Southern District of Florida
Press releases recorded for this federal judicial district.
Six Individuals and Two Companies Charged in Illegal Dietary Supplement SchemeRead the Press Release
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 .
U.S. Attorney’s Office Hosts Second Annual Reentry SimulationRead the Press Release
“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.
Miami CPA Sentenced to Prison for Tax EvasionRead the Press Release
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.
Miami CPA Sentenced to Prison for Tax EvasionRead the Press Release
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.
Florida Landscaper Indicted for Tax FraudRead the Press Release
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.
Bankrate Inc.’s Successor in Interest Agrees to Pay $28 Million to Resolve Securities and Accounting Fraud ChargesRead the Press Release
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.
City of Fort Lauderdale Department of Parks and Recreation Employee Sentenced to Fifteen Month in PrisonRead the Press Release
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.
West Palm Beach Investment Advisor Ordered to Pay over $1 Million in Restitution for Fraud SchemeRead the Press Release
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.
Traveling Bandit Charged in South FloridaRead the Press Release
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.
Alabama Man Pretending to be College Softball Coach Sentenced to 15 Years in Prison for Attempting to Produce Child PornographyRead the Press Release
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.
President and Vice President of South Florida Construction Company Convicted at Trial of Defrauding Low-Income Housing Development ProgramRead the Press Release
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.
Broward County Resident Sentenced to 14 Years in Prison for Leading a $2 Million Dollar Securities Fraud Scheme that Targeted the ElderlyRead the Press Release
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.
Broward County Resident Pleads Guilty to Distributing Information Pertaining to Explosives OnlineRead the Press Release
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.
Florida Home Health Services Company Owner and Co-Conspirator Sentenced to Prison for Role in $8.6 Million Health Care Fraud SchemeRead the Press Release
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.
Miami Beach Resident Sentenced to 20 Years in Prison for Attempting to Entice a Minor to Engage in Sexual ActivityRead the Press Release
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.
Three South Florida Residents Arrested on Federal Healthcare Fraud ChargesRead the Press Release
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.
South Florida Patient Recruiter Convicted for Role in $600,000 Health Care Kickback SchemeRead the Press Release
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 Charged with Armed RobberyRead the Press Release
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.
Illegal Charter Operator Sentenced Federally for Violating Coast Guard OrderRead the Press Release
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.
Former Miramar Police Department Employee Pleads Guilty to Fraud SchemeRead the Press Release
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.
Diamond Thief Sentenced to Three Years in PrisonRead the Press Release
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.
Cuban National Sentenced to more than 10 years for Labor Trafficking and Alien SmugglingRead the Press Release
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
Serial Bank Robber Pleads Guilty to IndictmentRead the Press Release
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.
Stuart Physician Convicted of 23 Counts of Health Care FraudRead the Press Release
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.
Hallandale Resident Sentenced to 20 Years in Prison for Enticing a Minor While a Convicted Sex OffenderRead the Press Release
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.
Fort Pierce Felon Convicted of Unlawfully Possessing a Firearm and More Than Two Pounds of MarijuanaRead the Press Release
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.
South Florida Securities Lawyer Sentenced to Seven Years’ Imprisonment for Role in Pump-and-Dump Securities Fraud SchemeRead the Press Release
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.
Seven More Defendants Sentenced for Participating in Schemes Related to Defrauding Health Care Benefit Programs, Unlawful Dispensing of Opioids, and Money LaunderingRead the Press Release
Seven defendants, in multiple cases, have been sentenced for their roles in schemes related to defrauding health care benefit programs, unlawful dispensing of opioids, and money laundering.
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.
Dr. Arman Abovyan and Tina Marie Barbuto (Case No. 18cr80122)
Dr. Arman Abovyan, 44, of Boca Raton, was sentenced today to 135 months in prison, to be followed by three years of supervised release, and was ordered to pay $1,058,097.88 in restitution. He was previously convicted at trial of one count of conspiracy to commit health care fraud; one count of conspiracy to possess, distribute, and dispense controlled substances; and seven counts of unlawfully dispensing controlled substances. On January 24, 2019, co-defendant Tina Marie Barbuto, 39, of Boca Raton, was sentenced to 36 months in prison, to be followed by three years of supervised release, and was ordered to pay $3,132,806.13 in restitution. She previously pled guilty to one count of conspiracy to commit health care fraud.
Abovyan, a licensed medical doctor in the State of Florida, was the Medical Director of Journey to Recovery (Journey) in Boca Raton and Reflections Treatment Center (Reflections) in Margate from July 2016 to December 2016. As medical director, Abovyan was responsible for evaluating patients, developing appropriate plans of treatment, and prescribing medically necessary treatment and testing. Barbuto served as the Assistant Clinical Director of Reflections from December 2015 to November 2016, and served as the Clinical Director of Reflections from November 2016 to December 2016. As Clinical Director, Barbuto was responsible for supervising clinical services, including regularly reviewing the work performed by subordinate employees.
The co-defendants established sober homes that were purportedly in the business of providing safe and drug-free residences for individuals suffering from drug and alcohol addiction. To obtain residents for the sober homes, members of the conspiracy provided kickbacks and bribes, in the form of free or reduced rent and other benefits, to individuals with insurance who agreed to reside at the sober homes, attend drug treatment, and submit to regular drug testing that members of the conspiracy could bill to the residents’ insurance plans. Although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing.
Abovyan and Barbuto’s co-conspirators, who owned, operated and managed sober homes, referred the residents with insurance to become patients at Journey and Reflections, in return for kickbacks and bribes which were often disguised as marketing fees, consulting fees, commissions, and case management fees. Barbuto and co-conspirators caused confirmatory testing to be performed and testing and substance abuse treatment to be billed for patients knowing that the patients had been discharged or had left the treatment centers and were no longer receiving treatment or submitting bodily fluid samples for testing at the treatment centers. Abovyan ordered drug testing for the treatment center patients, regardless of whether such testing was medically necessary or conducted and billed in compliance with the terms of the insurance plans; electronically signed hundreds of lab test results for Reflections' patients falsely certifying that he had reviewed the results and the statements of medical necessity for the lab testing; and provided blank, pre-signed prescriptions to other individuals who were not certified to prescribe controlled substances without those patients being examined.
Abovyan and Barbuto and their co-conspirators prepared and submitted fraudulent insurance claim forms to the insurance plans falsely stating that the testing and treatment had been medically necessary and actually rendered when some of the claimed testing and treatment had not been necessary or performed; failing to disclose that the patients had not been asked to pay their co-payments and deductibles; and failing to disclose that Journey and Reflections had obtained their licenses through false statements and omissions.
Mark Jeffrey Hollander (Case No. 18cr80102) and Bosco Jose Vega (Case No. 18cr80101)
On January 28, 2019, Mark Jeffrey Hollander, 44, of Miami, was sentenced to 21 months in prison, to be followed by two years of supervised release. On February 1, 2019, Bosco Jose Vega, 52, of Miami, was sentenced to 9 months in prison, to be followed by one year of supervised release. Both defendants previously pled guilty to one count of engaging in a monetary transaction of a value greater than $10,000 that was derived from health care fraud.
Smart Lab, LLC was a company that offered bodily fluid testing services, including confirmatory urinalysis testing. Smart Lab’s Chief Executive and Chief Operating Officers established employment agreements where co-conspirators would solicit bodily fluid samples from substance abuse treatment centers that would be submitted to Smart Lab for expensive confirmatory drug testing. In exchange, Smart Lab would kick back a portion of the insurance reimbursements, disguised as payments for sales commissions, to co-conspirators, understanding that a portion of these payments would then be paid, directly or indirectly, to owners, operators, or clinicians at the substance abuse treatment centers that referred the testing of urine samples from insured patients.
To achieve the goal, form standing orders and drug testing protocols were established that provided for duplicative, medically unnecessary, and expensive confirmatory testing regardless of the individual needs of any patients. To further the scheme, co-conspirator treatment center owners required the insured substance abuse treatment center patients to submit to confirmatory drug testing approximately three times per week, which Smart Lab could bill to the insurance plans. Smart Lab elected not to collect mandatory co-payments, deductibles, and other co-insurance from patients that could cause patients to be unable or unwilling to submit to testing. The defendants did not inform the insurance plans that they were not collecting the required co-insurance payments.
Hollander and Vega both signed employment agreements with Smart Lab that purported to make them “sales representatives”. These agreements were used to make it appear that monies paid to them were for services rendered. The employment contracts were created to hide the true purpose and recipient of the payments. Hollander and Vega did not perform any actual services for Smart Lab and they were paid “commissions” from the proceeds of health care fraud.
John Michael Skeffington, Babette Hayes, and Mona Montanino (Case No. 18cr80018)
On January 25, 2019, John Michael Skeffington, 52, of Boca Raton, was sentenced to 52 months in prison, to be followed by three years of supervised release. He previously pled guilty to one count of participating in a health care fraud conspiracy and one count of obstructing a criminal health care investigation. Co-defendants Babette Hayes, 58, of Sarasota, and Mona Montanino, 56, of Boca Raton, were both sentenced to probation after previously pleading guilty to one count of obstructing a criminal heath care investigation.
According to court documents, Skeffington, Hayes and Montanino established five shell companies, disguised as “laboratory marketing companies,” in order to unlawfully refer medically unnecessary and excessive bodily fluid tests for residents and patients of sober homes and substance abuse treatment facilities to various clinical laboratories and rural hospitals. Hayes and Montanino purported to be the chief executive officers of some of the companies, but it was Skeffington who actually operated and controlled the companies and directed the co-defendants’ actions. In exchange for patient referrals, the laboratories and hospitals would provide a pre-set percentage of insurance payments (“kickbacks”) to the defendants, which they would then share with the sober homes and substance abuse treatment facilities.
