Northern District of Alabama
Press releases recorded for this federal judicial district.
Birmingham Man Sentenced to 105 Months in Prison for CarjackingRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Birmingham resident and six-time convicted felon to 105 months in prison for a 2018 carjacking in Homewood, announced U.S. Attorney Jay E. Town and Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr.
U.S. District Judge L. Scott Coogler sentenced CORDERREL DEWAYNE POOLE, 32, on one count of carjacking. Poole pled guilty in June.
On November 5, 2018, Poole ran up to the victim as she was getting into her SUV in the parking lot of a Homewood business on Green Springs Highway. As the victim backed her vehicle out of the parking space, Poole repeatedly banged on her window and screamed for her to get out. When the victim did not meet his demands, he reached inside the SUV and grabbed her arm in an attempt to pull her out. Poole then put his hand into a shoulder bag he was carrying and acted as if he was going to pull a gun. Believing she was about to be shot, the victim gave up her vehicle. Poole drove off in the SUV and was apprehended the same evening by Lincoln Police Department at the scene of a one-vehicle crash on Interstate 20 in Lincoln, Alabama.
“This career criminal has been brought to justice. We will not sit idly by and allow criminals to intimidate our citizens with such violence,” Town said. “We will find you, and we will prosecute you. The revolving door for Poole is now locked tightly behind him and a warm prison bed awaits him.”
“I want to extend my personal thanks to all of our law enforcement partners whose efforts quickly brought Poole to justice,” Sharp said. “The FBI will continue to work closely with our partners to address violent crimes in north Alabama.”
The FBI investigated the case along with the Homewood Police Department, the Lincoln Police Department, and the Alabama Law Enforcement Agency. Assistant U.S. Attorneys Alan Baty and Kristy Peoples prosecuted the charge.
Former Alabama Resident Pleads Guilty to Concealing Terrorism FinancingRead the Press Release
BIRMINGHAM – A criminal information was filed on Sept. 11, 2019, against Alaa Mohd Abusaad, charging her with concealment of terrorism financing, in violation of Title 18, United States Code, Sections 2339C and 2. Abusaad pleaded guilty to the charge today. Assistant Attorney General for National Security John C. Demers, United States Attorney Jay E. Town of the Northern District of Alabama, and FBI Special Agent in Charge Johnnie Sharp Jr. of the Birmingham Division made the announcement today.
As set forth in the previously filed complaint, Abusaad instructed an FBI undercover employee (UCE) about how to send money to the mujahedeen—fighters engaged in jihad. Abusaad told the UCE that money “is always needed. You can’t have a war without weapons. You can’t prepare a soldier without equipment.” Abusaad also advised the UCE on how to send money in a manner that would avoid detection by law enforcement, including by using fake names and addresses when conducting electronic money transfers. Subsequently, Abusaad introduced the UCE to a financial facilitator who could route the UCE’s money to “brothers that work with aq” (meaning al Qaeda).
The maximum penalty for concealment of terrorism financing is ten years in prison and a $250,000 fine, and up to a life term of supervised release.
Investigation of the case was conducted by the FBI, including FBI offices in Birmingham, Alabama and Cleveland and Toledo, Ohio. The prosecution is being handled by Assistant United States Attorneys Henry Cornelius and Manu Balachandran and Trial Attorney Jennifer Levy of the National Security Division’s Counterterrorism Section.
Former Alabama Resident Pleads Guilty to Concealing Terrorism FinancingRead the Press Release
A criminal information was filed on Sept. 11, 2019, against Alaa Mohd Abusaad, charging her with concealment of terrorism financing, in violation of Title 18, United States Code, Sections 2339C and 2. Abusaad pleaded guilty to the charge today. Assistant Attorney General for National Security John C. Demers, United States Attorney Jay E. Town of the Northern District of Alabama, and FBI Special Agent in Charge Johnnie Sharp Jr. of the Birmingham Division made the announcement today.
As set forth in the previously filed complaint, Abusaad instructed an FBI undercover employee (UCE) about how to send money to the mujahedeen—fighters engaged in jihad. Abusaad told the UCE that money “is always needed. You can’t have a war without weapons. You can’t prepare a soldier without equipment.” Abusaad also advised the UCE on how to send money in a manner that would avoid detection by law enforcement, including by using fake names and addresses when conducting electronic money transfers. Subsequently, Abusaad introduced the UCE to a financial facilitator who could route the UCE’s money to “brothers that work with aq” (meaning al Qaeda).
The maximum penalty for concealment of terrorism financing is 10 years in prison and a $250,000 fine, and up to a life term of supervised release.
Investigation of the case was conducted by the FBI, including FBI offices in Birmingham, Alabama, and Cleveland and Toledo, Ohio. The prosecution is being handled by Assistant United States Attorneys Henry Cornelius and Manu Balachandran and Trial Attorney Jennifer Levy of the National Security Division’s Counterterrorism Section.
Center Point Man Sentenced to 50 Years for Producing, Distributing Child PornographyRead the Press Release
BIRMINGHAM – A federal judge yesterday sentenced a Center Point man to 50 years in prison for producing child pornography, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp, Jr.
U.S. District Judge Annemarie Axon sentenced DENNIS JAMES HUDSON JR., 28, also known as D.J. Zygi Hudson, Zygi Hudson, Tyler Johnson and Brandon McDaniels, on 5 counts of producing child pornography and one count of distributing child pornography. Hudson pled guilty in January 2019, for persuading persons under the age of 18 to engage in sexually explicit conduct and transmit images of that conduct over the internet, and to distributing child pornography using the internet and a file-sharing website.
“A long prison sentence is well-deserved for this defendant,” Town said. “We commend the FBI and ALEA for their work to diligently monitor the internet using every available resource to catch yet another child predator. He will now spend the next 50 years gazing at prison bars instead of a computer screen.”
“Hudson deserves every day of this sentence, as he used the internet for his own perverse behavior,” Sharp said. “Let this be a reminder to all parents to monitor your children's internet use. Know who they are communicating with and promptly report anything suspicious.”
FBI investigated the case, along with the Alabama Law Enforcement Agency. The case was prosecuted by Assistant United States Attorneys Manu Balachandran and Leann White.
Two Huntsville Men Arrested for Conspiracy to Distribute Fentanyl That Caused a DeathRead the Press Release
BIRMINGHAM – Federal agents arrested two Huntsville men for conspiracy to distribute fentanyl, a potent synthetic opioid painkiller, which resulted in a death, announced U.S. Attorney Jay E. Town and Drug Enforcement Administration Assistant Special Agent in Charge Clay Morris.
A two-count indictment charges Antonio Lavar Burton, a/k/a Fat Tony, 35, and Quincy Cortez McClendon, 35, with conspiring to distribute and possession with the intent to distribute fentanyl, that resulted in a death in November 2017 in Madison County. The grand jury returned the indictment against Burton and McClendon in August 2019.
“A tiny fraction of a gram of fentanyl can be lethal, and as dealers add it to more and more drugs, it is causing both fatal and non-fatal overdoses,” Town said. “Death and destruction of this criminal behavior will not be tolerated, and will be severely punished.”
“Time and time again we have warned drug dealers that we will relentlessly and aggressively bring them to justice in order to protect our children and communities,” Morris said. “We will not sit idly by while drug dealers continue to plague our streets with any drugs, especially fentanyl.”
The penalty for distributing a controlled substance that results in death is 20 years to life in prison and a maximum $1 million fine.
DEA investigated the case, in partnership with the Huntsville Police Department and the Madison County District Attorney’s Office and the United States Marshals Service, which Assistant U.S. Attorney Robert J. Becher Sr. is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Oneonta Man Convicted for Conspiracy to Distribute MethamphetamineRead the Press Release
BIRMINGHAM -- A federal jury yesterday convicted an Oneonta man of conspiracy to possess with the intent to distribute and distribution of over 500 grams of methamphetamine, announced U.S. Attorney Jay E, Town and Drug Enforcement Administration Assistant Special Agent in Charge Clay Morris.
The jury returned its guilty verdict against Brian Turner, 47, after two days of testimony before U.S. District Judge Annemarie Axon. Turner will be sentenced on January 9, 2020.
"My office is dedicated to stop the influx of dangerous drugs like methamphetamine into our communities,” Town said. “This verdict assured the citizens of the Northern District that yet another peddler of this poison faces a potential life sentence and that he will soon be joined by other drug dealers in a federal prison.”
“The verdict returned in this trial is yet another example of DEAs unwavering commitment to keeping drug dealers from selling poison in our communities. The defendant distributed untold amounts of methamphetamine and cocaine to those suffering from addiction. While battling the opioid epidemic, DEA and our law enforcement partners stand vigilant against the cyclical nature of drug distribution. We cannot forget or overlook methamphetamine. Our communities are also being flooded with this dangerous drug. Defendant Turner will now hear the clang of his prison cell door instead of the clink of profits lining his pocket from selling drugs.”
Evidence at trial proved that Turner conspired with others in 2016 and 2017 to distribute methamphetamine and cocaine in Northern Alabama. DEA agents identified Turner after intercepting a phone call between him and his drug supplier in June 2017. Further investigation revealed that Turner received methamphetamine and cocaine from his supplier every few weeks for more than a year and a half, receiving several pounds of the drugs over the life of the conspiracy.
The penalty for possessing with intent to distribute and distribution of over 500 grams of methamphetamine includes imprisonment for not less than 10 years or more than life.
The Drug Enforcement Administration investigated the case. Assistant United States Attorneys Austin Shutt and Blake Milner prosecuted the case.
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Couple Sentenced in Child Exploitation CaseRead the Press Release
BIRMINGHAM -- A federal judge yesterday sentenced a Prattville man and a Shelby County woman on child exploitation charges, announced Northern District of Alabama United States Attorney Jay E. Town, Middle District of Alabama United States Attorney Louis V. Franklin, Sr., and Homeland Security Investigations Special Agent in Charge for Alabama Nick S. Annan.
United States District Judge L. Scott Coogler sentenced Kenneth Earl Hooks, 36, of Prattville, to 120 years and 2 life sentences to run consecutively and Sarah Pauline Morris, 28, of Shelby County, to 197 months for producing child pornography and enticing a young child to engage in sexual activity for the purpose of creating obscene images. Hooks pled guilty to these charges in February 2019 and also to the additional charge of transportation of a minor for sexual purposes. Morris pled guilty in March 2019.
“This sentence very clearly reflects the seriousness of these child predator’s disgusting crimes,” Town said. “Our justice system will not tolerate these criminals who prey on innocent children. They will now occupy bed space that has been reserved for them in a federal prison.”
“The sentencing of Hooks and Morris brings justice to two serial offenders who preyed on societies most vulnerable,” said HSI Special Agent in Charge Nick S. Annan. Their self-described “Bonnie and Clyde” crime spree included depraved acts of abuse and violence and would have undoubtedly continued without fantastic case work of the agents involved in this investigation. “It is important to understand that the production of child pornography is simply the filming of child rape.”
The charges originated from numerous criminal events that occurred in the Northern District of Alabama and in the Middle District of Alabama. Cases in both districts were consolidated for sentencing in the Northern District.
Police in California found Hooks and Morris living in a desert area on the southern tip of the state after locating a red Mitsubishi Montero with an Alabama license plate there, according to a May 4, 2018, federal criminal complaint and arrest affidavit issued for Hooks in the Northern District of Alabama. According to the affidavit, the red Mitsubishi was registered to Morris and police were searching for it because security cameras at a Walmart in Brawley, California, caught her driving it on March 30, 2018, when security officers at the store reported Morris attempting to film two young girls in a bathroom stall.
According to court documents, as a result of further investigation, child pornographic images were discovered on a laptop that had been subjected to forensic examination by law enforcement officers in Imperial County, California. On or about April 27, 2018, agents from the Department of Homeland Security in Birmingham received these images which depicted sexual exploitation of 2 prepubescent children and a teenage female under the age of 18 by Hooks in Alabama. During the investigation, agents learned that Hooks had transported the teenage female victim from Mississippi to Alabama with the intent of sexually assaulting her and recording it on video.
HSI Birmingham investigated the case, along with the assistance of HSI Calexico, CA; HSI Las Cruces, NM; HSI El Paso, TX; Brawley Police Department, CA; Imperial County California District Attorney’s Office; U.S. Marshals Service Pacific Southwest Regional Fugitive Task Force, El Centro Division, CA; Chilton County Alabama Sheriff’s Office, Alabaster Police Department, AL, which Assistant United States Attorney R. Leann White, Northern District of Alabama and Assistant United States Attorneys Hollie Reed and Russell Duraski, Middle District of Alabama prosecuted.
Alabama Man Sentenced to Prison for Filing a False Tax ReturnRead the Press Release
WASHINGTON – A Jefferson County man was sentenced to 30 months in prison today for filing a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Jay E. Town for the Northern District of Alabama.
According to court documents and information provided to the court, Larry Wayne Battle owned and operated a tax preparation business in Jefferson County, Alabama. On his 2014 federal income tax return, Battle understated the gross receipts for his tax preparation business by approximately $321,638, resulting in a tax loss to the Internal Revenue Service (IRS) of $163,401. Battle also admitted to preparing false tax returns for clients.
“Today’s prison sentence for Larry Wayne Battle is an example of the commitment of the Tax Division and its partners in United States Attorneys’ Offices and the IRS to prosecute fraudulent tax return preparers and to hold such unscrupulous preparers accountable,” said Principal Deputy Assistant Attorney General Zuckerman.
“Tax preparers are held to a higher standard because of their position with public trust,” said U.S. Attorney Town. “We will continue to protect the public fisc from those who abuse their position to the detriment of the American taxpayer.”
In addition to the term of imprisonment imposed, Battle was ordered to serve one year of supervised release and to pay restitution in the amount of $234,300.53 to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Town commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant United States Attorney and former Tax Division Trial Attorney Allison Garnett and Assistant United States Attorney Melissa Atwood, who prosecuted the case.
Alabama Man Sentenced to Prison for Filing a False Tax ReturnRead the Press Release
A Jefferson County man was sentenced to 30 months in prison today for filing a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Jay E. Town for the Northern District of Alabama.
According to court documents and information provided to the court, Larry Wayne Battle owned and operated a tax preparation business in Jefferson County, Alabama. On his 2014 federal income tax return, Battle understated the gross receipts for his tax preparation business by approximately $321,638, resulting in a tax loss to the Internal Revenue Service (IRS) of $163,401. Battle also admitted to preparing false tax returns for clients.
“Today’s prison sentence for Larry Wayne Battle is an example of the commitment of the Tax Division and its partners in United States Attorneys’ Offices and the IRS to prosecute fraudulent tax return preparers and to hold such unscrupulous preparers accountable,” said Principal Deputy Assistant Attorney General Zuckerman.
“Tax preparers are held to a higher standard because of their position with public trust,” said U.S. Attorney Town. “We will continue to protect the public fisc from those who abuse their position to the detriment of the American taxpayer.”
In addition to the term of imprisonment imposed, Battle was ordered to serve one year of supervised release and to pay restitution in the amount of $234,300.53 to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Town commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant United States Attorney and former Tax Division Trial Attorney Allison Garnett and Assistant United States Attorney Melissa Atwood, who prosecuted the case.
Sylacauga Man Sentenced to 10 Years for Attempted Child EnticementRead the Press Release
BIRMINGHAM – A federal judge yesterday sentenced a Sylacauga man to 10 years in prison for attempted coercion and enticement of a minor, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp, Jr.
U.S. District Judge Abdul K. Kallon sentenced Jerry Wayne Hamilton, Jr., 49, on one-count of attempted coercion and enticement of a minor. Hamilton pled guilty to the charge in May 2019. According to court documents, Hamilton chatted with what he believed to be a 15-year old female on several different dating and chat applications between October 13, 2018 and October 21, 2018. In actuality, Hamilton was communicating with an undercover detective. On October 21, 2018, Hamilton arrived at Barnes and Noble to meet who he thought was the 15-year old female, but instead was met and arrested by the Mountain Brook Police Department.
“This defendant deserves every day of his 120-month sentence in a federal prison because of his reprehensible acts,” Town said. “Our law enforcement will continue to vigilantly monitor the internet using every available method available to us to uncover predators like Hamilton who seek to prey on innocent children. I commend the collaborative efforts of the FBI and the Mountain Book Police Department to bring this defendant to justice, proving once again there is no daylight between our local, state, and federal law enforcement agencies.”
“The FBI and our partners will continue to work diligently to bring individuals like Hamilton to justice and protect our most valuable asset, our children,” Sharp said.
FBI Birmingham Division Child Exploitation Task Force along with Mountain Brook Police Department investigated the case, which Assistant U.S. Attorney R. Leann White prosecuted.
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Huntsville Man Sentenced to 2 ½ Years in Prison for Tampering with Vehicle OdometersRead the Press Release
Huntsville – A federal judge today, sentenced a Huntsville man for tampering with vehicle odometers and bank fraud, announced U.S. Attorney Jay E. Town and U.S. Secret Service Acting Special Agent in Charge Robert Holloway.
A federal jury convicted Randy Eugene Greene, 62, in April of 11 counts of tampering with vehicle odometers and 3 counts of bank fraud. U.S. District Judge Abdul K. Kallon sentenced Greene to 30 months in prison, followed by three years supervised release and ordered him to pay more than $109,000 in restitution to the victims. The judge also entered a forfeiture judgment in the amount of $28,000.
“Greene violated the trust and confidence placed in him by the consumers and financial institutions,” Town said. “The theft and misuse of funds will not be tolerated by those who operate these type of schemes. They will be charged with federal crimes and will to go federal prison.”
“It is very important that consumers and financial institutions know that the vehicle being purchased from any auto dealership represents the true odometer reading,” Holloway said. “This type of fraud scheme can cause unwitting consumers significant financial hardship in repair bills from a vehicle they believed was in much better condition.”
Randy Eugene Greene, d/b/a RJ’s Auto Sales on South Memorial Parkway in Huntsville, was convicted by the jury of 11 counts of tampering with vehicle odometers and 3 counts of bank fraud. In the 11 counts related to odometer tampering, the offenses occurred between approximately October 1, 2014, and November 2, 2016. The largest discrepancy in the changed odometer reading was approximately 218,678 miles. The average discrepancy in the mileage on the odometers for the various vehicles was 122,046 miles. In the three counts related to Bank Fraud, Greene engaged in a scheme to defraud Redstone Federal Credit Union. The fraud occurred when the credit union financed three of the vehicles on which the odometers had been changed. Greene was served with a notice of forfeiture related to the bank fraud counts, which includes but is not limited to a money judgment in the amount of $28,000.
U.S. Secret Service is investigated the case, which Assistant United States Attorney Russell E. Penfield and R. Leann White prosecuted.
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Hartselle Man Sentenced to 12 ½ Years in Prison for Distributing Substance Laced with FentanylRead the Press Release
BIRMINGHAM –A federal judge yesterday sentenced a Hartselle man for distributing a substance laced with fentanyl, announced U.S. Attorney Jay E. Town and Drug Enforcement Administration Assistant Special Agent in Charge Clay Morris.
