Southern District of Florida
Press releases recorded for this federal judicial district.
Fort Pierce Federal Judge Orders Prison Time for South Florida Methamphetamine DealersRead the Press Release
MIAMI – Three men from the St. Lucie County and Polk County area, have been sentenced to federal prison terms for trafficking methamphetamine. The men were prosecuted as part of a long-term investigation that led to the seizure of approximately 10 kilograms of methamphetamine, 26 firearms (including several semi-automatic rifles), and a bulletproof vest.
Lance Ratterree, 44, was sentenced on October 7, by U.S. District Judge Aileen M. Cannon, to 130 months’ imprisonment after being convicted of distribution of 50 grams or more of a mixture and substance containing a detectable amount of methamphetamine, and possession with intent to distribute 50 grams or more of a mixture and substance containing a detectable amount of methamphetamine.
Kevin Tergliafera, 42, was sentenced on September 16, by Judge Cannon, to 90 months’ imprisonment after being convicted of conspiracy to distribute 50 grams or more of methamphetamine.
Edwin Fernando Fernandez, Jr., 53, was sentenced on September 16, by Judge Cannon, to 56 months’ imprisonment after being convicted of conspiracy to distribute 50 grams or more of methamphetamine.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida; Deanne L. Reuter, Special Agent in Charge, DEA Miami; Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami; Christopher A. Robinson, Special Agent in Charge, Bureau of Alcohol Tobacco Firearms and Explosives (ATF) Miami; St. Lucie County Sheriff Ken Mascara; and Polk County Sheriff Grady Judd announced the sentences.
DEA Miami, FBI Miami, ATF Miami, St. Lucie County Sheriff’s Office, and Polk County Sheriff’s Office investigated the case. Assistant U.S. Attorney Michael D. Porter prosecuted the case.
The prosecution was part of Operation Blown Gasket, which is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten the citizens of the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime. The OCDETF program facilitates complex, joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-14013.
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Basketball Tourney Gives Local Kids and Law Enforcement a Chance to Bond Through CompetitionRead the Press Release
MIAMI – Competition was fierce as local kids and law enforcement personnel vied for the title of Fall Classic Youth & Cops Basketball Tournament champion.
Held at the Betty T. Ferguson Recreational Complex in Miami Gardens, the fourth-annual tourney consisted of 11 teams, each one comprised of kids and police officers or staff from the U.S. Attorney’s Office for the Southern District of Florida (USAO-SDFL).
“It’s not youth against cops; it’s youth with cops,” said J.D. Smith, Chief of Law Enforcement Coordination and Community Outreach Section, USAO-SDFL.
The tournament was won by the North Miami Beach Police Department, with USAO-SDFL finishing second. But more important than winning was the opportunity for kids and law enforcement to mingle and get to know one another.
“I love seeing the departments come out,” said Chris Browne, assistant U.S. attorney. “Officers spot kids from their communities and get them to come play and show off their talents.”
Kevin Santos, a supervisory contract specialist with USAO-SDFL and former Coral Gables High School basketball player, already knew the kids on his USAO team.
“I have coached all of these kids through the We Are the Academy recreation league,” he said. “All are very talented players. I wanted to give kids from different backgrounds the chance to play and interact with our community law enforcement partners. As soon as they got an opportunity to represent the U.S. Attorney’s Office they jumped at the chance and immediately said yes.”
The idea for this tournament came from a town hall meeting a few years back where some youth said they thought police officers weren’t nice people.
“But they’d had no interaction with police officers,” said Smith. “An event like this humanizes people and helps break down barriers. It gives our youth a glimpse of the person behind the badge so they can see they’re regular folks just like the rest of us. That is why we started this.”
After a two-year hiatus due to COVID, Smith is happy the tournament is back. And judging from all of the smiles and high-fives, it seemed everyone else felt the same way.
“It’s great to be back,” said Smith. “It’s fun. This is what it’s all about. You can’t beat it.”
Tournament participation included Miramar Police Department; North Miami Police Department; Miami-Dade Police Department (The U); North Miami Beach Police Department; Miami-Dade Corrections Department; Miami Gardens Police Department; Miami Beach Police Department; United States Attorney’s Office; Miami Police Department; Florida Highway Patrol; and Miami-Dade Police Department Community Affairs.
Special acknowledgement to Miami Gardens Police Department for hosting the event in their city, as well as the police agencies who supplied refreshments to the more than 150 tournament participants.
Cutline information for photo: Members of the U.S. Attorney’s Office for the Southern District of Florida basketball team take a quick huddle to design a play during the recent Fall Classic Youth & Cops Basketball Tournament.
U.S. Attorney’s Office for the Southern District of Florida Enjoys Success in Protecting Older Adults Through Transnational Elder Fraud Strike ForceRead the Press Release
MIAMI – The United States Attorney’s Office for the Southern District of Florida has put a bullseye on those who would defraud elderly Americans through its work with the Justice Department’s Transnational Elder Fraud Strike Force.
In fact, the Strike Force is adding 14 additional U.S. Attorney’s Offices nationwide, bringing the total to 20. These include U.S. Attorneys’ Offices in California, Arizona, Texas, Florida, Georgia, Maryland, and New York. USAO-SDFL was one of the first to join in 2019. Since that time, the Justice Department’s Consumer Protection Branch, U.S. Attorneys’ Offices, the FBI, U.S. Postal Inspection Service, and Homeland Security Investigations have brought successful cases against the largest and most harmful global elder fraud schemes. These organizations also worked with foreign law enforcement to disrupt criminal enterprises, disable their infrastructure, and bring perpetrators to justice.
“The most common scams that target the elderly include impersonating a government official, robocalls, and sweepstakes,” said Juan Antonio “Tony” Gonzalez, U.S. Attorney for the Southern District of Florida. “Age-related health conditions such as dementia or decreased cognitive function can make it difficult for our senior citizens to detect a scam. Preying upon our elderly population is a shameful thing to do and it’s our job to go after these perpetrators and prosecute them to the fullest.”
And go after them is just what the U.S. Department of Justice (DOJ) plans to do by doubling down on its efforts and increasing available resources.
“We are intensifying our efforts nationwide to protect older adults, including by more than tripling the number of U.S. Attorneys’ offices participating in our Transnational Elder Fraud Strike Force dedicated to disrupting, dismantling and prosecuting foreign-based fraud schemes that target American seniors,” said Attorney General Merrick B. Garland. “This expansion builds on the Justice Department’s existing work to hold accountable those who steal funds from older adults, including by returning those funds to the victims where possible.”
From September 2021 to September 2022, DOJ personnel and its law enforcement partners pursued approximately 260 cases involving more than 600 defendants. Over that same time period, USAO-SDFL staff also had great success going after those who would swindle elders out of their money. Below are USAO-SDFL prosecutions that highlight those efforts:
United States v. Johnny Ray Thomas Case No. 22-20332
South Florida resident Johnny Ray Thomas and his Indian co-conspirators, Saher Mash Uppal and Prateek Uppal, operated several fraudulent Information Technology (IT companies), which falsely and fraudulently convinced elderly victims to make payments to the defendants’ companies for purported IT services and software when, in truth, and in fact, the victims received no legitimate services or software from the defendants’ businesses. Defendants and their co-conspirators “cold called” victims to inform them their computers had been hacked or otherwise compromised and convinced the victims to pay thousands for worthless “anti-virus” software and other services. Defendants and their co-conspirators installed remote access software on the victims’ computers in order to install the worthless software, which often consisted of nothing more than “scripts” that generated pop-ups on the victims’ computers notifying them their computers were infected with viruses. Defendants diverted the victims’ funds to corporate and personal bank accounts they controlled for their personal use and benefit and to carry out the conspiracy by paying for Internet marketing and other “leads.” Twelve victims lost over $20,000 each.
United States v. Jamare Mason, Case No. 19-60313
In November 2021 defendants Omar Bailey and Ronaldo Green were found guilty of conspiracy to commit wire fraud. The two, along with conspirators Jamare Mason, Mario Ricketts, and Kadeem Gordon were involved in a scheme in which the defendants fraudulently redirected Veteran Affairs benefits Social Security Administration benefits from rightful beneficiaries to accounts controlled by the defendants. The scheme was operated from Jamaica and involved stealing personal identifying information of veterans and social security beneficiaries. They then changed the deposit information from the original accounts to accounts that they controlled, providing the Veterans Administration and Social Security Administration with the information to these fraudulently created accounts. They then had the prepaid debit cards and ATM cards to these fraudulently created accounts sent to addresses of conspirators and thereafter used by coconspirators to withdraw funds from the accounts controlled by them. Once withdrawn, the funds were distributed to the conspirators in the United States and also sent to co-conspirators in Jamaica. Green was sentenced on March 2, 2022, to 78 months of imprisonment, five years supervised release and ordered to pay $915,825.97 in restitution. Bailey was sentenced on February 8, 2022, to 24 months of imprisonment, four years of supervised release and ordered to pay $48,000 in restitution. Jamare Mason was sentenced on January 18, 2022, to 78 months of imprisonment, five years of supervised release and ordered to pay $1,314,986.45 in restitution. Kadeem Gordon’s sentence was reduced for his cooperation and he was sentenced on December 14, 2021, to six months of imprisonment, 5 years of supervised release and ordered to pay $40,667.46 in restitution and Mario Ricketts’ sentence of 13 months imprisonment was reduced on December 21, 2021, to time served based on his cooperation. He was ordered to pay $564,230 in restitution.
United States v. Aisladys Diaz, Case No. 22-20354
Five defendants, Aisladys Diaz, 45, of Miami, her daughter Ailensy Buron Diaz, 29, of Miami, Berto Omar Rodriguez Fonseca, 33, of Cutler Bay, Florida, and husband and wife Yandys Diaz and Yainelis Perez Diaz of Miami, were charged in an indictment with conspiracy to commit access device fraud. According to allegations in the indictment, in May 2020 Aisladys Diaz, who was employed as an aide at a nursing home in Homestead, Florida, stole the personal identifying information of two elderly residents who were in her care. Diaz then shared that information with her daughter, Ailensy Buron Diaz, Berto Omar Rodriguez Fonseca, a finance manager at a car dealership in Miami Lakes, and Yandys Perez and Yainelis Perez Diaz, who used the information to purchase numerous new and used vehicles at car dealerships in Miami-Dade County, apply for numerous credit cards, and apply for an Economic Injury Disaster Loan, and an SBA loan under the CARES Act. The loss is approximately $700,000.
United States v. Sherri Lynn Smith, Case No. 21-14023
On August 26, 2022, defendant Sherri Lynn Smith of Broward County was sentenced to 51 months in prison, 4 years of supervised release and ordered to pay $288,865.92 in restitution for stealing from an elderly couple while she was employed as their caretaker. Smith worked for the couple from 2016 through 2019 and had access to the victims’ bank account to assist them in paying their bills. She used that access to embezzle approximately $300,000 out of the victims’ accounts without their knowledge or consent. She accomplished this by writing and forging the victim’s signature on checks made payable to herself, her family members, and her creditors; initiating Zelle electronic money transfers from the victims’ accounts to her own bank account; and making electronic payments from the victims’ accounts to her and her husband’s numerous credit card accounts.
United States v. Sean Kerwin Bindranauth, Case No. 19-10016
On March 21, 2022, defendant Sean Kerwin Bindranauth was sentenced to 180 months in prison for laundering approximately $1 million of victims’ funds that were illegally obtained from romance and investment fraud scams that targeted the elderly. According to court documents and the evidence presented at trial, Bindranauth’s conspirators contacted the victims who were generally lonely older women via social media, developed online relationships with the victims, and convinced them to send money to Bindranauth. Once Bindranauth received the money, he sent it from the United Sates to Nigeria using international money transfer companies, initialing direct bank transfers, purchasing gift cards, and relaying the gift card information. Over a dozen seniors and other victims were tricked into sending Bindranauth and his co-conspirators approximately $1 million. Evidence at trial also showed that other victims sent Bindranauth cash via USPS.
United States v. Isaac Grossman, Case No. 19-60300
On February 10, 2022, defendant Isaac Grossman, 47, of Parkland, Florida, was sentenced to 87 months in federal prison for directing an elder fraud scheme in which he sold stock in his South Florida-based technology company to elderly investors across the country and then misappropriated the funds for his own personal use. From September 2014 through April 2018, Grossman raised approximately $2.4 million in investor funds for his company, Dragon-Click Corp. He told potential investors the company was developing an internet application that would revolutionize internet shopping. He solicited funds by falsely telling potential investors they would double, triple, or quadruple their investments, and that Dragon-Click was on the verge of being sold to a large tech company, such as Google, Apple, or Amazon for more than $1 billion. He said investor funds would be used to complete technical development of the App, pay legal fees, etc. Grossman concealed from investors that he had been permanently barred by the Financial Industry Regulatory Authority from acting as a broker-dealer or associating with any broker-dealer firm. Grossman also had been permanently banned from commodities trading by the U.S. Commodity Futures Trading Commission. Not only did Grossman never use Investor money to develop the App, he instead spent $1.3 million on gambling, diamond jewelry, luxury cars, home mortgage payments, and tuition payments for his children’s private school education. For example, Grossman’s unlawful expenditures included a McLaren MP4-12C, a Chevrolet Corvette, and a 4.81 carat diamond ring.
These cases illustrate just some of the ways elders can be preyed upon. Just knowing some of a criminal’s tactics can make a big difference when it comes to defending against them. As part of the elder fraud efforts, USAO-SDFL staff regularly reach out to the community to raise awareness about scams and exploitation. During their weekly food distribution events around Miami and the surrounding areas they hand out elderly fraud and abuse flyers in addition to groceries.
Another big help is using the tip line. Consumer reporting about fraud and attempted fraud is critical to law enforcement efforts to investigate and prosecute schemes targeting older adults. Anyone age 60 or older who has been a victim of financial fraud, help is available from the National Elder Fraud Hotline: 1-833 FRAUD-11 (1-833-372-8311). This DOJ Hotline is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying the next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting or connect them with agencies and provide resources and referrals. The hotline is staffed seven days a week from 6 a.m. to 11 p.m. English, Spanish and other languages are available. More information about the DOJ’s elder justice efforts can be found on its Elder Justice website at www.elderjustice.gov.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
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Former Miami Resident Sentenced for Smuggling Illegal Refrigerant from China to U.S.Read the Press Release
MIAMI – Jorge Murrillo, 69, formerly of Miami, was sentenced to 15 months in federal prison for conspiring to violate the Clean Air Act (CAA) by importing over 300,000 kilograms of illegal hydrochlorofluorocarbon-22 (HCFC-22) worth more than $1.5 million from China. HCFC-22 is a widely used refrigerant for residential heat pump and air-conditioning systems.
According to court records and a Factual Statement filed in court, Murrillo smuggled large quantities of HCFC-22 into the United States to sell on the black market. Murrillo and his co-defendant would negotiate with a Chinese manufacturer for the purchase of large quantities of HCFC-22 and then import them into South Florida ports. At no point did he or his companies or associates hold unexpended consumption allowances that would have allowed the legal importation of HCFC-22. Between June and August 2007 Murrillo conspired to, and otherwise smuggled, approximately 309,536 kilograms of HCFC with a market value of $1.5 million into the U.S. Murrillo resided outside the United States from the time of his indictment in 2012 until his arrest in Miami in May 2022.
In addition to his prison term, U.S. District Judge Donald L. Graham sentenced Murrillo to one year of supervised release. Judge Graham also ordered him to pay $5,794.84 in restitution to Homeland Security Investigations for costs associated with storing the illegal merchandise. Murrillo’s co-defendant, Norberto Guada, was previously convicted in 2012 of illegally importing HCFC-22 and served a federal prison sentence.
The CAA regulates air pollutants, including ozone depleting substances such as HCFC-22. The CAA and its implementing regulations established a schedule to phase out the production and importation of ozone depleting substances, with a complete ban starting in 2030. To meet its obligations under an international treaty to reduce its consumption of ozone depleting substances, the United States issued baseline consumption allowances for the production and importation of HCFC-22 to individuals and companies. Those allowances were incrementally decreased culminating in a complete HCFC phaseout in 2030. To legally import HCFC-22 during all points in the phaseout, one must hold an unexpended consumption allowance.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida; Charles Carfagno, Special Agent in Charge, U.S. Environmental Protection Agency (EPA), Criminal Investigation Division, Southeast Area Branch; and Michael Buckley, Acting Special Agent in Charge, Homeland Security Investigations (HSI), Miami Field Office, announced the sentence.
EPA, Criminal Investigation Division and HSI Miami investigated the case. Customs and Border Protection assisted. Special Assistant U.S. Attorney Jodi A. Mazer and Assistant U.S. Attorney Thomas Watts-FitzGerald prosecuted it.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 12-cr-20514.
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Update on Press Release Issued August 22, 2013Read the Press Release
A federal jury found Patrick Campbell, of Sierra Leone, not guilty of the charges that were announced in the press release that appears below, originally issued on August 22, 2013.
A federal judge entered a judgment of acquittal in Campbell’s case on May 19, 2014.
Titled Individual Charged With Brokering Uranium Deal Intended For Supply To Iran
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), announce today that Patrick Campbell, 33, of Freetown, Sierra Leone, was arrested yesterday in Queens, NY as a result of an investigation conducted by the ICE-HSI. Campbell made his initial appearance earlier today in the Eastern District of New York.
According to the criminal complaint filed in the Southern District of Florida, Patrick Campbell was charged with brokering the supply of goods which the defendant knew were destined and intended for supply to Iran, in violation of the International Emergency Economic Powers Act (IEEPA) Title 50, United States Code, Section 1701, 1705 and the Iranian Transaction Regulations, 31 CFR 560.416, 560,204 and 560.203. If convicted, Campbell faces a possible statutory maximum sentence of up to 20 years in prison, followed by a term of three years of supervised release, and a possible $1,000,000 fine.
The criminal complaint alleges that on August 21, 2013, Campbell traveled to the United States from Sierra Leone and brought with him a sample of uranium, concealed in the soles of the shoes in his luggage, which he believed was to be provided to a representative of individuals seeking to obtain uranium for supply to Iran.
Mr. Ferrer commended the investigative efforts of ICE-HSI, the Port Authority of New York and the New Jersey Police Department. This case is being prosecuted by Assistant United States Attorney Michael Walleisa.
