Southern District of Florida

This month, the last of 14 defendants were sentenced for their respective roles in a violent criminal enterprise that operated in the Miami neighborhood of Allapattah for crimes committed as early as the year 2000. 

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, Jorge Colina, Chief, Miami Police Department (MPD), Juan Perez, Director, Miami-Dade Police Department (MDPD), and Daniel Junior, Director, Miami-Dade Corrections and Rehabilitation Department (MDCR), made the announcement as part of the Southern District of Florida Violence Reduction Partnership (VRP).

On September 14, 2018, at the conclusion of a two-month trial before U.S. District Judge Jose E. Martinez, the jury convicted 10 defendants for racketeering and drug-related offenses.  On April 12, 2019, Judge Martinez completed the sentencing of the final defendant.  The sentences as to the defendants convicted at trial are as follows: 

Antonio Glass, of Miami, was convicted at trial of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and one count of Possession of a Controlled Substance with Intent to Distribute.  Glass was sentenced to life imprisonment for his conduct, which included the death of a victim arising from the racketeering conspiracy;

Jerimaine Bryant, of Miami, was convicted at trial of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and three counts of Possession of a Controlled Substance with Intent to Distribute.  Bryant was sentenced to life imprisonment; 

Curtis Bryant, of Miami, was convicted at trial of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and one count of Attempted Possession of a Controlled Substance with Intent to Distribute.  Bryant was sentenced to life imprisonment for his conduct, which included the death of a victim arising from the racketeering conspiracy; 

Samuel Hayes, of Miami, was convicted at trial of one count of Racketeering Conspiracy, two counts of Robbery, and one count of Firearm Possession in Furtherance of a Crime of Violence.  Hayes was sentenced to 27 years imprisonment;

Mario Rodriguez, of Miami, was convicted at trial of one count of Drug Distribution Conspiracy, one count of Possession of a Controlled Substance with Intent to Distribute, and one count of Possession of a Firearm in Furtherance of a Drug Trafficking Crime.  Rodriguez was sentenced to 21 years imprisonment;

Michael Walker, of Miami, was convicted at trial of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and one count of Possession of a Controlled Substance with Intent to Distribute.  Walker was sentenced to 19 years imprisonment;

Reginald Graham, of Miami, was convicted at trial of one count of Racketeering Conspiracy, Drug Distribution Conspiracy, and one count of Attempted Possession of a Controlled Substance with Intent to Distribute.  Graham was sentenced to 19 years imprisonment;

Daniel Jones, of Miami, was convicted at trial of one count of Drug Distribution Conspiracy.   Jones was sentenced to 19 years imprisonment;

Levi Bryant, of Miami, was convicted at trial of one count of Drug Distribution Conspiracy and one count of Possession of a Controlled Substance with Intent to Distribute.  Bryant was sentenced to 16 years imprisonment; and

Torivis Reginald Ingram, of Miami, was convicted at trial of one count of Drug Distribution Conspiracy and one count of Possession of a Controlled Substance with Intent to Distribute.  Ingram was sentenced to 14 years imprisonment.

The other four defendants, of Miami, pled guilty prior to trial and were sentenced for periods of sixty months to 15 years imprisonment.

During the trial, evidence, that included civilian and law enforcement witness testimony, presented proved how the charged racketeering enterprise, which used names such as the Dub Side Blood Family (DSBF), for over 17 years conducted its unlawful business practices and controlled the South Gwen Cherry Housing Complex in the Allapattah neighborhood of Miami. Witness testimony established how the DSBF members routinely robbed victims at gunpoint and sold narcotics.  The enterprise’s criminal spree included five commercial businesses, including MetroPCS locations, a Food Plus store, and the armed robberies of drug dealers.

The evidence at trial showed that the DSBF became so emboldened that it told a future homicide victim’s own mother that her son would be killed.  The DBSF followed through on that promise with his subsequent murder.  Trial evidence also established that members of the group celebrated after another victim’s murder by posting images of the deceased’s body in a casket.  Trial evidence included jailhouse phone calls and private messages, which captured DSBF members discussing the operation of their organization and proposed responses to circumvent law enforcement’s investigation into the criminal enterprise.   Trial evidence from the defendants’ social media and cellular phone records demonstrated the group’s ability to continue criminal activity despite periods of time when its members were incarcerated.  

U.S. Attorney Fajardo Orshan commended the collaborative investigative efforts of ATF, FBI, DEA, MPD, MDPD, and MDCR, including the following key participants:  MPD’s Narcotics Unit, Gun Squad, Gang Intelligence Detail, Homicide Unit, and Robbery Unit; MDPD’s Robbery Bureau, Narcotics Bureau, Homicide Bureau, and Street Violence Task Force. Ms. Fajardo Orshan also thanked the U.S. Marshals Service, U.S. Customs and Border Protection, Homestead Police Department, Miami-Dade Corrections and Rehabilitation Department’s Security Threat Group Unit, and the South Florida High Intensity Drug Trafficking Task Force to include the High Intensity Drug Trafficking Area-Miami-Dade State Attorney’s Gang Strike Force for their support in the investigation.

Through the collaborative VRP, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks that plague communities throughout the Southern District of Florida. The sentences announced today are the result of the VRP’s law enforcement initiatives. Additional information regarding the VRP initiatives is available at [email protected] (link sends e-mail) or by calling (305) 961-9134.

The case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF), Operation Northern Light.  The Northern Light Task Force is a federal multi-agency, multi-jurisdictional task force that was formed to combat organized violent crime in Northern Miami-Dade County.  To date the Northern Light Task Force has secured the conviction of 27 defendants involved in complex violent crimes involving homicide, attempted murder, serial robbery, firearms offenses, drug trafficking, and other crimes.  The principal mission of the Northern Light Task Force is to identify, disrupt, and dismantle the most serious organized violent criminal conspiracies operating in Miami-Dade County, Florida.

This case was prosecuted by Assistant U.S. Attorneys Ignacio J. Vázquez, Jr. and Ilham A. Hosseini.

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.

Four Peruvian residents have been extradited to the United States, where they stand accused of operating a large-scale extortion scheme from 2012 through 2015, the Justice Department and U.S. Postal Inspection Service today announced.

Jesus Gerardo Gutierrez Rojas, 37, Maria de Guadalupe Alexandra Podesta Bengoa, 38, Virgilio Ignacio Polo Davila, 43, and Omar Alfredo Portocarrero Caceres, 39, face federal charges in Miami. Peruvian authorities arrested the four in late 2017, based upon a U.S. indictment. All four remained incarcerated in Peru since the time of their arrest. Peru approved their extradition to the U.S. on Jan. 18, 2019.

“The Department of Justice will pursue criminals who target and extort U.S. consumers, wherever they are,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Those who extort U.S. consumers by phone cannot escape justice by placing their calls from abroad. I thank the Republic of Peru for extraditing these individuals to face charges in U.S. courts.” 

“Individuals who defraud American consumers will be brought to justice, no matter where they are located,” said U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida. “Protecting the elderly and vulnerable members of our community from extortion schemes, such as this one, is a top priority of this Office and the Department of Justice, and I thank the U.S. Postal Inspection Service for their unwavering commitment to rid the U.S. mail system of these schemes. This is a reminder to our community to be wary of those individuals who threaten imprisonment, a negative credit score or a change in immigration status; please report those threats immediately.”

“The U.S. Postal Inspection Service will continue to aggressively investigate and pursue those who threaten U.S. consumers and extort them of their hard earned money, regardless of what country they operate from,” said U.S. Postal Inspector in Charge Antonio J. Gomez. “The U.S. Postal Inspection Service appreciates the continued partnership with the Department of Justice’s Consumer Protection Branch in pursuing South American call center operators who victimize consumers through the U.S. mail.”

Podesta, Polo, and Portocarrero allegedly managed and operated Peruvian call centers that placed calls to Spanish-speaking consumers across the United States while lying and threatening them into paying fraudulent settlements for nonexistent debts. Many of the consumer victims were elderly. Gutierrez was allegedly the general manager of a larger company where he worked in partnership with Podesta, Polo, and Portocarrero to facilitate their extortion scheme. The defendants’ associates in Miami collected the payments and sometimes shipped packages to victims in the U.S.

According to the allegations in the indictment, Podesta, Polo, Portocarrero, and their employees in Peru used Internet-based telephone calls and claimed to be attorneys and government representatives to threaten victims in the United States. The callers falsely claimed that victims failed to pay for or receive a delivery of products. The callers also falsely claimed that victims would be sued and that the companies would obtain large monetary judgements against them. Some victims were also threatened with negative marks on their credit reports, imprisonment, or immigration status. The callers said these threatened consequences could be avoided if the victims immediately paid “settlement fees.” Many victims made monetary payments based on these baseless threats. 

A 34-count federal indictment was filed against the defendants in the U.S. District Court for the Southern District of Florida on Dec. 6, 2016, and was unsealed upon the defendants’ extradition to the U.S. The defendants are approved to face 12 extortion counts pending against them. An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The case is being prosecuted by Trial Attorney Phil Toomajian of the Department of Justice’s Consumer Protection Branch. The Postal Inspection Service investigated the case. The Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office of the Southern District of Florida, the Diplomatic Security Service, and the Peruvian National Police provided critical assistance.

Four Peruvian residents have been extradited to the United States, where they stand accused of operating a large-scale extortion scheme from 2012 through 2015, the Justice Department and U.S. Postal Inspection Service today announced. 

Jesus Gerardo Gutierrez Rojas, 37, Maria de Guadalupe Alexandra Podesta Bengoa, 38, Virgilio Ignacio Polo Davila, 43, and Omar Alfredo Portocarrero Caceres, 39, face federal charges in Miami. Peruvian authorities arrested the four in late 2017, based upon a U.S. indictment. All four remained incarcerated in Peru since the time of their arrest. Peru approved their extradition to the U.S. on Jan. 18, 2019.

“The Department of Justice will pursue criminals who target and extort U.S. consumers, wherever they are,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Those who extort U.S. consumers by phone cannot escape justice by placing their calls from abroad. I thank the Republic of Peru for extraditing these individuals to face charges in U.S. courts.”  

“Individuals who defraud American consumers will be brought to justice, no matter where they are located,” said U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida. “Protecting the elderly and vulnerable members of our community from extortion schemes, such as this one, is a top priority of this Office and the Department of Justice, and I thank the U.S. Postal Inspection Service for their unwavering commitment to rid the U.S. mail system of these schemes. This is a reminder to our community to be wary of those individuals who threaten imprisonment, a negative credit score or a change in immigration status; please report those threats immediately.”

“The U.S. Postal Inspection Service will continue to aggressively investigate and pursue those who threaten U.S. consumers and extort them of their hard earned money, regardless of what country they operate from,” said U.S. Postal Inspector in Charge Antonio J. Gomez. “The U.S. Postal Inspection Service appreciates the continued partnership with the Department of Justice’s Consumer Protection Branch in pursuing South American call center operators who victimize consumers through the U.S. mail.” 

Podesta, Polo, and Portocarrero allegedly managed and operated Peruvian call centers that placed calls to Spanish-speaking consumers across the United States while lying and threatening them into paying fraudulent settlements for nonexistent debts. Many of the consumer victims were elderly. Gutierrez was allegedly the general manager of a larger company where he worked in partnership with Podesta, Polo, and Portocarrero to facilitate their extortion scheme. The defendants’ associates in Miami collected the payments and sometimes shipped packages to victims in the U.S. 

According to the allegations in the indictment, Podesta, Polo, Portocarrero, and their employees in Peru used Internet-based telephone calls and claimed to be attorneys and government representatives to threaten victims in the United States. The callers falsely claimed that victims failed to pay for or receive a delivery of products. The callers also falsely claimed that victims would be sued and that the companies would obtain large monetary judgements against them. Some victims were also threatened with negative marks on their credit reports, imprisonment, or immigration status. The callers said these threatened consequences could be avoided if the victims immediately paid “settlement fees.” Many victims made monetary payments based on these baseless threats.  

A 34-count federal indictment was filed against the defendants in the U.S. District Court for the Southern District of Florida on Dec. 6, 2016, and was unsealed upon the defendants’ extradition to the U.S. The defendants are approved to face 12 extortion counts pending against them. An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The case is being prosecuted by Trial Attorney Phil Toomajian of the Department of Justice’s Consumer Protection Branch. The Postal Inspection Service investigated the case. The Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office of the Southern District of Florida, the Diplomatic Security Service, and the Peruvian National Police provided critical assistance. 

A Palm Beach County resident was sentenced to 12 years in prison for distributing cocaine and heroin containing Fentanyl.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Adolphus P.  Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Rick Bradshaw, Sheriff, Palm Beach County Sheriff’s Office, Dave Aaronberg, State Attorney, Palm Beach County State Attorney’s Office, made the announcement. 

Duwayne Jones, 44, of Lake Worth, Florida, previously pled guilty to distributing a controlled substance (Case No. 19-CR-80004).  On April 12, 2019, Jones was sentenced by U.S. District Judge Kenneth A. Marra to 144 months in prison, to be followed by 3 years of supervised release.   

According to the court record, on October 2, 2018, Jones sold cocaine and heroin laced with Fentanyl to an undercover police officer.  On December 12, 2018, Jones again sold heroin to an undercover officer and was subsequently arrested.  During a search incident to his arrest additional heroin, cocaine, marijuana, and $415 in U.S. currency was recovered. 

Based upon prior police reports and telephone records, Jones was connected to two prior non-fatal overdoses.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the DEA and Palm Beach County Sheriff’s Office in this matter.  She thanked the Palm Beach County State Attorney’s Office for their assistance. This case was prosecuted by Assistant U.S. Attorney Jennifer C. Nucci and Special Assistant U.S. Attorney Andrew Carrabis.

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.

A California tobacco company executive on Friday was arrested after being charged with a conspiracy to evade the payment of millions of dollars in excise taxes on imported cigars.

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Nicholas Colucci, Assistant Administrator for Field Operations, Alcohol and Tobacco Tax and Trade Bureau (TTB), and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Washington, DC Field Office, made the announcement.

Akrum Alrahib, 41, of Los Angeles, California, was charged by indictment with the following counts: conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371; conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349; wire fraud, in violation of Title 18, United States Code, Section 1343.  The indictment also charged Alrahib with violations of the Internal Revenue Code, including: refusing to pay Federal Tobacco Excise Tax on large cigars, and attempting to evade or defeat the tax or payment thereof, in violation of 26 U.S.C. §  5762(a)(3); and willfully attempting to evade or defeat Federal Tobacco Excise Tax on large cigars, in violation of Title 26 U.S.C. § 7201.

According to the indictment, Alrahib was the President of Trendsettah USA, Inc. (“Trendsettah”), a California tobacco company authorized to transact business in the State of Florida. Trendsettah sold various tobacco products, such as large cigars, and marijuana paraphernalia, such as “blunt wraps,” many of which were imported from the Dominican Republic. 

In 2013, Alrahib partnered with Gitano Pierre Bryant, Jr., a TTB-permitted tobacco importer, to import large cigars from the Dominican Republic into Miami, Florida. The indictment alleges that Alrahib and Bryant agreed to lower their costs by underreporting the Federal Tobacco Excise Tax that was due and owing on the imported cigars. According to the charging document, Alrahib and Bryant consistently evaded Federal Tobacco Excise Tax by concealing the price Alrahib actually paid for the cigars.

It is alleged that Alrahib paid over $9 million for untaxed tobacco products during the course of the charged conspiracies and received over $700,000 in kickbacks from Bryant, on which aggregate amount he did not pay the required federal excise tax.  

Alrahib will remain in custody pending his removal to the Southern District of Florida.

If convicted, Alrahib can be sentenced up to five years imprisonment on the conspiracy to defraud the United States charge and each of the charges for violations of the Internal Revenue Code, and up to 20 years imprisonment on the wire fraud and wire fraud conspiracy charges.  Additionally, the court may impose a fine of up to $250,000, on each count alleged in the indictment. 

U.S. Attorney Fajardo Orshan commended the investigative efforts of the TTB and IRS-CI. The case is being prosecuted by Assistant United States Attorney Christopher Browne.

An indictment contains mere 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.

A tax preparer and two employees were indicted on charges related to the preparation and filing of false tax returns.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.

Olry Maurival, of West Palm Beach, Florida, Paula Pognon, also of West Palm Beach, Florida and Amos Regusme, of Felton, Delaware, have been indicted for conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371 (Case No. 19-80054-CR-Middlebrooks).  Maurival and Pognon have also been indicted for aiding and assisting in the preparation of false tax returns, in violation of Title 26, United States Code, Section 7206(2) and Maurival has been indicted for filing false tax returns, in violation of Title 26, United States Code, Section 7206(1).  Their initial appearances are scheduled for April 25, 2019, in West Palm Beach. 