The fraud scheme took advantage of higher insurance reimbursement rates for testing conducted by hospitals. In some cases, the hospitals would submit claim forms as if the patients submitted samples in person when, in reality, the patients were hundreds of miles away, were never treated at the hospitals, and were unaware that their insurance plans were billed for the services. During the course of the scheme, Skeffington increased his use of rural hospitals for the fraudulent testing, after insurance companies began to scrutinize claims from clinical laboratories for bodily fluid tests.
The kickback amounts, often disguised as payments for sales commissions to Skeffington’s companies, were based on written and unwritten agreements between Skeffington and the laboratories and hospitals. Upon receiving the payments, Skeffington would directly or indirectly provide kickback payments to the sober homes and substance abuse treatment center owners who were accomplices in the scheme.
Once Skeffington, Montanino and Hayes became aware of the FBI investigation into fraudulent medical claims, they created dozens of fake documents meant to obstruct the investigation and disguise the kickbacks as hourly payments for marketing services. They asked, both those from whom they had received kickbacks and those to whom they provided kickbacks, to sign the documents to further conceal their illegal activities. Signed documents and invoices were back-dated to make it appear as though they had been signed and submitted before the kickback payments were made.
These cases are all the result of the work of the Greater Palm Beach Health Care Fraud Task Force. The Task Force’s ongoing investigation into substance abuse treatment fraud in the Southern District of Florida has resulted in 30 convictions to date. Agencies of the Task Force include the FBI, IRS-CI, the Florida Division of Investigative and Forensic Services, Amtrak OIG, DOL-EBSA, and NICB.
U.S. Attorney Fajardo Orshan commended the investigative efforts of all law enforcement agencies connected with the Task Force, as they continue to combat sober home abuses and health care fraud.
These cases were prosecuted by Assistant U.S. 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 www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov
Joaquin “El Chapo’ Guzman, Sinaloa Cartel Leader, Convicted of Running A Continuing Criminal Enterprise and Other Drug-Related ChargesRead the Press Release
Joaquin Archivaldo Guzman Loera, known by various aliases, including “El Chapo” and “El Rapido,” was convicted today by a federal jury in Brooklyn, New York of being a principal operator of a continuing criminal enterprise – the Mexican organized crime syndicate known as the Sinaloa Cartel – a charge that includes 26 drug-related violations and one murder conspiracy. Guzman Loera was convicted of all 10 counts of a superseding indictment, including narcotics trafficking, using a firearm in furtherance of his drug crimes and participating in a money laundering conspiracy. The verdict followed a 12-week trial before U.S. District Judge Brian M. Cogan. Guzman Loera faces a mandatory sentence of life imprisonment at his sentencing scheduled on June 25.
Acting Attorney General Matthew G. Whitaker, U.S. Department of Homeland Security Secretary Kirstjen Nielsen, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Acting Administrator Uttam Dhillon of the U.S. Drug Enforcement Administration (DEA), FBI Director Christopher Wray, Executive Associate Director Derek Benner of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and Acting U.S. Marshal Bryan T. Mullee of the Eastern District of New York, announced the verdict.
The Evidence at Trial:
As proven at trial, Guzman Loera was a principal leader of the Sinaloa Cartel, a Mexico-based international drug trafficking organization responsible for importing and distributing vast quantities of cocaine, marijuana, methamphetamine and heroin into the United States. The evidence at trial, including testimony from 14 cooperating witnesses; narcotics seizures totaling over 130,000 kilograms of cocaine and heroin; weapons, including AK-47s and a rocket-propelled grenade launcher; ledgers; text messages; videos; photographs and intercepted recordings, detailed the drug trafficking activity of Guzman Loera and his co-conspirators over a 25-year period from January 1989 until December 2014. Guzman Loera was repeatedly referred to by witnesses as one of the leaders of the Sinaloa Cartel.
Guzman Loera oversaw the smuggling of narcotics to wholesale distributors in Arizona, Atlanta, Chicago, Los Angeles, Miami, New York, and elsewhere. The billions of illicit dollars generated from drug sales in the United States were then clandestinely transported back to Mexico. Guzman Loera also used “sicarios,” or hit men, who carried out hundreds of acts of violence in Mexico to enforce Sinaloa’s control of territories and to eliminate those who posed a threat to the Sinaloa Cartel.
Drug Trafficking
In the course of the decades-long drug trafficking conspiracy, the Sinaloa Cartel transported tens of thousands of kilograms of narcotics from Central and South America for distribution in the United States. Guzman Loera used various methods to transport the cartel’s narcotics into the United States, including submarines, carbon fiber airplanes, trains with secret compartments and transnational underground tunnels. Multiple witnesses testified about seizures by law enforcement officers of massive amounts of cocaine, heroin and marijuana linked to the Sinaloa Cartel. One of the largest seizures of drugs bound for the United States involved over seven tons of cocaine concealed in jalapeño cans.
The jury also heard recordings of Guzman Loera’s own damning words discussing his drug trafficking, corruption and violence. The calls included Guzman Loera discussing sending “ice,” meaning methamphetamine, to Los Angeles, California; Minneapolis, Minnesota; Ohio and Tucson, Arizona.
Communications Network
Guzman Loera also utilized a sophisticated encrypted communications network to operate the global narcotics trafficking operation. As an information technology engineer testified at trial, Guzman Loera paid him one million dollars to purchase and set up a network to enable the defendant to communicate via the internet with his drug trafficking associates in Colombia, Ecuador, Canada and the United States without fear of being intercepted by law enforcement or his rivals. The witness devised a secret and secure system, consisting of encrypted cell phones and encrypted apps.
Cartel Violence
The success of the Sinaloa Cartel relied upon the use of violence to maintain their power throughout the region and beyond. Numerous co-conspirators testified that Guzman Loera directed his hitmen to kidnap, interrogate, torture and shoot members of rival drug organizations, at times carrying out acts of violence himself. A former hitman testified that Guzman Loera beat two men with a tree branch until their bodies “were completely like rag dolls,” before shooting the men and ordering their bodies be tossed into a bonfire. The former hitman also testified that Guzman Loera interrogated a rival drug cartel member, shot him and ordered that he be buried alive. In an intercepted call, the jury heard Guzman Loera order one of his sicarios to kidnap rival cartel members, but not to kill them without first checking with him.
Weapons
The Sinaloa Cartel had unfettered access to weapons. A law enforcement witness showed the jury over 40 AK-47s that were seized in El Paso, Texas before they could be delivered to Guzman Loera in Mexico. Additionally, witnesses identifed photographs of various weapons, including grenades and a rocket-propelled grenade launcher utilized by the Sinaloa Cartel. Guzman Loera’s personal arsenal included a gold plated AK-47 and three diamond-encrusted .38 caliber handguns, one emblazoned with his initials, “JGL.”
Corruption
The evidence presented at trial demonstrated that to further the interests of the Sinaloa Cartel, Guzman Loera and his organization took advantage of a vast network of corrupt government officials. These officials ranged from local law enforcement officers, prison guards, state officials, high ranking members of the armed forces, as well as politicians. These corrupt officials assisted Guzman Loera and his organization in exchange for millions of dollars’ worth of bribery payments. For example, according to the testimony of several witnesses, in many instances, Guzman Loera and his workers were warned of pending law enforcement operations which allowed Guzman Loera to avoid capture on multiple occasions. In other instances, Guzman Loera, through his employees, paid officials to turn a blind eye to trafficking activities in an effort to facilitate the shipment of drugs, weapons, and bulk cash.
Money Laundering
Guzman Loera’s lucrative drug trafficking business generated billions of dollars in illicit proceeds. Guzman Loera used various methods to launder money including bulk cash smuggling from the United States to Mexico. One of the largest seizures was of $1.26 million seized from hidden compartments in a truck driven by Guzman Loera’s brother in Douglas, Arizona in 1989. In addition to the bulk cash smuggling, Guzman Loera oversaw numerous shell companies, including a juice company and a fish flour company to launder the cartel’s narcotics trafficking proceeds.
“I am pleased that the Department has brought Joaquin Guzman Loera (El Chapo) to justice by securing a conviction against this drug kingpin, who was a principal leader of the Sinaloa Cartel,” said Acting Attorney General Whitaker. “As was clear to the jury, Guzman Loera’s massive, multi-billion dollar criminal enterprise was responsible for flooding the streets of the United States with hundreds of tons of cocaine, as well as enormous quantities of other dangerous drugs such as heroin and methamphetamine. The trial evidence also overwhelmingly showed that Guzman’s unceasing efforts to expand his cartel’s control and consolidate its power left a wake of corruption and violence in communities in both Mexico and the United States. This case demonstrated the extraordinary reach of the U.S. government, our tenacity and commitment to pursuing kingpins like Guzman whom if their power is unchecked — will, like Guzman, develop what for 25 years was an almost unstoppable capacity to move massive quantities of drugs into our country. Guzman had the capital to absorb huge losses and run his enterprise with impunity; the enormous power to corrupt; and the capability to employ violence on a massive scale. This case, and more importantly, this conviction serves as an irrefutable message to the kingpins that remain in Mexico, and those that aspire to be the next Chapo Guzman, that eventually you will be apprehended and prosecuted. Finally, this verdict demonstrates that the United States, working in close partnership with the Mexican government, will continue to bring all possible resources to bear in its fight against international drug traffickers and their violent organizations.”
