Feds Indict Child Predator in Georgia’s First “MySpace” Case
SMYRNA MAN INDICTED FOR TRICKING CHILDRENINTO SENDING NUDE PICTURES OVER THE INTERNET
April 10, 2009
At Least Two Teenage Victims Were Allegedly Threatened Into SendingSexually Explicit Pictures and Videos of Themselves Over the Internet
Atlanta, GA - MICHAEL MACALUSO III, 37, formerly of Smyrna, and now of Marietta, Georgia, has been indicted by a federal grand jury on charges of producing, distributing and receiving child pornography, and using a computer to entice a minor to engage in sexual activity. He was arraigned early this afternoon and a bond hearing is now scheduled for April 15, 2009, at 3 p.m. before United States Magistrate Judge Alan Baverman.
United States Attorney David E. Nahmias said, “We warn our children that they need to know who is really on the other end of their computer, but this case drives that warning home in an unfortunately terrible way. This adult defendant was allegedly posing on-line as a teenager in an effort to entice other teenagers into sending him pictures and videos of themselves engaged in sexual activity, and then threatening them with widespread exposure when the victims wanted to stop.
We urge any other victims to contact the Georgia Bureau of Investigation. We also urge parents to use this case to educate their children about the dangers of internet contact with unknown persons and the loss of control involved in transmitting sexually explicit images of oneself on the internet.”
Georgia Bureau of Investigation (GBI) Director Vernon Keenan said, “Sex crimes against children have the highest priority at the GBI. We are working closely with the U. S. Attorney’s Office as the federal penalties for such crimes are extremely harsh. Identifying and bringing to justice those who use the Internet to prey on children for sexual purposes is the mission of the 98 federal, state, and local agencies that participate in Georgia’s Internet Crimes Against Children Task Force (ICAC). The ICAC Task Force program was created by the U. S. Department of Justice to help state and local law enforcement agencies enhance their investigative response to offenders who use the Internet, online communications systems, or other computer technology to sexually exploit children. Our experience has shown that there may be other victims of this defendant. I would urge any parent who feels their child may have come in contact with MACALUSO to contact the GBI’s High Technology Unit.”
According to United States Attorney Nahmias and the information presented in court: In or about June 2006, MACALUSO allegedly posed on-line as a 15-year old male and befriended a 15-year old male in Connecticut. MACALUSO allegedly convinced the victim to send him nude pictures and videos of the victim engaging in sexually explicit conduct. When the victim told MACALUSO he did not want to send any more pictures, MACALUSO allegedly threatened to expose the victim’s sexual orientation and post the explicit pictures in a widespread manner on the internet.
Relating to the second victim, in or about March 2008, MACALUSO allegedly posed as a 16-year old female on “MySpace” and befriended a 14-year old male in New Jersey. The two communicated on-line for a period of time, and again MACALUSO allegedly convinced the victim to send him nude pictures and videos of the victim engaging in sexually explicit conduct. Eventually, the victim expressed a desire to stop engaging in this activity, and MACALUSO then allegedly threatened to post the victim’s sexually explicit pictures in a widespread manner on the internet. Once again, during a search of MACALUSO’s computers, agents allegedly found a large number of child pornography images and videos.
Anyone who may have more information about the case or has had similar contact with the defendant, whose birth date is April 7, 1972, is encouraged to contact the Georgia Bureau of Investigation’s High Technology Unit at (404) 270-8870.
The indictment charges MACALUSO with two counts of production of child pornography, two counts of distribution of child pornography, two counts of receipt of child pornography, and two counts of using a computer to entice a child to engage in unlawful sexual activity. The production charges carry a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years. The distribution and receipt charges carry a mandatory minimum sentence of 5 years in prison and a maximum sentence of 30 years, and the enticement charges carry a mandatory minimum sentence of 10 years and a potential maximum sentence of life in prison. Each count also carries a fine of up to $250,000.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children via the Internet. For more information about Project Safe Childhood, please visit
www.projectsafechildhood.gov.This case is being investigated by Special Agents of the Georgia Bureau of Investigation (GBI).
Assistant United States Attorney Corey Steinberg is prosecuting the case.
For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
FORMER SOCIAL SECURITY ADMINISTRATION OFFICIALPLEADS GUILTY TO THEFT OF GOVERNMENT FUNDS
April 10, 2009
Atlanta, GA - HERIBERTO SANABRIA, 55, of McDonough, Georgia, a former Social Security Administration official, pleaded guilty today in federal district court to charges of theft of government funds.