According to the allegations in the indictment, Maurival operated a tax preparation business where he, Pognon, and Regusme prepared taxes.  From 2012 through 2015, they prepared and filed returns on which they claimed a variety of credits and deductions to which their clients were not entitled, including the Earned Income Credit, the Fuel Tax Credit, deductions for unreimbursed employee expenses, and deductions and credit for educational expenses.  In addition, Maurival underreported his gross earnings from the operation of his tax business on his personal tax returns.

If convicted, the defendants face maximum possible statutory sentences of 5 years in prison, for the conspiracy.  In addition, Maurival and Pognon face maximum possible statutory sentences of 3 years in prison on each of the other counts.

An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.

U.S. Attorney Fajardo Orshan commended the investigative efforts of IRS-CI.  This case is being prosecuted by Assistant U.S. Attorney Marc Osborne.

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.

A Palm Beach County resident was sentenced to prison in connection with a $1.4 million dollar insurance fraud scheme.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida and Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, made the announcement.

Alexander Hartman, of Palm Beach County, pled guilty, on January 24, 2019, to four counts of wire fraud, in violation of Title 18, United States Code, Section 1343 (18-80236-CR-Rosenberg).  On April 5, 2019, Hartman was sentenced by U.S. District Judge Robin L. Rosenberg to 33 months in prison, to be followed by three years of supervised release.

According to the court record, including the agreed upon factual proffer, Hartman was the sole owner and operator of Alexander Insurance Consultants (“AIC”).  During the period of August 2014 through May 2017, Hartman, while operating as the insurance agent/broker of AIC, engaged in a fraudulent course of conduct aimed at enriching himself.  Hartman submitted to Premium Assignment Corporation (“PAC”), via wire, false documentation in support of premium finance loans.  Hartman falsely represented to PAC that Lloyds of London had issued insurance policies for companies, that these companies were using PAC’s financing services to finance their premium payments, and that AIC had brokered the contracts and was entitled to collect the premiums on behalf of the insured.  None of the named companies were clients of AIC or Hartman and three of the companies did not exist.

Hartman defrauded PAC of approximately $1.4 million when he submitted false insurance obligations and used non-existent clients for which he sought premium financing.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the USSS in this matter.  This case was prosecuted by Assistant U.S. Attorney 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.

The owner of Woodbridge Group of Companies LLC and two former directors of investments have been charged criminally, in the Southern District of Florida, with orchestrating a massive investment fraud (Ponzi) scheme. 

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Ronald L. Rubin, Commissioner, Florida Office of Financial Regulation (OFR), made the announcement.

Robert Shapiro, 61, of Sherman Oaks, California, Dane R. Roseman, a/k/a “Dayne Roseman,” 35, of Encino, California, and Ivan Acevedo, 42, of Chatsworth, California, were charged, by an indictment out of the Southern District of Florida that was unsealed today, with conspiracy to commit mail and wire fraud and substantive mail fraud counts (Case No. 19-20178-CR-Altonaga/Goodman). Shapiro and Roseman were also charged with substantive wire fraud counts.  In addition, Shapiro was charged with conspiracy to commit money laundering and evasion of payment of federal income taxes.  Shapiro, Roseman and Acevedo were arrested today in California and had their initial appearances before a U.S. Magistrate Judge in the Central District of California.  Shapiro was ordered to be detained in prison.  Roseman and Acevedo were ordered to appear in the Southern District Florida for their arraignment.  An arraignment date has not yet been scheduled.

According to the indictment, the owner of Woodbridge Group of Companies LLC (Woodbridge) Shapiro, and his former Directors of Investments, Acevedo and Roseman, orchestrated a massive Ponzi scheme through the business.  They ran their scheme through Woodbridge offices located throughout the United States, including Boca Raton, Florida and Sherman Oaks, California.  The conspiracy ran from July 2012 to December 2017, and involved material misrepresentations and material omissions to investors in the sale of Woodbridge investments.  Through telephone and in-person conversations, emails and website displays, Shapiro, Acevedo, Roseman and their co-conspirators promoted speculative and fraudulent securities to potential investors, targeting elderly investors who had Individual Retirement Accounts (IRAs).  Shapiro hired sales agents to solicit potential investors from the Woodbridge “phone room” that Roseman and Acevedo managed.  The phone room functioned as a “boiler room,” and featured high-pressure sales tactics, deception, material misrepresentations, and investor manipulation. Through telemarketing, Woodbridge sales agents contacted potential investors located throughout the United States, and solicited, offered, and sold Woodbridge investments to them.  For the fraud-based investments, the defendants and their co-conspirators’ main business model was to solicit money from investors and, in exchange, issue investors promissory notes reflecting purported loans to Woodbridge that paid monthly interest and matured in twelve to eighteen months.  The defendants claimed that the investments were tied to real property owned by third-party property owners.

The indictment alleges that Shapiro, Acevedo, Roseman and their co-conspirators, made and caused others to make materially false and fraudulent statements to induce investors to provide money, such as, that Woodbridge investments were “low risk,” “simpler,” “safe” and “conservative;” that Woodbridge was profitable, but in reality new Woodbridge investor money was used to pay prior Woodbridge investors, and that third-party affiliates were property owners, when in fact Shapiro owned nearly all of the real property at the center of every investment product offered by Woodbridge. 

According to the indictment, Shapiro took approximately $35 million in investor money for his benefit, spending millions on personal expenditures, such as $3.1 million for chartering private planes and travel, $6.7 million on a personal home, $2.6 million on home improvements, $1.8 million on personal income taxes, $1.4 million to his ex-wife, and over $672,000 on luxury automobiles. 

The indictment further alleges that Shapiro caused most of the Woodbridge companies to file Chapter 11 bankruptcy, which caused investors to suffer substantial losses, as they were owed close to $1 billion in principal. 

At least 2,600 of these investor victims invested their retirement savings, totaling approximately $400 million.

According to information presented to the court, search warrants related to the indictment were executed today in California.

The U.S. Securities and Exchange Commission (SEC) filed parallel civil enforcement actions against Acevedo and Roseman related to the Ponzi scheme.

An indictment contains allegations.  Every defendant is presumed innocent unless and until proven guilty in a court of law.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, IRS-CI and OFR in this matter.  She thanked the SEC Miami Regional Office and the U.S. Attorney’s Office for the Central District of California for their assistance.  This case is being prosecuted by Assistant U. S. Attorneys Roger Cruz and Michael Sherwin.

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.

A Ft. Lauderdale resident has been charged with distributing fentanyl, a controlled substance that was ingested and caused the death of another individual.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division, and Rick Maglione, Chief, Fort Lauderdale Police Department, made the announcement.

Jean Jameson, 35, of Broward County, was indicted on one count of distribution of fentanyl resulting in death and two counts of distribution of fentanyl (Case No. 19-60083-CR-Zloch/Hunt).  A calendar call has been set for May 10, 2019 at 10:00 a.m. in Fort Lauderdale before Senior Judge William J. Zloch.   A jury trial has been scheduled for the trial period beginning May 13, 2019.  If convicted of the narcotics distribution resulting in death charge, Jameson faces a mandatory minimum sentence of 20 years to life in prison, to be followed by supervised release and a potential fine of up to $1 million dollars.  If convicted of the additional charges, Jameson faces a maximum statutory term of 20 years in prison, to be followed by supervised release and a potential fine of up to $1 million dollars.

According to the court record, on September 25, 2018, Jameson distributed fentanyl, a Schedule II controlled substance, to A.M., an individual who died as a result of ingesting the drug.  Thereafter, on two separate occasions, Jameson distributed a controlled substances, to wit, fentanyl. 

“Men and women in our community are losing their lives to the drug trade,” stated US Attorney Fajardo Orshan.  “Fentanyl, a highly potent controlled substance, is being illegally distributed with deadly results. We implore the public to educate themselves, friends and loved ones about the dangers of drug abuse and addiction. Federal law enforcement authorities will continue to prosecute those who endanger our residents by fueling the opioid epidemic.”

“The DEA takes the distribution of any illegal drug very seriously,” said DEA Special Agent in Charge Adolphus P. Wright.  “The recent spike in opioid sales, which correlates to an increased death toll, only heightens our commitment to continue in this fight.  The DEA Miami Field Division will continue to work very closely with our law enforcement partners in the Tri-County area along with the United States Attorney’s Office to fully investigate and prosecute those responsible for illicit drug trafficking activities to ensure that they are held accountable for their actions, especially when the consequences from those actions result in the tragic death of another individual.”  

Fort Lauderdale Chief of Police Rick Maglione stated, “Individuals who knowingly distribute a substance that often results in death should absolutely be held accountable for the results of their actions.  Hopefully these individuals will begin to think twice before taking advantage of people who are suffering from an addiction now that they realize the severity of the charges and potential penalties that can be associated with their crimes.”

In December of 2014, the DEA, the Fort Lauderdale Police Department, and the Broward County Sheriff's Office formed a partnership with the Broward Medical Examiner's Office to track both synthetic drug and heroin related overdoses.  From that, and as part of the Organized Crime Drug Enforcement Task Forces (OCDETF) National Heroin strategy to combat heroin/fentanyl trafficking and related overdose deaths, Operation Phantom Chase emerged.  The operation, begun in July 2017, is a multi-jurisdictional heroin/fentanyl initiative between the DEA, the U.S. Marshals Service, Homeland Security Investigations, U.S. Postal Inspection Service, Fort Lauderdale Police Department, Broward County Sheriff’s Office, Sunrise Police Department, Hollywood Police Department, Coral Springs Police Department and the U.S. Attorney’ Office in Broward County which operates as a data collection clearinghouse to analyze intelligence gathered from fatal and non-fatal heroin and fentanyl overdoses that occur in Broward County.  The charges being announced today result from the diligent investigative work of this successful federal-local partnership.      

An indictment is merely an allegation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the DEA and the Ft. Lauderdale police.  She also thanked the Broward Sheriff’s Office for their support during the course of this investigation.  This case is being prosecuted by Assistant U.S. Attorney Robert Juman.

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.

A federal jury found a South Florida health care facility owner guilty today for his role in the largest health care fraud scheme ever charged by the Justice Department, involving over $1.3 billion in fraudulent claims to Medicare and Medicaid for services that were not provided, were not medically necessary or were procured through the payment of kickbacks.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Deputy Administrator and Director Alec Alexander of the Centers for Medicare and Medicaid Services Center for Program Integrity made the announcement.

After an eight-week trial, Philip Esformes, 50, of Miami Beach, Florida, was convicted of one count of conspiracy to defraud the United States, two counts of receipt of kickbacks in connection with a federal health care program, four counts of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering, nine counts of money laundering, two counts of conspiracy to commit federal program bribery, and one count of obstruction of justice before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida.  Sentencing has not yet been scheduled.

“Philip Esformes orchestrated one of the largest health care fraud schemes in U.S. history, defrauding Medicare and Medicaid to the tune of over a billion dollars,” said Assistant Attorney General Benczkowski.  “I commend our dedicated prosecutors and law enforcement partners for their professionalism and unyielding pursuit of justice on behalf of American taxpayers and vulnerable beneficiaries who, as a result of Esformes’s crimes, were denied the level of care that they needed and deserved.”

“Philip Esformes’s criminal scheme defrauded America’s health care system out of millions of dollars, that would have otherwise provided quality care to patients in need,” said U.S. Attorney Fajardo Orshan.  “I commend the Assistant U.S. Attorneys from the Southern District of Florida, who worked tirelessly alongside their partners at the Department’s Criminal Division, the FBI and HHS-OIG to bring this case to justice.  This massive fraud scheme, perpetuated in nursing and assisted living facilities in our South Florida communities, compromised the integrity of our local health care system.  We remain united in our commitment to root out health care fraud and support quality patient care.”

“Philip Esformes is a man driven by almost unbounded greed,” said Assistant Special Agent in Charge Denise M. Stemen of FBI Miami.  “The illicit road Esformes took to satisfy his greediness led to over $800 million in fraudulent health care claims, the largest amount ever charged by the Department of Justice.  Along that road, Esformes cycled patients through his facilities in poor condition where they received inadequate or unnecessary treatment, then improperly billed Medicare and Medicaid.  Taking his despicable conduct further, he bribed doctors and regulators to advance his criminal conduct and even bribed a college official in exchange for gaining admission for his son to that university.  The FBI and its partners are constantly investigating health care fraudsters, big and small, who steal money from taxpayers at the expense of patients in need of quality medical care.”

“This largest ever healthcare fraud conviction highlights the awful toll criminal schemes take on federal health programs,” said HHS-OIG Special Agent in Charge Richmond.  “Even beyond the vital dollars lost though, Esformes exploited and victimized patients by providing inadequate medical care and poor conditions in his nursing homes.  Along with our law enforcement partners, we will continue the fight against such parasites.”

According to evidence presented at trial, from approximately January 1998 through July 2016, Esformes led an extensive health care fraud conspiracy involving a network of assisted living facilities and skilled nursing facilities that he owned.  Esformes bribed physicians to admit patients into his facilities, and then cycled the patients through his facilities, where they often failed to receive appropriate medical services, or received medically unnecessary services, which were then billed to Medicare and Medicaid, the evidence showed. Several witnesses testified to the poor conditions in the facilities and the inadequate care patients received, which Esformes was able to conceal from authorities by bribing an employee of a Florida state regulator for advance notice of surprise inspections scheduled to take place at his facilities.  The evidence further showed that Esformes used his criminal proceeds to make a series of extravagant purchases, including luxury automobiles and a $360,000 watch.  Esformes also used criminal proceeds to bribe the basketball coach at the University of Pennsylvania in exchange for his assistance in gaining admission for his son into the university. Altogether, the evidence established that Esformes personally benefited from the fraud and received in excess of $37 million.

Esformes’s coconspirator, physician’s assistant Arnaldo Carmouze, previously pleaded guilty to conspiracy to commit health care fraud and is scheduled to be sentenced on April 10.  Esformes’s coconspirator Odette Barcha also pleaded guilty to one count of conspiring to violate the anti-kickback statute.  She was sentenced on April 3, 2019, to 15 months in prison.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida with assistance from Florida Attorney General’s Office Medicaid Fraud Control Unit.  The case was prosecuted by Fraud Section Assistant Chiefs Allan Medina and Drew Bradylyons and Trial Attorneys James Hayes, Elizabeth Young and Jeremy Sanders, as well as Assistant U.S. Attorneys John Shipley and Dan Bernstein of the Southern District of Florida.  Assistant U.S. Attorneys Alison Lehr, Nalina Sombuntham and Daren Grove of the Southern District of Florida are handling the forfeiture aspects of the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.

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.

A federal jury found a South Florida health care facility owner guilty today for his role in the largest health care fraud scheme ever charged by the Justice Department, involving over $1.3 billion in fraudulent claims to Medicare and Medicaid for services that were not provided, were not medically necessary or were procured through the payment of kickbacks. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Deputy Administrator and Director Alec Alexander of the Centers for Medicare and Medicaid Services Center for Program Integrity made the announcement.

After an eight-week trial, Philip Esformes, 50, of Miami Beach, Florida, was convicted of one count of conspiracy to defraud the United States, two counts of receipt of kickbacks in connection with a federal health care program, four counts of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering, nine counts of money laundering, two counts of conspiracy to commit federal program bribery, and one count of obstruction of justice before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida.  Sentencing has not yet been scheduled.

“Philip Esformes orchestrated one of the largest health care fraud schemes in U.S. history, defrauding Medicare and Medicaid to the tune of over a billion dollars,” said Assistant Attorney General Benczkowski.  “I commend our dedicated prosecutors and law enforcement partners for their professionalism and unyielding pursuit of justice on behalf of American taxpayers and vulnerable beneficiaries who, as a result of Esformes’s crimes, were denied the level of care that they needed and deserved.”

“Philip Esformes’ criminal scheme defrauded America’s health care system out of millions of dollars, that would have otherwise provided quality care to patients in need,” said U.S. Attorney Fajardo Orshan.  “I commend the Assistant U.S. Attorneys from the Southern District of Florida, who worked tirelessly alongside their partners at the Department’s Criminal Division, the FBI and HHS-OIG to bring this case to justice.  This massive fraud scheme, perpetuated in nursing and assisted living facilities in our South Florida communities, compromised the integrity of our local health care system.  We remain united in our commitment to root out health care fraud and support quality patient care.”

“Philip Esformes is a man driven by almost unbounded greed,” said Assistant Special Agent in Charge Denise M. Stemen of FBI Miami.  “The illicit road Esformes took to satisfy his greediness led to over $800 million in fraudulent health care claims, the largest amount ever charged by the Department of Justice.  Along that road, Esformes cycled patients through his facilities in poor condition where they received inadequate or unnecessary treatment, then improperly billed Medicare and Medicaid.  Taking his despicable conduct further, he bribed doctors and regulators to advance his criminal conduct and even bribed a college official in exchange for gaining admission for his son to that university.  The FBI and its partners are constantly investigating health care fraudsters, big and small, who steal money from taxpayers at the expense of patients in need of quality medical care.”