“The guilty verdict against Joaquin Guzman Loera, one of the most violent and feared drug kingpins of our time, is a testament to the hard work and courage of America’s frontline law enforcement personnel, including ICE’s Homeland Security Investigations,” said DHS Secretary Nielsen. “They gathered substantial evidence over multiple investigations, which made his extradition to the United States and a successful prosecution possible. Today’s verdict sends an unmistakable message to transnational criminals: you cannot hide, you are not beyond our reach, and we will find you and bring you to face justice. Like Guzman, you will suffer the consequences of your criminal behavior. I applaud the brave men and women at DHS who helped make this conviction possible and thank our interagency and international partners for their exceptional work.”
“Guzman Loera’s bloody reign atop the Sinaloa Cartel has come to an end, and the myth that he could not be brought to justice has been laid to rest,” said U.S. Attorney Donoghue. “Today, Guzman Loera has been held accountable for the tons of illegal narcotics he trafficked for more than two decades, the murders he ordered and committed, and the billions of dollars he reaped while causing incalculable pain and suffering to those devastated by his drugs. Today’s verdict is the culmination of the tireless work of countless brave members of law enforcement, here and abroad, and we congratulate them. The Department of Justice is committed to eradicating criminal organizations that fuel America’s drug epidemic, and our mission will continue until it is completed.”
“The conviction of former Sinaloa Cartel leader Joaquin Guzman Loera strips the power from a man who employed horrific acts of violence to infect communities, throughout the United States and abroad, with the venom of illicit drugs,” said U.S. Attorney Fajardo Orshan. “Today’s verdict is a reminder to all, that our international borders do not protect narco-traffickers and the cartels’ criminal enterprises from federal prosecution. U.S. Attorney’s Offices across the nation stand united with our domestic and foreign law enforcement partners, as we continue our fight against transnational criminal organizations.”
“The reign of Joaquin Guzman Loera’s crime and violence has come to an end,” said FBI Director Wray. “As leader of the Sinaloa Cartel, Guzman Loera carried out and directed acts of brazen violence as he oversaw the import and distribution of vast amounts of illegal drugs throughout the United States. But today, through the steadfast determination and collective efforts of the FBI and our law enforcement partners both domestic and abroad, and due to our continuing partnership with the Government of Mexico, justice has been served.”
“Today’s conviction of Joaquin “El Chapo” Guzman demonstrates the dedication and determination of the men and women of DEA to bring the world’s most dangerous and prolific drug trafficker to justice,” said DEA Acting Administrator Dhillon. “Those who bring drugs and violence into the United States that destroy lives and communities will not be tolerated, nor evade our reach. The success of this case is a testament to the strength of our relationship with our Mexican counterparts. DEA will continue to pursue justice worldwide and protect Americans.”
“HSI is committed to using our unique border authority to target and dismantle transnational criminal organizations responsible for trafficking narcotics and bringing violence into the United States,” said HSI Executive Associate Director Benner. “Through collaboration with local, federal and international law enforcement partners, HSI special agents were able to bring an end to Joaquin Guzman Loera’s criminal activities, and help ensure he was brought to justice.”
“The conviction of Joaquin “El Chapo” Guzman demonstrates what is possible when law enforcement works collectively and coordinates their efforts,” said Acting U.S. Marshal Mullee. “The U.S. Marshals Service ensured the integrity of the judicial process in this case. From providing safe and secure detention and transportation of the world’s most notorious drug kingpin to ensuring the anonymity of the jury, protecting the judge, attorneys, witnesses and the public, the Marshals Service proudly played its important role in the process. I would like to express my gratitude to all of our law enforcement partners who worked tirelessly in support of our mission. They are the talented men and women of the New York City Police Department, Federal Protective Service, 24th Civil Support Team of the New York National Guard, and the Federal Bureau of Prisons. The U.S. Marshals take our responsibility of protecting the federal judicial process very seriously. We must anticipate and deter threats, while continuously developing and employing innovative protective tactics. We carry out these responsibilities with precision every day across the country. The successful prosecution of Joaquin “El Chapo” Guzman stands as a shining example of our mission.”
When sentenced by Judge Cogan, Guzman Loera faces a mandatory life sentence without the possibility of parole for leading a continuing criminal enterprise, and a sentence of up to life imprisonment on the seven remaining drug counts. After the verdict, the government will seek a forfeiture money judgment for billions of dollars constituting the cartel’s illegal drug-trafficking proceeds.
The government’s case is being prosecuted by U.S. Department of Justice Trial Attorneys Amanda Liskamm, Anthony Nardozzi, Michael Lang and Brett Reynolds of the Criminal Division’s Narcotic and Dangerous Drug Section, Assistant U.S. Attorneys Gina Parlovecchio, Andrea Goldbarg, Michael Robotti, Patricia Notopoulos and Hiral Mehta of the Eastern District of New York and Assistant U.S. Attorneys Adam Fels and Lynn Kirkpatrick of the Southern District of Florida.
The case was investigated by the DEA, HSI and the FBI, in cooperation with Mexican, Ecuadorian, Netherlands, Dominican, and Colombian law enforcement authorities. Substantial assistance was provided by the U.S. Attorneys’ Offices in the Northern District of Illinois, the Western District of Texas, the Southern District of New York, the Southern District of California and the District of New Hampshire. The Department of Justice’s Office of International Affairs also played an integral role in securing the extradition of Guzman Loera to the United States, in cooperation with authorities of the Mexican government, without which his extradition and prosecution would not have been possible. The investigative efforts in this case were coordinated with the Department of Justice’s Special Operations Division, comprising of agents, analysts and attorneys from the Criminal Division’s Narcotic and Dangerous Drug Section; DEA New York, DEA Miami, FBI Washington Field Office, FBI New York Field Office, FBI Miami Field Office; HSI New York, HSI Nogales; Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Marshals Service; IRS Criminal Investigation; U.S. Bureau of Prisons, NYPD and New York State Police.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Colombian Nationals Sentenced to 45 and 50 Years in Prison for Participating in Human Smuggling Event That Resulted in the Rape and Murder of Cuban NationalsRead the Press Release
Two Colombian nationals were sentenced to 45 and 50 years in prison for their roles in a scheme to smuggle illegal aliens from Colombia into the United States, which resulted in the rape of one and the death of two Cuban nationals.
U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Anthony Salisbury of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office made the announcement.
Carlos Emilio Ibarguen Palacios, 27, and Jhoan Stiven Carreazo Asprilla, 23, Colombian nationals, extradited to the United States in 2017 and 2018 respectively, to face these charges, previously pleaded guilty to one count of conspiracy to encourage and induce aliens to come to the Unites States resulting in death as well as three counts of encouraging and inducing aliens to come to the United States resulting in death and placing in jeopardy the lives of any person. Ibarguen Palacios and Carreazo Asprilla were sentenced to serve 540 months and 600 months in prison, respectively, by U.S. District Judge Jose E. Martinez of the Southern District of Florida, who also ordered them to serve three years of supervised release following their prison sentence.
“The defendants’ carried out a fatal human smuggling trip for which two victims paid the ultimate price,” said U.S. Attorney Fajardo Orshan. “But for the strength of the surviving victim, the defendants’ brutality would have been washed away at sea. The significant federal prison sentences imposed against the smugglers cannot bring back life but we hope can serve to thwart the dangerous business of alien smuggling.”
“The heinous acts committed by the defendants in this case provide a stark reminder that alien smuggling is inherently dangerous—and can be deadly,” said Assistant Attorney General Benczkowski. “But for the desperate escape of one of the victims, the defendants’ acts would have remained hidden with the bodies they left behind. The substantial prison sentence imposed today against these two smugglers demonstrates the Department of Justice’s continuing commitment to prosecute those who violate this country’s immigration laws.”
“These two individuals were involved in one of the most cold and callous cases investigated by HSI Miami,” said HSI Special Agent in Charge Salisbury. “Although the sentences will not return the victims to their loved ones, it does bring justice for their friends and family. HSI will continue to aggressively investigate, pursue and shut down these organizations that are involved in this heinous criminal act.”
According to the court record, including agreed-upon factual proffers, since 2014, Carlos Emilio Ibarguen Palacios, Jhoan Stiven Carreazo Asprilla, and their co-defendants, organized and arranged the unlawful smuggling of illegal aliens, transporting them across Colombia toward the Panamanian border, en route to the United States. In 2016, three Cuban nationals arranged with, and paid, the defendants to transport them from Colombia to Panama, as they traveled to the United States, intending to arrive in Miami.
On Sep. 7, 2016, during a portion of their journey, the three victims – two men and a woman – were delivered by co-defendant Fredis Valencia Palacios to a boat captained by Ibarguen Palacios. After some delay, Ibarguen Palacios was joined by Carreazo Asprilla and they began their journey to Panama. During the boat trip, Ibarguen Palacios and Carreazo Asprilla pulled a knife and gun, respectively, on the victims. Ibarguen Palacios tied the wrists of the two male passengers and then threw them overboard, anchoring them with rope to the inside of the boat. The surviving male victim reported that he heard Ibarguen Palacios and Carreazo Asprilla sexually assault the female victim before cutting her throat and murdering her. The surviving victim also heard Ibarguen Palacios and Carreazo Asprilla cut the other male victim’s throat, killing him. While his fellow travelers were being murdered, the survivor managed to free himself and escape by swimming away. Ibarguen Palacios and Carreazo Asprilla left him for dead.
The next day, a local fisherman discovered the survivor, who was subsequently rescued by the Colombian Navy. The survivor directed the Colombian authorities to the place where the murders happened, and the Colombian authorities retrieved the bodies. Their throats and bellies had been cut open and they were tied up together and submerged in the water. Shortly thereafter, Ibarguen Palacios and Carreazo Asprilla were located and arrested.
Co-defendant Valencia Palacios who assisted in arranging this smuggling event was sentenced to serve 15 years in prison on Dec. 4, 2018 before U.S. District Judge Martinez.