Acting United States Attorney F. Gentry Shelnutt said of the case, “The public expects government workers to work for the government, and not use the system for their own personal gain. The Social Security Administration’s Office of Inspector General and other government agencies will continue to keep a sharp eye on taxpayer money, and this office will take any appropriate steps to make sure those who take that money pay the price of justice.”
Guy Fallen, Special Agent in Charge of the Social Security Administration, Office of the Inspector General said, “The integrity of federal employees is a matter of great importance. Mr. Sanabria repeatedly violated the public trust through his actions. The Social Security Administration and its Office of the Inspector General are fully committed to identifying and prosecuting corrupt employees at every level. Thankfully, the vast majority of Social Security Administration employees are dedicated public servants who steadfastly administer the Social Security Programs each and every day.”
According to Acting United States Attorney Shelnutt and the information presented in court: SANABRIA was the former Region IV Manager of the Social Security Administration-Civil Rights Equal Opportunity Office in Atlanta, Georgia. In his position SANABRIA was responsible for oversight and management of the region’s equal employment opportunity program which encompassed complaint processing, alternative dispute resolution, diversity programs, sexual harassment and statistical analysis. SANABRIA also managed an office of 15 employees and provided EEO training and guidance to senior management officials.
The evidence showed that from March 2004 through March 2007 SANABRIA, through his personal consulting and conference planning company, “North and South Together” d/b/a “NST Group,” facilitated bi-annual regional workshops for the Combined Federal Campaign (CFC). The NST group negotiated a contract with the National CFC Committee to conduct CFC bi-annual regional workshops for 5% of the regional workshops gross registration revenues. The NST Group also negotiated contracts with host hotels and venues to receive 10% commission from workshop registrant’s accommodation fees. SANABRIA and the NST Group hosted CFC regional workshops in: San Diego, California; Miami, Florida; Palm Springs, California; San Antonio, Texas; Fort Lauderdale, Florida; Seattle, Washington; and New Orleans, Louisiana. The Social Security Administration requires all employees to receive approval to perform outside work activity before embarking on a venture that may present a conflict of interest between official duties and the outside work activity. SANABRIA did not receive approval from the Social Security Administration to perform outside work activity.
The evidence showed that even though all of SANABRIA’s work with the NST Group constituted “outside private work” activity, SANABRIA billed the Social Security Administration for the expenses associated with his work with the NST Group as well as his time for conducting the CFC workshops. Specifically, SANABRIA submitted travel vouchers to the Social Security Administration and received compensation in the amount of $11,028.57 to cover transportation, lodging, and meal expenses incurred while conducting the CFC workshops. Additionally, time and attendance rosters indicated SANABRIA was in pay status as a federal employee while conducting the CFC workshops. An audit conducted by the Social Security Administration Center for Human
Resources determined that SANABRIA should have been charged 336 hours of annual leave for work he performed for the NST Group while in pay status with the federal government. Based on SANABRIA’s salary 336 hours of annual leave equaled $17,029.68. The total fraud loss in this case was $28,058.25.
SANABRIA pleaded guilty today to a Criminal Information charging eight counts of theft of government funds. He could receive a maximum sentence of 10 years in prison for each count 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.
A sentencing date is set for June 22, 2009, at 10:30 a.m. before United States District Judge Thomas W. Thrash, Jr.
This case is being investigated by the Social Security Administration-Office of the Inspector General (OIG).
Special Assistant United States Attorney Loranzo M. Fleming is prosecuting this case.
For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
MARIETTA ATTORNEY CHARGED IN $28 MILLIONINVESTMENT FRAUD SCHEME
April 9, 2009
Copeland to Plead Guilty to Defrauding Over 125 VictimsAtlanta, GA - ROBERT P. COPELAND, 48, of Marietta, Georgia, was charged today in a criminal information relating to a $28 million investment fraud scheme that duped more than 125 investors.
United States Attorney David E. Nahmias said of the case, “This case involves yet another disturbing and tragic Ponzi scheme, in which the defendant tricked more than 125 of his fellow citizens into giving him millions of dollars of retirement and other savings.
These frauds will continue to land their perpetrators in prison for a long time.”