“This largest ever healthcare fraud conviction highlights the awful toll criminal schemes take on federal health programs,” said HHS-OIG Special Agent in Charge Richmond.  “Even beyond the vital dollars lost though, Esformes exploited and victimized patients by providing inadequate medical care and poor conditions in his nursing homes.  Along with our law enforcement partners, we will continue the fight against such parasites.”

According to evidence presented at trial, from approximately January 1998 through July 2016, Esformes led an extensive health care fraud conspiracy involving a network of assisted living facilities and skilled nursing facilities that he owned.  Esformes bribed physicians to admit patients into his facilities, and then cycled the patients through his facilities, where they often failed to receive appropriate medical services, or received medically unnecessary services, which were then billed to Medicare and Medicaid, the evidence showed.  Several witnesses testified to the poor conditions in the facilities and the inadequate care patients received, which Esformes was able to conceal from authorities by bribing an employee of a Florida state regulator for advance notice of surprise inspections scheduled to take place at his facilities.  The evidence further showed that Esformes used his criminal proceeds to make a series of extravagant purchases, including luxury automobiles and a $360,000 watch.  Esformes also used criminal proceeds to bribe the basketball coach at the University of Pennsylvania in exchange for his assistance in gaining admission for his son into the university.  Altogether, the evidence established that Esformes personally benefited from the fraud and received in excess of $37 million. 

Esformes’s coconspirator, physician’s assistant Arnaldo Carmouze, previously pleaded guilty to conspiracy to commit health care fraud and is scheduled to be sentenced on April 10.  Esformes’s coconspirator Odette Barcha also pleaded guilty to one count of conspiring to violate the anti-kickback statute.  Barcha was sentenced on April 3 to serve 15 months in prison followed by three years of supervised release.  She was also ordered to pay $704,516.00 in restitution.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida with assistance from Florida Attorney General’s Office Medicaid Fraud Control Unit  The case was prosecuted by Fraud Section Assistant Chiefs Allan Medina and Drew Bradylyons and Trial Attorneys James Hayes, Elizabeth Young and Jeremy Sanders, as well as Assistant U.S. Attorneys John Shipley and Dan Bernstein of the Southern District of Florida.  Assistant U.S. Attorneys Alison Lehr, Nalina Sombuntham and Daren Grove of the Southern District of Florida are handling the forfeiture aspects of the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.

A former Stuart Housing Authority employee pled guilty today to stealing government funds from the federal Housing Choice Voucher Program.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and Nadine Gurley, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG), made the announcement.

Cynthia Cabrera, 49, of Port St. Lucie, Florida, pled guilty today to one count of theft of government funds (Case No. 19-14014-CR-Rosenberg).  She is scheduled to be sentenced by U.S. District Judge Robin L. Rosenberg, in Fort Pierce, on June 12, 2019 at 10:00 a.m.  Cabrera faces a maximum statutory sentence of 10 years in prison and a $250,000 fine.

The Housing Choice Voucher Program is the federal government's main program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market.  Since housing assistance is provided on behalf of the family or individual, participants are able to find their own housing, including single-family homes, townhouses and apartments. The participant is free to choose any housing that meets the requirements of the program and is not limited to units located in subsidized housing projects.

Housing choice vouchers are administered locally by public housing agencies that receive federal funds from HUD.  The Stuart Housing Authority is one such public housing agency.  A housing subsidy is paid to the landlord directly by the public housing agency, on behalf of the participating family.  The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program.

Eligibility for the voucher program depends upon the applicant’s income and household composition.  A family with a greater number of dependents will allow a family to be eligible for more benefits.  A lower household income will allow applicants to obtain more benefits.  The threshold for eligibility to receive benefits is also influenced by the total household income and the number of dependents. 

Stuart Housing Authority employee Cynthia Cabrera unlawfully received benefits from the Housing Choice Voucher Program.  Between 2009 and 2015, while working as the Stuart Housing Authority bookkeeper Cabrera submitted fraudulent annual applications, in which she failed to accurately report her total income and assets.  Additionally, Cabrera failed to accurately report the number of people who occupied the residence and their income. 

The Section 8 benefit file reflected that Cabrera’s housing authority income was only reported for the first month of her program participation (January 2010).  Thereafter, her housing authority income was never declared, despite the fact that Cabrera was employed with the agency from 2009 through 2018.  Additionally, the presence of her husband, and his housing authority income, was never reflected on the applications.

During the period between 2010 and 2016, Cabrera significantly under-reported her household income by failing to disclose her actual earnings and the income of her husband, which resulted in her receipt of $73,953.00 in housing subsidies for which she would not have been entitled to receive had she accurately reported her total household income.

U.S. Attorney Fajardo Orshan commended the investigative efforts of HUD-OIG in this matter.  This case is being prosecuted by Assistant U. S. Attorney Daniel E. Funk.

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.

Sandra Ruballo, 47, of Davie, Florida, and Carlos Andres Montoya, 48, of Miramar, Florida, participated in a conspiracy to defraud the federally funded Child Care Food Program, which provides free and reduced meals to underprivileged children at hundreds of South Florida daycare centers.  As part of the scheme, the conspirators falsified paperwork, entered into various kickback arrangements, manipulated the catering contract bid process, and inflated annual budgets, all in order to receive millions of dollars of falsely and fraudulently obtained federal funds for their own personal use and benefit. 

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office,  Karen Citizen-Wilcox, Special Agent in Charge, U.S. Department of Agriculture (USDA), and Rick Maglione, Chief, Fort Lauderdale Police Department, made the announcement.

On March 29, 2019, following a four-week jury trial, Montoya was convicted of one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and one count of federal program bribery, in violation of Title 18, United States Code, Section 666(a)(2) (Case No. 18-CR-20393-Cooke(s)).  

On February 27, 2019, co-defendant Ruballo pleaded guilty, without a plea agreement, to all counts of the superseding indictment, including: one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349; three counts of wire fraud, in violation of Title 18, United States Code, Section 1343; one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h); and four counts of money laundering, in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i). 

U.S. District Judge Marcia G. Cooke is scheduled to sentence Ruballo on May 8, 2019 at 10:30 a.m. and  Montoya on June 5, 2019 at 10:00 a.m.  As to the conspiracy, as well as substantive wire fraud and money laundering counts, each defendant faces a maximum statutory sentence of 20 years’ imprisonment.  As to the bribery count, Montoya faces an additional maximum statutory sentence of 10 years’ imprisonment.

According to court documents and evidence presented at trial, the purpose of the Child Care Food Program (CCFP) is to provide nutritious meals and snacks for underprivileged, low-income children in daycare centers across Florida, including within the Southern District of Florida.  As such, the CCFP provides children classified at or below a certain family income level with daily meals and snacks, at a free or a reduced rate.  The government pays vastly higher reimbursement rates for children classified as “free,” as opposed to “non-needy,” for example, up to nine times more per meal.  Daycare centers often contract with a sponsoring organization to process and submit their program paperwork.  In those situations, the sponsoring organization enters into an agreement to operate the CCFP, and assumes administrative and financial responsibility on behalf of the center.  For many children in the CCFP, the subsidized food served at daycare centers is their only source of food each day.

Ruballo was the owner and operator of Highland Food Resources, Inc. (HFR), a sponsoring organization of more than two hundred child daycare centers that participated in the CCFP, covering the geographic area from Key West to West Palm Beach and across the State to Florida’s West Coast.  In this role, HFR processed paperwork and electronically submitted monthly reimbursement claims on behalf of such centers.  Reimbursement was calculated on a sliding scale, with the largest amount allocated for children at the daycare centers who were classified as free, then reduced, then non-needy meal recipients.  Once HFR was reimbursed with federal funds, they paid the daycare centers, less HFR’s fee, which is a percentage of the total monthly meal reimbursements.  Thus, the size of HFR’s payment was driven, in part, by the number of meals claimed by daycare centers that are multiplied by a higher reimbursement rate for the free and reduced meals/snacks. 

On behalf of HFR, Ruballo was responsible for soliciting meal catering companies and awarding contracts through a competitive, anonymous bidding process. 

Montoya was the owner and operator of Montoya Holdings, Inc., d/b/a Healthy Children Catering and Pelota Café and Pizzeria.  The evidence at trial showed that Montoya, Ruballo, and others conspired to rig the catering bid process and award contracts to Montoya from 2012 to 2016.  As a result of the bid-rigging scheme, Montoya Holdings received lucrative contracts, and was paid more than $14 million in federal funds, via HFR, which were supposed to be used for providing nutritious meals to children at daycare centers in South Florida. 

Ruballo, Montoya and others conspired to rig the catering bid process through materially false and fraudulent representations to the CCFP.  For a period of five years, Ruballo agreed to accept kickbacks in exchange for awarding catering contracts to Montoya Holdings at participating CCFP centers that used HFR as a sponsoring organization.  During the course of the scheme, the kickbacks added up to hundreds of thousands of dollars.  Montoya and co-conspirators withdrew more than $1.6 million in cash during the conspiracy, and hundreds of thousands of dollars of cash, in turn, were deposited into accounts controlled by Ruballo – including into an account for Ruballo’s husband’s purported mobile car wash business.

Montoya’s bribes bought him protection from regulating agencies, most notably, the Florida Department of Health, and ensured that HFR and Ruballo did not terminate contracts despite repeated complaints about spoiled food.  Indeed, the evidence showed that Ruballo and other employees at HFR, at Ruballo’s direction, created falsified reports about other caterers and submitted them to the Department of Health in an attempt to detract attention from Montoya when investigators became suspicious. 

After Montoya Holdings caused a staph-induced foodborne illness outbreak in November 2016, affecting more than 140 preschool children in Miami-Dade and Broward Counties, the Department of Health and regulators ultimately banned Montoya Holdings from participating in the CCFP.  Despite this prohibition, the bribery continued February 2017, Montoya paid a $160,000 bribe to Ruballo, which the co-conspirators attempted to disguise as a “donation” or “settlement.”

Montoya failed to report more than $27 million in income to the IRS for Montoya Holdings from 2013-2016.  Evidence at trial also showed that he used the proceeds of the crime to fund personal expenditures, including visits to the Seminole Hard Rock Casino, a strip club, homes, cars, and jewelry.

Ruballo and other co-conspirators also falsified paperwork for children enrolled at daycare centers in order to qualify more kids for free and reduced meals under the CCFP.  This fraudulent paperwork was used as the basis for inflated monthly reimbursement claims that Ruballo submitted to the program, for which HFR received reimbursement from the CCFP. 

Ruballo falsely and fraudulently inflated the HFR budget by adding non-existent companies and employees to the budget, thereby deceiving the Department of Health and USDA, to illegally obtain additional program funds.  In total, Ruballo caused a loss to the CCFP of at least $22 million. 

            A co-conspirator, Yudy Miranda, pleaded guilty in connection with the wire fraud conspiracy (Case No. 18-CR-20040) and was sentenced to 84 months in prison by U.S. District Judge Jose E. Martinez.  Assistant U.S. Attorney Anne McNamara was the lead prosecutor in that case. 

U.S. Attorney Fajardo Orshan commended the investigative efforts of IRS-CI, USSS, USDA and the Fort Lauderdale Police Department.  The case is being prosecuted by Assistant U.S. Attorneys Lisa H. Miller and Daniel J. Marcet.

            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.

A former salesman for Copans Motorsports d/b/a Champion Porsche was charged by criminal complaint for his participation in a scheme in which he entered into bogus sales orders for the sale of exotic Porsche models to over 30 customers throughout the United States.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Gregory Tony, Sheriff, Broward Sheriff’s Office (BSO), made the announcement.

A criminal complaint charged Shiraaz Sookralli, 44, of Plantation, with mail fraud, wire fraud, conspiracy to commit mail and wire fraud, and money laundering. Sookralli made his initial appearance earlier today, and is scheduled to appear before U.S. Magistrate Judge Patrick M. Hunt on Friday, April 5, at 10:00 a.m. for his pretrial detention hearing. 

According to the criminal complaint, in 2017, Sookralli opened a shell corporation with a name bearing a close resemblance to both Champion Porsche and another corporate affiliate of the dealership. After forming the shell corporation, Sookralli opened a bank account in the shell corporation’s name. Sookralli then entered into bogus sales orders with customers for the unauthorized sales of non-existent future exotic Porsche models. The majority of the vehicles were rare, highly sought-after, Carrera 911 models.  The defendant required deposits from his victims in the form of, wire transfers, bank checks, and cash that he later deposited into his shell company’s bank account. The buyers relied on Sookralli’s longtime employment at Champion Porsche, title as “Vice President of Marketing,” representations that he or she would receive a yet-to-be-built Porsche vehicle, and the seemingly legitimate bank account for wiring deposits to Sookralli. Champion Porsche did not authorize Sookralli to conduct these transactions.

The complaint also alleges that Sookralli received over $2,200,000 from approximately 30 customers who never received the Porsche vehicles, as agreed. As set forth in the complaint, the defendant used the money for extravagant expenditures including luxury vehicles, jewelry, nightclubs, and restaurants. Sookralli also funneled amounts in excess of $10,000 at a time from his shell company account to bank accounts he controlled.

After Champion Porsche uncovered Sookralli’s fraud scheme, it contacted his victims and began its cooperation with the criminal investigation.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, IRS-CI, and BSO in this matter. The case is being prosecuted by Assistant U.S. Attorney Roger Cruz.

A criminal complaint is merely an allegation and every defendant is presumed innocent until proven guilty.

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.

A Monroe County, Florida tax return preparer was sentenced today to 60 months imprisonment after he pled guilty to filing fraudulent tax returns with the Internal Revenue Service (IRS).

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

According to documents filed with the court, Pedro C. Rodriguez, 51, of Marathon, owned and operated the JC Mar Tax Services tax preparation business, located in Marathon, Florida. From approximately 2007 through 2017, Rodriguez filed fraudulent returns for his clients seeking refunds to which the clients were not entitled by reporting fictitious itemized deductions and fraudulent education and residential energy credits.  For each of the years 2013 through 2017, Rodriguez submitted between 1,900 and 2,200 tax returns on behalf of his clients.  At the sentencing hearing, the government provided evidence that established Rodriguez’s submission of fraudulent tax returns resulted in a loss amount to the IRS of $14,500,000. 

U.S. District Judge K. Michael Moore also sentenced Rodriguez to one year of supervised release and ordered him to pay $14,569,171 in restitution. 

U.S. Attorney Fajardo Orshan commended the investigative efforts of the IRS-CI and FBI in this matter.  Assistant U.S. Attorney Daniel J. Marcet prosecuted this case.

Information about how the public can protect themselves from tax fraud and report criminal practices may be found at https://www.irs.gov/compliance/criminal-investigation/tax-fraud-alerts.  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.

Broward County father and daughter were arrested today for charges related to filing fraudulent lottery ticket tax refund claims that collectively sought in excess of $175,000,000.

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Fred Stolper, Special Agent in Charge, Diplomatic Security Service (DSS), Miami Field Office, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and James S. Jackson, Deputy Inspector General for Investigations, Treasury Inspector General for Tax Administration (TIGTA), made the announcement. 

A criminal complaint unsealed today charged Danielle Takeila Edmonson (“D. Edmonson”), 35, of Boynton Beach, and Kenneth Roger Edmonson (“K. Edmonson”), 50, of Oakland Park, with filing false claims, mail fraud, and false statements.  K. Edmonson will appear before U.S. Magistrate Judge Patrick M. Hunt, on Friday, April 5, for his pretrial detention hearing.  D. Edmonson will make her initial appearance tomorrow, April 3, before Judge Hunt.

According to the affidavit filed in support of the criminal complaint, from 2015 through 2018  (the “relevant period”), D. Edmonson and K. Edmonson filed lottery ticket tax refund claims with the IRS totaling approximately $175 million, including individual refund claims ranging from hundreds of thousands of dollars to as high as eighty million dollars.  Despite the false nature of the claims, the Department of Treasury paid out approximately $3.4 million in refunds through the issuance of U.S. Treasury checks. 

According to the affidavit, D. Edmonson filed a fraudulent tax return seeking a large refund for tax year 2014 falsely indicating on handwritten forms that she had paid taxes of over $300,000.  The IRS did not receive any corresponding records indicating that D. Edmonson had actually paid these taxes.  Despite the false nature of the tax return, the Department of Treasury issued a tax refund check for $239,700 in 2015.  D. Edmonson deposited this tax refund check into her bank account and used the funds to purchase a BMW and make large cash withdrawals. 

According to the affidavit, D. Edmonson filed fraudulent tax returns for each of tax years 2015, 2016, and 2017, seeking refunds of approximately $80 million, $2.4 million, and $9 million, respectively.  These tax returns contained forms falsely claiming that D. Edmonson had paid over $145 million in taxes during this period.  The IRS did not receive any corresponding forms to support the payment of any of these taxes.  Despite the false nature of the tax returns, on September 4, 2017, the Department of Treasury issued a tax refund check to D. Edmonson in the amount of $2,405,703.  D. Edmonson subsequently deposited this tax refund check into her bank account.   