This case was investigated by HSI Miami, with assistance from the HSI Bogota field office. The Government of Colombia, including the Colombian Office of the Attorney General, provided significant assistance and support during the investigation. The Criminal Division’s Office of International Affairs provided significant support with the defendants’ extradition. The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
Assistant U.S. Attorney Brian Dobbins of the Southern District of Florida and Trial Attorney Danielle Hickman of the Criminal Division’s Human Rights and Special Prosecutions Section prosecuted the case.
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.
Colombian Nationals Sentenced to 45 and 50 Years in Prison for Participating in Human Smuggling Event that Resulted in the Rape and Murder of Cuban NationalsRead the Press Release
Two Colombian nationals were sentenced to 45 and 50 years in prison for their roles in a scheme to smuggle illegal aliens from Colombia into the United States, which resulted in the rape of one and the death of two Cuban nationals.
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 Special Agent in Charge Anthony Salisbury of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office made the announcement.
Carlos Emilio Ibarguen Palacios, 27, and Jhoan Stiven Carreazo Asprilla, 23, Colombian nationals, extradited to the United States in 2017 and 2018 respectively, to face these charges, previously pleaded guilty to one count of conspiracy to encourage and induce aliens to come to the Unites States resulting in death as well as three counts of encouraging and inducing aliens to come to the United States resulting in death and placing in jeopardy the lives of any person. Ibarguen Palacios and Carreazo Asprilla were sentenced to serve 540 months and 600 months in prison, respectively, by U.S. District Judge Jose E. Martinez of the Southern District of Florida, who also ordered them to serve three years of supervised release following their prison sentence.
“The heinous acts committed by the defendants in this case provide a stark reminder that alien smuggling is inherently dangerous—and can be deadly,” said Assistant Attorney General Benczkowski. “But for the desperate escape of one of the victims, the defendants’ acts would have remained hidden with the bodies they left behind. The substantial prison sentence imposed today against these two smugglers demonstrates the Department of Justice’s continuing commitment to prosecute those who violate this country’s immigration laws.”
“The defendants’ carried out a fatal human smuggling trip for which two victims paid the ultimate price,” said U.S. Attorney Fajardo Orshan. “But for the strength of the surviving victim, the defendants’ brutality would have been washed away at sea. The significant federal prison sentences imposed against the smugglers cannot bring back life but we hope can serve to thwart the dangerous business of alien smuggling.”
“These two individuals were involved in one of the most cold and callous cases investigated by HSI Miami,” said HSI Special Agent in Charge Salisbury. “Although the sentences will not return the victims to their loved ones, it does bring justice for their friends and family. HSI will continue to aggressively investigate, pursue and shut down these organizations that are involved in this heinous criminal act.”
According to the court record, including agreed-upon factual proffers, since 2014, Carlos Emilio Ibarguen Palacios, Jhoan Stiven Carreazo Asprilla, and their co-defendants, organized and arranged the unlawful smuggling of illegal aliens, transporting them across Colombia toward the Panamanian border, en route to the United States. In 2016, three Cuban nationals arranged with, and paid, the defendants to transport them from Colombia to Panama, as they traveled to the United States, intending to arrive in Miami.
On Sep. 7, 2016, during a portion of their journey, the three victims – two men and a woman – were delivered by co-defendant Fredis Valencia Palacios to a boat captained by Ibarguen Palacios. After some delay, Ibarguen Palacios was joined by Carreazo Asprilla and they began their journey to Panama. During the boat trip, Ibarguen Palacios and Carreazo Asprilla pulled a knife and gun, respectively, on the victims. Ibarguen Palacios tied the wrists of the two male passengers and then threw them overboard, anchoring them with rope to the inside of the boat. The surviving male victim reported that he heard Ibarguen Palacios and Carreazo Asprilla sexually assault the female victim before cutting her throat and murdering her. The surviving victim also heard Ibarguen Palacios and Carreazo Asprilla cut the other male victim’s throat, killing him. While his fellow travelers were being murdered, the survivor managed to free himself and escape by swimming away. Ibarguen Palacios and Carreazo Asprilla left him for dead.
The next day, a local fisherman discovered the survivor, who was subsequently rescued by the Colombian Navy. The survivor directed the Colombian authorities to the place where the murders happened, and the Colombian authorities retrieved the bodies. Their throats and bellies had been cut open and they were tied up together and submerged in the water. Shortly thereafter, Ibarguen Palacios and Carreazo Asprilla were located and arrested.
Co-defendant Valencia Palacios who assisted in arranging this smuggling event was sentenced to serve 15 years in prison on Dec. 4, 2018 before U.S. District Judge Martinez.
This case was investigated by HSI Miami, with assistance from the HSI Bogota field office. The Government of Colombia, including the Colombian Office of the Attorney General, provided significant assistance and support during the investigation. The Criminal Division’s Office of International Affairs provided significant support with the defendants’ extradition. The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks, or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
Trial Attorney Danielle Hickman of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Brian Dobbins of the Southern District of Florida prosecuted the case.
Former School Police Officer Sentenced for Filing a False Income Tax ReturnRead the Press Release
On February 6, 2019, a former Palm Beach County School Police Officer was sentenced federally for filing a false income tax return.
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), Frank Kitzerow, Chief of Police, Palm Beach County School District, made the announcement.
Ronnie Arnest Williams, 57, of West Palm Beach, Florida, previously pled guilty to filing a false personal income tax return for tax year 2017. As part of his plea, Williams was required to surrender his certificate to be a police officer and resigned as a school police officer. Williams had held certificates to be a corrections officer since 1985 and a police officer since 1994 and had worked in law enforcement for approximately 32 years. Williams was sentenced by U.S. District Judge Robin L. Rosenberg to time served and 12 months of supervised release.
According to the court docket, including information presented to the court at the time Williams entered his guilty plea, the defendant contacted a parent of a child at the school where he was employed as a safety officer, to obtain the names of minor children he could claim as dependents on his pending 2017 personal income tax return. Williams wanted two children’s names and social security numbers to claim as dependents so that his refund for the 2017 tax year would be increased. Law enforcement was notified of Williams desire to defraud the IRS.
In order to facilitate the investigation, Williams, was provided, by the FBI, with false names and social security numbers that he used when filing his return. The IRS received the false tax return that claimed a refund of more than $5,000 greater than that which Williams was entitled and promptly rejected the filing as the social security numbers did not match the ages of the children being claimed. Immediately after the rejection, Williams filed a personal income tax return that did not claim any dependents.
During this tax season, citizens should be aware of the extensive investigative efforts conducted by federal law enforcement agents of the Internal Revenue Service, the FBI and other agencies into the crime of filing false income tax returns.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, IRS-CI and the Palm Beach County School Police Department in this matter. This case was prosecuted by Assistant U.S. Attorney Ellen L. Cohen.
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.
Two South Florida Doctors Arrested on Charges of Unlawfully Dispensing OpioidsRead the Press Release
Two South Florida doctors were arrested on charges related to the unlawful dispensing of opioids.
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, Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG), Miami Regional Office, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, and Ashley B. Moody, Florida Attorney General, made the announcement.
Dr. Victor Hugo Espinosa, 57, of Fort Lauderdale, Florida is charged by criminal complaint with conspiring to unlawfully dispense controlled substances from August 9, 2017 to May 3, 2018. According to the complaint, as the designated physician at East Medical Office Inc., a pain clinic located in Hialeah Florida, Espinosa provided over 1,000 prescriptions for Oxycodone for no legitimate medical purpose in exchange for cash. During his time at East Medical, Espinosa prescribed approximately 119,534 tablets of Oxycodone, which accounted for approximately 99% of all controlled substances he prescribed at East Medical. Many of the patients to whom Espinosa prescribed Oxycodone were brought to East Medical by patient recruiters, who received and then illegally sold all or a portion of the Oxycodone Espinosa prescribed.
Dr. Rodolfo Gonzalez-Garcia, 65, of Weston, Florida, is charged by indictment, along with his wife Arlene Gonzalez, 60, of Weston, Florida, Sucett Lopez, 36, of, Hialeah, Florida, Annie Suarez-Gonzalez, 35, of Westmont, Illinois, and Fidel Marrero-Castellanos, 56, of Miami, Florida. The indictment alleges that between November 2016 and September 2018, Gonzalez-Garcia was the physician provider for West Medical Office, Inc. in Hialeah, Florida. Marrero-Castellanos and others recruited Medicare and Medicaid beneficiaries as patients to West and paid Gonzalez-Garcia, Gonzalez, Lopez and Suarez-Gonzalez, and others, for Oxycodone and OxyContin prescriptions.
Each defendant faces a maximum statutory sentence of 20 years’ imprisonment. The defendants had their initial appearance today in Miami, Florida before U.S. Magistrate Judge Edwin G. Torres. Pre-trial detention hearings have been scheduled, for Dr. Gonzalez-Garcia and Marrero-Castellanos, on February 12, 2019.
An indictment and a criminal complaint are charging instruments containing allegations. Every defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Today’s enforcement actions were coordinated by the U.S. Attorney’s Office for the Southern District of Florida, the Department of Justice’s Criminal Division Fraud Section’s Health Care Fraud Unit, the FBI, HHS, DEA, USSS and Florida Attorney General’s Medicaid Fraud Control Unit. They were initiated as part of the Medicare Fraud Strike Force. The cases are being prosecuted by Assistant U.S. Attorneys Brian J. Shack and Michael Gilfarb.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and the U.S. Department of Health and Human Services (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.
