Southern District of Florida

A former Miami-Dade County resident was sentenced by U.S. District Court Judge Cecilia M. Altonaga to 97 months in prison, to be followed by five years of supervised release, and was ordered to pay $722,000 in restitution for his roles in bank fraud and money laundering schemes.

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Katherine Fernandez Rundle, Miami-Dade State Attorney, Miami-Dade State Attorney’s Office, Juan J. Perez, Director, Miami-Dade Police Department (MDPD), and Adolphus P. Wright, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division made the announcement.

Jose Orlando Sanchez Cristancho, a/k/a Orlando Sanchez, 57, a citizen of Colombia who formerly resided in Miami-Dade County, previously pled guilty to one count of conspiracy to commit wire and bank fraud, in violation of Title 18, United States Code, Section 1349, and one count of conspiracy to launder money, in violation of Title 18, United States Code, Section 1956(h).

According to court documents, from 2003 through 2011, Sanchez agreed with other co-defendants to purchase condominium apartments and other real estate in South Florida. Their intention was to obtain mortgage loans on the properties through schemes that would enable them to profit from the loans, or the sales of the property, without having to re-pay the loans.

One of the schemes included recruiting a straw buyer to purchase property (at an inflated price) that Sanchez already owned. Sanchez arranged for the straw buyer to submit a loan application to a bank which he knew was entirely false. Sanchez knew the bank, insured by the FDIC, would rely on it in extending the loan. Sanchez went forward with the sale, and signed a HUD-I form used at the closing which he knew contained false statements about the finances of the purchase. When the purchase closed, Sanchez netted more than $400,000 from the transaction, which he obtained from the loan proceeds the buyer had obtained through the fraudulent application. The straw buyer defaulted on the loan obtained at Sanchez's direction, but Sanchez was able to keep the money the straw buyer had paid him from the loan proceeds. When the property was eventually sold in a short sale, the bank had a loss of $404,000.

In a different scheme, Sanchez applied for a mortgage loan from an FDIC-insured financial institution for the purpose of buying an apartment in Aventura, Florida. He submitted a loan application and then a HUD-I closing form with false statements. Approximately 1 ½ years after the purchase, Sanchez stopped making payments on the loan and the bank began foreclosure proceedings. The property was subsequently sold in a short sale for a loss to the bank of approximately $106,000.

The frauds perpetrated by Sanchez and his co-conspirators resulted in Sanchez receiving in in excess of $1 million from FDIC-insured financial institutions. Losses to those institutions totaled approximately $722,000.

During a prior  time period, Sanchez had acquired substantial real estate and money in Colombia from the trafficking of cocaine. Sanchez transferred approximately $1.3 million in drug-derived assets to the United States that he used for numerous real estate purchases and for living expenses. Sanchez laundered his drug proceeds by moving them through numerous bank accounts belonging to co-conspirators and accomplices, and by buying property through shell corporations, in order to disguise the nature and source of his money.

Co-defendants Andrea Marroquin and Luis Fernando Reyes were arrested in Colombia and are in the process of being extradited to the United States. Co-defendant Sergio Hernan Perdomo Lievano remains a fugitive.  An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

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 members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.

Mrs. Fajardo Orshan commended the investigative efforts of IRS-CI, the Miami-Dade State Attorney’s Office, MDPD, and DEA.  This case was prosecuted by Assistant U.S. Attorney Frank H. Tamen.

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.

WASHINGTON – Health Management Associates, LLC (HMA), formerly a U.S. hospital chain headquartered in Naples, Florida, will pay over $260 million to resolve criminal charges and civil claims relating to a scheme to defraud the United States.  The government alleged that HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services, paid remuneration to physicians in return for patient referrals, and submitted inflated claims for emergency department facility fees. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Assistant Attorney General Joseph H. Hunt of the Justice Department’s Civil Division, U.S. Attorney Maria Chapa Lopez for the Middle District of Florida, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, U.S. Attorney Charles E. Peeler for the Middle District of Georgia, U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania, U.S. Attorney Sherri Lydon for the District of South Carolina, Assistant Director Robert Johnson of FBI’s Criminal Investigative Division, and Acting Assistant Inspector General for Investigations Derrick L. Jackson for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

HMA was acquired by Community Health Systems Inc. (CHS), a major U.S. hospital chain, in January 2014, after the alleged conduct at HMA occurred.  Since July 2014, HMA has been operating under a Corporate Integrity Agreement (CIA) between CHS and the HHS-OIG.

As part of the criminal resolution, HMA entered into a three-year Non-Prosecution Agreement (NPA) with the Criminal Division’s Fraud Section in connection with a corporate-driven scheme to defraud Federal health care programs by unlawfully pressuring and inducing physicians serving HMA hospitals to increase the number of emergency department patient admissions without regard to whether the admissions were medically necessary.  The scheme involved HMA hospitals billing and obtaining reimbursement for higher-paying inpatient hospital care, as opposed to observation or outpatient care, from Federal health care programs, increasing HMA’s revenue.  Under the terms of the NPA, HMA will pay a $35 million monetary penalty.  Under the terms of the NPA, HMA and CHS, the current parent company, agreed to cooperate with the investigation, report allegations or evidence of violations of Federal health care offenses, and ensure that their compliance and ethics program satisfies the requirements of an amended and extended CIA between CHS and HHS-OIG.

In addition, an HMA subsidiary, Carlisle HMA, LLC, formerly doing business as Carlisle Regional Medical Center, has agreed to plead guilty to one count of conspiracy to commit health care fraud.  The plea agreement remains subject to acceptance by the court.  Up until 2017, Carlisle HMA, LLC owned and operated Carlisle Regional Medical Center, an acute care hospital located in Carlisle, Pennsylvania.  Carlisle HMA, LLC was charged in a criminal information filed today in the District of Columbia with conspiracy to commit health care fraud.

According to admissions made in the resolution documents, HMA instituted a formal and aggressive plan to improperly increase overall emergency department inpatient admissions at all HMA hospitals, including at Carlisle Regional Medical Center.  As part of the plan, HMA set mandatory company-wide admission rate benchmarks for patients presenting to HMA hospital emergency departments – a range of 15 to 20 percent for all patients presenting to the emergency department, depending on the HMA hospital, and 50 percent for patients 65 and older (i.e. Medicare beneficiaries) - solely to increase HMA revenue.  HMA executives and HMA hospital administrators executed the scheme by pressuring, coercing and inducing physicians and medical directors to meet the mandatory admission rate benchmarks and admit patients who did not need impatient admission through a variety of means, including by threatening to fire physicians and medical directors if they did not increase the number of patients admitted.

“HMA pressured emergency room physicians, including through threats of termination, to increase the number of inpatient admissions from emergency departments—even when those admissions were medically unnecessary,”  said Assistant Attorney General Benczkowski.  “Hospital operators that improperly influence a physician’s medical decision-making in pursuit of profits do so at their own peril.  Where we find such conduct, the Criminal Division’s Health Care Fraud Unit, together with our Civil Division and law enforcement colleagues, will aggressively prosecute those responsible to the fullest extent of the law.”

HMA also agreed to pay $216 million as part of a related civil settlement. The civil settlement resolves HMA’s liability for submitting false claims between 2008 and 2012 as part of its corporate-wide scheme to increase inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65.  The government alleged that the inpatient admission of these beneficiaries was not medically necessary, and that the care needed by, and provided to, these beneficiaries should have been provided in a less costly outpatient or observation setting.  HMA agreed to pay $62.5 million to resolve these allegations with $61,839,718 being paid to the United States and $706,084 being paid to participating States.

The civil settlement also resolves allegations that during the period from 2003 through 2011, two HMA hospitals in Florida, Charlotte Regional Medical Center and Peace River Medical Center, billed federal health care programs for services referred by physicians to whom HMA provided remuneration in return for patient referrals.  To induce patient referrals, Charlotte Regional provided a local physician group with free office space and staff, as well as direct payments, which purportedly covered overhead and administrative costs incurred by the group for its management of a Charlotte Regional physician.  HMA also provided another local physician with free rent and upgrades to his office space.  HMA agreed to pay $93.5 million to resolve these civil allegations, with the United States receiving $87.96 million, and the State of Florida receiving $5.54 million.

Additional allegations that are resolved by the civil settlement are that between 2009 and 2012, two former HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center in Pennsylvania, billed federal health care programs for services referred by physicians with whom the facilities had improper financial relationships.  These relationships stemmed from HMA’s excessive payments to (1) a large physician group in return for two businesses owned by the group and for services allegedly performed by the group, and (2) a local surgeon that exceeded the value of the services provided.  The government alleged that these arrangements were structured in this manner to disguise payments intended to induce the referral of patients.  HMA agreed to pay $55 million to the United States to resolve these civil allegations.

Finally, the civil settlement will also resolve claims that Crossgates Hospital, an HMA facility in Brandon, Mississippi, leased space to a local physician from Jan. 15, 2005 through Jan. 14, 2007, but required the physician to pay rent for only half of the space he was actually occupying, in return for patient referrals to Crossgates Hospital.  HMA agreed to pay $425,000 to the United States to resolve these civil allegations.

Federal law, including the Anti-Kickback Statute and the Stark Law, prohibits hospitals from providing financial inducements to physicians for referrals.  These provisions are designed to ensure that physician decision-making is not compromised by improper financial incentives.

“Billing for unnecessary hospital stays wastes federal dollars,” said Assistant Attorney General Hunt.  “In addition, offering financial incentives to physicians in return for patient referrals undermines the integrity of our health care system.  Patients deserve the unfettered, independent judgment of their health care professionals.”

“The payment of kickbacks in exchange for medical referrals undermines the integrity of our healthcare system,” said U.S. Attorney Chapa Lopez. “Today’s resolution should remind healthcare providers of their duty to comply with the law, and the heavy price to be paid for corrupt practices committed by their executives. Our Civil Division will continue to invest itself in the pursuit of health care providers who violate the law for personal gain.” 

“Our office will continue to enforce prohibitions on improper financial relationships between health care providers and their referral sources, as these relationships can serve to corrupt physician judgment about a patient’s true health needs,” said U.S. Attorney Fajardo Orshan.  “We will devote all necessary resources to ensure that those rendering medical care do so for the sole benefit of the patient and in compliance with the law.”

“By manipulating patient status, HMA increased Medicare costs and pocketed taxpayer funds to which it was not entitled,” said U.S. Attorney Peeler.  “Our Medicare patients and our taxpayers deserve better, and I am proud that justice has been done. Nonetheless, we will continue to pursue those hospitals in our district that would seek to take advantage of the Medicare Program.”

“Government healthcare programs are vital to the welfare of our communities,” said U.S. Attorney Murray for the Western District of North Carolina, where two HMA hospitals were located.  “We will aggressively pursue providers that fraudulently inflate charges to government programs and divert scarce resources from those in need into their own pockets.”

“Our resolution of this matter and the significant recovery we have obtained show once again that no matter how complex the scheme is, we will find it, stop it, and punish it,” said U.S. Attorney McSwain.  “HMA covered up kickbacks for patient referrals with sham joint venture agreements, lease payments, and management agreements. These sorts of improper physician inducements are a form of ‘pay to play’ business practices that will not be tolerated.  Healthcare institutions cannot pad their bottom line at the expense of the American taxpayers.  And most importantly, this conduct must be rooted out because it gets in the way of providing top-notch patient care to American citizens.”

“It is critically important to all of us that the patients’ interest drive the physicians’ decisions on care,” said U.S. Attorney Lydon.  “Unnecessary hospital admissions not only drive up costs but can cause damage to patients and cannot be tolerated.” 

The government further alleged that from September 2009 through December 2011, certain HMA hospitals submitted claims to Medicare and Medicaid seeking reimbursement for falsely inflated emergency department facility charges.  HMA agreed to pay $12 million to resolve these civil allegations, with $11.028 million being paid to the United States and $972,000 being paid to participating States.

“Compliance with government healthcare rules requires that patients only receive treatment they actually need,” said HHS-OIG Acting Assistant Inspector General for Investigations Jackson.  “Then government programs must be billed just for those services.  No more, no less.  Let there be no doubt, we will continue to protect federal healthcare programs and beneficiaries by holding provider organizations fully accountable.”    

“This settlement is a result of the FBI’s hard work and dedication to hold companies accountable for their role in healthcare fraud and abuse,” said FBI Assistant Director Johnson.  “The FBI will not stand by when there are allegations that a company operates a corporate wide scheme to increase their financial gain at the expense of the U.S. government. We appreciate those who come forward with allegations of criminal misconduct and recognize the importance of the public’s assistance in our work.”

The allegations resolved by the settlement were originally brought in eight lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery.  The eight qui tam cases, which were filed in various districts and transferred to the U.S. District Court for the District of Columbia as part of a multi-district litigation presided over by the Honorable Reggie B. Walton, are captioned: United States ex rel. Brummer v. HMA, Inc., 3-09-cv-135 (CDL) (M.D. Ga.); United States ex rel. Williams v. HMA, Inc., 3:09-cv-130 (M.D. Ga.); United States ex rel. Plantz v. HMA, Inc., 13-CV-1212 (N.D. Ill.); United States ex rel. Miller v. HMA, Inc., 10-3007 (E.D. Pa.); United States ex rel. Mason & Folstad v. HMA, Inc., 3:10-CV-472-GCM (W.D.N.C.); United States ex rel. Nurkin v. HMA, Inc., 2:11-cv-14-FtM-29DNF (M.D. Fla.); United States ex rel. Jacqueline Meyer & Cowling v. HMA, Inc., 0:11-cv-01713-JFA (D.S.C.); and United States ex rel. Paul Meyer v. HMA, Inc., 11-62445 cv-Williams (S.D. Fla.).

The whistleblower in United States ex rel. Nurkin will receive approximately $15 million as a share of the recovery, and the whistleblowers in United States ex rel. Miller will receive approximately $12.4 million as their share of the recovery.  The whistleblower shares to be awarded in the remaining cases have not yet been determined.

These matters were investigated by the Civil Division’s Commercial Litigation Branch; the Health Care Fraud Unit of the Criminal Division’s Fraud Section; the U.S. Attorneys’ Offices for the Middle District of Florida, Southern District of Florida, Middle District of Georgia, Northern District of Illinois, Western District of North Carolina, Eastern District of Pennsylvania and the District of South Carolina, the FBI Healthcare Fraud Unit Major Provider Response Team, HHS-OIG and Defense Health Agency Program Integrity.  On behalf of the States, an investigative/settlement team with members from North Carolina, Massachusetts, Virginia, Washington, and Florida assisted with the investigation and resolution of these matters. 

The government’s resolution of this matter illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud and Enforcement Action Team (HEAT) initiative, a partnership between the Department of Justice and the Department of Health and Human Services to focus efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

Except for those facts admitted to in the guilty plea and in the Non-Prosecution Agreement, the claims resolved by the settlement are allegations only, and there has been no determination of liability.

If you believe you are a victim of this offense, please call (888) 549-3945.

             On September 20, 2018, Palm Beach County resident Charles Edward Smith, 63, was sentenced to 235 months in prison by United States District Judge Donald M. Middlebrooks following his jury trial conviction for participating in a conspiracy to commit sex trafficking of a minor (Case No. 18-CR-80062).  Co-defendant Michael Joseph Clark, 44, was sentenced to 220 months in prison by Judge Middlebrooks, after he previously pled guilty to participating in the conspiracy and committing substantive sex trafficking of a minor offenses.

            Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Sarah J. Mooney, Chief of Police, West Palm Beach Police Department (WPBPD) made the announcement. 