According to the affidavit, K. Edmonson filed a fraudulent tax return in September 2017 seeking a refund of approximately $725,111.  The return contained false and fraudulent claims that K. Edmonson had paid a substantial amount of withholding taxes.  The IRS did not receive corresponding forms to support the claimed payments.  Despite the false nature of the tax return, on January 28, 2018, the Department of Treasury mailed a tax refund check to K. Edmonson for $734,266.27 (including $9,036.27 in interest).   Shortly thereafter, K. Edmonson deposited this tax refund check into his bank account.   

According to the affidavit, in January 2018, IRS agents conducted a search of the defendants’ residence.  During the search, in D. Edmonson’s bedroom, law enforcement found a letter from the Department of Treasury, dated June 2017, advising her that her tax refund claims are “worthless . . . [and] akin to a fraud” and handwritten “wish list” by D. Edmonson asking for a “refund check in the amount of $80,112.167.”  In addition, during the search, IRS agents advised K. Edmonson of the fraudulent nature of his tax return.  Shortly after law enforcement left, K. Edmonson went to his bank to attempt to withdraw the funds from the account that received the fraudulent refund check. 

If convicted, each defendant faces a maximum sentence of 20 years in prison for each count of mail fraud and five years in prison for each count of filing false claims and false statements. 

Ms. Fajardo Orshan thanked IRS-CI, DSS, FBI, and TIGTA for their work on the case. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

A criminal complaint is merely an allegation and every defendant is presumed innocent until proven guilty.

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.

A South Dakota resident pled guilty today to possession of an unregistered firearm.

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Katherine Fernandez Rundle, State Attorney, Miami-Dade State Attorney’s Office, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”), Miami Field Office, and Daniel J. Oates, Chief, Miami Beach Police Department (“MBPD”), made the announcement.

David James Goldammer, 32, of Sioux Falls, South Dakota, pled guilty to the single count Indictment that charged him with possession of an unregistered firearm in violation of Title 26, United States Code, Section 5861(d) (Case No. 18-20889-CR-Martinez). Goldammer is scheduled to be sentenced by U.S. District Judge Jose E. Martinez on June 4, 2019, at 1:30 p.m. Goldammer faces a maximum statutory sentence of 10 years in prison, up to 3 years of supervised release, and a fine of up to $10,000.  Goldammer will also have to forfeit the unregistered firearm.

According to court documents, on or about October 25, 2018, MBPD officers found Goldammer asleep behind the wheel of a vehicle parked with the engine running in an alleyway at the 1400 block of Ocean Court. The MBPD officers observed in plain view several open beer bottles and two handguns.  The officers asked Goldammer to exit the vehicle so that they could conduct a driving under the influence (“DUI”) and weapon violations investigation. Later, Goldammer was asked to perform standard field sobriety exercises in order to determine whether he was under the influence of drugs and/or alcohol. Goldammer refused to perform the field sobriety exercises. The MBPD officers arrested Goldammer based upon their own observations. 

After Goldammer was arrested, the MBPD officers determined that Goldammer’s vehicle needed to be towed in accordance with MBPD policy. Before Goldammer’s vehicle was towed, the officers were required to conduct an inventory search of the vehicle. During the inventory search, the MBPD officers located a green rifle bag underneath of the rear driver-side seat that contained a loaded rifle with a barrel of less than 16 inches in length, commonly referred to as a “short-barrel rifle”, a separate upper receiver that was longer than 16 inches in length and an additional loaded magazine. In addition, the MBPD officers found five handguns, several thousand rounds of ammunition, body armor, empty and loaded magazines, and other firearms accessories.

An ATF expert later examined the short-barrel rifle and determined that the overall length of the barrel was 7-5/8 inches, which is smaller than the legal limit of 16 inches before a rifle is exempt from registration under the National Firearms Act (“NFA”). The ATF expert also determined that the short-barrel rifle bore no NFA manufacturer’s marks of identification, as required by law. ATF further conducted a records check and determined that the short-barrel rifle was not registered to Goldammer in the National Firearms Registration and Transfer Record, as required by law.

Ms. Fajardo Orshan commended the investigative efforts of ATF and MBPD.  Ms. Fajardo Orshan also thanked the Miami-Dade State Attorney’s Office for their assistance. This case is being prosecuted by Special Assistant U.S. Attorney Benjamin A. Gellis from the Miami-Dade State Attorney’s Office, and Assistant U.S. Attorneys Daniel J. Marcet and Christine Hernandez.

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.

Gabriel Dominguez, 31, of Hialeah, Florida, was sentenced yesterday by U.S. District Court Judge Donald L. Graham to 240 months in prison and a lifetime of supervised release for distributing and possessing child pornography in connection with chats he had with minors over Instagram’s direct message feature and his cellular telephone.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida and Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.

According to the stipulated facts filed in court, on April 8, 2018, Instagram, a social media network, reported to the National Center for Missing and Exploited Children that an Instagram user had uploaded one file of child pornography onto their Instagram account. Instagram also reported that the account in question was registered to Dominguez.  The cellular telephone number associated with Dominguez’s Instagram account was his personal cellular telephone number.

On September 17, 2018, a search warrant was executed for Dominguez’s Instagram account, which showed Dominguez was engaged in multiple sexually explicit chats with numerous minors, including a  9-year-old, through the Instagram direct message feature.  Dominguez also received and distributed child pornography, some involving children as young as 2 years of age, through the direct messaging feature.

On October 16, 2018, a search warrant was executed at Dominguez’s residence in Hialeah. During a search of his residence, law enforcement seized multiple pieces of electronic media, including Dominguez’s Motorola Moto cellular telephone. A forensic examination of the Motorola Moto cellular telephone by law enforcement revealed multiple images and videos of child pornography.  On December 18, 2018, Dominguez pled guilty to the distribution and possession of child pornography. 

U.S. Attorney Fajardo Orshan commended the investigatory efforts of ICE-HSI in this matter.  She thanked the National Center for Missing and Exploited Children and the Miami-Dade Police Department for their assistance.  This case was prosecuted by Assistant U.S. Attorney Alejandra L. López. 

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

A Florida man pleaded guilty today to one count of wire fraud in connection with his scheme to steal monthly pension payments from victims enrolled in pension plans managed by the Pension Benefit Guaranty Corporation (PBGC). 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Jessie K. Liu of the District of Columbia and Inspector General Robert A. Westbrooks of the PBGC made the announcement.

According to court documents, Kessey Reggie Durand, 27, of Miami, Florida, used personally identifiable information (PII) he obtained while working as a contractor at the PBGC’s Miami Field Office to create or take over online MyPBA accounts of pension plan participants.  After commandeering those accounts, Durand changed the associated electronic direct deposit information in order to funnel victims’ monthly pension payments into accounts Durand controlled.  In other cases, Durand tried to change participants’ electronic direct deposit information through social engineering, using stolen PII to call into the PBGC call center to trick operators into believing he was the participant requesting the change. 

“Over a five-month span, Durand stole the confidential information of elderly retirees and then used it to commandeer their retirement accounts for his own benefit,” said Assistant Attorney General Benczkowski, “The Department of Justice and our law enforcement partners are committed to rooting out fraud by those who have been entrusted with access to sensitive financial and personal information, especially when that fraud harms vulnerable senior citizens.”

“Kessey Reggie Durand took advantage of his position as a PBGC contractor to use the personal information of retired workers and to steal their monthly pension payments,” said U.S. Attorney Liu,  “Our office will aggressively prosecute those who seek to deprive retirees of what may be their only form of income.”

“PBGC’s retirees rightfully expect that their pension accounts are secure and their personal information is safeguarded—especially from insider threats,” said Inspector General Westbrooks,  “We will continue to make data protection a top priority and greatly appreciate the support of the Justice Department in helping to ensure the integrity of PBGC’s MyPBA online system.”

According to court documents, Durand’s scheme spanned approximately five months and targeted over $100,000 in monthly pension payments.  Sentencing is set for June 28, 2019, before Chief Judge Beryl A. Howell of the U.S. District Court for the District of Columbia.

The case was investigated by the PBGC Office of Inspector General, with assistance from the U.S. Attorney’s Office for the Southern District of Florida and the Miami Gardens Police Department.  The case is being prosecuted by Special Assistant U.S. Attorney Joss Nichols, on detail from the Criminal Division’s Computer Crime and Intellectual Property Section.

On March 15, 2019, four Broward County, Florida residents were convicted by a federal jury for their participation in a string of armed robberies using firearms.  One defendant was also convicted of kidnapping four victims. 

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office and Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, made the announcement.

Following a four-week trial, all four defendants were convicted.  Jerome Simmons, 31, of Fort Lauderdale, Florida, was convicted of two counts of Hobbs Act robbery, two counts of brandishing a firearm in furtherance of a crime of violence, and one count of conspiracy to commit Hobbs Act robbery.  Adrian Hardy, 34, of Fort Lauderdale, Florida, was convicted of one count of Hobbs Act robbery, two counts of brandishing a firearm in furtherance of a crime of violence, one count of conspiracy to commit Hobbs Act robbery, and four counts of kidnapping. Christopher Brinson, 33, of Fort Lauderdale, Florida, was convicted of two counts of Hobbs Act robbery, one count of brandishing a firearm in furtherance of a crime of violence, and one count of conspiracy to commit Hobbs Act robbery.  Emmory Moore, 34, of Coral Springs, Florida, was convicted of one count of Hobbs Act robbery, one count of brandishing a firearm in furtherance of a crime of violence, and one count of conspiracy to commit Hobbs Act robbery.

According to the court record, including evidence introduced at trial, on March 3, 2017, Christopher Brinson entered Class Jewelers in Deerfield Beach, Florida and engaged one of the employee’s in conversation. Approximately, ten minutes later, Moore and Simmons entered the store, dressed in wigs, makeup and women’s clothing. They held the two employees at gunpoint and demanded they open the safe. Moore and Simmons stole jewelry and other items from the store then left in a waiting vehicle.

On March 15, 2017, historical cell site information showed that cell phones owned by Simmons, Hardy, Brinson, and Moore traveled to Spring Hill, Florida.  On March 6, 2017, two men dressed as women entered Lily’s Jewelry in Spring Hill and held the owner at gunpoint while stealing the store’s merchandise. One of the individuals dropped a cellular phone, which was later tied to Moore.

On March 31, 2017, historical cell site information showed that cell phones owned by Hardy, Brinson, and Moore traveled to Valdosta, Georgia. Hotel records established that Simmons checked into a local inn that evening. On April 1, 2017, three men dressed as women entered Bishop’s Jewelers in Valdosta. While holding the business owners at gunpoint, the men stole money, jewelry, and a firearm from the store’s safe. On April 6, 2017, during a traffic stop, the Fort Lauderdale Police Department recovered the firearm stolen in that robbery from the trunk of a car driven by Moore.

On April 16, 2017, three men dressed as women, left a white Jeep and entered LSO Jewelers in Port St. Lucie, Florida. Holding the owner and an employee at gunpoint, the men attempted to steal the store’s jewelry stock. An off duty state agent called the police and reported the robbery. As police arrived, the waiting white Jeep pulled away and the men inside the store fled on foot. Port Saint Lucie officers located Simmons in a nearby hospital parking lot wearing only his underwear and a sock.  Brinson, who was driving the white Jeep, was located at a nearby restaurant. Hardy escaped into a nearby retirement community and held the four residents, snowbirds from Toronto, Ontario, at gunpoint for several hours, eventually forcing them to drive him from Port St. Lucie to Fort Lauderdale.

The defendants are scheduled to be sentenced by U.S. District Judge Kenneth A. Marra on June 7, 2019, beginning at 1:30 p.m.  Simmons, Hardy, Brinson, and Moore face up to 20 years in prison for the robbery and robbery conspiracy charges and a consecutive mandatory minimum term of 7 years to life in prison for each conviction for brandishing a firearm during a crime of violence.  Additionally, Hardy faces up to 15 years in prison for each of the kidnapping charges.

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.   PSN was reinvigorated in 2017 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.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and ATF in this matter. She thanked the Broward Sheriff’s Office, Fort Lauderdale Police Department, Port St. Lucie Police Department, Hernando County Sheriff’s Office, Valdosta Police Department, and U.S. Marshals Service for their assistance.  The case was prosecuted by Assistant U.S. Attorneys Jodi L. Anton and Anita White.

Related court documents and information can 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.

A Florida pharmacist was sentenced to 120 months in prison today followed by three years supervised release. He was also orderd to pay $3.2 million in restitution and $1.4 million in forfeiture for his role in a massive compounding pharmacy fraud scheme, which impacted private insurance companies, Medicare and TRICARE.  Eight other individuals have previously been sentenced in connection with the scheme.  Various real properties, cars and a 50-foot boat have been forfeited as part of the sentencings. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent in Charge John F. Khin of the U.S. Defense Criminal Investigative Service’s (DCIS) Southeast Field Office made the announcement.

Ademola O. Adebayo, 55, of Odessa, Florida, was convicted on Jan. 11 after a four-day trial of one count of conspiracy to commit health care fraud and wire fraud, three counts of health care fraud, and one count of conspiracy to commit money laundering.  He was sentenced before U.S. District Judge Federico A. Moreno of the Southern District of Florida, who presided over the trial.

According to evidence presented at trial, from 2012 to 2015, Adebayo and his co-conspirators engaged in a scheme to defraud private insurance companies, Medicare and TRICARE out of $121 million by submitting false and fraudulent claims for compounded drugs, primarily pain and scar creams, and other prescription medications that were not medically necessary, never provided, or both.  The evidence established that in his role as the pharmacist at A to Z Pharmacy, a now-defunct pharmacy located in New Port Richey, Florida, Adebayo conspired to submit or cause the submission of claims that often amounted to several thousands of dollars for a single tube of pain or scar cream.  In 2014, when insurance companies discovered the fraud at A to Z Pharmacy and terminated their contracts with the pharmacy, Adebayo agreed to become the straw owner of Havana Pharmacy & Discount in Miami, which Adebayo and his co-conspirators used to continue the fraud, the evidence showed. 

The evidence further established that Adebayo personally benefited from the fraud and received $1.5 million through the fraud, which he used to purchase luxury vehicles, including a Ferrari, a Lamborghini, a Bentley, a Porsche and two Cadillacs, as well as a house in Land O Lakes, Florida.  All of these items were seized by the government.

Eight other defendants have pleaded guilty in this case.  Nicholas Borgesano, 46, of New Port Richey, is serving 15 years for his role as the owner of A to Z Pharmacy in the fraud that involved Havana Pharmacy, Medplus/New Life Pharmacy and Metropolitan Pharmacy, all of Miami; and Jaimy Pharmacy and Prestige Pharmacy, both of Hialeah, Florida.

In addition to Borgesano, the following defendants have previously been sentenced for their roles in the scheme:

• Scott P. Piccininni, 50, of Fort Lauderdale, Florida, sentenced to serve 51 months in prison;
• Bradley Sirkin, 56, of Boca Raton, Florida, sentenced to serve 46 months in prison;
• Peter B. Williams, 58, of New Port Richey, sentenced to serve 26 months in prison, to be served consecutively to a 60-month sentence of imprisonment he is serving as a result of his guilty plea to a separate indictment returned in the Southern District of Florida;
• Wayne M. Kreisberg, 41, of Parkland, Florida, placed on probation for a term of five years, to be served consecutively to a sentence of probation he is serving as a result of his guilty plea to a separate indictment returned in the Middle District of Florida;
• Joseph Degregorio, 71, of New Port Richey, sentenced to serve one year and one day in prison;
• Matthew N. Sterner, 48, of New Port Richey, sentenced to serve 36 months in prison; and
• Edwin Patrick Young, 49, of New Port Richey, sentenced to serve 66 months in prison.

This case was investigated by the FBI with support from HHS-OIG and DCIS and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The case was prosecuted by Trial Attorneys Timothy P. Loper and Aleza Remis of the Fraud Section. 

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Six people and two Florida corporations were charged in an indictment for their roles in a scheme to distribute illegal dietary supplements, the Department of Justice announced today.

Phillip Braun, 38, of Boca Raton, Florida, Aaron Singerman, 39, of Delray Beach, Florida, Robert DiMaggio, 49, of Henderson, Nevada, Anthony Ventrella, 41, of Boynton Beach, Florida, David Winsauer, 32, of Boca Raton, Florida, and James Boccuzzi, 34, of Parkland, Florida, were charged in a 14-count indictment that was returned by a federal grand jury in Miami, Florida on March 7, 2019, and was unsealed today.  The indictment also charged Blackstone Labs and Ventech Labs, two Florida limited liability companies in Palm Beach County, Florida.

The indictment alleges that the defendants sold hundreds of thousands of illegal products, including anabolic steroids, nationwide and internationally, fraudulently representing that those products and pills were high-quality, legal dietary supplements.  According to the indictment, the defendants created an illicit manufacturing company and routed sales of illegal products through trusted distributors, knowing that the products were unsafe or could not legally be sold to consumers.