Cuban Citizen Arrested on Charge of Making False Statements on an Application for Lawful Permanent ResidenceRead the Press Release
Indictment allege series of lies, including failure to disclose membership in the Cuban government’s Department of State Security
A Cuban citizen residing in Miami, Florida, was arrested on Feb. 5, by federal agents after being indicted on one count of making false statements in an immigration document.
U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Anthony Salisbury of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office made the announcement.
Saul Santos Ferro, 73, was charged in an indictment alleging that Santos made a number of lies and misrepresentations in his application to register as a permanent resident which he knowingly presented to U.S. immigration authorities, ultimately obtaining lawful permanent resident status. Specifically, the indictment asserts that, when he applied to register as a permanent resident, Santos failed to disclose his membership or affiliation with any organization, falsely stated that he never served in or been a member of a police unit, and falsely stated that he never served in any situation that involved detaining persons. In fact, Santos served as a high-ranking officer in the Cuban government’s Department of State Security or Departamento de Seguridad del Estado (DSE) for decades. Additionally, Santos falsely stated that he never by fraud or willful misrepresentation of a material fact, ever sought to procure, or procured, a visa, other documentation, entry into the United States, or any other immigration benefit.
“Individuals who make false statements in immigration documents expose themselves to the serious threat of federal prosecution,” said U.S. Attorney Fajardo Orshan. “Law enforcement in South Florida will continue to work together to prosecute those individuals who knowingly deceive the authorities about their criminal past or foreign ties, in order to fraudulently obtain immigration benefits.”
“Saul Santos Ferro allegedly lied to immigration authorities about his membership in the Cuban government’s internal security force to obtain lawful permanent residence status,” said Assistant Attorney General Benczkowski. “The Justice Department will continue to aggressively prosecute those who seek to exploit our immigration system through fraud and deceit.”
“The United States has a lawful system of immigration that is necessary for our country to be a prosperous and orderly nation,” said Special Agent in Charge Piro. “When the system is circumvented, the FBI and our law enforcement partners have a duty to investigate in order to protect our citizens from lawbreakers who may be hiding amongst us.”
“The arrest of Saul Santos Ferro should send a clear message that we will not tolerate individuals who purposely deceive the government and violate our immigration laws,” said HSI Special Agent in Charge Salisbury. “HSI is committed to working with our federal law enforcement partners to ensure that these crimes are properly investigated and prosecuted to the fullest extent of the law.”
Santos Ferro had his initial court appearance today before U.S. Magistrate Judge Edwin G. Torres for the Southern District of Florida, who ordered him released to home confinement with GPS monitoring and a $100,000 bond.
The charges contained in the indictment are merely allegations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI and HSI. The case is being jointly prosecuted by Assistant U.S. Attorney Daniel Cervantes of the Southern District of Florida and Trial Attorney Rami S. Badawy of the Criminal Division’s Human Rights and Special Prosecutions 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 at http://pacer.flsd.uscourts.gov.
Charges Filed in Gold Heist CaseRead the Press Release
A third individual has been indicted on charges related to the armed robbery of gold bars.
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.
Pedro Santamaria, 56, is charged by indictment with conspiring to commit a Hobbs Act robbery and with conspiring to use and carry a firearm in furtherance of that robbery. The indictment alleges that Santamaria conspired to commit these crimes with Adalberto Perez and Roberto Cabrera, both of whom previously pled guilty for their involvement in the robbery (Case Nos. 16-Cr-20158-JAL and 16-Cr-20160-KMM).
According to the court records, including the indictment, Santamaria, Perez and Cabrera caused noxious fumes to fill the cabin of the TransValue, Inc. truck that was transporting gold bars to Massachusetts. At gunpoint, two robbers removed and bound the TransValue employees. The robbers then transferred the gold bars to their vehicle and fled.
An indictment contains allegations. Every defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.S. Attorney Fajardo Orshan commended the FBI for their continued assistance in this matter. The case is being prosecuted by Assistant U.S. Attorneys Michael Gilfarb and Alejandra Lopez.
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.
Cuban Citizen Arrested on Charge of Making False Statements on an Application for Lawful Permanent ResidenceRead the Press Release
A Cuban citizen residing in Miami, Florida, was arrested on Feb. 5, by federal agents after being indicted on one count of making false statements in an immigration document.
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 Anthony Salisbury of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office made the announcement.
Saul Santos Ferro, 73, was charged in an indictment alleging that Santos made a number of lies and misrepresentations in his application to register as a permanent resident which he knowingly presented to U.S. immigration authorities, ultimately obtaining lawful permanent resident status. Specifically, the indictment asserts that, when he applied to register as a permanent resident, Santos failed to disclose his membership or affiliation with any organization, falsely stated that he never served in or been a member of a police unit, and falsely stated that he never served in any situation that involved detaining persons. In fact, Santos served as a high-ranking officer in the Cuban government’s Department of State Security or Departamento de Seguridad del Estado (DSE) for decades. Additionally, Santos falsely stated that he never by fraud or willful misrepresentation of a material fact, ever sought to procure, or procured, a visa, other documentation, entry into the United States, or any other immigration benefit.
“Saul Santos Ferro allegedly lied to immigration authorities about his membership in the Cuban government’s internal security force to obtain lawful permanent residence status,” said Assistant Attorney General Benczkowski. “The Justice Department will continue to aggressively prosecute those who seek to exploit our immigration system through fraud and deceit.”
“Individuals who make false statements in immigration documents expose themselves to the serious threat of federal prosecution,” said U.S. Attorney Fajardo Orshan. “Law enforcement in South Florida will continue to work together to prosecute those individuals who knowingly deceive the authorities about their criminal past or foreign ties, in order to fraudulently obtain immigration benefits.”
“The United States has a lawful system of immigration that is necessary for our country to be a prosperous and orderly nation,” said Special Agent in Charge Piro. “When the system is circumvented, the FBI and our law enforcement partners have a duty to investigate in order to protect our citizens from lawbreakers who may be hiding amongst us.”
“The arrest of Saul Santos Ferro should send a clear message that we will not tolerate individuals who purposely deceive the government and violate our immigration laws,” said HSI Special Agent in Charge Salisbury. “HSI is committed to working with our federal law enforcement partners to ensure that these crimes are properly investigated and prosecuted to the fullest extent of the law.”
Santos Ferro had his initial court appearance today before U.S. Magistrate Judge Edwin G. Torres for the Southern District of Florida, who ordered him released to home confinement with GPS monitoring and a $100,000 bond.
The charges contained in the indictment are merely allegations and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the FBI and HSI. The case is being jointly prosecuted by Trial Attorney Rami S. Badawy of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Daniel Cervantes of the Southern District of Florida.
South Florida Resident Convicted of $100 Million International Fraud Scheme that Led to Collapse of One of Puerto Rico’s Largest BanksRead the Press Release
A Key Biscayne, Florida resident was found guilty yesterday by a federal jury for his role in a $100 million scheme to defraud Westernbank of Puerto Rico (Westernbank); the losses triggered a series of events leading to Westernbank’s insolvency and ultimate collapse. The defendant was also convicted of a $3 million scheme to defraud Mellon United National Bank of Miami (Mellon Bank).
U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Special Agent in Charge Michael J. De Palma of IRS Criminal Investigation (IRS-CI) for Miami and Puerto Rico, Special Agent in Charge Iván J. Arvelo of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in San Juan and Special Agent in Charge Douglas A. Leff of the FBI’s San Juan, Puerto Rico Field Office made the announcement.
Jack Kachkar, 55, was convicted of eight counts of wire fraud affecting a financial institution after a three-week trial before U.S. District Judge Donald L. Graham of the Southern District of Florida. Kachkar is scheduled to be sentenced by Judge Graham on April 30, 2019.
“Jack Kachkar’s fraud caused substantial harm to the 1,500 employees of Westernbank and the people of Puerto Rico,” said U.S. Attorney Fajardo Orshan. “The U.S. Attorney’s Office remains committed to the prosecution of those individuals and corporations that use Miami and other South Florida communities as their base to operate multinational fraud schemes.”
“Jack Kachkar engineered a massive fraud scheme that led directly to the failure of a major Puerto Rican bank with more than 1,500 employees,” said Assistant Attorney General Benczkowski. “I want to commend the prosecutors and our law enforcement partners for their tireless work investigating this complex case and holding the defendant to account for these crimes.”
“Today’s verdict holds the defendant accountable for orchestrating fraudulent schemes that resulted in more than $100 million in losses to insured institutions and the FDIC as receiver,” said Inspector General Lerner. “The FDIC Office of Inspector General remains committed to investigate cases of deception and swindles that undermine the integrity of financial institutions, and we will continue to work with our law enforcement partners to bring to justice those who commit such offenses.”
“IRS Criminal Investigation will always pursue investigations like this where Mr. Kachkar, for his own personal benefit, orchestrated such a large scheme at the expense of one of Puerto Rico’s largest banks and its 1,500 employees,” said IRS-CI Special Agent in Charge De Palma. “This investigation shows that the appearance of success can be a mask for a tangled financial web of lies, and we are proud to be part of the prosecution team that is bringing Mr. Kachkar to justice.”
“HSI San Juan will continue working with our local, state and federal partners to investigate and prosecute these types of cases as well as those involving violations to the more than 400 federal statutes that we investigate, “ said HSI Special Agent in Charge Arvelo. “This man was responsible for one of the largest fraud schemes ever recorded in the banking business in Puerto Rico and he will pay the consequences.”
“This defendant’s greed was powerful enough to destroy a bank, taking with it the jobs of approximately 1,500 hard working citizens of Puerto Rico,” said FBI Special Agent in Charge Leff. “The FBI thanks the US Attorney’s Office for sending an equally strong message that most fraud schemes will eventually lead to a prison cell.”
