US Attorney's Office News
November 9, 2009
HILLSVILLE MAN PLEADS GUILTY TO ENTICEMENT CHARGE
Dewey Nelson Admitted Today To Traveling Across
State Lines To Engage In Sex With A Minor
ROANOKE, VIRGINIA -- A Hillsville, Virginia, man faces a lengthy prison term after pleading guilty today to traveling halfway across the country for the purpose of engaging in sexual conduct with a minor.
Dewey Edward Nelson, 38, entered pleas of guilty today to two counts of traveling in interstate commerce for the purpose of engaging in illicit sexual conduct with a minor and two counts of transporting a minor in interstate commerce with the intent that such individual engage in sexual activity.
“This prosecution exemplifies the commitment the United States Attorney’s Office has placed on finding those individuals who exploit children and bringing them to justice,” United States Attorney Timothy J. Heaphy said today. “This office will not allow adults like Mr. Nelson to make victims of innocent children through online enticement.”
Today in District Court, Mr. Nelson admitted that in February 2009 and again in May 2009, he traveled from his apartment in Hillsville, Virginia to Texas and Kansas, respectively, to pick up a 15-year-old girl he had met online for the purpose of bringing her back to Virginia to engage in sexual conduct.
According to evidence presented by Assistant United States Attorney Sharon Burnham, the investigation of this case began when officials from the Augusta Kansas Police Department contacted the Hillsville Police Department in regards to a missing 15-year-old girl. When Hillsville police officers went to the home of Mr. Nelson, he told authorities the child seen inside his apartment was his daughter. To further hide the victim’s true age, the defendant created a false identification card indicating the girl was over 18.
AUSA Burnham presented further evidence that the defendant met the victim online through their MySpace pages and knew she was 15 years old when he traveled to Texas and Kansas to have sex with her.
At sentencing, Mr. Nelson faces a possible term of incarceration of between 10 and 30 years for both counts one and three and a possible maximum sentence of life for both counts two and four. In addition, the defendant faces a possible fine of up to $1 million and the forfeiture of computer equipment that was found to contain child pornography. A sentencing hearing has been scheduled for February 4, 2010.
The investigation of the case was conducted by the Federal Bureau of Investigation, the Hillsville Police Department and the Augusta Kansas Police Department . Assistant United States Attorney Sharon Burnham is prosecuting the case for the United States.
November 6, 2009
PONZI SCHEMER SENTENCED
John Donnelly Will Spent 90 Months In Prison
CHARLOTTESVILLE, VIRGINIA -- The Crozet, Virginia man who bilked his friends, family and associates out of more than $5 million dollars with an intricate Ponzi scheme was sentenced today in U.S. District Court here.
Today in District Court, John Mark Donnelly, 53, was ordered to serve 90 months in prison and five years of supervised release thereafter. In addition, the Honorable Judge Norman K. Moon ordered the former Charlottesville businessman to pay $5,311,038 in restitution payments to his victims.
In May, Donnelly waived his right to indictment and pled guilty to an information charging him with one count of wire fraud, one count of securities fraud, one count of fraud in connection with futures contracts, and one count of impeding the administration of the internal revenue laws. At that time, he admitted to defrauding over 30 victims.
“In a time when so many of our friends and neighbors are experiencing economic hardships, it is the duty of the United States Attorney’s Office to continue our adamant pursuit of individuals who destroy lives through financial crime. Some of the victims in these cases lose their entire life savings and never fully recover from the economic damage caused by the greedy men and women who perpetrate these schemes,” United States Attorney Timothy J. Heaphy said today.
“Individuals who intentionally jeopardized the financial well-being of their clients through the use of fraudulent high-yield investment schemes will be held account by our legal system. IRS Criminal Investigation Special Agents will use their financial expertise and continue to combat investor fraud and tax crimes,” said Thomas Kelly, Assistant Special Agent in Charge of the IRS Criminal Investigation. “Hopefully this case will help educate future investors and reinforce the fact that investing money is inherently risky. Nowhere is the old adage ‘if it sounds too good to be true, it probably is’ more applicable than here.”