“Fraud by supplement manufacturers and distributors is extremely dangerous for consumers, who rightly assume that a dietary supplement product sold in stores or online will not contain unapproved drugs,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “These products are not safe and that is why we will continue to aggressively pursue and prosecute those who import, manufacture, and distribute dangerous and illegal ingredients for fraudulent purposes.”

“Consumers who use dietary supplements expect those products to be safe. When they contain drugs that are not FDA-approved, the health of the public is put at risk,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations. “We will continue to pursue and bring to justice those who place consumers’ health in jeopardy.”

All of the defendants were charged with one count of a conspiracy to defraud consumers and the Food and Drug Administration (FDA) by selling products labeled as dietary supplements that contained unapproved new drugs, illegal steroids, and other ingredients that were hazardous and prohibited by law.  The indictment also charges Braun, an owner of Blackstone Labs, and Singerman, a former company owner, with two counts of introducing a product known as Super DMZ RX 2.0, an unapproved new drug, into interstate commerce.  The maximum punishment for the conspiracy to defraud is five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.  The maximum punishment for each of the two counts of introducing an unapproved new drug is three years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.

The indictment further charges Braun, Singerman, and six other defendants with one count of a conspiracy to distribute anabolic steroids, which are Schedule III controlled substances under federal law and which may cause kidney failure, liver damage, and other permanent health problems when misused.  The indictment alleges that one person suffered serious bodily injury from the use of one of the steroids involved in the conspiracy.  The maximum punishment for the conspiracy to distribute controlled substances is 15 years’ imprisonment and a fine of $500,000 or twice the gross gain or loss from the offense. 

The indictment additionally charges several defendants in three separate counts of distribution of anabolic steroids and charges Ventrella with one count of possession of an anabolic steroid with the intent to distribute.  The maximum punishment for each count of distribution of a controlled substance and for the count of possession of a controlled substance with intent to distribute is 10 years in prison and a fine of $500,000.  Finally, Braun and Singerman are each charged with three counts of money laundering.  The maximum punishment for each money laundering charge is 10 years in prison and a fine of $250,000 or twice the amount of the property involved in the money laundering transaction.

“Illegal dietary supplements pose a public health risk,” stated U.S. Attorney Fajardo Orshan.  “The U.S. Attorney’s Office for the Southern District of Florida and our partners at the Food and Drug Administration strive to ensure that consumers are fully apprised of the ingredients contained in the substances they are ingesting.  Those who attempt to circumvent the law and create a public safety hazard will be held accountable.”

This case is being prosecuted by Trial Attorneys Alistair Reader and David Frank of the Department of Justice’s Consumer Protection Branch, with assistance from Daren Grove, Assistant United States Attorney for the Southern District of Florida.  The case was investigated by FDA’s Office of Criminal Investigations with assistance from Sarah Hawkins of the Office of Chief Counsel.

An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Southern District of Florida, visit its website at https://www.justice.gov/usao-sdfl.

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.

The Medical Director of a substance abuse treatment center in Wellington, Florida, was sentenced to prison today after having previously pled guilty today to unlawfully distributing controlled substances (opioids, barbiturates, and benzodiazepines). 

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida; George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI); Jimmy Patronis, Florida Chief Financial Officer; Michael J. Waters, Special Agent in Charge, Amtrak Office of Inspector General (Amtrak-OIG); Isabel Colon, Regional Director, United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA); and Dennis Russo, Director of Operations, National Insurance Crime Bureau (NICB), made the announcement.

Kenneth Rivera-Kolb, M.D., 65, of Largo, previously pled guilty to one count of conspiracy to unlawfully dispense and distribute controlled substances (Case No. 18cr80121).  Senior U.S. District Court Judge James I. Cohn sentenced Dr. Rivera-Kolb to 30 months in prison, to be followed by 2 years of supervised release.

According to court documents, in 2013, Rivera-Kolb was hired to serve as the Medical Director of Angel’s House LLC (“Angel’s Recovery”), a substance abuse treatment facility located in Wellington, Florida.  Angel’s Recovery was owned and operated by Tovah Lynn Jasperson and her father, Alan Martin Bostom (Case No. 17cr80194).  In addition to the treatment facility, Angel’s Recovery also operated sober homes that were purportedly in the business of providing safe and drug-free residences for individuals suffering from drug and alcohol addiction.

As the medical director, Dr. Rivera-Kolb was purportedly responsible for evaluating patients and prescribing medically necessary treatment and testing.  In February 2015, Rivera-Kolb had his medical license suspended by the State of Florida for a period of four years.  Despite the absence of a medical license, the defendant continued to serve as the medical director of Angel’s Recovery, and knowingly prescribed controlled substances at the facility.  Jasperson and Bostom were aware of Rivera-Kolb’s license suspension, having hired chauffeurs to transport him to hearings before the Board of Medicine of the State of Florida, but continued to employ him as a treating physician and allowed him to write prescriptions for patients. The defendant continued to serve in this capacity until at least September 2015.

Jasperson previously pled guilty to conspiracy to commit health care fraud and was sentenced to 78 months in prison.  Bostom previously pled guilty to knowingly and willfully falsifying, concealing, and covering up by a trick, scheme, and device a material fact in a matter involving health care benefit programs and was sentenced to 30 months in prison.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the Greater Palm Beach Health Care Fraud Task Force. Agencies of the task force include the FBI, IRS-CI, the Florida Division of Investigative and Forensic Services, Amtrak-OIG, DOL-EBSA, and NICB.  This matter was prosecuted by Assistant United States Attorneys A. Marie Villafaña and Alexandra Chase.

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 at http://pacer.flsd.uscourts.gov/

Six people and two Florida corporations were charged in an indictment for their roles in a scheme to distribute illegal dietary supplements, the Department of Justice announced today.

Phillip Braun, 38, of Boca Raton, Florida, Aaron Singerman, 39, of Delray Beach, Florida, Robert DiMaggio, 49, of Henderson, Nevada, Anthony Ventrella, 41, of Boynton Beach, Florida, David Winsauer, 32, of Boca Raton, Florida, and James Boccuzzi, 34, of Parkland, Florida, were charged in a 14-count indictment that was returned by a federal grand jury in Miami, Florida on March 7, 2019, and was unsealed today.  The indictment also charged Blackstone Labs and Ventech Labs, two Florida limited liability companies in Palm Beach County, Florida.

The indictment alleges that the defendants sold hundreds of thousands of illegal products, including anabolic steroids, nationwide and internationally, fraudulently representing that those products and pills were high-quality, legal dietary supplements.  According to the indictment, the defendants created an illicit manufacturing company and routed sales of illegal products through trusted distributors, knowing that the products were unsafe or could not legally be sold to consumers.

“Fraud by supplement manufacturers and distributors is extremely dangerous for consumers, who rightly assume that a dietary supplement product sold in stores or online will not contain unapproved drugs,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “These products are not safe and that is why we will continue to aggressively pursue and prosecute those who import, manufacture, and distribute dangerous and illegal ingredients for fraudulent purposes.”

“Consumers who use dietary supplements expect those products to be safe. When they contain drugs that are not FDA-approved, the health of the public is put at risk,” said Catherine A. Hermsen, Acting Director, FDA Office of Criminal Investigations. “We will continue to pursue and bring to justice those who place consumers’ health in jeopardy.”

All of the defendants were charged with one count of a conspiracy to defraud consumers and the Food and Drug Administration (FDA) by selling products labeled as dietary supplements that contained unapproved new drugs, illegal steroids, and other ingredients that were hazardous and prohibited by law.  The indictment also charges Braun, an owner of Blackstone Labs, and Singerman, a former company owner, with two counts of introducing a product known as Super DMZ RX 2.0, an unapproved new drug, into interstate commerce.  The maximum punishment for the conspiracy to defraud is five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.  The maximum punishment for each of the two counts of introducing an unapproved new drug is three years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.

The indictment further charges Braun, Singerman, and six other defendants with one count of a conspiracy to distribute anabolic steroids, which are Schedule III controlled substances under federal law and which may cause kidney failure, liver damage, and other permanent health problems when misused.  The indictment alleges that one person suffered serious bodily injury from the use of one of the steroids involved in the conspiracy.  The maximum punishment for the conspiracy to distribute controlled substances is 15 years’ imprisonment and a fine of $500,000 or twice the gross gain or loss from the offense. 

The indictment additionally charges several defendants in three separate counts of distribution of anabolic steroids and charges Ventrella with one count of possession of an anabolic steroid with the intent to distribute.  The maximum punishment for each count of distribution of a controlled substance and for the count of possession of a controlled substance with intent to distribute is 10 years in prison and a fine of $500,000.  Finally, Braun and Singerman are each charged with three counts of money laundering.  The maximum punishment for each money laundering charge is 10 years in prison and a fine of $250,000 or twice the amount of the property involved in the money laundering transaction.

“Illegal dietary supplements pose a public health risk,” stated U.S. Attorney Fajardo Orshan.  “The U.S. Attorney’s Office for the Southern District of Florida and our partners at the Food and Drug Administration strive to ensure that consumers are fully apprised of the ingredients contained in the substances they are ingesting.  Those who attempt to circumvent the law and create a public safety hazard will be held accountable.”

This case is being prosecuted by Trial Attorneys Alistair Reader and David Frank of the Department of Justice’s Consumer Protection Branch, with assistance from Daren Grove, Assistant United States Attorney for the Southern District of Florida.  The case was investigated by FDA’s Office of Criminal Investigations with assistance from Sarah Hawkins of the Office of Chief Counsel.An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Southern District of Florida, visit its website at https://www.justice.gov/usao-sdfl.

Note: Ongoing updates for victims can be followed at https://www.justice.gov/civil/consumer-protection-branch/case/united-states-v-braun-etal . 

“A Day in the Life”

West Palm Beach - Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Jeri Muoio, Mayor of the City of West Palm Beach, Stephanie Sejnoha, Public Safety Director of the Palm Beach County Public Safety Department, Steve Craig, President and Chief Executive Officer of CareerSource of Palm Beach County, and Willie Bentley, Northwest Community Center Director for the Salvation Army, announced the successful completion of the second annual Reentry Simulation held today at the Salvation Army’s Northwest Community Center.  More than 120 community members, officials and stakeholders attended the event, which simulates the struggles and challenges faced by individuals who are transitioning from incarceration back into society. The U.S. Attorney’s Office for the Southern District of Florida and its dedicated partners continue to take significant steps to reduce recidivism and help formerly incarcerated individuals successfully contribute to their communities.

The Reentry Simulation is just one of many initiatives that support Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction strategy.  Locally, PSN is carried out by the Violence Reduction Partnership (VRP), a holistic, three-pronged approach to violence reduction – one focused not only on enforcement, but also on prevention and reentry. Utilizing this multi-faceted approach, the VRP aims to reduce crime and promote safer and more resilient communities.

Each year, more than 600,000 citizens return to our neighborhoods after serving time in federal and state prisons, and another 11.4 million individuals cycle through local jails. The long-term impact of a criminal record prevents many returning citizens from obtaining employment, housing, a quality education, adequate health care, personal identification and even financial credit. These often-crippling barriers can contribute to a cycle of incarceration that makes it difficult for even the most well intentioned individuals to continue on the right path and avoid reentering the criminal justice system. Within the Southern District of Florida, comprehensive reentry initiatives promote the successful reintegration of returning citizens and strive to reduce recidivism.  The goal is to help those who have paid their debt to society best prepare for substantive opportunities beyond the prison gates, promote family unity, contribute to the health of our economy, advance public safety and sustain the strength of our local communities.

Participants in today’s VRP Reentry Simulation gained an understanding of the significant obstacles faced by men and women, upon their release from incarceration.  Employment opportunities, social services, and resources are needed in order to support the returning citizens’ successful transition back into our local community. 

In addition to the Re-Entry Simulations, the U.S. Attorney’s Office and our partners support other invaluable reentry initiatives.

In 2016, the Southern District of Florida launched its first ever Reentry Court, known as the Court-Assisted Reentry (CARE) Initiative. The CARE Initiative is a problem-solving, collaborative effort between U.S. District Court, the U.S. Probation Office, the U.S. Attorney’s Office and Federal Public Defender representatives, and a Department of Justice Re-Entry Specialist. The CARE Team’s mission is to: help those returning from prison to become productive members of society by providing coordination for job training and placement, housing assistance, educational support, and the medical, substance abuse and mental health referrals; promote community safety by reducing recidivism and victimization; and reduce taxpayer spending on incarceration. Through bi-weekly court sessions, the CARE Team assesses each participants’ progress, addresses any issues with his or her reentry, decides whether wrap-around services can be provided, and determines appropriate rewards and/or sanctions.

To further support our returning citizens, the U.S. Attorney’s Office, alongside the Federal Bureau of Prisons, U.S. Probation and non-profit service providers have conducted Reentry and Resource (“in-reach”) Meetings at both the Federal Detention Center and the Federal Correctional Institution located in the Southern District. The meetings provide inmates preparing to be released from incarceration with the tools and information they need to navigate their successful re-entry into society and reduce their risk of recidivism. Since 2013, more than 300 individuals have attended the meetings and received a Reentry Resource Guide. 

The U.S. Attorney’s Office and our community partners also continue to support the South Florida Reentry Center Hub, a traveling one-stop service center for returning citizens and their families. The Reentry Center Hub provides returning citizens with easy, centralized access to a variety of reentry services within their local communities. Since 2014, Reentry Center Hub events, held in Fort Pierce, Miami Gardens, Liberty City and Goulds, Florida, have reached more than 400 returning citizens and their families.

The success of these initiatives and today’s simulation would not have been possible, without community support.  In particular, of the City of West Palm Beach Mayor’s Village Initiative, a collaborative multidisciplinary strategy to prevent and reduce youth violence and improve outcomes for African American boys and young men in the North End of the City of West Palm Beach.  Also, the Palm Beach County Public Safety Department, Justice Services Division, Reentry Initiative and CareerSource of Palm Beach County, both of which currently provide services to returning citizens to reduce recidivism. 

Additional information regarding the CARE and VRP initiatives is available at [email protected] (link sends e-mail) or by calling (305) 961-9134.

A Miami, Florida, certified public accountant (CPA) was sentenced today to 39 months in prison for tax evasion, announced U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI).

U.S. Attorney Fajardo Orshan stated, “Rather than uphold the ethical obligations and professional code of conduct of a dutiful tax professional, Darryl Sharpton defrauded the federal government to avoid paying his own taxes, as well as taxes withheld from his employees’ pay.  As millions of hard-working taxpayers prepare and file their tax returns this season, today’s prison sentence should serve as a reminder of the stiff penalties that will be imposed on those who undermine the integrity of the U.S. tax system.”    

“Tax professionals, such as Darryl Sharpton, who use their expertise to commit tax fraud and enrich themselves rather than to assist honest taxpayers will be fully prosecuted by the Department of Justice and held accountable for their criminal conduct,” stated Principal Deputy Assistant Attorney General Zuckerman. “Employment tax fraud is a violation of the trust of employees and all honest taxpayers.” 

“For years, Darryl Sharpton, a CPA with three decades of public accounting and consulting experience, cheated the government and egregiously evaded the payment of substantial amounts of income taxes,” stated Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI). “Today’s sentencing is an important victory for American taxpayers who play by the rules and have no tolerance for those who fail to pay their fair share. IRS-CI will continue to investigate and recommend prosecution for individuals such as Mr. Sharpton who ignore the law and shun their tax responsibilities.”

In December 2018, Darryl Sharpton, a CPA living in Miami, Florida, pleaded guilty to willfully evading the payment of federal income taxes for tax years 2004 through 2008, and 2010. Sharpton was an owner of The Sharpton Group, formerly known as Sharpton, Brunson and Company. The Sharpton Group specialized in financial and management consulting, audit and attestation, and tax and wealth planning. Sharpton filed personal income tax returns for years 2004 through 2008 and 2010, but willfully evaded payment of the taxes he owed for those years. To facilitate his fraud, Sharpton caused The Sharpton Group to pay his personal expenses through its corporate bank accounts, and then falsely stated to an IRS Revenue Officer that he did not pay his personal expenses from the corporate bank accounts.

The indictment also alleged that, after the IRS issued levies and liens against Sharpton to collect his unpaid tax liabilities, Sharpton took affirmative steps to evade the IRS’s collection efforts, including removing himself from The Sharpton Group’s payroll after the IRS issued a levy against his wages in 2007. Sharpton also admitted to not filing personal income tax returns for the years 2009 and 2011 through 2016.

Sharpton also failed to pay over to the IRS payroll taxes for The Sharpton Group for the quarters ending Dec. 31, 2012 through Dec. 31, 2013 and Dec. 31, 2014 through Dec 31, 2017.

In addition to the term of imprisonment imposed, U.S. District Court Judge Cecilia M. Altonaga ordered Sharpton to serve three years of supervised release and to pay $1,380,602 in restitution to the Internal Revenue Service.