Nahmias added, “But we hope this case sends a second message as well. This defendant came forward, reported his crimes, and pledged his full cooperation, which has already resulted in numerous seizures of assets that will be restored to the victims. While his punishment will reflect the seriousness of his massive and long-running scam, his contrition and cooperation will also be given consideration. You are much better off knocking on our door to confess, instead of waiting for the FBI to come knocking on your door. This investigation is continuing, with the defendant’s cooperation.”
FBI Atlanta Special Agent in Charge Gregory Jones said, “The FBI has seen a steady increase in the number of these fraudulent investment schemes. Investors must exercise due diligence and do their homework before turning their hard earned money over to someone promising a high rate of return on their money.”
According to United States Attorney Nahmias, the Criminal Information and other information presented in court: COPELAND, a Marietta-based real estate attorney, allegedly operated a fraudulent investment scam, commonly known as a “Ponzi” scheme, from at least 2004 through early 2009. He solicited individuals directly, through seminars he participated in, and through financial planners to whom he paid commissions in exchange for referrals of investment clients. COPELAND represented that he would use an investor’s money in lucrative real estate financing and/or development activities, such as by funding a mortgage or bridge loan to a real estate purchaser who needed financing.
In the scheme, COPELAND promised returns as high as 15% every 6 to 12 months, and would furnish the investor a note and security deed that would purport to document the investor’s secured interest in a particular piece of real estate. Based on these representations, COPELAND raised more than $40 million since 2004 from hundreds of investors nationwide. Some of these investors were elderly and used up their retirement funds.
The Criminal Information alleges that COPELAND’s investment business was a scam. He was engaged in little if any real estate financing, development, or other profit-making activities with investor funds. The notes and security deeds he furnished investors were in almost all cases bogus. Instead of using investor funds in the ways he had represented, he operated a so-called “Ponzi” scheme, in which COPELAND used the money from new investors to pay earlier investors the distributions that he had promised to them. When the time came to pay the new investors, he would have to solicit and take in yet more investments. This created an unsustainable and ever-expanding mountain of debt. When the scheme collapsed in early 2009, COPELAND was left owing over $28 million to over 125 victims.
COPELAND was charged with one count of wire fraud, which encompassed his entire five-year scheme. The charge carries a maximum sentence of 20 years in prison, a fine of up to $250,000, full restitution to all victims, and forfeiture of any assets traceable to the proceeds of the offense. 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. As part of a civil complaint filed in March 2009 by the United States Attorney’s Office in Atlanta, the United States has already seized 12 properties to which alleged proceeds of the offense have been traced.
COPELAND is expected to plead guilty to the charges contained in the information before a United States District Judge within the next few weeks although an exact date has not yet been set.
Members of the public are reminded that the information contains only allegations. A defendant is presumed innocent of the charges and it will be the government’s burden to prove a defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by Special Agents of the Federal Bureau of Investigation, in cooperation with the staff of the Atlanta Division of the U.S. Securities and Exchange Commission.
Assistant United States Attorney Justin S. Anand and Special Assistant United States Attorney Gerald S. Sachs are prosecuting the case.
For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
“STING” SENDS FORMER LOAN OFFICERTO PRISON FOR MORTGAGE FRAUD
April 9, 2009
Property’s Price Inflated by $2 Million To Get Multi-Million Dollar KickbackGainesville, GA - ANDREW JOHN SMITH, 29, of Cleveland, Georgia, was sentenced today by United States District Judge William C. O’Kelley to serve over 3 years in prison on a federal charge of conspiracy to commit bank, wire and mail fraud arising from a mortgage fraud scheme.
United States Attorney David E. Nahmias said of the case, “We will continue to use undercover ‘sting’ operations to stop the closing of fraudulent loans before the proceeds are disbursed, especially when a loss of over a million dollars to such frauds could seriously impact the lending banks during these difficult times. We remain committed to the prosecution of mortgage frauds, which has so devastated our local and national economy, and anyone involved in such fraud should fear that everyone else involved in the deal may be cooperating with the FBI.”
FBI Atlanta Special Agent in Charge Gregory Jones said, “This investigation should send a clear message to those criminals involved in mortgage fraud that the FBI may also be at the closing with cameras rolling and a set of handcuffs.”
FDIC-OIG Special Agent in Charge, Southeast Region, C. Ed Slagle said, “This investigation should serve as a warning to those who continue to attempt mortgage frauds in ever increasing amounts at a time when the community has already been so negatively impacted by such frauds.”
SMITH was sentenced to 3 years, 6 months in prison to be followed by 5 years of supervised release. The court has ordered SMITH to pay restitution but has not yet set a final amount. SMITH pleaded guilty to the charge on January 9, 2009.
