McHenry County Blog

A press release from the U.S. Attorney’s Office:

CHICAGO LEADER OF ROMANIAN-BASED CONSPIRACY THAT OBTAINED $1.6 MILLION IN FALSE TAX REFUNDS SENTENCED TO 85 MONTHS IN PRISON

CHICAGO — The leader in Chicago of a Romanian-based international conspiracy to fraudulently obtain millions of U.S. tax dollars was sentenced to just over seven years in federal prison.

The defendant, OVIDIU ISAC, oversaw and directed nearly two dozen co-defendants in the United States who used their bank accounts to receive fraudulent federal income tax refunds after overseas co-conspirators filed hundreds of false tax returns claiming refunds in the names of Romanian citizens who had visited the United States on exchange student visas.

At least 470 false tax returns, typically claiming refunds between $4,000 and $7,000, were filed and resulted in a loss of more than $1.6 million to the U.S. Treasury during the conspiracy that spanned three tax years between 2007 and 2009.

The returns were filed in the names and social security numbers of individuals who had previously traveled to the United States on temporary student visas and had filed tax returns in the past, but who were likely no longer living in the U.S. nor filing a real return in their own name.

Isac led and organized the co-conspirators in Chicago and controlled the flow of money to his co-conspirators in Romania.

On one occasion, Isac led a group of co-conspirators in physically attacking a group of individuals who were associated with someone who refused to pay Isac his cut of the proceeds.

Isac, 31, a Romanian citizen who lived in Skokie, was sentenced on Friday to 85 months in prison and ordered to pay restitution totaling $1,641,209 by U.S. District Judge Charles Norgle.

Isac pleaded guilty in January to conspiracy to defraud the United States and theft of government funds.

He will be subject to deportation after completing his sentence.

Isac was arrested in April 2010 and was among 24 defendants who were indicted in July that year for their roles in the conspiracy. Nineteen of the defendants have been convicted and sentenced, while five remaining co-defendants are fugitives.

Evidence in two companion cases showed that the fraudulent returns typically claimed large deductions for moving expenses, and the fraud was concealed by electronically submitting false wage and tax statements.

The returns were filed in the names of real individuals and employers who likely were unaware that their identities and information were being misused.

At least 200 bank accounts in the names of more than 75 individuals were used to receive and obtain the tax refund money triggered by the fraudulent returns.

Gary Shapiro

The sentence was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois; Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; James C. Lee, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division; and Gary Hartwig, Special Agent-in-Charge of Homeland Security Investigations (HSI) in Chicago.

The government was represented by Assistant U.S. Attorneys Matthew Burke, Jennie Levin and Julie Porter.

A press release from the U.S. Attorney’s Office:

TWELVE DEFENDANTS INDICTED FOR ALLEGED ROLES IN SCHEME TO  OBTAIN MORE THAN $1 MILLION FROM COUNTERFEIT CHECKS

CHICAGO — Twelve Chicago and area defendants were indicted on federal bank fraud charges, and five of them were also charged with aggravated identity theft, for their alleged roles in a scheme to obtain more than $1 million from counterfeit personal and corporate checks, and actually obtaining more than $700,000, by cashing the bogus checks at various local banks and sharing the proceeds among themselves.

The defendants were charged in a 37-count federal grand jury indictment that was unsealed last Thursday after the lead defendant, KENNTH PEARSON, was arrested by U.S. Secret Service agents who conducted the investigation with assistance from the Downers Grove Police Department and other suburban police departments. Pearson, 39, of Chicago, was charged with 32 counts of bank fraud and one count of aggravated identity theft. He remains in federal custody pending a detention hearing at 10:30 a.m. tomorrow before U.S. District Judge Virginia Kendall.

A co-defendant, DAVID KOTLICKY, 23, of Downers Grove, was ordered detained without bond after he was arrested on Nov. 27, 2012, on a criminal complaint, which preceded the indictment that was returned under seal last month charging Kotlicky, Pearson and 10 other defendants.

Defendant ANTIONE MAHONE, 24, of Chicago, was arrested on Friday and released on bond, and an arrest warrant is outstanding for ERIC JACKSON, 24, of Chicago.

The eight remaining defendants will be arraigned on various dates this month before Judge Kendall in Federal Court.

Gary Shapiro

The indictment was announced today by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Frank Benedetto, Special Agent-in-Charge of the Chicago office of the Secret Service.

According to the indictment, between August 2010 and December 2012, the defendants created hundreds of counterfeit checks, with face values totaling more than $1 million, presented them to various banks to be cashed, usually in amounts of approximately $2,500, and kept and shared the proceeds.

Defendant LATRESE LESHORE, 30, of Chicago, through her employment processing individuals’ health insurance applications and payments, allegedly stole bank customers’ authentic checks and account information by making copies at work, and providing them to a co-defendant in exchange for cash, knowing that the victims’ accounts would be compromised.

The indictment alleges that Pearson, Kotlicky and Jackson then used the stolen checks and account information to create counterfeit checks. Pearson and Kotlicky then made and caused others to falsely make changes to the bank customers’ account information so that they could monitor the customers’ accounts, intercept bank employees’ questions about account activity, and prevent immediate detection of the alleged scheme.

