Criminal Investigations

TULSA, Okla. — United States Attorney Danny C. Williams Sr. announced today that a Mannford woman had pleaded guilty in federal court to fraudulently obtaining Federal Emergency Disaster Agency (FEMA) disaster assistance benefits made available to victims of the Mannford wildfires.

Kerry Lynn Rowell, 42, of Mannford, pleaded guilty before United States District Court Chief Judge Gregory K. Frizzell to a charge that she had made false statements to a Federal agency. Rowell faces the maximum statutory penalty of five (5) years imprisonment and a fine of $250,000. A sentencing date has been set for August 12, 2014.

According to court documents, from August 23, 2012 to September 23, 2013, Rowell made false statements and provided false documents to support her application for FEMA disaster assistance. Rowell claimed her primary residence was destroyed, when in fact she did not reside at that residence. The house was actually owned by her mother and was uninhabited, dilapidated, and had no utility service. None of the personal property she listed on the FEMA application was in the abandoned house when it was destroyed by the fire. Rowell fraudulently received $31,400 in FEMA disaster assistance benefits.

“Anyone with information that an individual may have defrauded the government in connection with a disaster may call the toll-free Department of Homeland Security’s Office of Inspector General Hotline at 1-800-323-8603,” said U.S. Attorney Williams. “Complaints may be made anonymously and confidentially via the official website (www.oig.dhs.gov), or by mailing DHS Office of Inspector General/MAIL STOP 0305, Attention: Office of Investigations—Hotline, 245 Murray Lane SW, Washington, DC 20528.”

The case was investigated by the U.S. Department of Homeland Security’s Office of the Inspector General and the United States Secret Service. Assistant United States Attorney Charles M. McLoughlin prosecuted on behalf of the United States.

If someone has any questions about how assistance benefits may be spent, has made a mistake when reporting damage, or has misrepresented losses, he or she may correct the situation immediately by calling the toll-free FEMA Helpline at 1-800-621-FEMA or 1-800-462-7585 (TTY) for the speech or hearing impaired.

ALEXANDRIA, Va. – A former service contractor for U.S. Customs and Border Protection (CBP) pleaded guilty today for his role in accepting over $350,000 in connection with the awarding of a $24 million contract by CBP.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; John Roth, Inspector General for the Department of Homeland Security (DHS); Robert C. Erickson, Jr., Acting Inspector General, General Services Administration (GSA); Peggy E. Gustafson, Small Business Administration (SBA) Inspector General; and Richard J. Griffin, Acting Inspector General, Department of Veterans Affairs (VA), made the announcement after the plea was accepted by U.S. District Judge Anthony J. Trenga.

Chancellor Ellis, 37, of Manassas, Virginia, pleaded guilty to conspiracy to obtain illegal gratuities and to violate the procurement integrity act.  Ellis faces a maximum penalty of five years in prison when he is sentenced on September, 12, 2014.  He will also pay restitution and forfeiture in the amount of $351,176.60, representing the total amount of illicit payments sought and accepted by Ellis in connection with the procurement fraud scheme.

In a statement of facts filed with the plea agreement, Ellis admitted that, throughout the conspiracy, he worked for CBP as a service contractor.  Among other duties and responsibilities at CBP, Ellis worked as a technical advisor on a procurement for a Wide Area Network (WAN) optimization project.  The procurement resulted in an award to a service-disabled veteran-owned small business, identified in the statement of facts as Company T, at a contract price of approximately $24 million.

Prior to the award to Company T, Ellis—who was actively working for CBP on the procurement—requested that Company T agree to pay ten percent of any profits from the WAN optimization contract to a company co-owned by Ellis.  Shortly after reaching this agreement with Company T, Ellis provided nonpublic source selection information related to the WAN optimization procurement, including independent government cost estimates, to Company T employee Anthony Bilby.  Bilby and other co-conspirators used the source selection information in crafting the winning bid on behalf of Company T.  Bilby and other conspirators also caused nominal competitors of Company T to submit rigged bids on the contract in excess of the amount of Company T’s bid.  After Company T won the contract, it paid $351,176.60—approximately ten percent of its profits—to Ellis’s company.

