TBI: Two Newport police captains indicted in drug conspiracy

Two veteran detectives in an East Tennessee police department — including the police chief’s brother — are among four people indicted in a drug conspiracy and money laundering case, authorities announced Wednesday.

Newport Police Department Detective Capt. James Finley Holt, 59, allegedly was at the center of the criminal ring, selling prescription pills from his patrol cruiser while on duty, and trading drugs for stolen goods that he then used to stock the Newport convenience store he ran with his wife and son, according to court records.

Detective Capt. Roger Lynn Shults, 54, the older brother of Newport Police Chief Maurice Shults, also is named in the indictment returned by a special-called Cocke County grand jury Wednesday.

“The conduct giving rise to these charges is an embarrassment to the city of Newport, to Cocke County and to law enforcement in general,” said 4th Judicial District Attorney General Jimmy Dunn. “The very people entrusted with upholding the law are now charged with violating it.”

Holt is charged with 10 counts of official misconduct, eight counts of money laundering, one count of conspiracy to commit money laundering and five counts of sale and delivery of a controlled substance, according to the Tennessee Bureau of Investigation.

Roger Shults is accused of participating in the conspiracy to a lesser extent. He was indicted on four counts of official misconduct and one county of conspiracy to commit money laundering.

Holt’s wife, Kathy Holt, 50, and son, Kenneth Trece Myers, also are named in the indictment as well. Kathy Holt, a Newport alderwoman, was indicted on one count of conspiracy to commit money laundering and three counts of money laundering.

The 31-year-old Myers faces one count of conspiracy to commit money laundering.

Additionally, James Holt faces federal charges in U.S. District Court of illegal distribution of drugs and possession of a firearm in the furtherance of drug trafficking, according to U.S. Attorney Bill Killian’s office.

The criminal complaint filed in the federal case details numerous instances in which Holt traded hydrocodone and Xanax pills for stolen goods supplied by a confidential informant who was working with the Tennessee Bureau of Investigation.

The stolen items — including cartons of cigarettes, candy bars, beef jerky and Harley-Davidson gear — later were sold at the “Pit Stop” Mobil gas station, 405 Cosby Highway, run by James Holt and his family. On other occasions, the complain reads, James Holt sold the pills to the informant for cash, and accepted stolen goods to pay down the outstanding debt of the informant’s girlfriend.

Newport police captain charged in drug conspiracy in court
Submitted by WBIR Web Staff
Thursday, July 24th, 2014, 1:06pm
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(WBIR) The first of four suspects accused in a drug conspiracy case in Cocke County appeared in federal court Thursday.

A grand jury indicted Newport Police Captain James Holt on several federal charges related to money laundering. Officials also arrested Holt’s wife, Kathy, who is Newport alderwoman. Kathy Holt’s son, Kenny Myers, and Newport Police Captain Roger Lynn Shults are also facing charges.

 

James Holt appeared in federal court in Greeneville Thursday morning. The hearing dealt with just the federal charges, which include distributing hydrocodone in May 2014 and possessing a firearm while committing that crime. If convicted, Holt could spend up to 20 years in prison for the first count with an additional mandatory five years to life for the second charge.

Newport Police Chief Maurice Shults said the department suspended both Holt and Roger Lynn Shults without pay.

The Tennessee Bureau of Investigation said James Holt, who is a detective, sold drugs in exchange for items he knew were stolen, according to court documents.

 

TBI agents said this exchange happened from his police car where he was carrying a gun. He then sold the stolen merchandise as new at his wife’s gas station, according to the TBI.

FBI and TBI agents searched the Pitstop Mobil Mart off Cosby Highway and got search warrants for the Newport Police Department.

The other people charged in the money laundering case only face state charges. James Holt also faces money laundering and official misconduct charges in state court.

TBI said the investigation took several months, and it’s still looking into the case. Cocke County is no stranger to corruption. Just eight years ago, the Los Angeles Times dubbed Cocke County as “Little Chicago.” The nickname stems from a five-year investigation called Operation Rose Thorn, which began in 2001.

Over a seven-year period, the investigation led to 48 arrests on federal charges, including the arrests of seven officers from the Newport Police Department and county sheriff’s department. Charges ranged from money laundering, theft, conspiracy to distribute cocaine and trafficking stolen goods.

Another 170 people faced charges for cockfighting, gambling, and illegal liquor.

Cocke County Sheriff D.C. Ramsey resigned during that investigation, citing health reasons.