A criminal complaint is only an accusation and the defendant is presumed innocent until proven guilty.
Attachment:
Patrick Campbell Complaint (PDF)
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
South Florida Resident Sentenced to 35 Years in Prison for Production and Distribution of Child PornographyRead the Press Release
MIAMI – Billy Joe Gann, Jr., 32, of Sebring, has been sentenced to 420 months in federal prison for producing and distributing child pornography.
Court records show that in June of 2021, Gann began chatting online with a person whom he believed to be a woman living with her young daughter in Wisconsin. During the chats, Gann sent images and a video of a seven-year-old in lascivious poses and discussed his role in the girl’s sexual molestation. Gann encouraged the woman he believed to be a Wisconsin mother, and like-minded predator, to get her 14-year-old daughter drunk and sexually assault her after she was passed out. Law enforcement officers arrested Gann soon after that chat.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami, announced the sentence that U.S. District Judge Robin L. Rosenberg imposed yesterday in West Palm Beach.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
FBI Miami investigated the case with assistance from the Winnebago County Sheriff’s Office and the Highlands County Sheriff’s Office, Special Victims Unit. Assistant U.S. Attorney Luisa Honora Berti prosecuted it.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, case number is 21-cr-14034.
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Highlands County Methamphetamine Dealer Sentenced to Decade in Federal PrisonRead the Press Release
MIAMI – Doyle Van Roan, 64, was sentenced today by U.S. District Judge Donald L. Graham to 120 months in prison for drug trafficking. Roan previously pled guilty to possession with intent to distribute 50 grams or more of methamphetamine.
On February 19, 2021, law enforcement officers seized from Roan’s home approximately 65 grams of methamphetamine, packaged in three separate bags, two of which were marked as “1/2”. They also seized several smaller bags of methamphetamine, digital scales, and drug paraphernalia. At the time, Roan was on Alabama state probation for manufacturing methamphetamine.
As part of his guilty plea in this case, Roan admitted that all of the methamphetamine was his and that he sold it from his Avon Park home.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida; Deanne L. Reuter, Special Agent in Charge, Drug Enforcement Administration, Miami Field Division; and Paul Blackman, Sheriff, Highlands County Sheriff’s Office, announced the sentence.
DEA Miami and Highlands County Sheriff’s Office investigated this case. Assistant U.S. Attorney Michael D. Porter prosecuted it.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-14009.
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South Florida Armed Drug Trafficker Sentenced to 20 Years in Federal PrisonRead the Press Release
MIAMI – Today, a federal district judge sentenced Shelton Andrews, 38, of Highlands County, Florida, to 240 months in federal prison. Earlier this year, Andrews pled guilty to possessing with the intent to distribute 50 or more grams of methamphetamine and possessing a firearm as a convicted felon.
On September 27, 2021, Highlands County Sheriff’s deputies attempted to arrest Andrews on an outstanding warrant in Sebring, Florida. As officers approached, Andrews ran from the scene, throwing to the ground a backpack and loaded Smith & Wesson, Model 37, .38 caliber revolver. The backpack carried 211 grams of methamphetamine. The grip of the loaded gun carried Andrews’ DNA. While Andrews evaded arrest that day, he was taken into police custody a few weeks later, following a high-speed car chase.
Andrews was sentenced as a career offender under the federal sentencing guidelines.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, Deanne L. Reuter, Special Agent in Charge, DEA Miami, and Paul Blackman, Sheriff, Highlands County Sheriff's Office, announced the sentence imposed in federal court in Ft. Pierce by U.S. District Judge Donald L. Graham.
The case was prosecuted by Assistant U.S. Attorney Michael D. Porter.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-14045.
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Non-Payment of Federal Income Tax on Cryptocurrency Earnings Leads to Conviction for South Florida ResidentRead the Press Release
MIAMI – Ethan Thomas Trainor, has pled guilty to attempted tax evasion. Trainor used sophisticated on-line techniques to conceal from the IRS over $1 million in cryptocurrency he earned through illegal dark web transactions.
During a hearing in Ft. Lauderdale before U.S. District Judge Rodney Smith, Trainor admitted that he used cryptocurrency to buy and sell hacked online account logins (usernames and passwords) on dark web marketplaces. The hacked logins were connected to paid movie and music streaming services, pornography websites, educational websites, ride-share service accounts, and other on-line services.
Taxpayers who transact business in cryptocurrency must report their virtual earnings to the IRS and pay federal taxes on that income. From 2014 to 2017, Trainor earned over $1 million in cryptocurrency through dark web transactions and tried to avoid paying taxes on it by using services and techniques designed to conceal that the money was his. For example, Trainor ran his virtual currency transactions through “mixers,” on-line services that pool together (mix) the cryptocurrency transactions of different users, then distribute “clean” cryptocurrency to the users’ virtual wallets. The mixing makes it harder to determine the identity of those dealing in the cryptocurrency.
Trainor is scheduled to be sentenced in December. He faces up to five years in federal prison.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida; Special Agent in Charge Matthew D. Line, IRS Criminal Investigation (IRS-CI), Miami; Deanne L. Reuter, Special Agent in Charge, DEA Miami, Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami; Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), Miami; and Juan A. Vargas, Acting Inspector in Charge, United States Postal Inspection Service (USPIS), Miami, announced the conviction.
IRS-CI Miami, DEA Miami, FBI Miami, HSI Miami, and USPIS Miami investigated the case. Assistant U.S. Attorney Monique Botero is prosecuting it.
This case and prosecution were carried out by members of the South Florida High Intensity Drug Trafficking Area (HIDTA) Task Force. The South Florida HIDTA, established in 1990, is made up of federal, state, and local law enforcement agencies who, cooperatively, target the region’s drug-trafficking and money laundering organizations. The South Florida HIDTA is funded by the Office of National Drug Control Policy, which sponsors a variety of initiatives focused on the nation’s illicit drug trafficking threats.
This prosecution was part of Operation TORnado, which is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten the citizens of the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime. The OCDETF program facilitates complex, joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case no. 22-cr-60194.
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Miami Resident Charged with Running $4.6 Million Ponzi Scheme, Spending Investor Money on Wedding and VacationsRead the Press Release
MIAMI -- South Florida federal prosecutors have charged Judith Dianne Paris-Pinder, 49, with defrauding people out of millions by lying about the nature of proposed investments (soon-to-be paid, lawyer-negotiated insurance company settlements) and the expected rate of return (50%).
Paris-Pinder was the President of Pinder Associates, Inc, a North Miami company. Prosecutors allege that from November 2019 to October 2021, Paris-Pinder used the following fraudulent sales pitch to lure investors into the scheme: She worked with lawyers representing litigation plaintiffs who had settled their claims but were still waiting for actual settlement payments from the insurance companies. Paris-Pinder would use investor funds to advance or lend to plaintiffs a portion of their settlements (less than the full settlement amount). In exchange for the advances or loans, once the litigation plaintiffs received the actual settlement payment from the insurance companies, they would turn that entire amount over to Paris-Pinder. Then, Paris-Pinder would distribute to investors their initial contributions plus any returns – which could be as high as 50%.
According to the charges, however, the entire investment scenario was a scam. Paris-Pinder did not work with lawyers representing litigation clients and there were no settlement agreements. It is alleged Paris-Pinder kept the Ponzi scheme going by using money from new investors to pay existing investors and that, in total, she deceived victims out of over $4.6 million. Paris-Pinder spent about $1 million on herself, paying for her wedding, vacations and other entertainment, say federal prosecutors.
Paris-Pinder made her initial appearance yesterday in federal magistrate court in Miami. If convicted, she faces up to 20 years in federal prison.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, Robert M. DeWitt, Acting Special Agent in Charge, FBI, Miami Field Office, and Russell C. Weigel, III, Commissioner, Florida Office of Financial Regulation announced the charges.
FBI Miami and Florida Office of Financial Regulation are investigating this case. Assistant U.S. Attorney Eric E. Morales is prosecuting it.
An information is a charging instrument containing allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov, under case number 22-cr-20452.
Leader of Sex Trafficking Ring Sentenced to 60 Years in Federal Prison, Ordered to Pay over $14 Million in RestitutionRead the Press Release
MIAMI – A South Florida federal district judge has sentenced William D. Foster, 50, to 60 years in prison for running a sex trafficking organization for more than 20 years that exploited dozens of vulnerable women and girls. The judge also entered a $3.4 million forfeiture money judgment against Foster and ordered him to pay over $14 million in restitution to his victims.
At any given time, up to 15 women and girls lived with, and worked for, Foster. Through manipulation, lies, and threats, Foster forced his victims to work at South Florida exotic dance clubs and engage in commercial sex. Foster told the victims that he would invest their earnings so that they could retire in their 20s, which was not true. Foster coerced victims into working eight-hour shifts, six days a week, every week of the year and kept all their money.
He used psychological coercion and violence to keep victims in line. If a victim wanted to buy things like food, clothes, or personal hygiene products, she first had to get permission from Foster. He required many of the victims to go on liquid diets, get unsafe weight loss surgeries, and take anti-anxiety and anti-psychotic medications without proper diagnoses. Foster often had sex with victims, some of whom were minors.
If a victim attempted to leave, Foster would threaten financial ruin and other harm. If a victim left, she left with nothing.
Foster expanded his operation beyond South Florida. He transported victims to other states including New York, New Jersey, Michigan, and Nevada, for the purpose of engaging in prostitution.
Law enforcement officers recovered one of Foster’s victims out of a Detroit hotel room after she called the National Human Trafficking Hotline.
Foster tried to grow his business by starting a website (Foster’s Care) that promised to help human trafficking victims. His plan, however, was not to save anyone, but to lure them into his commercial sex business.
Foster pled guilty in March to conspiracy to commit sex trafficking; sex trafficking of a minor; sex trafficking of a minor by force, fraud, and coercion; five counts of sex trafficking by force, fraud, and coercion; two counts of sex trafficking by fraud and coercion; conspiracy to transport individuals for purposes of prostitution; two counts of transporting individuals for prostitution and a money laundering conspiracy.
Two of Foster’s co-conspirators -- Ashleigh Holloway, 37, and Hanah Chan, 32 – pled guilty in the Southern District of Florida to bank fraud charges in connection with the operation. They are scheduled to be sentenced on October 11.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida; Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami; and Anthony Salisbury, Homeland Security Investigations (HSI), Miami Field Office announced the sentence imposed yesterday by U.S. District Judge Raag Singhal.
FBI Miami and HSI Miami investigated this case. This case was prosecuted by Assistant U.S. Attorneys Jessica Kahn Obenauf and Brooke Elise Latta. Assistant U.S. Attorney Emily Stone is handling the asset forfeiture aspects of the case.
To report suspected human trafficking or to obtain resources for victims, please call 1-888-373-7888; text “BeFree” (233733), or live chat at HumanTraffickingHotline.org. The toll-free phone, SMS text lines, and online chat function are available 24 hours a day, 7 days a week, 365 days a year. Help is available in English, Spanish, Creole, or in more than 200 additional languages. The National Hotline is not managed by law enforcement, immigration or an investigative agency. Correspondence with the National Hotline is confidential and you may request assistance or report a tip anonymously. To learn more about the hotline, visit www.humantraffickinghotline.org.
To learn more about the U.S. Department of Justic’s efforts to combat human trafficking visit www.justice.gov/humantrafficking.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 19-cr-20804.
Former Securities Brokers Sentenced to Federal Prison Terms for Perpetrating Securities Fraud SchemeRead the Press Release
MIAMI – A South Florida federal judge has ordered prison sentences for two former securities brokers who defrauded investors out of $1.5 million by -- among other things -- lying about stock offerings, failing to disclose their exorbitant commission rates, and using an alias to hide one of the broker’s disciplinary pasts.
U.S. District Judge Rodney Smith sentenced Jeffrey Alan Horn, 47, of Coral Springs, Florida to 100 months and Omar Leon Plummer, 54, of Margate, Florida, to 36 months in prison. In April, a federal jury in Ft. Lauderdale found Horn and Plummer guilty of conspiring to commit securities fraud. The jury also found Horn guilty of conspiracy to commit mail fraud and wire fraud, and four counts of securities fraud.
Between October 2014 and April 2016, Horn and Plummer contacted prospective investors and made materially false statements and omissions about the private placement offering of restricted common shares of Sunset Capital Assets (formerly known as Sunset Brands). Horn and Plummer failed to disclose to prospective investors that that the brokers would receive exorbitant commissions from the sale of Sunset stock. In addition, Plummer failed to disclose his real name to prospective investors, using the alias “Al Goldstein” to conceal his extensive disciplinary history in the securities industry. This discipline history included cease-and-desist orders issued by state regulators in Colorado and Arkansas that prohibited Plummer from engaging in certain securities activities in those states.
Horn and Plummer misled prospective Sunset investors in other ways. For example, Horn sent Private Placement Memoranda and other written offering materials to investors that misrepresented both Sunset’s assets and the company’s intended use for the funds. Horn, Plummer, and others funneled nearly all $1.5 million of Sunrise investor money into their own pockets. Neither Horn nor Plummer held an active securities license with the Financial Industry Regulation Authority (FINRA) when they contacted investors about the Sunset offering.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami, announced the sentences.
FBI Miami investigated this case, with assistance from FINRA. Assistant U.S. Attorneys Dwayne Williams and David Snider prosecuted the case. Assistant U.S. Attorney Emily Stone is handling asset forfeiture.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-60019.
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First-Ever Paycheck Protection Program False Claims Act Whistleblower Case in Which the United States Intervened Against the Borrower SettlesRead the Press Release
MIAMI – Pan African Interchange LLC and Stanley Damas have agreed to pay $21,583.31 to resolve False Claims Act allegations arising from their false certifications that Pan African Interchange LLC would not receive more than one Paycheck Protection Program (PPP) loan prior to December 31, 2020, announced U.S. Attorney Juan Antonio Gonzalez.
The Coronavirus Aid, Relief and Economic Security (CARES) Act authorized the issuance of PPP loans to eligible small businesses struggling to pay employees and other business expenses during the pandemic. Under the PPP, in 2020, eligible businesses could obtain one SBA guaranteed PPP loan. Businesses were required to spend loan proceeds for employee compensation, rent or mortgage, and other specified expenses and, depending on their use of the loan proceeds, could qualify for loan forgiveness up to the full amount of the loan if certain requirements were met.
The SBA delegated authority to third-party lenders to underwrite and approve the PPP loans. To obtain a PPP loan, a qualifying business (through its authorized representative) signed and submitted a PPP loan application online through the lender’s application platform. The PPP loan application required the business (through its authorized representative) to acknowledge the PPP program rules and make certain affirmative certifications in order to be eligible to obtain the loan. Borrowers were required to certify as true and accurate that the applicant had not and would not receive more than one loan under the PPP prior to December 31, 2020. A similar certification was required if a borrower applied for loan forgiveness.
On April 14, 2022, the United States intervened in, and on May 20, 2022, filed its Complaint in Intervention against Pan African Interchange LLC and its owner, Stanley Damas, in a whistleblower case filed against Pan African Interchange LLC pursuant to the qui tam provisions of the False Claims Act. This case is the first PPP False Claims Act whistleblower case in which the United States intervened. The United States alleged that after applying for a PPP loan on May 20, 2020, Pan African Interchange LLC, through Stanley Damas, applied for a second PPP loan on May 21, 2020, and having received a PPP loan on May 22, 2020 from its first application, falsely certified that Pan African Interchange had not and would not receive more than one loan prior to December 31, 2020, when on June 12, 2020, Pan African Interchange, LLC signed a promissory note for a second PPP loan that it received on June 24, 2020. The United States further charged in its Complaint in Intervention that, despite numerous demands, and in violation of the PPP rules and the FCA, Pan African Interchange LLC and Damas unlawfully refused to return the second PPP Loan.
After the United States filed and served its Complaint in Intervention, Damas and Pan African Interchange LLC paid back to the United States, $208,332.00 to satisfy the second Pan African Interchange PPP Loan. However, in the settlement announced today, Pan African Interchange LLC and Damas agreed to pay an additional $21,583.31.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Assistant U.S. Attorney James A. Weinkle handled the matter, and Department of Justice Civil Division Trial Attorney Jared Wiesner and the SBA’s Office of Litigation assisted.
The qui tam action in the United States District Court for the Southern District of Florida captioned United States of America ex rel. Bryan Quesenberry v. Pan African Interchange, LLC, et al., Case No. 9:20-cv-81717-DMM (S.D. Fla).
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
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South Florida Residents Indicted for Nationwide Interstate Moving Fraud SchemeRead the Press Release
MIAMI – Yesterday, Arvaham Zano, 36, of Hollywood, made his first appearance in federal court to face charges that he and a co-conspirator operated an interstate moving company scam that included inflating the costs of clients’ interstate moves, taking possession of client household belongings, failing to deliver the goods as promised, and abandoning them throughout the nation at undisclosed self-storage facilities, often resulting in the total loss of client property.
A South Florida federal grand jury indicted Zano and Sofein Mlayah, 28, of North Miami Beach on September 15, 2022, charging them with Conspiracy to Commit Interstate Transportation of Stolen Property, Wire Fraud, Interstate Transportation of Stolen Property, and Failure to Give Up Possession of Household Goods.
Law enforcement arrested Zano yesterday. Mlayah is scheduled to self-surrender to authorities in Denver, Colorado tomorrow, after which he will make his initial appearance in federal court there.
According to the allegations of the indictment, Zano owned Zano Moving and Storage, LLC, and acquired jobs through various moving brokers. The brokers would negotiate moving service fees with clients, then subcontract the moving jobs to Zano. With the subcontracts in hand, Zano and his drivers, including Mlayah, traveled to the job locations -- often on dates different from the ones originally scheduled and sometimes late at night -- and loaded the household items to be moved into rental trucks. Zano or Mlayah would tell clients that they had more household items than the moving broker originally estimated. Then, with the items already in the truck, they demanded more money to begin the move – sometimes two to three times more than the original estimate. If the clients refused, they risked losing their deposits and belongings. It is alleged that Zano and Mlayah argued with the victims and coerced them into paying more for their moves. On other occasions, Zano and Mlayah would not start loading the trucks until they received the higher fees or loaded the trucks but never delivered the items, according to the indictment. Most of the victims’ household items have never been recovered.