U.S. District Judge R. David Proctor sentenced Michael Anthony Sain, 32, to 151 months in prison. Sain pled guilty in November 2018, to one-count of unlawfully distributing a substance containing detectable amounts of fentanyl that caused serious bodily injury to an individual, resulting from the use of the substance.
“The battle to save our young people from overdosing on fentanyl and other dangerous drugs is one we must win,” Assistant United States Attorney Robert Becher said. “The drug dealers in North Alabama need to know that we will prosecute them vigorously and that they will spend a substantial portion of their lives behind bars.”
“Time and time again we have warned drug dealers that we will relentlessly and aggressively bring them to justice in order to protect our children and communities,” Morris said. “Today, we have another example of a drug dealer who did not heed our warnings. “Prison awaits those who deal with destruction and we will not sit idly by."
DEA investigated the case, which Assistant U.S. Attorney Robert Becher, Sr. prosecuted.
Birmingham Man Pleads Guilty During TrialRead the Press Release
BIRMINGHAM – Birmingham man pled guilty during trial, announced U.S. Attorney Jay E. Town, and Special Agent and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Marcus Watson.
Monterius King, 31, entered his plea on August 5th before U.S. District Judge Liles Burke at the end of the first day of trial, after several witnesses had testified. King pled guilty to robbing the ServisFirst Bank on Richard Arrington Blvd. on January 3, 2017. King also pled guilty to robbing the Jet Pep gas station on Center Point Parkway on April 24, 2017, and to discharging a firearm during that robbery, in which he shot a clerk in the stomach. King has pending charges remaining in state court for attempted murder and robbery arising from the JetPep robbery, and for robbery arising from the ServisFirst bank robbery. A sentencing date has been set for December 16th.
“Those who threaten the lives of innocent employees and customers are exactly the violent criminals we will remove from our communities and relocate to a bed in federal prison,” Town said. “The government was fully prepared to present evidence at trial that would prove the guilt of this defendant. He now faces federal time in a federal prison.”
“Protecting the public by the removal of the criminal element that commits acts of violence with a firearm was the result of the combined efforts by ATF and our partners,” Watson said.
King faces up to 20 years in prison for each of the robberies, plus a consecutive term of at least 10 years for discharging a firearm during a crime of violence.
The ATF investigated the case, which Assistant U.S. Attorney John J. Geer, III, is prosecuting.
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Birmingham Psychologist Agrees to Plead Guilty to Defrauding State Medicaid Agency of $1.5 Million by Filing False Claims for CounselingRead the Press Release
BIRMINGHAM— A one-count information filed yesterday in U.S. District Court charges a Birmingham psychologist with defrauding the Alabama Medicaid Agency by filing false claims for counseling services that were not provided, announced U.S. Attorney Jay E. Town, U.S. Department of Health and Human Services-OIG Special Agent in Charge Derrick L. Jackson, and Alabama Attorney General Steve Marshall.
SHARON D. WALTZ, 50, operated Capstone Medical Resources in a number of locations around Alabama, with its primary office in Birmingham. Among other services, Waltz provided individual and group counseling sessions for at-risk youth. The information charges that many of the services billed to the Alabama Medicaid Agency were never performed. Waltz has agreed to plead guilty to conspiracy to defraud Medicaid of at least $1.5 million. Waltz has also agreed to pay restitution to Medicaid in the amount of $1.5 million.
“The greed of this defendant deprived mental health care to many at-risk young people in Alabama, with the focus on profit rather than the efficacy of care,” Town said. “The costs are not just monetary, but have social and health impacts on the entire Northern District. This prosecution, and this investigation, demonstrates what is possible when federal and state law enforcement agencies work together.”
“This defendant was entrusted to provide essential mental health care for young people who were at risk, and to provide these services through an agency with scarce resources for vulnerable Alabamians who are truly in need,” said Attorney General Marshall. “Her actions demonstrate a callous abuse of this trust and a fraud of staggering proportions against the Alabama Medicaid Agency and the taxpayers of our state. Thankfully, the vigilance of this agency served to protect public funds from further misuse and she has been held to account and punished for her crimes.”
“Stealing tax payer dollars meant for vital community services will not be tolerated,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “The OIG will continue to work with our partners at the Alabama Medicaid Fraud Control Unit to ensure that fraud schemes such as these are identified and the perpetrators punished.”
An investigation was initiated by the Program Integrity Division of the Alabama Medicaid Agency after an audit showed that Waltz’s billings to the Medicaid Agency had increased from $99,000 in 2015 to more than $2.2 million in 2017. The Program Integrity Division referred its findings to the Attorney General’s Medicaid Fraud Control Unit after Waltz submitted falsified records during the Program Integrity audit.
A subsequent investigation was conducted by the Medicaid Fraud Control Unit and the Office of Investigations of the U.S. Department of Health and Human Services Office of Inspector General. This investigation determined that the majority of claims submitted by Capstone during 2016 through 2018 were fraudulent and that Waltz submitted and directed her employees to submit claims for counseling services that never occurred, and in some instances for individuals—including family members and friends of employees—who never received services at all.
The U.S. Department of Health and Human Services OIG, the Alabama Attorney General’s Medicaid Fraud Control Unit, and the Program Integrity Division of the Alabama Medicaid Agency, investigated the case, which Assistant U.S. Attorney J.B. Ward and Assistant Attorney General Bruce Lieberman, working as a Special Assistant U.S. Attorney, are prosecuting.
Opelika Woman Sentenced to 42 months for Wire FraudRead the Press Release
BIRMINGHAM –An Opelika woman who stole money from the Talladega County Association of Volunteer Fire Departments was sentenced yesterday, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp, Jr.
U.S. District Judge R. David Proctor sentenced Andrea Payne, 63, to 42 months for wire fraud. Payne pled guilty in April to one-count of wire fraud.
“Our brave first responders often do more with less, so it is especially aggravating when the public trust is violated not only for the sake of greed but at the ultimate expense of public safety,” Town said. “Payne will repay her debt over the next 42 months which comes as little comfort to the citizens protected by the Talladega County Association of Volunteer Fire Departments and the Association itself.”
“This case should send a message to the citizens of North Alabama, if you choose to violate the public trust and steal tax payer dollars, the FBI and our partners will be right behind you,” Sharp said. “Payne will now spend the next several years behind bars reflecting on her actions. I want to extend my personal thanks to the Talladega County Sheriff’s Office and the Talladega County District Attorney’s Office for their assistance in this case.”
According to the plea agreement, Payne previously served as the Treasurer of the Talladega County Association of Volunteer Fire Departments. Between 2012 and 2018, the Association received quarterly checks from the Talladega County Commission as distributions from the two-cent sales tax revenue. The purpose of the distributions was to provide financial assistance to fifteen volunteer fire departments throughout Talladega County. As the Treasurer, Payne was responsible for receiving the funds from the Talladega County Commission and distributing the funds equally among the fifteen volunteer fire departments within Talladega County. Payne was not authorized to receive any compensation for her role as the elected Treasurer and was not authorized to use the funds for personal use. Payne embezzled funds from the Association by using the funds to pay for her personal credit card. The defendant’s scheme resulted in Payne stealing over $640,000 from the Association.
The FBI investigated the case, along with the Talladega County Sheriff’s Office and the Talladega District Attorney’s Office, which Assistant U.S. Attorney Robin Beardsley Mark prosecuted.
Federal Jury Convicts on Federal Gun and Ammunition ChargesRead the Press Release
Yesterday, a federal jury convicted Christopher McNabb (a.k.a. “Rudy”) from Leeds, Alabama, of three firearm and ammunition related offenses announced U.S. Attorney Jay E, Town and the Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Marcus Watson.
The jury returned its guilty verdict against McNabb after two days of testimony before U.S. District Judge Karon O. Bowdre. McNabb will be sentenced on December 10, 2019, and faces up to 10 years in federal prison.
“Our prosecutors and law enforcement partners continue to show that they will not leave their fight in the dressing room, and as a result another violent offender has been convicted,” Town said. “This is the third trial, and third conviction, in the last three weeks of this type. The public can rest assured that we will continue to bring justice to these defendants. These criminals can rest assured in a federal prison bed.”
“Reducing the potential for violent crime in this case was critical due to ATF partnering with our state, local and federal partners,” Watson said.
Evidence at trial proved that McNabb, a known member of the Southern Brotherhood white supremacist gang, possessed a machinegun, a .223 caliber assault rifle as well as two .380 caliber pistols and assorted ammunition.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case. Assistant United States Attorneys Kevin Sanchez and Michael Pillsbury prosecuted the case.
Birmingham Man Sentenced to 241 months for Drug and Gun ConvictionsRead the Press Release
BIRMINGHAM – On Tuesday, a federal judge sentenced Jarrett Denard Boykins, of Birmingham, to serve 241 months in prison for convictions related to drug trafficking and gun possession, announced U.S. Attorney Jay E. Town and Bureau of Alcohol Tobacco, Firearms and Explosives Special Agent in Charge Marcus Watson.
“This sentence demonstrates that felons in possession of firearms while dealing deadly narcotics will continue to be prosecuted and continue to do time behind bars,” Town said. “Drug dealers who arm themselves to further their illegal drug trade have bed space waiting for them in federal prison.”
“ATF’s Crime Gun Intel partnerships are working together more effectively than any combination of criminal enterprises that attempt to endanger the safety of our communities,” Watson said.
In March, a federal jury found Boykins guilty of one count of possession with the intent to distribute more than 50 grams of crystal methamphetamine, one count of possession with the intent to distribute 152 methamphetamine tablets, two counts of carrying a gun in relation to a drug-trafficking crime, and three counts of possession of a firearm by a convicted felon.
Evidence at the trial proved that on October 2, 2017, Boykins, was found in the Pleasant Grove City Park after dark with more than 50 grams of methamphetamine and a firearm. Approximately six months later, Boykins was stopped by a Homewood police officer and found to have 152 methamphetamine tablets in a diaper bag in the back seat of his vehicle next to his infant child. Officers also found a pistol inside the diaper bag. On October 2, 2018, ATF agents along with officers from the Birmingham Police Department travelled to a Birmingham residence to arrest Boykins. Upon entering the residence, agents found Boykins in possession of another firearm, a non-controlled substance that was packaged for sale to appear like methamphetamine, and a large quantity of various calibers of ammunition scattered throughout the residence.
The Bureau of Alcohol, Tobacco, Firearms, and Explosives, along with the Pleasant Grove Police Department, Homewood Police Department, and Birmingham Police Department investigated the case, which Assistant United States Attorneys Brad Felton and Alan Baty prosecuted.
A Morgan County Man Who Faked His Death Pleads GuiltyRead the Press Release
BIRMINGHAM – A Morgan County man who faked his death pled guilty today in federal court, announced U.S. Attorney Jay E. Town and Social Security Administration Office of Inspector General Special Agent in Charge Rod Owens.
Jackson Matthew Hall, 28, of Lacey Springs, AL, entered his guilty plea before U.S. District Judge R. David Proctor to charges of Social Security fraud and aggravated identity theft. The indictment was unsealed on May 21st.
“Mr. Hall thought he could get lost in Thailand and avoid federal prosecution,” Town said. “Instead - because of the hard work and dedication of the Social Security Administration Office of Inspector General, the United States Marshal Service, the State Department, and the Morgan Country Sheriff’s office - justice found him.”
According to Hall’s plea agreement, Hall was facing criminal charges of rape 1st degree and sodomy 1st degree (a child under 12 years of age) in Cullman County, Alabama, and an aggravated child abuse charge in Madison County, Alabama. Hall had pending court dates in both counties in March 2016 and April 2016. Between December 2015 and February 2016, Hall used another person’s identifiers to obtain a social security card, Alabama Driver’s license, and U.S. passport. He then faked his death and used those documents to travel out of the country. In September 2017 Hall was apprehended in Koh Samui, Thailand, by Thai authorities. In October 2017, the U.S. Marshals Service, along with a Madison County task force officer assigned to the Gulf Coast Regional Fugitive Task Force traveled to Bangkok, Thailand, and took custody of Hall and transported him back to the United States of America.
The maximum penalty for Social Security fraud is five years in prison and maximum fine of $250,000.
The penalty for aggravated identity theft is two years in prison and a maximum fine of $250,000.
The Social Security Administration Office of Inspector General, along with U.S. Marshals Service Gulf Coast Regional Fugitive Task Force, State Department, and the Morgan County Sheriff’s Office investigated the case, which Assistant U.S. Attorney Davis Barlow is prosecuting.
Justice Department Launches National Public Safety Partnership with Anniston and Oxford Police DepartmentsRead the Press Release
OXFORD, AL - Today, officials from the Department of Justice's Bureau of Justice Assistance, the United States Attorney's Office, Northern District of Alabama, and the Anniston and Oxford Police Departments convened in Oxford, AL to initiate the National Public Safety Partnership (PSP) program with the Anniston and Oxford Police Departments. This Justice Department program is a three-year engagement that seeks to leverage department assets in support of a local jurisdictions' commitment to drive down violent crime.
On June 3, 2019, Attorney General William Barr announced the selection of the Anniston and Oxford Police Departments as two of ten FY 2019 PSP sites where the Justice Department will work collaboratively to provide training and technical assistance in areas such as crime analytics, emerging technology and community engagement.
Since 2017, the Justice Department has directed nearly $14.9 million in customized training and technical assistance to help build crime fighting capacity in PSP sites, including $6.6 million to support the FY 2019 sites through FY 2022. PSP seeks to bring law enforcement stakeholders together to work collaboratively in reducing violent crime attributed to felonious firearm use, drug trafficking and human trafficking.
“Today our team is on-site in Oxford, AL, to collaborate with local law enforcement officials in their mission to improve public safety and drive down violent crime,” said Jon Adler, Director of the Bureau of Justice Assistance. "Through the Public Safety Partnership, we are committed to fulfilling the Attorney General's priority of supporting local law enforcement to combat violent gangs, felonious firearms use and drug trafficking," added Adler.
“The Public Safety Partnership will continue to make our communities more secure, our partnerships more robust, and our law enforcement agencies more impactful,” U.S. Attorney Jay E. Town said. “We look forward to surging our federal, state and local law enforcement partners into the Anniston and Oxford areas to reduce violent crime and to return these communities back to their rightful owners…the law-abiding citizens. State and federal prison beds have been reserved for the alpha criminals operating in Calhoun County…and we are coming.”
“Criminals respect no jurisdictional boundaries,” Anniston Police Chief Shane Denham said. “Through cooperation and aggressive pursuit and prosecution, we can make a difference in our region. The Anniston Police Department is looking forward to working together with our local and federal partners through this initiative. Together we can make a difference through the Public Safety Partnership initiative.”
“We are looking forward to working with our federal partners along with the East Metro Area Crime Center to drive down gun crimes and violent crime in general, this is a great partnership,” Oxford Police Chief Partridge said.
Since 2017, the Justice Department has worked with more than 30 local jurisdictions under the nationwide PSP program. Many participating cities have already seen dramatic reductions in violent crime. New Orleans ended 2018 with 146 murders, the lowest number of murders since the early 1970s. In Milwaukee, homicides declined in 2018 for a third straight year after hitting a deadly peak in 2015.
Agencies in attendance at this meeting will include the U.S. Attorney’s Office, Northern District of Alabama; the Office of Justice Programs; the Federal Bureau of Investigation; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshals Service; the U.S. Drug Enforcement Administration; the Anniston Police Department; the Oxford Police Department; the Calhoun and Cleburne Counties District Attorney’s Office; the Talladega County District Attorney’s Office; Anniston Mayor Jack Draper’s Office; Oxford Mayor Alton Craft’s Office; Calhoun County Sheriff’s Office and the 7th Judicial Major Crimes Unit.
For more information about PSP, visit https://www.nationalpublicsafetypartnership.org.
Federal Jury Convicts a Pinson Man on Drug and Gun ChargesRead the Press Release
A federal jury yesterday convicted a Pinson man of two counts of possession of heroin, methamphetamine, cocaine powder, and cocaine base, also known as “crack” cocaine, with the intent to distribute, and one-count of possession of a gun in furtherance of a drug-trafficking crime, announced U.S. Attorney Jay E, Town and Drug Enforcement Administration Assistant Special Agent in Charge Clay Morris.
The jury returned its guilty verdict against Deveonte Brown, of Pinson, after two days of testimony before U.S. District Judge Madeline H. Haikala. Brown will be sentenced on December 18, 2019.
“This type conviction is the second in two weeks in the Northern District of Alabama,” Town said. “We will not tolerate criminals who pose a clear threat to our District. Criminals who plague our streets with drugs and guns will continue to be targets for federal prosecution where the debt to society is full price. No discounts. No parole.”
“Dangerous criminals like Brown need to take notice that DEA and our law enforcement partners will not tolerate their criminal activities,” Morris said. “Drugs and guns are a deadly combination that often end with violent acts. Again, today’s verdict should send a resounding message to all drug dealers in Alabama. We will target you, investigate you, and ensure that you go to prison in order to make our communities safe.”
Evidence at trial proved that on October 6, 2017, Brown left a shoe box containing methamphetamine, heroin, cocaine powder, cocaine base, and a digital scale in his hotel room. Brown later returned to the hotel to retrieve the shoe box. Fultondale police officers attempted to confront Brown in his vehicle when he fled from police at a high rate of speed. The chase was called off due to Brown’s erratic driving. On October 12, 2017, Brown was found in the passenger seat of a white dodge charger in Pinson. Brown was sitting on a bag containing over $7,000 and a gun. Jefferson County Sheriff’s Deputies found a bag with heroin and methamphetamine in the back seat of the car.
The penalty for possessing with intent to distribute is up to 20 years prison. The possession of a firearm in furtherance of a drug trafficking crime carries an additional sentence of 5 years that cannot be run concurrently with the drug sentence.
The Drug Enforcement Administration investigated the case. Assistant United States Attorneys Blake Milner and Greg Dimler prosecuted the case.
Tuscaloosa Man Sentenced to 10 Years in Prison for Felon in Possession of a FirearmRead the Press Release
BIRMINGHAM – A Tuscaloosa man who tried to run over a Tuscaloosa police officer was sentenced to 10 years in prison on Monday, announced U.S. Attorney Jay E. Town and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Marcus Watson.
U.S. District Judge L. Scott Coogler sentenced DEVONTE JAISHUN TUCKER, 23, Tuscaloosa, to 10 years in prison for being a felon in possession of a firearm. Tucker pled guilty in April to one-count of being a felon in possession of a firearm.
“This sentence comes at a time when we have seen an increase in violence against law enforcement in Alabama,” Town said. “Those who would threaten the life of any member of law enforcement would threaten the life of any member of the community. While Tucker is provided a federal prison bed in which to lay, the rest of us should all stand with the men and women of the badge.”
“Reducing the potential for violent crime in this case was critical due to ATF partnering with our state, local and federal partners,” Watson said.