As part of his plea agreement, Ellis has agreed to cooperate in the investigation of others involved in the conspiracy.  Two other co-conspirators, Anthony Bilby and Thomas Flynn, have previously pleaded guilty and have been sentenced for their roles in the conspiracy.

This case was investigated by the Offices of the Inspector General for DHS, GSA, SBA, and the VA, with assistance from DHS’s Office of the Chief Security Officer, Cyber Forensic Branch.  Assistant U.S. Attorney Kosta S. Stojilkovic is prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:14-cr-205.

Two former federal agents have been charged with wire fraud, money laundering and related offenses for stealing digital currency during their investigation of the Silk Road, an underground black market that allowed users to conduct illegal transactions over the Internet.  The charges are contained in a federal criminal complaint issued on March 25, 2015, in the Northern District of California and unsealed today.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division, Special Agent in Charge José M. Martinez of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Justice Department’s Office of the Inspector General Washington Field Office and Special Agent in Charge Lori Hazenstab of the Department of Homeland Security’s Office of the Inspector General in Washington D.C. made the announcement. 

Carl M. Force, 46, of Baltimore, was a Special Agent with the Drug Enforcement Administration (DEA), and Shaun W. Bridges, 32, of Laurel, Maryland, was a Special Agent with the U.S. Secret Service (USSS).  Both were assigned to the Baltimore Silk Road Task Force, which investigated illegal activity in the Silk Road marketplace.  Force served as an undercover agent and was tasked with establishing communications with a target of the investigation, Ross Ulbricht, aka “Dread Pirate Roberts.”  Force is charged with wire fraud, theft of government property, money laundering and conflict of interest.  Bridges is charged with wire fraud and money laundering. 

According to the complaint, Force was a DEA agent assigned to investigate the Silk Road marketplace.  During the investigation, Force engaged in certain authorized undercover  operations by, among other things, communicating online with “Dread Pirate Roberts” (Ulbricht), the target of his investigation.  The complaint alleges, however, that Force then, without authority, developed additional online personas and engaged in a broad range of illegal activities calculated to bring him personal financial gain.  In doing so, the complaint alleges, Force used fake online personas, and engaged in complex Bitcoin transactions to steal from the government and the targets of the investigation.  Specifically, Force allegedly solicited and received digital currency as part of the investigation, but failed to report his receipt of the funds, and instead transferred the currency to his personal account.  In one such transaction, Force allegedly sold information about the government’s investigation to the target of the investigation.  The complaint also alleges that Force invested in and worked for a digital currency exchange company while still working for the DEA, and that he directed the company to freeze a customer’s account with no legal basis to do so, then transferred the customer’s funds to his personal account.  Further, Force allegedly sent an unauthorized Justice Department subpoena to an online payment service directing that it unfreeze his personal account. 

Bridges allegedly diverted to his personal account over $800,000 in digital currency that he gained control of during the Silk Road investigation.  The complaint alleges that Bridges placed the assets into an account at Mt. Gox, the now-defunct digital currency exchange in Japan.  He then allegedly wired funds into one of his personal investment accounts in the United States mere days before he sought a $2.1 million seizure warrant for Mt. Gox’s accounts.     

Bridges self-surrendered today and will appear before Magistrate Judge Maria-Elena James of the Northern District of California at 9:30 a.m. PST this morning.  Force was arrested on Friday, March 27, 2015, in Baltimore and will appear before Magistrate Judge Timothy J. Sullivan of the District of Maryland at 2:30 p.m. EST today. 

The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington D.C.  The Treasury Department’s Financial Crimes Enforcement Network also provided assistance with the investigation of this case.  The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section.