If convicted, Zano and Mlayah face up to 20 years in prison.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida; Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami; and Todd Damiani, Special Agent in Charge, Department of Transportation Office of Inspector General (DOT-OIG), Southern Region, made the announcement.
FBI Miami and DOT-OIG investigated this case with assistance from the Sunny Isles Beach Police Department. The case is being prosecuted by Assistant U.S. Attorney Marc Anton.
An indictment contains mere allegations and defendants are presumed innocent unless and until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-60200.
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Food Drive Makes a difference for Those on a Fixed IncomeRead the Press Release
Staff from the United States Attorney’s Office for the Southern District of Florida (USAO-SDFL) served hundreds of locals this morning during a Farm Share Food Distribution at Gwen Cherry Park in Miami.
Staff was at it bright and early, setting up tents and tables to get food and pet supplies ready to distribute.
The line of cars stretched around the park’s main building long before 9 a.m. event kick-off. On today’s menu was whole chicken, milk, an assortment of bread, canned vegetables and pasta, as well as dog and cat food.
“I think it helps the community because we have food deserts throughout this district that we live in,” said J.D. Smith, Chief of Law Enforcement Coordination and Community Outreach Section, USAO-SDFL. “People are disabled, they’re unemployed, they’re senior citizens on a fixed income and it’s important for them to have a resource to add to whatever budget they have for food each month.”
Several people in line echoed this sentiment as they waited for their supplies.
“It helps me out a lot because it helps my social security check go a bit further,” one said. “I try to be here every time they hold one of these … if I can get up early enough. Everyone you see in line has been here for several hours.”
Another person waiting in line said, “These food drives are very important to me because I am disabled and on a fixed income.”
Department of Justice staff members hold these drives four times per month by partnering with Farm Share, Miami-Dade County Parks and Recreation, and Miami-Dade Police Department—South District. Click here for times and locations as they do change.
Anyone interested in volunteering for these events may call (305) 961-9134 to speak with someone at the U.S. Attorney’s Office.
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Hialeah Armed Hostage-Taking Ring Busted for Ransoming Cuban Migrants and Human Smuggling OffensesRead the Press Release
MIAMI – On September 15, 2022, Didier Perez Perez, Lester Leyniel Soca Diaz, and Yoandy Alonso were indicted by a Miami Southern District of Florida Grand Jury for transporting Cuban nationals into the U.S. via Monroe County, Fla., to a migrant stash house in Hialeah, Fla., where they were held for a requested ransom of $15,000.
Migrants were threatened—to include being told they would be left in the middle of the ocean if their smuggling debts were not paid. Law enforcement rescued the captured migrants and busted the alien transport ring by accompanying a victim’s friend to the hostage exchange point.
The three men were charged with: Conspiracy to Transport and Harbor Aliens for Profit; Transporting Aliens for Profit; Conspiracy to Commit Hostage Taking; and Hostage Taking. All three defendants have been detained pending trial.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (“OCDETF”) investigation. The principal mission of the OCDETF is to identify and dismantle the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten U.S. citizens. The task force uses a prosecutor-led, intelligence-driven, multiagency approach to combat transnational organized crime. The OCDETF handles complex operations by focusing its partner agencies on priority targets.
These arrests are the result of ongoing efforts of the Operation Sisyphus Task Force, a multiagency partnership established by the OCDEFT’s Priority Transnational Organized Crime Program. The Operation Sisyphus Task Force was formed to combat Caribbean-based organized crime and includes the U.S. Attorney’s Office for the Southern District of Florida, FBI Miami, and HSI Miami. In recent years, the Operation Sisyphus Task Force has targeted organizations utilizing coercion and extortion to compel migrants and their families to make payments for the release of loved ones.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, Robert M. DeWitt, Acting Special Agent in Charge of the FBI’s Miami Field Office, Anthony Salisbury, Special Agent in Charge of Homeland Security Investigations (HSI), Miami Field Office, and George Fuente, Chief of Police, Hialeah Police Department, made the announcement.
This case was investigated by FBI Miami, HSI Miami, and the Hialeah Police Department. This case is being prosecuted by Assistant United States Attorney Elena Smukler. Assistant United States Attorney Annika Miranda is handling the case’s asset forfeiture.
An indictment contains mere allegations and defendants are innocent unless and until found guilty in a court of law.
If you believe you are a victim of migrant coercion or extortion or know someone who is, you are encouraged to call 1-800-CALLFBI (225-5324). The toll-free phone number is available 24 hours a day all year. Help is available in English, Spanish, and other languages.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-mj-03513.
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Broward County Felon Sentenced to 10 Years for Federal Gun and Identity Theft CrimesRead the Press Release
MIAMI – Deshawn Lemonte Wheeler, a 38-year-old felon from Lauderhill, Florida, was sentenced to 120 months in prison for possessing a cache of firearms and ammunition, as well as sensitive identity and financial information belonging to others.
According to court documents, a narcotics investigation led law enforcement officers to Wheeler. On March 3, officers executed a search warrant at Wheeler’s home, where they recovered 10 firearms (including pistols, revolvers, and a rifle), multiple high-capacity-drums and other magazines, and a vast amount of multiple caliber ammunition. They also recovered numerous credit and debit card account numbers, bank account numbers, driver’s license identification numbers, and a Department of Defense identification number, all belonging to other people, say the court filings.
On March 3, Wheeler was a felon, having been previously convicted in federal court of conspiring to commit a Hobbs Act robbery.
(Court docket entry #8, exhibit #1)
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami, made the announcement.
FBI Miami investigated the case, with assistance from Broward County Sheriff’s Office, Lauderhill Police Department, and Fort Lauderdale Police Department. Assistant U.S. Attorney Joseph A. Cooley prosecuted the case.
This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. In 2017, PSN was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement, and the local community to develop effective, locally-based strategies to reduce violent crime.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-60063.
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South Florida U.S. Attorney’s Office to Lead COVID-19 Fraud Strike Force Team Against Pandemic Relief FraudRead the Press Release
MIAMI – Recognized as a leader in pandemic relief fraud prosecutions, the Southern District of Florida’s U.S. Attorney’s Office has been selected to head one of three COVID-19 Fraud Strike Force Teams nationally. In recent weeks alone, the district has charged 23 COVID-19 relief fraud cases, with scheme amounts totaling over $150 million.
The Department of Justice established the Strike Force to enhance the department’s existing efforts to combat and prevent COVID-19 related fraud.
“Over the years, the South Florida U.S. Attorney’s Office and its law enforcement partners have developed robust domestic and international anti-fraud and money laundering practices,” said Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida. “Our experience with these data-driven financial prosecutions allowed us to launch an early and aggressive attack on COVID-19 relief fraud by holding accountable those who tried to capitalize on an unprecedented crisis. We are proud to have been selected to lead one of three COVID-19 Fraud Strike Force Teams and look forward to continuing to advance this important Department of Justice effort.”
In total, the South Florida U.S. Attorney’s Office has charged over 80 cases since the CARES Act was passed. It has seized over $23.5 million in stolen relief funds. The Strike Force Team will build on this momentum.
“These Strike Force Teams will build on the Department’s historic enforcement efforts to deter, detect, and disrupt pandemic fraud wherever it occurs,” said Attorney General Merrick B. Garland. “Since the start of this pandemic, the Justice Department has seized over $1.2 billion in relief funds that criminals were attempting to steal and charged over 1,500 defendants with crimes in federal districts across the country, but our work is far from over. The Department will continue to work relentlessly to combat pandemic fraud and hold accountable those who perpetrate it.”
Anticipating the need to protect the integrity of these taxpayer funds and to otherwise protect South Floridians from financial fraud related to the COVID-19 pandemic, the Southern District of Florida established multiple efforts to identify, investigate, and prosecute such fraud. This multifaceted approach has proven invaluable in going after those who have cheated the system.
“The Strike Force Teams are the latest example of the Justice Department’s commitment to fight pandemic fraud,” said Associate Deputy Attorney General Kevin Chambers, who serves as the department’s director for COVID-19 Fraud Enforcement. “The work being done by our prosecutors, trial attorneys, agents and partners on our COVID-19 Fraud Enforcement Task Force has been extraordinary. We’re going a step further with the announcement of strike force teams to support, enhance, and continue the great work being done across the department.”
“Our investigations of schemes to defraud federal pandemic relief programs have continued and will continue even as the pandemic itself evolves,” said Federal Deposit Insurance Corporation Office of Inspector General Special Agent in Charge Kyle A. Myles. “The cases described in this announcement reflect collaboration with our law enforcement partners and specific progress made in the fight to identify, investigate, and prosecute financial crime affecting FDIC-insured institutions.”
The Southern District of Florida’s Strike Force Team will be comprised of dedicated prosecutors, working together with agents from Department of Labor Office of Inspector General, Small Business Administration Office of Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, Department of Homeland Security Office of Inspector General, FBI, U.S. Secret Service, Homeland Security Investigations, Internal Revenue Service Criminal Investigations, U.S. Postal Inspection Service, Federal Reserve System Office of Inspector General, Treasury Inspector General for Tax Administration, and U.S. Coast Guard Investigative Service. The Pandemic Response Accountability Committee and Special Inspector General for Pandemic Recovery will assist the Strike Force.
“OIG stands firm in the fight to hold persons that commit fraud responsible in collaboration with our law enforcement partners,” said SBA OIG’s Inspector General Hannibal M. Ware. “OIG remains committed to rooting out bad actors and protecting the integrity of SBA programs every day. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
A group effort is needed to address this problem and that is exactly what these agencies and departments have committed to doing.
“This announcement is the culmination of hard work by numerous agencies,” said Wayne Rosen, Assistant Special Agent in Charge, Miami Regional Office, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection. “It sends a clear message that federal law enforcement is watching and will relentlessly pursue fraudsters and bring them to justice. We are proud to work with our law enforcement partners in this endeavor.”
Although these COVID-19 loan programs have ended, guilty parties should not get a false sense of security. Their capture certainly remains a priority.
“The CARES Act provided vital funds to thousands of small businesses impacted by the COVID-19 pandemic economic downturn,” said Jason J. Carley, Assistant Special Agent in Charge, FBI Miami. “While those loan programs have ended, the FBI’s commitment to seeking out those who defrauded the government continues. Millions of taxpayer dollars earmarked for CARES Act programs were diverted away from the intended recipients by illegal activity. If you defrauded these programs, know that our investigators will continue to follow the money right to your doorstep.”
The actions of fraudsters have basically taken money from struggling people doing their best to endure the pandemic.
“These defendants are alleged to have defrauded a program intended to assist hardworking Americans who have been unfairly impacted as a result of this unprecedented and challenging health crisis,” said Special Agent in Charge (SAC) Anthony Salisbury, HSI Miami. “HSI remains committed to working with our law enforcement partners to bring every asset to bear against anyone who seeks to take advantage of the pandemic to deliberately harm and deceive others for their own profit.”
That fraudsters have taken advantage of a critical health situation only seems to bolster the efforts to take them down.
“It is very unfortunate that criminals have seized on the COVID-19 pandemic as a money-making opportunity and created fraudulent schemes to steal from federal programs designed to assist law-abiding Americans,” said Matthew D. Line, Special Agent in Charge, IRS-Criminal Investigation (IRS-CI), Miami Field Office. “We continue relentlessly committed to working with our law enforcement partners to aggressively pursue criminal investigations and hold crooks accountable for fraudulently profiting from CARES Act programs.”
“The allegations in these matters are very disturbing,” said J. Russell George, Treasury Inspector General for Tax Administration. “Exploiting some of the most vulnerable people in our society will not be tolerated. The Treasury Inspector General for Tax Administration aggressively investigates abuse of the Federal tax system. We are committed to working with our law enforcement partners to ensure that those who endeavor to corrupt federal tax administration are prosecuted to the fullest extent of the law.”
As much success as the agencies pursuing this type of criminal activity have had, there still remains work to be done.
“An important mission of the U.S. Department of Labor, Office of Inspector General is to investigate allegations of fraud related to the unemployment insurance program,” said Mathew Broadhurst, Special Agent-in-Charge, Atlanta Region, U.S. Department of Labor, Office of Inspector General. “The DOL-OIG fully supports the Department of Justice’s COVID-19 Strike Force Team program. Through collaboration and leveraging of resources, the federal law enforcement community has made great strides in holding COVID-19 fraudsters accountable but there is more work to be done. We will continue to work closely with the U.S. Attorney’s Office and our strike team partners to safeguard unemployment compensation benefit programs for those who most need them.”
It is a team effort that everyone should take pride in.
“The DHS Office of Inspector General thanks the U.S. Department of Justice and our law enforcement partners for significant collaboration within the COVID-19 Fraud Strike Force,” said Dr. Joseph V. Cuffari, Inspector General of the Department of Homeland Security. DHS OIG will continue to investigate these crimes and to help ensure the integrity of DHS programs.”
Criminal enforcement in the Southern District of Florida to combat COVID-19/CARES Act-related financial fraud schemes have proceeded on numerous fronts, including:
- Paycheck Protection Program (PPP) fraud: Prominent among the District’s efforts have been cases involving attempts to obtain PPP loans through fraud. These loans were intended to help small businesses financially survive the COVID-19 pandemic. The cases charged in the district involve a range of conduct, from individual business owners who have inflated their payroll expenses to obtain larger loans than they otherwise would have qualified for to serial fraudsters who revived dormant corporations and purchased shell companies with no actual operations to apply for multiple loans. They then falsely stated they had significant payroll to organized criminal networks submitting identical loan applications and supporting documents under the names of different companies.
- Economic Injury Disaster Loans (EIDL) fraud: Another type of fraud charged in the district has been fraud against the EIDL program, which was designed to provide loans to small businesses, agricultural, and non-profit entities. Fraudsters have targeted the program by applying for EIDL advances and loans on behalf of ineligible, newly-created shell or non-existent businesses and diverting the funds for illegal purposes.
- Unemployment Insurance (UI) fraud: Due to the COVID-19 pandemic, more than $860 billion in federal funds has been appropriated for UI benefits through September 2021. People looking to exploit UI benefits during the pandemic use stolen identities to fraudulently file for UI benefits.
RECENT PROSECUTIONS
In recent weeks, the district has charged 23 COVID-19 relief fraud cases, with scheme amounts totaling over $150 million. It is alleged that the defendants in these cases received over $35 million.
United States v. Hernandez, Case No. 22-mj-03333
The Southern District of Florida recently charged Daniel Hernandez, 50, a Market Manager for a top national bank, with orchestrating a $30 million COVID-19 relief fraud scheme. According to the criminal complaint affidavit, Hernandez – who oversaw 80 bank employees and more than 20 branches throughout South Florida – recruited bank customers and at least one former bank employee to submit over 90 fraudulent PPP loan applications. It is alleged that Hernandez advised the recruits on how to file the applications and what to include in them, then used his position at the bank to ensure the fraudulent loans were reviewed and, when possible, approved. The applications sought over $30 million in fraud proceeds. The investigation to date has identified over $15 million in fraudulent loans issued.
In addition to Hernandez, the Southern District has charged others with participating in the fraud. Willian Alexander Posada Sandrea pled guilty and is scheduled to be sentenced on October 24, 2022 (22-cr-20194).
Armando De Leon, who worked at the bank with Hernandez, was charged with conspiracy to commit wire fraud (22-20420-CR-KMM). Javier Alfonso Barata (22-mj-3095), and Alvaro Enrique Castillo along with Douglas David Melean Socorro (22-mj-2928) have also been charged.
FDIC-OIG, FBI Miami, SBA-OIG, and the Florida Department of Revenue investigated this matter.
Assistant U.S. Attorney Eli S. Rubin of the Southern District of Florida is prosecuting the case, which charges Hernandez with conspiracy to commit bank fraud.
Assistant U.S. Attorney Joshua Paster is handling forfeiture.
United States v. Emile, Case No. 22-cr-60176
The Southern District recently charged Herbert Emile, 41, with participating in a $100 million COVID-19 relief fraud scheme. In 2019, the FDIC-OIG began investigating a group of individuals who were using shell companies, stolen personal identification information – including stolen social security numbers-- and synthetic identities to commit fraud against several federally-insured banks in the United States.
When the CARES Act was enacted in 2020, members of the conspiracy used their pre-established shell companies to steal millions of dollars from the Act’s programs. In total, members of this conspiracy and their associates are responsible for stealing over $100 million from U.S. banks and PPP/CARES Act programs.
In addition to Emile, others were also charged in this district with participating in the fraud scheme. These defendants have pled guilty: Hasan Hakim Brown, 46; Jean Renald Fleuridor, 42; Raul Mauricio Gonzalez, 48; and Lorin George Saunders, 40.
FDIC-OIG and the United States Secret Service investigated the case. SBA-OIG and FBI Miami assisted.
Assistant U.S. Attorney Brooke Watson is prosecuting the case.
United States v. Philossaint Case No. 22-cr-08336
United States v. Tollinchi, 22-cr-08337
United States v. Shazier, et al., 22-cr-08357
In cases alleging PPP fraud, EIDL fraud, and loan forgiveness application fraud, a South Florida federal grand jury recently charged Joff Stenn Wroy Philossaint, 32, of Miramar, Florida; Mariel Tollinchi, 35, of Miramar, Florida; Maurice Shazier, 50, of Fort Pierce, Florida; David Andre Johnson, 52, of Lauderhill, Florida; Regine Marie Rene, 32, of Boynton Beach, Florida; and Brianna Monique Gayle, 23, of Riviera Beach, Florida, with conspiring to commit wire fraud and money laundering, as well as with aggravated identity theft. Philossaint also was charged with obtaining U.S. citizenship through fraud.
It is alleged that Philossaint and Gayle, working through one of Philossaint’s businesses, worked with others to prepare PPP and EIDL loan applications, as well as loan forgiveness applications, on behalf of dozens of companies that falsely certified their number of employees, their revenue, and their business expenses. As alleged, to support the EIDL and PPP loan applications, and the PPP loan forgiveness applications, the defendants prepared and submitted fake IRS documents and created payroll accounts with a national payroll processing company using stolen identities to make it appear that the companies had paid wages, which they never did.
According to the allegations, Philossaint charged a kickback of 10 percent of the funded loans and required others to disguise the kickback payments by splitting them into smaller amounts and writing “advertising” on the memo lines of the checks.