According to United States Attorney Nahmias and information presented in court: In early 2007, SMITH was employed as a part-time Loan Officer by United International Mortgage (UIM) in Buford, Georgia, when he originated a fraudulent loan for his own residence. SMITH was later recruited by an UIM co-conspirator not named in the indictment to refinance UIM loans with other lenders, as well as to sell UIM foreclosed properties on which construction was not complete to unqualified straw borrowers funded by other lenders. SMITH’s own loan for his residence had been included in the UIM portfolio of non-performing loans facing imminent foreclosure.
On June 9, 2008, SMITH and his UIM co-conspirator were caught in an FBI/FDIC-OIG (Federal Deposit Insurance Corporation-Office of Inspector General) “sting” after SMITH had arranged for the sales price of a Pendergrass, Georgia, property to be inflated from $2 million to $4 million. Prior to his arrest, SMITH submitted fraudulent documents to federally insured banks to arrange a $3.2 million purchase money mortgage loan to finance the purchase of the property. SMITH then negotiated a side agreement with the sellers (who were, unbeknownst to SMITH, cooperating with the FBI) for the secret kickback of $2 million to his shell company. SMITH was arrested by federal agents at the property during a subsequent meeting to negotiate his multi-million dollar kickback for the “deal.”
Notably, the property at issue was sold for its true market value of $1.8 million immediately upon conclusion of the FBI’s sting operation.
The FBI investigation is ongoing.
This case was investigated by Special Agents of the Federal Bureau of Investigation and the Office of Inspector General, Federal Deposit Insurance Corporation.
Assistant United States Attorney Gale McKenzie prosecuted the case.
For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
BANK-ROBBING “DRACULA” SENTENCED TO OVER 20 YEARS IN PRISONApril 8, 2009
Armed Robber Wearing Dracula Mask Preyed Twice on CDC Credit UnionATLANTA, GA - NATHANIEL LITTLE, JR., 43, of Decatur, Georgia, was sentenced today by United States District Judge Charles A. Pannell, Jr., to serve more than 20 years in prison on charges of armed bank robbery and possession of a firearm during a crime of violence.
United States Attorney David E. Nahmias said, “Today’s sentence drives a stake into the heart of a simple yet dangerous crime: robbing banks. This “Dracula” bandit will now spend many nights in the dark and confined cavern of a prison cell. In this scary economy, robbing banks may seem like a quick way for criminals to get money, but the real horror begins once they are caught.”
FBI Atlanta Special Agent in Charge Gregory Jones said, “The FBI would like to thank the Rockdale County Sheriff’s Office and the DeKalb County Police Department for their assistance in this investigation. It was with their help the FBI was able to successfully track Little and ultimately remove an armed and dangerous criminal from our community.”
LITTLE was sentenced to 20 years in prison to be followed by 5 years of supervised release, and ordered to pay restitution of $14,669. LITTLE pleaded guilty to the charges on November 12, 2008.
According to United States Attorney Nahmias and the information presented in court: On the morning of August 23, 2006, LITTLE, wearing a Dracula mask, walked into the CDC Federal Credit Union on Brandywine Road in Atlanta with a semi-automatic gun in his hand. He placed a bag on the counter and, while pointing the gun, yelled at the tellers to fill it up. After getting the money, the defendant fled the bank. A little over a month later, on September 29, 2006, LITTLE robbed the same CDC Federal Credit Union in the same way: he walked in wearing a Dracula mask and carrying a semi-automatic handgun, he placed a bag on the counter and, while pointing the gun at the tellers, he ordered them to fill up his bag. At one point during this robbery, LITTLE shouted at a teller, “Don’t make me have to shoot you.”
After getting the money, he fled the bank. The FBI later tracked a car that had been parked near the robbery and, after a lengthy investigation, located key witnesses, which helped investigators identify LITTLE, who had been arrested on unrelated state charges after the robberies.
This case was investigated by Special Agents of the FBI.
Assistant United States Attorney Matthew T. Jackson prosecuted the case.
For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
FORMER INSURANCE EXECUTIVE PLEADS GUILTY INSCHEME TO EMBEZZLE $1.2 MILLION IN INSURANCE PREMIUMS
April 7, 2009
Rome, GA - GEORGIANNE CARLISLE, 57, of Taylorsville, Georgia, pleaded guilty this morning to a federal charge of conspiracy arising out of a scheme to embezzle $1.2 million in insurance premiums from her employer and various other companies with which her employer did business. RICHARD CALVIN COOK, 56, from Dallas, Texas, has been charged with the same crime.