            On or about March 13, 2018, members of the WPBPD discovered a 14-year old minor, identified as a missing person, in a West Palm Beach residence controlled by Smith.  The defendant and other co-conspirators, including Michael Joseph Clark, operated a prostitution operation out of the residence.  Smith had the minor work as a prostitute, setting up her sexual encounters, giving her drugs and requiring her to use her prostitution earnings to stay at the house. 

            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 United States 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.

             Mrs. Fajardo Orshan commended the investigative efforts of the FBI and the WPBPD in this matter.  The case was prosecuted by Assistant U.S. Attorneys Lothrop Morris and Ellen Cohen.

Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Following a one-week jury trial, on September 21, 2018, Joudanorve Lafleur, of Miami, Florida, was convicted of armed bank robbery, and brandishing and discharging a firearm in furtherance of the armed robbery. 

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

According to evidence presented at trial, at approximately 9:20 a.m. on April 20, 2018 at a TD Bank in Miami Shores, Lafleur, wearing a black ski mask, black hoodie, and pants, robbed two bank tellers and one bank customer at gunpoint.  After repeatedly demanding “all of the hundreds” from his victims, 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 his 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 trial evidence included witness testimony, bank surveillance video, DNA expert testimony, and cellular telephone analysis. 

Sentencing is scheduled before U.S. District Judge Jose E. Martinez on December 5, 2018, at 2:00 p.m.  Lafleur faces up to twenty five years in prison for the bank robbery and a consecutive mandatory minimum term of ten years to life in prison for brandishing and discharging the firearm offense of conviction.

This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.   Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

Mrs. Fajardo Orshan commended the investigative efforts of the FBI in this matter.  This case is being 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.

Roberto Paul Mendoza, 28, of Palm Beach County, was sentenced today by U.S. District Court Judge Donald M. Middlebrooks to 240 months in prison, to be followed by four years of supervised release, after previously pleading guilty to three counts of distribution of heroin, carfentanyl, and cocaine, one count of possession with intent to distribute heroin, and one count of knowingly possessing a firearm in furtherance of drug trafficking. 

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, Adolphus P.  Wright, Special Agent in Charge, Drug Enforcement Administration (DEA) and Ric Bradshaw, Sheriff of the Palm Beach County Sheriff’s Office (PBSO) made the announcement.

According to the court record, Mendoza distributed heroin mixed with carfentanyl and cocaine to an undercover police officer on three occasions.  Thereafter, during the execution of a search warrant of Mendoza’s residence and vehicle distribution quantities of heroin and a firearm were discovered and seized by law enforcement.  Further, court records also showed that Mendoza was responsible for distributing carfentanyl, which ultimately caused the death of a 40 year-old man. 

Mrs. Fajardo Orshan commended the investigative efforts of the DEA and PBSO in this matter.  This case was prosecuted by Assistant U.S. Attorney Jennifer C. Nucci.

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.

The former chief financial officer of Bankrate Inc., a publicly traded financial services and marketing company formerly headquartered in North Palm Beach, Florida, was sentenced today to 10 years in prison for orchestrating an accounting and securities fraud scheme that caused more than $25 million in shareholder losses.

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’s Criminal Investigations Group made the announcement.

Edward J. DiMaria, 53, of Fairfield County, Connecticut, was sentenced by Chief U.S. District Judge K. Michael Moore of the Southern District of Florida, who also imposed three years of supervised release and ordered DiMaria to pay restitution in the amount of $21,234,214.  On June 28, DiMaria pleaded guilty to one count of conspiracy to making false statements to a public company’s accountants, falsifying a public company’s books, records and accounts, and securities fraud; and one count of making materially false statements to the Securities and Exchange Commission (SEC).  

“While serving as Bankrate’s CFO, Edward DiMaria blatantly manipulated the company’s publicly reported financial statements by repeatedly lying and directing others to lie to auditors, regulators, and shareholders,” said Assistant Attorney General Benczkowski.  “The significant sentence handed down today underscores the serious nature of corporate fraud and the damage it causes to shareholders and to the public’s trust in our financial markets.  The sentence also demonstrates the Department’s commitment to prosecuting corporate misconduct to the fullest extent of the law.”

“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 Delany DeLeon-Colon. “Anyone who engages in this type of financial fraud scheme should know they will be found and they will be held accountable.”

As part of his guilty plea, DiMaria admitted that between 2010 and 2014 he directed and conspired to commit 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, DiMaria admitted that he conspired with other Bankrate employees to misrepresent certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics.  DiMaria made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries, and he caused Bankrate’s financial statements filed with the SEC to be materially misstated, he admitted.

Hyunjin Lerner, Bankrate’s former vice president of finance, previously pleaded guilty for his role in the conspiracy.  Lerner was sentenced by Judge Moore earlier this year to serve 60 months in prison. 

The U.S. Postal Inspection Service’s National Headquarters Fraud Team investigated the case.  Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section are prosecuting 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: www.justice.gov/criminal-vns/case/edward-j-dimaria.

WASHINGTON – The former chief financial officer of Bankrate Inc., a publicly traded financial services and marketing company formerly headquartered in North Palm Beach, Florida, was sentenced today to 10 years in prison for orchestrating an accounting and securities fraud scheme that caused more than $25 million in shareholder losses.

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’s Criminal Investigations Group made the announcement.

Edward J. DiMaria, 53, of Fairfield County, Connecticut, was sentenced by Chief U.S. District Judge K. Michael Moore of the Southern District of Florida, who also imposed three years of supervised release and ordered DiMaria to pay restitution in the amount of $21,234,214.  On June 28, DiMaria pleaded guilty to one count of conspiracy to making false statements to a public company’s accountants, falsifying a public company’s books, records and accounts, and securities fraud; and one count of making materially false statements to the Securities and Exchange Commission (SEC).  

“While serving as Bankrate’s CFO, Edward DiMaria blatantly manipulated the company’s publicly reported financial statements by repeatedly lying and directing others to lie to auditors, regulators, and shareholders,” said Assistant Attorney General Benczkowski.  “The significant sentence handed down today underscores the serious nature of corporate fraud and the damage it causes to shareholders and to the public’s trust in our financial markets.  The sentence also demonstrates the Department’s commitment to prosecuting corporate misconduct to the fullest extent of the law.”

“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 Delany DeLeon-Colon. “Anyone who engages in this type of financial fraud scheme should know they will be found and they will be held accountable.”

As part of his guilty plea, DiMaria admitted that between 2010 and 2014 he directed and conspired to commit 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, DiMaria admitted that he conspired with other Bankrate employees to misrepresent certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics.  DiMaria made materially false statements to Bankrate’s independent auditors to conceal the improper accounting entries, and he caused Bankrate’s financial statements filed with the SEC to be materially misstated, he admitted.

Hyunjin Lerner, Bankrate’s former vice president of finance, previously pleaded guilty for his role in the conspiracy.  Lerner was sentenced by Judge Moore earlier this year to serve 60 months in prison. 

The U.S. Postal Inspection Service’s National Headquarters Fraud Team investigated the case.  Assistant Chief Henry Van Dyck and Trial Attorneys Emily Scruggs and Jason Covert of the Criminal Division’s Fraud Section are prosecuting 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: www.justice.gov/criminal-vns/case/edward-j-dimaria.

A Homestead, Florida man who was charged with surreptitiously producing and distributing pornographic audio and video recordings of himself engaging in sexual activity with multiple men, pleaded guilty today in federal court in Miami.      

Bryan Deneumostier, 32, also known by the screen name “susanleon33326,” pleaded guilty to two counts of illegal interception of oral communications. 

U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Special Agent in Charge Mark Selby of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office, made the announcement today.  Judge Cecilia M. Altonaga scheduled the sentencing hearing for Nov. 29.  Deneumostier was arrested in July 2018 and has been held in custody since then.

According to the indictment to which Deneumostier pleaded guilty and to other facts he admitted in his plea agreement, Deneumostier assisted in the operation of a subscription-based pornography website.  The site offered for streaming approximately 619 “hook up” videos that depicted sexual activity between Deneumostier and other men.  The defendant had surreptitiously made audio and video recordings of the sexual encounters, without the victims’ knowledge or consent.  He later sold the “hook up” videos to a third party located overseas and caused them to be posted onto the website.  The indictment and plea agreement refer to three known victims whose identities are being withheld to protect their privacy.  Deneumostier admitted that he recorded himself engaging in sexual activity with approximately 150 men that were featured on his website and that approximately 80 of those did not know that he was recording them. 

The investigation was conducted by HSI.  Assistant U.S. Attorney Cary Aronovitz of the Southern District of Florida and Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and 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 on http://pacer.flsd.uscourts.gov.

A Homestead, Florida man who was charged with surreptitiously producing and distributing pornographic audio and video recordings of himself engaging in sexual activity with multiple men, pleaded guilty today in federal court in Miami.      

Bryan Deneumostier, 32, also known by the screen name “susanleon33326,” pleaded guilty to two counts of illegal interception of oral communications. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, and Special Agent in Charge Mark Selby of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office, made the announcement today.  Judge Cecilia M. Altonaga scheduled the sentencing hearing for Nov. 29.  Deneumostier was arrested in July 2018 and has been held in custody since then.

According to the indictment to which Deneumostier pleaded guilty and to other facts he admitted in his plea agreement, Deneumostier assisted in the operation of a subscription-based pornography website.  The site offered for streaming approximately 619 “hook up” videos that depicted sexual activity between Deneumostier and other men.  The defendant had surreptitiously made audio and video recordings of the sexual encounters, without the victims’ knowledge or consent.  He later sold the “hook up” videos to a third party located overseas and caused them to be posted onto the website.  The indictment and plea agreement refer to three known victims whose identities are being withheld to protect their privacy.  Deneumostier admitted that he recorded himself engaging in sexual activity with approximately 150 men that were featured on his website and that approximately 80 of those did not know that he was recording them. 

The investigation was conducted by HSI.  Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Cary Aronovitz of the Southern District of Florida are prosecuting the case.  

This morning, Ariana Fajardo Orshan addressed the Office after being sworn in as the United States Attorney for the Southern District of Florida.  She succeeds Benjamin G. Greenberg, who has been serving as the chief federal law enforcement officer for the district since March 4, 2017. 

On September 17, 2018, the Chief Judge of the United States District Court for the Southern District of Florida, K. Michael  Moore, administered the oath of office to Mrs. Fajardo Orshan, who was nominated by President Trump to serve as U.S. Attorney for the Southern District of Florida on June 7, 2018.  The U.S. Senate confirmed her nomination on August 28, 2018. 

“I am honored to have been afforded the privilege to serve as the U.S. Attorney for the Southern District of Florida, in an Office that is committed to public service and the pursuit of justice.” said U.S. Attorney Fajardo Orshan.  “I look forward to partnering with our dedicated federal, state and local law enforcement allies to ensure that our community is safe and the rule of law is closely guarded.” 

Prior to her appointment, Mrs. Fajardo Orshan served as a Judge of the Eleventh Judicial Circuit Court of Florida and an adjunct professor at Florida International University College of Law.  She was appointed to the bench in 2012 by Governor Rick Scott.  Before becoming a judge, Mrs. Fajardo Orshan was a partner in a boutique law firm where she specialized in litigation. She began her legal career as an Assistant State Attorney in Miami-Dade County, where she prosecuted a wide variety of crimes, specializing in narcotics and organized crime.  Mrs. Fajardo Orshan was born and raised in Miami.  She earned her B.S. from Florida International University and her J.D. from Nova Southeastern University Shepard Broad Law Center.

As U.S. Attorney, Mrs. Fajardo Orshan will lead the nation’s third largest U.S. Attorney’s Office to enforce and defend the laws of the United States of America through the prosecution of diverse federal criminal cases; pursue civil cases in which the United States is a party; and collect debts owed to the Federal government that are administratively uncollectible. The Southern District of Florida encompasses a geographical area of more than 15,000 square miles extending south to Key West, north to Sebastian and west to Sebring. The Southern District includes the counties of Miami-Dade, Broward, Monroe, Palm Beach, Martin, St. Lucie, Indian River, Okeechobee and Highlands. Mrs. Fajardo Orshan will supervise a staff of approximately 220 Assistant U.S. Attorneys and a similar number of support personnel, in the district’s offices in Miami, Fort Lauderdale, West Palm Beach, and Fort Pierce.

As she accepted the honor bestowed upon her, U.S. Attorney Fajardo Orshan thanked Mr. Greenberg for his dedicated service to the U.S. Attorney’s Office and the South Florida community.  Mr. Greenberg will remain with the Office as the First Assistant to the U.S. Attorney.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida; Special Agent in Charge Ari C. Shapira for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division; Special Agent in Charge Robert Lasky for the Federal Bureau of Investigation (FBI), Miami Field Office; Special Agent in Charge Adolphus P. Wright for the U.S. Drug Enforcement Administration (DEA), Miami Field Division; Chief Jorge R. Colina of the City of Miami Police Department (MPD); and Director Juan J. Perez of the Miami-Dade Police Department (MDPD) announced the trial convictions of ten members and associates of a violent criminal enterprise operating in Miami, Florida, as part of the Southern District of Florida Violence Reduction Partnership (VRP) initiative.

This prosecution resulted from the Operation Northern Light Organized Crime and Drug Enforcement Task Force (OCDETF) that began in May of 2015.  The Operation Northern Light Task Force is jointly-led by the United States Attorney’s Office in Miami, the FBI, ATF, and DEA, with participation from MPD, MDPD, and other state and local law enforcement agencies, and focuses on the investigation and reduction of organized violent crime in the north end of Miami-Dade County.

In 2017, fourteen individuals were charged by indictment with various criminal acts, including participating in a racketeering conspiracy; facilitating a conspiracy to possess with intent to distribute narcotics, including crack cocaine; commercial armed robberies; and the use of firearms in furtherance of robberies and narcotics trafficking. 

Ten of the charged individuals, all of Miami, proceeded to trial and were convicted on September 14, 2018, of the following offenses: 

Antonio Glass was convicted of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and one count of Possession of a Controlled Substance with Intent to Distribute.  Glass faces a mandatory minimum term of 10 years and up to life in prison. 

Jerimaine Bryant was convicted of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and three counts of Possession of a Controlled Substance with Intent to Distribute.   Jerimaine Bryant faces a mandatory minimum term of 20 years and up to life in prison.

Samuel Hayes was convicted of one count of Racketeering Conspiracy, two counts of Robbery, and one count of Possession of a Firearm in Furtherance of a Crime of Violence.  Hayes faces a mandatory minimum term of 5 years and up to life in prison.

Curtis Bryant was convicted of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and one count of Attempted Possession of a Controlled Substance with Intent to Distribute.  Curtis Bryant faces a mandatory minimum term of 10 years and up to life in prison.

Levi Bryant was convicted of one count of Drug Distribution Conspiracy, and one count of Possession of a Controlled Substance with Intent to Distribute.  Levi Bryant faces a mandatory minimum term of life in prison.

Michael Walker was convicted of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and one count Possession of a Controlled Substance with Intent to Distribute.  Walker faces a mandatory minimum term of 10 years and up to life in prison.

Reginald Graham was convicted of one count of Racketeering Conspiracy, one count of Drug Distribution Conspiracy, and one count of Attempted Possession of a Controlled Substance with Intent to Distribute. Graham faces a mandatory minimum term of 10 years and up to life in prison.

Daniel Jones was convicted of one count of Drug Distribution Conspiracy.  Daniel Jones faces a mandatory minimum term of 10 years and up to life in prison.

Torivis Ingram was convicted of one count of Drug Distribution Conspiracy, and one count of Possession of a Controlled Substance with Intent to Distribute.  Ingram faces a mandatory minimum term of life in prison.

Mario Rodriguez was convicted of one count of Drug Distribution Conspiracy, one count of Possession of a Controlled Substance with Intent to Distribute, and one count of Possession of a Firearm in Furtherance of a Drug Trafficking Crime.  Rodriguez faces a mandatory minimum term of 15 years and up to life in prison.