It is alleged that Philossaint and his fiancée, Tollinchi, directly received PPP and EIDL loans of nearly $500,000, in addition to kickback payments; Shazier received PPP and EIDL loans totaling $873,328; Johnson received PPP and EIDL loans totaling $443,792; and Rene received PPP and EIDL loans totaling $183,906. It is also alleged that the 26 companies for which Philossaint and Gayle set up payroll processing received at least 33 PPP and EIDL loans totaling more than $4.8 million.
SBA-OIG, U.S. Secret Service, FBI Miami, IRS-CI Miami (West Palm Beach), and HSI Miami are investigating the case. The West Palm Beach U.S. Attorney’s Office is prosecuting it.
United States v. Almaguer, et al., Case No. 22-cr-80118
According to the indictment, Defendants Leiner Pena Infante, Yandre Garcia Hernandez, Eduardo Ramos Leyva and others gave Yunior Barrera Almaguer information about companies they controlled so that Barrera could use the information to fraudulently apply for PPP loans. The conspirators received approximately $8 million in PPP funds and spent much of the loan proceeds for their personal use and benefit. After receiving the loans, the defendants named above laundered the funds along with co-defendants Jorge S. Alvarez, Dariel Garcia Carmona, and Jose Raul Amaro – who had separately obtained their own fraudulent PPP loans, according to the charges. FBI Miami investigated the case. Assistant U.S. Attorney Susan Osborne is prosecuting the case.
United States v. Diaz, et al., Case No. 22-cr-20354
Aisladys Diaz, 45, of Miami, Florida, her daughter Ailensy Buron Diaz, 29, of Miami, Florida, Berto Omar Rodriguez Fonseca, 33, of Cutler Bay, Florida, and husband and wife Yandys Diaz, 29, and Yainelis Perez Diaz, 33, of Hialeah, Florida, were charged in an indictment with conspiracy to commit access device fraud, use of an unauthorized access device, aggravated identity theft, conspiracy to commit wire fraud and wire fraud. According to allegations in the indictment, in May 2020, Aisladys Diaz, a former aide employed at a nursing home in Homestead, Florida, stole the personal identifying information (“PII”) of two elderly residents in her care. The conspirators used the PII of these elderly victims in several schemes including one where a fraudulent Economic Disaster Injury Disaster Loan, an SBA loan under the CARES Act was applied for. FBI Miami and TIGTA investigated the case. Assistant United States Attorney Lois Foster-Steers is prosecuting it.
United States v. Ferguson, Case No. 22-cr-60164
Ego Ferguson, 53, of Pompano Beach, Florida, was charged by indictment with wire fraud and engaging in financial transactions in criminally derived property. The indictment alleges that Ferguson caused the preparation of false/fraudulent PPP loan applications on behalf of various companies that falsely certified number of employees and employee payroll. As alleged, Ferguson caused the submission of these fraudulent PPP loan applications to a loan processor and Ferguson also provided fraudulent IRS forms that falsely indicated that these companies had paid employee wages and taxes that the companies had not actually paid. The indictment alleges that that Ego Ferguson charged a fee of twenty percent for these loans and that Ferguson maintained a spreadsheet showing the submission of apparent PPP loans totaling over $6 million. IRS-CI Miami, FDIC-OIG, FRB and the U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorney Michael Berger is prosecuting the case.
United States v. Carrillo et al., Case No. 22-cr-20368
Kenia Carrillo, 45, Roberto Lopez, 50, Lester Hedman Safont, 51, Oreste Ruiz Linares, 51, Honolio Navarro Caballero, 39, Barbara Alvarez, 44, Javier Pico, 56, Alfredo Contrera, 50, and Erisbel Gonzalez Gomez, 43, have been charged by indictment with conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, and money laundering. The indictment charges that the group, and others, participated in a conspiracy to submit fraudulent PPP applications and obtained over $2.6 million in fraudulent loan proceeds. Once they obtained the money, instead of spending it on payroll and other permissible business expenses, the group laundered the funds by issuing checks to each other to conceal the fraud. The U.S. Secret Service and SBA-OIG, with the assistance of the Miami-Dade Police Department, investigated the case. Assistant U.S. Attorney Thomas Haggerty is prosecuting it. Assistant U.S. Attorney Peter Laserna is handling asset forfeiture.
United States v. Hermoso, Case No. 22-cr-20360
Maritza Morales Hermoso, 57, Miami, Florida, was charged by Indictment with conspiracy to commit wire fraud, wire fraud, and money laundering. The Indictment charges that Hermoso and others participated in a conspiracy to submit fraudulent PPP and EIDL applications and obtained approximately $1.5 million in fraudulent loan proceeds. Specifically, the Indictment charges that Hermoso submitted six PPP loan applications and two EIDL applications for eight different businesses. The Indictment also alleges that once Hermoso obtained the loan proceeds, instead of spending it on payroll and other permissible business expenses, she used it for cosmetic surgery, gambling, and to buy a Cadillac. She often disguised her misuse of funds by laundering the proceeds through multiple unrelated business accounts or withdrawing the money in cash, it is alleged. U.S. Secret Service and the SBA-OIG investigated the case. Assistant U.S. Attorney Joseph Egozi is prosecuting it.
United States v. Joseph, Case No. 22-cr-60162
Sherry Joseph, 33, of New York, was charged by indictment with wire fraud conspiracy and wire fraud. The indictment alleges that Joseph, while on federal pretrial release in a separate case in the District of New Jersey, participated in a conspiracy to submit millions of dollars of fraudulent PPP loan applications. Specifically, the indictment alleges that Joseph used aliases to hide her identity while coordinating between the scheme ringleader and several individuals she recruited to seek fraudulent PPP loans through the scheme. Joseph also demanded and received kickbacks from recruits who received fraudulent PPP loans through the scheme, it is alleged. IRS-CI Miami investigated the case. Assistant U.S. Attorney Kiran N. Bhat and Department of Justice (DOJ) Trial Attorney Philip B. Trout are prosecuting it.
United States v. Sheppard, Case No. 22-cr-20290
Eric Dean Sheppard, 53, of Bal Harbour, Florida, was charged by indictment with six counts of wire fraud. The indictment alleges that Sheppard, through three different entities that he controlled, applied for and obtained EIDL and PPP loan proceeds in excess of $900,000. He falsified tax forms and misrepresented the borrowing entities’ revenues, monthly payroll, and numbers of employees. FBI Miami investigated the case. Assistant U.S. Attorney Marty Fulgueira Elfenbein is prosecuting it.
United States v. Jacquez, Case No. 22-cr-60171
Florencio Jacquez, 41, of Cape Coral, Florida, was charged by information with conspiracy to commit wire fraud. The information against Jacquez alleges that Jacquez participated in a conspiracy to submit millions of dollars in fraudulent PPP loan applications. Specifically, the information alleges that Jacquez received a fraudulent PPP loan of $801,250 for his own company, Next Auto Body, LLC. The U.S. Secret Service, IRS-CI Miami, and SBA-OIG investigated the case. Assistant U.S. Attorney Amanda Perwin is prosecuting it.
United States v. Harricharan, Case No. 22-cr-60173
Keegan Harricharan, 39, of Coral Springs, Florida, was charged by information with conspiracy to commit wire fraud. The information against Harricharan alleges that Harricharan participated in a conspiracy to submit millions of dollars in fraudulent PPP loan applications. Specifically, the information alleges that Harricharan received a fraudulent PPP loan of $840,827 for his own company, World Scientific Industrial and Medical, Inc. The U.S. Secret Service, IRS-CI Miami, FBI Miami, and SBA-OIG investigated the case. Assistant U.S. Attorney Amanda Perwin is prosecuting it.
United States v. Sales, Case No. 22-cr-60172
Abdolrahman Sales, 26, of Lake Elsinore, California, was charged by information and pled guilty to conspiracy to commit an offense against the United States. He is scheduled to be sentenced on November 7, 2022, before Judge William P. Dimitrouleas of the United States District Court for the Southern District of Florida. In pleading guilty, Sales admitted that he participated in a conspiracy to obtain a fraudulent PPP loan. Specifically, Sales admitted that he received a fraudulent PPP loan of $407,727 for his company, Kyng Simba, Inc. His loan application included falsified bank statements and payroll tax forms that overrepresented the company’s number of employees and monthly payroll. Sales also admitted that he paid kickbacks to co-conspirators for their roles in helping him obtain this fraudulent PPP loan. IRS-CI Miami investigated the case. Assistant U.S. Attorney Kiran N. Bhat and DOJ Trial Attorney Philip B. Trout are prosecuting it.
United States v. Kelly, Case No. 22-cr-20168
Randy Kelly, 35, of Miami, was charged by information and pled guilty to conspiracy to commit an offense against the United States. He was sentenced August 19, 2022, before Judge Robert N. Scola of the United States District Court for the Southern District of Florida. In pleading guilty, Kelly admitted that he participated in a conspiracy to obtain a fraudulent PPP loan. Specifically, Kelly admitted that he received a fraudulent PPP loan of $495,822 for his company, Connected Forever LLC, after submitting a loan application that included falsified bank statements and payroll tax forms that overrepresented the company’s number of employees and monthly payroll. Kelly also admitted that he paid kickbacks to a co-conspirator who helped obtain this fraudulent PPP loan. IRS-CI Miami and FBI Miami investigated the case. Assistant U.S. Attorney Kiran N. Bhat and DOJ Trial Attorney Philip B. Trout prosecuted it.
United States v. Rojas, Case No. 22-cr-20364
Yadira Escobar Rojas, 34, of Homestead, Florida, was charged by information with wire fraud. The information alleges that Escobar Rojas submitted two false and fraudulent EIDL applications and one false and fraudulent PPP loan application on behalf of two different entities she controlled, Los Molinos Trucking, Inc. and Molino Fish Inc. She received over $495,000 in fraud proceeds. FBI Miami investigated the case. Assistant U.S. Attorney Eli S. Rubin is prosecuting it.
United States v. Floradin, Case No. 22-cr-20361
Elie Floradin, 59, of Miami, Florida, was charged by indictment with wire fraud and money laundering in connection with the alleged repeated submission of fraudulent Paycheck Protection Program (“PPP”) applications on behalf of his purported hiring agency business, You’re Hired Employment Agency, LLC (“You’re Hired”). The indictment alleges that, in July 2020, Floradin caused the submission of a false and fraudulent PPP application on behalf of You’re Hired, which resulted in the disbursement of approximately $199,999 in federal COVID-19 assistance funds directly into Floradin’s personal bank account. Shortly thereafter, the government alleges that Floradin transferred approximately $177,000 of those funds into a different account that he controlled, knowing that the PPP funds were derived from unlawful activity. The indictment further alleges that Floradin then filed multiple (unsuccessful) “second draw” applications, attempting to once again fraudulently obtain COVID-19 assistance funds in the year 2021, including through the use of falsified federal tax forms, all in an effort to continue to enrich himself and others. TIGTA and the Florida Office of Financial Regulations investigated the case. Assistant United States Attorney Eduardo Gardea, Jr., is prosecuting it.
United States v. Izzo, Case No. 22-cr-60155
Jennifer Pamela Izzo, 34, of Coral Springs, Florida, was charged by indictment with wire fraud and aggravated identity theft for her alleged months-long embezzlement scheme against her former employer’s company, through which she misappropriated company funds and attempted to personally enrich herself from a COVID-relief loan submitted on behalf of the Broward-based company. The indictment charges that from October 2019 to April 2020, Izzo abused her position as the company’s bookkeeper and accounts payable clerk by creating fictitious accounts in the names of the company’s real vendors, to carry out fraudulent charges using the company’s credit cards, ultimately funneling the funds into her own personal bank account. The indictment further charges that Izzo abused her position by filing an Economic Injury Disaster Loan, which she had been asked to file on behalf of the company to apply for federal COVID-assistance funds, but which she submitted with her own personal bank account information to personally enrich herself. The U.S. Secret Service and the Fort Lauderdale Police Department investigated the case. Assistant United States Attorney Eduardo Gardea, Jr. is prosecuting it.
United States v. Hyppolite, Case No. 22-cr-20394
Mackinson Hyppolite, 33, of Miami, was charged by indictment with using someone else’s identity to fraudulently apply to the U.S. Small Business Administration (“SBA”) for a COVID-19 relief advance grant and low-interest Economic Injury Disaster Loan (“EIDL”) loan for a company to which Hyppolite had no connection. According to the indictment, the loan application falsely certified, among other things, that an individual named “D.A.” owned the company and had suffered economic injury due to the COVID-19 pandemic. In reality, Hyppolite, not D.A., filed the application and neither Hyppolite nor D.A. had any relationship to the company. The indictment alleges that Hyppolite possessed and used D.A.’s personal identifying information without her knowledge or authorization, including her social security number. As a result of the fraudulent application, the SBA preapproved Hyppolite for a $26,600 federal loan.
The Indictment charges Hyppolite with one count of wire fraud, one count of access device fraud, and three counts of aggravated identity theft. The Office of Treasury Inspector General for Tax Administration (TIGTA) and FBI Miami investigated the case. Assistant U.S. Attorney Will J. Rosenzweig is prosecuting the case. Assistant U.S. Attorney Peter Laserna is handling asset forfeiture.
United States v. Potokri, Case No. 22-cr-60147
Obukowho Potokri, 36, of Fort Lauderdale, Florida, was charged by indictment with theft of government funds. Potokri is alleged to have fraudulently received unemployment insurance benefits that were issued to an individual named “D.M.” The Department of Labor Office of Inspector General investigated the case. Assistant U.S. Attorney Karla Albite of the Southern District of Florida is prosecuting the case. Assistant U.S. Attorney Joshua Paster is handling forfeiture.
United States v. Hilaire, Case No. 22-cr-60175
Chirac Hilaire, 41, of Broward County, Florida, was charged by indictment with wire fraud and money laundering. The indictment against Hilaire alleges that Hilaire participated in the submission of several fraudulent EIDL and PPP loan applications. Specifically, the indictment alleges that Hilaire received fraudulent PPP loan proceeds amounting to approximately $150,000 for his own company, Hilaire LLC. FBI Miami investigated the case. Assistant U.S. Attorney Lauren A. Astigarraga is prosecuting it.
United States v. Sarmiento Carrion, Case No. 22-mj-03412
Yoliesse Sarmiento, 39, of Miami, Florida, has been charged by criminal complaint with bank fraud. Sarmiento conspired with others to file a fraudulent PPP loan application. In May of 2020, he re-instated a company that had been dissolved in 2019 and listed himself as the sole officer of the company. Two weeks later, a co-conspirator submitted a fraudulent PPP loan application for the company and included a forged bank statement with the application. Sarmiento received $255,000 in PPP funds and, over two weeks, depleted the entirety of the funds. The U.S. Secret Service and SBA-OIG, with the assistance of the Miami-Dade Police Department, investigated the case. Assistant U.S. Attorney Thomas Haggerty is prosecuting it. Assistant U.S. Attorney Peter Laserna is handling asset forfeiture.
PLEASE NOTE: Criminal complaints, informations, and indictments contain mere allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Former Florida Atlantic University Student Pleads Guilty to Production of Child PornographyRead the Press Release
Miami, Florida – Shawn Anthony Jackson Outler, 23, has pled guilty in Ft. Pierce federal court to producing child pornography.
According to court records, Outler formed online relationships with children as young as 12 through social media. After befriending the minors, he would entice them to create sexually explicit videos. He also directed them to engage in sexually explicit activity by video conferencing. Outler directed one 14-year-old victim to masturbate during one such conference. He took and saved screenshots of the activity.
At sentencing, Outler faces between 15 and 30 years in prison and up to a lifetime of supervised release. Sentencing is set for December 16, 2022, at 10:10 a.m., before U.S. District Judge Aileen M. Cannon.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Acting Special Agent in Charge Robert M. DeWitt, FBI Miami made the announcement.
FBI Miami investigated the case. Assistant United States Attorney Diana Acosta is prosecuting it.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-14018.
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Florida Businessman Pleads Guilty in Three Cases Involving Conspiracies to Commit Health Care Fraud, Pay and Receive Unlawful Kickbacks, and Money LaunderingRead the Press Release
PITTSBURGH, Pa. – A resident of Fort Lauderdale, Florida, pleaded guilty in federal court to three counts of conspiracy related to the submission of fraudulent health care claims, United States Attorney Cindy K. Chung announced today.
Daniel Hurt, 58, pleaded guilty to one count of conspiracy to commit health care fraud, pay and receive unlawful kickbacks, and commit money laundering, as charged in a criminal Information filed in the Western District of Pennsylvania on July 26, 2022; one count of conspiracy to commit health care fraud, as charged in a criminal Information filed in the District of New Jersey on August 31, 2022; and one count of conspiracy to pay and receive kickbacks, as charged in a Second Superseding Indictment filed in the Southern District of Florida. Prior to the defendant’s guilty pleas, the cases originating in the District of New Jersey and the Southern District of Florida were transferred to the Western District of Pennsylvania.
As to the conduct originating in the Western District of Pennsylvania, Hurt admitted during his plea hearing that beginning in late 2018 and continuing through approximately October 2019, he participated in a conspiracy related to Medicare billing for cancer genomic (CGx) testing. CGx testing used DNA sequencing to detect mutations in genes that could indicate a higher risk of developing certain types of cancers in the future. CGx testing, however, was not a method of diagnosing whether an individual presently had cancer. Hurt admitted that he and his co-conspirators, including individuals associated with so-called marketing entities, acquired thousands of testing samples from Medicare beneficiaries located throughout the United States. Marketers used targeted campaigns to induce beneficiaries to submit CGx specimens by means of cheek swabs sent to their homes or provided to them at purported “health fairs” held throughout the United States.