U.S. Attorney Fajardo Orshan and Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS Criminal Investigation, who investigated the case, and Assistant U.S. Attorney for the Southern District of Florida Christopher J. Clark and Trial Attorneys Mara Strier and Sean Beaty of the Tax Division, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

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.

A Miami, Florida, certified public accountant (CPA) was sentenced today to 39 months in prison for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, and Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI).

“Tax professionals, such as Darryl Sharpton, who use their expertise to commit tax fraud and enrich themselves rather than to assist honest taxpayers will be fully prosecuted by the Department of Justice and held accountable for their criminal conduct,” stated Principal Deputy Assistant Attorney General Zuckerman. “Employment tax fraud is a violation of the trust of employees and all honest taxpayers.” 

U.S. Attorney Fajardo Orshan stated, “Rather than uphold the ethical obligations and professional code of conduct of a dutiful tax professional, Darryl Sharpton defrauded the federal government to avoid paying his own taxes, as well as taxes withheld from his employees’ pay.  As millions of hard-working taxpayers prepare and file their tax returns this season, today’s prison sentence should serve as a reminder of the stiff penalties that will be imposed on those who undermine the integrity of the U.S. tax system.”    

“For years, Darryl Sharpton, a CPA with three decades of public accounting and consulting experience, cheated the government and egregiously evaded the payment of substantial amounts of income taxes,” stated Chief Don Fort, Internal Revenue Service-Criminal Investigation (IRS-CI). “Today’s sentencing is an important victory for American taxpayers who play by the rules and have no tolerance for those who fail to pay their fair share. IRS-CI will continue to investigate and recommend prosecution for individuals such as Mr. Sharpton who ignore the law and shun their tax responsibilities.”

In December 2018, Darryl Sharpton, a CPA living in Miami, Florida, pleaded guilty to willfully evading the payment of federal income taxes for tax years 2004 through 2008, and 2010. Sharpton was an owner of The Sharpton Group, formerly known as Sharpton, Brunson and Company. The Sharpton Group specialized in financial and management consulting, audit and attestation, and tax and wealth planning. Sharpton filed personal income tax returns for years 2004 through 2008 and 2010, but willfully evaded payment of the taxes he owed for those years. To facilitate his fraud, Sharpton caused The Sharpton Group to pay his personal expenses through its corporate bank accounts, and then falsely stated to an IRS Revenue Officer that he did not pay his personal expenses from the corporate bank accounts.

The indictment also alleged that, after the IRS issued levies and liens against Sharpton to collect his unpaid tax liabilities, Sharpton took affirmative steps to evade the IRS’s collection efforts, including removing himself from The Sharpton Group’s payroll after the IRS issued a levy against his wages in 2007. Sharpton also admitted to not filing personal income tax returns for the years 2009 and 2011 through 2016.

Sharpton also failed to pay over to the IRS payroll taxes for The Sharpton Group for the quarters ending Dec. 31, 2012 through Dec. 31, 2013 and Dec. 31, 2014 through Dec 31, 2017.

In addition to the term of imprisonment imposed, U.S. District Court Judge Cecilia M. Altonaga ordered Sharpton to serve three years of supervised release and to pay $1,380,602 in restitution to the Internal Revenue Service.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Fajardo Orshan commended special agents of IRS Criminal Investigation, who investigated the case and Assistant U.S. Attorney for the Southern District of Florida Christopher J. Clark and Trial Attorneys Mara Strier and Sean Beaty of the Tax Division, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

A Florida man had his initial appearance in court yesterday after being arrested on an indictment charging him with filing false tax returns with the Internal Revenue Service, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida.

According to the indictment, Joseph J. Ferry III, owned Ferry Enterprises Inc., a residential and commercial landscaping business serving customers in Martin and Saint Lucie County. Ferry Enterprises also provided landscaping services for Martin County and the City of Port Saint Lucie.

Ferry was charged with five counts of filing false corporate income tax returns and five counts of filing false individual income tax returns with the Internal Revenue Service (IRS) that fraudulently understated the total income earned by Ferry Enterprises - and Ferry himself - for tax years 2012 through 2016. The indictment alleges that business income was deposited into corporate bank accounts; however, Ferry allegedly used money from the business bank accounts to pay his personal expenses, including payments on his personal mortgage and loans, purchases of firearms, home renovations, and jewelry. Ferry also allegedly withdrew more than $2.9 million in cash from the corporation’s bank accounts.

If convicted, Ferry faces a maximum sentence of three years in prison for each count of filing a false tax return with the IRS. He also faces substantial monetary penalties and restitution.

An indictment merely alleges that a crime has been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Fajardo Orshan commended special agents of IRS Criminal Investigation, who investigated the case, and Trial Attorneys Allison J. Garnett and Sean Beaty of the Tax Division, who are prosecuting the case. 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Baton Holdings LLC, as the successor in interest to Bankrate Inc., a financial services and marketing company (Bankrate), has entered into a nonprosecution agreement and agreed to pay $28 million in combined monetary penalties and restitution to resolve the government’s investigation into a complex accounting and securities fraud scheme carried out by former executives of Bankrate.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida and Inspector in Charge Delany DeLeon-Colon of the U.S. Postal Inspection Service made the announcement.

Bankrate admitted in the resolution documents that former executives engaged in a complex scheme to artificially inflate Bankrate’s earnings through so-called “cookie jar” or “cushion” accounting, whereby millions of dollars in unsupported expense accruals were purposefully left on Bankrate’s books and then selectively reversed in later quarters to boost earnings.  In addition, Bankrate admitted that former executives misrepresented certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics, and also made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries.  As a result of the scheme, Bankrate admitted that the fraudulent conduct caused Bankrate’s shareholders to suffer at least $25 million in losses.  According to the resolution documents, Red Ventures Holdco LP, which acquired Bankrate in November 2017 after the securities and accounting fraud scheme took place, also agreed to certain terms and obligations under the agreement but had no involvement in the underlying criminal conduct.

“Today’s resolution with Bankrate’s successor in interest—together with the previously announced convictions of the company’s CFO and vice president of finance—closes the books on an accounting fraud that caused more than $25 million in losses to the company’s shareholders,” said Assistant Attorney General Benczkowski.  “This case reflects the Department’s commitment to holding both individuals and institutions accountable for fraudulent conduct, and to obtaining restitution for the victims of fraud.”    

“The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace from fraudulent activities by trusted insiders who abuse their positions,” said Inspector in Charge DeLeon-Colon. “Anyone who engages in this type of financial fraud scheme should know they will be found and they will be held accountable.”

Bankrate Inc.’s former CFO, Edward J. DiMaria, previously pleaded guilty for his role in the scheme and was sentenced by Chief U.S. District Judge K. Michael Moore of the Southern District of Florida to serve 10 years in prison and ordered to pay $21,234,214 in restitution.  Hyunjin Lerner, Bankrate’s former vice president of finance, also previously pleaded guilty for his role in the scheme and was sentenced by Judge Moore to serve 30 months in prison and ordered to pay $21,234,214 in restitution.

The U.S. Postal Inspection Service’s Washington, D.C. Division investigated the case.  Principal Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section prosecuted the case, with assistance from the U.S Attorney’s Office for the Southern District of Florida.  The SEC also provided assistance in this matter.

Potential victims of the scheme can find information about their rights under relevant law at the following website: https://www.justice.gov/criminal-vns/case/edward-j-dimaria.

On March 1, 2019, two individuals, including a City of Fort Lauderdale Parks and Recreation Department employee, were sentenced by U.S. District Judge Beth Bloom in Miami.

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Rick Maglione, Chief, Fort Lauderdale Police Department (FLPD), made the announcement.

Phillip Richard Peterson, 42, of Coral Springs, Florida, pled guilty on December 19, 2018, to five counts of theft from a program receiving federal funds and conspiracy to commit wire fraud, in violation of Title 18, United States Code, Sections 666, 1343 and 1349.  Each theft count covers a single year, beginning in 2013 and running through 2017.  Peterson was sentenced to 15 months’ imprisonment on each count, to be served concurrently, and three years of supervised release after the termination of his prison term.  Peterson was also ordered to pay $119,982.69 in restitution to the City of Fort Lauderdale.  Gino Joseph Ferraro, age 49, of Fort Lauderdale, Florida, also pled guilty on December 19, 2018, to one count of conspiracy to commit wire fraud.  He was sentenced to five years of probation, a $2,000 fine, and ordered to complete 200 hours of community service.  Ferraro was also ordered to pay $24,337 in restitution to the City of Fort Lauderdale.    

According to the court record, including the defendants’ admissions as part of their pleas, Peterson had been issued a credit card by the City of Fort Lauderdale in connection with his employment to allow him to make job related purchases, on behalf of the Department of Parks and Recreation.  Peterson admitted he would purchase items using his City of Fort Lauderdale credit card, and then sell the items to a local pawn store.  Each year, between 2013 and 2017, Peterson sold more than $5,000 worth of merchandise in this manner.   

Peterson and Ferraro were both sentenced on one count of conspiracy to commit wire fraud. Both Peterson and Ferraro unjustly enriched themselves by charging the City of Fort Lauderdale Parks and Recreation Department for volleyball court repairs and other items that were not completed or provided.   Ferraro admitted that Peterson had paid him using his City issued credit card, and he would give Peterson approximately half of the amount that had been charged. 

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and FLPD in this matter.  This case was prosecuted by Assistant U.S. Attorney Cynthia R. Wood. 

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.

On February 26, 2019, a West Palm Beach, Florida, investment advisor was ordered to pay over $1 million in restitution for his involvement in a pension trust fraud scheme.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Isabel Colon, Regional Director, United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA), made the announcement.

William H. Minor, of West Palm, pleaded guilty in  September 2018 to one count of mail fraud (Case No. 18-80152-Cr-Middlebrooks).  On November 29, 2018, he was sentenced to 41 months in prison, three years of supervised release.  On February 26, 2019, U.S. District Judge entered an Order, requiring Minor to pay $1,636,604 in restitution.

According to the court record, Minor was the operator of Multi Financial Insurance Corp., a provider of investment advice and administrative services for pension plans.  Starting in 1991 and continuing until June 2016, Minor transferred approximately $2 million from the Rehabilitation Center for Children & Adults Inc. Pension Trust to accounts he controlled.

The Rehabilitation Center for Children & Adults Inc., a Palm Beach nonprofit rehabilitation center that provides outpatient physical, occupational, and speech therapy to children and adults, sponsored the plan. Minor served as a volunteer member of the center’s board of governors.

In October 1991, Minor moved plan assets to Transamerica Life Insurance and Annuity Co., for which he registered as an insurance agent. Minor falsely represented to the rehabilitation center and plan trustees that Multi Financial would work in partnership with Transamerica Life to administer the plan, even though Transamerica had no partnership with Minor, and did not provide any administrative or record keeping services for the plan. As a result, Minor was able to exercise control of the plan.

Minor used that authority to direct one plan trustee to endorse benefit checks from Transamerica to Multi Financial, with the understanding that Minor would then issue payments to specified plan participants. In other instances, Minor forged the trustee’s name on the checks.  Later in the scheme, Minor opened a bank account in the name of “Trustee for the Rehabilitation.”  Since the checks were payable to the Trustee for the Rehabilitation, Minor could directly deposit the checks into this account without the endorsement of the plan trustee. 

Minor made at least 63 fraudulent requests to Transamerica for lump sum benefits checks for participants not entitled to plan benefits. Transamerica honored the requests and issued 63 checks payable to the Trustee for the Rehabilitation.  Minor deposited the first 15 checks into the Multi Financial account and the remaining 48 checks into the Trustee for the Rehabilitation account.  In total, he fraudulently transferred approximately $2 million from the plan’s Transamerica account to his own accounts, using the plan’s assets to benefit himself.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and DOL-EBSA in this matter.  This case was prosecuted by Assistant U.S. Attorney Adrienne Rabinowitz.

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.

A man accused of robbing banks around the country has been charged and is being detained in South Florida.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

Jason Lee Robinson, 40, of Pikeville, Kentucky, has been charged by criminal complaint in the Southern District of Florida with bank robbery, in violation of Title 18, United States Code, 2113(a) (Case No. 19-mj-2082).   He is currently being detained in South Florida.   If convicted of a single count of bank robbery, Robinson faces a maximum statutory sentence of 20 years in prison.

According to the court record, allegations contained in the criminal complaint, Robinson robbed seven banks in states around the country.  On December 28, 2018, Robinson robbed a Capital Bank in Aventura, Florida of approximately $1,900.  On January 2, 2019, he robbed a SunTrust Bank in Asheville, North Carolina. On January 4, 2019, he robbed a Mountain Commerce Bank in Johnson City, Tennessee.  On January 8, 2019, he robbed a U.S. Bank in Mount Juliet, Tennessee.  On January 10, 2019, he robbed a Trustmark Bank in Prattville, Alabama.  On January 14, 2019, he robbed a Fifth Third Bank in Mount Vernon, Illinois.  On January 17, 2019, he robbed a Wells Fargo Bank in Price Branch, Utah.

The banks’ deposits were insured by the Federal Deposit Insurance Corporation. 

A criminal complaint is merely an accusation.  A defendant is presumed innocent unless and until proven guilty in a court of law. 

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI in this matter.  She thanked the FBI’s Field Offices, in Charlotte, North Carolina; Knoxville, Tennessee; Memphis, Tennessee; Mobile, Alabama; Springfield, Illinois; Salt Lake City, Utah; Denver, Colorado and Louisville, Kentucky, for their assistance.  This case is being prosecuted by Assistant U.S. Attorney Lisa H. Miller in the Southern District of Florida.

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.

Jason Ford, a former teaching assistant and travel softball coach, was sentenced to 15 years in prison today after previously pleading guilty to attempting to produce child pornography.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Miami, Florida Field Office, Charles P. Spencer,  Special Agent in Charge of the FBI Jacksonville, Florida Field Office, James E. Jewell, Special Agent in Charge of the FBI Mobile, Alabama Field Office, and Alphonso Norris, Special Agent in Charge of the FBI Columbia, South Carolina Field Office made the announcement.

Ford, 42, of Dothan, Alabama, was sentenced by U.S. District Judge Beth Bloom, in Fort Lauderdale, Florida (Case No. 18-cr-60117), to a total of 15 years in prison.  He was also sentenced to serve 20 years of supervised release and must register as a sex offender. 

According to the court docket, including the agreed upon factual proffer Ford was a teaching assistant and travel softball coach, working out of Dothan, Alabama.   However, Ford falsely represented himself to be a University of North Florida and University of South Carolina softball coach, in order to have contact with female high school softball players.  Ford engaged in a calculated scheme to gain the trust of minor females who aspired to earn college athletic scholarships.  Ford engaged in inappropriate conversations with teen softball players in Florida, Alabama and Tennessee. Ultimately, Ford made contact online with an undercover agent he believed to be a 15-year-old female softball player. Ford was arrested after he sent the teen (who in fact was an undercover agent) currency for a sexually explicit video.         

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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI Miami, Florida; Jacksonville, Florida; Mobile, Alabama; and Columbia, South Carolina Field Offices in this matter.  She also thanked the Dothan Police Department for their assistance.  This case was prosecuted by Special Assistant U.S. Attorney M. Catherine Koontz.

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.

Following a six-day jury trial, the president and vice president of a South Florida construction company were convicted of defrauding a low-income housing development program. 

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), Nadine Gurley, Special Agent in Charge, United States Department of Housing and Urban Development, Office of Inspector General (HUD-OIG), and Mary T. Cagle, Inspector General, Miami Dade County Office of the Inspector General, made the announcement.

Javier Estepa, 48, of Davie, Florida and Diego Alejandro Estepa Vasquez, 37, of Boca Raton, Florida, were convicted yesterday of one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and three counts of Wire Fraud, in violation of Title 18, United States Code, Section 1343 (Case No. 18-CR-20530).   In addition, Javier Estepa was convicted of three counts of making a false statement to a federal agency and Diego Alejandro Estepa Vasquez was convicted of one count of making a false statement to a federal agency, in violation of Title 18, United States Code, Section 1001.  The defendants face a statutory maximum penalty of 20 years in prison as to each count of wire fraud and a statutory maximum penalty of 5 years in prison for each count of making a false statement.   Sentencing is scheduled for May 10, 2019, at 2 p.m. before U.S. District Court Judge Ursula Ungaro.

The evidence at trial established that, between June 2014 and December 2016, Javier Estepa and Diego Alejandro Estepa Vasquez engaged in a scheme to unlawfully enrich themselves by securing Miami-Dade Public Housing and Community Development (PHCD) bid awards and causing payments on those contracts by making materially false and fraudulent representations, and by the concealment of material facts concerning, among other things, the utilization of subcontractors, the number of workers employed on the construction projects, the hours worked, and the status of those workers as employees of Aaron Construction Group, Inc.