On November 15, 2018, just after midnight, Tuscaloosa police officer Joshua Smith attempted to stop a stolen vehicle in the parking lot of Creekwood Village Apartments. The unidentified driver obeyed Officer’s Smith’s commands to exit the vehicle when the armed passenger, Tucker, jumped in the driver’s seat. Tucker attempted to run over Officer Smith as he fled the scene in the stolen car. A high speed chase ensued.
Tuscaloosa police officer Jacob Morris was in the area, observed Tucker speeding near Stillman College. Officers Morris and Smith pursued Tucker in a high speed chase on 15th Street and McFarland Boulevard with Tucker reaching speeds near 100 mph. Tucker finally abandoned the stolen vehicle and fled on foot near the Springbrook neighborhood. Although Tucker was armed, Officers Morris and Smith relentlessly pursued Tucker and apprehended him. Tucker was armed with a stolen Hi-Point .45 caliber pistol.
Tucker was sentenced to the statutory maximum of 10 years based on his criminal history. He endangered the life of Officer Joshua Smith, other Tuscaloosa police officers involved in the chase, and innocent lives traveling on Tuscaloosa streets that morning.
ATF investigated the case, which the Assistant United States Attorney Blake Milner prosecuted.
Marshall County Woman Sentenced for Sexual Exploitation of a ChildRead the Press Release
Marshall County Woman Sentenced for Sexual Exploitation of a Child
BIRMINGHAM – A federal judge on Wednesday sentenced a Marshall County woman for sexually exploitation of a child, announced U.S. Attorney Jay E. Town and U.S. Immigration and Custom Enforcement’s Homeland Security Investigations Assistant Special Agent in Charge James G. Hernandez.
U.S. District Judge Abdul K. Kallon sentenced ANNA MARIE GOMEZ, 31, to 18 years in prison. Gomez plead guilty in April to one-count of sexually exploitation of a child. Gomez persuaded a six-year old girl to engage in sexually explicit conduct to produce images of that conduct and transport them across state lines.
“A long prison sentence is well-deserved for the defendant in this case,” Town said. “Gomez gave no sanctuary to this young victim and now has been given bed space in a federal prison with no sanctuary of parole.”
“HSI is committed to working with our law enforcement partners to protect the members of our population that are the most vulnerable,” Hernandez said. “I hope that the sentence in this case allows the victim time to heal.”
U.S. Immigration and Custom Enforcement’s Homeland Security Investigations investigated the cases, which the Assistant United States Attorney Robert Becher, Sr. prosecuted.
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Federal Jury Convicts Birmingham Man on Drug and Gun ChargesRead the Press Release
Federal Jury Convicts Birmingham Man on Drug and Gun Charges
A federal jury took only an hour and half today to convict a Birmingham man of possession of 230 grams of cocaine base, also known as “crack” cocaine, with the intent to distribute, and one-count of possession of a gun in furtherance of a drug-trafficking crime, announced U.S. Attorney Jay E, Town and Drug Enforcement Administration Special Agent in Clay Morris.
The jury returned its guilty verdict against Edwin Pettaway, 46, of Birmingham, after three days of testimony before U.S. District Judge Annemarie Axon. Pettaway will be sentenced on November 13, 2019.
Evidence at the trial proved that on November 15, 2017, Pettaway was found to be in possession of crack cocaine and a firearm in furtherance of the drug crime. Upon entering the residence, agents found Mr. Pettaway in a bedroom with 230 grams of “crack” cocaine, digital scales, packaging materials, and a firearm among his personal belongings.
“Convicted felons with drugs and firearms pose a clear threat to every person in the Northern District,” Town said. “Our prosecutors will not leave their fight in the dressing room when bringing threats like Pettaway to justice. Beds are reserved in federal prison for those who continue to plague our communities with illegal drugs and guns. Our prison beds can never be too full of these dangerous criminals.”
“Dangerous criminals like Pettaway need to take notice that DEA and our law enforcement partners will not tolerate their criminal activities,” Morris said. “Drugs and guns are a deadly combination that often end with violent acts. Again, today’s verdict should send a resounding message to all drug dealers in Alabama. We will target you, investigate you, and ensure that you go to prison in order to make our communities safe.”
The penalty for possessing with intent to distribute 28 grams or more of cocaine base is a minimum of 5 years in prison. The possession of a firearm in furtherance of a drug trafficking crime carries an additional sentence of 5 years that cannot be run concurrently with the drug sentence.
The Drug Enforcement Administration along with the Birmingham Police Department investigated the case. Assistant United States Attorneys William G. Simpson and John G. Camp prosecuted the case.
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Federal Jury Convicts Birmingham Doctor and Nurse for $7.8 Million Health Care Fraud, Unlawful Drug Distribution and Money LaunderingRead the Press Release
BIRMINGHAM – A federal jury today convicted Dr. PATRICK EMEKA IFEDIBA, 60, of Shelby County and Patrick Ifediba’s sister, NGOZI JUSTINA OZULIGBO, 49, of Trussville of numerous crimes stemming from their involvement with Care Complete Medical Clinic, located in Birmingham, Alabama, announced U.S. Attorney Jay E. Town, FBI Special Agent in Charge Johnnie Sharp Jr., and Drug Enforcement Administration Assistant Special Agent in Charge Clay Morris.
Following a four-week trial before Judge David R. Proctor, the jury convicted Ifediba of thirty-five counts involving unlawful drug distribution, health care fraud, and money laundering. Specifically, Ifediba was convicted of: (i) one count of conspiracy to illegally distribute controlled substances by means of prescriptions; (ii) fourteen counts of illegal prescribing; (iii) one count of maintaining drug-involved premises; (iv) one count of conspiracy to commit health care fraud; (v) ten counts of health care fraud; (vi) one count of conspiracy to commit money laundering; (vii) three counts of concealment money laundering; and (viii) four counts of engaging in monetary transactions involving criminally derived property greater than $10,000.
For her part in the offenses, Ozuligbo, a licensed practical nurse, was convicted of twelve counts involving health care fraud and money laundering. Specifically, Ozuligbo was convicted of: (i) one count of conspiracy to commit health care fraud; (ii) nine counts of health care fraud; (vi) one count of conspiracy to commit money laundering; and (vii) one count of concealment money laundering. No sentencing date has been set.
“This jury verdict should put all health care providers on notice that sacrificing care for greed will land you in federal court,” Town said. “And we have bed space in federal prison for all that do.”
“In defrauding the Medicare system, Ifediba violated a sacred oath taken by physicians but above all he violated the law,” Sharp said. “He submitted fraudulent claims to both Medicare and other health care insurers as part of the scheme. The FBI and our partners will continue to hold medical professionals accountable for abusing positions of trust in the community and for harming the financial integrity of our health care system. The FBI remains dedicated to combating health care fraud and to doing our part in reducing the impact that opioids have on our nation.”
“Today, a jury of community members resoundingly confirmed what DEA had known all along,” Morris said. “Dr. Ifediba had long forgotten to care for his patients. Instead, he chose to fill his bank accounts with cash. Sadly, Dr. Ifediba is yet another example of putting profit over his professional responsibility to help those in need. For over three years, DEA and our law enforcement colleagues investigated and ultimately prosecuted Dr. Ifediba for violations of many federal laws including drug distribution and money laundering. Collectively, we are committed to protecting our communities from the scourge of opioid abuse and those who profit from it. We will tirelessly protect the innocent and vigorously investigate those who prey on the addictions of others.”
Evidence at the trial proved that Ifediba was a doctor of internal medicine who owned Care Complete Medical Clinic (“CCMC”) and operated it with his wife, Dr. Uchenna Ifediba. The evidence showed that the doctors operated CCMC as a pill mill. They routinely prescribed dangerous and addictive opioids for the primary purpose of making money from repeated return office visits. Ifediba not only overprescribed opioids, he also prescribed dangerous cocktails of drugs, including one called “the holy trinity,” that produces a heroin-like high, but creates a significant risk of an overdose. Although Ifediba was not a pain management specialist and CCMC did not hold itself out as a pain management clinic, approximately 85% of its patients received opioid prescriptions.
In addition to operating a pill mill, the evidence showed that Ifediba and others, including Ozuligbo, cheated and stole millions of dollars from Medicare and private health insurers in connection with an allergy fraud scheme. Although neither had any training in allergy medicine, the pair would order patients with health insurance to take allergy tests and submit to allergy treatments they didn’t need. Ifediba even forced some patients to take unwanted allergy tests by withholding their opioid prescriptions if they refused. Ifediba then ordered expensive allergy therapy treatments for all these patients even when the patients tested negative.
The purpose of the allergy scheme was to increase CCMC’s revenue. CCMC billed health insurers more than $7.8M over the course of the scheme. Representatives of Medicare and several private insurance companies testified at trial. The evidence showed that Ifediba billed one of the private insurers nearly $3M for allergy services over a two-and-a-half year period. Ifediba was their number one biller in the state of Alabama, accounting for sixty-one percent of all allergy-related billing. The insurance company’s next highest biller was an allergy and asthma center employing eight doctors and nine nurse practitioners.
The evidence at trial showed that Ifediba opened numerous bank accounts and used shell corporations in order to hide the money he made from his crimes. Ifediba moved the illicit funds between bank accounts and used the names of family members, including Ozuligbo, to make it appear as though the bank accounts and companies belonged to someone else. A substantial portion of these illicit funds were used to buy a condominium, annuities, and other investments held in the names of others, but which were for Ifediba’s personal use and benefit.
The charges of conspiracy to commit health care fraud and health care fraud both carry maximum penalties of 10 years in prison and a $250,000 fine.
Conspiracy to distribute controlled substances and distribution of controlled substances both carry a maximum penalty of 20 years in prison and a $1 million fine. Maintaining drug-involved premises carries a maximum penalty of 20 years in prison and a $500,000 fine.
Money laundering conspiracy and laundering of monetary instruments both carry a maximum penalty of 20 years in prison and a $250,000 fine. Engaging in monetary transactions in criminally derived property worth more than $10,000 carries a maximum penalty of 10 years in prison and a fine of $250,000 or twice the amount of the criminally derived property involved.
The FBI and DEA investigated the case as part of an Organized Crime Drug Enforcement Task Force operation, which Assistant U.S. Attorneys Mohammad Khatib and Jim Weil are prosecuting.
Father and Son Sentenced to Prison in Multimillion-Dollar Investment Fraud SchemeRead the Press Release
A father and son who ran a complex investment fraud scheme by which they stole more than $10 million over the course of seven years were sentenced today to 60 months and 27 months in prison, respectively.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jay E. Town of the Northern District of Alabama and Special Agent in Charge Johnnie Sharp Jr. of the FBI Birmingham Field Office made the announcement.
Donald Watkins Sr., 70, of Atlanta, Georgia, and Donald Watkins Jr., 47, of Birmingham, Alabama, were sentenced by U.S. District Judge Karon O. Bowdre of the Northern District of Alabama. Judge Bowdre also ordered Donald Watkins Sr. to serve five years of supervised release and to pay restitution in the amount of $14,000,100.00 and ordered Donald Watkins Jr. to serve three years of supervised release and to pay restitution jointly with his father in the amount of $13,850,000.
The father and son co-defendants were convicted on March 8, 2019, following a jury trial that lasted over two weeks. Donald Watkins Sr. was convicted of seven counts of wire fraud, two counts of bank fraud and one count of conspiracy. Donald Watkins Jr. was convicted of one count of wire fraud and one count of conspiracy.
According to evidence presented at trial, between approximately 2007 and 2013, Donald Watkins Sr. sold “economic participations” and promissory notes connected with Masada Resource Group, a company that he ran as manager and CEO. Investors paid more than $10 million dollars after Donald Watkins Sr. and Donald Watkins Jr. falsely represented that the money would be used to grow Masada, which Donald Watkins Sr. described as a “pre-revenue” company that supposedly had technology that could convert garbage into ethanol. Instead of investing the money into Masada, however, Donald Watkins Sr. and Donald Watkins Jr. diverted funds to pay personal bills and the debts of their other business ventures, the evidence showed. Victim money was used to pay for Donald Watkins Sr.’s alimony, hundreds of thousands of dollars in back taxes, personal loan payments, a private jet and clothing purchased by Donald Watkins Jr. and his wife. Emails introduced at trial also showed that Donald Watkins Sr. and Donald Watkins Jr. planned to obtain millions of dollars for these purposes from one victim on multiple occasions, when they knew that this victim and other victims trusted them to put their money to use in growing Masada.
Donald Watkins Sr. also was convicted of defrauding Alamerica Bank, an entity in which Donald Watkins Sr. held a controlling interest through his ownership of Alamerica Bank Corp stock, the evidence showed. In order to pay hundreds of thousands of dollars in litigation expenses associated with another one of Donald Watkins Sr.’s business ventures, Donald Watkins Sr. executed a plan to use a straw borrower to take out money from Alamerica Bank and use those funds to pay the defendant’s litigation expenses. This straw borrower—Donald Watkins Sr.’s long-time mentor and a prominent figure in the Birmingham community—took over $900,000 in loans from Alamerica Bank and then immediately permitted Donald Watkins Sr. to use those funds for his personal benefit, the evidence showed.
The investigation was conducted by the FBI’s Birmingham Field Office. Trial Attorney Kyle C. Hankey of the Criminal Division’s Fraud Section and First Assistant U.S. Attorney Lloyd C. Peeples III, Special Assistant U.S. Attorney Beau Brown (on detail from the Alabama Securities Commission) and Special Assistant U.S. Attorney Xavier O. Carter Sr. of the Northern District of Alabama prosecuted the case.
Father and Son Sentenced to Prison in Multimillion-Dollar Investment Fraud SchemeRead the Press Release
WASHINGTON – A father and son who ran a complex investment fraud scheme by which they stole more than $10 million over the course of seven years were sentenced today to 60 months and 27 months in prison, respectively.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jay E. Town of the Northern District of Alabama and Special Agent in Charge Johnnie Sharp Jr. of the FBI Birmingham Field Office made the announcement.
Donald Watkins Sr., 70, of Atlanta, Georgia, and Donald Watkins Jr., 47, of Birmingham, Alabama, were sentenced by U.S. District Judge Karon O. Bowdre of the Northern District of Alabama. Judge Bowdre also ordered Donald Watkins Sr. to serve five years of supervised release and to pay restitution in the amount of $14,000,100.00 and ordered Donald Watkins Jr. to serve three years of supervised release and to pay restitution jointly with his father in the amount of $13,850,000.
The father and son co-defendants were convicted on March 8, 2019, following a jury trial that lasted over two weeks. Donald Watkins Sr. was convicted of seven counts of wire fraud, two counts of bank fraud and one count of conspiracy. Donald Watkins Jr. was convicted of one count of wire fraud and one count of conspiracy.
“These defendants sought to enrich themselves through wire and bank fraud,” Town said. “The sentences give notice to the public that the Department of Justice stands ready with the resources to investigate and prosecute similar offenders.”
“Today’s sentence should send a message to those who would engage in financial fraud,” Sharp said. “We are pleased that the Watkins are being held accountable for their crimes and that they were ordered to pay restitution to the victims. The FBI will continue to work with our law enforcement partners to investigate and prosecute those who commit complex financial crimes.”
According to evidence presented at trial, between approximately 2007 and 2013, Donald Watkins Sr. sold “economic participations” and promissory notes connected with Masada Resource Group, a company that he ran as manager and CEO. Investors paid more than $10 million dollars after Donald Watkins Sr. and Donald Watkins Jr. falsely represented that the money would be used to grow Masada, which Donald Watkins Sr. described as a “pre-revenue” company that supposedly had technology that could convert garbage into ethanol. Instead of investing the money into Masada, however, Donald Watkins Sr. and Donald Watkins Jr. diverted funds to pay personal bills and the debts of their other business ventures, the evidence showed. Victim money was used to pay for Donald Watkins Sr.’s alimony, hundreds of thousands of dollars in back taxes, personal loan payments, a private jet and clothing purchased by Donald Watkins Jr. and his wife. Emails introduced at trial also showed that Donald Watkins Sr. and Donald Watkins Jr. planned to obtain millions of dollars for these purposes from one victim on multiple occasions, when they knew that this victim and other victims trusted them to put their money to use in growing Masada.
Donald Watkins Sr. also was convicted of defrauding Alamerica Bank, an entity in which Donald Watkins Sr. held a controlling interest through his ownership of Alamerica Bank Corp stock, the evidence showed. In order to pay hundreds of thousands of dollars in litigation expenses associated with another one of Donald Watkins Sr.’s business ventures, Donald Watkins Sr. executed a plan to use a straw borrower to take out money from Alamerica Bank and use those funds to pay the defendant’s litigation expenses. This straw borrower—Donald Watkins Sr.’s long-time mentor and a prominent figure in the Birmingham community—took over $900,000 in loans from Alamerica Bank and then immediately permitted Donald Watkins Sr. to use those funds for his personal benefit, the evidence showed.
The investigation was conducted by the FBI’s Birmingham Field Office. Trial Attorney Kyle C. Hankey of the Criminal Division’s Fraud Section and First Assistant U.S. Attorney Lloyd C. Peeples III, Special Assistant U.S. Attorney Beau Brown (on detail from the Alabama Securities Commission) and Special Assistant U.S. Attorney Xavier O. Carter Sr. of the Northern District of Alabama prosecuted the case.
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The U.S. Attorney’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives Provided LE Training on Project Safe Neighborhoods/P3 ProgramRead the Press Release
FLORENCE– Alabama law enforcement officers from seven counties across the Northern District of Alabama attended training in Florence on Wednesday. The training was conducted by the U.S. Attorney’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) on prosecution of cases involving firearms and drugs in federal and state court, constitutional protections concerning search warrants, arrests and trials, and the U.S. Attorney’s Office Prosecutor-to Prosecutor Program, or P3.
“It was gratifying to see law enforcement officers from so many different agencies and counties, from all across our district, come together to hear about all of the ways our office is ready, willing and able to prosecute, and remove criminals from our neighborhoods,” said Assistant U.S. Attorney Bob Becher.
The U.S. Attorney’s Office provided an update for police officers, sheriffs and district attorneys on individual protections provided by the 4th, 5th and 6th Amendments of the U.S. Constitution and an explanation of P3.
The 4th Amendment guarantees the right of individuals to be free from unreasonable search and seizure. The 5th Amendment in criminal cases provides the right to a grand jury, forbids double jeopardy, and protects against self-incrimination. The 6th Amendment protects the rights of criminal defendants, including the right to a public trial without unnecessary delay, the right to counsel and the right to an impartial jury. The 6th Amendment also guarantees defendants the right to know the nature of the charges and evidence against them, and who their accusers are.
P3 is a six-step process by which state and federal prosecutors jointly determine whether a criminal case should be prosecuted by the U.S. Attorney’s Office. The “P3 Overlay” identifies state and federal criminal statutes with similar elements. Common elements that could trigger federal prosecution include use of a firearm, crossing of state lines, use of phones or internet to commit a crime, or victimizing an institution that is federally regulated or insured, or that receives federal grant funds. P3 is part of Project Safe Neighborhoods, the Department of Justice’s centerpiece program for fighting violent crime. PSN and P3 both underscore the need to target the worst offenders in the worst areas of crime in order to reduce violence.