According to evidence presented at trial, from 2005 to 2007, Kachkar served as chairman and CEO of Inyx Inc., a publicly traded multinational pharmaceutical manufacturing company. Beginning in early 2005, Kachkar caused Westernbank to enter into a series of loan agreements in exchange for a security interest in the assets of Inyx and its subsidiaries. Under the loan agreements, Westernbank agreed to advance money based on Inyx’s customer invoices from “actual and bona fide” sales to Inyx customers, the evidence showed.
The trial evidence showed that Kachkar orchestrated a scheme to defraud Westernbank by causing numerous Inyx employees to make tens of millions of dollars worth of fake customer invoices purportedly payable by customers in the United Kingdom, Sweden and elsewhere. Kachkar caused these invoices to be presented to Westernbank as valid invoices. Kachkar made false and fraudulent representations to Westernbank executives about purported and imminent repayments from lenders in the United Kingdom, Norway, Libya and elsewhere in order to lull Westernbank into continuing to lend money to Inyx, the evidence showed. In fact, these lenders had not agreed to repay Westernbank’s loan. Kachkar made false and fraudulent representations to Westernbank executives that he had additional collateral, including purported mines in Mexico and Canada worth hundreds of millions of dollars, to induce Westernbank to lend additional funds, the evidence showed. In fact, this additional collateral was worth barely a fraction of that represented by Kachkar.
During the course of the scheme, Kachkar caused Westernbank to lend approximately $142 million, primarily based on false and fraudulent customer invoices. The evidence showed that the defendant diverted tens of millions of dollars for his own personal benefit, including for the purchase of, among other things, a private jet, luxury homes in Key Biscayne and Brickell, Miami, luxury cars, luxury hotel stays, and extravagant jewelry and clothing expenditures.
In or around June 2007, Westernbank declared the loan in default and ultimately suffered losses exceeding $100 million on the Inyx loans. According to trial evidence, these losses later triggered a series of events leading to Westernbank’s insolvency and ultimate collapse. At the time of its collapse, Westernbank had approximately 1,500 employees and was one of the largest banks in Puerto Rico.
In addition, the evidence showed, Kachkar knowingly deposited a $3 million check at Mellon Bank from the purported sale of his private jet. At the time of its deposit, based on the evidence presented, Kachkar knew that the check was worthless. In fact, the defendant agreed to sell his plane to a different buyer. After receiving a provisional credit for the check from Mellon Bank, the defendant wired out all of the provisional credit, including a $1 million wire to Kachkar’s personal account in Canada. Upon Mellon Bank’s request to reverse this $1 million wire, Kachkar refused to do so, resulting in at least a $1 million loss to Mellon Bank, the evidence showed.
This matter was investigated by the FDIC-OIG, IRS-CI, HSI and FBI. The Department of Justice’s Office of International Affairs provided significant support in the investigation. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger of the Southern District of Florida and Trial Attorney Michael O’Neill of the Criminal Division’s Fraud 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 at http://pacer.flsd.uscourts.gov.
South Florida Pain Management Doctor Convicted of 11 Counts of Illegally Dispensing Opioid DrugsRead the Press Release
Dr. Jeanne E. Germeil, 55, of Aventura, Florida was convicted by a federal jury, on January 31, 2019, of eleven counts of dispensing controlled substances, opioid pain medications, without a legitimate medical purpose.
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida and Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration (DEA), Miami Field Division made the announcement.
“Physicians, such as Dr. Jeanne Germeil, who dispense pain medications without a legitimate medical purpose fuel the opioid epidemic,” stated U.S. Attorney Fajardo Orshan. “The U.S. Attorney’s Office and our law enforcement partners will continue to prosecute those medical professionals who seek to profit off of a public health crisis.”
“Dr. Germeil’s conviction clearly illustrates the consequences of what could happen when medical professionals misuse their authority and dispense narcotics illegally,” said DEA Special Agent in Charge Adolphus P. Wright. “The DEA remains committed to working with our law enforcement partners to rid our communities of these rogue medical professionals who have violated the trust of many.”
According to evidence admitted at trial, Dr. Germeil ran Germeil Medical, Inc., a family medicine and pain management clinic, in North Miami Beach, Florida. Beginning in or around March 2016 and continuing through November 2017, Dr. Germeil prescribed controlled opioid pain medication to patients. The true and intended purpose of the consultations was to improperly issue prescriptions to patients for opioids, such as Hydromorphone, Oxycodone, and Oxycodone-Acetaminophen, in exchange for cash, cash co-pays, and other payments. Pursuant to Dr. Germeil’s instructions, office staff were required to obtain an MRI from patients to create a façade of legitimacy before an office consult. After passing the gate-keeping function, Dr. Germeil prescribed opioids at levels consistent with treating end of life, cancer, and terminally ill patients and maintained those prescription levels throughout the duration of the patient visits.
Between February 1, 2016 and September 26, 2017, Dr. Germeil wrote 13,759 prescriptions to patients for 1,458,727 units of Hydromorphone, Oxycodone, and/or Oxycodone-Acetaminophen. Dr. Germeil was not providing a medically meaningful consultation but was in fact acting outside the scope of her professional practice and without legitimate medical purpose.
Dr. Germeil is scheduled to be sentenced by U.S. District Judge Ursula M. Ungaro on April 9, at 2:00 p.m. in Miami.
U.S. Attorney Fajardo Orshan commended the investigation conducted by the DEA and the Aventura Police Department, City of Miami Police Department, Miami-Dade Police Department, Miami Gardens Police Department, North Miami Beach Department and Florida Department of Health’s Prescription Drug Monitoring Program, E-FORCSE. This case is being prosecuted by Assistant U.S. Attorneys Andy R. Camacho and Kurt Lunkenheimer of 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 at http://pacer.flsd.uscourts.gov.
Chinese National Sentenced to Prison for Illegal Photography of U.S. Naval Installation in Key West, FloridaRead the Press Release
A People’s Republic of China (PRC) foreign national was sentenced to prison today for illegal photography of the U.S. Naval Air Station Key West, Joint Interagency Task Force, South (JIATF-South).
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.
Zhao Qianli, 21, of Shanxi, PRC was sentenced today to the statutory maximum term of 12 months in prison, to be followed by 1 year of supervised release, by Chief U.S. District Judge K. Michael Moore, after previously pleading guilty to one count of photographing defense installations (Case No. 18-10035-CR).
According to the court record, in September 2018, Zhao Qianli was apprehended after illegally entering JIATF-South. At the time of his arrest, Zhao Qianli was observed taking photographs of JIATF-South and associated military hardware. A search warrant of Zhao Qianli’s cellular telephone and digital camera revealed multiple photographs and video footage of the Key West military installation.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and the South Florida Joint Terrorism Task Force (JTTF). The case was prosecuted by Assistant U.S. Attorney Michael R. 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
St. Lucie County Resident Sentenced for Falsely Claiming Veteran Status and Theft of Government BenefitsRead the Press Release
A St. Lucie County resident was sentenced in federal court, on January 28, 2019, for falsely claiming to be a veteran of the U.S. Armed Forces, in order to apply for employment and obtain free medical services.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, David Spilker, Special Agent in Charge, U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division (VAOIG CID), Southeast Field Office, and John A. Bolduc, Chief, Port St. Lucie Police Department, made the announcement.
On November 9, 2018, Edward Louis Liroff, 47, of St. Lucie County, pled guilty to theft of government property and making false claims of military accomplishments (Case No. 18-14049-CR). U.S. District Judge Robin L. Rosenberg sentenced Liroff to four years’ probation and ordered him to pay over $4,000 in restitution.
According to the court record, including an agreed upon factual proffer, in March of 2018, Liroff submitted two job applications with the city of Port St. Lucie, claiming to be a decorated military combat veteran, in order to obtain veteran’s preference in hiring. As proof of his veteran’s status, Liroff presented a fraudulent and forged DD Form 214 “Certificate of Release and Discharge From Active Duty,” which is the document the U.S. Department of Defense issues upon a military service member's retirement, separation, or discharge from active duty in the U.S. Armed Forces. Liroff supplemented his application with a resume, claiming to be a highly decorated retired U.S. Army Ranger, Combat Medic and Recruiter, holding a top-secret security clearance.
In addition, in January of 2013, Liroff used the same fraudulent DD Form 214 and claimed, to the U.S. Department of Veteran Affairs, that he was awarded numerous Army medals, including two Purple Hearts, the Silver Star, the Bronze Star, Legion of Merit, and an Air Medal for Valor. As a result of his false representation of being a Purple Heart recipient, Liroff received free health care benefits from the VA, in excess of $4,000, including prescriptions, outpatient and inpatient services. A Purple Heart recipient receives medical treatment priority, and is never responsible for a copay for medical treatment.
In truth and fact, Liroff never served in the U.S. military.
U.S. Attorney Fajardo Orshan commended the investigatory efforts of the VAOIG-CID and the Port St. Lucie Police Department in this matter. This case was prosecuted by Assistant U.S. Attorney Carmen Lineberger.
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.
Miami Resident Sentenced to 13 Years in Prison for Robbing Miami Shores TD Bank Branch at Gunpoint and Discharging the Firearm During the RobberyRead the Press Release
A Miami resident was sentenced today to a total of thirteen years in federal prison for robbing a Miami Shores TD Bank Branch at gunpoint and discharging the firearm during the course of the robbery.
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) made the announcement.
Following a one-week jury trial, on September 21, 2018, Joudanorve Lafleur, 24, of Miami, Florida, was convicted of armed bank robbery, and brandishing and discharging a firearm in furtherance of the armed robbery. U.S. District Judge Jose E. Martinez sentenced Lafleur to a total of 161 months in prison, to be followed by 5 years of supervised release and was ordered to pay $3,000 in restitution.
