Summary of recent cases brought by the US Attorney in Northern District of Illinois: August 22, 2022
Two Defendants Convicted in Federal Investigation That Dismantled Mexico-to-Chicago Drug Pipeline
August 9, 2022
A jury has convicted two suburban Chicago men on drug conspiracy charges as part of a federal investigation that disrupted a Mexico-to-Chicago drug pipeline.
SHELDON MORALES and EDUARDO SANTANA conspired with a supplier in Mexico and two inmates in a prison in Texas to traffic methamphetamine, fentanyl, and cocaine from Mexico to Evanston, Ill., and Morton Grove, Ill., in 2019. The drugs were sent in packages from California and Arizona and later sold on the streets in the Chicago area.
Law enforcement uncovered the drug trafficking activities through the use of wiretapped cellular phones and extensive surveillance. The case was part of an Organized Crime Drug Enforcement Task Forces investigation. OCDETF identifies, disrupts, and dismantles drug traffickers and other criminal offenders that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
After a week-long trial in U.S. District Court in Chicago, the jury on Aug. 5, 2022, convicted Morales, 40, of Morton Grove, Ill., and Santana, 45, of Skokie, Ill., on a drug conspiracy charge. Morales was also convicted of an individual drug charge related to his possession of methamphetamine and fentanyl. Morales faces a mandatory minimum sentence of 15 years in federal prison and a maximum of life, while Santana faces a mandatory minimum of ten years and a maximum of life.
U.S. District Judge Mary M. Rowland has not yet scheduled sentencings.
Three Chicago-Area Residents Charged with COVID-Relief Fraud
August 10, 2022
Three Chicago-area residents have been indicted on federal charges for allegedly fraudulently obtaining more than $2.75 million in small business loans under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.
SAMUEL W. JACKSON, DAVID L. SULLIVAN II, and ELIZABETH A. CHERVINKO engaged in fraud related to the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Program (EIDL) – two sources of relief under the CARES Act, according to an indictment unsealed in the Northern District of Illinois. The indictment charges Jackson, 42, of Chicago, with five counts of wire fraud and three counts of money laundering, while Sullivan, 49, of Naperville, Ill., and Chervinko, 41, of Chicago, are each charged with one count of wire fraud.
Jackson pleaded not guilty during his arraignment before U.S. Magistrate Judge Sunil R. Harjani. Arraignments for Sullivan and Chervinko were set for Aug. 17, 2022, at 1:30 p.m., before U.S. Magistrate Judge Jeffrey Cole.
Pursuant to the CARES Act, a PPP loan allows the interest and principal to be forgiven if businesses spend a certain amount of the proceeds on essential expenses, such as payroll, rent, and utilities, while the EIDL provides loan assistance or grants to cover working capital and other operating expenses.
According to the indictment, the defendants in the spring and summer of 2020 submitted fraudulent applications and supporting documents to lenders, loan service providers, and the SBA, in their own names and in the names of related corporate entities, including three Montana-based companies – Dream Builder LLC, Ordained Destination LLC, and Ordained Real Estate LLC – and two Illinois-based companies – Top Flight Real Estate LLC and Tips @ 170 Inc. The applications and supporting documents contained materially false representations about the defendants’ companies, including the number of purported employees, revenue and payroll amounts, and other expenses, the indictment states.
The indictment alleges that the defendants defrauded lenders of approximately $2.49 million in PPP loans and defrauded the SBA of approximately $256,500 in EIDL funds. Much of the money was allegedly used for the defendants’ personal benefit, including the purchase of real estate and the lease and purchase of luxury automobiles.
Each wire fraud charge is punishable by up to 20 years in federal prison, while the maximum penalty for each count of money laundering is ten years.
Former Accountant for Chicago Construction Company Charged with Embezzling Millions in Company Funds
August 12, 2022
A former senior accountant for a Chicago construction company has been indicted on federal fraud charges for allegedly embezzling millions in company funds.
RICHARD A. MANDARINO entered false payment requests in the construction company’s accounting system, causing checks to be issued to vendor companies for goods and services that Mandarino knew were never provided, according to an indictment returned in U.S. District Court in Chicago. Mandarino then converted those payments to his and others’ personal use, the indictment states. Mandarino allegedly concealed the thefts by creating fictitious credits and offsets in the construction company’s accounting system.
Mandarino committed the alleged fraud from 2015 to 2017 while he resided in Canada and worked on the construction company’s Canadian business projects, the indictment states. The charges allege that Mandarino fraudulently embezzled and obtained more than two million Canadian dollars.
The indictment charges Mandarino, 43, of Scarborough, Ontario, Canada, with three counts of wire fraud. Arraignment in U.S. District Court in Chicago has not yet been scheduled. Each count of wire fraud is punishable by up to 20 years in federal prison.