U.S. District Judge Jose E. Martinez has scheduled the sentencing hearings of the defendants, who were convicted at trial, on various dates throughout December 2018. 

Prior to the trial, co-defendants Vencess Toby, Donzell Jones, and Latitia Houser pled guilty to one count of Conspiracy to Possess a Controlled Substance with Intent to Distribute.  Toby was sentenced to 60 months in prison.  Donzell Jones was sentenced to 188 months in prison.  Houser is scheduled to be sentenced on September 18, 2018.

Quincy Bryant, the last remaining defendant charged under the indictment, is scheduled to proceed to trial on October 29, 2018, before Judge Martinez.  An indictment is merely an accusation.  A defendant is presumed innocent until proven guilty in a court of law.

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

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

U.S. Attorney Benjamin Greenberg said, "Justice has been served for the residents of Allapattah, with the convictions of members and associates of a violent criminal enterprise that threatened the public’s safety".  Today’s announcement leaves no doubt that the lure of gang culture and criminality does not pay.  The U.S. Attorney’s Office and our Violence Reduction Partners stand ready to continue our enforcement efforts, in order to protect our South Florida communities and combat violent crime.

ATF Special Agent in Charge Ari C. Shapira stated, “I am pleased by the results of this outstanding investigation worked jointly with our federal, state and local partners.  It highlights the value of our collaborative effort to reduce violent crime in our community.  Dedicated ATF Special Agents, Task Force Officers and their partners will relentlessly continue to help improve those vulnerable neighborhoods plagued by gun violence.”

“Drugs and the violent gangs that profit from them have a devastating effect on our communities and we will continue to work with our law enforcement partners to make South Florida a safer place,” said Scott A. Rottman, acting Special Agent in Charge, FBI Miami.  “The FBI is committed to using every legal means available, including federal racketeering statutes, to dismantle these criminal enterprises who plague our society.”

“The dismantlement of this violent organization has allowed for a major criminal element to be removed from the community of Allapattah,” stated DEA Special Agent in Charge Adolphus Wright. “The efforts from those involved illustrates the devotion and success of the Violence Reduction Partnership which has allowed law enforcement partners at the federal and local levels to work together to rid communities of the criminal afflictions which have plagued them for far too long, and to continue efforts to keep these communities as safe as possible.”

MPD Chief Colina stated, “We are pleased with the outcome of this joint investigation, and are always available  to work with our local and federal partners to make the City of Miami and Miami-Dade County the safest community in the nation.”

“The professionalism exhibited during this investigation and the commitment to work together, solidifies the collaboration between federal and local law enforcement.  The dedication and efforts of United States Attorney’s Office for the Southern District of Florida are to be commended.” said Juan J. Perez, MDPD Director. “The Miami-Dade Police Department is committed to this collaborative endeavor and will not stop working toward our goal of establishing a safe and secure environment, free from crime and the fear of crime.”

The investigation of this enterprise was jointly led by the ATF, FBI, DEA, MPD, and MDPD. Key participants in the investigation included the MPD’s Narcotics Unit, Gun Squad, Gang Intelligence Detail, Homicide Unit, and Robbery Unit; the MDPD’s Robbery Bureau, Narcotics Bureau, Homicide Bureau, and Street Violence Task Force. The investigation was also supported by the U.S. Marshals Service, U.S. Customs and Border Protection, Homestead Police Department the Miami-Dade Corrections and Rehabilitation Department’s Security Threat Group Unit, and the South Florida High Intensity Drug Trafficking Task Force to include the High Intensity Drug Trafficking Area-Miami-Dade State Attorney’s Gang Strike Force.

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

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 members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.

This case is being prosecuted by Assistant U.S. Attorneys Ignacio J. Vazquez and Ilham Hosseini.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Former Village of Biscayne Park Chief of Police, Raimundo Atesiano, pleaded guilty in federal court to conspiring with subordinate officers to violate individuals’ civil rights by making false arrests, announced U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida, Acting Assistant Attorney General John Gore for the Justice Department’s Civil Rights Division, Robert F. Lasky, Special Agent in Charge, FBI Miami Field Office, Katherine Fernandez Rundle, Miami-Dade State Attorney, and Troy Walker, Special Agent in Charge, Florida Department of Law Enforcement (FDLE).   

According to documents filed in connection with the plea entered today, Atesiano was acting under color of law as chief of police when on three separate occasions he ordered officers under his command to falsely arrest and charge individuals with unsolved burglaries.  In court filings related to the plea, Atesiano admitted that on one occasion he instructed an officer to falsely arrest and charge an individual for several vehicle burglaries based upon what Atesiano knew were false confessions. According to the documents, Atesiano intentionally encouraged officers to arrest individuals without a legal basis in order to have arrests effectuated for all reported burglaries, which created a fictitious 100% clearance rate for that category of crime.

Guillermo Ravelo, a former Biscayne Park Officer who is named in the superseding indictment, previously entered a guilty plea for his role in the conspiracy with Atesiano to violate individuals’ civil rights. Charlie Dayoub and Raul Fernandez, former Biscayne Park officers who also are named in the superseding indictment, previously entered guilty pleas for their roles in effecting false arrests.

The Court set the sentencing date for Atesiano on Nov. 27. Guillermo Ravelo is scheduled to be sentenced on Oct. 4, and Charlie Dayoub and Raul Fernandez are scheduled to be sentenced on Oct. 16. 

“The vast majority of law enforcement officers across the nation serve our communities with honor and integrity,” stated U.S. Attorney Benjamin G. Greenberg.  “We will not allow the minority of officers who cast aside their oaths to tarnish the reputation of those who protect us all.  Instead, as evidenced today with former Chief Raimundo Atesiano’s guilty plea, we will continue to hold them accountable in federal court for criminal acts that threaten our constitutional guarantees.” 

“The right to be free from false arrests is fundamental to our Constitution and system of justice,” said Acting Assistant Attorney General John Gore. “Law enforcement officers who abuse their authority and deny any individual this right will be held accountable. As the Chief of Police, Defendant Atesiano was trusted by his community to lead their police officers by example; he has failed his community and the officers of Biscayne Park.”

“Law enforcement officers are entrusted with a great deal of responsibility and authority and therefore must be held to a high standard. Raimundo Atesiano failed to meet this standard by abusing his authority and breaking laws,” said Scott A. Rottman, Acting Special Agent in Charge, FBI Miami.  "Unfortunately, the actions of a very few dishonest officers, such as Atesiano and his co-conspirators, undercut the public’s trust and they must be rooted out. His actions do not represent the overwhelming majority law enforcement officers who are diligent, honorable professionals who are worthy of that trust."

“It is a deliberate injustice to intentionally charge and arrest an innocent man. Police Chief Raimundo Atesiano’s actions were intended to give his community a false sense of security and were a betrayal of his oath to protect the residents of Biscayne Park and all the people of Miami-Dade County,” commented State Attorney Katherine Fernandez Rundle.  “I applaud the combined efforts of our law enforcement partnership to end this calculated abuse of power.” 

“Law enforcement officers must be held to the highest moral standards and when that trust is broken, FDLE will work aggressively to investigate and find the truth ensuring all citizens are treated justly,” said FDLE Miami Special Agent in Charge Troy Walker.  

The case was investigated by the FBI, the FBI Miami Area Corruption Task Force and the FDLE, with assistance from the Miami-Dade State Attorney’s Office. The case was prosecuted by Assistant U.S. Attorney Harry C. Wallace, Jr., Trial Attorney D.W. Tunnage of the Civil Rights Division of the Department of Justice, and Assistant State Attorney Trent Reichling.

Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Yesterday, a Tamarac resident was sentenced to over 12 years in prison by United States District Senior Judge James I. Cohn, for being a felon unlawfully in possession of a loaded firearm while being the subject of a Domestic Violence Protection Order.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, and Scott Israel, Sheriff, Broward Sheriff’s Office (BSO), made the announcement.

Terry Cadet, 34, of Tamarac, Florida, previously pled guilty to being a felon in possession of a firearm and ammunition, while also being the subject of a Domestic Violence Protection Order that prohibited the defendant from possessing any firearm or ammunition.  The defendant was sentenced to a total of 151 months in prison, to be followed by 3 years of supervised release. 

According to the court record, on February 18, 2018, BSO Deputies responded to a domestic violence call in Hallandale Beach, Florida.  During the course of Cadet’s arrest for domestic violence, BSO deputies discovered a 9mm pistol, with an obliterated serial number, secreted on Cadet’s person.  The firearm was loaded with ten rounds of ammunition.  At the time of his arrest, Cadet was a convicted felon and thereby prohibited from being in possession of a firearm or ammunition.  In addition, a pending Domestic Violence Protection Order required Cadet to have previously surrendered any firearms and ammunition in his possession to the Broward County Sheriff’s Office.

This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.   Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

Mr. Greenberg commended the investigative efforts of the ATF and BSO in this matter.  The case was prosecuted by Assistant U.S. Attorney Jodi L. Anton.

Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Today, a Fort Lauderdale resident was sentenced to over 92 years in prison by United States District Senior Judge James I. Cohn, after having been convicted at trial of three armed robberies, a carjacking, and brandishing a firearm during the commission of each violent act.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, Rick Maglione, Chief, Fort Lauderdale Police Department (FLPD), and Keith Dunn, Chief, Davie Police Department, made the announcement.

De Andre Smith, 23, of Fort Lauderdale, Florida, was convicted by a trial jury on July 2, 2018, on all eight federal charges.  Smith was sentenced to a total of 1,105 months in prison, to be followed by 5 years of supervised release. 

According to the court record, on December 12, 2017, Smith brandished a firearm at an IT Tech in Fort Lauderdale, demanding software be placed on his computer.  When the tech refused, Smith proceeded to beat the tech in the face with the firearm and then steal computer software.  As a result of this beating, the tech eventually had to have one eye amputated.

On December 20, 2017, Smith carjacked a victim at gunpoint in Fort Lauderdale.  Smith then immediately went to a Dunkin Donuts in Davie, jumped the counter and held the clerk at gunpoint, while demanding money.  After obtaining money, Smith then left and went to a third location in South Florida, a Subway restaurant in Davie.  There, at gunpoint, Smith again jumped the counter, demanded and stole money from the employees. 

This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.   Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

Mr. Greenberg commended the investigative efforts of the ATF, FLPD and Davie Police Department in this matter.  The case was prosecuted by Assistant U.S. Attorneys Jodi L. Anton and Francis Viamontes.

Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

A Miami resident was sentenced, on September 7, 2018, to 32 years in prison by United States District Judge William P. Dimitrouleas for committing a string of armed robberies.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, Scott Israel, Sheriff, Broward Sheriff’s Office (BSO), and Sergio Velazquez, Chief, Hialeah Police Department, made the announcement.

Damon Woodard, 27, of Miami, Florida, previously pled guilty to two counts of brandishing a firearm in furtherance of a crime of violence, in violation of, Title 18, United States Code, Section 924(c)(A)(1)(ii).  Woodard was sentenced to a total of 384 months in prison, to be followed by 5 years of supervised release. 

According to the court record, on December 9, 2017, Woodard robbed Murphy Gas Station in Miami Gardens, Florida, at gunpoint.  On December 13, 2017, Woodard robbed a BP Gas Station in Dania Beach, Florida, at gunpoint. Woodard subsequently robbed numerous other businesses, including two check-cashing stores in Hialeah, Florida with codefendant Suwayne Hylton.  In total, Woodard admitted his involvement in approximately 20 additional armed robberies in Broward and Miami-Dade Counties. 

Hylton previously pled guilty to two counts of Hobbs Act Robbery.  On July 9, 2018, Hylton was sentenced by Judge Dimitrouleas to 84 months in prison, to be followed by 3 years of supervised release, and was ordered to pay $16,392 in restitution.

This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.   Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

Mr. Greenberg commended the investigative efforts of the ATF, BSO and Hialeah Police Department in this matter.  He also thanked the Davie Police Department, Hollywood Police Department, Hallandale Beach Police Department, Miami-Dade Police Department, Virginia Gardens Police Department, North Miami Beach Police Department, Miami Gardens Police Department, Fort Lauderdale Police Department, Pembroke Pines Police Department, and Miramar Police Department for their assistance. The case was prosecuted by Assistant U.S. Attorney Jodi L. Anton.

Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

On August 28, 2018, Alfredo Garcia, 35, of Miami-Dade County, was sentenced to a total of 264 months in prison by U.S. District Court Judge Federico A. Moreno, after previously pleading guilty to three counts of Hobbs Act robbery and one count of brandishing a firearm in furtherance of a crime of violence.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, and Jorge R. Colina, Chief, City of Miami Police Department (MPD), made the announcement.

According to court records, between February 11, 2016, and February 14, 2016, Garcia robbed a Stop & Shop convenience store, a Valero Gas Station, and a Westar Gas Station, all in Miami-Dade County.  In each robbery, Garcia approached the cashier, stated that he had a firearm, and demanded money from the cash register.  During the robbery of the Stop & Shop convenience store, Garcia displayed the butt of a firearm that was in his jacket pocket. 

This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.  Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

Mr. Greenberg commended the investigatory efforts of the ATF and MPD in this matter.  This case was prosecuted by Assistant United States Attorney David Turken.

Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

A Fort Lauderdale resident was sentenced, on September 7, 2018, to 27 years in prison by United States Chief District Judge Michael K. Moore for committing two armed robberies.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, Scott Israel, Sheriff, Broward Sheriff’s Office (BSO), and Rick Maglione, Chief, Fort Lauderdale Police Department (FLPD), made the announcement.

Jermar Jerome Roberson, 25, of Fort Lauderdale, Florida, previously pled guilty to two counts of Hobbs Act Robbery and discharging a firearm in furtherance of a crime of violence, in violation of, Title 18, United States Code, Sections 1951(a) and 924(c)(A)(1)(iii).  Roberson was sentenced to a total of 324 months in prison, to be followed by 5 years of supervised release.

According to the court record, in October of 2017, Roberson negotiated the sale of two cellular phones (iPhones) over the internet and robbed both victims at gunpoint when they arrived at the meeting place.  During the second robbery, Roberson discharged the firearm and struck the victim.

Roberson’s co-defendant Shyann Lee Williams previously pled guilty to a single Hobbs Act Robbery and was sentenced by Judge Moore on September 7, 2018 to 63 months in prison, to be followed by 3 years of supervised release.

A restitution hearing has been scheduled for both defendants on November 29, 2018 at 11 a.m. before Judge Moore.

This case stems from Project Safe Neighborhoods (PSN), a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone.   Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

Mr. Greenberg commended the investigative efforts of the ATF, BSO and FLPD in this matter.  The case was prosecuted by Assistant U.S. Attorney Jodi L. Anton.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

A U.S.-based financial advisor pleaded guilty today for his role in an international money laundering conspiracy involving the proceeds of a scheme to pay bribes to officials of Ecuador’s state-owned and state-controlled energy company, Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador).  

U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Acting Special Agent in Charge Kelly Jackson of IRS Criminal Investigation’s (IRS-CI) Washington, D.C. office made the announcement.

Jose Larrea, 40, a U.S. citizen who lives in Miami, Florida, pleaded guilty in Miami before U.S. District Judge Marcia G. Cooke of the Southern District of Florida to one count of conspiracy to commit money laundering.  He is scheduled to be sentenced on Nov. 14, by Judge Cooke.