According to information entered into the record previously by Assistant United States Attorney Ronald Huber, Donnelly, through the use of numerous corporations and partnerships he established, devised a scheme to defraud and obtain money from investors through false pretenses.
Specifically, Donnelly devised and marketed a complex securities and futures market trading strategy and told investors he would be investing their money using this strategy. However, the money received by Donnelly was never traded and was actually distributed to other investors.
In order to maintain the scheme, Donnelly sent monthly statement to investors showing fictitious returns. The defendant also sent annual 1099-INT, 1099-MISC and K-1 tax forms to investors. These forms caused many investors to pay income taxes on their fictitious investment returns.
More than 30 investors entrusted over $5 million to Donnelly between 1998 and 2009. At the time of his March 11, 2009 arrest, the defendant was in the process of raising additional funds from new investors based on fictitious returns previously reported to defrauded investors.
The investigation of the case was conducted by the Federal Bureau of Investigation, the United States Department of Justice Tax Division, the Internal Revenue Service, the Security Exchange Commission and the Commodities Future Trading Commission. Assistant United States Attorneys Stephen Pfleger and Ronald Huber prosecuted the case for the United States, they were assisted by Department of Justice Tax Division Trial Attorney Gregory Bockin.
November 5, 2009
CHILD PORNOGRAPHERS PLEAD GUILTY IN SEPERATE HEARINGS
Ian Zearley, Mark Church and Patrick William Kreutzer Admitted
to Possessing Child Porn Today in U.S. District Court
CHARLOTTESVILLE, VIRGINIA -- In separate and unrelated cases, three men pled guilty today in U.S. District Court to various charges related to the transportation, receipt and possession of child pornography.
The defendants, Ian A. Zearley, 28, of Charlottesville, Mark Church, 41, of Louisa and Patrick William Kreutzer, 37, of Mineral, Virginia, appeared before the Honorable Judge Norman K. Moon today and admitted to criminal acts involving child pornography.
“Protecting our children is the most important responsibility of law enforcement. The child pornography cases presented here today, and others like them throughout the Western District of Virginia, are examples of the unwavering commitment the United States Attorney’s Office has placed on putting an end to child exploitation in any form,” United States Attorney Timothy J. Heaphy said today.
This morning in District Court, Zearley waived his right to indictment and instead pled guilty to a two-count information charging him with one count of receiving child pornography and one count of possessing child pornography. The defendant faces a period of incarceration between 5 and 20 years for the receipt charge and up to 10 years for the possession charge.
This investigation began as a proactive enforcement case by the Charlottesville Police Department. Working in an undercover capacity, a detective with that department logged onto a popular file-sharing program and began looking for shared images that could contain child pornography. After identifying one or more items in the defendant’s shared folder that appeared to be child pornography, detectives traced the IP address to Zearley’s home, and subsequently executed a search warrant at his home. As a result of the search, a laptop computer and a thumb drive belonging to the defendant were recovered. Both devices were found to contain child pornography.
Church also waived his right to indictment today in District Court and instead pled guilty to a one-count Information charging him with possession of child pornography. As part of the defendant’s plea agreement, he will be sentenced to five years incarceration and 15 years of supervised release.
This investigation started after Church’s friend brought Church’s computer to a repair shop. While working on the computer, a technician at the repair shop discovered images of child pornography and advised his supervisor, they immediately took action and contacted law enforcement. Following the execution of a search warrant, the defendant admitted to downloading child pornography. Numerous images of child pornography were recovered from disks found at the defendant’s home.
Already under indictment, Kreutzer pled guilty to one count of transporting child pornography and one count of possessing child pornography. The defendant faces a period of incarceration between 5 and 20 years for the transportation charge and up to 10 years for the possession charge.
The investigation into Kreutzer began after he started an online chat with an undercover member of law enforcement posing as the mother of a seven-year-old girl. The “mother” and Kreutzer chatted about the possibility of the defendant engaging in sexual acts with her purported daughter. The two chatted for a period of at least three months, during which time the defendant sent images containing child pornography, both via the United States Mail and the Internet, to the “mother.” The defendant has admitted to being in possession of child pornography. As a result of a search warrant, agents discovered that Kreutzer used his computer to transmit numerous images of child pornography to other individuals.