ATF provided training on the National Integrated Ballistic Information Network (NIBIN), a national database of digital images of spent bullets, shell casings, and cartridge cases that were found at crime scenes or test-fired from confiscated weapons. The ATF manages the system and provides the equipment to crime labs around the country. There are NIBIN machines in many areas in Alabama, to include Birmingham, Huntsville, Mobile, Montgomery.
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Fultondale Doctor Charged with Additional Counts of Prescribing Controlled SubstancesRead the Press Release
BIRMINGHAM – A federal grand jury yesterday issued a 135-count second superseding indictment charging a Fultondale doctor with 31 additional counts of dispensing controlled substances without a legitimate medical purpose, announced U.S. Attorney Jay E. Town, Drug Enforcement Administration Assistant Special Agent in Charge Clay Morris, and FBI Special Agent in Charge Johnnie Sharp, Jr. The doctor was previously charged in November 2018 with conspiracy to prescribe controlled substances and participating in a healthcare fraud conspiracy with a Demopolis pharmacist and a Tuscaloosa sales representative.
The prior indictment charged PAUL ROBERTS, M.D., 46, of Fultondale, AL, with multiple counts of conspiring and dispensing controlled substances without a legitimate medical purpose. The drugs Roberts prescribed include Adderall, a drug used to treat attention deficit hyperactivity disorders, Suboxone, a drug used to treat opioid addiction, and oxycodone, an opioid. The indictment also charged Roberts with prescribing oxycodone to an individual in exchange for sexual favors. The second superseding indictment charges Roberts with prescribing oxycodone, hydrocodone, and other controlled substances to another individual. According to the indictment, Roberts directed that individual to complain of fabricated physical ailments in order to obtain controlled substances, and solicited explicit photographs from the individual. The indictment also charges Roberts with prescribing controlled substances without a legitimate medical purpose to the individual and various other individuals.
As in the prior indictment, Roberts is also charged with participating in a healthcare fraud conspiracy and scheme that involved delegating responsibility for seeing patients with opioid addictions to staff such as his X-ray technician and office manager, but billing Blue Cross Blue Shield of Alabama as though he personally saw the patients. The indictment also charges Roberts, along with STANLEY F. REEVES, 60, of Demopolis, AL, a pharmacist and owner of F&F Drugs, and BRETT TAFT, 45, of Tuscaloosa, AL, with defrauding third-party administrators of health insurance plans of over $10.5 million in fraudulently billed compounded drugs. Reeves is also charged with making false statements to federal agents and with tampering with a witness, and both Reeves and Taft are charged with spending the proceeds of health care fraud.
“The U.S. Attorney’s Office and our law enforcement partners will continue to aggressively pursue doctors who demonstrate such blatant disregard for their patients’ well-being, and to prosecuting individuals who defraud the healthcare insurance plans that exist to help the citizens of this district pay for healthcare,” Town said. “Dope dealers sometimes wear a white coat.”
“DEA is fully committed to the pursuit of any individual who abandons their oath as a medical professional,” Morris said. “We will continue to work with our law enforcement partners, the medical community and the public to identify and stop those responsible for endangering lives in our communities and bring them to justice.”
The maximum penalty for the dispensing controlled substances charges is 20 years in prison and a $1,000,000 fine. The maximum penalty for health care fraud and conspiracy charges is 10 years in prison and a $250,000 fine. The maximum penalty for the false statement charge is five years in prison and a $250,000 fine. The maximum penalty for the witness tampering charge is 20 years in prison and a $250,000 fine. The maximum penalty for the spending proceeds of healthcare fraud charge is 10 years in prison and a $250,000 fine.
DEA and FBI investigated the cases, which Assistant U.S. Attorneys Austin Shutt and Chinelo Dike-Minor are prosecuting.
An indictment contains only charges. Defendants are presumed innocent unless and until proven guilty.
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Madison County Pill Mill Doctor Pleads Guilty to Illegally Dispensing Prescription DrugsRead the Press Release
BIRMINGHAM – A Madison County physician pleaded guilty Wednesday in federal court to charges related to illegally distributing and dispensing prescription drugs, announced U.S. Attorney Jay E. Town and Drug Enforcement Administration Assistant Special Agent in Charge Clay Morris.
DR. RODNEY MORRIS, 64, pleaded guilty before U.S. District Court Judge Annemarie Carney Axon to sixty-four counts of illegally distributing and dispensing Schedule II controlled substances, including opioid painkillers, outside the scope of professional medical practice and not for legitimate medical purposes. Instead, the evidence shows that Dr. Morris prescribed these painkillers in exchange for sexual favors and monetary gain. He is scheduled for sentencing on October 23, 2019.
“The public should be able to trust that a medical professional would not engage in such aberrant and disgusting conduct,” Town said. “Those who choose to engage in such illicit practices will no longer wear white coats, but instead prison stripes.”
“Unfortunately, Dr. Morris and his criminal conduct represents a disturbing trend in the medical profession for those practitioners who abandon their hypotactic oath,” DEA ASAC Clay Morris said. “Dr. Morris’ actions clearly contributed to continuing the opioid epidemic that is plaguing our communities and country. He will soon be where he belongs…in prison. The DEA, U.S. Attorney’s Office and our law enforcement partners will not stand idly by and allow criminals to profit off of the addictions of others.”
Dr. Morris was known to give preferential treatment to female patients when it came to office visits, drug testing (or lack of thereof), and prescriptions of controlled substances. Records show that between August 2012 and May 2017, Dr. Morris illegally prescribed one particular patient hydrocodone, alprazolam, oxycodone and tramadol in exchange of sexual favors. This patient illegally sold some of these drugs to supplement her income. After the patient’s death in May 2017, Dr. Morris attempted to delete electronic medical records and erase evidence of her being his patient.
According to the Alabama Prescription Drug Monitoring Program, Dr. Morris ranked 67 out of 13,118 medical doctors in the State of Alabama for the number of prescriptions filled for Schedule II, III, IV and V controlled substances. He also ranked seventh in Madison County for the quantity of controlled substances prescribed. From January 1, 2017 through June 27, 2017, Dr. Morris wrote 6,721 prescriptions for controlled substances with the total dosage units being 499,784.
The penalty for illegally dispensing and distributing prescription drugs is a maximum of 20 years in prison and a maximum fine of $1,000,000.
DEA investigated the case, which Assistant U.S Attorney Mary Stuart Burrell is prosecuting.
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Deputy Attorney General Recognizes District EmployeeRead the Press Release
BIRMINGHAM – China M. Davidson, Chief of Administrative Division of the U.S. Attorney’s Office in the Northern District of Alabama was one of 172 members of the Department of Justice recognized by Deputy Attorney General Jeffrey Rosen, and Executive Office for U.S. Attorneys (EOUSA) Director James Crowell, IV at the 35th Director’s Awards Ceremony today in Washington D.C.
The Northern District of Alabama was one of 31 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In his prepared remarks, Deputy Attorney General Jeffrey Rosen addressed the recipients and guests, saying, “Today’s honorees have earned the esteem of their colleagues. But most importantly, you have earned the gratitude of your fellow citizens — whose communities you have made safer, whose lives you have improved, and whose trust you have rewarded.”
In his remarks, EOUSA Director James Crowell told the recipients, “The Department of Justice is in truth a deployed force. Your work isn’t easy, but it is vital to the functioning and enduring nature of our democracy. As federal prosecutors, we are held to a higher standard, a standard that requires us to ensure that we uphold the rule of law and the fundamental rules of fairness in every trial, every settlement, every plea, and every legal argument in which we are involved.”
China M. Davidson is recognized for her sustained exemplary service, which exceeds the highest standards of excellence in executive leadership, management, and advisory services. During her 24 years of service, Ms. Davidson significantly contributed to her division’s community by promoting a culture of excellence and professionalism. Ms. Davidson has many talents relating to management, team building, community-outreach services, and grant writing, which she has generously used to create numerous unique opportunities for her division and the USAO community. In addition, Ms. Davidson has shown steadfast commitment to advance the Attorney General’s ‘Project Safe Neighborhoods Initiative’ through early prevention in schools and training for law enforcement officers. Ms. Davidson’s tenure has been characterized by exceptional service as a Department pathfinder, mentor, instructor, and counselor who has consistently inspired leadership and professionalism.
“China Davidson has served the Department of Justice with great distinction for the better part of three decades,” Town said. “It is rare to have one person have such a positive impact on the functionality of an office. The Northern District of Alabama has been made safer, our lives made better, and our future made brighter because of China Davidson’s resourcefulness and leadership. Her recognition by Director Crowell just underscores her value to the Department, my office, and the citizens of Alabama.”
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
Pickens County Sheriff to Plead Guilty to Wire Fraud and Tax ChargesRead the Press Release
Pickens County Sheriff to Plead Guilty to Wire Fraud and Tax Charges
BIRMINGHAM – Today a federal indictment was unsealed against the longstanding sheriff of Pickens County for wire fraud and filing false tax returns, announced U.S. Attorney Jay E. Town, FBI Special Agent in Charge Johnnie Sharp, Jr. and IRS-Criminal Investigation Special Agent in Charge Thomas J. Holloman. Also today, a plea agreement was filed in federal district court. According to that agreement, the defendant has agreed to plead guilty to one count of wire fraud and one count of filing a false tax return.
The nine-count indictment filed in U.S. District Court charges Pickens County Sheriff DAVID EUGENE ABSTON, of Gordo, with seven counts of wire fraud and two counts of filing a false tax return.
“A sitting county sheriff is alleged to have defrauded a food bank and a church for his personal gain at the expense of the underprivileged that the food bank serves,” Town said. “Our office will continue to aggressively pursue and prosecute public officials who violate the public trust for their own personal gain.”
“No matter what your career or position is within our communities, all U.S. citizens are obligated to comply with the tax laws,” said Holloman. “Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets as well as skirt their tax obligations.”
According to the indictment, as sheriff of Pickens County, Abston was responsible for the care and custody of prisoners housed in the Pickens County Jail. That responsibility included feeding inmates housed in the jail. In exchange, Abston was entitled to receive a specified food allowance per prisoner per day from the state of Alabama and other governmental entities. Between 2014 and 2018, Abston received more than $400,000 in food allowance money from the state of Alabama and other governmental entities. During that same period, Abston—like many sheriffs in Alabama—had a practice of keeping for himself any food allowance money that he did not spend to feed inmates.
During that same period Abston engaged in a scheme to defraud the West Alabama Food Bank, as well the Highland Baptist Church of Gordo, Alabama—where Abston was a member—in order to reduce his jail food expenses and increase the amount of food allowance money he could keep.
The West Alabama Food Bank (WAFB) is a non-profit based in Tuscaloosa, Alabama, with the stated mission of helping to alleviate hunger and food insecurity in nine West Alabama counties. WAFB collects donations of food and distributes that food to partner agencies such as churches, soup kitchens, and food pantries. To become a partner agency with WAFB, a church must submit an application stating, among other things, that the church will distribute food in compliance with WAFB policy. The criteria for a church’s partnering with WAFB include a requirement that the church use the food it receives solely to serve the ill, needy, or infants. In turn, WAFB provides food to its partner agencies for a nominal fee to help cover the costs of food maintenance and storage.
According to the indictment, in 2014 Abston convinced Highland Baptist Church in Gordo, Alabama, to permit him to open a bank account to be used for a church food pantry with WAFB. Abston opened that bank account, in the name of the Highland Baptist Church Food Pantry. Abston was the sole signatory on the account.
Around the same time, Abston applied, on behalf of the Highland Baptist Church Food Pantry, to become a partner agency of WAFB. The application to WAFB claimed that the “general program” of the church food pantry would be to help “feed poor” and “children from disadvantage[d] and poor neighborhoods.” The application claimed that the food pantry would use unemployment, sickness, and poverty as eligibility guidelines for food. The application said nothing about the food pantry’s providing any food to inmates in the Pickens County Jail.
Between 2014 and 2018, Abston wrote more than $80,000 in checks from his own bank account to the church food pantry bank account, and wrote more than $80,000 in checks from the food pantry bank account to WAFB in exchange for food.
According to the indictment, Abston used a significant portion of that food to feed inmates in the Pickens County Jail.
The indictment also alleges that Abston filed false tax returns for the 2015 and 2016 tax years, because he failed to report all of his income for those years.
Each count of wire fraud carries a maximum penalty of 20 years and a fine of up to $250,000. The maximum penalty for filing a false tax return is three years in prison and a $100,000 fine for each count.
The Federal Bureau of Investigation and Internal Revenue Service investigated the case, which Assistant U.S. Attorney John B. Ward is prosecuting.
An indictment contains only charges and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
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Convicted Felons Indicted for Illegal Firearms PossessionRead the Press Release
BIRMINGHAM – An effort focused on domestic violence in gun crimes resulted in federal charges against five defendants, announced U.S. Attorney Jay E. Town, Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Marcus Watson.
In separate and unrelated indictments, the grand jury charged LYNN GADSON, NICHOLAS CAMPBELL, KERRY ALFORD, KELVIN STRICKLAND, MONTEZ SPRADLEY, ANDRAE CROOK, as convicted felons in possession of firearms. These investigations originated from local law enforcement responding to domestic violence calls.
The maximum penalty for being a felon in possession of a firearm is 10 years in prison and a $250,000 fine.
“These indictments represent the hard work of our federal, state and local law enforcement partners,” Town said. “This is the new normal in that local investigators and prosecutors are cooperating with federal law enforcement more than ever before to get these trigger-pullers off of the streets. Felons who possess firearms should expect to find themselves in federal court where, upon conviction, a federal sentence to a federal penitentiary is their reward.”
“ATF’s priority of reducing violent crime focuses on individuals responsible for domestic violence incidents involving firearms,” Watson stated.
In FY18, the United States Attorney’s Office Northern District of Alabama prosecutions of illegal firearms cases rose 27% to 286, which is the largest number of illegal firearms prosecutions ever recorded in the Northern District of Alabama and accounted for about half of all federal prosecutions by the United States Attorney’s Office. The previous high was 225, which was recorded in FY17. Nationally, the prosecution of illegal firearms defendants accounts for approximately 1 in 6 of all federal prosecutions. Project Safe Neighborhoods, the premier violent crimes reduction program reinvigorated by the Department of Justice in 2017, has continued to focus on habitual felony offenders engaged in violent behavior and the Department continues to break its own records for federal prosecutions as a result.
DeKalb County Man Arrested for Failure to Register in the State of Alabama as Sex OffenderRead the Press Release
BIRMINGHAM – A DeKalb County man was arrested for a violation of the Sex Offender Registration and Notification Act announced U.S. Attorney Jay E. Town and U.S. Marshal Martin Keely.
A criminal complaint filed in the U.S. District Court charges JASON WIENK, 45, with failure to register or update registration in violation of the Sex Offender Registration and Notification Act (SORNA). Wienk was convicted of predatory criminal sexual assault of a child in the Circuit Court of Winnebago County, Illinois. Such criminal conviction requires Wienk to register as a sex offender for life. Wienk moved across state lines to Alabama and did not register as a sex offender. Wienk will be detained and held in federal custody pending disposition of this case.
“Sexual assault of an innocent child is despicable,” Town said. “U.S. Marshals proved in this case that sex offenders who flee to another state, and violate the law by not registering as a sex offender in that state, will be caught. Our net will always be bigger than their map. We appreciate the investigative work of the U.S. Marshals Service in Alabama and Illinois, and our partnership with the DeKalb County Sheriff’s Office, in this investigation.”
Under the Adam Walsh Child Protection and Safety Act of 2006, if a convicted sex offender travels to another state and fails to register as required by law, he/she is subject to federal prosecution that carries penalties of a fine and/or imprisonment for up to 10 years.
U.S. Marshals Service for the Northern District of Alabama and Northern District of Illinois along with DeKalb County Sheriff’s Office investigated the case. Assistant U.S. Attorney R. Leann White is prosecuting the case.
A criminal complaint contains only charges. A defendant is presumed innocent unless and until proven guilty.
Vestavia Hills Doctor Indicted on Charges of Producing and Possessing Child PornographyRead the Press Release
BIRMINGHAM – Federal authorities on Tuesday arrested a Birmingham-area doctor for producing and possessing child pornography, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp, Jr.
A two-count indictment filed in U.S. District Court last week charges DR. RONALD TAI YOUNG MOON, JR., of Vestavia Hills, with one count of production of child pornography and one count of possession of child pornography. Moon is a physical medicine doctor who practices at a clinic called The Industrial Athlete located in Birmingham. Moon is charged with producing child pornography sometime between 2007 and 2010. Moon is charged with possessing child pornography on or about January 15 of this year.
Producing child pornography carries a penalty of 15 to 30 years in prison, and a maximum $250,000 fine. The maximum penalty for possessing child pornography is 20 years in prison and a $250,000 fine.
The Federal Bureau of Investigation investigated the case, which Assistant U.S. Attorney John B. Ward and First Assistant U.S. Attorney Lloyd C. Peeples, III are prosecuting.
An indictment contains only charges and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
U.S. Attorney Jay E. Town Announces Support to Anniston and Oxford, Alabama as Part of the National Public Safety Partnership to Combat Violent CrimeRead the Press Release
BIRMINGHAM– As the Department of Justice continues its efforts to fulfill President Donald J. Trump’s commitment to reducing violent crime in America, Attorney General William P. Barr today announced that the Northern District of Alabama was selected to join the National Public Safety Partnership (PSP) initiative. PSP provides a framework for enhancing federal support of state, local and tribal law enforcement officials and prosecutors as they aggressively investigate and pursue violent criminals, specifically those involved in gun crime, drug trafficking and gang violence.
“The Public Safety Partnership is a successful program that directs federal law enforcement resources to the cities where they can have the greatest impact," Attorney General Barr said. "These resources help police departments to diagnose where crime is highest—and why—and to find, arrest and prosecute criminals. Several participating cities have already seen dramatic reductions in violent crime over the past two years. As we expand this program to 10 more cities across America, we are determined to replicate that success.”
“The Public Safety Partnership provides data-driven resources to assist law enforcement in removing the habitual offenders from the southeast side of the Northern District,” Town said. “Our collective goal is simply to reduce crime, especially violent crime, in Anniston, Oxford, and surrounding areas. My office, local and federal law enforcement, and the Department of Justice are fully committed to facilitating the strategies, training, and technical assistance to do just that. We have prison beds already reserved for the alpha criminals in Calhoun County…and we are coming.”
The Justice Department created PSP and the Task Force on Crime Reduction and Public Safety in response to President Trump’s February 9, 2017, Executive Order charging the agency with leading a national effort to combat violent crime. In June 2017, the Department of Justice announced the formation of the National Public Safety Partnership initiative.
To be considered for selection, a site must have sustained levels of violence that far exceed the national average and demonstrate a commitment to reducing crime. Cities must also display compliance with federal immigration requirements.