According to his admissions at the plea hearing, Larrea conspired with his co-defendant, Frank Roberto Chatburn Ripalda (Chatburn), 40, a dual U.S. and Ecuadorian citizen who also lives in Miami, and others to conceal the proceeds of an unlawful scheme, namely to pay bribes to PetroEcuador officials.  Larrea admitted to participating in the money laundering scheme by wiring more than $1 million from his own U.S.-based bank account to several U.S.-based bank accounts.  Those wire transfers were made to conceal a bribery scheme involving an oil services contractor who made payments to PetroEcuador officials in an effort to retain existing contracts and win new business with PetroEcuador.  Larrea further admitted that he created false and back-dated documents on behalf of the oil services contractor.  

Larrea is the fourth individual to plead guilty in this case.  In addition to Larrea, two former officials of PetroEcuador who received bribe payments and the contractor described above have previously pleaded guilty to date in connection with the government’s ongoing investigations into the PetroEcuador bribery and money laundering schemes. 

Chatburn was charged in the same indictment on April 19, with one count of conspiring to violate the Foreign Corrupt Practices Act (FCPA), one count of violating the FCPA, one count of conspiring to commit money laundering and two counts of money laundering.  Chatburn has pleaded not guilty, and his trial is currently set for Oct. 15. 

All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The FBI’s International Corruption Squad in Miami and IRS-CI are investigating the case.  Assistant Chief Lorinda Laryea and Trial Attorneys David Fuhr and Katherine Raut of the Criminal Division’s Fraud Section, Trial Attorneys Randall Warden and Mary Ann McCarthy of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorneys Karen Rochlin and Nalina Sombuntham of the Southern District of Florida are prosecuting the case. 

The U.S. Marshals Service and the Criminal Division’s Office of International Affairs has provided significant assistance by obtaining key evidence in this case, as have public authorities in, among other countries, Ecuador, Panama and the Cayman Islands.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Gabriel Grchan, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), St. Paul Field Office, Michael J. De Palma, Acting Special Agent in Charge, IRS-CI, Miami Field Office, and Dexter M. Williams, Chief, Miramar Police Department, announced that Frantz Silvene, 34, of Miami, was sentenced to 87 months after pleading guilty to one count of conspiracy to defraud the government with respect to claims in violation of Title 18, United States Code, Section 286, and one count of aggravated identity theft in violation of Title 18, United States Code, Section 1028A, for a tax refund scheme that resulted in the filing of approximately $7 million in fraudulent tax refund claims.  Also connected to this scheme, Myriam Gisme, 38 of Miami, was sentenced to 53 months after pleading guilty to one count of conspiracy to defraud the government with respect to claims.  At sentencing, on August 28, 2018, the defendants were also ordered to pay approximately $1.5 million in restitution. 

According to the plea documents, from January 2010 to October 2013, the defendants agreed on a scheme to file fraudulent tax returns seeking refunds with the IRS using stolen personal identity information.  Silvene knowingly provided stolen personal identity information for the preparation of fraudulent tax returns and assisted in opening bank accounts in Minnesota to receive fraudulently obtained tax refunds.   Gisme, and others, knowingly caused the filing of false tax returns from South Florida using stolen identity information for the payment of refunds to accounts in Minnesota and elsewhere. 

During the course of the conspiracy, the defendants caused the filing of approximately 1,000 tax returns seeking approximately $7 million in fraudulent tax refunds claims.  The IRS paid out approximately $1.5 million in refunds to accounts controlled by Silvene, Gisme, and other co-conspirators.

Mr. Greenberg commended the investigative efforts of IRS-CI in Minnesota and Miami and the Miramar Police Department.  The case was prosecuted by Assistant U.S. Attorney Michael N. Berger.

A Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office and Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI) announced that on September 5, 2018, Yant Garcia, 38 of Hialeah, pled guilty to one count of conspiracy to commit an offense against the United States.  

According to the plea document, beginning around 2012, and continuing through around 2015, Garcia agreed with others to launder the proceeds of an identity theft tax refund scheme and mortgage fraud scheme by cashing checks in names of persons who were not present at check-cashing stores in Miami.

In or around 2013, Garcia’s co-conspirators submitted fraudulent tax returns to the Internal Revenue Service (IRS) using stolen personal identity information seeking refunds ranging in value from $130,000 to $170,000.  In total, the Department of Treasury paid out approximately $4.3 million in fraudulent refund claims by mailing out tax refund checks.  The defendant and a co-conspirator met with the owner of a check-cashing store in Hialeah and the true owner of the store agreed to cash these checks for a thirty percent fee.

In or around 2015, Garcia and his co-conspirators engaged in a mortgage fraud scheme on a property in Miami Beach.  Garcia and his coconspirators submitted fraudulent loan applications and received approximately $3.7 million in proceeds from this mortgage fraud via interstate wire to the account of the fake title company in Miami.  Garcia then provided checks to co-conspirators who cashed these checks at check-cashing stores in South Florida in the names of payees who were not present.  

Garcia is scheduled to be sentenced on November 14, 2018 at 10:30 a.m. before U.S. District Judge Marcia G. Cooke. 

Mr. Greenberg commended the investigative efforts of the FBI and IRS-CI.  The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

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.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office and Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI) announced that on August 31, 2018, Salvatore Colonna, 69, of Fort Lauderdale, pled guilty to one count of conspiracy to commit wire fraud. 

According to the plea documents, from January 2010, through October 2013, Colonna worked as a broker for Liberty International Financial Services and related entities (together, “Liberty”) in Fort Lauderdale, Florida.  During that period, Colonna agreed on a scheme with other co-conspirators to obtain money from investors by means of materially false and fraudulent pretenses, including (a) that investors’ money would be used to buy precious metals; (b) that investors would receive substantial dividends on Liberty investments; and (c) that the defendant would only take a five to fifteen percent commission on investments.  In truth and in fact, as Colonna knew, Liberty was not using investor money to buy precious metals, Liberty investments would not pay substantial dividends, and the defendant knowingly took commissions on investors’ monies as high as forty percent.  

According to the plea documents, from January 2010, through October 2013, investors sent over $16 million in funds to Liberty.  Liberty returned only around $3 million to investors.  A substantial percentage of the money was used to pay the founders of Liberty and the defendant, who received over $2 million in commissions.  

Colonna is scheduled to be sentenced on November 16, 2018 at 1:30 p.m. before U.S. District Judge Beth F. Bloom. 

Mr. Greenberg commended the investigative efforts of the FBI and IRS-CI.  The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.

Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Dr. Andres Mencia, 64, of Fort Lauderdale, Florida was sentenced today to 78 months in prison, after having been convicted by a federal jury in South Florida, of participating in a conspiracy to distribute a controlled substance.

U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration (DEA), Miami Field Division; Special Agent in Charge Shimon R. Richmond of U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Special Agent in Charge Mark Selby of  U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.

“Dr. Mencia has been held accountable in a court of law for casting aside his medical ethics to illegally distribute controlled substances and fuel the opioid epidemic,” said U.S. Attorney Greenberg.  “The U.S. Attorney’s Office and our law enforcement partners remain committed to do everything possible to protect the community from the dangers of opioid abuse and addiction.”

“The opioid epidemic is ravaging communities across the country,” said Assistant Attorney General Benczkowski.  “It is especially disturbing when doctors — like Andres Mencia — disregard their oaths to ‘do no harm’ in exchange for lining their pockets with illicit profits.  The Criminal Division is dedicated to fighting the opioid epidemic by aggressively investigating and prosecuting those healthcare providers who, rather than help those in need, contribute to the opioid epidemic by writing medically unnecessary prescriptions for highly addictive and harmful painkillers.  Thanks to the hard work of our dedicated prosecutors and law enforcement partners, Mencia now faces serious consequences for his crimes.”  

“Today’s sentencing of Dr. Mencia serves as evidence that medical professionals who unethically and illegally dispense highly addictive opioid medication unnecessarily will be subject to prosecution.” said DEA Special Agent in Charge Wright.  “Together with our law enforcement partners, the DEA Miami Field Division continues its commitment to protecting our communities from all forms of illegal practices that result in drug addiction.”

“Dr. Mencia violated the law and his Hippocratic oath to do no harm,” said HHS-OIG Special Agent in Charge Richmond.  “Health professionals who profit by prescribing poisonous opioids can expect to face the law’s full weight.”  

According to evidence admitted at trial, Dr. Mencia ran Adult & Geriatric Institute of Florida lnc, d/b/a AGI Medical & Dental (AGI), in Oakland Park, Florida.  Beginning in or around January 2014 and continuing through October 2017, Dr. Mencia, and office personnel Oscar Luis Ventura-Rodriguez, 41, of Ft. Lauderdale; Nadira Sampath-Grant, 51, of Margate, and John Mensah, 50, of Miami, conspired to perform sham consultations with cash-paying patients.  The evidence showed that the true and intended purpose of the consultations was to improperly issue the patients’ prescriptions for opioids and narcotics, such as Oxycodone, OxyContin and Percocet, in exchange for cash payments.  Pursuant to Dr. Mencia’s instructions, co-conspirators kept track of the drug-seeking patients by identifying them as “CS” (controlled substance) “patients.” On occasion, Dr. Mencia provided his co-conspirators pre-signed prescriptions to issue the “CS” patients prescriptions for controlled substances in his name.  During the course of the conspiracy, Dr. Mencia was not providing a medically meaningful consultation but was in fact acting outside the scope of his professional practice and without legitimate medical purpose.  

Ventura-Rodriguez, Sampath-Grant and Mensah previously pleaded guilty to conspiracy to defraud the United States by unlawfully distributing controlled substances.  U.S. District Judge William P. Dimitrouleas sentenced the conspirators as follows:

Dr. Mencia was sentenced to 78 months in prison, to be followed by three years of supervised release, along with a $4,800 forfeiture and $250,000 fine.  Ventura-Rodriguez was sentenced to serve 24 months in prison, to be followed by three years of supervised release and ordered to pay $396,428.18 in restitution, jointly and severally.  Sampath-Grant was sentenced to serve 18 months in prison, to be followed by three years of supervised release, and ordered to pay $396,428 in restitution.  Mensah was sentenced to time-served, three years of supervised release and ordered to pay $132,142 in restitution.

The investigation was conducted by DEA, HHS-OIG and HSI.  The Aventura Police Department, City of Miami Police Department, Miami-Dade Police Department, and Miami Gardens Police Department assisted in the investigation.  This case was prosecuted by Assistant U.S. Attorney Michael Gilfarb of the Southern District of Florida and Trial Attorney Adam G. Yoffie 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 http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.

Dr. Andres Mencia, 64, of Fort Lauderdale, Florida was sentenced today to 78 months in prison, after having been convicted by a federal jury in South Florida, of participating in a conspiracy to distribute a controlled substance.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida; Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration (DEA), Miami Field Division; Special Agent in Charge Shimon R. Richmond of U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Special Agent in Charge Mark Selby of  U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.

“The opioid epidemic is ravaging communities across the country,” said Assistant Attorney General Benczkowski.  “It is especially disturbing when doctors — like Andres Mencia — disregard their oaths to ‘do no harm’ in exchange for lining their pockets with illicit profits.  The Criminal Division is dedicated to fighting the opioid epidemic by aggressively investigating and prosecuting those healthcare providers who, rather than help those in need, contribute to the opioid epidemic by writing medically unnecessary prescriptions for highly addictive and harmful painkillers.  Thanks to the hard work of our dedicated prosecutors and law enforcement partners, Mencia now faces serious consequences for his crimes.”  

“Dr. Mencia has been held accountable in a court of law for casting aside his medical ethics to illegally distribute controlled substances and fuel the opioid epidemic,” said U.S. Attorney Greenberg.  “The U.S. Attorney’s Office and our law enforcement partners remain committed to do everything possible to protect the community from the dangers of opioid abuse and addiction.”

“Today’s sentencing of Dr. Mencia serves as evidence that medical professionals who unethically and illegally dispense highly addictive opioid medication unnecessarily will be subject to prosecution.” said DEA Special Agent in Charge Wright.  “Together with our law enforcement partners, the DEA Miami Field Division continues its commitment to protecting our communities from all forms of illegal practices that result in drug addiction.”

“Dr. Mencia violated the law and his Hippocratic oath to do no harm,” said HHS-OIG Special Agent in Charge Richmond.  “Health professionals who profit by prescribing poisonous opioids can expect to face the law’s full weight.”   

According to evidence admitted at trial, Dr. Mencia ran Adult & Geriatric Institute of Florida lnc, d/b/a AGI Medical & Dental (AGI), in Oakland Park, Florida.  Beginning in or around January 2014 and continuing through October 2017, Dr. Mencia, and office personnel Oscar Luis Ventura-Rodriguez, 41, of Ft. Lauderdale; Nadira Sampath-Grant, 51, of Margate, and John Mensah, 50, of Miami, conspired to perform sham consultations with cash-paying patients.  The evidence showed that the true and intended purpose of the consultations was to improperly issue the patients’ prescriptions for opioids and narcotics, such as Oxycodone, OxyContin and Percocet, in exchange for cash payments.  Pursuant to Dr. Mencia’s instructions, co-conspirators kept track of the drug-seeking patients by identifying them as “CS” (controlled substance) “patients.”  On occasion, Dr. Mencia provided his co-conspirators pre-signed prescriptions to issue the “CS” patients prescriptions for controlled substances in his name.  During the course of the conspiracy, Dr. Mencia was not providing a medically meaningful consultation but was in fact acting outside the scope of his professional practice and without legitimate medical purpose.  

Ventura-Rodriguez, Sampath-Grant and Mensah previously pleaded guilty to conspiracy to defraud the United States by unlawfully distributing controlled substances.  U.S. District Judge William P. Dimitrouleas sentenced the conspirators as follows:

Dr. Mencia was sentenced to 78 months in prison, to be followed by three years of supervised release, along with a $4,800 forfeiture and $250,000 fine.  Ventura-Rodriguez was sentenced to serve 24 months in prison, to be followed by three years of supervised release and ordered to pay $396,428.18 in restitution, jointly and severally.  Sampath-Grant was sentenced to serve 18 months in prison, to be followed by three years of supervised release, and ordered to pay $396,428 in restitution.   Mensah was sentenced to time-served, three years of supervised release and ordered to pay $132,142 in restitution.

The investigation was conducted by DEA, HHS-OIG and HSI.  The Aventura Police Department, City of Miami Police Department, Miami-Dade Police Department, and Miami Gardens Police Department assisted in the investigation.  This case was prosecuted by Assistant U.S. Attorney Michael Gilfarb of the Southern District of Florida and Trial Attorney Adam G. Yoffie of the Criminal Division’s Fraud Section.

A Miami escort service owner was sentenced today to 24 months in prison for filing a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida. 

According to court documents, Dennis Zarudny was the director and 100% shareholder of Denzar Inc., which did business as “Elite Miami Escorts” and “Elite Escort Service” in the Miami area. According to Denzar’s internet website, the company was a “prestigious escort agency providing 24 hour outcall escort services & adult entertainment for upscale gentlemen and couples in South Florida.” Zarudny previously pleaded guilty in April 2018 to filing a false individual income tax return for 2012 that underreported his total income from his escort business. 

For tax years 2011 through 2014, Zarudny filed false corporate and personal income tax returns with the IRS, which substantially underreported his business income.  Zarudny allowed his customers to pay for the escorts’ services by cash, check, and credit card.  Zarudny reported income from credit card transactions but did not fully report the income he received from customers who paid in cash and check.

In addition to the term of imprisonment imposed, Zarudny was ordered to serve one year of supervised release. The court scheduled a hearing to determine restitution to the IRS on December 7, 2018.

Principal Deputy Assistant Attorney General Zuckerman and United States Attorney Greenberg commended special agents of IRS-Criminal Investigation, who investigated the case, and Assistant United States Attorney Joshua Rothstein and Trial Attorney Grace Albinson of the Tax Division, who are prosecuting this case.