 

 

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Former West Palm Beach Police Officer Sentenced

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, David W. Bourne, Special Agent in Charge, U.S. Food and Drug Administration (FDA), Office of Criminal Investigations, Miami Field Office, and Bryan Kummerlen, Chief, West Palm Beach Police Department, announce that Dewitt McDonald, 46, of Wellington, was sentenced today in Ft. Lauderdale by United States District Judge James I. Cohn to five years in prison, to be followed by three years of supervised release. McDonald was also ordered to pay $25,810.00 in restitution. The defendant pled guilty on April 30, 2014, to carrying a firearm during and in relation to a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c)(1)(A). At the time of this offense, the defendant was a police officer with the West Palm Beach Police Department.

When he entered his guilty plea, the defendant admitted that, while he was employed as a police officer, the defendant operated two businesses: Prime Performance Wellness Centers, Inc., located in Lake Worth, and Prime Health and Rejuvenation Clinic, located in Wellington, through which he unlawfully distributed anabolic steroids and other prescription drugs. The defendant further admitted that, on March 5, 2013, while on duty and carrying his Smith & Wesson MP40 pistol, the defendant made a delivery of these drugs to someone in Palm Beach County.

Mr. Ferrer commended the investigative efforts of the FBI and FDA-Office of Criminal Investigations. Mr. Ferrer also thanked the West Palm Beach Police Department for their cooperation and assistance in this matter. This case is being prosecuted by Assistant U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz and Jeffrey N. Kaplan.

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How police get wiretaps!

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Drug Conspiracy

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How a wiretap works !

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Former Texas sheriff sentenced to prison for drug trafficking

Guadalupe Trevino, aka Lupe Trevino, has been sentenced to federal prison following his conviction of conspiracy to commit money laundering, announced U.S. Attorney Kenneth Magidson. Trevino, 64, of McAllen, was the former sheriff of Hidalgo County and pleaded guilty April 14, 2014.

“No one is above the law,” said Magidson. “Those entrusted with protecting the public safety have a specific duty to guard against corruption. When they become crooked themselves, the interests of the people demand full accounting for their illegal activities.”

Calling this day a “sad” one for Hidalgo County, U.S. District Judge Micaela Alvarez upwardly departed from the recommended guidelines and handed Trevino a 60-month term of imprisonment. He was also ordered to pay a $60,000 fine and will serve a two-year-term of supervised release following completion of the prison sentence.

“The sentencing of the former Hidalgo County sheriff is the culmination of a long-term investigation into corruption and the violation of public trust,” said Special Agent in Charge Janice Ayala of Homeland Security Investigations (HSI) in San Antonio. “While the local community mourns this violation, they’re now able to put this chapter behind them.”

Jose A. Padilla, of Weslaco, a former deputy commander with the Hidalgo County Sheriff’s Office who served under the leadership of Trevino pleaded guilty to receiving a bribe, in a separate, but related case. Nine others, including drug trafficker Tomas Reyes Gonzalez aka “El Gallo,” were convicted in relation to the underlying narcotics/money laundering conspiracy. They will all be sentenced Sept. 18, 2014, by U.S District Judge Randy Crane.

The investigation revealed that from 2007 to 2013, Reyes Gonzalez headed a drug trafficking organization responsible for the distribution of thousands of kilograms of marijuana and hundreds of kilograms of cocaine. The narcotics were transported from the Rio Grande Valley to Arkansas, Tennessee, Alabama and Georgia. Reyes Gonzalez used the resulting drug proceeds to purchase properties.

Trevino admitted he received cash contributions for his election campaign through Padilla from Reyes Gonzalez, acknowledging he accepted the money knowing it was from illegal activities. At the time of his guilty plea, Padilla also admitted he received cash from Reyes Gonzalez in exchange for providing information to him related to ongoing law enforcement activities.

Trevino admitted he accepted the monies directly and through others as donations to assist with his 2012 election campaign. Some of the monies received were subsequently deposited into bank accounts Trevino controlled and were comingled with other funds. During and after the transactions, Trevino and others acted to disguise and conceal the nature, location, source, ownership and control of the currency by filing false Candidate/Officeholder Campaign Finance Reports and producing other documents.

Trevino’s former chief of staff and campaign treasurer, Maria Patricia Medina, pleaded guilty to misprision of a felony, admitting she assisted Trevino in the concealment of the donations by falsifying election records. She will be sentenced July 23, 2014, by Chief U.S. District Judge Ricardo Hinojosa.

The overall investigation was conducted by Homeland Security Investigations, Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation and Texas Department of Public Safety, Rangers Division. Assistant United States Attorneys James Sturgis and Anibal Alaniz prosecuted the case.