Hurt subsequently caused CGx specimens to be sent to Ellwood City Medical Center (ECMC), a hospital located in Ellwood City, Pennsylvania. Hurt further used ECMC as the billing entity for Medicare purposes despite the fact that the facility did not possess properly validated equipment to conduct any CGx testing on-site and, as such, ECMC staff were required, at Hurt’s direction, to repackage the samples and send them to third-party reference laboratories that were capable of completing the testing. In order to justify Medicare reimbursement for the CGx testing, Hurt and his co-conspirators obtained CGx prescriptions from telemedicine physicians without regard to the fact that the doctors did not conduct proper telemedicine visits, were not treating the Medicare beneficiaries for cancer or symptoms of cancer, and did not use the test results in the treatment of the beneficiaries. Hurt further admitted causing ECMC to submit Medicare claims for CGx testing that regularly exceeded $12,000 per beneficiary. In total, between approximately January 2019 and October 2019, Medicare reimbursed ECMC more than $25 million for CGx testing. During this time, Hurt directed ECMC staff to transfer millions of dollars from ECMC-related accounts to bank accounts that Hurt controlled. In turn, Hurt admitted using funds he obtained from ECMC to pay millions of dollars in kickbacks to the marketers, among others, in exchange for their efforts to obtain CGx samples. To disguise such kickbacks, Hurt entered into sham contracts with the marketers to make it appear that they were engaged in, and being paid for, legitimate marketing and referral services. Likewise, Hurt, acting through entities he controlled, entered into similar agreements and business arrangements with ECMC that disguised the payments he obtained from the facility as purportedly legitimate payments, including payments related to management services at ECMC’s laboratory. Payments, in fact, were based on the volume of CGx tests and the amount of resulting Medicare reimbursements. Finally, Hurt admitted that he and others used a portion of Medicare reimbursements obtained through the fraudulent submission of CGx claims to engage in monetary transactions in excess of $10,000, including approximately $3 million in payments toward the purchase of a luxury watercraft in Florida called “In My DNA.”
As to the conduct originating in the District of New Jersey, Hurt admitted his involvement in a similar but separate conspiracy between January 2019 and October 2021. Specifically, Hurt admitted that he owned several clinical laboratories that conducted or arranged for a variety of medical tests, and that he paid kickbacks and bribes to various entities who supplied referrals and orders for CGx for Medicare and other health care benefit program beneficiaries, without regard to medical necessity. The Hurt-controlled laboratories submitted claims for payment to Medicare for these CGx tests, and Medicare reimbursed the laboratories without knowing that the services were not medically necessary or were procured through the payment of kickbacks. During the conspiracy, Hurt, through the laboratories, submitted or caused to be submitted claims to Medicare, including claims for beneficiaries residing in New Jersey. Hurt likewise admitted paying kickbacks to entities who supplied referrals for each CGx test that was billed to Medicare and other health care benefit programs. To conceal the payments of bribes, Hurt and the suppliers entered into sham contracts to make it appear that the suppliers were engaged in, and being paid for, legitimate marketing and referral services. This conspiracy resulted in Medicare paying the Hurt-controlled laboratories at least $53.3 million for CGx test claims, with Hurt receiving at least $26.9 million from the Medicare reimbursements.
As to the conduct originating in the Southern District of Florida, Hurt admitted that he and his co-conspirators were engaged in a scheme to defraud health insurance plans, including two plans funded by the U.S. government, TRICARE and CHAMPVA. TRICARE provides worldwide health care benefits to military personnel and their dependents, as well as military retirees. CHAMPVA operates through the Department of Veteran’s Affairs and shares the costs of health care services for eligible beneficiaries, including veterans. Hurt admitted that he and his co-conspirators participated in a scheme to bill TRICARE, CHAMPVA, and other insurance providers for expensive compounded medications that were not medically necessary. Hurt and his co-conspirators worked with patient recruiters to solicit patients who had health care insurance, including TRICARE and CHAMPVA. The patient recruiters, in turn, would generate prescriptions containing the patients’ information, and a limited selection of expensive compounded medications. These prescriptions, which used formulations created or altered to obtain the maximum possible reimbursement from the insurance companies, were then referred to a telemedicine service located in Utah. Hurt and his co-conspirators paid for the telemedicine services only after the prescriptions had been generated, and the prescriptions were then sent to a pharmacy owned by Hurt and his coconspirators.
Beginning in the fall of 2014, Hurt and two co-conspirators formed a corporation, OptimuMD. Through OptimuMD, Hurt and his co-conspirators purchased a three (3) percent interest in Executive Pharmacy, located in Broward County, Florida. In return, Hurt and his co-conspirators were to receive up to 70% of the gross revenues from Executive Pharmacy. During the conspiracy,
Hurt and his co-conspirators directed patient recruiters and the telemedicine service to send thousands of medically unnecessary prescriptions to Executive Pharmacy. After filling the prescriptions, the pharmacy would bill the patients’ insurance plan thousands of dollars for the compounded medications. Once the pharmacy received payment for the prescriptions, the pharmacy would then pay a kickback to Hurt and his co-conspirators. Hurt and his co-conspirators would then pay kickbacks to the patient recruiters. Executive Pharmacy paid OptimuMD millions of dollars during the scheme—money generated by the prescriptions for medically unnecessary compounded medications. As part of his plea, Hurt admitted to personally receiving $4,265,144 from the scheme. Furthermore, he has agreed to pay $18,440,230 in restitution to TRICARE and $450,844 in restitution to CHAMPVA.
As part of his plea agreement, Hurt has agreed to pay restitution to Medicare, TRICARE, and CHAMPVA in an amount totaling $97,360,451.76. Hurt has separately agreed to the entry of forfeiture money judgments totaling $31,148,624.70, and to forfeit the luxury watercraft, “In My DNA.”
As to each of the conspiracies charged originally in the Western District of Pennsylvania and Southern District of Florida, Hurt faces a maximum sentence of five years in prison and a fine of not more than the greater of $250,000 or an alternative fine in an amount not more than the greater of twice the gross pecuniary gain to any person or twice the pecuniary loss to any person other than the defendant. As to the conspiracy originally charged in the District of New Jersey, Hurt faces a maximum sentence of ten years in prison and a fine of not more than the greater of $250,000 or an alternative fine in an amount not more than the greater of twice the gross pecuniary gain to any person or twice the pecuniary loss to any person other than the defendant. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Eric G. Olshan of the Western District of Pennsylvania is prosecuting these cases on behalf of the government. Assistant United States Attorney Sean M. Sherman handled the investigation of the conduct that led to the Information originally filed in the District of New Jersey, and Assistant United States Attorney Cynthia Wood of the Southern District of Florida handled the investigation that led to the Second Superseding Indictment originally filed in the Southern District of Florida. The Federal Bureau of Investigation, U.S. Department of Health and Human Services – Office of Inspector General, Defense Criminal Investigative Service, Internal Revenue Service – Criminal Investigation, U.S. Department of Labor – Employee Benefits Security Administration, U.S. Department of Veterans Affairs – Office of Inspector General, Food and Drug Administration – Office of Criminal Investigation, and U.S. Army Criminal Investigation Division – Florida Fraud Resident Unit conducted the investigations of the defendant.
Five Defendants Indicted in a Conspiracy to Distribute Child PornographyRead the Press Release
Miami, Florida – A federal grand jury in West Palm Beach has charged five men with one count of conspiracy to distribute child pornography and multiple counts of distribution and solicitation of child pornography.
Anthony Wayne Santiago, 28, of Novi, MI; Jacob Dominic VanDyke, 25, of Muskegon, MI; Johnathan Scott Fleak, 32, of Pryor, OK; Aaron Ray Iuliano, 27, of Ravenna, OH; and Michael Paul Gianfrancesco, 39, of Livingston, TN, were members of a chat room predicated on the distribution of pornography of children under the age of 13 years.
According to the indictment, from September to October 2021, the five defendants entered and participated in a private online chat. These defendants all distributed and or solicited child pornography amongst more than 50 other individuals.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), and Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office (PBSO), made the announcement.
HSI Miami and PBSO investigated the case. Assistant U.S. Attorney Gregory Schiller is prosecuting the case.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
An indictment contains mere allegations and defendants are innocent unless found guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-80127.
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Companies and Owner Sentenced in Federal Court for Defrauding Government AgenciesRead the Press Release
Miami, Florida – Juan Guillermo Gonzalez and his companies, Accelogic LLC and Intellectual Property Systems LLC (Intellep) have been sentenced by U.S. District Judge Aileen M. Cannon for their roles in obtaining information from U.S. departments and agencies and improperly using it for commercial advantage and private financial gain.
Judge Cannon sentenced Gonzalez to 32 months in federal prison, followed by one year of supervised release and ordered him to pay $1.7 million in restitution. She ordered Accelogic and Intellep to pay $2.9 million in restitution and placed the companies on probation for three years. The defendants cannot participate in any government contracts while on supervised release or probation. Money judgments also were imposed against each defendant to forfeit their ill-gotten gains.
Gonzalez owned and operated companies Accelogic and Intellep. He used the companies to acquire research and development (R&D) contracts with various U.S. departments to include the Department of the Army, Missile Defense Agency, Defense Advanced Research Projects Agency, National Aeronautics and Space Administration, U.S. Air Force, and Department of Energy.
“As lucrative as it may seem to defraud the federal government and its programs, those who try eventually end up in prison,” said Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida. “The sentences handed out in this case should serve as a warning to those who may be tempted to try.”
Gonzalez used the Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer (STTR) program—both of which were established to encourage small U.S. businesses to engage in federal R&D that had potential for commercialization and to stimulate the U.S. economy.
“Fraud in the Small Business Innovation Research program harms our nation’s scientific and technological advancement and diverts valuable tax dollars from their intended purpose,” said Department of Energy Inspector General Teri L. Donaldson. “These sentencings are the result of our efforts to protect these important funds. We appreciate the efforts of the U.S. Attorney’s Office and our law enforcement partners on this joint investigation.”
Gonzalez electronically submitted software improvement proposals to the aforementioned programs using phrases like “world-class multidisciplinary team of experts … put together to guarantee the success of this project.”
The defendants made these statements to lead the proposal reviewers to believe that the companies were working with well-known professors and had the personnel necessary to complete the research and development within the timeframe set by the contracts. One of the contracts specified that Accelogic would partner with a professor and his students at Stanford University, but Accelogic did the work itself and kept the Air Force research funds ear-marked for Stanford. In many cases, work stipulated in the contracts never got done and instead of paying the promised “world-class multidisciplinary team,” the bulk of the funds were routed to Gonzalez and his wife through Accelogic and Intellep.
Due to the sensitive nature of the research, the terms of the SBIR and STTR programs also mandated that all work on the contracts be performed within the United States by U.S. citizens or Legal Permanent Residents. Despite repeatedly certifying that Accelogic was obeying those rules, Gonzalez hired engineers in Venezuela to perform testing, including giving them access to government software via government computers. The engineers in Venezuela performed the testing for a fraction of the cost that U.S.-based engineers would charge. Accelogic also hired foreign workers in the United States who were not approved to work on the contracts. These workers also were paid significantly less than U.S. citizens would have been paid.
“The SBIR Program is intended to support legitimate small businesses in pursuit of meaningful and innovative technological discoveries,” said Assistant Inspector General for Investigations for NASA-OIG Robert Steinau. “Individuals who fraudulently obtain federal funding through blatant deceit for personal enrichment compromise the integrity of the program and deprive the U.S. economy of crucial technological advancements. As we collaboratively continue to pursue and prosecute such individuals, I commend the U.S. Attorney’s Office and our investigative partners for their tremendous work on this case.”
These types of cases should serve as a warning to those looking to follow suit.
“These sentences show that individuals, as well as companies, will be prosecuted when they break the law,” said Special Agent-in-Charge Scott Moreland, Army Criminal Investigation Division Major Procurement Fraud Field Office. “It should send a message to those who are tempted to defraud the government that CID and its federal law enforcement partners are committed to rooting out fraud.”
The case arose from a joint investigation between the U.S. Attorney’s Office, Homeland Security Investigations (HSI), NASA’s Office of Inspector General, Department of Defense’s Office of Inspector General, Army Criminal Investigation Division, and the Department of Energy’s Office of Inspector General.
“This case highlights the collaboration between HSI and our federal law enforcement partners who work tirelessly every day,” said Homeland Security Investigations Miami Special Agent in Charge Anthony Salisbury. “HSI was able to use its expertise that highlighted the fraud committed by the defendants. HSI will continue to investigate and unravel complex fraud schemes anytime there is a foreign nexus to defraud the United States government.”
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case numbers 22-cr-60101 and 22-cr-80080.
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South Florida Man Sentenced to 30 Years After Sexually Abusing Non-Verbal, Autistic ChildRead the Press Release
Miami, Florida – A Port Saint Lucie man who in 2018-2019 sexually abused a non-verbal, autistic child has been sentenced to 360 months in federal prison. Earlier this year, Ethan Alexander Concepcion, 24, pled guilty in West Palm Beach federal court to production of child pornography.
Homeland Security Investigations (HSI) learned about Concepcion’s abuse of the child after being contacted in January 2022 by the Queensland Police Service, a law enforcement agency in Australia. They reported to HSI that they had prosecuted an individual in Australia who had received by email approximately two dozen child sex abuse images and videos from someone using an IP address located in Greenacres, Florida. In some of the images, the child was holding a sign that read, “For Mr. Plextor.” Authorities believed that “Mr. Plextor” was a reference to the recipient of the images in Australia. Metadata from the images revealed that Concepcion likely abused the child on at least four occasions from March 2018 to January 2019. The child was 5-6 years old at the time. Agents traced the IP address to Concepcion’s residence. On March 10, 2022, Concepcion confessed to abusing the child.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Anthony Salisbury, Special Agent in Charge, HSI Miami Field Office, announced the sentence imposed by United States District Judge Donald M. Middlebrooks yesterday.
HSI Miami (West Palm Beach office) investigated the case. Assistant U.S. Attorney Mark Dispoto prosecuted it.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorney’s Offices and the Criminal Divisions Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-80043.
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Registered Sex Offender Charged by South Florida Federal Grand JuryRead the Press Release
Miami, Florida – A South Florida federal grand jury has charged a 41-year-old Delray Beach man with possessing child pornography and failing to properly register as a sex offender. Nicholas Deraway appeared today in West Palm Beach federal court for his arraignment.
According to the indictment and an earlier-filed criminal complaint affidavit, in January 2022, Google alerted the National Center of Missing and Exploited Children that one of its users had uploaded child pornography to an account. An investigation into this CyberTip led law enforcement officers to Deraway’s home, where they executed a search warrant and found thousands of images and videos of child pornography, say the charging documents.
In 2004, Deraway was convicted in the Southern District of Florida for an offense that required him to comply with the ongoing requirements of the federal sex offender registration law. According to the allegations, Deraway used an on-line alias (Nick Meenachan), yet failed to update his sex offender registration information with the associated email addresses. The name “Nick Meenachan” is linked to the child pornography uploads that led to the January 2022 CyberTip.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami, and Marshal Gadyaces S. Serralta, U.S. Marshal for the Southern District of Florida, announced the charges.
FBI Miami and USMS investigated the case with assistance from the Delray Beach Police Department. Assistant U.S. Attorney Gregory Schiller is prosecuting the case.
An indictment contains mere allegations and defendants are innocent unless and until found guilty in a court of law.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-80135.
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Food Drive Helps Ease Burden for Those in NeedRead the Press Release
Miami, Florida – Staff from the United States Attorney’s Office for the Southern District of Florida (USAO-SDFL) served nearly 400 people this morning during a Farm Share Food Drive at Demps Park in Miami.
The distribution was scheduled to run from 9 a.m. to noon, but people were lined up by 8 a.m. so staff adjusted and began an hour early. The supplies, which included two pallets of meat, several bread bins, and a large amount of pasta and canned items were gone shortly after 10 a.m.
“The reality is that there is food insecurity nationwide and particularly in South Florida,” said J.D. Smith, Chief of Law Enforcement Coordination and Community Outreach Section, USAO-SDFL. “Prices have gone up on everything and people are on limited incomes … this is an important resource that people depend on.”
If the speed with which the food drive was over is any indication, then, yes, it seems people do depend on these types of services.
“There is this impression that everyone is working, but that just isn’t the case,” said Smith. “For senior citizens, the young, and the unemployed, it can be a difficult situation. We are fortunate enough to have jobs and be in a position to help.”
For Smith, it comes down to doing the right thing. It’s a sense of duty.
“It’s important for us to pay it forward,” he said. “We all have that bell in the back of our minds that reminds us to help people other than our own families. It’s our duty to answer that bell.”
The most important aspect for Department of Justice staff at the food drive was simple—helping people.
“It means a lot to me because people have suffered,” said Mark McKinney, Law Enforcement Coordination specialist with USAO-SDFL. “Doing something positive for the community helps relieve a burden. We do these food drives consistently so at least those who need assistance know they can count on this.”
Department of Justice staff members hold these drives four times per month by partnering with Farm Share, Miami-Dade County Parks and Recreation, and Miami-Dade Police Department—South District. Click here for times and locations as they do change.
Staff from the U.S. Attorney’s Office for the Southern District of Miami gather by the Farm Share truck that supplied the food for today’s Food Drive at Demps Park in Miami. Nearly 400 people were served in a little more than two hours.
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Mother and Daughter Pharmacy Owners Charged with Health Care Fraud and Kickback CrimesRead the Press Release
Miami, Florida – A South Florida federal grand jury has charged Mirosis Gonzalez, 58, and her daughter Berioska Sosa, 32, with paying kickbacks in exchange for referrals of Medicare beneficiaries to their pharmacy, then using the referrals to steal millions from Medicare.
Gonzalez and Sosa owned and operated Aviva Care Pharmacy (which did business under the name American Care Pharmacy) in Sunrise, Florida. Gonzalez, who lives in Palm Beach County, was the listed President and Registered Agent of Aviva Care Pharmacy. Sosa, who lives in Broward County, was the listed Manager.
According to the indictment, from August 2016 through May 2020, the defendants paid kickbacks and bribes to marketing and telemedicine companies in exchange for their referring Medicare beneficiaries, as well as doctors’ orders and prescriptions, to Aviva Care Pharmacy. It is alleged that the bribed companies sent, and Aviva accepted, orders for expensive durable medical equipment (DME) and prescriptions for pharmaceutical medication, without considering medical necessity or Medicare reimbursement eligibility. The defendants negotiated the kickback and bribe arrangements with the companies and created sham contracts meant to disguise the bribes as payments for marketing and other services, says the indictment.
According to the allegations, Gonzalez and Sosa submitted over $12 million in false claims to Medicare and Aviva Care Pharmacy received payments totaling more than $8.4 million.
The indictment charges Gonzalez and Sosa with conspiracy to commit health care fraud and wire fraud, health care fraud, conspiracy to pay health care kickbacks, and payment of kickbacks.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami, and Omar Perez Aybar, Special Agent in Charge, U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) announced the charges.
FBI Miami and HHS-OIG Miami investigated the case. The case is being prosecuted by Assistant U.S. Attorney Christopher J. Clark. Assistant U.S. Attorney Nicole Grosnoff is handling the asset forfeiture component of the case.
A complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-60193.
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Miami Man Who Used Durable Medical Equipment Company as Front for Health Care Fraud Sentenced to Seven Years in Federal PrisonRead the Press Release
Miami, Florida – Yesterday, a federal district judge in Miami sentenced 42-year-old Daniel Pintado Cazola to 87 months in prison for his role in using a durable medical equipment company to commit Medicare and Medicaid fraud, and trying to conceal his connection to the crime by listing a straw owner in corporate and bank records.
Earlier this year, Pintado Cazola pled guilty to one count of conspiracy to commit health care fraud, wire fraud, and mail fraud, and one count of aggravated identity theft.
Myers Professional Services was established as a durable medical equipment (DME) company in Ft. Myers, Florida. To conceal Pintado’s role as the true owner who exercised control over the DME company (and the fraud), a nominee or “straw” owner was listed as the owner of Myers Professional Services on its corporate records and bank account. As part of his guilty plea, Pintado admitted that he – and not a straw owner -- purchased lists of Medicare “patients” and then directed a “biller” to submit fraudulent claims to Medicare for durable medical equipment that was not being prescribed by a doctor, that was not medically necessary, and that was not being supplied to any Medicare beneficiary or Medicaid recipient. During a three-month period -- from November 2021 and February 2022 – and under Pintado’s direction, Myers Professional Services submitted over $2.3 million in fraudulent claims to Medicare and Medicaid. The DME company was paid over $1.6 million through February 2022, when Pintado was arrested. The proceeds of the fraud were transferred from the Myers Professional Services account to accounts held in the names of shell companies. Then, those proceeds were withdrawn from the shell company accounts by others so that it could not be traced to Pintado.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, and Omar Pérez Aybar, Special Agent in Charge, Health and Human Services, Office of Inspector General (HHS-OIG), Miami Region announced the sentenced imposed by U.S. District Judge Beth Bloom.
“The sentence imposed in this case reflects the seriousness of the defendant’s conduct,” said U.S. Attorney Gonzalez. “This Office will not relent in holding accountable those who steal from government programs that provide health care to the most vulnerable in our society.”
“The magnitude of Mr. Pintado’s criminal behavior, literally, knew no bounds,” said Special Agent in Charge Pérez-Aybar. “His ability to deceptively pilfer the Medicare trust fund meant to protect our most vulnerable population came to an abrupt halt because of the relentless efforts of our agents and prosecutors that continue to bring to justice those that defraud our nation’s health care programs.”
HHS-OIG Miami investigated the case. The prosecution was handled by Assistant U.S. Attorney Aimee C. Jimenez. Assistant U.S. Attorney Joshua Paster handled asset forfeiture.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-20097.
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British Citizens Sentenced in Death of Scuba DiverRead the Press Release
Miami, Florida – After more than 10 years on the run from authorities, Christopher Jones and Alison Gracey were sentenced in Miami federal court today for their role in the involuntary manslaughter death of a scuba diver in 2011.
The Honorable James Lawrence King, Senior United States District Court Judge, sentenced Jones to 51 months of imprisonment and a three-year term of supervised release. Alison Gracey was sentenced to the time she already has served in custody – 18.5 months and a one-year term of supervised release. Both will be deported from the United States at the conclusion of their prison terms.
Jones, 58, and Gracey, 55, owned the Key Largo Scuba Shack, LLC, a business that operated charter scuba diving trips in the Florida Keys from approximately June 2010 to December 2011. They operated a 24.8-foot vessel named the M/V Get Wet as part of the business. On December 18, 2011, the M/V Get Wet conducted a scuba trip with two crew members and six passengers. During their first dive stop, sea conditions went from calm to choppy and the boat operator noticed that the bilge pump had failed. As the divers reboarded the boat after the dive, the vessel began taking on water and rolling heavily. The Get Wet ultimately capsized, and quickly sank about 30 feet to the ocean floor. During its descent, a 300-pound bench that was not properly secured to the vessel’s deck detached. Made of buoyant material, the bench sprang toward the ocean’s surface as the vessel itself sank. The two large and heavy objects collided, pinning one of the passenger’s legs against the vessel’s windshield. The passenger was trapped and drowned.
Coast Guard experts later inspected the Get Wet and found serious deficiencies. None of Get Wet’s bilge compartments including the engine spaces below the ship’s deck were watertight. The aftmost bilge space was covered by a deck plate with holes for 30 bolts, 22 of which were missing and the remaining eight were loose. The wood at the bottom of the 300-pound bench was rotten, and the screws intended to secure it to the deck were too small. Beneath the deck, holes that allowed water to flow between the various bilge compartments compromised all the bulkheads. A bilge pump had been disassembled and re-assembled incorrectly, causing it to fail.
The Coast Guard’s criminal investigation following the death of the diver revealed that Jones and Gracey knew before the tragedy that the vessel needed repairs. Jones and Gracey continued operating the M/V Get Wet despite the following, all of which occurred prior to December 18, 2011:
- Following inspections, the United States Coast Guard had notified Jones and Gracey that the vessel needed repairs, including securing the center engine bench cover to the deck and making repairs below the deck to insure the water-tight integrity of bulkheads.
- The dive operation’s employees repeatedly informed Jones that the Get Wet flooded dangerously. The deck plates were barely attached, and the engine bench cover would rock back and forth.
- The Get Wet broke down repeatedly and equipment on the boat failed, including the pumps intended to de-water the vessel.
- On one voyage with Gracey aboard as dive master, the Get Wet almost sank.
- In the two months before the boat sank, a marine salvor towed the Get Wet to shore on three separate occasions.
Shortly after the diver’s death, Jones and Gracey fled the United States and spent over 10 years moving from jurisdiction to jurisdiction, fighting extradition each time law enforcement found them. They were finally arrested in 2021 in Spain, where Spanish authorities took them into custody based on an Interpol Red Notice. In January 2022, Jones and Gracey were extradited to the United States to face federal charges in Southern District of Florida.
United States Attorney for the Southern District of Florida Juan Antonio Gonzalez and Zinnia James, Special Agent in Charge, Southeast Region, U.S. Coast Guard Investigative Service (CGIS), announced the results of the sentencing hearing today.
The U.S. Coast Guard Investigative Service investigated the case. The U.S. Department of Justice, Office of International Affairs, provided invaluable assistance, pursuing the extradition of the defendants from multiple countries. The U.S. Marshal’s Service also assisted by transporting the defendants from Spain to Florida.
Former Assistant U.S. Attorney Jaime Raich worked on the investigation and initially prosecuted this case, which Assistant U.S. Attorney Thomas Watts-FitzGerald is now handling.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 12-cr-10013.
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Man Charged in Federal Court for Destroying Property at U.S. Courthouse and Federal Building in Fort LauderdaleRead the Press Release
Miami, Florida – A federal criminal complaint filed this week in U.S. District Court in Fort Lauderdale has charged Matthew Leon Chilcutt, 43, with destruction of federal property for allegedly causing extensive damage to the U.S. Courthouse and Federal Building in Fort Lauderdale on September 5, 2022.
According to the criminal complaint affidavit, Chilcutt broke into the courthouse’s main entrance and vandalized the interior and exterior spaces of the building, including smashing windows, breaking doors, causing water damage, and destroying other property. He was found inside the courthouse by officers from Fort Lauderdale Police Department who arrested Chilcutt and charged him with burglary. The courthouse was closed to the public during the incident in observance of the Labor Day holiday, and no one was injured.
Chilcutt is scheduled to appear in federal court on September 9, 2022, to answer the federal charges. If convicted, he faces up to 10 years in prison.
U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida and the Federal Protective Service (“FPS”), Miami Region, made the announcement.
FPS investigated this case with assistance from the Fort Lauderdale Police Department. Assistant U.S. Attorney David A. Snider is prosecuting the case.
A complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. The below photos are part of the criminal complaint.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-mj-06428.
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EmpiresX Head Trader Pleads Guilty to Global Cryptocurrency Investment Fraud Scheme that Amassed Approximately $100 Million from InvestorsRead the Press Release
A Florida man pleaded guilty today to conspiracy to commit securities fraud in connection with a global cryptocurrency-based Ponzi scheme that took in approximately $100 million from investors.
According to court documents, Joshua David Nicholas, 28, of Stuart, was the “Head Trader” for EmpiresX, a purported cryptocurrency platform. Nicholas admitted that he and others fraudulently promoted EmpiresX by making numerous misrepresentations regarding, among other things, a purported proprietary trading bot and fraudulent “guaranteed” returns to investors and prospective investors in the company. Nicholas and his co-conspirators claimed that EmpiresX operated a trading bot that used artificial and human intelligence to maximize profitability for investors. Instead, EmpiresX operated a Ponzi scheme by paying earlier investors with money obtained from later EmpiresX investors. In addition, despite representations to the contrary, EmpiresX never registered, nor took steps to register, EmpiresX’s investment program as an offering and sale of securities with the U.S. Securities and Exchange Commission, nor did EmpiresX have a valid exemption from this registration requirement.
Nicholas pleaded guilty to one count of conspiracy to commit securities fraud and faces a maximum penalty of five years in prison. A sentencing date has not yet been scheduled. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; and Special Agent in Charge Anthony Salisbury of Homeland Security Investigations (HSI) Miami made the announcement.
The FBI Miami Field Office and HSI’s Miami Field Office are investigating the case.
Trial Attorneys Kevin Lowell and Sara Hallmark of the Justice Department’s Fraud Section and Assistant U.S. Attorney Yisel Valdes for the Southern District of Florida are prosecuting the case.
All investor victims of the EmpiresX scheme are encouraged to visit the webpage https://www.justice.gov/criminal-vns/crypto-enforcement to identify themselves as potential victims and obtain more information on their rights as victims, including the ability to submit a victim impact statement.
25-Year Federal Prison Sentence for Man Who Tried to Kill South Florida Police OfficersRead the Press Release
Miami, Florida — The Miami man who earlier this year discharged a hail of gunfire at two FBI Task Force Officers and a City of Homestead Police Detective as the officers drove past him has been sentenced to 310 months in federal prison.
Earlier this year, James Robert Mills, Jr., pled guilty to attempting to murder the three officers and forcibly assaulting the officers with a deadly weapon. Mills also pled guilty to two counts of discharging a firearm during and in relation to a crime of violence.
On January 31, the three officers were on duty, driving an unmarked white sports utility vehicle (SUV) in the Homestead-Miami area. At about 8:30 p.m., as they drove north on S.W. 116th Avenue, an officer noticed a gun pointed at them from an open backseat window of a parked car. Mills was pointing the gun, which he then fired at the SUV as it drove by. The officers’ SUV accelerated, trying to evade the gunshots. The three officers in the SUV managed to lose the suspects’ vehicle without being wounded or firing their weapons. Crime scene investigators recovered approximately 24 nine-millimeter (9 mm) bullet casings and one projectile from the scene, says the affidavit.
An investigation into the shooting led law enforcement officers to Mills, whom they arrested following a search of a Miami residence where he was staying. They recovered a Glock 17, 9 mm pistol with an extended magazine from the attic of the house, where Mills had stashed it after the January 31 shooting. Mills confessed to shooting the firearm.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami, Alexander E. Roller, Jr. Chief, Homestead Police Department, and Alfredo Ramirez, III, Director, Miami-Dade Police Department, announced the sentence imposed yesterday by United States District Judge Jose E. Martinez.
The FBI Miami Division, along with the Homestead and Miami-Dade Dade Police Departments, investigated the case. The prosecution was led by Assistant U.S. Attorney Dwayne E. Williams.
This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. In 2017, PSN was reinvigorated as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime. This prosecution was also brought through the efforts of the Miami-Dade Chiefs of Police Operation Community Shield Initiative.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
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South Florida Federal Judge Orders Prison Time for Former Pharmatech CEORead the Press Release
Miami, Florida – A former owner and CEO of a Broward County drug manufacturing company who lied to the FDA and allowed contaminated products to make their way to pediatric hospitals was sentenced yesterday to 37 months in federal prison.
Raidel Figueroa co-owned Pharmatech, LLC, a company that from 2016 to 2017 manufactured and distributed the laxative Diocto Liquid. In July 2016, as part of a larger investigation into an outbreak of infections linked to bacteria known as Burkholderia cepacia (“B. cepacia”), the FDA inspected Pharmatech’s operations. Typically found in water and soil, and transmissible through contaminated medications, B. cepacia can lead to respiratory and other infections for people with weak immune systems, chronic lung disease, and other conditions.
The FDA notified Figueroa in August 2016 that a sample taken from Pharmatech’s water system had tested positive for B. cepacia. Figueroa assured the FDA that Pharmatech would re-engineer its purified water system to prevent future contaminations.
In March 2017, the FDA again inspected Pharmatech’s operations and asked Figueroa to disclose all products that the company had manufactured since its supposed water system upgrade. Figueroa lied to the FDA investigators by knowingly excluding Diocto Liquid from its products distribution list (even though Pharmatech shipped over 7,000 units of the drug earlier that month) and by telling the FDA that Pharmatech’s new water system had met “acceptance criteria,” which was not true.
In July 2017, the CDC notified the FDA of multiple B. cepacia infections in pediatric patients at Stanford Children’s Health Lucile Packard Children’s Hospital in Palo Alto, California and Johns Hopkins Children’s Center in Baltimore, Maryland. The FDA investigated, collecting bottles of Diocto Liquid from these medical centers. Several of the bottles contained unacceptable amounts of bacteria, yeast, and mold. Some bottles tested positive for B. cepacia. The FDA’s investigation revealed that Pharmatech had distributed those same bottles in March 2017 – something that Figueroa knowingly failed to disclose to the FDA.
In June, Raidel pled guilty to conspiring to defraud the FDA, falsifying records in an FDA investigation, obstructing proceedings before the FDA, and distributing adulterated drugs.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Justin C. Fielder, Special Agent in Charge, Food and Drug Administration (FDA) Office of Criminal Investigations Miami Field Office, announced the sentence imposed by Senior United States District Judge James I. Cohn.
The FDA Office of Criminal Investigations, Miami Field Office investigated the case. Assistant U.S. Attorney Deric Zacca is prosecuting this case, with the assistance of Laura Akowuah, from FDA’s Office of Chief Counsel.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-60033.
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Miami Men to be Sentenced for Weapons SmugglingRead the Press Release
Miami, Florida – Compressed air tanks most commonly are used for filling tires, but Jorge Chica-Giler, 28, found a different use for them—smuggling weapons from Miami to Ecuador. He pled guilty August 29 in Fort Pierce U.S. District Court.
During the hearing before U.S. District Judge Jose E. Martinez, Chica-Giler admitted he conspired to deal in, and smuggle, firearms out of the United States by directing co-conspirators to purchase firearms on his behalf, and by directing co-defendants Rolando Alexei Pupo-Abrahantes and Nicolas Ayala to hide them inside compressed air tanks for shipment to a co-conspirator in Ecuador. Chica-Giler admitted to making eight such shipments, totaling at least 35 firearms, to include several assault-rifles.
They concealed the weapons by taking two 11-gallon tanks, cutting an end off each one, and placing the shrink-wrapped firearms inside. Pupo-Abrahantes then welded the two tanks together to form one 22-gallon tank and concealed the modification by painting the tanks with black spray paint.
Surveillance footage from August 2021 placed Chica-Giler at a Harbor Freight store in Miami. This footage is consistent with the time he purchased other supplies needed for the transport, to include the air tanks, one masonry cutting wheel, and one welding blanket.
Soon after, law enforcement witnessed Chica-Giler and a co-conspirator drop two packages off at a freight forwarding service in Miami. Agents seized and x-rayed the packages pursuant to border search authority, which revealed hidden firearms.
Chica-Giler pled guilty to one count of conspiracy, in violation of Title 18, United States Code, Section 371; one count of dealing in firearms without a license, in violation of Title 18 United States Code, Section 922(a)(1)(A); one count of smuggling firearms from the United States, in violation of Title 18, United States Code, Section 554; one count of delivery of a firearm to a common carrier without written notification, in violation of Title 18, United States Code, Section 922(e); and one count of possession of a firearm by an unlawful alien, in violation of Title 18, United States Code, Section 922(g)(5)(B).
Chica-Giler’s sentencing is scheduled for November 7 at 2:30 p.m. before Judge Martinez. He faces a maximum penalty of 35 years in prison. The judge will consider U.S. Sentencing Guidelines and other statutory factors prior to issuing any sentence.
Co-defendants Pupo-Abrahantes and Ayala pled guilty for their role in the weapons transport.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida; Christopher A. Robinson, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Miami Field Office; and Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), Miami Field Office, made the announcement.
HSI Fort Pierce and ATF Fort Pierce investigated the case. Assistant United States Attorneys Christopher Hudock and Justin Hoover are prosecuting the case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-14035.
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Violent Crime Spree Leads to 30-Year Federal Prison SentenceRead the Press Release
Miami, Florida – A 29-year-old Sunrise man has been sentenced to 30 years in prison for one count of carjacking, one count of kidnapping, two counts of bank robbery, one count of attempted bank robbery, and two counts of brandishing a firearm during a crime of violence.
The evidence revealed that, in January 2021, Tevin Shane Souffranc terrorized Broward and Collier Counties through a violent crime spree. On one occasion, he attacked a young woman as she was returning to her vehicle. Souffranc pushed her into the car and hit her in the face with the butt of a firearm, chipping two of her teeth. On another occasion, Souffranc and an accomplice attacked a young woman as she walked to her car, threatening to kill her. Souffranc also robbed and attempted to rob multiple banks in South Florida and Naples.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, and Robert Dewitt, Acting Special Agent in Charge, FBI Miami, announced the sentence imposed by United States District Judge Roy K. Altman.
FBI Miami investigated the case. Broward Sheriff’s Office, Fort Lauderdale Police Department, Hollywood Police Department, Collier County Police Department, Boca Raton Police Department, and Sunrise Police Department assisted. Assistant United States Attorney Ajay J. Alexander is prosecuting this case. Assistant United States Attorney Annika Miranda is handling asset forfeiture.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case numbers 21-cr-60069 and 22-cr-60064.
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Felon on Federal Supervision Sentenced for Gun PossessionRead the Press Release
Miami, Florida – Antonio Ferguson, 41, of Port St. Lucie, Florida, has been sentenced to 46 months in prison after being convicted of possessing a firearm while being a convicted felon.