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

U.S. District Judge Federico A. Moreno sentenced a Miami area man to four years in prison, three years’ supervised release, and $1,800 in restitution for obstructing the free exercise of religious beliefs by threatening, in a phone message, to detonate a bomb at a mosque in Pembroke Pines, Florida, U.S. Attorney Benjamin G. Greenberg, Acting Assistant Attorney General of the Civil Rights Division John Gore, and Robert F. Lasky, Special Agent in Charge of the FBI Miami Field Office announced.

Dustin Allen Hughes, 26, pleaded guilty in June 2018 in the Southern District of Florida to one count of obstructing the free exercise of religious beliefs for making the threatening call.  During the plea hearing, Hughes admitted that on May 5, he called an emergency contact for the Jamaat Ul Muttaqeen Mosque of Pembroke Pines, Florida, and left a hate-filled and profanity-laden voicemail message denigrating Islam and threatening to blow up the mosque.  Hughes further admitted that in his message he specifically stated that he had a detonator, that he was “going to blow your . . . temple up,” and that “you guys are all going to be up in flames after I’m done with you.”

Following the threatening voice message, law enforcement was contacted and immediately responded, but no bomb was uncovered after an extensive exterior and interior sweep of the mosque.

“This prosecution sends a clear message that committing hate crimes has serious consequences,” said U.S. Attorney Benjamin Greenberg. “Along with our law enforcement partners, the U.S. Attorney’s Office will continue to prosecute those individuals who threaten members of our South Florida community because of their religious beliefs.”

“The sentence handed down today reflects the seriousness of threats to places of worship, which can instill fear in whole communities,” said Acting Assistant Attorney General John Gore. “The Justice Department will continue to vigorously prosecute hate crimes so that all people, no matter how they worship, can live their lives freely and without fear.”

“Freedom of religion is a fundamental right for every American,” said Robert F. Lasky, Special Agent in Charge of the FBI Miami Field Office. “The FBI and its partners will work tirelessly to ensure anyone who threatens those rights is held accountable.”

This case was investigated by the FBI’s Miami Area Corruption Task Force and the FBI’s Joint Terrorism Task Force (JTTF). The Pembroke Pines Police Department, the Miami-Dade Police Department, and the City of Miami Police Department also provided assistance with this matter.  The case was prosecuted by Assistant U.S. Attorney Michael Davis of the Southern District of Florida and Trial Attorney Samantha Trepel of the Civil Rights Division.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, and  Larry S. Hortert, Regional Director, United States Department of Agriculture (USDA), Food Safety & Inspection Service (FSIS), announced that Victor H. Gonzalez, 53, of Loxahatchee, Florida, was sentenced on August 27, 2018, for his involvement in the inhumane slaughter of swine and the sale of swine meat for human consumption, in violation of the Humane Methods of Slaughter Act (HMSA), Title 71, United States Code, Section 1902(a) and the Federal Meat Inspection Act (FMIA), as amended, Title 21, United States Code, Section 610(b).

Gonzalez, who had previously pled guilty, was sentenced by U.S. District Judge Donald M. Middlebrooks, to three years of probation and a fine of $75,000.  Judge Middlebrooks also barred Gonzalez from any activities connected with the slaughtering of meat products for any commercial sale or use for the term of probation. In imposing sentence, the Court exercised its discretion to vary upward and imposed a fine almost 10 times the guideline range for the economically driven offense.

According to the court record, including a Joint Factual Statement, Gonzalez was the president of El Milagro Nursery, Inc. (“Milagro”), a company with its principal place of business in Loxahatchee, Florida. Gonzalez was responsible for the day-to-day management and oversight of its activities, and engaged in the slaughtering, processing, handling, storing, and selling of meat and meat food products in commerce, for human consumption, including swine.

On December 17, 2016, federal officers conducted a surveillance and inspection visit at the Milagro facility.  Employees were observed engaged in the slaughter and processing of swine for customers.  The premises lacked proper, operable equipment to stun or otherwise render the animals insensible to pain, as required by law.  The business practices at Milagro, as directed by Gonzalez, were not humane. 

The HMSA established as the public policy of the United States, that the slaughtering or handling for slaughter of livestock, including swine, may only be carried out by humane methods.  The law requires that such animals be rendered insensible to pain by one of the methods described in the law, prior to the animal being shackled, hoisted, thrown, cast, or cut. Title 7, United States Code, Sections 1901-1902(a).

Mr. Greenberg commended the investigative efforts of the USDA FSIS, Office of Program Evaluation, Enforcement and Review, Compliance & Investigations Division and thanked the Palm Beach County Agricultural Unit for their assistance.  This matter was prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.

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.

Michael R. Casey, 71, who was apprehended in Mexico after being a fugitive for over four years, pled guilty on August 31, 2018 to knowingly failing to appear in court in 2014.   United States District Judge Federico A. Moreno accepted the guilty plea in the bond jump matter, Case No. 14-20619-Cr-Moreno, and scheduled a sentencing hearing for November 15, 2018.  

​            Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Amos Rojas, Jr., United States Marshal, United States Marshals Service (USMS), Southern District of Florida, made the announcement.

When Casey jumped bond, he was pending trial on federal charges related to an alleged $20 million investment fraud scheme.  The investment fraud case is scheduled for trial before U.S. District Judge K. Michael Moore on October 29, 2018.

            According to the court record, including facts agreed to by the defendant at the failure to appear plea hearing, Casey had been arrested and released on bond in September 2012 in United States v. James C. Howard, III, et al., Case No. 12-20630-Cr-Lenard (this matter is now pending before Judge Moore).  Pursuant to bond conditions, the defendant’s travel was restricted to the Southern District of Florida, with the exception that he could travel to visit his mother in North Carolina with prior permission from the U.S. Probation Office.

During the course of the fraud case, U.S. District Judge Joan A. Lenard entered multiple Orders requiring Casey and his co-conspirators to be present at all hearings and conferences.  Casey was present at status conferences from 2012 to 2014, including the one where the fraud trial was set for May of 2014.  A further status conference was set for April 29, 2014.Casey received permission to travel, via car, to North Carolina and back to South Florida, prior to the April 29, 2014 status conference.  On April 21, 2014, Casey rented a car in Tallahassee, Florida, drove over 2,000 miles, and returned the car on April 25, 2014 in Laredo, Texas, a city on the United States border with Mexico.  On April 29, 2014, Judge Lenard held the status conference at the U.S. District Court in Miami-Dade County, Florida.  Casey knowingly failed to appear at the hearing and Judge Lenard issued a bench warrant.

According to allegations contained in the court record of the fraud case, Casey, originally of Fort Lauderdale, and co-defendants Patricia S. Saa, of Tampa, Louis N. Gallo, III, of Parkland, and James C. Howard, III, of Parkland, defrauded individuals who invested in Commodities Online LLC (COL).  From approximately January 2010 through April 2011, Casey and his co-conspirators allegedly used material false and fraudulent representations and material omissions to obtain over $20 million from over 700 investors.

Casey and his co-conspirators allegedly used COL to sell COL ownership units, subscriptions to the COL website, and investments in purported transactions to buy and sell commodities.  Casey and his co-conspirators represented to investors that COL had a track record of profits on these purported contracts.  However, COL did not have profits. 

Casey and his co-conspirators also allegedly made material misrepresentations and omissions about the leaders of COL.  After mid-2010, Casey and his co-conspirators represented that Howard, who had a prior federal criminal conviction, was no longer managing COL, when in fact, Howard remained in charge.  

In September 2013, Howard pled guilty to one count of conspiracy to commit mail and wire fraud.  In December 2013, Howard was sentenced to 189 months in prison. 

In August of 2014, Gallo, pled guilty to one count of conspiracy to commit mail and wire fraud.  In October of 2014, Gallo was sentenced to 168 months in prison.

In July of 2014 Balbirer, an assistant to Gallo, pled guilty to two counts of money laundering.  In September of 2015, Balbirer was sentenced to 17 months in prison.

In addition, other co-conspirators in the COL fraud scheme were charged separately with conspiracy to commit mail and wire fraud.  In November 2013, three defendants pled guilty for their involvement in the scheme.  In February 2015, Timothy Josselson was sentenced to 38 months in prison, in Case No. 13-20730-Cr-Altonaga.  In February 2015, Kathryn Josselson was sentenced to 36 months in prison, in Case No. 13-20731-Cr-Moore.   In March 2015, Robert Lananna was sentenced to 40 months in prison, in Case No. 13-20732-Cr-Ungaro. 

            Mr. Greenberg commends the investigative efforts of the FBI and USMS in this matter.  Mr. Greenberg thanks the Mexican government for its assistance with the defendant’s apprehension.  This case is being prosecuted by Assistant U.S. Attorney Ana Maria Martinez.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty in a court of law. 

Related court documents and information can be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

Smart Lab LLC, the corporation’s Chief Executive and Chief Operating Officers, as well as the top sales representative pled guilty for their participation in a multi-million health care fraud scheme that involved the filing of fraudulent insurance claim forms, defrauding health care benefit programs, and money laundering.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida; Robert Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Michael J. De Palma, Acting 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.

H. Hamilton Wayne, a/k/a “Hawkeye,” 40, of Palm Beach Gardens, Justin Morgan Wayne, 39, of Boca Raton, and Smart Lab LLC, of Palm Beach Gardens, pled guilty today to one count of conspiracy to commit health care fraud.  The Waynes and the corporation are scheduled to be sentenced on November 1, 2018 at 11 a.m. before United States District Judge Donald M. Middlebrooks.

Yesterday, Lanny Fried, 41, of Miami, pled guilty to one count of conspiracy to commit money laundering.  Sentencing for Fried is scheduled for November 7, 2018 at 3 p.m. before United States District Judge Robin Rosenberg. 

According to court documents, Smart Lab LLC was established by Chief Executive Officer H. Wayne, and Chief Operating Officer J. Wayne, to perform confirmatory urinalysis testing. Smart Lab, H. Wayne and J. Wayne established bank accounts to receive proceeds of insurance claims for medically unnecessary urinalysis testing and to pay kickbacks and bribes to individuals and entities that referred urine samples to Smart Lab for testing.

H. Wayne and J. Wayne established employment agreements wherein H. Wayne and 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, Smart Lab, H. Wayne, J. Wayne, and co-conspirators developed form standing orders and drug testing protocols 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, H. Wayne, J. Wayne, and others could bill to the insurance plans.  Smart Lab, H. Wayne and J. Wayne 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.

In addition, Fried, a top Smart Lab sales representative, had an agreement with Smart Lab to receive commissions of approximately 50% of the insurance reimbursements for the substance abuse treatment facilities he referred to Smart Lab.  These payments were classified as commissions when in reality they were kickbacks for the referral of excessive, medically unnecessary, fraudulent and duplicative confirmatory drug testing.  Fried served as the sales representative for Smart Lab’s largest account, Reflections Treatment Center in Margate, Florida.  Fried used a portion of these commissions to pay Reflections’ owner, Kenneth Chatman, illegal cash kickbacks to induce him to continue referring urine samples to Smart Lab.  Using Fried as a “middleman” for the payments to Chatman disguised the true ownership and purpose of the funds.  From 2005 through 2017, Smart Lab paid Fried over $600,000.  These payments came from proceeds of health care fraud.

Fried also recruited friends and business associates to engage in similar activity.  These individuals 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 Fried and others were for services rendered.  The employment contracts were created to hide the true purpose and recipient of the payments. Fried and the others involved did not perform any actual services for Smart Lab and they were paid “commissions” from the proceeds of health care fraud.  These funds were then disbursed to others, per Fried’s instructions.

Mr. Greenberg commended the investigative efforts of the Greater Palm Beach Health Care Fraud Task Force. Agencies of the task force include the FBI, IRS-CI, Florida Division of Investigative and Forensic Services, Amtrak OIG, DOL-EBSA, and  NICB.  These cases are being prosecuted by Assistant United States Attorneys A. Marie Villafaña and Alexandra Chase.     

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov at www.usdoj.gov/usao/fls.

Yesterday, Donald Rowley, 62, of Port St. Lucie, Florida, was sentenced by U.S. District Court Robin L. Rosenberg to 168 months in prison and a lifetime of supervised release, after previously pleading guilty to possessing and receiving child pornography.

Benjamin G. Greenberg, U.S. Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

            According to the court record, from July through December 2017, Rowley used a peer-2-peer internet network to search for, receive and share child pornography.  Upon executing a search warrant at Rowley’s home, law enforcement discovered computers with over 450 videos of child pornography, search terms for child pornography, and peer-2-peer software.

Rowley had previously pled guilty to committing a sex offense involving two young girls in 1988, in the State of Maryland.

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.

Mr. Greenberg commended the investigative efforts of the FBI.  This case is being prosecuted by Assistant United States Attorney Gregory Schiller.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

A Miami-Dade Police Officer had her initial appearance today on conspiracy and theft of government money charges.

Benjamin G. Greenberg, U.S. Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Juan J. Perez, Director, Miami-Dade Police Department (MDPD), made the announcement.

Ebony Nesbitt, 28, of North Miami, was charged by indictment with one count of conspiracy to commit an offense against the United States, in violation of Title 18, United States Code, Section 371; and one count of theft of government money, in violation of Title 18, United States Code, Section 641.  If convicted, Nesbitt faces a maximum statutory sentence of 5 years in prison for the conspiracy and 10 years in prison for the theft.  Nesbitt is scheduled to be arraigned on the indictment on September 12, 2018.

According to the indictment, Nesbitt participated in a scheme in which she and her co-conspirators designated Nesbitt’s Higher One, Inc. bank account to receive the direct deposit of a fraudulently obtained federal income tax refund.  The refund was deposited into Nesbitt’s Higher One, Inc. account on October 2, 2013, before Nesbitt joined the MDPD as a police officer.

An indictment is merely an accusation. A defendant is presumed innocent until proven guilty in a court of law.

Mr. Greenberg commends the investigative efforts of the FBI, IRS-CI, MDPD, and FBI Miami Area Corruption Task Force in this matter.  This case is being prosecuted by Assistant U.S. Attorney Brian Dobbins. Per U.S Attorneys Office Ebony Nesbitt was acquitted of the charges at trial

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

On August 28, 2018, a Broward resident was sentenced to 36 months in prison, to be followed by three years of supervised release, and was ordered to pay $988,175 in restitution for theft of government money.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

Anthony Charles Dwight Box, 57, of Plantation, Florida, previously pled guilty to one count of theft of government money, in violation of Title 18, United States Code, Section 641.

According to court documents, in late 2012, a federal income tax return was filed on behalf of Box for tax year 2011 that included a fake Form W-2G claiming gross gambling winnings of $3,775,000 from a poker tournament and claiming federal tax withholdings of $1,057,000.  The defendant’s Form 1040 also claimed $3,525,266 in gambling losses, which were used to offset Box’s purported income from gambling winnings, thereby generating a claimed refund of $986,618.

The IRS approved payment of Box’s refund and applied over $250,000 to Box’s 2005 and 2006 tax liabilities and to non-IRS debt.  The remainder of the refund was sent to Box via a United States Treasury check in the amount of $735,463.69.  Box endorsed and deposited the check knowing that he was not entitled to the refund and that it did not belong to him.

The IRS determined that Box’s 2011 federal income tax return was fraudulent and the claimed gambling winnings, withholdings, and losses were false.  The fraudulent misrepresentations on Box’s tax return resulted in a loss of $988,175 to the IRS.

Mr. Greenberg commended the investigative efforts of IRS-CI and the FBI.  This case was prosecuted by Assistant U.S. Attorney Daya Nathan.

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.

Today, three individuals, a Vero Beach attorney, a property developer and a condominium buyer were sentenced to prison for participating in a criminal conspiracy and making false statements to a federally insured institution.  Two of the three men were ordered to forfeit a total of approximately $290,000.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida; Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Edwin Bonano, Special Agent in Charge, Tampa, Florida, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) made the announcement.