Javier Estepa and Diego Alejandro Estepa Vasquez, the president and vice president, respectively, of Aaron Construction Group, submitted bids to PHCD, on behalf of Aaron Construction, for specific renovation and repair of low-income housing in various locations throughout Miami-Dade County.  In the bids, Javier Estepa and Diego Alejandro Estepa Vasquez falsely and fraudulently represented that no subcontractors would be utilized in connection with the contract, that each worker would be paid for each hour worked, including for overtime, according to the Davis Bacon prevailing wage rates, and that Aaron Construction would obtain workers’ compensation insurance, in accordance with state laws.  However, immediately after being awarded the contracts, Aaron Construction entered into agreements with subcontractors which set a fixed payment at very low amounts for their work, regardless of the number of hours worked.  In addition, Aaron Construction required subcontractors to provide the information of  two or three subcontractor employees so that they could be placed on Aaron Construction’s certified payroll to appear as if they were Aaron Construction employees.  The evidence at trial established that Aaron Construction failed to accurately report the hour employees worked on the job sites or the specific categories of work performed.

In order to obtain payment from PHCD, Javier Estepa and Diego Alejandro Estepa Vasquez submitted Periodic or Final Estimate for Payment packets to PHCD containing false and fraudulent certified payroll records that listed fewer workers than were actually employed on the project and falsified the number of hours worked.  In addition, the evidence at trial established that the workers were not paid the appropriate wages under the Davis Bacon Act, nor were the workers paid overtime.  Javier Estepa and Diego Alejandro Estepa Vasquez falsely and fraudulently stated that they had no subcontractors working on the project, falsely characterizing the workers as employees of Aaron Construction, when in fact they were subcontractors and subcontractor employees.  In addition, Javier Estepa and Diego Alejandro Estepa Vasquez submitted with the Periodic or Final Estimate for Payment packets sworn statements of compliance that falsely and fraudulently certified that the information submitted was true and correct.  As a result of these false and fraudulent submissions, PHCD transferred over $3.9 million dollars in funds to bank accounts controlled by Javier Estepa and Diego Alejandro Estepa Vasquez.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the DOL-OIG, HUD-OIG and the Miami Dade County Office of the Inspector General.  She thanked the Miami-Dade Police Department for their assistance.  The case was prosecuted by Assistant U.S. Attorneys Joshua S. Rothstein and John Gonsoulin.

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.

Yesterday, Thomas Michael White, 60, of Parkland, Florida was sentenced to 14 years in prison for leading a multi-year conspiracy that robbed over a dozen senior citizens of their retirement money.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Ron Rubin, Commissioner, Florida Office of Financial Regulation (OFR), made the announcement.

A jury in Miami found White guilty, on December 13, 2018, of one count of conspiracy to commit mail and wire fraud and four counts of mail fraud, in connection with the scheme to fraudulently raise $2 million from over a dozen elderly victims throughout the United States  (Case No. 18-60174-CR-Bloom).  U.S. District Judge Beth Bloom sentenced White (the mastermind of the fraud scheme) to a total of 168 months in prison.  He was also ordered to pay $1,936,400 in restitution to his victims and serve three years of supervised release. 

According to the court record, including evidence introduced at trial, White was President and CEO of First Call Ventures, LLC, the parent company of First Call Movers & Transport of Florida, LLC, a moving company that also brokered customer moves for other companies. From November 2011 through mid-2014, White ran the Broward-based moving business’ call center that booked moves throughout the Southeast.  He also oversaw a "phone room" out of his corporate offices to raise money from investors.  During telephone calls, White and his co-conspirators used false statements, manipulation, and high-pressure tactics to target elderly investors (“vulnerable, elderly victims”) and their retirement money. The victims included retired teachers, farmers, small business owners, and homemakers, from across the United States.  When his targets did not have available funds to invest, White tricked them into converting their Individual Retirement Account ("IRA") money and transferring the funds to his corporate bank account.   As a result, White and his conspirators were given a total of more than $2 million from over a dozen senior citizens.

In truth and fact, White and his partners used the investors’ money for themselves, including millions in cash and bank check payments.  Bank records also demonstrated that over the course of the fraud scheme, White withdrew over $130,000 in investor proceeds at the Seminole Coconut Creek casino.   White and his partners siphoned all profits and victim money to their own personal accounts, declared a $1.8 million "loss," and shuttered the business.  As a result of the fraudulent scheme, some of the senior citizens are now living on food stamps, lost their homes, or were forced to take on odd jobs for income.

Four other individuals tied to this case and a related indictment previously pled guilty.  White's co-defendants, John Kevin Reech, 56, of Delray Beach, Florida, and Joseph Mario Genzone, 53, of Boca Raton, Florida, previously pled guilty.  Genzone and Reech were also recently charged by Information for operating a separate offering fraud (Case No. 18-80193-CR-Bloom).  Reech pled guilty in both matters and was sentenced to a concurrent term of 51 months' imprisonment.  Genzone also pled guilty and on December 21, 2018, Judge Bloom sentenced him in both cases to 41 months' imprisonment, concurrently.  Daniel Joseph Touizer, 44, of Aventura, Florida was sentenced to 68 months' imprisonment for leading a similar fraud scheme linked to White and Reech’s criminal conduct (Case No. 17-60286-CR-Bloom).  Saul Daniel Suster, 66, of Sunny Isles Beach, Florida, a phone room worker of Touizer's, was sentenced to 30 months’ imprisonment.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and Florida OFR in this matter.  This case was prosecuted by Assistant U.S. Attorney Roger Cruz.

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.

A Broward County resident pled guilty today to distributing information pertaining to explosives, destructive devices and weapons of mass destruction.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

Tayyab Tahir Ismail, 33, of Pembroke Pines, Florida, pled guilty to Count 2 of an Indictment that charged him with distributing information pertaining to explosives, destructive devices, and weapons of mass destruction, in violation of Title 18, United States Code, Section 842(p)(2) (Case No. 18-60352-CR-Moore).  Ismail is scheduled to be sentenced by U.S. District Judge K. Michael Moore on May 23, 2019, at 2 p.m.  Ismail faces a maximum statutory sentence of 20 years in prison, up to 5 years of supervised release and up to a $250,000 fine.

According to the court record, including the agreed upon factual proffer, on or about July 16, 2018, through on or about September 17, 2018, Ismail posted and distributed online documents including, but not limited to, documents containing step-by-step instructions on how to construct a bomb and other explosives, with the intent that the information be used for and in furtherance of an activity that constitutes a federal crime of violence, that is, the use or attempted use of a weapon of mass destruction. 

On at least four occasions in or around July, August, and September 2018, Ismail posted bomb making instructions on a the internet, on a social media platform.  During that time, Ismail was a member of various rooms within the platform and each of these rooms contained members who support violent jihad.  Ismail posted to these various rooms and his postings could be seen by all members of the room in which the information was posted.  In and around the same time of Ismail’s postings, other members made postings in support of violent jihad. 

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI’s Miami Field Office and South Florida’s Joint Terrorism Task Force (JTTF) in this matter.  The case is being jointly prosecuted by Assistant U.S. Attorney Karen E. Gilbert of the Southern District of Florida and Trial Attorney Troy Edwards of the National Security Division’s Counterterrorism Section.

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.

A home health services company owner and a co-conspirator, both Miami, Florida residents, were sentenced to prison today for their roles in a $8.6 million health care fraud scheme. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Miami Air and Marine Branch Director Martin G. Wade of the U.S. Customs and Border Protection (CBP) Air and Marine Operations made the announcement.

Alexander Ros Lazo (Ros Lazo), 54, the owner of T.L.C. Health Services of Miami, was sentenced to serve 87 months in prison.  Misleady Ibarra, 46, who performed home health therapy services without a license, was sentenced to serve 24 months in prison.  The defendants were sentenced by U.S. Circuit Judge Adalberto Jordan sitting in the Southern District of Florida.  Judge Jordan also ordered Ros Lazo to pay $8,603,859 in restitution and to forfeit the same amount, and Ibarra to pay restitution in an amount to be determined.  Ibarra and Ros Lazo pleaded guilty in December 2018 to one count of conspiracy to commit health care fraud.  Both defendants were charged in an indictment returned on June 21, 2018.

As part of his guilty plea, Ros Lazo admitted that he paid kickbacks and bribes to his co-conspirators in exchange for home health services prescriptions and the referral of Medicare beneficiaries to T.L.C. Health Services.  He further admitted that he and Ibarra agreed with their co-conspirators to commit health care fraud by billing Medicare for physical therapy services performed by Ibarra on behalf of licensed therapists despite knowing that she was not licensed to render those services to the Medicare beneficiaries.  Ros Lazo admitted that as a result of the fraudulent claims, Medicare paid $8.6 million in benefits that it otherwise would not have. 

As part of her guilty plea, Ibarra admitted to conspiring with Ros Lazo to commit health care fraud by rendering home health therapy services to Medicare beneficiaries when Ibarra was not licensed to provide these services. 

The case was investigated by the FBI, HHS-OIG and CBP Air and Marine Operations.  Trial Attorneys Alexander Kramer and Sara Clingan of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Yisel Valdes of the Southern District of Florida prosecuted the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.

Jay Walter Sall, 54, of Miami Beach, was sentenced, on February 21, 2019, to a total of 240 months in prison by U.S. District Judge K. Michael Moore, for attempting to entice a minor to engage in sexual activity.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigations (FBI), Miami Field Office, made the announcement.

According to the court record, Sall communicated with an undercover FBI agent by text messages. In those text messages, Sall solicited and paid for the agent to record sexual intercourse between the agent and the agent’s purported 9-year-old daughter. During the course of the investigation, the FBI also learned that Sall had been secretly recording three other females, two of which were minors at the time of the recordings.

On November 29, 2018, Sall pleaded guilty to attempting to entice a minor to engage in sexual activity.  On February 21, 2019, the Honorable K. Michael Moore sentenced Sall to 240 months in prison, 15 years of supervised release, payment of a $50,000 fine, and registration as a sex offender for life.

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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

U.S. Attorney Fajardo Orshan commended the investigatory efforts of the FBI and FBI Miami Child Exploitation Task Force in this matter.  She thanked the Miami Beach Police Department for their assistance.  This case was prosecuted by Assistant U.S. Attorney Daniel Cervantes.

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.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office and Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health & Human Services, Miami Regional Office, Office of Inspector General (HHS-OIG), announced that Jose Antonio Mesa Sixto, 53, of Miami, Llunaisy Acanda, 41, of Miami Gardens, and Ania Hans, 41, of Miami, were arrested on charges relating to healthcare fraud and payment and receipt of healthcare kickbacks.

The Indictment, which was the basis for the defendants’ arrests, alleges that between August 4, 2014, and August 19, 2015, Mesa Sixto was the owner and operator of Nissi Home Health Services, Inc (“Nissi”), in Virginia Gardens, Florida.  He is alleged to have paid kickbacks to Acanda and Hans in return for Medicare home health patient referrals to Nissi.   Mesa Sixto is also charged with witness tampering.  The indictment further alleges that between April 2012, and June 2015, Acanda, Hans, and others falsely certified therapy notes indicating that they provided therapy services to Medicare beneficiaries on behalf of Nissi through their companies, A&A Professional Therapy, St. Judges Staffing Group, Inc, and Krystal Rehabilitation Services Corp.

If convicted, Mesa Sixto faces a maximum statutory sentence of 5 years’ imprisonment for paying kickbacks and 20 years’ imprisonment for witness tampering.   Acanda and Hans face a maximum statutory sentence of 5 years’ imprisonment for receiving kickbacks and 20 years’ imprisonment for healthcare fraud.

An indictment is only an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and HHS-OIG in this matter.  The case is being prosecuted by Assistant U.S. Attorney Michael Gilfarb.

A federal jury found a South Florida patient recruiter guilty today for her role in a scheme involving approximately $600,000 in Medicare claims for home health care that were procured through the payment of kickbacks.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

After a four-day trial, Yamilet Diaz, 50, of Hialeah, Florida, was convicted of one count of conspiracy to defraud the United States and receive health care kickbacks and four counts of receiving health care kickbacks.  Sentencing has been scheduled for May 9 before U.S. District Judge James I. Cohn of the Southern District of Florida, who presided over the trial.

According to evidence presented at trial, from approximately October 2012 to June 2013, Diaz received kickbacks in return for referring Medicare beneficiaries to Good Friends Services Inc. (Good Friends), a now-defunct home health agency located in Hialeah Gardens, Florida, to serve as patients.  The evidence established that Diaz and her co-conspirators caused Medicare to make over $600,000 in payments to Good Friends based upon claims for home health services submitted on behalf of the beneficiaries recruited by Diaz.  The evidence further established that Diaz personally benefited from the fraud and received at least $306,800. 

This case was investigated by the FBI with support from HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The case was prosecuted by Trial Attorneys Patrick Mott, John Scanlon and Timothy Loper of the Fraud Section and Assistant U.S. Attorney Leslie Wright of the District of Massachusetts, previously with the Fraud Section. 

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Three Florida residents have been arrested and charged with conspiracy to commit Hobbs Act robbery, Hobbs Act robbery, and brandishing a firearm in furtherance of a crime of violence.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Anthony Rosa, Chief, Sunrise Police Department, made the announcement.

Zyheem Ian Smith, of Orlando, Gedeon Joseph, of Clermont, and Watverly Mortimer, of West Park, were charged by indictment with offenses related to the December 24, 2018 armed robbery of the Yard House restaurant at the Sawgrass Mills Mall in Sunrise, Florida (Case No. 19-CR-60055-UNGARO).  The defendants have been arrested and had their initial hearings.  Mortimer was detained after a detention hearing on February 15, 2019, before U.S. Magistrate Judge Patrick M. Hunt in Ft. Lauderdale.  Smith and Joseph are currently being detained, following a hearing before U.S. Magistrate Judge Thomas B. Smith in Orlando.  They are awaiting transport to the Southern District of Florida for a subsequent hearing.

According to court records, including allegations contained in the complaint and indictment, Smith and Joseph entered the Yard House on the morning of December 24, 2018, before the restaurant had opened, through a back door that was opened by Mortimer, a Yard House employee.  Smith and Joseph went upstairs to the manager’s office, pointed a Glock 19X handgun at the manager, and grabbed the manager’s cellphone.  They threatened to shoot the manager if he did not empty the safe.  Smith and Joseph left with approximately $22,000.

An indictment is only an accusation and every defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law. 

U.S. Attorney Fajardo Orshan commended the investigatory efforts of the FBI and the Sunrise Police Department in this matter.  This case is being prosecuted by Assistant U.S. Attorney Robert Juman.

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.

An illegal charter operator was sentenced in federal court yesterday for violating a U.S. Coast Guard Captain of the Port Order.

Ariana Fajardo Orshan, U.S. Attorney of the Southern District of Florida and Zinnia P. James, Special Agent in Charge, U.S. Coast Guard Investigative Service (CGIS), Southeast Region, made the announcement.

Randy Postma, 71, of Davie, previously pled guilty to violating a Captain of the Port Order, in violation of Title 33, United States Code, Section 1232(b)(1)).  He was sentenced by U.S. District Judge Cecilia M. Altonaga to three years of probation, including 180 days of home detention, and a $4,000 fine.

According to the court record, Postma is the registered owner of the 147-foot motor yacht GOLDEN TOUCH II.  On or about August 19, 2018, the Coast Guard suspected that the GOLDEN TOUCH II yacht was operating illegally as a charter vessel.  Illegal charters can cause accidents resulting in property damage, injuries and death.  Given these concerns, the Coast Guard issued Postma a Captain of the Port Order on August 24, 2018, requiring him to immediately cease operation of the GOLDEN TOUCH II yacht as a passenger vessel until the defendant was in compliance with all federal laws and regulations.  Postma was advised that his failure to comply with the Captain of the Port Order could subject him to civil penalties, imprisonment and a fine.

Thereafter, on or about September 1, 2018, Postma continued to operate the GOLDEN TOUCH II as an illegal charter, in violation of the Captain of the Port Order. 

“The operation of illegal charters poses a safety risk to passengers and the public at large,” stated U.S. Attorney Fajardo Orshan.  “The U.S. Attorney’s Office will continue to partner with the U.S. Coast Guard to protect our South Florida residents and visitors.  We will continue to forge ahead with federal charges against those who knowingly violate laws and regulations that endanger lives and compromise legitimate business practices.”

“Those who seek to dodge federal regulations and take shortcuts by operating illegally willfully put their passengers at risk and will be held accountable,” said Capt. Ladonn Allen, Chief of Coast Guard 7th District Prevention Department. “This sentence demonstrates the aggressive posture the Coast Guard and our partners from the U.S. Attorney’s Office have taken in the detection of illegal passenger vessels and in seeking maximum enforcement actions for violations.”  

U.S. Attorney Fajardo Orshan commended the investigative efforts of the CGIS in this matter.  This case was prosecuted by Coast Guard Special Assistant U.S. Attorney Philip Jones.

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.

A former Miramar Police Department employee pled guilty today to participating in a fraud scheme.