Texas Man Sentenced to 4 Years in Federal Prison for Distributing Anabolic Steroids through the Mail
August 12, 2022
A Texas man has been sentenced to four years in federal prison for distributing anabolic steroids through the mail.
DAVID E. HUTCHINSON, 47, of Georgetown, Texas, pleaded guilty earlier this year to one count of distributing anabolic steroids. U.S. District Judge John R. Blakey imposed the prison sentence Thursday after a hearing in federal court in Rockford.
According to a written plea agreement, Hutchinson, who used the name “Robolics,” distributed anabolic steroids through the U.S. mail from at least January to November of 2019. Hutchinson sold a variety of products containing anabolic steroids. He advertised the steroids through online forums, both directly and through sales representatives. He took orders via email, and he accepted payment either by cash mailed to a fictitious company or via bitcoin transfer. Upon payment, Hutchinson shipped orders of anabolic steroids to customers in multiple states. Hutchinson admitted in the plea agreement that he mailed several parcels containing anabolic steroids to a location in Algonquin, Ill. The shipments fulfilled orders that were placed by federal law enforcement acting in an undercover capacity.
When law enforcement executed a search warrant at Hutchinson’s then-residence in North Carolina on Nov. 21, 2019, Hutchinson was found to be in possession of more than 6,900 grams of anabolic steroids in powder form, several U.S. mail parcels containing anabolic steroids that Hutchinson had packaged for shipment, various mixing and packaging materials, several firearms, a safe containing more than $88,000 in cash, and a cryptocurrency hard wallet containing approximately $87,332 in cryptocurrency. Hutchinson admitted in the plea agreement that on Nov. 18, 2019, he delivered to a post office in North Carolina a parcel containing samples of his product that he was shipping to Slovakia for chemical analysis. The following day, he delivered to the post office nine parcels containing anabolic steroids that he was mailing to customers.
Two Men Charged in Federal Court with Violent Carjackings in Chicago Suburbs
August 19, 2022
A federal grand jury has indicted two men on carjacking charges in connection with the violent thefts of vehicles in the north suburbs of Chicago.
EDSON RESENDEZ and MAVERICK CELA forcibly took vehicles in Morton Grove, Ill., and Skokie, Ill., according to an indictment unsealed in U.S. District Court in Chicago. The indictment charges Resendez, 21, and Cela, 21, both of Chicago, with one count of conspiracy to commit carjackings and two counts of carjacking. Resendez also faces an additional count of using, carrying, and brandishing a firearm during a crime of violence.
Resendez was arrested Thursday morning and pleaded not guilty during his arraignment in federal court. A detention hearing is set for Aug. 23, 2022, at 1:30 p.m. before U.S. Magistrate Judge Jeffrey T. Gilbert.
Cela is currently in the custody of the state of Illinois. His arraignment in federal court has not yet been scheduled.
According to the indictment, Resendez and Cela took a Chevrolet Sonic from a victim in Morton Grove on Sept. 11, 2020. Cela later disposed of the vehicle by lighting it on fire in the 6200 block of North Lincoln Avenue in Chicago, the indictment states.
On Sept. 13, 2020, Resendez and Cela took a Lexus GS350 from a victim in Skokie, the indictment states. The pair later disposed of the vehicle in the 4800 block of South Hermitage Avenue in Chicago, the charges allege.
Each carjacking count is punishable by up to 15 years in federal prison. The firearm count against Resendez carries a minimum prison sentence of seven years and a maximum of life, which must be served consecutively to the sentence imposed for the carjacking offense. The conspiracy charge is punishable by up to five years.
Man Sentenced to Nearly Four Years in Federal Prison for Illegally Possessing Loaded Gun on Chicago Street
August 22, 2022
A man has been sentenced to nearly four years in federal prison for illegally possessing a loaded handgun during an altercation on a Chicago street.
JULIAN ALMANZA, 22, of Chicago, illegally possessed the gun on the afternoon of Jan. 14, 2021, in Chicago’s Humboldt Park neighborhood. At one point during the altercation Almanza stood in the middle of a street and pointed the gun at multiple individuals. When Chicago Police officers began arriving on the scene, Almanza slid the firearm under a truck. The officers quickly discovered the gun, which was equipped with an extended magazine and loaded with 25 rounds of ammunition.
Almanza had previously been convicted of two firearm felonies in state court and was not legally allowed to possess the gun. He was on parole for the more recent firearm offense at the time of the federal charge.
Almanza pleaded guilty earlier this year to a federal charge of illegal possession of a firearm. U.S. District Judge John Z. Lee imposed a 44-month prison sentence after a hearing in federal court in Chicago.
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