According to the court record, in 2009, Eric Granitur, age 60, a member of the Florida Bar, owned and operated Live Oak Title, which conducted two real estate closings for the purchase of five condominiums at the Vero Beach Hotel and Spa.  The seller and developer of the Vero Beach Hotel and Spa, George Heaton, age 75, of West Palm Beach, paid numerous incentives to buyer Stephen McKenzie, age 46, of Melbourne, to purchase the condominiums.  Heaton agreed to pay the “cash-to-close” amount that the buyer McKenzie was expected to bring to closing, and nearly $380,000 in additional cash after closing. 

Granitur’s title company, Live Oak Title, conducted the closings for the sales of the Vero Beach Hotel and Spa condominium units sold to buyer McKenzie.  As an escrow agent, Granitur was required to truthfully and accurately prepare and distribute a settlement statement to the financial institutions, known as a “HUD-1,” in preliminary form for review by the financial institution, prior to the closing of escrow.   The closing statement was required to accurately reflect, among other information, the sales price, the closing funds provided by the borrower and all of the seller’s contributions.  As an escrow agent, Granitur was responsible for receiving and holding in trust, in an escrow account, the mortgage loan proceeds from the financial institutions that financed the purchase of the condominium units, and he was responsible for disbursing those loan proceeds only after final approval by the financial institutions. 

On two occasions, involving Vero Beach Hotel and Club condo units sold by Heaton to McKenzie, Granitur knowingly caused a false closing statement to be transmitted to a federally insured financial institution.  The HUD-1 closing statements failed to truthfully disclose seller credits and incentives.  Additionally, the closing statements failed to disclose that the seller was paying the buyer’s “cash-to-close.”  The financial institutions relied upon the closing statement in authorizing the release of funds.

U.S. District Judge Robin L. Rosenberg sentenced Granitur, Heaton and McKenzie to prison today.

Granitur was sentenced to 12 months and one day in prison, to be followed by 5 years of supervised release.  He was ordered to forfeit approximately $28,000.

Heaton, who pleaded guilty and cooperated with the government, was sentenced to 6 months in prison, 3 years of supervised release, and forfeited approximately $263,000.

McKenzie, who pleaded guilty and cooperated with the government, was sentenced to 4 months in prison and 3 years of supervised release.

Mr. Greenberg commended the investigative efforts of the FBI and FHFA-OIG in this matter.  This case was prosecuted by Special Assistant U.S. Attorney Joseph A. Capone and Assistant U.S. Attorney Daniel E. Funk.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida and Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced today that that a Grand Jury sitting in Miami, Florida returned an indictment against Samuel Baptiste, 25, of Miami, Florida, charging him with four counts of distributing information pertaining to explosives, in violation of Title 18, United States Code, Section 842(p)(2)(A), one count of attempting to provide material support to a foreign terrorist organization, in violation of Title 18, United States Code, Section 2339B(a)(1), and one count of attempting to provide material support to terrorists, in violation of Title 18, United States Code, Section 2339A.             

Baptiste, who is currently serving an 80 month prison sentence on federal firearms charges, had his initial appearance in front of U.S. Magistrate Judge Edwin G. Torres on August 27, 2018. A detention hearing is scheduled before a U.S. Magistrate Judge, in Miami, on August 30, 2018 at 10:00 a.m.

According to allegations contained within the indictment, on November 6, 2016, Baptiste posted and distributed online documents titled “Instructions: How to Make a Homemade Pipe Bomb,” “Pipe Bombs,” “Improvised Explosive Devices,” and “Improvised Munitions Black Book, Volume 1,” with the intent that the information be used for and in furtherance of an activity that constitutes a Federal crime of violence.  Moreover, by posting these documents, Baptiste attempted to provide material support and resources to a foreign terrorist organization, specifically ISIS.

If convicted, Baptiste faces a maximum sentence of twenty years in prison as to each of count of distributing information and attempting to provide material support to a foreign terrorist organization and fifteen years in prison for attempting to provide material support to terrorists. In addition, Baptiste faces up to three years of supervised release and up to a $250,000 fine on each count of conviction.

The case was investigated by the FBI’s Miami Division and the South Florida Joint Terrorism Task Force (JTTF).  The case is being prosecuted by Assistant U.S. Attorneys Marc S. Anton and Michael Thakur.  Department of Justice Counterterrorism Attorney Joseph Attias provided assistance with this matter.

An indictment is merely an accusation. A defendant is presumed innocent until proven guilty in a court of law. 

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Mauricio Alvarez, 49, of Miami, Florida, pled guilty today, before U.S. District Court Judge Cecilia M. Altonaga, to misconduct or neglect of a ship officer that resulted in the death of an individual, in violation of Title 18, United States Code, Section 1115.

Benjamin G. Greenberg, United States Attorney of the Southern District of Florida, Zinnia P. James, Acting Special Agent in Charge, U.S. Coast Guard Investigative Service (CGIS), Southeast Region and Major Alfredo Escanio, Regional Commander, Florida Fish and Wildlife Conservation Commission (FWC), Division of Law Enforcement, South B Region, made the announcement.

“Illegal charter boat operations pose a grave danger to the public’s safety,” stated U.S. Attorney Benjamin Greenberg.  “Before embarking on an excursion, we implore all passengers to confirm that the charter boat company and captain are authorized to operate.  The U.S. Attorney’s Office and our USCG and FWC partners will continue to enforce all federal criminal laws and maritime regulations and hold the violators accountable, so that residents and visitors can safely enjoy South Florida’s open waters.”

"Tragically people have lost their lives on illegal charters, as was seen in the case of the vessel Jaguar in the Tampa Bay area and in the case of the Miami Vice yacht in Miami," said Capt. Ladonn Allen, Chief of the Coast Guard Seventh District Prevention Department. "The unsafe atmospheres that these types of companies and unlicensed captains, who knowingly engage in illegal activity, create on their boats show a complete disregard for passenger safety and have been responsible for multiple deaths in Florida alone. We cannot stress enough to anyone looking to charter a boat to verify the captain’s license and safety of the vessel."

"The results of this case send a strong message to anyone looking to operate a charter boat illegally," said Capt. Michael Fazio, Staff Judge Advocate for the Coast Guard's Seventh District in Miami. "We will continue to work with our Department of Justice partners to investigate, enforce, and hold accountable these reckless companies and operators who take shortcuts and care only about the money they can make while subverting the regulations and licensing designed to prevent tragedies such as this one."

“The work performed by investigators with all of the agencies involved in this case was exemplary, and we at the FWC appreciate the work done by the Coast Guard Investigative Service and the U.S. Attorney's Office to reach a lawful resolution to this tragedy,” stated Major Alfredo Escanio, FWC.

According to the court record, including the agreed upon factual proffer, on April 1, 2018, the United States Coast Guard (USCG) received a report from a Miami-Dade 911 operator that a person was trapped under the motor yacht (M/Y) MIAMI VICE, near Monument Island.  USCG and local law enforcement units arrived at the scene of the reported incident and located M/Y MIAMI VICE adjacent to Monument Island.  An investigation by FWC revealed M/Y MIAMI VICE was chartered for a four-hour period on April 1, 2018 and departed a marina with approximately seven passengers.  Alvarez was employed as the vessel captain of M/Y MIAMI VICE and had a first mate on board the vessel.  M/Y MIAMI VICE had been chartered for a four-hour trip for $3,000 and Alvarez was to be paid $150 per hour.

Two passengers were reportedly in the water in close proximity to the stern of M/Y MIAMI VICE when Alvarez engaged the engines of M/Y MIAMI VICE in reverse.  One of the individuals, who was swimming in the water, was struck by M/Y MIAMI VICE’s propellers and killed.  Alvarez, as the operator of the M/Y MIAMI VICE, could not see the stern of the vessel or ensure the safety of any remaining swimmers in the water while engaging the engines from this location without assistance from another individual.  Alvarez did not have a United States Captain license at the time of the incident.

Alvarez is scheduled to be sentenced by Judge Altonaga on November 19, 2018 at 9:00 a.m., in Miami.

Mr. Greenberg commended the investigative efforts of CGIS and FWC in this matter.  This case is being prosecuted by Assistant U.S. Attorney Daniel J. Marcet and Coast Guard Special Assistant U.S. Attorney Phil 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 on http://pacer.flsd.uscourts.gov.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida and Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced today the arrest of Michael Mora, 35, of Miami, Florida, on a criminal complaint charging him with making hoax bomb threats, in violation of Title 18, United States Code, Section 844(e).  Mora had his initial appearance today in front of U.S. Magistrate Judge Edwin G. Torres.

According to allegations contained within the complaint, on August 21, 2018, the Dadeland Mall located in Miami, Florida received a bomb threat via their customer inquiry form.  Further investigation revealed that this threat originated from Mora’s residence, and while investigating this threat, law enforcement learned that bomb threats made by Mora had also been made against the White House, the U.S. Capitol, the Lincoln Memorial, Arlington National Cemetery, and Fort Knox.

The case was investigated by the FBI’s Miami Division, the South Florida Joint Terrorism Task Force (JTTF) and Miami-Dade Police Department.  The case is being prosecuted by Assistant U.S. Attorney Marc S. Anton.

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

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Bank Admits to Helping U.S. Taxpayers Conceal Income and Assets

from the United States; Agrees to Pay $60.4 Million

Basler Kantonalbank (BKB), a bank headquartered in Basel, Switzerland, entered into a deferred prosecution agreement (DPA) that was approved today by the U.S. District Court for the Southern District of Florida, announced United States Attorney Benjamin G. Greenberg, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division, and Chief Don Fort for Internal Revenue Service-Criminal Investigation.  As part of the agreement, Basler Kantonalbank will pay $60.4 million in total penalties.  

“U. S. citizens who seek to avoid their tax obligations by hiding income in undeclared bank accounts abroad, and the financial institutions that assist them in doing so, will be held accountable for their actions, both civilly and criminally,” said U. S. Attorney for the Southern District of Florida Benjamin G. Greenberg. “In this case, BKB will not only pay a criminal fine and restitution, but also a civil forfeiture of $29.7 million in proceeds illegally derived from their conduct. The U.S. Attorney’s Office is committed to helping the IRS investigate and prosecute not only those who evade their taxes, but the financial institutions that assist them in doing so.”

“The era of hiding money overseas to evade U.S. tax obligations is over,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “Financial institutions, professionals, and accountholders are on notice that the Department continues to aggressively pursue these offenses and will hold both individuals and entities accountable.”

“The deferred prosecution agreement signed today with BKB reinforces that while the deadline for the offshore voluntary disclosure program may be fast approaching, holding banks and individuals accountable will not stop,” said Chief Don Fort for IRS-Criminal Investigation. “Those who think they have successfully avoided detection and prosecution for hiding or failing to report offshore holdings to date should know that our commitment in this area is only increasing through our international partnerships and the strategic use of sophisticated data analytic tools.”

In the DPA and related court documents, BKB admits that between 2002 and 2012 it conspired with its employees, external asset managers, and clients to: 1) defraud the United States with respect to taxes; 2) commit tax evasion; and 3) file false federal tax returns.  At its peak in 2010, the bank held approximately 1,144 accounts for U.S. customers, with an aggregate value of approximately $813.2 million (many, but not all of which, were undeclared accounts that were part of the conspiracy).   According to the terms of the DPA approved today, BKB will cooperate fully, subject to applicable laws and regulations, with the United States, the Internal Revenue Service (IRS), and other U.S. authorities.  The DPA also requires BKB to affirmatively disclose certain material information it may later uncover regarding U.S.-related accounts, as well as to disclose certain information consistent with the Department’s Swiss Bank Program with respect to accounts closed between January 1, 2009, and December 31, 2017.  Under the DPA, prosecution against the bank for conspiracy will be deferred for an initial period of three years to allow BKB to demonstrate good conduct. 

The $60.4 million penalty against BKB has three parts.  First, BKB agreed to pay $17,200,000 in restitution to the IRS, which represents the unpaid taxes resulting from BKB’s participation in the conspiracy.  Second, BKB agreed to forfeit $29,700,000 to the United States, which represents gross fees (not profits) that the bank earned on its undeclared accounts between 2002 and 2012.  Finally, BKB agreed to pay a fine of $13,500,000.  This penalty amount reflects BKB’s thorough internal investigation and cooperation with the United States, as well as the bank’s extensive efforts at remediation, and its waiver of any claim of foreign sovereign immunity.  Among other remedial efforts, BKB implemented measures to require all U.S.-related accounts be tax compliant, closed a branch office responsible for much of the tax fraud and fired the employees involved in the offense, and conducted extensive outreach to former clients to encourage them to participate in IRS-sponsored voluntary disclosure programs. 

According to court documents filed as part of the DPA, BKB is a bank incorporated by the Parliament of the Basel City Canton.  From 1997 to 2014, BKB had a private-banking branch that operated from Zurich.  The bank assisted certain U.S. clients in concealing their offshore assets and income from U.S. taxing authorities.  By 2010, when BKB’s U.S.-related business was at its peak, the bank held approximately 1,144 accounts for U.S. customers, with an aggregate value of approximately $813.2 million.  Many, but not all, of these accounts were undeclared and part of the conspiracy to defraud the United States.

BKB employees met directly with clients, but the bank primarily dealt with its undeclared U.S. customers through external asset managers.  Among these external asset managers was Martin Lack.  (Lack was later charged and pleaded guilty to a tax-fraud conspiracy charge.)  In or around 2003, Lack left Swiss bank UBS AG, where he had been a Team Head on the North America desk, and brought over 20 undeclared U.S. clients to BKB.  Lack met directly with the management of the Zurich branch, including the executive who headed the branch and served on BKB’s Extended Executive Board, and discussed bringing his clients to the bank.  With the knowledge and encouragement of the leadership of BKB’s Zurich branch, Lack traveled to the United States to meet with clients with undeclared accounts.  The head of the Zurich branch was also aware that Lack had new clients sign opening forms for BKB while in the United States. In some instances, the forms falsely reported that they were signed in Zurich.  During his trips to the United States, Lack also provided clients with cash services.  He accepted cash from clients wanting to make deposits to their Swiss accounts, and used those funds to provide cash to other clients wanting to make withdrawals.  When he returned to Switzerland, Lack provided BKB with receipts for the transactions so that the clients’ accounts could be reconciled.  BKB recorded the cash transactions as having occurred in Switzerland as normal withdrawals and deposits.  The Zurich branch’s management was aware of these practices.  The bank also provided Lack with office space in Zurich for several months after Lack was released by an external asset management firm for whom he initially worked. 

In March 2008, BKB became aware that UBS was considering closing its cross-border business servicing U.S. persons.  Soon after, in May 2008, it became public that UBS’s cross-border business was under criminal investigation by U.S. authorities.  BKB’s Zurich branch saw this as a business opportunity and sought to attract clients leaving UBS.  A bank document prepared as part of the Zurich branch’s 2009 budgeting process and shared with the Executive Board describes this outlook: As “competitor banks partially withdraw from U.S. business,” BKB should “seize [U.S. customer] market opportunities immediately” as this opportunity was “not leveraged enough.”  The Bank was aware that many of the clients it sought to attract wanted to continue to conceal their accounts.  For example, in one email, BKB employees discussed how a prospective client “received a letter from UBS stating that they either have to tax their assets held with UBS . . . or that, otherwise, they would have to look for a new bank.”  The email made clear that the funds to be transferred to the Bank “were never taxed in the U.S.A.” 

To attract new clients, the Bank signed up several new external asset managers and offered them finder’s fees.  For example, in 2008 the bank reached an agreement with a Swiss financial advisor (who was later indicted in the United States for conspiring with U.S. taxpayers to defraud the United States) who brought ten clients, with over $73 million in assets to the bank from UBS and Credit Suisse AG.  Another adviser brought several U.S. clients to the bank, including a family from New York that transferred over $100 million in undeclared assets from a bank in Liechtenstein. 