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

Brian M. Chen, 39, of Weston, Florida, a former Information Technology Analyst with the police department for the city of Miramar, Florida, pled guilty today before U.S. District Judge William P. Dimitrouleas to an Information charging him with three counts of mail fraud, in violation of Title 18, United States Code, Section 1341 (19-CR-60007).  Judge Dimitrouleas is scheduled to sentence the defendant on May 2, 2019, at 1:15 p.m. in Fort Lauderdale, Florida.  Chen faces a statutory maximum term of 60 years’ imprisonment and a fine of the greater of $750,000 or twice the amount of the gross gain or the gross loss.

According to the court record, including stipulated statements of fact, the State of Florida had a contract with Verizon Wireless for a cellular telephone service plan, which included the acquisition by state and local agencies of cellular telephones and devices.  The contract allowed state and local agencies in Florida to obtain iPhones and Android cellular telephones for free or at a discounted rate, provided that the cellular telephones were obtained for official use and that Verizon Wireless was utilized as the service provider.  In his position as Information Technology Analyst, Chen was the administrator of the plan and was in charge of overseeing the purchase and use of cellular telephones and service.

Beginning in or about 2013, Chen, through his position as Information Technology Analyst with the Miramar P.D., ordered cellular telephones online through the Verizon “My Business” portal for free or at a substantial discount with the intent to unlawfully resell those cellular telephones. Upon ordering the cellular telephones, Chen caused Verizon to initiate a monthly service plan for each line of service.  Chen attempted to suspend the monthly service plan for each cellular telephone in order to conceal his illegal acquisition of them.

Chen offered the illegally obtained telephones for sale individually through an online auction and resale provider and also sold the illegally obtained telephones in bulk to persons in the business of reselling cellular telephones.   Due to the volume of telephones illegally purchased and the associated lines of service plans, some service plans could not be continuously suspended. Miramar P.D. incurred a loss of approximately $350,000 by paying for service plans for telephones purchased by Chen pursuant to the fraudulent scheme.   From in or about 2013, through on or about November 29, 2018, Chen illegally profited, from the scheme, by receiving approximately $800,000 through the sale of over a thousand illegally obtained cellular telephones.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI in connection with this matter.  She thanked the Miramar Police Department for their assistance.  The case is being prosecuted by Assistant U.S. Attorneys Jeffrey N. Kaplan and Paul F. Schwartz.

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.

Scott Bradley Meyrowitz, 61, of Lake Worth, was sentenced to three years in prison yesterday for wire fraud.  

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

On December 13, 2018, Meyrowitz pled guilty to the one-count Information charging him with wire fraud (Case No. 18-80216-CR-Middlebrooks).  U.S. District Judge Donald M. Middlebrooks sentenced Meyrowitz to a total of 36 months in prison, to be followed by three years of supervised release.  Meyrowitz was also ordered to pay $1,817,400 in restitution to two victims in the case.    

According to court documents, including an agreed upon factual proffer, in January 2015, Meyrowitz took possession of a 4.05 carat flawless heart shaped blue diamond for the purpose of finding a buyer in Florida. Unbeknownst to the owner of the diamond in New York, Meyrowitz contacted a pawn shop in Arizona and negotiated a loan in the amount of $1 million by having Meyrowitz’s friend pose as the actual owner of the diamond.  In order to finalize the loan, Meyrowitz procured a gem grading certificate detailing the diamond’s cut, color and clarity, all of which have an impact on the diamond’s value.

Through Meyrowitz’s friend the pawn shop wire transferred $1 million on March 3, 2015, in exchange for the pledging of the diamond as collateral.  Of that amount, $955,000 of the proceeds were deposited into an account controlled by Meyrowitz.  Later, the pawn shop agreed to buy the diamond for $1.3 million, and wire transferred an additional $250,000, with $225,000 going into Meyrowitz’s account.

As part of the wire fraud scheme, Meyrowitz repeatedly assured the owner of the diamond in New York that he would find a buyer for the diamond, and/or return the diamond to the owner.  Instead, he took the proceeds from the sale of the diamond and used them for his own purposes, including trading in the stock market.

The restitution includes repaying $1,250,000 to the Arizona pawn shop, which ultimately returned the diamond to its rightful owner, and $567,400 in legal fees to the New York owner of the diamond which were incurred by the owner in litigation to get the diamond returned. 

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI in this matter.  This case was prosecuted by Assistant U.S. Attorney Lauren Jorgensen.

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.

A Cuban national was sentenced to more than 10 years in prison for smuggling three women into the United States and requiring them to pay off an imposed debt through forced labor.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Anthony Salisbury, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s, Homeland Security Investigations, (ICE-HSI), and Rick Bradshaw, Sheriff, Palm Beach County Sheriff’s Office, (PBSO), made the announcement.

Ivan Madrigal Zamora, 46, of Cuba, who was living in Palm Beach County, previously pled guilty to two counts of forced labor trafficking, in violation of Title 18, United States Code, Section 1589(a), and two counts of encouraging and inducing an alien to reside in the United States, in violation of Title 8, United States Code, Section 1324(a)(1)(A)(iv) & (B)(i).  U.S. District Judge Robin L. Rosenberg sentenced Zamora today to 121 months, three years of supervised release, and ordered restitution be paid to the three victims totaling $40,100

According to court records, including an agreed upon factual proffer, Zamora entered the United States through Mexico, by claiming asylum in May 2016.  He entered with a female, who was a Cuban National, having traveled with her from Cuba beginning in February 2016.  Upon arriving in Florida, Zamora had this woman work in Palm Beach County strip clubs to pay him a smuggling debt of over $10,000.  Zamora smuggled a second female from Cuba to Florida, via Mexico, after providing her with fake identification information.  Like the first victim, Zamora forced the second victim to work in strip clubs to pay him a $26,000 smuggling debt.  Then, in early 2017, Zamora had a third female victim smuggled from Cuba, by wiring money to smugglers throughout Central America.  Upon arriving through the Mexico-Texas border, the third victim was arrested and detained for more than two months.  After posting her bond, Zamora flew the third victim to Florida in July 2017.  Zamora then ordered the woman to work in strip clubs to pay back him a $26,000 smuggling debt.  Within three weeks, the third victim escaped Zamora and called 911.

The court record further indicated that during the course of the alien smuggling and forced labor trafficking, Zamora beat the three women and verbally threatened them and their families.

U.S. Attorney Fajardo Orshan commended the investigation efforts of ICE-HSI and PBSO in this matter.  She thanked the Palm Beach County Human Trafficking Task Force for their assistance.  This case was prosecuted by Assistant U.S. Attorney Gregory Schiller.

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

A Jupiter resident pled guilty yesterday to committing a string of robberies in Palm Beach and Martin Counties in 2017 and 2018.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Bruce H. Colton, State Attorney for Indian River, Martin, Okeechobee, and Saint Lucie Counties, Dave Aronberg, State Attorney for Palm Beach County, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, William D. Snyder, Sheriff, Martin County Sheriff’s Office (MCSO), Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office (PBSO) and Daniel J. Kerr, Chief, Jupiter Police Department (JPD), made the announcement.

On the scheduled trial date, Ronnie Montsdeoca, age 59, of Jupiter, Florida, pled guilty to the superseding indictment, which charged three counts of bank robbery and one count of attempted bank robbery. At sentencing, the defendant faces a combined maximum statutory sentence of 80 years in prison and a fine of $1,000,000.00.  Montsdeoca is scheduled to be sentenced by U.S. District Judge Donald M. Middlebrooks on April 16, 2019, in Miami, Florida.

According to the court record, including the indictment and the defendant’s admissions at the time of the plea, Montsdeoca robbed a TD Bank in Jupiter Florida on April 21, 2017, a Wells Fargo Bank in West Palm Beach, Florida on August 27, 2018, and another TD Bank in Stuart, Florida, on September 10, 2018.  Montsdeoca also attempted to rob a Bank United in Hobe Sound, Florida, shortly before the TD Bank robbery on September 10, 2018. 

The defendant took, by means of intimidation during the course of the bank robberies, in excess of $37,000 from the institutions whose deposits were insured by the Federal Deposit Insurance Corporation.

U.S. Attorney Fajardo Orshan commended the investigative efforts of FBI, MCSO, PBSO and JPD in this matter. She thanked the State Attorney’s Office for Saint Lucie County and State Attorney’s Office for Palm Beach County for their assistance.  The case is being prosecuted by Assistant U.S. Attorney Adam McMichael and Special Assistant U.S. Attorney Christopher Hudock.  

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.

On February 15, 2019, a doctor who previously worked in Stuart, Florida, was convicted by a federal jury of committing repeated acts of health care fraud.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG), Miami Regional Office, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Ashley B. Moody, Florida Attorney General, made the announcement.

Sheetal Kanar Kumar, M.D., 48, formerly of Stuart, Florida, was found guilty by a jury of committing twenty-three counts of health care fraud (Case No. 18-14063-CR-Marra).  Dr. Kumar is scheduled to be sentenced on April 19, 2019 at 10:00 a.m., by U.S. District Judge Kenneth A. Marra in Fort Pierce.

According to the court record, including evidence introduced at trial, Dr. Sheetal Kumar owned and operated the medical practice Advanced Healthcare for Women in Stuart, Florida.  Dr. Kumar was an obstetrician and gynecologist who treated incontinence.  From at least as early as January 2014, until July 2017, Dr. Kumar submitted or caused the fraudulent submissions of claims to Medicare, Medicaid and private insurance companies.  The fraudulent claims sought money for specific health care benefits, items, and services that were not provided as billed.  As a result of such false and fraudulent claims, Medicare, Medicaid and private insurance companies, made payments in the approximate amount of $637,000.

U.S. Attorney Fajardo Orshan commended the investigative efforts of HHS-OIG, FBI and Florida Attorney General’s Medicaid Fraud Control Unit in this matter.  This case is being prosecuted by Assistant U. S. Attorneys Daniel E. Funk and Diana M. Acosta.

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.

Peter Robert Bobal, 42, of Hallandale Beach, was sentenced, on February 15, 2019, to a total of 240 months in prison by U.S. District Judge Beth Bloom, after having been previously convicted by a trial jury of enticing a 14-year-old to engage in sexual activity and committing a felony involving a minor while being required to register as a sex offender (Case No. 18-Cr-60072).

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigations (FBI), Miami Field Office, made the announcement.

According to the court record, including evidence presented at trial, after receiving information from a concerned citizen, the FBI opened an investigation into Bobal.  An undercover FBI agent posed as a 14 year-old girl and communicated with Bobal online.  Over a period of twelve days in March of 2018, Bobal asked the individual he believed to be the 14 year-old minor more than 56 times to provide sexually explicit photographs and more than 70 times to meet him in person in order to engage in sexual activity.  Bobal arranged to meet the 14-year old minor to commit a sexual act on March 14, 2018.  On that date, Bobal was arrested when he arrived at the pre-arranged location to meet with the minor. 

The jury found that Bobal committed a felony involving a minor while being required to register as a sex offender, following a 2005 conviction for enticement of a minor.

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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

U.S. Attorney Fajardo Orshan commended the investigatory efforts of the FBI and FBI Miami Child Exploitation Task Force in this matter.  This case was prosecuted by Special Assistant U.S. Attorney M. Catherine Koontz and Assistant United States Attorney Francis Viamontes.

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.

On February 14, 2019, Jose Antonio Morales, 33, of Fort Pierce, was convicted, by a federal jury in West Palm Beach, of being a felon unlawfully in possession of a firearm and possessing marijuana with the intent to distribute the controlled substance.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office and Ken J. Mascara, Sheriff, St. Lucie County Sheriff’s Office, made the announcement.

According to the court record, including evidence introduced at trial, in June 2018 law enforcement seized two pounds of high-grade marijuana and a loaded firearm from a safe in Morales’ bedroom while executing a search warrant at his residence in Fort Pierce.  Morales is a convicted felon and was prohibited, by law, to possess a firearm and/or ammunition.

Morales faces a statutory maximum sentence of 10 years in prison on each count of conviction (Case No. 18-Cr-14056).  He is scheduled to be sentenced by U.S. District Judge Robin L. Rosenberg on April 29, 2019 at 11:00 a.m.            

U.S. Attorney Fajardo Orshan commended the investigative efforts of the ATF and St. Lucie County Sheriff’s Office in this matter.  The case is being prosecuted by Assistant U.S. Attorneys Michael D. Porter and Marton Gyires.

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.

A Boca Raton attorney was sentenced today to 84 months’ imprisonment and ordered to pay restitution of $19.7 million to 2,156 investors, after previously being convicted by a federal jury of 33 counts of conspiracy, securities fraud, wire fraud, and money laundering offenses.  This case involved a scheme to fraudulently register public shell companies with the U.S. Securities and Exchange Commission (SEC), issue a class of purported free-trading shares that were secretly controlled, and sell these shares as part of pump-and-dump stock swindles. 

            Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.  

James M. Schneider, 77, a securities lawyer from Boca Raton, Florida, was convicted on December 7, 2018, by a federal jury after a two-week trial in Miami (Case No. 17-20712-CR-FAM(s)).  Schneider was convicted of conspiracy to commit securities and wire fraud, in violation of Title 18, United States Code, Section 1349; securities fraud, in violation of Title 18, United States Code, Section 1348; wire fraud, in violation of Title 18, United States Code, Section 1343; conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h); and money laundering, in violation of Title 18, United States Code, Section 1957.  In addition to the sentence of 84 months’ imprisonment, U.S. District Judge Federico A. Moreno ordered restitution in the amount of $19.7 million to be paid to 2,156 investors and forfeiture of $4.8 million.

According to evidence introduced at trial, from approximately March 2008 through the end of 2013, Schneider participated in a fraudulent “shell factory” scheme, in which the conspirators created approximately 20 shell companies and filed numerous false documents with the SEC.  The filings falsely stated that the companies were controlled by a nominee chief executive officer (CEO).  The straw CEO would be listed as the owner of the control block of shares but in reality the companies were controlled by the undisclosed principals.  The control block of shares listed in the name of the sole officer were deemed restricted and could not be sold to the public.  The principals would register an offering of shares with the SEC and put these shares the names of various shareholders for each company to make it appear that these shares were owned by persons unaffiliated with the company.  These shares would later be deemed “free trading” and secretly sold to shell buyers.  Using false and fraudulent documentation describing the companies’ business purpose and share ownership, the conspirators would then obtain approval to sell the companies’ shares publicly in the open market.  Thereafter, the conspirators would sell the companies to shell buyers who would secretly obtain both the control shares and the purported “free trading” shares without disclosure to the SEC or the investing public.  These buyers would then use the shares to conduct pump-and-dump stock swindles and other securities manipulation schemes.  Evidence at trial showed that the shares of the fake companies were then sold to investors for millions of dollars.

Schneider, according to the evidence introduced at trial, was a Florida attorney who authored false and fraudulent legal opinion letters indicating that shares of the 20 companies that were owned by persons who were not “affiliates,” when in truth and in fact the shares were owned and controlled by the conspirators.  Schneider also created false billing records to make it appear that he was performing work for, and taking direction from, the straw CEOs.  In reality, he took his direction from his co-conspirators, who sought to keep their names off publicly filed documents.  Schneider also performed so-called escrow services for the sale of the shell entities, including the illegal sale of the purported free trading shares, and wired more than $5.6 million in proceeds to bank accounts controlled by the conspirators.  Schneider did this, according to evidence introduced at trial, without authorization from the named shareholders or verification that the persons whose names were listed on escrow agreements authorized or approved these transfers.

Eleven other defendants have been convicted in the Southern District of Florida in connection with the Shell Factory Fraud investigation: John Ahearn and Andrew Wilson, Case No. 17-20883-CR-KMW; Yelena Furman, Case No. 17-20713-CR-CMA; David Lubin, Case No. 17-20508-CR-MGC; Sheldon Rose and Ian Kass, Case No. 16-20706-CR-JEM; Steven Sanders and Alvin S. Mirman, Case No. 16-20572-CR-CMA; Daniel McKelvey and Jeffrey Lamson, Case No. 16-20546-CR-RNS; and, Delaney Equity Group LLC, Case No. 18-20336-CR-CMA.  Defendant Myron Gushlak has also been charged but his case was transferred to fugitive status in Case No. 17-20713-CR-CMA.  These convicted defendants included two attorneys who practices securities law (Lubin and Wilson), a registered securities representative (Kass), a stock transfer agent (Ahearn), a securities broker-dealer (Delaney Equity Group LLC), an accountant (Lamson), and five stock promoters (Sanders, McKelvey, Mirman, Rose, and Furman).

Previously, the SEC filed parallel civil enforcement actions against Schneider and the other criminal defendants charged in the Shell Factory Fraud investigation.

The United States Attorney commended the investigative efforts of the FBI’s Miami Field Office, and also thanked the SEC’s Miami Regional Office for their assistance with the ongoing Shell Factory Fraud investigation.  The United States was represented at trial by Assistant U.S. Attorneys Jerrob Duffy and Christopher B. Browne, and Special Assistant U.S. Attorney Jeffrey T. Cook, and forfeiture is being handled by Assistant U.S. Attorney Alison W. Lehr.

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.