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FEDEX INDICTED FOR ITS ROLE IN DISTRIBUTING CONTROLLED SUBSTANCES AND PRESCRIPTION DRUGS

 

 A federal grand jury in San Francisco indicted FedEx Corporation, FedEx Express, Inc., and FedEx Corporate Services, Inc., today, with conspiracies to traffic in controlled substances and misbranded prescription drugs for its role in distributing controlled substances and prescription drugs for illegal Internet pharmacies, announced United States Attorney Melinda Haag, Drug Enforcement Administration (DEA) Special Agent in Charge Jay Fitzpatrick, and Food and Drug Administration (FDA) Acting Director of the Office of Criminal Investigations Philip J. Walsky.

According to the indictment, beginning in approximately 1998, Internet pharmacies began offering consumers prescription drugs, including controlled substances, based on the provision of information over the Internet.  While some Internet pharmacies were managed by well-known pharmacy chains that required valid prescriptions and visits to the patient’s personal physician, others failed to require a prescription before filling orders for controlled substances and prescription drugs. Rather, these Internet pharmacies filled orders based solely on the completion of an online questionnaire, without a physical examination, diagnosis, or face-to-face meeting with a physician.  Such practices violated federal and state laws governing the distribution of prescription drugs and controlled substances.

According to the indictment, from at least as early as 2004, DEA, FDA and members of Congress and their staff informed FedEx that illegal Internet pharmacies were using its shipping services to distribute controlled substances and prescription drugs in violation of the Controlled Substances Act (CSA), Food, Drug and Cosmetic Act (FDCA), and numerous state laws.  In 2004, FedEx established an Online Pharmacy Credit Policy requiring that all online pharmacy shippers be approved by the Credit Department prior to opening a new account.  The stated reason for this policy was that many Internet pharmacies operated outside federal and state regulations over the sale of controlled drugs and many sites had been shut down by the government without warning, leaving a large balance owed to FedEx.  According to the indictment, FedEx also established a Sales policy in which all online pharmacies were assigned to a “catchall” classification to protect the commission-based compensation of its sales professionals from the volatility caused by online pharmacies moving shipping locations often to avoid detection by the DEA.

According to the indictment, as early as 2004, FedEx knew that it was delivering drugs to dealers and addicts.  FedEx’s couriers in Kentucky, Tennessee, and Virginia expressed safety concerns that were circulated to FedEx Senior management, including that FedEx trucks were stopped on the road by online pharmacy customers demanding packages of pills, that the delivery address was a parking lot, school, or vacant home where several car loads of people were waiting for the FedEx driver to arrive with their drugs, that customers were jumping on the FedEx trucks and demanding online pharmacy packages, and that FedEx drivers were threatened if they insisted on delivering packages to the addresses instead of giving the packages to customers who demanded them. In response to these concerns, FedEx adopted a procedure whereby Internet pharmacy packages from problematic shippers were held for pick up at specific stations, rather than delivered to the recipient’s address.

FedEx is charged in the indictment with conspiring with two separate but related Internet pharmacy organizations:  the Chhabra-Smoley Organization, from 2000 through 2008, and Superior Drugs, from 2002 through 2010.  In each case, FedEx is alleged to have knowingly and intentionally conspired to distribute controlled substances and prescription drugs, including Phendimetrazine (Schedule III); Ambien, Phentermine, Diazepam, and Alprazolam (Schedule IV), to customers who had no legitimate medical need for them based on invalid prescriptions issued by doctors who were acting outside the usual course of professional practice.  The indictment charges that FedEx conspired with these organizations to violate the CSA, 21 U.S.C. §§ 841, 846, and the FDCA, 21 U.S.C. §§ 331, et seq.

According to the indictment, FedEx began delivering controlled substances and prescription drugs for Internet pharmacies run by Vincent Chhabra, including RxNetwork and USA Prescription, in 2000.  When Chhabra was arrested in December of 2003 for illegally distributing controlled substances based on a doctor’s review of an on-line questionnaire, Robert Smoley took over the organization and continued the illegal distribution of controlled substances and prescription drugs through FedEx.

According to the indictment, FedEx began delivering controlled substances and prescription drugs for Superior Drugs in 2002.  FedEx’s employees knew that Superior Drugs filled orders for online pharmacies that sold controlled substances and prescription drugs to consumers without the need for a face-to-face meeting with, or physical examination or laboratory tests by, a physician.