Pearson, Kotlicky, Jackson, STACEY SANDERS, 38, of Chicago, and DEANGRIA WELLS, 27, of Chicago, allegedly recruited runners to take the counterfeit checks to branches of

• American Chartered Bank,
• Chase Bank,
• Citibank,
• Fifth Third Bank,
• First Midwest Bank,
• BMO Harris Bank, and
• U.S. Bank

to be cashed. Those same defendants then allegedly collected proceeds of the cashed counterfeit checks from runners, paid the runners a fee for cashing the checks, and distributed the remaining proceeds to Pearson.

Also indicted were: ROGER ELAM, 48; his sister, ROSIE ELAM, 59; LYNADA MAHONE, 34, (Antione Mahone’s cousin); TOVISE STONE, 34; and STARLINDA STUBBS, 21, all of Chicago.

All 12 defendants face at least one or more counts of bank fraud.

In addition, Pearson, Kotlicky, Jackson, Sanders, and Leshore were each charged with one count of aggravated identity theft, and Kotlicky alone was charged with one count of passing $80 in counterfeit currency.

The indictment also seeks forfeiture of approximately $1 million from Pearson and Kotlicky.

Each count of bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. Aggravated identity theft carries a mandatory consecutive sentence of two years in prison and a maximum $250,000 fine, and passing counterfeit currency carries a maximum of 20 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The government is being represented by Assistant U.S. Attorney Julie Porter.

The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

A press release from the U.S. Attorney’s Office:

EIGHT SELF-IDENTIFIED “BOY LOVERS” SENTENCED TO FEDERAL PRISON FOR CHILD SEXUAL EXPLOITATION CRIMES AFTER FBI INVESTIGATION

CHICAGO — Three years after several self-identified “boylovers,” who met in person and online to discuss their sexual interest in children and trade child pornography, were arrested in an FBI sting during or soon after a purported party at a hotel in suburban Skokie, a total of eight defendants have been convicted and sentenced to federal prison terms as a result of the investigation.

The sentences ranged from nine years for a suburban Crest Hill man sentenced last week in Chicago to 120 years for a Missouri man sentenced last year in St. Louis.

Six of the eight defendants pleaded guilty and three of them cooperated against others, while the Crest Hill man and a Missouri defendant were convicted after separate trials. All were prosecuted as part of an investigation by the Chicago FBI’s Innocent Images Task Force, which culminated with the undercover sting in September 2009.

Gary Shapiro

“The sentences in these cases reflect the stark reality that defendants who prey upon children by sexually exploiting or abusing them will be punished severely,” said Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois. He announced the sentences together with William C. Monroe, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The Chicago area defendants and details of their cases follow:

• Mark McGill, 27, of Crest Hill, sentenced to nine years in prison, followed by 20 years’ supervised release, by U.S. District Judge Joan Gottschall on Oct. 9. McGill was convicted of possessing and distributing child pornography after a trial in March of this year. Evidence at McGill’s trial showed that he had attended at least one party with other “boylovers.” In August 2009, McGill gave a cooperating defendant a thumb drive containing approximately 3,500 images and nearly 60 videos containing child pornography;
• Jose Garcia, 25, of Schererville, Ind., sentenced to 33 years in prison, followed by lifetime supervised release, by U.S. District Judge Amy St. Eve on July 23. Garcia, who cooperated, pleaded guilty to producing, possessing, and distributing child pornography;
• Jacob Elliott, 32, of Matteson, sentenced to 20 years in prison, followed by 10 years’ supervised release, by U.S. District Judge John Grady on July 18. Elliott, who cooperated, pleaded guilty to producing and possessing child pornography;
• Corey Stinefast, 30, of Kenosha, Wis., sentenced to 18 years in prison, followed by lifetime supervised release, by Judge St. Eve on June 13. Stinefast pleaded guilty to possessing and distributing child pornography, and he was found to have amassed a collection of more than 191,000 images of child pornography;
• Neal Maschke, 42, of West Chicago, sentenced to nine years in prison, followed by five years’ supervised release, by U.S. District Judge Samuel Der-Yeghiayan in October 2010. Maschke pleaded guilty to possessing child pornography; and
• Donald Peppers, 38, of Hoffman Estates, sentenced to 27 years in prison, followed by lifetime supervised release, by the late U.S. District Judge William Hibbler in December 2010. Peppers, who cooperated, pleaded guilty to producing, transporting, and possessing child pornography, including an admission that he had produced a video of himself sexually molesting a 1-year-old child. Peppers’ arrest and subsequent cooperation touched off the investigation that resulted in the other prosecutions.

Garcia and Maschke were arrested when they showed-up for what they believed was going to be a “boylovers” party at the Skokie hotel in September 2009.

McGill and Stinefast were arrested a short time later.

Two other defendants, Michael Martin and Matthew Klopfenstine, were convicted in Federal Courts in St. Louis and Kansas City, respectively, based on evidence gathered during this investigation.

Martin was sentenced last year to 120 years in prison for producing child pornography, and Klopfenstine was sentenced recently to 15 years and eight months for producing child pornography.

FBI offices in Milwaukee, St. Louis, and Kansas City assisted in the investigation.

The government was ­represented in the Chicago cases by Assistant U.S. Attorneys Tiffany Tracy, John Kness, and Julie Porter.