN L. CHEATWOOD, who operated “A-Z Discount” in Cedartown, Georgia, and other co-conspirators to buy, receive, and possess goods stolen from nearly two dozen interstate tractor trailer and container shipments valued at over $3 million throughout the Southeastern United States, including shipments stolen in Alabama, Georgia, South Carolina, and Tennessee. The tractor trailers and containers were stolen while parked at truck stops, motels, and container storage facilities, often at night. SMITH, CHEATWOOD, and others then sold the goods at discounted prices to consumers and wholesalers.

Federal, state, and local law enforcement officers recovered portions of the stolen interstate shipments during searches of warehouses controlled by SMITH, CHEATWOOD, and others in 2005, 2007, and 2009. The stolen goods included a $123,000 shipment of brand name TVs and computers, a $164,000 shipment of “Casio, Inc.” electronics, $100,000 in “GT One” cigarettes, a $1.8 million shipment of computerized “Husqvarna” and “Pfaff” sewing machines, an $86,000 shipment of “Starkist” canned tuna, $40,000 in “Carter’s, Inc.” baby clothes, and $64,000 in “Wrigley’s” chewing gum. Many of the stolen shipments were bound for major retailers such as “Best Buy,” “Lowe’s,” “Sam’s Club,” “Target,” “Wal-Mart,” “OfficeMax,” and “Office Depot.”

As part of a plea agreement with the government, SMITH pleaded guilty to a three count Criminal Information filed on May 17, 2010, charging one count of conspiracy; one count of buying, receiving, and possessing goods stolen from an interstate cargo shipment; and one count of money laundering. He could receive a maximum sentence of up to 5 years in prison on the conspiracy count, 10 years in prison on each of the cargo theft and money laundering counts, and a fine of up to $250,000 on each count. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

CHEATWOOD, who cooperated in the investigation, pleaded guilty to charges related to the stolen goods recovered by law enforcement in 2005. He pleaded guilty in federal court in Rome, Georgia on September 11, 2009, and is currently serving a ten month prison sentence. Neither SMITH nor CHEATWOOD are charged with the actual theft of the cargo containers.

The investigation is ongoing. The GBI has asked that any members of the public who may have seen semi-trailer trucks being unloaded at rest stops, truck stops, industrial areas or residential areas, particularly at night or on weekends, and believe such off-loading may be suspicious, to call the GBI’s Major Theft Unit at 404-244-2600.

SMITH’s sentencing is scheduled for August 17, 2010, at 9:30 a.m., before United States District Judge William S. Duffey, Jr.

The prosecution is the result of a joint investigation conducted by Special Agents of the Federal Bureau of Investigation and the Internal Revenue Service, and by Special Agents and Task Force Officers with the Major Theft Unit of the Georgia Bureau of Investigation. Multiple additional local law enforcement agencies and offices assisted with the investigation, including the Marietta-Cobb-Smyrna Organized Crime Intelligence Unit, Cobb County Police Department, Cobb County District Attorney’s Office, the DeKalb County Police Department, and the Cedartown Police Department.

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Georgia Man Pleads Guilty to Distributing Child Pornography

Galen E. Vanord, 53, of Millen, Georgia, pled guilty today in U.S. District Court to one count of distribution of child pornography. Vanord will be sentenced on August 27, 2010, by United States District Judge Henry Hudson. He faces a mandatory minimum sentence of five years’ imprisonment and a maximum penalty of 20 years’ imprisonment. As a result of this conviction, Vanord will also be required to register as a sex offender in any U.S. jurisdiction in which he lives, works, or attends school.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; and Michael F.A. Morehart, Special Agent-in-Charge of the FBI’s Richmond Field Office announced the plea.

According to court documents, Vanord was identified by law-enforcement officers during an undercover investigation of individuals trading images of child pornography over the Internet. Officers downloaded 600 images of child pornography and one video from Vanord. In the course of their investigation, agents seized Vanord’s computer, on which they found over 16,000 images of child pornography.

This case was investigated by agents of the Federal Bureau of Investigation. Assistant United States Attorney Jessica Aber Brumberg prosecuted the case on behalf of the United States.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

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Georgia Man Admits to Producing Child Pornography

Dennis C. Pfannenschmidt, United States Attorney for the Middle District of Pennsylvania, announced that a 53-year-old Georgia resident pleaded guilty May 28 before Senior U.S. District Court Judge Edwin M. Kosik to producing child pornography as an aider and abettor during November 2008.

Pfannenschmidt stated that Scott Swanson, of Hiwassee, Georgia, admitted to persuading a minor to create sexually explicit images of the minor and transmit them from Pennsylvania to Georgia via computer.

Swanson was indicted by a federal grand jury on July 23, 2009. Swanson’s charges resulted from an investigation conducted by the Federal Bureau of Investigation (FBI), the Georgia Bureau of Investigation, Scranton Police, and the Wyoming County District Attorney’s Office.

Pfannenschmidt noted that as a result of the guilty plea, Swanson faces a mandatory minimum sentence of 15 years in prison and a possible maximum sentence of 30 years in prison. Sentencing will be scheduled after the completion of a pre-sentence investigation by the United States Probation Office.

Pfannenschmidt noted that this case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Pfannenschmidt noted that the case is being prosecuted by Assistant U.S. Attorney Francis P. Sempa.

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Carjacking and Firearms Conviction

Albert Eugene Dunn, age 26 of Valdosta, Georgia, was found guilty on May 10,2010 after a five-day federal jury trial in Valdosta, Georgia. Dunn was convicted on three counts of carjacking and four counts of federal firearm violations which involved two separate home invasions.

The evidence introduced at trial showed that Dunn, with the help of an accomplice, invaded the homes of college students through the use of firearms and knives. He then demanded valuables and took vehicles belonging to the victims with the intent to cause death and serious bodily injury. In one instance, the jury found that the intended serious bodily injury included Dunn causing another person to engage in a sexual act by using force. The Honorable Louis Sands, U.S. District Judge, presided over the trial. Sentencing will be scheduled by the Court at a later date.

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Emanuel County Couple Plead Guilty to Mortgage Fraud Scheme

BRIAN STEPTOE, 41, and NATASHA STEPTOE, 38, both from Emanuel County, Georgia, pleaded guilty today in federal district court to bank fraud and conspiracy to commit bank fraud, respectively.

“The U.S. Attorney’s Office will continue to work with law enforcement partners to investigate and prosecute those who engage in financial crimes,” stated United States Attorney Ed Tarver.

Evidence presented during their guilty pleas revealed that the Steptoes, with the assistance of others, knowingly submitted a false loan application and other documentation to Bank of America with regard to a $400,000 home loan. The investigation revealed that the Steptoes’ scheme was to defraud Bank of America in order to pocket sizeable sums of money for themselves and others. The property went into foreclosure soon after it was sold and remains on the market to this day.

BRIAN STEPTOE faces a maximum penalty of thirty (30) years' imprisonment, a $1,000,000 fine, and five (5) years' of supervised release. He is currently incarcerated and awaits sentencing. NATASHA STEPTOE faces a maximum penalty of five (5) years' imprisonment, a $250,000 fine, and three (3) years' of supervised release. She remains on bond pending her sentencing hearing, which has not yet been scheduled.

This case was brought in coordination with President Barack Obama's Financial Fraud Enforcement Task Force. 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.

U.S. Attorney Tarver recognized the extensive efforts of the FBI in bringing this criminal activity to light, and particularly praised the efforts of Statesboro FBI Special Agent Cornelius Harris, who investigated this case.

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