The 10 sites announced today are as follows:
- Anniston, Alabama
- Oxford, Alabama
- Anchorage, Alaska
- Davenport, Iowa
- Wichita, Kansas
- Baton Rouge, Louisiana
- Baltimore, Maryland
- Cleveland, Ohio
- Amarillo, Texas
- Harris County, Texas
More than 30 cities have participated in PSP. The primary participating Justice Department components include the Office of Justice Programs, Office on Violence Against Women, Office of Community Oriented Policing Services, Bureau of Alcohol, Tobacco, Firearms and Explosives, FBI, U.S. Drug Enforcement Administration and U.S. Marshals Service.
More information about PSP can be found at: http://www.nationalpublicsafetypartnership.org
Seminole Drug Dealer Sentenced to 31+ Years in Federal PrisonRead the Press Release
A long-time Seminole, Texas drug dealer was sentenced today to 31 years and 10 months in federal prison, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.
Following a three-day trial in early January, a federal jury in Lubbock unanimously convicted Robert Bazan, 45, of two methamphetamine offenses and four firearm offenses, including possession of firearms in furtherance of a drug trafficking crime.
“The Defendant was a violent man who endangered both law enforcement officers and everyday citizens across the South Plains,” said U.S. Attorney Nealy Cox. “The community will be relieved to hear he will no longer be a danger to this region.”
“Six previous felony convictions did not deter Mr. Bazan from engaging in the illegal drug and gun trade. High-speed flight to avoid apprehension and witness tampering show he is a threat to the public at large and any individual that might witness or hinder his criminal activity,” stated ATF Special Agent in Charge of the Dallas Field Division Jeffrey C. Boshek II. “When ATF says we investigate the worst of the worst, we are talking about Mr. Bazan.”
According to evidence presented at trial, in April 2018, Mr. Bazan – a six-time convicted felon – unlawfully sold an AR-style pistol and methamphetamine to a confidential informant.
Less than four months later, in July 2018, Mr. Bazan led deputies with Gaines County, Texas, and Lea County, New Mexico, on a high speed pursuit following a traffic stop near the Texas/ New Mexico border. During the pursuit, which reached speeds of over 95 miles per hour, Bazan attempted to discard two handguns and approximately 413 grams of methamphetamine.
Local law enforcement officers pursued the defendant at high speeds until Bazan began shooting at them. Later that day, officers recovered two handguns and methamphetamine from the side of the roadway. At trial, an officer testified that during his decade-plus career, he had never recovered such a large amount of methamphetamine from a defendant.
Mr. Bazan worked unsuccessfully to block prosecution. Upon indictment, he attempted to intimidate a cooperating witness. At trial, the jury heard a recorded jail telephone call in which Bazan ordered the publication of the name of the witness in order to influence her testimony.
Agents with the Bureau of Alcohol, Tobacco, Firearms & Explosives and the United States Drug Enforcement Administration conducted the investigation with the assistance of the Lubbock Police Department and the Gaines, Lea, and Lubbock County Sheriff’s Offices. U.S. District Court Judge Sam R. Cummings presided over the trial. Assistant U.S. Attorneys Ann Howey, Stephen Rancourt and Jeff Haag prosecuted the case.
Darknet Fentanyl Dealer Indicted in Nationwide Undercover Operation Targeting Darknet Vendors Who were Selling to Thousands of U.S. ResidentsRead the Press Release
Yesterday, the U.S. Attorney for the Northern District of Texas announced the indictment of a darknet drug dealer who has been indicted for leveraging Bitcoin’s apparent anonymity to sell fentanyl online. The charges against him are the result of the first nationwide undercover operation targeting darknet vendors that the Justice Department announced in June 2018.
Sean Shaughnessy, 51, of the Dallas Fort Worth, Texas area, was charged by federal grand jury with conspiracy to possess with intent to distribute controlled substances, distribution of a controlled substance, distribution of a controlled substance analogue and eight counts of money laundering.
According to the indictment, which was unsealed on May 24 following the defendant’s initial appearance, Mr. Shaughnessy allegedly sold fentanyl and fentanyl analogues over the dark web, an unindexed portion of the internet accessible only via specialized software that allows users to conduct transactions with relative anonymity. His buyers purchased the fentanyl and fentanyl analogues, which was shipped to their addresses, using cryptocurrencies like Bitcoin, the indictment alleges. One user, who allegedly purchased a fentanyl analogue from Mr. Shaughnessy, overdosed on the substance and died. Mr. Shaughnessy allegedly transferred his Bitcoin proceeds to other cryptocurrency wallets in exchange for regular fiat currency, which was shipped to his home in Dallas. Unbeknownst to Mr. Shaughnessy, he sent more than $120,000 bitcoin to wallet addresses controlled by federal agents. Yesterday, he was ordered to remain in federal custody. The charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The investigation into Sean Shaughnessy was part of Operation Dark Gold, a year-long, coordinated national operation that used the first nationwide undercover action to target vendors of illicit goods on the darknet. Special agents of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) New York Field Office posed as a money launderer on darknet market sites, exchanging U.S. currency for virtual currency. Through this operation, HSI New York was able to identify numerous vendors of illicit goods, leading to the opening of more than 90 active cases around the country, including the investigation into Mr. Shaughnessy in the Northern District of Texas.
The Money Laundering and Asset Recovery Section (MLARS) of the Department of Justice’s Criminal Division, coordinated with law enforcement and federal prosecutors from more than 50 U.S. Attorney’s Offices to investigate 65 targets identified by the undercover operation, which led to the arrest and impending prosecution of more than 30 darknet vendors.
One year after 70 search warrants were executed in May 2018, numerous opioid and narcotics distributors have been charged and convicted around the country. Those include:
- Brian Gutierrez-Villasenor, 27, of San Francisco, California, was sentenced recently to serve 120 months in prison for possessing with the intent to distribute methamphetamine and transporting funds to promote unlawful activity. Gutierrez-Villasenor was charged by the U.S. Attorney’s Office for the Northern District of California. According to his guilty plea, between 2014 and May of 2018, Gutierrez-Villasenor distributed cocaine and methamphetamine for a darknet vendor site called “JetSetLife.” In addition to the prison term, Gutierrez-Villasenor was ordered to pay a $40,000 fine and to serve an additional five-year term of supervised release to begin after his prison term. Gutierrez-Villasenor has been in custody since his arrest on May 17, 2018, and is serving his prison sentence.
- John Edward Monette, 50, of Sioux Falls, South Dakota, was sentenced to serve five years in prison, followed by three years of supervised release. Monette was convicted of conspiracy to distribute a controlled substance on Nov. 15, 2018. On April 25, 2018, a federal search warrant was executed on Monette’s residence as part of Operation Dark Gold. Law enforcement officers seized approximately 838 grams of MDMA, numerous ecstasy pills, approximately 69 grams of cocaine, drug packaging, scales, shipping materials, computers, cell phones and a rifle. Also seized were 3.3882104 bitcoin (approximate value $32,464.38) from a Mycelium wallet on Monette’s cell phone. Monette had been buying MDMA and other controlled substances from sellers in Europe and elsewhere via the dark web. He used Bitcoin to pay his suppliers, and received the drugs via mail. He also used the mail to deliver drugs to his customers.
- Ryan Farace, 34, of Reisterstown, Maryland, and Robert Swain, 34, of Freeland, Maryland, were charged by the U.S Attorney’s Office for the District of Maryland. Farace was sentenced to serve 57 months in prison, followed by three years of supervised release, for drug distribution and money laundering conspiracies. The charges arose from a scheme to manufacture and distribute Alprazolam, or “Xanax,” through sales on the darknet in exchange for Bitcoin. Farace and his co-conspirator, Robert Swain, laundered the drug proceeds through financial transactions designed to conceal the source and ownership of the illegal funds. Farace was ordered to forfeit a money judgment equal to $5,665,000 and 4,000 bitcoin (currently worth approximately $3.2 million). Farace was also ordered to forfeit assets seized by law enforcement during the execution of search warrants in 2018, at locations associated with the conspiracies, including approximately $1.5 million in cash, 1.100 bitcoin and approximately $2.5 million in computer equipment. Robert Swain previously pleaded guilty to the money laundering conspiracy and faces a maximum statutory sentence of 20 years in prison at his sentencing on June 18.
- Tyler Lee Ward, 35, of Moody, Alabama, and Henry Long Nguyen, 33, of Birmingham, Alabama, pleaded guilty in the Northern District of Alabama to three counts including conspiracy to manufacture, distribute, and possess with intent to distribute Alprazolam; maintaining a drug-involved premises; and conspiracy to commit money laundering. Ward was sentenced to serve 24 months in prison and Nguyen was sentenced to serve 30 months in prison. Both Ward and Nguyen were ordered to forfeit numerous assets, including more than $200,000 in cryptocurrency. Joseph William Davis 26, of Madison, Alabama, pleaded guilty to conspiracy to distribute Alprazolam and was sentenced to serve 126 months in prison.
- Sam Bent, 32, of St. Johnsbury, Vermont (and formerly of East Burke, Vermont), and his cousin, Djeneba Bent, 26, also of St. Johnsbury (and formerly East Burke) were both charged by the U.S. Attorney’s Office for the District of Vermont. They both pleaded guilty to conspiracy to distribute controlled substances. Sam Bent also pleaded guilty to three counts of money laundering and agreed to a forfeiture money judgment. As part of his plea agreement, Sam Bent admitted that he set up accounts on dark web marketplaces, established online identities, accepted Bitcoin in exchange for sales over the dark web, and mailed controlled substances from several different post offices in Northeastern Vermont and Northwestern New Hampshire in an effort to avoid detection. Their sentencings are currently scheduled for July 2019.
- Kyle Lindemann, 31, of Birmingham, Michigan, was charged by the U.S. Attorney’s Office for the Eastern District of Michigan, and pleaded guilty to one count of possession with intent to distribute MDMA. As part of his plea, Lindemann admitted that he had managed a vendor account on the darknet marketplace known as “Dream Market,” on which he sold Alprazolam (Xanax), Adderall, Ecstasy (MDMA), and GHB. Lindemann also agreed to the forfeiture of 4.430550289998 Monero and 39.17488 MilliBitcoin that were seized during Operation Dark Gold, in May 2018.
The investigations are pending.
- Brian Gutierrez-Villasenor, 27, of San Francisco, California, was sentenced recently to serve 120 months in prison for possessing with the intent to distribute methamphetamine and transporting funds to promote unlawful activity. Gutierrez-Villasenor was charged by the U.S. Attorney’s Office for the Northern District of California. According to his guilty plea, between 2014 and May of 2018, Gutierrez-Villasenor distributed cocaine and methamphetamine for a darknet vendor site called “JetSetLife.” In addition to the prison term, Gutierrez-Villasenor was ordered to pay a $40,000 fine and to serve an additional five-year term of supervised release to begin after his prison term. Gutierrez-Villasenor has been in custody since his arrest on May 17, 2018, and is serving his prison sentence.
Two Men Indicted for False Invoice Scheme Against Birmingham Water Works BoardRead the Press Release
BIRMINGHAM – A federal grand jury today indicted two men on charges of wire fraud and conspiracy to commit wire fraud, announced U.S. Attorney Jay E. Town and Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp Jr.
A 21-count indictment filed in U.S. District Court charges JERRY JONES, 55, of Maylene, and TERRY WILLIAMS, 54, of Mt. Vernon, with conspiring between December 2014 and January 2016 to create false invoices and submitting them for payment to the Birmingham Water Works Board (BWWB) for work purportedly performed on the Shades Mountain Filter Plant project.
“These defendants demonstrated a callous disregard for the citizens of Birmingham by stealing money meant to improve the Birmingham Water Works Board’s operations,” Town said. “Their breach of the special trust given to them makes their thievery even more intolerable. We appreciate the investigative work of the FBI, and our partnership with the Alabama Attorney General’s Office, in this investigation.”
According to the indictment, Jerry Jones was an Arcadis Vice-President and the Principal-in-Charge for Arcadis on the Shades Mountain Filter Plant project. Arcadis U.S., Inc., was an engineering and consulting firm with offices located throughout the United States, including Birmingham, Alabama. Arcadis entered into contracts with the BWWB to perform work on several projects, including design and bid phase services on a project involving improvements to the Shades Mountain Filter Plant.
Terry Williams owned a company in Mobile, Alabama, called Global Systems International, LLC (GSI). Arcadis entered into sub-contracts with GSI for work on certain BWWB projects for Arcadis. Terry Williams hired an individual to perform that work. Arcadis paid GSI by direct deposit into GSI’s bank account based on invoices submitted to Arcadis.
Each month, Arcadis submitted a report and invoice to the BWWB by email that summarized work by Arcadis and its sub-contractors on the BWWB projects. Arcadis included on the invoices amounts owed by Arcadis to sub-contractors. Per the terms of its contract with Arcadis, the BWWB was required to pay Arcadis a 10 percent premium over and above the amount charged by Arcadis’ sub-contractors.
As part of the conspiracy, Jones and Williams created nine GSI invoices falsely stating that during certain periods of time GSI employees had performed work for a certain number of hours on the Shades Mountain Filter Plant project. Jones sent emails to Arcadis employees to facilitate processing and payment of the false GSI invoices. Jones would then submit invoices to the BWWB that included the amounts reflected on the false GSI invoices, plus the 10 percent premium payment.
According to the indictment, BWWB paid Arcadis a total amount of $255,300.10, of that amount GSI received $232,091.00.
As part of the conspiracy, Williams shared the proceeds of the false invoice scheme with Jones.
The maximum penalty for the conspiracy charge is five years in prison and a $250,000 fine. The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine.
FBI investigated the case, which Assistant United States Attorneys George Martin and Catherine Long are prosecuting.
Alabama Husband and Wife Business Owners Plead Guilty to Payroll Tax FraudRead the Press Release
A Crane Hill couple pleaded guilty yesterday in the U.S. District Court for the Northern District of Alabama to failing to pay over employment taxes to the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Jay E. Town for the Northern District of Alabama.
According to court documents, Walter Michael Williams and Amy Butler Williams operated Dixie Steel Erectors (DSE), a commercial construction business in Hanceville, Alabama. Mr. Williams, president and owner of DSE, and Ms. Williams, bookkeeper and office manager of DSE, were responsible for withholding and paying over DSE’s payroll taxes. During 2012 and 2013, the couple withheld payroll taxes from the pay of DSE’s employees, but willfully failed to pay over the withheld amounts to the Internal Revenue Service (IRS). During the same period, the couple caused DSE to make thousands of dollars of expenditures for their personal benefit. The couple’s employment tax fraud caused a loss of approximately $503,000 to the IRS.
In addition, Mr. Williams has not filed personal income tax returns with the IRS since 2009.
Ms. Williams has not filed such returns since 2013.
Sentencing is scheduled for Sept. 23, 2019. Mr. and Ms. Williams each face a maximum sentence of five years in prison, as well as a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Town commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorney Allison Garnett and Assistant United States Attorney Melissa Atwood, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
U.S. Attorney Jay E. Town Recognizes Police WeekRead the Press Release
BIRMINGHAM — U.S. Attorney Jay E. Town recognized the service and sacrifice of federal, state, local, and tribal police officers on the occasion of National Police Week, which is being observed Sunday, May 12 to Saturday, May 18, 2019.
In October 1962, Congress enacted a joint resolution, which the President signed, declaring May 15th as National Peace Officers Memorial Day to honor law enforcement officers killed or disabled in the line of duty. The resolution also created National Police Week as an annual tribute to law enforcement service and sacrifice.
“During Police Week, our nation celebrates the contributions of police officers from around the country, and especially in the Northern District of Alabama, by recognizing their hard work, dedication, loyalty and commitment in keeping our communities safe. As the United States Attorney for the Northern District of Alabama, I want to acknowledge the work performed by our federal, state, local, and tribal law enforcement, and the decision made to protect and serve knowing that at any moment they could find themselves facing dangerous situations. We must never forget the families of these brave men and women, you have our respect and support. This week let us all take time to recognize the sacrifices of every member of law enforcement, especially those fallen officers who gave their lives in the line of duty.”
According to statistics reported to the FBI, 106 law enforcement officers were killed in line-of-duty incidents in 2018.
Comprehensive data tables about these incidents and brief narratives describing the fatal attacks are included in the sections of Law Enforcement Officers Killed and Assaulted, 2018 https://ucr.fbi.gov/leoka/2018/ released this week by the FBI.
The names of all 106 fallen officers nationwide were formally dedicated on the National Law Enforcement Officers Memorial in Washington, DC, during the 31st Annual Candlelight Vigil on the evening of May 13, 2019.
The Candlelight Vigil is one of many commemorative events taking place in the nation’s capital during National Police Week 2019.
For more information about other National Police Week events, please visit www.policeweek.org.
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29 Defendants Taken Off the Streets of North AlabamaRead the Press Release
BIRMINGHAM – An effort focused on reducing violent crime in North Alabama resulted in federal charges against 29 defendants, announced U.S. Attorney Jay E. Town, Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Marcus Watson.
The U.S. Attorney’s Office and ATF joined with the Madison County Sheriff’s Office, Huntsville Police Department, City of Madison Police Department, Madison County District Attorney’s Office, Marshall County Sheriff’s Office, Marshall County District Attorney’s Office, Guntersville Police Department, DeKalb County Sheriff’s Office, DeKalb County District Attorney’s Office, Morgan County Sheriff’s Office and Jackson County Sheriff’s Office in an intense effort to charge violent offenders and take guns off the streets.
“Violent crime and violent criminals, especially our worst offenders, continue to be our highest priority for prosecution,” Town said. “It is my judgment that the law abiding public deserves the continued best efforts and partnerships of law enforcement to rid our streets of these violent criminals, these repeat offenders, and these trigger-pullers. Once convicted, these habitual felons will be rewarded with neatly tucked bedding awaiting them in a state or federal penitentiary. Our communities are safer due to the relentless and tireless work of the ATF and so many other of our local, state, and federal partners.”
The majority of the defendants charged are violent offenders. Below are some of the noteworthy investigations.
Roger Johnson: A pipe bomb detonated in the vicinity of a Jackson County Deputy and Johnson’s mother in relation to a civil dispute. Luckily, no injuries were sustained.
Daniel Steele: Agents recovered numerous unregistered machine guns, to include a Colt belt-fed .50 caliber machine gun, smoke grenades and templates for Glock conversion devices from Steele. Steele had no prior criminal history and was not on anyone’s radar.
Barry Williams, Melvin Rolin, Marcus Kyle and Britney Black: Members of the Froggy Drug Trafficking Organization (DTO). In an interview with ATF, Rolin stated he was responsible for distributing at least 200 kilograms of methamphetamine in North Alabama within a two-year period, as the head of the DTO. Numerous firearms were recovered from the DTO, to include a converted AK-47 machine gun that ATF seized in Tennessee.
Victor Ortiz-Castillo: Illegal alien in possession of a firearm after he was involved in a shooting at a residence in Huntsville.