In addition to the three above defendants, last week in U.S. District Court, Daniel Edward Walsh, 53, of Staunton, Virginia, pled guilty to one count of receiving child pornography and one count of possessing child pornography before the Honorable Magistrate Judge B. Waugh Crigler. The defendant faces a period of incarceration between 5 and 20 years for the receipt charge and up to 10 years for the possession charge.
The investigation of Walsh began when members of the Southern Virginia Internet Crimes Against Children Task Force (SOVA ICAC) found that Walsh had one or more apparent child pornography videos available for download from a popular file-sharing website. The Staunton Police Department and SOVA ICAC executed a search warrant at Walsh’s home. Walsh’s computer was seized and analyzed, revealing numerous videos and images of child pornography.
The investigations of these cases were conducted by the United States Postal Inspection Service, the Federal Bureau of Investigation, the United States Secret Service, U.S. Immigration and Customs Enforcement, the Charlottesville Police Department, the Staunton Police Department, the Southern Virginia Internet Crimes Against Children Task Force and the Louisa County Sheriff’s Office. Assistant United States Attorney Nancy S. Healey is prosecuting these cases for the United States.
These cases were 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.
October 16, 2009
TIMOTHY J. HEAPHY SWORN IN AS UNITED STATES ATTORNEY FOR THE WESTERN DISTRICT OF VIRGINIA
ABINGDON, VIRGINIA – Timothy J. Heaphy was sworn in this morning as United States Attorney for the Western District of Virginia. Chief Judge for the United States District Court for the Western District of Virginia, James P. Jones, administered the oath of office. President Obama formalized Mr. Heaphy’s appointment following confirmation by the U.S. Senate on October 14, 2009.
“As I begin work today as United States Attorney, I feel a deep sense of honor and privilege to serve. This office will continue to work with all of the diverse communities in the Western District to both prevent crime and punish those who break the law. I look forward to that important effort, and to working to promote justice in the days ahead,” United States Attorney Timothy J. Heaphy said today.
Mr. Heaphy’s career includes 12 years of service (1994-2005) as an Assistant United States Attorney with both the Western District of Virginia and the District of Columbia. During his time as an AUSA, Mr. Heaphy prosecuted a broad spectrum of criminal matters including, narcotics, weapons offenses, homicides, sexual offenses, white collar fraud cases and racketeering.
In 2002 and 2003, he was counsel for the United States in the longest-running criminal trial ever held in the U.S. District Court for the District of Columbia -- a RICO prosecution of a violent drug gang in which the defendants faced capital punishment. He also briefed and argued more than a dozen criminal appeals. After moving to Charlottesville, Va., he spent three years prosecuting environmental, national security, narcotics, violent crime, and public corruption crimes as an Assistant United States Attorney in the Western District of Virginia.
Upon entering private practice, Mr. Heaphy joined the law firm of McGuireWoods, LLP as a partner. While there, his practice involved the representation of individuals and business entities in white collar criminal defense matters. He has specific experience in an array of subject areas, including securities, public corruption, environmental crimes, tax, government contracting, campaign finance, conflicts of interest, fraud and conspiracy.
In addition to his criminal defense work, Mr. Heaphy represented corporations in complex
commercial litigation. He has been engaged in commercial disputes in disparate industries, including energy, transportation, telecommunications, manufacturing, food service, and professional services. He has applied his considerable trial experience to these matters, appearing in state and federal courts, and before administrative and regulatory agencies.
Prior to his time with McGuireWoods, Mr. Heaphy worked as a litigation associate for Morrison & Foerster in San Francisco, California and a law clerk for Justice John A. Terry of the District of Columbia Court of Appeals.
He is a graduate of the University of Virginia and the University of Virginia Law School. In addition to practicing law, Mr. Heaphy has taught at the University of Virginia School of Law. He has also lectured frequently at the U.S. Department of Justice's National Advocacy Center in Columbia, S.C.