According to the evidence presented at trial, at approximately 9:20 a.m. on April 20, 2018, Lafleur, wearing a black ski mask, black hoodie, and pants, robbed two bank tellers and one bank customer at gunpoint. After demanding “all of the hundreds” from his victims repeatedly, Lafleur fired a bullet into the ceiling of the bank. Then, he fled, with more than $2,000.
The FBI tracked Lafleur to his residence within an hour of the robbery, and after a search of Lafleur’s home, investigators recovered Lafleur’s disguise (mask and hoodie); the stolen money; and the firearm used in the robbery, among other items. Evidence at trial also showed that Lafleur robbed one of his elderly neighbors, stealing his clothes in the minutes before law enforcement arrived, in an attempt to distance himself from the crime and change his appearance. The evidence against Lafleur presented at trial included witness testimony, bank surveillance video, DNA expert testimony, cellular telephone analysis, and other evidence. The jury found Lafleur guilty of all counts of the Indictment.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI. This case was prosecuted by Assistant U.S. Attorneys Lisa H. Miller and Jessica K. Obenauf.
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.
Lantana Resident Sentenced to More Than 21 Years in Prison for Distributing Heroin and Fentanyl and Possessing a Firearm in Furtherance of Drug TraffickingRead the Press Release
A Lantana resident was sentenced yesterday to more twenty-one years in prison for distributing heroin and fentanyl and possessing a firearm in furtherance of drug trafficking.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Sean Scheller, Chief, Lantana Police Department, and Dave Aronberg, State Attorney, Palm Beach County State Attorney made the announcement.
Kerry Maurice McCray, 41, of Palm Beach County, was sentenced by U.S. District Judge Robin L. Rosenberg to a total of 262 months in prison, to be followed by 5 years of supervised release, after previously pleading guilty to two counts of possession with intent to distribute heroin and fentanyl, and one count of knowingly possessing a firearm in furtherance of drug trafficking (Case No. 18-80159-CR).
Following a number of undercover purchases of heroin from McCray, law enforcement obtained search warrants for his vehicles, cell phones, and motel room. As officers approached McCray’s motel room he fled, tossing items from his person and refusing to obey their lawful orders to stop. He was eventually apprehended and taken into custody. Several pieces of crack cocaine were discovered around McCray’s person, along with three cell phones. Additionally, officers found a baggie containing heroin and fentanyl that had fallen from McCray, when he was fleeing the police. The search of McCray’s motel room revealed additional pre-packaged heroin, marijuana, a scale, a cutting agent, a Ruger 9mm handgun and two magazines containing ammunition.
Based upon an analysis of telephone records and two victim reports, McCray was connected to eight non-fatal overdoses of narcotics.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the DEA and Lantana Police Department. She thanked the Palm Beach County State Attorney’s Office for their assistance in this matter. This case was prosecuted by Assistant U.S. Attorney Jennifer C. Nucci and Special Assistant U.S. Attorney John Parnofiello.
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.
Fort Pierce Resident Sentenced to Prison for ISIS Related ThreatsRead the Press Release
A Fort Pierce resident was sentenced to prison yesterday for making ISIS related threats.
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.
Charlton Edward LaChase, 28, of Fort Pierce, Florida, was sentenced yesterday to 18 months in prison, to be followed by three years of supervised release, by U.S. District Judge Robin Rosenberg, after previously pleading guilty to two counts of transmitting threats through interstate or foreign commerce (Case No. 18-24011-CR).
According to the court record, LaChase sent text messages professing his support for ISIS and threatening to kill several people while committing acts of terrorism and mass murder. A search warrant for LaChase’s Facebook account revealed several attempts by LaChase to purchase firearms, as well as threats to commit mass murder, threats to kill politicians, and statements of support for ISIS.
LaChase received an enhancement at sentencing for obstruction of justice because he disposed of the cellphone he used to send the text messages, shortly after becoming aware that he was under investigation by the FBI.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and the South Florida Joint Terrorism Task Force (JTTF). The case was prosecuted by Assistant United States Attorneys Rolando Garcia and Michael Porter.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Five Miami Residents Sentenced to Prison for Tax Fraud SchemeRead the Press Release
Five residents of Miami were sentenced to federal prison for their participation in a tax fraud scheme.
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.
Jamal Dyer, 32, of Miami, was sentenced to 28 months in prison, to be followed by 3 years of supervised release. Jorge Alfonso Osorio Rodriguez, 35, of Miami, was sentenced to 28 months in prison, to be followed by 3 years of supervised release. Tramaine Das Sealy, 34, of Miami, was sentenced to 14 months in prison, to be followed by 3 years of supervised release. Jonathan Charles Edwards, 33, of Miami, was sentenced to 12 months in prison, to be followed by 3 years of supervised release. The final defendant, Daniel Alvaro Murias, 28, of Miami, was sentenced today to 14 months in prison, to be followed by one year of supervised release. Dyer, Osorio, Das Sealy, and Edwards previously pled guilty to one count of conspiracy to aid and assist the preparation of false tax returns, in violation of Title 18, United States Code, Section 371, and Murias previously pled guilty to one count of aiding and assisting the preparation of a false tax return, in violation of Title 26, United States Code, Section 7206(2) (Case No. 18-20581-CR-SCOLA).
According to the court docket, including the agreed upon factual proffer, from February of 2015 through May of 2017, the defendants operated a tax preparation business called “The Tax Firm Miami” in Miami, Florida. While operating out of The Tax Firm Miami, all five defendants knowingly and willfully submitted thousands of false statements and claims on their clients’ tax returns, including false claims to the Education Credit, the American Opportunity Credit, and the Residential Energy Credit, resulting in a greater tax refund being paid from the IRS to their clients, or a lesser tax liability owed by their clients to the IRS. Collectively, through the submission of tax returns claiming these false credits, the defendants stole more than $12 million on behalf of themselves and their clients.
U.S. Attorney Fajardo Orshan commended the investigative efforts of IRS-CI in this matter. Assistant U.S. Attorney Daniel J. Marcet prosecuted this case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
Miami-Dade County Resident Sentenced to Twenty-Five Years in Prison for Cocaine TraffickingRead the Press Release
Eugene Hilton Russell, 51, of Miami-Dade County, was sentenced today by U.S. District Judge to Jose E. Martinez to 300 months in prison for trafficking in cocaine.
Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, Diane J. Sabatino, Director, Field Operations, U.S. Customs and Border Protection (CBP), Miami Field Office, U.S. Coast Guard (USCG), 7th District, and Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office made the announcement.
On November 28, 2018, Russell was convicted by a trial jury of importation, and possession with the intent to distribute, five kilograms or more of cocaine (Case No. 18-20518-CR). The sentence imposed for the cocaine trafficking offenses of conviction will run consecutively to a 37-month term of imprisonment imposed by U.S. District Judge Patricia A. Seitz for the defendant’s violation of supervised release (Case No. 07-20338-CR).
The evidence presented at trial showed that, on the morning of June 2, 2018, Russell travelled from Miami to Bahamian waters, just off the coast of Bimini. There he met up with another boat for refueling. When he left the area, the defendant had a cooler in the back of the boat. Inside the cooler, there were a load of fish, some bottled water, and some Gatorade. There was one fishing pole on the boat, but it was unrigged and had no hook. All that was designed to cover up the 12 bricks of cocaine hidden in the walls of the cooler.
When Russell’s boat entered U.S. territorial waters, CBP attempted an interception. As the CBP marine boats approached, the defendant abruptly changed course and sped away. The CBP boats gave chase. They soon caught up with Russell and were able to stop his boat. Upon inspection of Russell’s boat, CBP agents discovered the concealed cocaine (with an approximate street value of over $300,000 U.S. dollars).
U.S. Attorney Fajardo Orshan commended the investigatory efforts of the ICE-HSI, CBP, USCG, and DEA in this matter. She thanked the Miami-Dade Police Department for their assistance. This case was prosecuted by Assistant U.S. Attorneys Arimentha Walkins and Brooke Watson.
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.
Florida Keys Return Preparer Pleads Guilty to Filing Fraudulent Tax ReturnsRead the Press Release
On January 17, 2019, a Monroe County, Florida tax return preparer pleaded guilty to two counts of filing fraudulent tax returns with the Internal Revenue Service.
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 Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI) 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 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. Rodriguez’s submission of false tax returns caused multi-million dollar losses to the IRS. A final calculation of the loss amount will be made at sentencing.
Sentencing is scheduled for April 1, 2019 at 9:00 a.m. before Chief Judge K. Michael Moore, in Key West (Case No. 18-10024-CR). Rodriguez faces a statutory maximum sentence of three years in prison on each false return count. The defendant also faces a period of supervised release, restitution and monetary penalties.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI and IRS-CI in this matter. Assistant U.S. Attorney Daniel J. Marcet is prosecuting the 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.
Fifth Defendant Sentenced to Prison for Sophisticated International Cellphone Fraud SchemeRead the Press Release
A former West Palm Beach, Florida resident who was extradited to the United States from the Dominican Republic was sentenced to 65 months in prison today for multiple criminal charges in connection with a sophisticated global cell phone fraud scheme that involved compromising cellphone customers’ accounts and “cloning” their phones to make fraudulent international calls.
U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
Braulio De la Cruz Vasquez, 54, pleaded guilty earlier to one count of conspiracy to commit wire fraud, access device fraud, the use, production or possession of modified telecommunications instruments, and the use or possession of hardware or software configured to obtain telecommunications services. De la Cruz also pleaded guilty to one count of wire fraud and one count of aggravated identity theft. He was sentenced by U.S. District Judge Beth Bloom of the Southern District of Florida.