According to court documents, on September 29, 2021, multiple Federal and State law enforcement agencies executed a search warrant on a residence in Port St. Lucie, Florida, after a drug investigation. Antonio Ferguson was found in the residence and in possession of a firearm. Ferguson was on federal supervision after serving a prison sentence for selling narcotics. As a convicted felon, Ferguson was prohibited from possessing firearms.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Special Agent in Charge Christopher A. Robinson of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Miami Field Division, made the announcement. ATF Miami investigated this case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-14010-CR-AMC.
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Broward County Resident Charged in Alleged MJ Capital Financing Ponzi SchemeRead the Press Release
Miami, Florida – Twenty-nine-year-old Pavel Ramon Ruiz Hernandez has been charged in South Florida federal court with conspiring to commit wire fraud through an investment Ponzi fraud scheme linked to MJ Capital Funding, LLC (“MJ Capital Funding”).
According to the allegations in the information, MJ Capital Funding was a Pompano Beach company that offered merchant cash advances, or MCAs, a type of short-term financing typically used by small and medium-sized businesses. The information alleges that from about March to August 12, 2021, Ruiz Hernandez and his co-conspirators fraudulently solicited money from investors to fund MJ Capital Funding’s MCAs. It also alleges that Ruiz Hernandez and his co-conspirators recruited others to solicit additional investors, typically paying the recruits about 10% of the money they raised each month.
According to the information, Ruiz Hernandez and his co-conspirators lied to investors about MJ Capital Funding’s use of investor funds. For example, Ruiz Hernandez told investors that they would use the money to fund MCAs and that the profits of MJ Capital Funding’s MCA business would fund investor returns, which was not true. In fact, MJ Capital Funding made few MCAs and failed to earn anywhere near the profits it needed to pay the investor returns or principal amounts, it is alleged. As a result, the information charges that Ruiz Hernandez and his co-conspirators paid investor returns by running a large Ponzi fraud scheme, paying existing investors using new investor funds, while misappropriating millions of dollars for themselves. The information alleges Ruiz Hernandez and his co-conspirators defrauded investors of over $42 million.
Ruiz Hernandez made his initial federal court appearance today in federal magistrate court in Miami. If convicted, Ruiz Hernandez faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Robert M. DeWitt, Acting Special Agent in Charge, FBI, Miami Field Office, made the announcement.
FBI Miami investigated this case. Florida’s Office of Financial Regulation and SEC Miami assisted. Assistant U.S. Attorney Eric E. Morales of the Southern District of Florida is prosecuting the case.
An information is a charging instrument containing allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-20185.
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Caretaker of Senior Couple Sentenced for Stealing Hundreds of Thousands from Elderly Couple’s Bank AccountsRead the Press Release
Miami, Florida – A U.S. federal district judge sentenced 52-year-old Sherri Lynn Smith to 51 months in prison, followed by four years of supervised release for stealing nearly $300,000 from two seniors by accessing their bank accounts while employed as their caretaker.
From 2016 to 2019, Smith worked as a caretaker for an elderly couple in Broward County. As part of her duties, Smith had access to the victims’ bank accounts to assist them with paying their monthly bills. Smith used her access to the victims’ finances to embezzle approximately $300,000 out of the victims’ accounts without their knowledge or consent. She accomplished this by writing and forging the victim’s signature on checks made payable to herself, her family members, and her creditors; initiating Zelle electronic money transfers from the victims’ accounts to her own bank account; and making electronic payments from the victims’ accounts to her and her husband’s numerous credit card accounts.
In addition to sentencing Smith to prison and supervised release terms, the judge entered a forfeiture money judgment in the amount of $288,865.92 and ordered Smith to pay $168,895.92 in restitution. United District Judge Thomas P. Barber, of the Middle District of Florida, presided over this Southern District of Florida case.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, and Robert M. DeWitt, Acting Special Agent in Charge, FBI Miami, made the announcement.
FBI Miami investigated the case. Assistant U.S. Attorney Diana M. Acosta prosecuted it. Assistant U.S. Attorney Emily Stone is handling asset forfeiture.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. The mission of the Department’s Elder Justice Initiative is to support and coordinate the Department’s enforcement and programmatic efforts to combat elder abuse, neglect and financial fraud and scams that target our nation’s seniors. To learn more visit https://www.justice.gov/elderjustice. The public is encouraged to report victimization and suspected fraud schemes by calling the National Elder Fraud Hotline at 1-833-FRAUD 11 (1-833- 372-8311).
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-14023.
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Identity Fraudster Pleads Guilty in Miami Federal CourtRead the Press Release
Miami, Florida – A 30-year-old Romanian national pled guilty this week to his role in an Automated Teller Machine (ATM) “skimming” fraud scheme.
From in or about January of 2015, until in or about February of 2015, Alin Bambaloi and his co-conspirators used portable card-reading devices and miniature cameras to steal account information from bank customers using ATMs. With the stolen information re-encoded blank plastic cards or gift cards with the legitimate bank customers’ account information and then made unauthorized withdrawals from the customers’ accounts. As a result of this fraud scheme, there were 195 reported fraud loss cases and approximately $128,064 in losses.
Juan Antonio Gonzalez, United States Attorney, Southern District of Florida, and Robert DeWitt, Acting Special Agent in Charge, FBI Miami Field Office, made the announcement.
The case was indicted in 2016. Bambaloi was a fugitive until December 20, 2021, when he was apprehended in Texas and later transferred to the Southern District of Florida for prosecution.
Bambaloi pled guilty to one count of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349, and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A. He faces a maximum term of 32 years’ imprisonment. His sentencing is currently scheduled for November 4, before U.S. District Judge Beth Bloom.
FBI Miami investigated this case. It is being prosecuted by Assistant U.S. Attorneys Cynthia Wood and Adam Hapner. Assistant U.S. Attorney Sara Klco is handling asset forfeiture related to the matter.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 16-cr-60260.
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Venezuelan Businessman Charged in Bribery and Money Laundering SchemeRead the Press Release
Miami, Florida – A federal grand jury in Miami returned an indictment today charging a Venezuelan national for laundering the proceeds of substantially inflated procurement contracts obtained by making bribe payments to senior officials at Petropiar, a joint venture between Venezuela’s state-owned and state-controlled energy company and an American oil company.
According to the indictment, from at least 2015 through at least May 2019, Rafael Rixon Rafael Moreno Oropeza, 46, allegedly engaged in a scheme to obtained multimillion-dollar contracts from Petropiar by paying bribes to senior officials at Petropiar. Moreno allegedly agreed to pay a $1 million bribe to a senior official in the Venezuelan government to install another person as a high-ranking official in the procurement division of Petropiar. In addition, Moreno allegedly sent millions of dollars in bribe payments to senior Petropiar officials from accounts he controlled in South Florida. In exchange for these bribe payments, Moreno allegedly received benefits including over $30 million in payments on contracts from Petropiar to accounts Moreno controlled in South Florida. Illustrative of this, Moreno received approximately $2.7 million from a Petropiar contract to supply breathing devices, a contract whose price had been allegedly inflated to 100 times the actual cost. Moreno allegedly used the proceeds obtained from the Petropiar contracts for his own personal benefit, including to purchase real estate, a private jet, and luxury vehicles in South Florida.
Moreno is charged with conspiracy to commit money laundering; concealment money laundering; international promotional money laundering; and engaging in transactions involving criminally derived property. If convicted, Moreno faces a maximum penalty of 20 years in prison for each count of money laundering and conspiracy to commit money laundering and up to 10 years in prison for each count of engaging in transactions in criminally derived property. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida, Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, Special Agent in Charge Anthony Salisbury of the Homeland Security Investigations (HSI) Miami Field Office, and Special Agent in Charge Matthew D. Line of the IRS Criminal Investigation’s (IRS-CI) Miami Field Office made the announcement.
HSI’s Miami Field Office and IRS-CI Miami Field Office investigated this case.
Assistant U.S. Attorney Michael Berger of the Southern District of Florida and Trial Attorney Alexander Kramer of the Justice Department’s Fraud Section are prosecuting the case. Assistant U.S. Attorney Sara Klco of the Southern District of Florida is handling asset forfeiture.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
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Venezuelan Businessman Charged in Bribery and Money Laundering SchemeRead the Press Release
A federal grand jury in Miami returned an indictment today charging a Venezuelan national for laundering the proceeds of substantially inflated procurement contracts obtained by making bribe payments to senior officials at Petropiar, a joint venture between Venezuela’s state-owned and state-controlled energy company and an American oil company.
According to the indictment, from at least 2015 through at least May 2019, Rixon Rafael Moreno Oropeza, 46, allegedly engaged in a scheme to obtain multimillion-dollar contracts from Petropiar by paying bribes to senior officials at Petropiar. Moreno allegedly agreed to pay a $1 million bribe to a senior official in the Venezuelan government to install another person as a high-ranking official in the procurement division of Petropiar. In addition, Moreno allegedly sent millions of dollars in bribe payments to senior Petropiar officials from accounts he controlled in South Florida. In exchange for these bribe payments, Moreno allegedly received benefits including over $30 million in payments on contracts from Petropiar to accounts Moreno controlled in South Florida. Illustrative of this, Moreno received approximately $2.7 million from a Petropiar contract to supply breathing devices, a contract whose price had been allegedly inflated to 100 times the actual cost. Moreno allegedly used the proceeds obtained from the Petropiar contracts for his own personal benefit, including to purchase real estate, a private jet, and luxury vehicles in South Florida.
Moreno is charged with conspiracy to commit money laundering; concealment money laundering; international promotional money laundering; and engaging in transactions involving criminally derived property. If convicted, Moreno faces a maximum penalty of 20 years in prison for each count of money laundering and conspiracy to commit money laundering and up to 10 years in prison for each count of engaging in transactions in criminally derived property. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Juan Antonio Gonzalez of the Southern District of Florida, Special Agent in Charge Anthony Salisbury of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office, and Special Agent in Charge Matthew D. Line of the IRS Criminal Investigation’s (IRS-CI) Miami Field Office made the announcement.
HSI's Miami Field Office and IRS-CI Miami Field Office investigated this case.
Trial Attorney Alexander Kramer of the Justice Department’s Fraud Section and Assistant U.S. Attorney Michael Berger of the Southern District of Florida are prosecuting the case. Assistant U.S. Attorney Sara Klco of the Southern District of Florida is handling asset forfeiture.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former South Florida Pharmacy VP and Executive Assistant Sentenced for Their Roles in Health Care Fraud Scheme Targeting U.S. MilitaryRead the Press Release
Miami, Florida – A former South Florida pharmacy executive was sentenced today to seven and a half years in prison for defrauding Tricare and CHAMPVA of approximately $88 million through a compounding pharmacy fraud scheme. His executive assistant received a sentence of five years imprisonment for her role in the conspiracy.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida; Cynthia A. Bruce, Special Agent in Charge, Southeast Field Office of the Defense Criminal Investigative Service (DCIS); Robert DeWitt, Acting Special Agent in Charge, FBI Miami; David Spiker, Special Agent in Charge, U.S. Department of Veterans Affairs, Office of Inspector General (VA-OIG); and Justin Fielder, Special Agent in Charge, U.S. Food and Drug Administration, Office of Criminal Investigations (FDA-OCI) made the announcement.
Matthew Smith, 58, of Boca Raton, Florida, pleaded guilty on January 24, 2022, to one count of conspiracy to commit health care fraud. His executive assistant, Alisa Catoggio, 41, also of Boca Raton, Florida, pleaded guilty on May 17, 2022, to one count of conspiring to pay healthcare kickbacks. In connection with the plea, Smith admitted his role submitting fraudulent claims to Tricare and CHAMPVA for expensive, medically unnecessary compound drugs through a Broward pharmacy. Tricare and CHAMPVA are the health care benefit programs for the United States Department of Defense and Department of Veterans Affairs. In furtherance of the scheme, Smith paid kickbacks to patient recruiters in exchange for their recruiting beneficiaries and referring prescriptions for the medical unnecessary drugs. For her role, Catoggio calculated and tracked the kickbacks and sham co-pay assistance programs used to further the scheme. The fraudulent referrals caused an actual loss to the government programs of approximately $88 million.
In addition to the prison sentence, the Court imposed restitution in the amount of $75,106,971.
DCIS, FBI Miami, VA-OIG, and FDA-OCI investigated the case. Assistant U.S. Attorney Jon Juenger prosecuted the case. Assistant U.S. Attorney Daren Grove is handling the asset forfeiture component of the case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
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Investment Scam Ringleader Pleads Guilty After Being Recorded Paying Cash Kickbacks at Boca Raton StarbucksRead the Press Release
Miami, Florida – Paul Geraci, 45, of Parkland, Florida, pleaded guilty today for his role in a large investment scheme in which he and others defrauded investors out of approximately $21 million by falsely claiming that investors’ money would go towards the development of a lucrative mobile gaming app that, in reality, never launched and generated no revenue during the scheme.
Juan Antonio Gonzalez, United States Attorney, Southern District of Florida, and Robert DeWitt, Acting Special Agent in Charge, FBI Miami Field Office, made the announcement.
Geraci pleaded guilty to conspiring to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349. He faces a maximum term of 20 years’ imprisonment. The United States is pursuing forfeiture of Geraci’s home and under the terms of his plea agreement, Geraci must pay a forfeiture money judgment amount of approximately $1.2 million.
Geraci is the fifth defendant in the scam to plead guilty:
- Michael Assenza, a/k/a “Michael Grimaldi”, 44, of Boca Raton, Florida, the former Director of Technology at Social Voucher pleaded guilty and was sentenced to 52 months’ imprisonment on August 11, 2022;
- Ted Romeo, a/k/a “Ted Lamar”, 62, of Pompano Beach, Florida, an employee of Geraci’s boiler room who solicited Social Voucher investors, pleaded guilty and is scheduled to be sentenced on August 26, 2022;
- Paul Vandivier a/k/a “Doug Wright”, 61, of West Palm Beach, Florida, who operated a boiler room that solicited Social Voucher investors, pleaded guilty and is scheduled to be sentenced on October 7, 2022;
- Cindy Vandivier a/k/a “Madison Brooke” a/k/a “Madison Brookes”, 64, of West Palm Beach, Florida, who helped her husband operate a boiler room that solicited Social Voucher investors, pleaded guilty and is scheduled to be sentenced on October 7, 2022.
Gerald Parker, 78, of Juno Beach, Florida, the former Chief Executive Officer of Social Voucher, is still awaiting trial, currently scheduled for September 27, 2022. The case is assigned to United States District Judge Rodney Smith in Fort Lauderdale, Florida.
Geraci admitted in plea documents that, from the fall of 2016 until December 2018, he used Pinnacle Atlantic to fraudulently sell stock in a Florida company called Social Voucher.com, Inc. (“Social Voucher”) that was later referred to as Stocket, Inc. (“Stocket”). Geraci admitted that he and others at Pinnacle Atlantic took commissions as large as 50 percent of the investment, a fact that was not disclosed to investors. According to Geraci’s plea documents, he paid co-defendant Ted Romeo in cash to pitch Social Voucher stock even though Ted Romeo had a civil judgment against him (a fact that was, again, not disclosed to investors). Geraci also admitted that he knew the Social Voucher stock offering was not registered with the Securities and Exchange Commission or state regulators. According to Geraci’s plea agreement, he caused between $1.5 and $3.5 million in loss to the investors.
According to court filings by the Government, Geraci was recorded several times during the scheme. For example, Geraci was recorded pitching Social Voucher stock to an undercover FBI agent posing as an investor, telling the FBI agent on the recording that his investment money was “all for programming and software and so and so.” In reality, the FBI agent invested $50,000 in undercover funds and half the money went into Geraci’s pocket. Geraci was also recorded paying cash kickbacks at a Boca Raton Starbucks to a man he knew was under a federal fraud indictment in Detroit, in exchange for securing investors. Geraci was recorded explaining to this Detroit fraudster that he wouldn’t disclose the kickbacks to the fraudster on tax returns and that is what he did for his employees “with these special backgrounds.”
After the FBI executed a search warrant at the Social Voucher office in June 2018, investors sued the company, and the court granted the investors’ request to appoint a receiver to take over management of the company. See David Goerz, et al. v. Social Voucher, Case No. 50-2018-CA-011965, pending in the Circuit Court of the 15th Judicial District in Palm Beach County, Florida.
U.S. Attorney Gonzalez commended the investigative efforts of the FBI’s Miami Field Office and their extensive work on this case, work that included numerous undercover recordings and multiple search warrants. This case is being prosecuted by Assistant U.S. Attorneys Elizabeth Young and Will Rosenzweig. Assistant U.S. Attorney Emily Stone is handling asset forfeiture related to the matter.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-60101.
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Self-Professed Bodybuilder Sentenced to Federal Prison After Stealing Money from the U.S. Department of Veterans AffairsRead the Press Release
Miami, Florida – A federal district judge in Ft. Pierce has sentenced a military veteran, and self-proclaimed bodybuilder, to one year in federal prison after lying to the VA in order to obtain disability benefits.
Zachary Barton, a veteran of the United States Army, lied about the extent of his mental and physical impairments to receive U.S. Department of Veterans Affairs (VA) disability benefits to which he was not entitled. Specifically, Barton manipulated the results of subjective tests of mental health claiming he was in combat, which made him eligible for benefits relating to PTSD and self-reported his inability to lift weights more than 10-20 pounds or walk without the benefit of a cane. The VA found that Barton was 100% disabled based on the manipulated test responses.
Despite his claimed impairments to the VA, surveillance footage, social media posts, and other evidence showed Barton had no such limitations. Barton engaged with and provided workout advice to others and performed strenuous weight-lifting activity, including leg pressing 650 pounds and chest pressing over 300 pounds. He performed activities of daily life such as shopping, driving a car and walking his pet without any difficulty.
In addition to the one-year prison sentence, the court ordered Barton to pay $245, 932.52 in restitution to the VA.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, and David Spilker, Special Agent in Charge, VA Office of the Inspector General, Southeast Field Office, announced the sentence imposed by U.S. District Judge Aileen M. Cannon on August 11.
This case was investigated by the Department of Veterans Affairs – Office of the Inspector General and prosecuted by AUSA Robin Waugh.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-80106.