United States Attorney David E. Nahmias said of the case, “This insurance industry executive violated the trust that her employer had placed in her by embezzling insurance premiums collected from customers and converting the money to her own use. This criminal conduct harms insurance companies and their customers and undermines public confidence in the insurance industry. Such criminals will face federal prosecution and prison time.”
According to United States Attorney Nahmias and other information presented in court: CARLISLE was the President of “IUI of Georgia, Inc.,” a wholesale insurance broker in Cartersville, Georgia. Co-defendant COOK was an employee of “Trans Insurance Services, Corp.,” a retail insurance agency in Dallas, Texas, which sold insurance to trucking companies. From 2001 through 2004, COOK and CARLISLE conspired to embezzle $1.2 million in insurance premiums collected from COOK’S customers, which premiums were owed to IUI of Georgia, Insurers Unlimited, Inc., Clarendon National Insurance Company, Clarendon America Insurance Company, Transportation Insurance Services, The Connecticut Indemnity Company, and Clearwater Insurance Company.
COOK paid kickbacks to CARLISLE so that CARLISLE would under-report the number of vehicles to be insured on certain accounts and the total insured value of those accounts.
COOK and CARLISLE were charged in a Criminal Information with one count of conspiracy to commit mail fraud, to which CARLISLE pleaded guilty. CARLISLE could receive 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.
Members of the public are reminded that a Criminal Information only contains charges. Defendant COOK is presumed innocent of the charges, and it will be the government’s burden to prove his guilt beyond a reasonable doubt at trial.
Sentencing for CARLISLE has been set for June 18, 2009, at 10 a.m. before Judge Robert L. Vining, Jr.
This case is being investigated by Special Agents of the Federal Bureau of Investigation.
Assistant United States Attorney Russell Phillips is prosecuting the case.
For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
“ALTERNATIVE MEDICINE” CLINIC OPERATORPLEADS GUILTY TO FEDERAL HEALTH CARE FRAUD CHARGE
April 7, 2009
Beckwith Defrauded Insurance Companies and Medicareof More Than $1 Million in “Hyperbaric Therapy” Scheme
Atlanta, GA - CHAUNSAY BECKWITH, 46, of Tucker, Georgia, pleaded guilty today in federal district court to a charge of health care fraud in connection with the operation of her clinic, “International Alternative Medicine, Inc.” She was indicted on 35 counts of health care fraud by a federal grand jury on December 16, 2008.
United States Attorney David E. Nahmias said of the case, “Hyperbaric chambers have a number of legitimate medical uses, as varied as helping burn victims and even scuba divers in their recovery. This defendant, however, turned a hyperbaric chamber into a means of generating over a million dollars in fraudulent claims. Health care fraud raises the costs of health care for everyone.”
According to Nahmias and information presented in court: Between 2003 and 2007, BECKWITH, an owner/operator who does not hold any type of medical license, provided hyperbaric oxygen therapy to numerous patients in her clinic, International Alternative Medicine, Inc., located at 4450 Hugh Howell Road, in Tucker, Georgia. None of the patients were diagnosed with medical conditions that made them eligible to receive payments from health care benefit programs. BECKWITH submitted $1,577,827 in claims to insurance companies and Medicare, which included false diagnosis codes that enabled her to fraudulently receive $1,035,144 in payments for the hyperbaric chamber treatments.
BECKWITH could receive a maximum sentence of 10 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.
Sentencing is scheduled for June 18, 2009, at 2 p.m., before Senior United States District Judge Marvin H. Shoob.
This case is being investigated by Special Agents of the Federal Bureau of Investigation.
Assistant United States Attorney David E. McClernan is prosecuting the case.
For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
NORTHWEST GEORGIA AND TENNESSEEDRUG DISTRIBUTORS SENTENCED TO FEDERAL PRISON
April 2, 2009
Defendants Were Affiliated With Mexican SuppliersRome, GA - JOSE HERNANDEZ, 40, originally from Mexico, VANCE ROGERS, 50, of Old Fort, Tennessee, and PAUL FAULKNER, 83, of Summerville, Georgia, were sentenced today as the last defendants in a large group now sentenced to federal prison for their roles in importing and distributing drugs in the North Georgia area, including Chattooga, Whitfield, Floyd, Gordon, and Murray Counties, as well as Polk County, Tennessee.