Rex Tidmore: He is a prior felon who had numerous firearms, an underground marijuana grow, and an outside marijuana grow. He was indicted for felon in possession, possession of a firearm in furtherance of a drug trafficking crime, and possession with intent to distribute a controlled substance.
In FY18, the United States Attorney’s Office Northern District of Alabama prosecutions of illegal firearms cases rose 27% to 286, which is the largest number of illegal firearms prosecutions ever recorded in the Northern District of Alabama and accounted for about half of all federal prosecutions by the United States Attorney’s Office. The previous high was 225, which was recorded in FY17. Nationally, the prosecution of illegal firearms defendants accounts for approximately 1 in 6 of all federal prosecutions. Project Safe Neighborhoods, the premier violent crimes reduction program reinvigorated by the Department of Justice in 2017, has continued to focus on habitual felony offenders engaged in violent behavior and the Department continues to break its own records for federal prosecutions as a result.
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Vestavia Hills Cardiologist Sentenced to 87 Months in Prison for Illegally Prescribing OpioidsRead the Press Release
BIRMINGHAM – A federal judge on Wednesday sentenced a physician to 87 months in prison for illegally prescribing opioid painkillers, announced United States Attorney Jay E. Town, Drug Enforcement Administration-Birmingham Assistant Special Agent in Charge Clay Morris and Internal Revenue Service-Criminal Investigation Special Agent in Charge Thomas J. Holloman.
United States District Judge L. Scott Coogler sentenced STEVEN BRUCE HEFTER, 61, of Vestavia Hills, to 87 months in prison, to be followed by three years of supervised release and was directed to forfeit more than $38,000. Hefter must report to the Bureau of Prisons on June 30th.
Hefter pled guilty in December 2017 to one count of conspiracy to distribute controlled substances outside the usual scope of professional practice and not for a legitimate medical purpose. The charge arose from Hefter’s involvement between 2012 and 2016 with the now defunct clinic Cindy Dunn & Dr. Buckingham, M.D., Weight Loss Clinic and Pain Management (CDPM) in Moody, Alabama.
“The opioid crisis in the United States accounts for the overdose deaths of tens of thousands of Americans every year,” Town said. “This sentence puts on notice any medical provider that justice will find you, from the street corner to the clinic. There is no hiding behind the white coat or white shoes. You will be caught, you will be prosecuted and you will occupy a federal prison bed. We will even leave the light on for you.”
“Today’s sentence should serve as a warning to any medical professional considering exploiting their patients for profit: you will be caught, you will be prosecuted, and you will pay a steep price,” said Thomas J. Holloman, Special Agent in Charge IRS Criminal Investigation, Atlanta Field Office. “IRS-CI remains committed to working with our law enforcement partners to bring those seeking to enrich themselves at the expense of their patients, to justice.”
“As always, DEA stands ready to protect our citizens, families and often time our children from the devastating effects from the criminal diversion of opioid based drugs.” Morris said. “We will not allow physicians who have abandoned their Hippocratic oath to continue to poison our communities. The DEA and our law enforcement partners will continue to aggressively investigate those who choose profit over patient care.”
In early 2018, Hefter surrendered his Alabama medical license and his federal Drug Enforcement Administration registration authorizing him to prescribe controlled substances.
Hefter was a cardiologist by training, with no specialization in pain management. Nevertheless, he worked for CDPM as a pain management physician. CDPM was a pill mill. The cash-only clinic received anywhere from 40 to 80 patients in a single day. The primary method for treating pain was by writing multiple prescriptions for high doses of potent and addictive opioids, usually oxycodone, for months and years without offering any other modes of treatment. According to Alabama’s Prescription Drug Monitoring Program, which tracks the dispensing of controlled substances, during the span of approximately four months in late 2015, Hefter wrote 2,785 prescriptions for 279,665 opioid pills. The vast majority of Hefter’s prescriptions were pre-signed and issued to patients while Hefter was absent from CDPM. CDPM patients were rarely, if ever, examined properly. CDPM didn’t even have a patient examination table. Many patients were either drug addicts or were diverting their pills to the street.
“This sentence should serve as a warning to unscrupulous doctors who abuse their prescribing authority and put lives at risk for financial gain, said Assistant United States Attorney Mohammad Khatib, “You are not above the law, and when you are caught, justice awaits.”
This case was a multi-agency investigation by the DEA and IRS-Criminal Investigation as part of an Organized Crime Drug Enforcement Task Force operation. Assistant United States Attorney Mohammad Khatib prosecuted the case.
Ten, including Pharmacy Owners, Pharmacist, and Nurse Practitioner, Charged in over $200 Million Prescription Drug FraudRead the Press Release
BIRMINGHAM – Ten defendants were charged in a 103-count indictment, including a nurse practitioner, and the owners, a pharmacist, managers, sales representatives, and billers, of a Haleyville, Ala.-based pharmacy, Northside Pharmacy doing business as Global Compounding Pharmacy. The indictment charges them with fraudulently billing health care insurers and prescription drug administrators for over $200 million in prescription drugs. In one listed instance, the defendants’ fraudulent conduct caused a prescription plan administrator to pay over $29,000 for one tube of a cream advertised as treating “general wounds.”
U.S. Attorney Jay E. Town, Federal Bureau of Investigation Special Agent in Charge Johnnie Sharp, Jr., U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, Defense Criminal Investigative Service Special Agent in Charge John F. Khin, United States Postal Inspector in Charge, Houston Division Adrian Gonzalez, and Internal Revenue Service-Criminal Investigation Special Agent in Charge Thomas Holliman announced the charges.
The indictment filed in U.S. District Court charges the following individuals:
- John Jeremy Adams, 38, of Panama City Beach, Florida, an owner and president of Global, charged in 38 counts;
Adams was arrested on Wednesday and arraigned on Thursday in the Northern District of Florida.
- Ashley Adams, 36, of Santa Rosa Beach, Florida, director of HR for Global, charged in 10 counts;
- Jeffrey Black, 54, of Destin, Florida, an owner and vice president and COO of Global, charged in 18 counts;
- James A. Mays, III, 43, of Winfield, Alabama, a pharmacist at Global, charged in 20 counts;
- Jessica Linton, 36, of Clearwater, Florida, the manager of the billing team at Global, charged in 24 counts;
- Lisa Holmes, 40, of Troy, Alabama, a district manager supervising sales representatives at Global, charged in 12 counts;
- John Gladden, 49, of Tallahassee, Florida, a district manager supervising sales representatives at Global, charged in 9 counts;
- Christi Cunningham, aka Christi Mook, 34, of Crestview, Florida, a sales representative at Global, charged in 9 counts;
- Juan Rodriguez, 41, of Tampa, a biller at Global, charged in 6 counts; and
- Lori Dawn Edenfield, 45, of Marianna, Florida, a nurse practitioner, charged in 32 counts.
“Motivated by greed, the defendants executed a brazen health care fraud conspiracy and scheme that cost health insurance plans, including those that protect the elderly, disabled, military members and veterans, millions of dollars,” Town said. “Their scheme deprived health insurance plans of money that could have gone to assist patients with real medical needs. To date, this investigation has resulted in 28 people being charged. Would-be healthcare fraudsters should be on notice that our Office is dedicated to rooting out this conduct. We applaud the investigative agencies for their hard work.”
“The egregious corruption uncovered in this complex and wide-ranging fraud scheme wasted millions of dollars in American taxpayer funds, and furthermore, deprived U.S. military members and their families of legitimate prescription medications and other needed medical care,” said John F. Khin, Special Agent in Charge, DCIS-Southeast Field Office. “Through our aggressive investigative efforts with our partner agencies, DCIS helped stop this shameful abuse of one of DoD’s most critical programs.”
“Healthcare Fraud continues to impact the cost of healthcare in America and is amplified when trusted professionals abandon their ethical code in the name of greed. These unethical practices are damaging the lives of individuals and families throughout this country,” said Thomas J. Holloman, Special Agent in Charge for IRS Criminal Investigation. “IRS CI will continue to work closely with our law enforcement partners in an effort to prosecute those abusing our healthcare system for profit.”
“This audacious multimillion-dollar fraud scheme posed a significant threat to the integrity of government healthcare programs at the expense of taxpayers,” said Special Agent in Charge Derrick L. Jackson of the HHS Office of Inspector General. “Working closely with our law enforcement partners, our agency will continue to protect Medicare and Medicaid from such costly scams.”
“In addition to undermining public health and safety, health care fraud cheats Americans out of more than eighty billion dollars a year in higher premiums and increased out-of-pocket expenses,” said Adrian Gonzales, Postal Inspector in Charge, Houston Division. “The United States Postal Inspection Service is committed to investigations with our law enforcement partners whenever health care fraudsters try to involve the U.S. Mail in their nefarious schemes, as in this case against Northside Pharmacy of Haleyville, Alabama, doing business as Global Compounding Pharmacy.”
“Pursuing those who perpetrate fraud against VA programs and operations is a priority for VA OIG,” said Veteran Affairs Office of Inspector General Criminal Investigations Division Special Agent in Charge David Spilker. “We will continue to work with our law enforcement partners to ensure the integrity of VA programs designed to help our nation’s veterans and their families.”
According to the indictment, Global, which described itself as “one of the top three largest compounding pharmacies in the United States,” primarily shipped compounded and other drugs from its Haleyville facility, but did most of its prescription processing, billing and customer service at its “call center” in Clearwater, Fla. The company hired sales representatives who were located in various states and were responsible for generating prescriptions from physicians and other prescribers. The company also worked with affiliated pharmacies.
The indictment describes a multi-faceted health care fraud and mail fraud conspiracy and scheme in which the defendants billed for medically unnecessary drugs. Aspects of the scheme included paying prescribers to issue prescriptions; directing employees to get medically unnecessary drugs for themselves, family members, and friends, to be filled and billed by Global and other related pharmacies; altering prescriptions to add non-prescribed drugs including controlled substances such as Tramadol and Ketamine; automatically refilling prescriptions—often as many as 12 times—regardless of patient need; routinely waiving and discounting co-pays to induce patients to obtain and retain medically unnecessary drugs; and billing for drugs without patients’ knowledge and hiding that conduct from patients by mailing the drugs to J. Adams’ home. According to the indictment, when prescription drug administrators attempted to police this fraudulent conduct, the defendants evaded and obstructed those efforts, including by providing false information in response to audits and diverting their billing through affiliated pharmacies. In executing the scheme, the defendants billed health insurance plans and their prescription plan administrators over $200 million and were paid over $50 million.
The indictment states that the defendants targeted multiple health insurance plans, including Global’s, Blue Cross Blue Shield of Alabama, and plans providing health insurance to the elderly, disabled, members of the military, and veterans—Medicare, TRICARE, and CHAMPVA, among others. In addition, the defendants targeted the health insurance plans of Medtronic, a medical device company, and Novartis Pharmaceuticals Corp., pharmaceutical company, both known by some of the defendants to have high-reimbursing health insurance. According to the indictment, Adams and Black would hire individuals known to be on Medtronic and Novartis’s health insurance plans, and direct them to get prescriptions for medically unnecessary drugs for themselves, family members, and friends, and then pay them a commission for these prescriptions.
Some of the conduct described in the indictment includes billing for female sex creams issued to male patients, billing for drugs issued to children that Global stated were contraindicated for use by children, and billing for drugs that patients did not need and therefore simply discarded in the trash.
The indictment also charges the defendants with aggravated identity theft, charges J. Adams, Black, and Edenfield with participating in a kickback conspiracy, and charges J. Adams, Black, and Mays with multiple counts of spending the proceeds of health care fraud and mail fraud. Purchases included for private plane travel and expensive watches.
The charges stem from a larger investigation that has to date resulted in 18 additional individuals being charged and signing plea agreements. Those individuals include Global Vice President of Sales Phillip Marks, Operations Manager Jeffrey South, District Manager Angie Nelson, National Field Trainer and sales representative Bridget McCune; sales representatives Bonita Amonett, Roddrick Boykin, Joshlyn Bowen, Erin Brown, Vanessa Case, Peter Eodice II, Jody Hobbs, Robin Lowry, Kelley Norris and Dawn Whitten; billers Fermin Alfonso, Stacey Cardozo, and Christopher Nunez; and a nurse practitioner, Brandy Lunsford.
The maximum penalty for healthcare and mail fraud conspiracy is 20 years in prison and a $250,000 fine. The maximum penalty for health care fraud is 10 years in prison and a $250,000 fine. The maximum penalty for mail fraud is 20 years and a $250,000 fine. The penalty for aggravated identity theft is a mandatory two years, to run consecutive to other counts. The maximum penalty for the kickback conspiracy charge is 5 years in prison and a $250,000 fine. The maximum penalty for spending proceeds of health care fraud and mail fraud is 10 years in prison and a $250,000 fine.
The FBI, HHS-OIG, DCIS, USPIS, IRS-CI, and a United States Attorney’s Office investigator investigated the cases, which Assistant U.S. Attorneys Chinelo Dike-Minor and Don Long are prosecuting. The Veteran Affairs Office of Inspector General Criminal Investigations Division provided assistance in the investigation.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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Seven People Arrested in Marijuana Trafficking ConspiracyRead the Press Release
BIRMINGHAM – Federal agents this week arrested seven people indicted in April on charges that they conspired to distribute marijuana, announced U.S. Attorney Jay E. Town and Alcohol, Tobacco and Firearms Special Agent in Charge Marcus Watson.
A 12-count superseding indictment charges Stephen Lamar Gadson, 38, Lynn Darnell Gadson, Jr., 32, Ryan Jamal Washington, 31, Keoni Keith Gaddy, 30, Erica Jacinda Gadson, 30, Cormisha Ketua Quinn, 24, and Janacia Latrice Thomas, 28, all from Birmingham, in a conspiracy to possess with the intent to distribute more than 100 kilograms of marijuana between January 2016 and late March 2019. The charges arise from an operation to bring large quantities of marijuana from California to Birmingham via commercial airline flights.
“These arrests are the result of a long-term investigation by our law enforcement partners,” Town said. “Guns and drugs are a volatile mix, as well as a problem for the Northern District of Alabama, which we will continue to do everything within our power to stop.”
“These indictments represent the long term enforcement efforts by ATF and area law enforcement,” Watson said. “As a result, the violent criminal acts that plaque our neighborhoods have been reduced.
The indictment includes one count charging Stephen Gadson, Lynn Gadson, Jr., Ryan Washington, Erica Gadson, and Cormesia Quinn with in a money laundering.
According to the indictment, Stephen Gadson, Lynn Gadson, Jr., and Ryan Washington also have individual federal firearm charges. Stephen Gadson is charged with possessing and discharging a firearm during a drug trafficking crime. Lynn Gadson, Jr. and Ryan Washington are charged with felon in possession of a firearm.
Stephen Gadson, who led the conspiracy, was indicted in February for being a felon in possession of a firearm. In January 2019, ATF agents and Jefferson County Sheriff's deputies found a gun in his car while arresting him on an outstanding state trafficking marijuana warrant from 2016. The state warrant arose from an incident where Gadson is alleged to have shot a Jefferson County Sherriff’s Deputy during a narcotics search warrant in June 2016. Three of Gadson's individual charges in the April 2019 federal indictment deal with Gadson's conduct during the 2016 arrest, including discharging a firearm during a drug trafficking crime, which has a mandatory minimum consecutive sentence of ten years in federal prison.
The mandatory minimum for possession with intent to distribute 100 kilograms of marijuana is five years in prison. The maximum penalty for money laundering is 20 years in prison. The minimum penalty for discharging a firearm during a drug trafficking crime is a 10 years in prison, which must be served consecutively to any other sentence imposed. The penalty for felon in possession of a firearm is a maximum of 10 years in prison and a $250,000 fine.
ATF investigated the case along with the Irondale Police Department, Jefferson County Sheriff’s Office, Birmingham Police Department, and Oxford Police Department. Assistant United States Attorney John Geer is prosecuting.
An indictment carries only charges. A defendant is presumed innocent unless and until proven guilty.
Birmingham Man Convicted of Trafficking Nearly Half a Kilogram of Deadly FentanylRead the Press Release
BIRMINGHAM – Yesterday a federal jury convicted a Birmingham man of possessing nearly half a kilogram of the highly addictive and extremely potent opioid fentanyl with the intent to distribute, announced U.S. Attorney Jay Town and Drug Enforcement Administration (DEA) Assistant Special Agent in Charge Clay Morris.
Following a two-day trial before U.S. District Judge R. David Proctor, the jury convicted BOB COTCHERY III, 28, of one count of possession with the intent to distribute over 400 grams of fentanyl.
According to the evidence at trial, on the evening of December 14, 2017, Birmingham police officers on routine patrol in the Norwood area of Birmingham attempted to stop COTCHERY for a traffic violation. Seeing police, COTCHERY bailed out of his moving car and fled. Officers gave chase into a dark alley where they saw COTCHERY crouch down near a car just before he was taken into custody. Under the car near where COTCHERY bent down, officers recovered a Ziploc plastic bag, which was later determined to contain 494 grams of fentanyl. COTCHERY, who has previous drug trafficking convictions, faces a minimum sentence of 10 years and a maximum sentence of life in prison for his crimes.
“Fentanyl is responsible for too many overdose deaths across Alabama and is something we wish we could uninvent”, Town said. “As Cotchery found out today, criminals that peddle poisonous opioids like this, from clinic to street corner, will continue to be targets for prosecution. We will even leave a light on for them in a federal prison cell.”
"Today’s guilty verdict should send a clear message to anyone involved in the distribution of synthetic opioids. The DEA and our law enforcement partners will work tirelessly to protect our communities, families, and children,” said Morris. “The distribution of any drug, especially fentanyl, will not be tolerated.”
The DEA investigated the case along with the Birmingham Police Department, which Assistant U.S. Attorneys Gregory R. Dimler and Mohammad Khatib prosecuted.
Federal Grand Jury Indicts Tuscaloosa Man Previously Convicted of Felony MurderRead the Press Release
BIRMINGHAM – A federal grand jury indicted a Tuscaloosa man for being a felon in possession of a firearm announced U.S. Attorney Jay E. Town and ATF Special Agent in Charge Marcus Watson.
A one-count indictment filed in U.S. District Court charges MONTEZ VANTERUS SPRADLEY, 36, with felon in possession of a firearm. The firearm was seized by the Tuscaloosa Police Department after responding to a domestic disturbance at an apartment on March 26, 2019. Spradley is prohibited from possessing firearms because he has prior state court convictions in Jefferson County for felony murder, intimidating a witness, unlawful possession of a controlled substance with the intent to distribute, unlawful possession of a controlled substance, and second degree assault.
“Individuals with felony convictions, especially those involving violence and drugs, will answer to federal charges if they are caught with firearms,” Town said. “The U.S. Attorney’s Office appreciates the thorough investigation by the Tuscaloosa patrol officers at the scene and the ATF Task Force Officer’s quick preparation of this case for a federal charge. Criminals should be aware that every level of law enforcement is working together to get them off of the streets...and it’s working!”