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Manager of Key West Labor Staffing Companies Sentenced for Tax Crimes and Immigration FraudRead the Press Release
The manager of Key West, Florida, labor staffing companies was sentenced today to 48 months in prison for tax and immigration crimes related to the operation of those businesses.
According to court documents and statements made in court, from approximately January 2016 through October 2020, Volodymyr Ogorodnychuk, of Key West, helped operate Paradise Choice LLC, Paradise Choice Cleaning LLC, Tropical City Services LLC and Tropical City Group LLC, all of which were labor staffing companies in southern Florida. The staffing companies facilitated the employment of individuals in hotels, bars and restaurants in Key West and other locations, even though the employees were not authorized to work in the United States.
As part of his plea, Ogorodnychuk admitted that he and his co-conspirators paid the workers without withholding Social Security, Medicare and income taxes from their wages, and then did not report those wages to the IRS as required by law. Ogorodnychuk also admitted he and his co-conspirators defrauded the IRS out of more than $3.5 million in employment taxes.
In addition to the term of imprisonment, U.S. District Court Judge Jose E. Martinez for the Southern District of Florida ordered Ogorodnychuk to serve three years of supervised release. Restitution will be determined within 90 days.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida made the announcement.
The U.S. Department of Homeland Security, Homeland Security Investigations and IRS-Criminal Investigation investigated the case.
Senior Litigation Counsel Sean Beaty, Trial Attorneys Jessica A. Kraft and Nicholas J. Schilling Jr. of the Justice Department’s Tax Division and Assistant U.S. Attorney Chris Clark of the Southern District of Florida prosecuted the case.
Former Long-Term Employee of Miami-Dade Police Department Convicted of Covid-19 Relief Fraud Sentenced to Prison TimeRead the Press Release
Miami, Florida – Yesterday, Senior U.S. District Judge Donald L. Graham sentenced 51-year-old Elisa Rivera to 60 days in federal prison, to be followed by 18 months of supervised release, after she pled guilty earlier this year to participating in a Covid-19 relief fraud conspiracy. Prior to the sentencing hearing, Rivera repaid to the federal government all the money she had fraudulently obtained for herself and others through the conspiracy: over $117,000.
When the pandemic hit our country in 2020, Rivera worked full-time with the Miami-Dade Police Department (“MDPD”) as an Administrative Officer. As an MDPD employee (which she had been for many years), Rivera suffered no loss of salary due to the COVID-19 pandemic. Despite this, on July 3, 2020, Rivera authorized a co-conspirator to electronically submit an EIDL application on her behalf stating that Rivera was the 100% owner of a for-profit business operating under the name “Elisa Rivera.” That application falsely and fraudulently certified that the business named “Elisa Rivera” was established on or about March 1, 2017, and that during the 12 month period prior to January 31, 2020, that business had gross revenues of $325,446 and 12 employees. In reality, the defendant did not own any business, was not an independent contractor, and had no business gross revenues or employees. As a result of this fraudulent application, Rivera received $71,300 from the SBA in loans and grants.
After having the co-conspirator submit the fraudulent EIDL application on her behalf, Rivera offered to, and did, submit fraudulent EIDL applications to the SBA on behalf of a limited group of other individuals (the “Applicants”) who also did not own small businesses and did not qualify for EIDL relief. These applications contained false representations as to the existence of their small businesses, their gross revenues, and the number of employees each business had. It was the intent of Rivera and the Applicants to obtain for the Applicants the $10,000 EIDL advances from the SBA, but not to obtain any additional loan amount. As a result of these fraudulent applications, four of the Applicants each received the $10,000 advances from SBA. In exchange for submitting these fraudulent EIDL applications to the SBA, Rivera collected fees from the Applicants.
In February, Rivera pled guilty to a felony Information charging her with conspiracy to commit wire fraud in connection with a scheme to file fraudulent applications to the U.S. Small Business Administration for COVID-19 relief advance grants and low-interest COVID-19 relief loans. The full sentenced imposed yesterday by Senior Judge Graham was 60 days’ imprisonment, 18 months of supervised release (with the first 60 days in home confinement), restitution in the amount of $115,063.61, forfeiture in the amount of $2,000, and a $100 special assessment. As the judge recognized during yesterday’s hearing, Rivera satisfied her restitution and forfeiture obligations prior to their being ordered as part of her sentence. Rivera must surrender to the Bureau of Prisons by November 4.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, Acting Special Agent in Charge Robert M. DeWitt of the FBI’s Miami Field Office, and Special Agent in Charge Amaleka McCall-Brathwaite of the Small Business Administration, Investigations Division (SBA-OIG), made the announcement.
FBI Miami (in particular, its Corruption Task Force, which includes task force officers from the Miami-Dade Police Department’s Professional Compliance Bureau - Criminal Conspiracy Unit) and SBA-OIG investigated this matter. Miami-Dade County Office of Inspector General assisted. Assistant U.S. Attorney Edward N. Stamm prosecuted this case. Assistant U.S. Attorney Gabrielle Charest-Turken is handling asset forfeiture.
In March 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted. It was designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. Among other sources of relief, the CARES Act authorized and provided funding to the SBA to provide Economic Injury Disaster Loans (“EIDLs”) to eligible small businesses, including sole proprietorships and independent contractors, experiencing substantial financial disruptions due to the COVID-19 pandemic to allow them to meet financial obligations and operating expenses that could otherwise have been met had the disaster not occurred. EIDL applications were submitted directly to the SBA via the SBA’s on-line application website, and the applications were processed and the loans funded for qualifying applicants directly by the SBA.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-20028.
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Durable Medical Equipment Company Owner Pleads Guilty to Health Care FraudRead the Press Release
Miami, Florida – Ariel Madero Paez, 56, pleaded guilty today in federal court in Ft. Pierce to fraudulently billing Medicare over $2 million for durable medical that was never provided to beneficiaries.
According to court records, from November 2021 through May 2022, Madero owned Always Medical Supply (“Always”), located in Stuart, Florida. Always, a Florida corporation, purported to provide durable medical equipment (“DME”) to eligible Medicare beneficiaries. In a five-month period in 2022, Always submitted approximately $2.2 million in fraudulent health care claims to Medicare for DME that Always never provided, and that Medicare beneficiaries never requested. As a result, Medicare paid over $1.4 million. After Madero’s arrest on May 6, 2022 at the Miami International Airport, bank accounts for Always and Madero had a sum of over $500,000 derived from or traceable to the health care fraud.
United States District Court Judge Donald M. Middlebrooks will sentence Madero on October 5, at 11:00 a.m. in West Palm Beach. At sentencing, Madero faces a maximum prison sentence of 10 years on the health care charges.
Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, and Omar Pérez Aybar, Special Agent in Charge, Health and Human Services, Office of Inspector General (HHS-OIG), Miami Region announced the guilty plea that defendant entered before U.S. Magistrate Judge Shaniek M. Maynard.
HHS-OIG Miami investigated the case. Assistant U.S. Attorney Diana M. Acosta prosecuted it. Assistant U.S. Attorney Peter Laserna is handling asset forfeiture.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-14023.
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Miami Doctor Sentenced to Federal Prison for Committing $38 Million Health Care Fraud Scheme, Spending Proceeds on Beachfront Condos and Luxury VehiclesRead the Press Release
Miami, Florida – Armando Valdes, 63, was sentenced yesterday by U.S. District Judge Kathleen M. Williams to 60 months in federal prison for directing a $38 million health care fraud scheme. Valdes was also ordered to forfeit four real estate properties, including a beachfront condominium unit in Pompano Beach, as well as numerous luxury vehicles, including a Cadillac Escalade and a Tesla Model S, all of which he had purchased using the ill-gotten proceeds of his fraud scheme.
From February 2015 through July 2021, Valdes owned and operated Gasiel Medical Services, Corp., a medical clinic in Miami, Florida. Through Gasiel Medical Services, Valdes submitted approximately $38 million in fraudulent claims to United Healthcare and Blue Cross Blue Shield for infusions of the prescription drug Infliximab. Infliximab, known by the brand name Remicade, is an expensive prescription immunosuppressive approved for the treatment of adult and pediatric Crohn’s disease, adult and pediatric ulcerative colitis, rheumatoid and psoriatic arthritis, ankylosing spondylitis, and plaque psoriasis. Infliximab is one of the most expensive prescription drugs on the market—a single dose can have a retail price of nearly $10,000. Despite claiming approximately $38 million in reimbursements for infusions of Infliximab purportedly provided to patients of Gasiel Medical Services, Valdes admitted as part of his guilty plea earlier this year, that he never provided even a single infusion of the drug, nor did patients of the clinic require the medication.
Valdes attempted to conceal his involvement in this fraud scheme by distancing himself on paper from the medical clinic. For example, Valdes employed a 91-year-old physician at Gasiel Medical Services who rarely treated patients and never prescribed Infliximab, but who Valdes listed as the rendering provider for all $38 million of the fraudulently billed Infliximab infusions. Similarly, even though Valdes effectively owned and operated Gasiel Medical Services, he paid another individual to act as its “nominee owner.” This other individual, and not Valdes, was listed as the president and registered agent of the clinic in corporate records and other official documents.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Robert M. DeWitt, Acting Special Agent in Charge, FBI, Miami Field Office announced the sentence.
Assistant U.S. Attorney Michael B. Homer prosecuted this case. Assistant U.S. Attorney Annika Miranda is handling asset forfeiture.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-20590.
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Former DCF Employee and Substance Abuse Treatment Facility Consultant Plead Guilty in Bribery SchemeRead the Press Release
Miami, Florida – Today, a State of Florida employee who agreed to accept bribe money in exchange for expediting the license application process of certain substance abuse treatment facilities, as well as a facilities consultant involved in the bribery scheme, pled guilty in South Florida federal court to extortion conspiracy.
According to court documents and the information to which 31-year-old Alexandra Alia Cadet of West Palm Beach, Florida and 34-year-old Shannel Simone Escoffery of Coral Springs, Florida pled guilty, Cadet was a licensing specialist for the State of Florida, Department of Children and Families (DCF), Substance Abuse and Mental Health Program Office. As a licensing specialist, Cadet had responsibility and authority to review and recommend the approval of applications submitted by substance abuse treatment facilities for licenses authorizing the provision of substance abuse treatment services in Florida. Once Cadet recommended approval of an application, a supervisor had authority to issue a final approval and the corresponding license.
Escoffery was a consultant for substance abuse treatment facilities. Escoffery assisted facilities with preparing their licensing applications, submitting them to DCF, and obtaining licenses.
The bribery scheme would operate as follows: Escoffery would solicit and obtain payments from the substance abuse treatment facilities. Then, Escoffery would deliver all or some of the money, usually cash, to Cadet in exchange for official action; that is, Cadet’s expedited review and recommendation of approval of licenses authorizing the facilities to provide substance abuse treatment services in Florida. The quicker the issuance of a license, the quicker the facility could open and start generating revenue.
As part of the bribery scheme, in October 2017, Cadet and Escoffery accepted a bribe payment from a substance abuse treatment facility in Broward County, Florida. In exchange for the bribe payment, Cadet reviewed and recommended approval of the facility’s application, expediting the issuance of a license to the facility.
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Robert M. DeWitt, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Sentencing is set for October 18 before U.S. District Judge Raag Singhal.
FBI Miami investigated this case. Assistant United States Attorney Daya Nathan is prosecuting it. Assistant United States Attorney Peter Laserna is handling asset forfeiture.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 22-cr-60158.
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South Florida Drug Trafficker Who Traveled to California to Rob Supplier Sentenced to over 17 Years in Federal PrisonRead the Press Release
Miami, Florida – Yesterday, a federal district judge in West Palm Beach, Florida sentenced the 34-year-old leader of a South Florida drug trafficking ring to 210 months in federal prison for conspiring to commit a Hobbs Act robbery and conspiring to traffic 100 kilograms or more of marijuana.
As part of his guilty plea earlier this year, Christopher Michael Frantantoni admitted that in June 2019, he and five members of the drug trafficking organization that he ran flew from South Florida to San Francisco, California, to commit a home invasion robbery of Frantantoni’s marijuana supplier. Frantantoni gained access to the home where the supplier kept the stash by setting up a meeting there to negotiate the purchase of 90 pounds of high-grade marijuana. Frantantoni and the seller met at the house on June 24, 2019. Frantantoni walked inside, leaving the entrance door ajar. Three men wearing black tactical uniforms and body armor burst through the door pretending to be DEA agents. In fact, they were Frantantoni’s associates. The men then pointed what appeared to be two pistols and a rifle at the residence’s three occupants, demanding that the victims get on the ground and not look at them. They grabbed cash and 90 pounds of high-grade marijuana and fled the scene. Frantantoni also admitted that, prior to the robbery, he and his crew had purchased large amounts of marijuana in California for resale in South Florida.
Co-defendants Kyle Edwin Firestone and Bradley Broder pled guilty and were sentenced to 27 months’ imprisonment. Two other co-defendants pled guilty and are awaiting sentencing as follows: April Renee Frantantoni (October 11, 9:00 a.m.) and Jonathan Paul Bonanno (December 9, 9:00 a.m.).
Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and Christopher A. Robinson, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Miami Field Office, announced the sentence imposed by U.S. District Judge Kenneth A. Marra.
ATF Miami investigated the case with assistance from Homeland Security Investigations (HSI), the Palm Beach County Sheriff’s Office (PBSO) Tactical Unit, and the U.S. Marshals Service. Assistant U.S. Attorney John McMillan prosecuted the case.
This prosecution is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten the citizens of the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime. The OCDETF program facilitates complex, joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-80178.
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Leader of “Genesis II Church of Health and Healing,” Who Sold Toxic Bleach as Fake “Miracle” Cure for Covid-19 and Other Serious Diseases, Extradited from Colombia to the United StatesRead the Press Release
Miami, Florida – Mark Grenon, 64, made his initial appearance today in federal court in Miami, Florida, after being extradited from Colombia. Grenon is charged—along with his three sons, Jonathan Grenon, 36, Jordan Grenon, 28, and Joseph Grenon, 34—with fraudulently marketing and selling “Miracle Mineral Solution,” a toxic industrial bleach, as a cure for COVID-19, cancer, Alzheimer’s, diabetes, autism, malaria, hepatitis, Parkinson’s, herpes, HIV/AIDS, and other serious medical conditions, and with defying federal court orders.
According to an indictment returned by a federal grand jury, the Grenons, all of Bradenton, Florida, manufactured, promoted, and sold a product they named Miracle Mineral Solution (“MMS”). MMS is a chemical solution containing sodium chlorite and water which, when ingested orally, became chlorine dioxide, a powerful bleach typically used for industrial water treatment or bleaching textiles, pulp, and paper. The Grenons claimed that ingesting MMS could treat, prevent, and cure COVID-19, according to the charges. The FDA, however, had not approved MMS for treatment of COVID-19, or for any other use. Rather, in prior official warning statements, the FDA had strongly urged consumers not to purchase or use MMS for any reason, explaining that drinking MMS was the same as drinking bleach and could cause dangerous side effects, including severe vomiting, diarrhea, and life-threatening low blood pressure. See https://www.fda.gov/consumers/consumer-updates/danger-dont-drink-miracle-mineral-solution-or-similar-products. In fact, FDA received reports of people requiring hospitalizations, developing life-threatening conditions, and even dying after drinking MMS.
The indictment further alleges that before marketing MMS as a cure for COVID-19, the Grenons marketed MMS as a miracle cure-all for dozens of other serious diseases and disorders, even though the FDA had not approved MMS for any use. The Grenons sold tens of thousands of bottles of MMS nationwide, including to consumers throughout South Florida, according to the allegations. They sold this dangerous product under the guise of Genesis II Church of Health and Healing (“Genesis”), an entity they are accused of creating to avoid government regulation of MMS and shield themselves from prosecution. According to charging documents, Genesis’ own websites describe Genesis as a “non-religious church,” and Defendant Mark Grenon, the co-founder of Genesis, has repeatedly acknowledged that Genesis “has nothing to do with religion,” and that he founded Genesis to “legalize the use of MMS” and avoid “going [ ] to jail.” The Genesis websites further stated that MMS could be acquired only through a “donation” to Genesis, but the donation amounts for MMS orders were set at specific dollar amounts, and were mandatory, such that the donation amounts were effectively just sales prices. The indictment alleges that the Grenons received more than $1 million from selling MMS.
The indictment also charges the Grenons with criminal contempt. The United States previously filed a civil case against the defendants and Genesis II Church of Health and Healing. See United States v. Genesis II Church of Health and Healing, et al., Case No. 20-21601-CV-WILLIAMS. In that civil case, the United States obtained court orders halting the Grenons’ distribution of MMS. According to charging documents, the Grenons willfully violated those court orders and continued to distribute MMS. The Grenons also allegedly threatened the federal judge presiding over the civil case, and threatened that, should the government attempt to enforce the court orders halting their distribution of MMS, the Grenons would “pick up guns” and instigate “a Waco.”
Furthermore, according to statements made in court by federal prosecutors in Miami, a search warrant was executed for Defendant Jonathan Grenon’s house at the time of his arrest, and officers discovered that the Grenons were manufacturing MMS in a shed in Jonathan Grenon’s backyard in Bradenton, Florida. Officers seized dozens of blue chemical drums containing nearly 10,000 pounds of sodium chlorite powder, thousands of bottles of MMS, and other items used in the manufacture and distribution of MMS. The government also recovered multiple loaded firearms, including one pump-action shotgun concealed in a custom-made violin case to disguise its appearance, according to prosecutors.
Trial is set to begin on September 12, in Miami, Florida, before Chief U.S. District Judge Cecilia M. Altonaga.
U.S. Attorney for the Southern District of Florida Juan Antonio Gonzalez and Assistant Commissioner of the FDA’s Office of Criminal Investigations Catherine Hermsen made the announcement.
Assistant U.S. Attorneys Michael B. Homer and John Shipley of the Southern District of Florida are prosecuting the case. FDA’s Office of Criminal Investigations investigated the case.
U.S. Attorney Gonzalez commends and thanks the government of Colombia for its assistance. U.S. Attorney Gonzalez also extends his gratitude to the Justice Department’s Office of International Affairs (OIA) and the Narcotic and Dangerous Drug Section (NDDS) Judicial Attachés in Bogota, Colombia for their substantial assistance in securing the arrest and extradition of Mark Grenon to the United States.
An indictment is a charging instrument containing allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 21-cr-20242.
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