During this process, BKB and the external asset managers working with the bank promoted BKB as a safe haven because it lacked a U.S. presence and supposedly would not be subject to a U.S. criminal investigation.  Between July 2008 and March 2009, BKB opened 398 new accounts for U.S. customers, with a resulting inflow of approximately $441.6 million in new assets.

Throughout the conspiracy, BKB took a number of steps and provided a number of services to its undeclared clients.  These services included promoting Swiss bank secrecy as a means of concealing assets and income from taxation in the United States, providing hold-mail services and “assumed name” and “numbered” accounts, and allowing accounts to be established through nominee entities set up in tax-haven jurisdictions such as the British Virgin Islands, Liechtenstein, and Panama.     

In response to prosecutions brought by the Justice Department, BKB took a number of steps to gradually wind down its undeclared business.  Only in late 2011, however, following the indictment of Lack in the United States, did the bank make a decision to exit the business of servicing U.S.-domiciled clients.  Afterward, however, the bank began a thorough process of remediation and cooperation (within the bounds of Swiss law).

U.S. Attorney Greenberg, Principal Deputy Assistant Attorney General Zuckerman and Chief Fort commended special agents of IRS-Criminal Investigation, who investigated this case, as well as Senior Litigation Counsel Mark F. Daly and Trial Attorney Jason H. Poole of the Tax Division, who prosecuted this case.  Zuckerman also thanked Assistant U.S. Attorneys Thomas P. Lanigan, Michelle B. Alvarez, and Eloisa D. Fernandez of the Southern District of Florida for their substantial assistance.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.

Basler Kantonalbank (BKB), a bank headquartered in Basel, Switzerland, entered into a deferred prosecution agreement (DPA) that was approved today by the U.S. District Court for the Southern District of Florida, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division, United States Attorney Benjamin G. Greenberg, and Chief Don Fort for Internal Revenue Service-Criminal Investigation.  As part of the agreement, Basler Kantonalbank will pay $60.4 million in total penalties.  

“The era of hiding money overseas to evade U.S. tax obligations is over,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “Financial institutions, professionals, and accountholders are on notice that the Department continues to aggressively pursue these offenses and will hold both individuals and entities accountable.”

“U. S. citizens who seek to avoid their tax obligations by hiding income in undeclared bank accounts abroad, and the financial institutions that assist them in doing so, will be held accountable for their actions, both civilly and criminally,” said U. S. Attorney for the Southern District of Florida Benjamin G. Greenberg. “In this case, BKB will not only pay a criminal fine and restitution, but also a civil forfeiture of $29.7 million in proceeds illegally derived from their conduct. The U.S. Attorney’s Office is committed to helping the IRS investigate and prosecute not only those who evade their taxes, but the financial institutions that assist them in doing so.”

“The deferred prosecution agreement signed today with BKB reinforces that while the deadline for the offshore voluntary disclosure program may be fast approaching, holding banks and individuals accountable will not stop,” said Chief Don Fort for IRS-Criminal Investigation. “Those who think they have successfully avoided detection and prosecution for hiding or failing to report offshore holdings to date should know that our commitment in this area is only increasing through our international partnerships and the strategic use of sophisticated data analytic tools.”

In the DPA and related court documents, BKB admits that between 2002 and 2012 it conspired with its employees, external asset managers, and clients to: 1) defraud the United States with respect to taxes; 2) commit tax evasion; and 3) file false federal tax returns.  At its peak in 2010, the bank held approximately 1,144 accounts for U.S. customers, with an aggregate value of approximately $813.2 million (many, but not all of which, were undeclared accounts that were part of the conspiracy).   According to the terms of the DPA approved today, BKB will cooperate fully, subject to applicable laws and regulations, with the United States, the Internal Revenue Service (IRS), and other U.S. authorities.  The DPA also requires BKB to affirmatively disclose certain material information it may later uncover regarding U.S.-related accounts, as well as to disclose certain information consistent with the Department’s Swiss Bank Program with respect to accounts closed between January 1, 2009, and December 31, 2017.  Under the DPA, prosecution against the bank for conspiracy will be deferred for an initial period of three years to allow BKB to demonstrate good conduct. 

The $60.4 million penalty against BKB has three parts.  First, BKB agreed to pay $17,200,000 in restitution to the IRS, which represents the unpaid taxes resulting from BKB’s participation in the conspiracy.  Second, BKB agreed to forfeit $29,700,000 to the United States, which represents gross fees (not profits) that the bank earned on its undeclared accounts between 2002 and 2012.  Finally, BKB agreed to pay a fine of $13,500,000.  This penalty amount reflects BKB’s thorough internal investigation and cooperation with the United States, as well as the bank’s extensive efforts at remediation, and its waiver of any claim of foreign sovereign immunity.  Among other remedial efforts, BKB implemented measures to require all U.S.-related accounts be tax compliant, closed a branch office responsible for much of the tax fraud and fired the employees involved in the offense, and conducted extensive outreach to former clients to encourage them to participate in IRS-sponsored voluntary disclosure programs. 

According to court documents filed as part of the DPA, BKB is a bank incorporated by the Parliament of the Basel City Canton.  From 1997 to 2014, BKB had a private-banking branch that operated from Zurich.  The bank assisted certain U.S. clients in concealing their offshore assets and income from U.S. taxing authorities.  By 2010, when BKB’s U.S.-related business was at its peak, the bank held approximately 1,144 accounts for U.S. customers, with an aggregate value of approximately $813.2 million.  Many, but not all, of these accounts were undeclared and part of the conspiracy to defraud the United States.

BKB employees met directly with clients, but the bank primarily dealt with its undeclared U.S. customers through external asset managers.  Among these external asset managers was Martin Lack.  (Lack was later charged and pleaded guilty to a tax-fraud conspiracy charge.)  In or around 2003, Lack left Swiss bank UBS AG, where he had been a Team Head on the North America desk, and brought over 20 undeclared U.S. clients to BKB.  Lack met directly with the management of the Zurich branch, including the executive who headed the branch and served on BKB’s Extended Executive Board, and discussed bringing his clients to the bank.  With the knowledge and encouragement of the leadership of BKB’s Zurich branch, Lack traveled to the United States to meet with clients with undeclared accounts.  The head of the Zurich branch was also aware that Lack had new clients sign opening forms for BKB while in the United States. In some instances, the forms falsely reported that they were signed in Zurich.  During his trips to the United States, Lack also provided clients with cash services.  He accepted cash from clients wanting to make deposits to their Swiss accounts, and used those funds to provide cash to other clients wanting to make withdrawals.  When he returned to Switzerland, Lack provided BKB with receipts for the transactions so that the clients’ accounts could be reconciled.  BKB recorded the cash transactions as having occurred in Switzerland as normal withdrawals and deposits.  The Zurich branch’s management was aware of these practices.  The bank also provided Lack with office space in Zurich for several months after Lack was released by an external asset management firm for whom he initially worked. 

In March 2008, BKB became aware that UBS was considering closing its cross-border business servicing U.S. persons.  Soon after, in May 2008, it became public that UBS’s cross-border business was under criminal investigation by U.S. authorities.  BKB’s Zurich branch saw this as a business opportunity and sought to attract clients leaving UBS.  A bank document prepared as part of the Zurich branch’s 2009 budgeting process and shared with the Executive Board describes this outlook: As “competitor banks partially withdraw from U.S. business,” BKB should “seize [U.S. customer] market opportunities immediately” as this opportunity was “not leveraged enough.”  The Bank was aware that many of the clients it sought to attract wanted to continue to conceal their accounts.  For example, in one email, BKB employees discussed how a prospective client “received a letter from UBS stating that they either have to tax their assets held with UBS . . . or that, otherwise, they would have to look for a new bank.”  The email made clear that the funds to be transferred to the Bank “were never taxed in the U.S.A.” 

To attract new clients, the Bank signed up several new external asset managers and offered them finder’s fees.  For example, in 2008 the bank reached an agreement with a Swiss financial advisor (who was later indicted in the United States for conspiring with U.S. taxpayers to defraud the United States) who brought ten clients, with over $73 million in assets to the bank from UBS and Credit Suisse AG.  Another adviser brought several U.S. clients to the bank, including a family from New York that transferred over $100 million in undeclared assets from a bank in Liechtenstein. 

During this process, BKB and the external asset managers working with the bank promoted BKB as a safe haven because it lacked a U.S. presence and supposedly would not be subject to a U.S. criminal investigation.  Between July 2008 and March 2009, BKB opened 398 new accounts for U.S. customers, with a resulting inflow of approximately $441.6 million in new assets.

Throughout the conspiracy, BKB took a number of steps and provided a number of services to its undeclared clients.  These services included promoting Swiss bank secrecy as a means of concealing assets and income from taxation in the United States, providing hold-mail services and “assumed name” and “numbered” accounts, and allowing accounts to be established through nominee entities set up in tax-haven jurisdictions such as the British Virgin Islands, Liechtenstein, and Panama.     

In response to prosecutions brought by the Justice Department, BKB took a number of steps to gradually wind down its undeclared business.  Only in late 2011, however, following the indictment of Lack in the United States, did the bank make a decision to exit the business of servicing U.S.-domiciled clients.  Afterward, however, the bank began a thorough process of remediation and cooperation (within the bounds of Swiss law).

Principal Deputy Assistant Attorney General Zuckerman, U.S. Attorney Greenberg and Chief Fort commended special agents of IRS-Criminal Investigation, who investigated this case, as well as Senior Litigation Counsel Mark F. Daly and Trial Attorney Jason H. Poole of the Tax Division, who prosecuted this case.  Zuckerman also thanked Assistant U.S. Attorneys Thomas P. Lanigan, Michelle B. Alvarez, and Eloisa D. Fernandez of the Southern District of Florida for their substantial assistance.

An individual who had a pending agreement to purchase a Miami-based licensed towing company (“the Towing Company”) was sentenced to prison after previously pleading to participating in a conspiracy to pay bribes in order to obtain a contract with the City of Opa Locka. 

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.

Raul Sosa Sr. (“Sosa Sr.”) pled guilty before United States District Judge Jose E. Martinez to conspiring to commit Federal programs bribery, in violation of Title 18, United States Code, Sections 371 and 666(a)(2) (Count 1 of the Superseding Indictment).  On August 24, 2018, Judge Martinez sentenced Sosa Sr. to 30 months in prison, to be followed by 3 years of supervised release.  Judge Martinez ordered that the full sentence be served consecutively to the 78-month sentence Sosa Sr. is currently serving for an unrelated federal tax conviction in 2016.

According to the court record, Sosa Sr. and his son Raul Sosa Jr. (“Sosa Jr.), who was the manager of the Towing Company, conspired with then-Opa Locka City Commissioner Luis Santiago and his associate, Dante Starks, to pay Santiago and Starks a $10,000 bribe so that Santiago and Starks would use their positions and influence to ensure that the Towing Company was selected to receive a city towing contract.

The illegal agreement was finalized at an April 19, 2015 meeting between Sosa Sr., Santiago, and Starks, during which Sosa Sr. paid the first installment of the bribe and designated his son, Sosa Jr., as the person who would work with Santiago and Starks to carry out the illegal arrangement.  Over the next month, Sosa Jr., who also pled guilty to conspiring to commit bribery in this case, made additional bribe payments with cash provided by Sosa Sr., and Starks arranged for an Opa Locka city employee to assemble and prepare the Towing Company’s bid package.  After this bid was submitted, Starks violated the City’s purchasing Cone of Silence by contacting a member of the City’s committee ranking the towing bids and directing that individual to rank the Towing Company as the number one company.  To complete the illegal arrangement, Santiago used his position as a City Commissioner to move and vote in favor of the June 24, 2015 resolution authorizing the City Manager to enter into towing contracts with the Towing Company and three other companies.  The next day, Sosa Jr. paid the final installment of the $10,000 bribe to Starks.  Sosa Jr.’s sentencing is set for September 7, 2018, before Judge Martinez.

In related cases, arising from the Opa Locka corruption investigation, Santiago previously pled guilty to conspiring to commit Federal programs bribery and Hobbs Act extortion under color of official right (Case No. 16-20971-CR-WILLIAMS) and was sentenced to 51 months in prison.  His sentence was recently reduced to 30 months in prison.  Starks pled guilty to conspiracy to commit Hobbs Act extortion under color of official right and to commit Federal programs bribery; and to failure to file income tax returns and is scheduled to be sentenced on November 7, 2018.  (Case No. 18-20313-CR-MARTINEZ).  Former Opa Locka City Manager David Chiverton pled guilty to conspiring to commit Federal programs bribery and Hobbs Act extortion under color of official right and was sentenced to 38 months in prison (Case No. 16-20596-CR).  Former Opa Locka Assistant Public Works Director Gregory Harris pled guilty to conspiring to commit Federal programs bribery and Hobbs Act extortion under color of official right (Case No. 16-20589-CR-BLOOM).  Harris was the first defendant to plead guilty to charges arising from this investigation, and received a sentence of probation. 

Mr. Greenberg commended the investigative efforts of the FBI Miami Area Corruption Task Force and IRS-CI in this matter.  Mr. Greenberg thanked the Miami-Dade Police Department and Hialeah Police Department for their assistance.   This case is being prosecuted by Assistant United States Attorneys Edward N. Stamm and Maurice Johnson.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

A West Palm Beach return preparer was charged by indictment with filing false tax returns with the IRS.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, and Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service (IRS-CI), made the announcement. 

Tamara Jeune, a/k/a Tamara Voltaire, was charged by indictment with one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286; four counts of claiming false tax refunds, in violation of Title 18, United States Code, Section 287; and five counts of aiding in the preparation of false tax returns, in violation of Title 26, United States Code, Section 7206(2).

According to the indictment, Jeune obtained four different Employee Identification Filing Numbers (EFINs) for different businesses. The EFINs allowed the businesses to submit tax returns electronically in the names of other individuals. The defendant worked as a tax preparer at one of the businesses in Miami-Dade County, Investment Equity Development, Inc., and managed others at this location. Jeune prepared, filed, and oversaw the preparation and filing of fraudulent federal income tax returns with false IRS Forms for her clients for the 2012 through 2014 tax years. As a result of this scheme, the IRS paid approximately $700,000 in tax refunds related to the fraudulent tax returns, and Jeune often diverted her clients' tax refunds to bank accounts that she controlled.

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

Mr. Greenberg commended the investigative efforts of IRS-CI in connection with this matter.  This case is being 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 on http://pacer.flsd.uscourts.gov.

The former managing director and vice chairman of a Swiss bank pleaded guilty today for his role in a billion-dollar international scheme to launder funds embezzled from Venezuelan state-owned oil company Petróleos de Venezuela, S.A. (PDVSA).U.S. Attorney Benjamin Greenberg of the Southern District of Florida, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Special Agent in Charge Mark Selby of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office made the announcement.

Matthias Krull, 44, a German national and Panamanian resident, pleaded guilty to one count of conspiracy to commit money laundering.  He is scheduled to be sentenced on Oct. 29 by U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida, who accepted his plea today.

As part of his plea, Krull admitted that in his position with the Swiss bank, he attracted private clients, particularly clients from Venezuela, to the bank.  In this role, Krull’s clients included Francisco Convit Guruceaga, who was indicted on money laundering charges on Aug. 16.  Krull’s clients also included three unnamed conspirators described in the Aug. 16 indictment. 