According to the plea agreement, De le Cruz and his co-conspirators participated in a scheme to steal access to existing cell phone accounts, and fraudulently open new cellphone accounts, using the personal information of individuals around the United States.
De la Cruz admitted that his role in the scheme included operating a “call site” from his residence in West Palm Beach. He admitted that he would receive telecommunication identifying information associated with customers’ accounts from his co-conspirators and use that data, as well as other software and hardware, to reprogram cellphones that he controlled. According to the plea agreement, De la Cruz’s co-conspirators would then transmit thousands of international calls over the internet to De la Cruz’s residence, where he would route them through the re-programmed cellphones to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates. The calls were billed to the customers’ compromised accounts.
In addition, De la Cruz admitted that from March 2011 through April 2013, co‑conspirators sent him more than 700 emails containing approximately 2,158 telecommunications identifying numbers associated with cellphone account holders around the United States. He also admitted that, as part of the conspiracy, he received tens of thousands of dollars from at least one Voice over Internet Protocol (VoIP) company for fraudulently routing international calls through his call center.
De la Cruz is a citizen of the Dominican Republic. He was arrested in the Dominican Republic at the request of the United States and then, in August 2018, extradited to Miami, where he is currently in custody.
De la Cruz is the fifth defendant to be sentenced in the case. Previously, defendants Edwin Fana, Farintong Calderon, Jose Santana, and Ramon Batista pleaded guilty to similar charges and have already been sentenced to prison terms ranging from 36 months to 75 months.
The FBI investigated the case, dubbed Operation Toll Free, which is part of the FBI’s ongoing effort to combat large-scale telecommunications fraud. The Criminal Division’s Office of International Affairs handled the extradition in this matter. Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida and Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.
Fifth Defendant Sentenced to Prison for Sophisticated International Cellphone Fraud SchemeRead the Press Release
A former West Palm Beach, Florida resident who was extradited to the United States from the Dominican Republic was sentenced to 65 months in prison today for multiple criminal charges in connection with a sophisticated global cell phone fraud scheme that involved compromising cellphone customers’ accounts and “cloning” their phones to make fraudulent international calls.
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 Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
Braulio De la Cruz Vasquez, 54, pleaded guilty earlier to one count of conspiracy to commit wire fraud, access device fraud, the use, production or possession of modified telecommunications instruments, and the use or possession of hardware or software configured to obtain telecommunications services. De la Cruz also pleaded guilty to one count of wire fraud and one count of aggravated identity theft. He was sentenced by U.S. District Judge Beth Bloom of the Southern District of Florida.
According to the plea agreement, De le Cruz and his co-conspirators participated in a scheme to steal access to existing cell phone accounts, and fraudulently open new cellphone accounts, using the personal information of individuals around the United States.
De la Cruz admitted that his role in the scheme included operating a “call site” from his residence in West Palm Beach. He admitted that he would receive telecommunication identifying information associated with customers’ accounts from his co-conspirators and use that data, as well as other software and hardware, to reprogram cellphones that he controlled. According to the plea agreement, De la Cruz’s co-conspirators would then transmit thousands of international calls over the internet to De la Cruz’s residence, where he would route them through the re-programmed cellphones to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates. The calls were billed to the customers’ compromised accounts.
In addition, De la Cruz admitted that from March 2011 through April 2013, co‑conspirators sent him more than 700 emails containing approximately 2,158 telecommunications identifying numbers associated with cellphone account holders around the United States. He also admitted that, as part of the conspiracy, he received tens of thousands of dollars from at least one Voice over Internet Protocol (VoIP) company for fraudulently routing international calls through his call center.
De la Cruz is a citizen of the Dominican Republic. He was arrested in the Dominican Republic at the request of the United States and then, in August 2018, extradited to Miami, where he is currently in custody.
De la Cruz is the fifth defendant to be sentenced in the case. Previously, defendants Edwin Fana, Farintong Calderon, Jose Santana, and Ramon Batista pleaded guilty to similar charges and have already been sentenced to prison terms ranging from 36 months to 75 months.
The FBI investigated the case, dubbed Operation Toll Free, which is part of the FBI’s ongoing effort to combat large-scale telecommunications fraud. The Criminal Division’s Office of International Affairs handled the extradition in this matter. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida are prosecuting the case.
Federal Jury Convicts South Florida Resident of Participating in Heroin Trafficking ConspiracyRead the Press Release
A West Palm Beach resident was convicted by a federal jury today of participating in a heroin trafficking conspiracy.
Ariana Fajardo Orshan, U.S. Attorney of the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, and Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office (PBSO) made the announcement.
Balmy Lincoln Joseph, 24, of West Palm Beach, was convicted of conspiracy to distribute one kilogram or more of a mixture and substance containing a detectable amount of heroin, possession with intent to distribute one kilogram or more of a mixture and substance containing a detectable amount of heroin, possession with intent to distribute a mixture and substance containing fentanyl, and possession with intent to distribute a mixture and substance containing heroin (Case No. 18-CR-80153). Joseph is scheduled to be sentenced by U.S. District Judge William P. Dimitrouleas on March 21, 2019 at 1:15 p.m. in Fort Lauderdale.
According to the court records, including evidence introduced at trial, on July 18, 2018, a search warrant was executed by PBSO personnel at Joseph’s residence in West Palm Beach. The investigation revealed that Joseph had rented his apartment using a stolen identity. During the course of the search, law enforcement discovered 14 grams of fentanyl and 59 grams of heroin in the pockets of a jacket hanging in Joseph’s closet. In Joseph’s bathroom, officers discovered empty capsules, a cutting agent, and a scale associated with heroin trafficking. Joseph shared the residence with his co-defendant, Delson Marc. In Marc’s room, which was open and accessible to Joseph, law enforcement found a garage door clicker and keys that opened a locked garage freezer. Law enforcement executed a second search warrant in the detached garage and found 7.1 kilograms of heroin in the freezer, with an estimated street value of 1.4 million dollars. Ketamine and fentanyl were also found in the freezer.
Marc previously pled guilty to participating in the conspiracy and is scheduled to be sentenced on January 15, 2019 by Judge Dimitrouleas.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the DEA and PBSO in this matter. This case is being prosecuted by Assistant U.S. Attorney Rinku Tribuiani and Special Assistant U.S. Attorney John Parnofiello.
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.
Colombia’s Former National Director of Anti-Corruption and a Foreign Attorney Sentenced to Prison for Participating in a Conspiracy to Launder Money in Order to Promote Foreign BriberyRead the Press Release
The former National Director of Anti-Corruption in Colombia and a foreign attorney were sentenced to prison today in federal court in Miami for their participation in a conspiracy to launder money with the intent to promote foreign bribery.
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida and Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration’s (DEA) Miami Field Division made the announcement.
Luis Gustavo Moreno Rivera, 37, the former National Director of Anti-Corruption in Colombia and Leonardo Luis Pinilla Gomez, 32, an attorney practicing in Colombia, each previously pled guilty to conspiracy to launder money in order to promote foreign bribery. U.S. District Judge Ursula Ungaro sentenced Moreno to 48 months and Pinilla to 24 months.
According to the court docket, including the agreed upon factual proffers, beginning in November 2016, in Colombia, a cooperating source of information (CS) was approached by Moreno and Pinilla who attempted to entice a bribe from the CS. Specifically, in exchange for 100 million Colombian pesos (the equivalent of approximately $34,500 US), Moreno and Pinilla offered to give the CS copies of sworn statements taken from cooperators who had testified against the CS. In June 2017, Moreno and Pinilla traveled to Miami, Florida and met with the CS who, under the direction of the DEA, provided Moreno and Pinilla with a $10,000 deposit of the bribe money. Recorded conversations revealed that Moreno and Pinilla discussed Moreno’s ability to control the investigation into the CS and that Moreno could inundate his prosecutors with work so that they would be unable to focus on the CS’s investigation. In exchange, Moreno and Pinilla were asking for a 400 million Colombian peso payment (the equivalent of approximately $132,000 US), with an additional $30,000 to be paid prior to Moreno leaving the United States.
Several of the $100 bills, from the $10,000 paid to Moreno and Pinilla, were found on Moreno and his traveling companion as they boarded their flight back to Bogota, Colombia from Miami. Both Moreno and Pinilla were arrested in Colombia pursuant to an Interpol Red Notice.
This investigation and prosecution was carried out by members of the South Florida High Intensity Drug Trafficking Area (HIDTA) Task Force. The South Florida HIDTA, established in 1990, is made up of federal, state and local law enforcement agencies who, cooperatively, target the region’s drug-trafficking and money laundering organizations. The South Florida HIDTA is funded by the Office of National Drug Control Policy, which sponsors a variety of initiatives focused on the nation’s illicit drug trafficking threats.
U.S. Attorney Fajardo Orshan commends the DEA for their investigative assistance with this case. She also thanked the Criminal Division’s Office of International Affairs and Office of Judicial Attache in Colombia along with the DEA Bogota Country Office; the Internal Revenue Service, Criminal Investigations (IRS-CI), Miami Field Office and Attache Office in Colombia; U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Miami Field Office and Attache Office in Colombia; U.S. Customs and Border Protection, Miami Office of Field Operations; and Federal Bureau of Investigation (FBI), Legal Attache Office in Colombia, for their assistance in this matter. Assistant U.S. Attorneys Juan Antonio Gonzalez and Lynn M. Kirkpatrick of the International Narcotics and Money Laundering Section in the Southern District of Florida prosecuted the case.
The U.S. Attorney’s Office and our federal partners commend the Attorney General of Colombia and the Cuerpo Tecnico de Investigacion (CTI) for their cooperative efforts in this investigation.
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.