United States Attorney David E. Nahmias said of the case, “The arrest and prosecution of these traffickers has significantly disrupted the flow of illegal drugs in Northwest Georgia. They were responsible for much of the marijuana being distributed in Chattooga County and surrounding areas, as well as a significant quantity of cocaine and methamphetamine. The lengthy sentences imposed should signal to others considering this path, or already on this path, that such criminal conduct ultimately leads to a prison cell.”
Rodney G. Benson, Special Agent in Charge of the DEA Atlanta Field Division said of the sentencings, “This organization’s marijuana trafficking activities posed a significant threat to the quality of life in rural North Georgia and in Polk County, Tennessee. These individuals will spend well-deserved time in prison and the communities that they impacted are much safer. I commend our local law enforcement counterparts who played a crucial role in the success of this investigation.”
IRS-Criminal Investigation Special Agent in Charge Reginael McDaniel said, “Narcotics
trafficking generates huge amounts of currency that must be concealed using elaborate money laundering schemes and other sophisticated means. Following the money trail takes us to the leaders of the narcotics organizations. Leaders of drug trafficking organizations often don’t touch the drugs, but they always touch the money.”
GBI Director Vernon Keenan said, “Cases such as these cannot be effectively investigated without the cooperation of local, state and federal agencies working together to improve the quality of life for Georgians impacted by these poly-drug organizations. Today’s marijuana distributor may be tomorrow’s methamphetamine manufacturer.
Whether it’s in northeast Georgia or southwest Georgia, success in investigating these types of cases requires a highly skilled work force, a cooperative spirit and a common goal to seek the truth.”
HERNANDEZ was sentenced to 20 years in federal prison to be followed by 10 years of supervised release. ROGERS was sentenced to 3 years and 10 months in federal prison to be followed by 3 years of supervised release. FAULKNER was sentenced to 20 years in federal prison to be followed by 10 years of supervised release. There is no parole in the federal system.
According to United States Attorney Nahmias and the information in court: The Drug Enforcement Administration, Georgia Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation began investigating this drug trafficking organization in 2005, initially focusing on members of a local family who reportedly had been distributing marijuana in Chattooga County and the surrounding areas for nearly two decades. The investigation ultimately determined that those family members, including
PAUL FAULKNER, his son, MICHAEL SMITH, and his grandson, JAMES FAULKNER, had distributed hundreds of kilograms of marijuana during that time, and had accumulated numerous assets with the drug sales proceeds, including nearly 40 properties with a total value of more than $1 million.
MICHAEL SMITH, the primary marijuana distributor, took elaborate steps to avoid detection by law enforcement. SMITH resided on an isolated, multi-acre property where he could observe law enforcement approaching. He buried marijuana in ammunition cans scattered on his property, which customers would unearth and replace with money. SMITH communicated with his customers by use of a pager system.
As the investigation expanded, law enforcement learned that the family was being supplied by a group having ties to Mexico. This group, headed by convicted co-conspirator GERONIMO GASTELUM, moved to North Georgia from California in approximately 2005, and began to supply multi-kilogram quantities of drugs in the area, including methamphetamine, cocaine, and marijuana. The drugs were brought to North Georgia from California, Arizona, and Texas by various means, including tractor trailer.
The drug organization hired individuals to pick up drugs in vehicles equipped with tires packed with marijuana. GASTELUM and several of his co-conspirators have ties to Mexico, which is believed to be the ultimate source of the drugs imported and where much of the cash proceeds were returned.
Law enforcement ultimately arrested 10 members of the organization. All pleaded guilty to drug distribution and money-laundering charges. The defendants previously sentenced in the case received the following sentences:
•RUSSELL BRONSON, 51, of Endicott, New York, was sentenced to 7 years, 3 months in federal prison;
•BILL ALAN GARRETT, 52, of Tennga, Georgia, was sentenced to 4 years, 3 months in federal prison;
•JESUS MENDEZ, 23, of Smithfield, North Carolina, was sentenced to 6 years, 3 months in federal prison;
•MICHAEL WALLIN, 39, of LaFayette, Georgia, was sentenced to 4 years in federal prison; and
•JAMES FAULKNER, 36, of Summerville, Georgia, was sentenced to 9 years, 9 months in federal prison.
Assistant United States Attorneys Todd Alley and Scott Hulsey prosecuted the case.
For further information, please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.
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