“ATF’s Crime Gun Intelligence Centers are the driving force to reduce the violent crime that plagues our neighborhoods,” Watson said. “This indictment illustrates the effective partnerships with law enforcement and the community.”
If convicted, Spradley qualifies as an armed career criminal and will face a mandatory minimum sentence of 15 years in prison.
ATF investigated the case, which Assistant United States Attorney Alan Baty is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Jefferson County Home Builder Charged with a Wire Fraud SchemeRead the Press Release
BIRMINGHAM – Federal prosecutors yesterday charged a Jefferson County home builder with a wire fraud scheme, announced U.S. Attorney Jay E. Town and FBI Special Agent in Charge Johnnie Sharp, Jr.
In a one-count information filed in U.S. District Court, the U.S. Attorney’s office charges JEFFREY RUSERT, 52, with a wire fraud scheme.
According to the information, Rusert embezzled over $1.3 million from his customers. Rusert was the owner and President of Southern Craftsman Custom Homes, Inc. Southern Craftsman was engaged in the business of residential homebuilding. Between 2016 and 2018, Rusert engaged in a fraudulent scheme to obtain money from at least sixteen known individuals and/or families. Rusert solicited individuals and families to sign a contract and pay money to Southern Craftsman for the construction of a custom home. Rusert accepted the checks and down payments from numerous individuals and families and fraudulently used the proceeds on unrelated construction projects, outstanding debt, and personal expenses. In addition to obtaining personal checks from the victims, Rusert assisted individuals and families with obtaining a loan to finance the construction of their custom home. After obtaining financing, Rusert submitted false and fraudulent invoices and documentation to financial institutions for the purpose of obtaining checks or draws from the construction loans purportedly to pay for materials, labor and expenses associated with a particular home under construction. Rusert failed to apply the money obtained from the financial institutions towards the construction of the customer’s home project.
“The victims trusted the defendant to help them achieve the American dream of a custom built home and instead he took their money, used it for his own benefit, and left them without a home, while he moved on to other unsuspecting victims,” Town said. “We appreciate the collaborative work of the FBI and the Alabama Home Builders Licensure Board.”
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine.
The FBI investigated the case with assistance from the Alabama Home Builders Licensure Board, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Bookkeeper Pleads Guilty to Embezzling Money from Best Western Oak Mountain Inn; Co-Conspirator Indicted on Related ChargesRead the Press Release
BIRMINGHAM – Earlier this week, a former bookkeeper at a Pelham-area accounting firm pled guilty to charges that she embezzled money from a local hotel, and on Thursday, a grand jury returned an indictment against the bookkeeper’s alleged co-conspirator on related charges, announced U.S. Attorney Jay E. Town and United States Secret Service Special Agent in Charge Michael Williams.
In a one-count information filed in U.S. District Court, the United States Attorney charged DELAINE DAWSON SUMMERVILLE, 50, with wire fraud for her role in an embezzlement scheme targeting one of her accounting firm’s clients, the Best Western Oak Mountain Inn, located in Pelham, Alabama. A plea agreement was also filed. According to the plea agreement, Summerville had been employed as a bookkeeper at Bryan L. Parker, CPA. During 2016 and 2017, the Best Western Oak Mountain Inn was among Parker CPA’s clients. Summerville provided bookkeeping, accounting, and payroll services to the hotel, and in that role she had the ability to create checks drawn on the hotel’s bank account. During the latter half of 2016 and early 2017, Summerville created dozens of checks payable to herself from the hotel’s bank account, which she cashed or deposited. Summerville also created dozens of checks payable to another individual, DANA MISCHELLE BRAXTON. In all, the embezzlement totaled more than $175,000, according to Summerville’s plea agreement.
DANA MISCHELLE BRAXTON, 51, of Leeds, was charged in a six-count indictment filed in U.S. District Court with wire fraud and aggravated identity theft for her role in the embezzlement scheme. According to the indictment, between June 2016 and February 2017, Braxton received checks from Summerville drawn on Best Western Oak Mountain Inn’s bank account. During this time, Braxton either cashed the checks or deposited them into a bank account that she controlled. Braxton was not an employed by Parker CPA or by the Best Western Oak Mountain Inn, and cashed or deposited the checks without knowledge or authorization of either entity.
“This case is about a hard-working hotel owner who had hundreds of thousands of dollars stolen from him by someone he trusted,” Town said. “Our office will continue to work tirelessly to bring the perpetrators of such frauds to justice.”
The maximum penalty for wire fraud is 20 years in prison and a fine of up to $250,000.
The penalty for aggravated identity theft is two years in prison.
The Secret Service investigated the cases, which Assistant U.S. Attorney John B. Ward is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Appalachian Regional Prescription Opioid (ARPO) Strike Force Takedown Results in Charges Against 60 Individuals, Including 53 Medical ProfessionalsRead the Press Release
BIRMINGHAM – Attorney General William P. Barr and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, together with multiple law enforcement partners, today announced enforcement actions involving 60 charged defendants across 11 federal districts, including 31 doctors, 7 pharmacists, 8 nurse practitioners, and 7 other licensed medical professionals, for their alleged participation in the illegal prescribing and distributing of opioids and other dangerous narcotics and for health care fraud schemes. In addition, HHS announced today that since June 2018, it has excluded over 2,000 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes more than 650 providers excluded for conduct related to opioid diversion and abuse. Since July 2017, DEA has issued 31 immediate suspension orders, 129 orders to show cause, and received 1386 surrenders for cause nationwide for violations of the Controlled Substances Act.
“The opioid epidemic is the deadliest drug crisis in American history, and Appalachia has suffered the consequences more than perhaps any other region,” Attorney General William P. Barr said. “But the Department of Justice is doing its part to help end this crisis. One of the Department's most promising new initiatives is the Criminal Division's Appalachian Regional Prescription Opioid Strike Force, which began its work in December. Just four months later, this team of federal agents and 12 prosecutors has charged 60 defendants for alleged crimes related to millions of prescriptions. I am grateful to the Criminal Division, their U.S. Attorney partners, and to the members of the strike force for this outstanding work that holds the promise of saving many lives in Appalachian communities.”
“Reducing the illicit supply of opioids is a crucial element of President Trump’s plan to end this public health crisis,” said HHS Secretary Alex Azar. “It is also vital that Americans struggling with addiction have access to treatment and that patients who need pain treatment do not see their care disrupted, which is why federal and local public health authorities have coordinated to ensure these needs are met in the wake of this enforcement operation. The Trump Administration’s law enforcement and public health leaders will continue to work hand in hand to end this crisis that has hit Appalachia hard and steals far too many lives across America every day.”
“Sometimes the only difference between a drug dealer and a doctor is the white coat,” Town said. “The Department of Justice, DEA, FBI, and other federal, state, and local partners will continue to aggressively address our opioid crisis, from the corner to the clinic, until those responsible for the unlawful distribution of this poison, which too often results in overdose, are brought to justice.”
Attorney General Barr and Secretary Azar were joined in the announcement by Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Robert M. Duncan Jr. for the Eastern District of Kentucky; U.S. Attorney Russell M. Coleman for the Western District of Kentucky; U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio; U.S. Attorney William J. Powell for the Northern District of West Virginia; U.S. Attorney Michael B. Stuart for the Southern District of West Virginia; U.S. Attorney J. Douglas Overbey for the Eastern District of Tennessee; U.S. Attorney Donald Q. Cochran for the Middle District of Tennessee; U.S. Attorney D. Michael Dunavant for the Western District of Tennessee; U.S. Attorney Jay E. Town for the Northern District of Alabama; U.S. Attorney Thomas T. Cullen for the Western District of Virginia; Executive Assistant Director Amy Hess of the FBI’s Criminal, Cyber, Response, and Services Branch; Deputy Inspector General for Investigations Gary L. Cantrell of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Assistant Administrator John J. Martin of the DEA Diversion Control Division, and Centers for Medicare and Medicaid Services (CMS) Deputy Administrator and Director of the Center for Program Integrity (CPI) Alec Alexander.
In addition to the cases announced today, Attorney General Barr and U.S. Attorney Thomas T. Cullen announced today that the ARPO Strike Force will expand into the Western District of Virginia, making it the tenth ARPO Strike Force district. ARPO is a joint law enforcement effort that brings together the resources and expertise of the Health Care Fraud Unit in the Criminal Division’s Fraud Section (HCF Unit), the U.S. Attorney’s Offices for ten federal districts in six states, as well as law enforcement partners at the FBI, HHS Office of the Inspector General (HHS-OIG) and U.S. Drug Enforcement Administration (DEA). In addition, the operation includes the participation of the Tennessee Bureau of Investigation and multiple State Medicaid Fraud Control Units. The mission of the ARPO Strike Force is to identify and investigate health care fraud schemes in the Appalachian region and surrounding areas, and to effectively and efficiently prosecute medical professionals and others involved in the illegal prescription and distribution of opioids.
The charges announced today involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a priority for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.
“Today’s takedown demonstrates the FBI’s unwavering commitment to working alongside our Strike Force partners, including the HHS-OIG and DEA, to fight the opioid epidemic and related criminal activity in the Appalachian region,” said FBI Executive Assistant Director Hess. “We will not stand by and allow the harmful and oftentimes deadly practice of over-prescribing highly addictive drugs to continue unchecked. The FBI will pursue medical personnel who misuse their positions of trust to blatantly disregard others’ very lives for their own financial gain.”
“The opioid crisis has had a devastating impact in the Appalachian region,” said Principal Deputy Inspector General Chiedi. “Addressing this public health issue and ensuring beneficiaries have continuity of care requires a collaborative approach with our federal, state, and local partners. Our commitment is resolute. We will continue working together to protect the health and well-being of all Americans and ending this terrible epidemic.”
“Opioid misuse and abuse is an insidious epidemic, created in large part, by the over-prescribing of potent opioids nationwide, and unfortunately, Appalachia is at the center,” said DEA Assistant Administrator Martin. “Today’s announcement sends a clear message that investigations involving diversion of prescription drugs have been, and continue to be, a priority for DEA.”
“CMS CPI is proud to work very closely everyday with our law enforcement partners to stop the exploitation of vulnerable patients and misuse of taxpayer dollars,” said Deputy Administrator and Director of Center for Program Integrity Alexander. “Nowhere is this collaboration more important than in our fight against the opioid crisis in America. This is one of the President’s highest priorities and we are proud to be an important part of the largest prescription opioid enforcement effort ever undertaken. We will continue to work tirelessly through investigation, data coordination and administrative action to protect the health and wellbeing of all Americans.”
The ARPO Strike Force is made up of prosecutors and data analysts with the HCF Unit, prosecutors with the ten U.S. Attorney’s Offices in the region, including the newly added Western District of Virginia, and special agents with the FBI, HHS-OIG and DEA. The ARPO Strike Force operates out of two hubs based in the Cincinnati, Ohio/Northern Kentucky and Nashville, Tennessee, areas, supporting the ten districts that make up the ARPO Strike Force region. In addition, the APRO Strike Force works closely with other state and federal law enforcement agencies, including the Tennessee Bureau of Investigation, State Medicaid Fraud Control Units. *********
For the ARPO Strike force locations, in the Southern District of Ohio, six individuals, including two doctors and three registered pharmacists were charged with several counts, including unlawful distribution of controlled substances and conspiracy to obtain controlled substances by fraud. In one case, a doctor who is alleged to have been at one time the highest prescriber of controlled substances in the state, and several pharmacists are charged with operating an alleged “pill mill” in Dayton, Ohio. According to the indictment, between October 2015 and October 2017 alone, the pharmacy allegedly dispensed over 1.75 million pills. These cases were brought with assistance from the FBI, DEA, and HHS-OIG, as well as the Ohio Attorney General's Office, Medicaid Fraud Control Unit; the Ohio Bureau of Workers' Compensation Ohio; the Ohio Board of Pharmacy and the Ohio Medical Board.
In the Western District of Kentucky, a doctor was charged with controlled substance and health care fraud counts in connection with providing pre-signed, blank prescriptions to office staff who then used them to prescribe controlled substances when he was out of the office, and for directing staff at the clinic, including individuals not licensed to practice medicine, to perform medical services on patients. In another case, a doctor, a Florida compounding pharmacy and its owner were charged in connection with a scheme that involved the payment of alleged kickbacks in return for writing prescriptions for compounded drugs that included controlled substances, and for fraudulently inflating the costs for prescriptions that were billed for reimbursement by Medicare and TRICARE. These cases were brought with assistance from the FBI, DEA, HHS-OIG, and the Defense Criminal Investigative Service, as well as the Kentucky State Police, the Louisville Metropolitan Police Department, the Kentucky Office of Inspector General, the Kentucky Department of Insurance, and the Kentucky Medicaid Fraud Control Unit.
In the Eastern District of Kentucky, a total of five people were charged, including three doctors, a dentist and an office assistant who were charged in connection with several health care fraud and/or controlled substance schemes. In one case a doctor operating a clinic that focused on pain management allegedly provided pre-signed, blank prescriptions to office staff who then used them to prescribe controlled substances when he was out of the office. In another case, a solo practitioner who operates a five-clinic family practice focusing on pain management allegedly billed Medicare for urine testing that was not done and for urine testing that was not medically necessary. A dentist was charged for alleged conduct that included writing prescriptions for opioids that had no legitimate medical purpose and that were outside the usual course of professional practice, removing teeth unnecessarily, scheduling unnecessary follow-up appointments, and billing inappropriately for services. In yet another case, a doctor was charged for allegedly prescribing opioids to Facebook friends who would come to his home to pick up prescriptions, and for signing prescriptions for other persons based on messenger requests to his office manager, who then allegedly delivered the signed prescriptions in exchange for cash. These cases were brought with assistance from the FBI, DEA, HHS-OIG, and the Kentucky Medicaid Fraud Control Unit.
In the Middle District of Tennessee, total of nine individuals including four doctors, a nurse and a pharmacist were charged in six cases, all of which relate to the distribution of controlled substances. Two cases involve doctors who were previously sanctioned by the Tennessee Medical Board in connection with the overprescribing of opioids, one of whom was sanctioned for providing prescriptions to vulnerable patients, while the other allegedly prescribed opioid pills after serving a Board imposed term of probation. Another case alleges that a doctor prescribed opioids and other controlled substances to at least four individuals. In another case, an advanced practice registered nurse at a pain management clinic allegedly wrote prescriptions for opioids that had no legitimate medical purpose and that were outside the usual course of professional practice. Separately, a pharmacist was charged for allegedly dispensing large amounts of opioids outside the usual scope of professional practice and for no legitimate medical purpose. Finally, a podiatrist was charged with unlawful distribution of controlled substances. In addition to assistance provided by the FBI, DEA, and HHS-OIG, these cases were brought in connection with assistance from the Tennessee Bureau of Investigation, Medicaid Fraud Control Unit; the 18th Judicial District Drug Task Force; the Sumner County District Attorney’s Office; and the District Attorney General for the 22nd Judicial District.
In the Eastern District of Tennessee, at total of eight individuals, including five doctors, a nurse practitioner, a physician’s assistant, and an office manager were charged in four cases. Four doctors, a nurse practitioner and a physician’s assistant were charged with the unlawful distribution of opioids. Two doctors were charged with health care fraud violations. Three of these cases are related to alleged pill mill operations in the Eastern District of Tennessee.
In the Western District of Tennessee, 15 individuals were charged, involving eight doctors and several other medical professionals. In one case, a doctor who branded himself the “Rock Doc,” allegedly prescribed powerful and dangerous combinations of opioids and benzodiazepines, sometimes in exchange for sexual favors; over approximately three years, the doctor allegedly prescribed approximately 500,000 hydrocodone pills, 300,000 oxycodone pills, 1,500 fentanyl patches, and more than 600,000 benzodiazepine pills. In another case, a nurse practitioner charged with conspiracy to unlawfully distribute controlled substances allegedly prescribed over 500,000 Hydrocodone pills, approximately 300,000 Oxycodone pills, and approximately 300,000 benzodiazepine pills (mostly Alprazolam), along with a myriad of other controlled substances. In another case, a physician charged with controlled substances and health care fraud violations allegedly prescribed approximately 300,000 hydrocodone pills, 200,000 oxycodone pills, 2,500 fentanyl patches, and 180,000 benzodiazepine pills, and prescribed medically unnecessary durable medical equipment that was billed to Medicare. Another doctor charged with controlled substances violations allegedly prescribed approximately 4.2 million opioid pills, sometimes in dangerous combinations with other drugs, such as benzodiazepines, and prescribed opioids to known addicts.
In the Northern District of Alabama, multiple individuals were charged in five cases, including four doctors. In one case, the owners and operators of a medical clinic and dispensary were charged with the unlawful distribution of controlled substances and health care fraud. In that case, a doctor allegedly prescribed opioids in high dosages, dangerous combinations, and in many cases, after having knowledge that patients failed drug screens and were addicts, preferring cash payments and charging a “concierge fee” that ranged from approximately $50 per visit or $600 per year. In another case, a doctor allegedly recruited prostitutes and other young women with whom he had sexual relationships to become patients at his clinic, while simultaneously allowing them and their associates to abuse illicit drugs at his house. In yet another case, a doctor allegedly dispensed controlled substances and other prescription drugs directly from the clinic, and prescribed excessive quantities of controlled substances to the same patients several times per month resulting in as many as 15 pills per day for some patients. In that case, the doctor also signed blank prescription forms to be completed by her staff when she was not at the clinic.
In the Northern District of West Virginia, a case was brought against an orthopedic surgeon who allegedly used fraudulent prescriptions to obtain hundreds of tablets of tramadol, acetaminophen-codeine, and diazepam for his own use over the course of approximately two years. To obtain the pills, the surgeon allegedly used the names and DEA numbers of two of his colleagues without their authorization and also wrote out prescriptions in the names of a relative and former patients even though the pills were for his own use, using driver’s licenses that he had stolen from relatives and a colleague to obtain the pills from pharmacies.
In the Southern District of West Virginia, a doctor was charged with allegedly distributing narcotics, including dextroamphetamine, methylphenidate, and amphetamine salt, to a patient who did not have a medical need for the drugs and whom the doctor never examined.
*********
In addition to the ARPO Strike Force districts, today’s enforcement actions include cases brought in the Eastern District of Pennsylvania, and the Eastern District of Louisiana.
In the Eastern District of Louisiana, a neurologist at an alleged pill mill was charged with conspiracy to dispense controlled substances and conspiracy to commit health care fraud. The defendant allegedly pre-signed prescriptions for controlled substances, including oxycodone, for patients whom he did not personally examine to determine medical necessity for the prescriptions, and pre-signed prescriptions for controlled substances while he was travelling internationally. The defendant allegedly knew that certain of these patients used their Medicare Part D and Medicaid benefits to pay for the medically unnecessary prescriptions.
In the Eastern District of Pennsylvania, a former licensed practical nurse allegedly filled fraudulent prescriptions for oxycodone in her name and in the names of others at a local pharmacy in order to obtain the pills for herself and to distribute to others.