According to the indictment, FedEx’s employees knew that online pharmacies and fulfillment pharmacies affiliated with both the Chhabra-Smoley organization and Superior Drugs were closed down by state and federal law enforcement agencies and that their owners, operators, pharmacists, and doctors were indicted, arrested and convicted of illegally distributing drugs.  Nevertheless, FedEx continued to deliver controlled substances and prescription drugs for the Chhabra-Smoley organization and Superior Drugs.

“The advent of Internet pharmacies allowed the cheap and easy distribution of massive amounts of illegal prescription drugs to every corner of the United States, while allowing perpetrators to conceal their identities through the anonymity the Internet provides,” said U.S. Attorney Melinda Haag. “This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior.”

“Pharmaceutical drug abuse is a serious problem affecting millions of consumers in the United States,” said DEA Special Agent in Charge Jay Fitzpatrick.  “While DEA is committed to ensuring patients receive legitimate prescriptions, today’s action should send a strong message that corporations that participate in illegal activity risk investigation and prosecution.”

“Illegal Internet pharmacies rely on illicit Internet shipping and distribution practices. Without intermediaries, the online pharmacies that sell counterfeit and other illegal drugs are limited in the harm they can do to consumers,” said Philip J. Walsky, Acting Director, FDA’s Office of Criminal Investigations. “The FDA is hopeful that today’s action will continue to reinforce the message that the public’s health takes priority over a company’s profits.”

FedEx has been summoned to appear in federal court in San Francisco on July 29, 2014.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.  If convicted, the defendants face a maximum sentence of 5 years of probation, and a fine of between $1 and 2.5 million, or twice the gross gain derived from the offense, alleged in the indictment to be at least $820 million.  The defendants are also liable for restitution to victims of the crime, as well as forfeiture of the gross proceeds of the offense and any facilitating property.  However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Kirstin M. Ault and Kyle F. Waldinger are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Maryam Beros and Rawaty Yim.  The prosecution is the result of a 9-year investigation by the DEA and FDA, Office of Criminal Investigations.

Click here to view Indictment

 

 

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Baltimore School Police Officer Pleads Guilty to Drug Trafficking Conspiracy

BALTIMORE, MD—Napoleon McLain, Jr., age 31, of Randallstown, Maryland pleaded guilty today to conspiring to distribute and possess with intent to distribute cocaine base.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.

According to his plea agreement, McLain is an officer with the Baltimore City School Police Force (BCSPF). BCSPF officers are granted police privileges to carry firearms and conduct arrests within the City of Baltimore.

From no later than December 2012 to August 2013, while he was employed as a BCSPF officer, McLain was a member of a conspiracy to distribute cocaine base. McLain bought multiple ounces of cocaine base at a time from his suppliers, which he sold to others. On four occasions between December 2012 and August 2013, McLain sold a total of approximately 150 grams of cocaine base to a confidential source for $9,800.

McLain faces a maximum sentence of 40 years in prison. U.S. District Judge Catherine C. Blake scheduled sentencing for October 15, 2014 at 9:15 a.m.

United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant U.S. Attorney David I. Sharfstein, who is prosecuting the case.

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Halifax deputy fired after his arrest

Halifax

Halifax

A deputy who worked for the Halifax County Sheriff’s Office, Tyler Hux, has been fired after he was arrested Sunday for domestic assault, according to Sheriff Wes Tripp.

“He has been terminated,” Tripp said Monday.

He was arrested by members of the Sheriff’s Office.

Tripp said anytime a situation involving someone from the Sheriff’s Office presents itself, the State Bureau of Investigation is usually called in; however, the sheriff said he made the decision to handle it in house.

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Murder Suspect Acquitted

Camrin Burton has been acquitted on all counts in the murder of Timothy Howell.

Camrin Burton has been acquitted on all counts in the murder of Timothy Howell.

Howell was shot to death near 14th and Ames last summer.

Burton was arrested in the case seven weeks later, booked for First Degree Murder and Use of a Weapon to Commit a felony.

A judge found Burton not guilty of all charges after a bench trial. The decision was announced Thursday afternoon.

Judge Peter Batallion said there was, “too much uncertainty” for a finding of guilt beyond a reasonable doubt in a case where the judge noted,

“young, immature, drunk individuals had guns.”

A friend of the Howell family said the decision was wrong.

“He should have got charged with something,” Laura Thomas said. “His mom is pretty shook up. It’s a sad situation…young kids and guns and drinking…it’s sad.”

Burton’s mother screamed when she heard the verdict.

“I just kept saying God please let it be not guilty,” Cory Burton said. “And then the next one was I hope they get justice for Timothy Howell and his family.”

Howell’s family said they want to help find the killer.

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