********
For any patients impacted by the law enforcement operations, DOJ, DEA, HHS-OIG, HHS’ Substance Abuse and Mental Health Services Administration, CDC’s Opioid Rapid Response Team and all 5 State Departments of Health are deploying federal and state-level strategies to address patient harm and insure continuity of care. Additional information regarding available treatment programs and where patients can turn for assistance is available as follows:
Alabama: If you are seeking help in Alabama, please call: 1-866-264-4073
http://www.alabamapublichealth.gov/pharmacy/opioid-and-heroin.html
https://mh.alabama.gov/understanding-the-opioid-crisis/
For individuals seeking help in other states, please call 1-800-662-HELP
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. The Medicare Fraud Strike Force, including the ARPO Strike Force, has charged more than 200 individuals with opioid-related crimes.
If you, a family member, friend or loved one believe you may be a victim in any of these cases or in connection with any charged defendant, please visit the following website for additional information: https://www.justice.gov/criminal-vns/case/ARPO
Additional documents related to this announcement are available here:
https://www.justice.gov/opa/documents-and-resources-april-17-2019-press-conference
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Appalachian Regional Prescription Opioid (ARPO) Strike Force Takedown Results in Charges Against 60 Individuals, Including 53 Medical ProfessionalsRead the Press Release
Attorney General William P. Barr and Department of Health and Human Services (HHS) Secretary Alex M. Azar II, together with multiple law enforcement partners, today announced enforcement actions involving 60 charged defendants across 11 federal districts, including 31 doctors, seven pharmacists, eight nurse practitioners, and seven other licensed medical professionals, for their alleged participation in the illegal prescribing and distributing of opioids and other dangerous narcotics and for health care fraud schemes. In addition, HHS announced today that since June 2018, it has excluded over 2,000 individuals from participation in Medicare, Medicaid and all other Federal health care programs, which includes more than 650 providers excluded for conduct related to opioid diversion and abuse. Since July 2017, DEA has issued 31 immediate suspension orders, 129 orders to show cause, and received 1,386 surrenders for cause nationwide for violations of the Controlled Substances Act.
“The opioid epidemic is the deadliest drug crisis in American history, and Appalachia has suffered the consequences more than perhaps any other region,” Attorney General William P. Barr said. “But the Department of Justice is doing its part to help end this crisis. One of the Department's most promising new initiatives is the Criminal Division's Appalachian Regional Prescription Opioid Strike Force, which began its work in December. Just four months later, this team of federal agents and 14 prosecutors has charged 60 defendants for alleged crimes related to millions of prescription opioids. I am grateful to the Criminal Division, their U.S. Attorney partners, and to the members of the strike force for this outstanding work that holds the promise of saving many lives in Appalachian communities.”
“Reducing the illicit supply of opioids is a crucial element of President Trump’s plan to end this public health crisis,” said HHS Secretary Alex Azar. “It is also vital that Americans struggling with addiction have access to treatment and that patients who need pain treatment do not see their care disrupted, which is why federal and local public health authorities have coordinated to ensure these needs are met in the wake of this enforcement operation. The Trump Administration’s law enforcement and public health leaders will continue to work hand in hand to end this crisis that has hit Appalachia hard and steals far too many lives across America every day.”
Attorney General Barr and Secretary Azar were joined in the announcement by Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Robert M. Duncan Jr. for the Eastern District of Kentucky; U.S. Attorney Russell M. Coleman for the Western District of Kentucky; U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio; U.S. Attorney William J. Powell for the Northern District of West Virginia; U.S. Attorney Michael B. Stuart for the Southern District of West Virginia; U.S. Attorney J. Douglas Overbey for the Eastern District of Tennessee; U.S. Attorney Don Cochran for the Middle District of Tennessee; U.S. Attorney D. Michael Dunavant for the Western District of Tennessee; U.S. Attorney Jay E. Town for the Northern District of Alabama; U.S. Attorney Thomas T. Cullen for the Western District of Virginia; Executive Assistant Director Amy Hess of the FBI’s Criminal, Cyber, Response, and Services Branch; Deputy Inspector General for Investigations Gary L. Cantrell of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Assistant Administrator John J. Martin of the DEA Diversion Control Division, and Centers for Medicare and Medicaid Services (CMS) Deputy Administrator and Director of the Center for Program Integrity (CPI) Alec Alexander.
In addition to the cases announced today, Attorney General Barr and U.S. Attorney Thomas T. Cullen announced today that the ARPO Strike Force will expand into the Western District of Virginia, making it the tenth ARPO Strike Force district. ARPO is a joint law enforcement effort that brings together the resources and expertise of the Health Care Fraud Unit in the Criminal Division’s Fraud Section (HCF Unit), the U.S. Attorney’s Offices for ten federal districts in six states, as well as law enforcement partners at the FBI, HHS Office of the Inspector General (HHS-OIG) and U.S. Drug Enforcement Administration (DEA). In addition, the operation includes the participation of the Tennessee Bureau of Investigation, multiple State Medicaid Fraud Control Units, and other federal and state agencies. The mission of the ARPO Strike Force is to identify and investigate health care fraud schemes in the Appalachian region and surrounding areas, and to effectively and efficiently prosecute medical professionals and others involved in the illegal prescription and distribution of opioids.
The charges announced today involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a priority for the Department. According to the CDC, approximately 130 Americans die every day of an opioid overdose.
“Today’s takedown demonstrates the FBI’s unwavering commitment to working alongside our Strike Force partners, including the HHS-OIG and DEA, to fight the opioid epidemic and related criminal activity in the Appalachian region,” said FBI Executive Assistant Director Hess. “We will not stand by and allow the harmful and oftentimes deadly practice of over-prescribing highly addictive drugs to continue unchecked. The FBI will pursue medical personnel who misuse their positions of trust to blatantly disregard others’ very lives for their own financial gain.”
“The opioid crisis has had a devastating impact in the Appalachian region,” said Principal Deputy Inspector General Chiedi. “Addressing this public health issue and ensuring beneficiaries have continuity of care requires a collaborative approach with our federal, state, and local partners. Our commitment is resolute. We will continue working together to protect the health and well-being of all Americans and ending this terrible epidemic.”
“Opioid misuse and abuse is an insidious epidemic, created in large part, by the over-prescribing of potent opioids nationwide, and unfortunately, Appalachia is at the center,” said DEA Assistant Administrator Martin. “Today’s announcement sends a clear message that investigations involving diversion of prescription drugs have been, and continue to be, a priority for DEA.”
“CMS CPI is proud to work very closely everyday with our law enforcement partners to stop the exploitation of vulnerable patients and misuse of taxpayer dollars,” said Deputy Administrator and Director of Center for Program Integrity Alexander. “Nowhere is this collaboration more important than in our fight against the opioid crisis in America. This is one of the President’s highest priorities and we are proud to be an important part of the largest prescription opioid enforcement effort ever undertaken. We will continue to work tirelessly through investigation, data coordination and administrative action to protect the health and wellbeing of all Americans.”
The ARPO Strike Force is made up of prosecutors and data analysts with the HCF Unit, prosecutors with the 10 U.S. Attorney’s Offices in the region, including the newly added Western District of Virginia, and special agents with the FBI, HHS-OIG and DEA. The ARPO Strike Force operates out of two hubs based in the Cincinnati, Ohio/Northern Kentucky and Nashville, Tennessee, areas, supporting the 10 districts that make up the ARPO Strike Force region. In addition, the APRO Strike Force works closely with other state and federal law enforcement agencies, including the Tennessee Bureau of Investigation, State Medicaid Fraud Control Units.
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For the ARPO Strike force locations, in the Southern District of Ohio, six individuals, including two doctors and three registered pharmacists were charged with several counts, including unlawful distribution of controlled substances and conspiracy to obtain controlled substances by fraud. In one case, a doctor who is alleged to have been at one time the highest prescriber of controlled substances in the state, and several pharmacists are charged with operating an alleged “pill mill” in Dayton, Ohio. According to the indictment, between October 2015 and October 2017 alone, the pharmacy allegedly dispensed over 1.75 million pills. These cases were brought with assistance from the FBI, DEA, and HHS-OIG, as well as the Ohio Attorney General's Office, Medicaid Fraud Control Unit; the Ohio Bureau of Workers' Compensation Ohio; the Ohio Board of Pharmacy and the Ohio Medical Board.
In the Western District of Kentucky, a doctor was charged with controlled substance and health care fraud counts in connection with providing pre-signed, blank prescriptions to office staff who then used them to prescribe controlled substances when he was out of the office, and for directing staff at the clinic, including individuals not licensed to practice medicine, to perform medical services on patients. In another case, a doctor, a Florida compounding pharmacy and its owner were charged in connection with a scheme that involved the payment of alleged kickbacks in return for writing prescriptions for compounded drugs that included controlled substances, and for fraudulently inflating the costs for prescriptions that were billed for reimbursement by Medicare and TRICARE. These cases were brought with assistance from the FBI, DEA, HHS-OIG, and the Defense Criminal Investigative Service, as well as the Kentucky State Police, the Louisville Metropolitan Police Department, the Kentucky Office of Inspector General, the Kentucky Department of Insurance, and the Kentucky Medicaid Fraud Control Unit.
In the Eastern District of Kentucky, a total of five people were charged, including three doctors, a dentist and an office assistant who were charged in connection with several health care fraud and/or controlled substance schemes. In one case a doctor operating a clinic that focused on pain management allegedly provided pre-signed, blank prescriptions to office staff who then used them to prescribe controlled substances when he was out of the office. In another case, a solo practitioner who operates a five-clinic family practice focusing on pain management allegedly billed Medicare for urine testing that was not done and for urine testing that was not medically necessary. A dentist was charged for alleged conduct that included writing prescriptions for opioids that had no legitimate medical purpose and that were outside the usual course of professional practice, removing teeth unnecessarily, scheduling unnecessary follow-up appointments, and billing inappropriately for services. In yet another case, a doctor was charged for allegedly prescribing opioids to Facebook friends who would come to his home to pick up prescriptions, and for signing prescriptions for other persons based on messenger requests to his office manager, who then allegedly delivered the signed prescriptions in exchange for cash. These cases were brought with assistance from the FBI, DEA, HHS-OIG, and the Kentucky Medicaid Fraud Control Unit.
In the Middle District of Tennessee, federal indictments were unsealed today charging nine Middle Tennessee medical professionals, including four doctors, four nurse practitioners and a pharmacist, with various charges alleging their participation in illegally prescribing and dispensing opioids and other dangerous narcotics and health care fraud schemes. Two cases involve doctors who were previously sanctioned by the Tennessee Medical Board in connection with the overprescribing of opioids, one of whom was sanctioned for providing prescriptions to vulnerable patients, while the other allegedly prescribed opioid pills after serving a Board imposed term of probation. Another case alleges that a doctor prescribed opioids and other controlled substances to at least four individuals. In another case, an advanced practice registered nurse at a pain management clinic allegedly wrote prescriptions for opioids that had no legitimate medical purpose and that were outside the usual course of professional practice. Separately, a pharmacist was charged for allegedly dispensing large amounts of opioids outside the usual scope of professional practice and for no legitimate medical purpose. Finally, a podiatrist was charged with unlawful distribution of controlled substances. In addition to assistance provided by the FBI, DEA, and HHS-OIG, these cases were brought in connection with assistance from the Tennessee Bureau of Investigation, Medicaid Fraud Control Unit; the 18th Judicial District Drug Task Force; the Sumner County District Attorney’s Office; and the District Attorney General for the 22nd Judicial District.
In the Eastern District of Tennessee, at total of eight individuals, including five doctors, a nurse practitioner, a physician’s assistant, and an office manager were charged in four cases. Four doctors, a nurse practitioner and a physician’s assistant were charged with the unlawful distribution of opioids. Two doctors were charged with health care fraud violations. Three of these cases are related to alleged pill mill operations in the Eastern District of Tennessee. In addition to assistance provided by the FBI, DEA, and HHS-OIG, these cases were brought in connection with assistance from the Tennessee Bureau of Investigation, Medicaid Fraud Control Unit.
In the Western District of Tennessee, 15 individuals were charged, involving eight doctors and several other medical professionals. In one case, a nurse practitioner who branded himself the “Rock Doc,” allegedly prescribed powerful and dangerous combinations of opioids and benzodiazepines, sometimes in exchange for sexual favors; over approximately three years, the doctor allegedly prescribed approximately 500,000 hydrocodone pills, 300,000 oxycodone pills, 1,500 fentanyl patches, and more than 600,000 benzodiazepine pills. In another case, a nurse practitioner charged with conspiracy to unlawfully distribute controlled substances allegedly prescribed over 500,000 Hydrocodone pills, approximately 300,000 Oxycodone pills, and approximately 300,000 benzodiazepine pills (mostly Alprazolam), along with a myriad of other controlled substances. In another case, a physician charged with controlled substances and health care fraud violations allegedly prescribed approximately 300,000 hydrocodone pills, 200,000 oxycodone pills, 2,500 fentanyl patches, and 180,000 benzodiazepine pills, and prescribed medically unnecessary durable medical equipment that was billed to Medicare. Another doctor charged with controlled substances violations allegedly prescribed approximately 4.2 million opioid pills, sometimes in dangerous combinations with other drugs, such as benzodiazepines, and prescribed opioids to known addicts. In addition to assistance provided by the FBI, DEA, and HHS-OIG, these cases were brought in connection with assistance from the Tennessee Bureau of Investigation, Medicaid Fraud Control Unit, the Tennessee Office of Inspector General, and the West Tennessee Drug Task Force (28th District).
In the Northern District of Alabama, multiple individuals were charged in five cases, including four doctors. In one case, the owners and operators of a medical clinic and dispensary were charged with the unlawful distribution of controlled substances and health care fraud. In that case, a doctor allegedly prescribed opioids in high dosages, dangerous combinations, and in many cases, after having knowledge that patients failed drug screens and were addicts, preferring cash payments and charging a “concierge fee” that ranged from approximately $50 per visit or $600 per year. In another case, a doctor allegedly recruited prostitutes and other young women with whom he had sexual relationships to become patients at his clinic, while simultaneously allowing them and their associates to abuse illicit drugs at his house. In yet another case, a doctor allegedly dispensed controlled substances and other prescription drugs directly from the clinic, and prescribed excessive quantities of controlled substances to the same patients several times per month resulting in as many as 15 pills per day for some patients. In that case, the doctor also signed blank prescription forms to be completed by her staff when she was not at the clinic.
In addition to assistance provided by the FBI, DEA, HHS-OIG, the Defense Criminal Investigative Service and the Food and Drug Administration, Office of Criminal Investigations, these cases were brought in connection with assistance from the Hoover Police Department, the Huntsville Police Department, the Huntsville Area HIDTA Drug Task Force Strategic Counter Drug Team, the Marshall County Drug Task Force, the Alabama Medicaid Fraud Control Unit, and the Madison County Sheriff’s Office.
In the Northern District of West Virginia, a case was brought against an orthopedic surgeon who allegedly used fraudulent prescriptions to obtain tablets of acetaminophen-codeine for his own use. To obtain the pills, the surgeon allegedly wrote out prescriptions using his DEA number, and in the names of a relative even though the pills were for his own use, using a driver’s license that he had stolen from a colleague to obtain the pills from pharmacy. This case was brought in connection with assistance from the DEA and HHS-OIG.
In the Southern District of West Virginia, a doctor was charged with allegedly distributing narcotics, including dextroamphetamine, methylphenidate, and amphetamine salt, to a patient who did not have a medical need for the drugs and whom the doctor never examined. This case was brought in connection with assistance from the DEA and HHS-OIG.
*********
In addition to the ARPO Strike Force districts, today’s enforcement actions include cases brought in the Eastern District of Pennsylvania and the Eastern District of Louisiana.
In the Eastern District of Louisiana, a neurologist at an alleged pill mill was charged with conspiracy to dispense controlled substances and conspiracy to commit health care fraud. The defendant allegedly pre-signed prescriptions for controlled substances, including oxycodone, for patients whom he did not personally examine to determine medical necessity for the prescriptions, and pre-signed prescriptions for controlled substances while he was travelling internationally. The defendant allegedly knew that certain of these patients used their Medicare Part D and Medicaid benefits to pay for the medically unnecessary prescriptions. In addition to assistance provided by the FBI, DEA, HHS-OIG, these cases were brought in connection with assistance from the U.S. Departments of Veterans Affairs – Office of Investigations.
In the Eastern District of Pennsylvania, a former licensed practical nurse allegedly filled fraudulent prescriptions for oxycodone in her name and in the names of others at a local pharmacy in order to obtain the pills for herself and to distribute to others. In addition to assistance provided by the FBI, DEA, HHS-OIG, the Office of Personnel Management, the U.S. Marshalls Service, these cases were brought in connection with assistance from the Caln Township Police.
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For any patients impacted by the law enforcement operations, DOJ, DEA, HHS-OIG, HHS’ Substance Abuse and Mental Health Services Administration, Centers for Disease Control and Prevention, and all five State Departments of Health are deploying federal and state-level strategies to address patient harm and insure continuity of care. Additional information regarding available treatment programs and where patients can turn for assistance is available as follows:
Alabama: The Alabama Department of Mental Health has a dedicated telephone number to connect those affected by the closure. The toll-free substance abuse number is 1-844-307-1760. Information about substance abuse and opioids is available at the following websites:
http://www.alabamapublichealth.gov/pharmacy/opioid-and-heroin.html
https://mh.alabama.gov/understanding-the-opioid-crisis/
Kentucky: If you are in Kentucky and are suffering with addiction you can find help by calling 833-8KY-HELP or logging in at Findhelpnowky.org
Ohio: If you are seeking help in Ohio, please call the OhioMHAS patient helpline, at 1-877-275-6364
Tennessee: If you are seeking help in Tennessee:
- For a referral to addiction treatment services, call the Tennessee REDLINE: 800-889-9789.
- In a mental health crisis, call the Statewide Crisis Line: 855-CRISIS-1 (855-274-7471).
- For help accessing substance abuse or mental health services call the Tennessee Department of Mental Health and Substance Abuse Services Helpline: 800-560-5767 or 615-532-6700. This line is staffed Monday-Friday, 8 a.m. - 4:30 p.m. CT.
West Virginia: If you are in West Virginia and are suffering with addiction you can find help by calling 1-844-HELP-4WV or logging in at https://HelpandHopeWV.org
For individuals seeking help in other states, please call 1-800-662-HELP
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. The Medicare Fraud Strike Force, including the ARPO Strike Force, has charged more than 200 individuals with opioid-related crimes.
If you, a family member, friend or loved one believe you may be a victim in any of these cases or in connection with any charged defendant, please visit the following website for additional information:
https://www.justice.gov/criminal-vns/case/ARPO
Additional documents related to this announcement are available here:
https://www.justice.gov/opa/documents-and-resources-april-17-2019-press-conference
- For a referral to addiction treatment services, call the Tennessee REDLINE: 800-889-9789.