Krull admitted that the conspiracy began in December 2014 with a currency exchange scheme that was designed to embezzle around $600 million from PDVSA, obtained through bribery and fraud, and the conspirators’ efforts to launder a portion of the proceeds of that scheme.  By May 2015, the conspiracy had doubled in amount to $1.2 billion embezzled from PDVSA.  PDVSA is Venezuela’s primary source of income and foreign currency (namely, U.S. Dollars and Euros).  Krull joined the conspiracy in or around 2016, he admitted, when a co-conspirator contacted him to launder the proceeds of a PDVSA foreign-exchange embezzlement scheme. 

Ultimately, Krull joined the conspiracy to launder $1.2 billion worth of funds that were embezzled from PDVSA, he admitted.  Krull and members of the money laundering conspiracy used Miami, Florida real estate and sophisticated false-investment schemes to conceal that the $1.2 billion was in fact embezzled from PDVSA.  Krull also admitted that surrounding and supporting these false-investment laundering schemes are complicit money managers, brokerage firms, banks and real estate investment firms in the United States and elsewhere, operating as a network of professional money launderers. 

Krull’s co-conspirators indicted on Aug. 16 include former PDVSA officials, professional third-party money launderers, and members of the Venezuelan elite, sometimes known as “boliburgués.”

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

This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force’s (OCDETF) “Operation Money Flight,” a partnership among federal, state and local law enforcement agencies.  The OCDETF mission is to identify, investigate and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.

Mr. Greenberg and Mr. Benczkowski commended the investigative efforts of HSI Miami, HSI London, HSI Rome and HSI Madrid in this matter.  This case is being prosecuted by Southern District of Florida Assistant U.S. Attorneys Francisco R. Maderal of the International Narcotics and Money Laundering Section and Michael Nadler of the Economic and Environmental Crimes Section and Assistant Chief David Johnson and Trial Attorney Gwendolyn Stamper of the Criminal Division’s Fraud Section. Assistant U.S. Attorney Nalina Sombuntham of the Southern District of Florida is handling the asset forfeiture.

The Criminal Division’s Office of International Affairs provided substantial assistance in this matter, and U.S. Customs and Border Protection; the National Crime Agency of the United Kingdom; and Italian, Spanish and Maltese law enforcement authorities provided assistance. 

The Fraud Section is responsible for investigating and prosecuting all Foreign Corrupt Practices Act (FCPA) matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.      

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

The former managing director and vice chairman of a Swiss bank pleaded guilty today for his role in a billion-dollar international scheme to launder funds embezzled from Venezuelan state-owned oil company Petróleos de Venezuela, S.A. (PDVSA).

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Benjamin Greenberg of the Southern District of Florida and Special Agent in Charge Mark Selby of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami Field Office made the announcement.

Matthias Krull, 44, a German national and Panamanian resident, pleaded guilty to one count of conspiracy to commit money laundering.  He is scheduled to be sentenced on Oct. 29 by U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida, who accepted his plea today.

As part of his plea, Krull admitted that in his position with the Swiss bank, he attracted private clients, particularly clients from Venezuela, to the bank.  In this role, Krull’s clients included Francisco Convit Guruceaga, who was indicted on money laundering charges on Aug. 16.  Krull’s clients also included three unnamed conspirators described in the Aug. 16 indictment. 

Krull admitted that the conspiracy began in December 2014 with a currency exchange scheme that was designed to embezzle around $600 million from PDVSA, obtained through bribery and fraud, and the conspirators’ efforts to launder a portion of the proceeds of that scheme.  By May 2015, the conspiracy had doubled in amount to $1.2 billion embezzled from PDVSA.  PDVSA is Venezuela’s primary source of income and foreign currency (namely, U.S. Dollars and Euros).  Krull joined the conspiracy in or around 2016, he admitted, when a co-conspirator contacted him to launder the proceeds of a PDVSA foreign-exchange embezzlement scheme. 

Ultimately, Krull joined the conspiracy to launder $1.2 billion worth of funds that were embezzled from PDVSA, he admitted.  Krull and members of the money laundering conspiracy used Miami, Florida real estate and sophisticated false-investment schemes to conceal that the $1.2 billion was in fact embezzled from PDVSA.  Krull also admitted that surrounding and supporting these false-investment laundering schemes are complicit money managers, brokerage firms, banks and real estate investment firms in the United States and elsewhere, operating as a network of professional money launderers. 

Krull’s co-conspirators indicted on Aug. 16 include former PDVSA officials, professional third-party money launderers, and members of the Venezuelan elite, sometimes known as “boliburgués.”

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

This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force’s (OCDETF) “Operation Money Flight,” a partnership among federal, state and local law enforcement agencies.  The OCDETF mission is to identify, investigate and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.

HSI Miami, HSI London, HSI Rome and HSI Madrid investigated this case.  This case is being prosecuted by Assistant Chief David Johnson and Trial Attorney Gwendolyn Stamper of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Francisco R. Maderal of the Southern District of Florida’s International Narcotics and Money Laundering Section and Michael Nadler of the Southern District of Florida’s Economic and Environmental Crimes Section. Assistant U.S. Attorney Nalina Sombuntham of the Southern District of Florida is handling the asset forfeiture.

The Criminal Division’s Office of International Affairs provided substantial assistance in this matter, and U.S. Customs and Border Protection; the National Crime Agency of the United Kingdom; and Italian, Spanish and Maltese law enforcement authorities provided assistance. 

The Fraud Section is responsible for investigating and prosecuting all Foreign Corrupt Practices Act (FCPA) matters.  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.      

A former federal grand juror was sentenced to prison today for obstructing justice.

Benjamin G. Greenberg, U.S. Attorney for the Southern District of Florida and Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

Leslie Lynn Heburn, 37, Miami, previously pled guilty to obstruction of justice, in violation of Title 18, United States Code, Section 1503.  U.S. District Judge Marcia G. Cooke sentenced Heburn to one year and one day in prison, to be followed by one year of supervised release.

According to the court record, on January 19, 2017, Heburn was sworn in as a federal grand juror and advised of the rules concerning grand jury secrecy, including that a grand juror is not to disclose matters occurring before the grand jury.  Heburn was also advised of the possible criminal consequences of making any unauthorized disclosure of grand jury information.

On May 4, 2017, Heburn was present during the United States Attorney’s Office presentation to the federal grand jury of a proposed indictment for Rocky Dejesus Molina.  Copies of the proposed indictment for Molina were distributed to the members of the grand jury, but they were not supposed to leave the grand jury chamber.  Later that day, the grand jury returned an indictment against Molina (Case Number 17-20304-CR-ALTONAGA). 

On May 10, 2017, prior to Molina’s arrest, Heburn used an alias Facebook account to contact Molina’s girlfriend via Facebook Messenger.  During the course of their communication, Heburn advised Molina’s girlfriend that she was serving as a grand juror and had seen Molina’s name on an indictment.  Heburn then warned Molina’s girlfriend that Molina had been set up by a “snitch” since March 2016.

After Molina’s arrest on May 24, 2017, Molina’s girlfriend contacted Heburn at the alias Facebook account to ask more questions.  Heburn sent the girlfriend photos of the proposed indictment for Molina that was part of the secret grand jury proceedings.  Heburn continued to tell Molina’s girlfriend that Molina had been set up on a number of occasions by a confidential informant.  Heburn acknowledged during their communications that she knew she could get into trouble for disclosing information regarding the grand jury proceedings.

On October 20, 2017, Molina pleaded guilty to dealing in firearms without a license and being a felon in possession of a firearm.  He was sentenced to 180 months in prison on January 3, 2018.

Mr. Greenberg commended the investigative efforts of the FBI in this matter.  He also thanked the FBI Miami Area Corruption Task Force, Miami-Dade Police Department, and Bureau of Alcohol, Tobacco, Firearms and Explosives for their assistance.  This case was prosecuted by Assistant U.S. Attorney Brian Dobbins.

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.

Alberto Rodriquez, 65, of Briarwood, New York, was sentenced to prison today after previously pleading guilty today to mail fraud in connection with a scheme to evade federal excise tax on imported cigars.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida and Ron Hancock, Acting Assistant Administrator for Field Operations, Alcohol and Tobacco Tax and Trade Bureau (TTB), made the announcement.

According to information contained in the court record, from as early as July 2013, Rodriguez operated as a customs broker in the State of New York.  Rodriguez contracted with two tobacco importers to import large cigars into the United States.  In an effort to defraud the United States of excise tax due on the imported cigars, Rodriguez created false and fraudulent documents, including United States Customs and Border Protection (CBP) Forms 7501 ("Entry Summaries"), which misrepresented, among other things, the quantities of large cigars imported into the United States and the Federal tobacco excise tax due for those importations.  In addition to consistently underreporting and evading the Federal tobacco excise tax, Rodriguez transmitted false and fraudulent documents to CBP using the United States Postal Service mail.

To profit from the scheme, Rodriguez sent invoices to the two tobacco importers reflecting the true quantities of imported large cigars and the properly calculated Federal tobacco excise tax due, which resulted in the importers paying Rodriguez more than what he paid to CBP.

To conceal the scheme, Rodriguez altered documents, including importer invoices and bank records, and provided these altered documents to TTB agents and employees, all for the purpose of misleading TTB and pretending that he had correctly calculated and paid to CBP the Federal tobacco excise tax due on the large cigars imported by the two importers.

Rodriguez previously pled guilty to an information charging him with mail fraud, in violation of Title 18, United States Code, Section 1341.  In total, Rodriguez evaded approximately $503,681.15 in Federal Tobacco Excise Tax.  U.S. District Judge Cecilia M. Altonaga sentenced Rodriguez to 10 months in prison, to be followed by 6 months of house arrest and 3 years of supervised release.  Rodriguez was also ordered to pay $503,681.15 in restitution to CBP.

Mr. Greenberg commended the investigative efforts of TTB in this matter.  He also thanked Internal Revenue Service, Criminal Investigation and CBP for their assistance.  This case was prosecuted by Assistant United States Attorney Christopher B. Browne.

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.

Last week, a Coral Springs man was sentenced to five years in prison and ordered to pay over $3 million in restitution for carrying out a residential arson.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Ari C. Shapira, Special Agent in Charge, United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Office, and Clyde Parry, Chief, Coral Springs Police Department, made the announcement.

Nathan Counts, 40, of Coral Springs, previously pled guilty to arson, in violation of Title 18, United States Code, Section 844(i).  On August 15, 2018, U.S. District Judge William P. Dimitrouleas sentenced the defendant to 60 months in prison, to be followed by three years of supervised release.  The defendant was also ordered to pay restitution in the amount of $3,129,781.00.

According to court documents, on February 12, 2018, Nathan Counts purchased a portable gas tank, filled it with gasoline, and drove home to his apartment in Coral Springs, Florida.  Counts then poured gasoline on several areas within his residence and set the apartment on fire.  In setting the fire, Counts intended to damage his own apartment and other apartments within the building. 

As a result of the fire, two buildings (including 28 individual units) received varying degrees of fire, heat, smoke and water damage.  The residents of both buildings were displaced and three cats were killed.  The total damage to real and personal property was approximately $3,129,781.00. 

Mr. Greenberg commends the investigative efforts of the ATF and Coral Springs Police Department and thanks the Division of Investigative & Forensic Services Bureau of Fire Arson Explosive Investigations for their assistance.   The case was prosecuted by Assistant United States Attorney Frederic Shadley.

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.

Theodore William Symonds, 51, was sentenced yesterday by United States District Judge Robert N. Scola to more than 17 years in prison and 30 years of supervised release, after previously pleading guilty to traveling to the Dominican Republic for the purpose of engaging in illicit sexual conduct with minors.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, and Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.

Symonds, a U.S. citizen, frequently traveled between the United States and the Dominican Republic, including on March 20, 2017.  Symonds was arrested on March 23, 2017, by local Dominican authorities for crimes related to the sexual abuse of children.  ICE-HSI began investigating him shortly thereafter and uncovered proof of Symonds’ sexual abuse of children, both in person and using the internet. 

U.S. Attorney Benjamin Greenberg said, “The U.S. Attorney’s Office and our law enforcement partners stand united against child exploitation and abuse.  There is no immunity for these heinous crimes, whether committed at home or abroad.  Any individual who victimizes the most vulnerable members of society, our children, can look to today’s sentencing to see there will be severe consequences within the U.S. federal criminal justice system.”

“This sentence should send a powerful message to child predators who believe that they can evade law enforcement by using international travel to engage in this type of reprehensible behavior,” said Mark Selby, Special Agent in Charge of HSI Miami. “Sexual exploitation of children is a despicable crime that will never be tolerated. HSI will continue to work closely with its law enforcement partners around the world so that sexual predators are always brought to justice.”

Mr. Greenberg commends the investigative efforts of ICE-HSI in support of this matter.  Mr. Greenberg also thanked the local prosecutors and law enforcement officers in Puerto Plata, Dominican Republic, as well as members of the HSI Dominican Republic Transnational Criminal Investigative Unit (TCIU), for their assistance.  This case was prosecuted by Assistant United States Attorneys Jonathan Kobrinski and 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 on http://pacer.flsd.uscourts.gov.

Esteban Santiago-Ruiz (Santiago) was sentenced today to life in prison by United States District Judge Beth Bloom, after previously pleading guilty to charges of committing acts of violence at an international airport resulting in five deaths and serious injuries, in connection with the mass-shooting at Fort Lauderdale-Hollywood International Airport on January 6, 2017.   

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Scott Israel, Sheriff, Broward County Sheriff’s Office (BSO), made the announcement.

“While nothing can ever heal the wounds inflicted by the defendant’s unspeakable and horrific acts of violence, we hope that the life sentence imposed today provides at least some sense of justice for the victims and their loved ones,” said U.S. Attorney Benjamin G. Greenberg.  “Though we all hope that such tragedy never again occurs, law enforcement remains committed to making our community safer and caring for victims of crime when tragedy strikes.”

“My thoughts are with the victims, their loved ones and everyone affected by this senseless and cowardly act of violence,” said Robert F. Lasky, Special Agent in Charge, FBI Miami.  “While this sentence cannot erase what happened, may it serve to demonstrate society’s commitment to honor and remember those who suffered that day.”

“Since this horrible tragedy first occurred, my prayers have remained with the families,” Sheriff Scott Israel said. “Though this sentencing won’t change the outcome, I hope everyone affected by this killer’s heinous actions can find a way to move forward and heal.”

On May 23, 2018, Santiago pled guilty to five counts of committing acts of violence at an international airport causing death (Counts 1-5) and six counts of committing acts of violence at an international airport causing serious bodily injury (Counts 6-11), all in violation of Title 18, United States Code, Section 37(a)(1).  Judge Bloom sentenced Santiago to five consecutive terms of life imprisonment on Counts 1-5, and consecutive terms of 20 years imprisonment on Counts 6-11.

According to court documents, shortly before 1 p.m. on January 6, 2017, Santiago carried out an armed attack on newly-arrived passengers retrieving their luggage in the Terminal 2 baggage claim area of the Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida.  Santiago pulled out a handgun and started shooting at numerous victims, aiming at the victims’ heads and bodies until he was out of ammunition. Santiago killed five people and seriously wounded six more.  Moments later, Santiago was confronted by a BSO deputy.  He dropped his handgun on the ground and was arrested by BSO deputies.  The FBI investigated the case along with the U.S. Attorney’s Office.

Mr. Greenberg commended the investigative assistance of FBI and BSO in this matter.  This case was prosecuted by Assistant United States Attorneys Ricardo A. Del Toro and Lawrence D. LaVecchio.

Court documents and information related to this case 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.

MIAMI, FL - Esteban Santiago-Ruiz (Santiago) was sentenced today to life in prison by United States District Judge Beth Bloom, after previously pleading guilty to charges of committing acts of violence at an international airport resulting in five deaths and serious injuries, in connection with the mass-shooting at Fort Lauderdale-Hollywood International Airport on January 6, 2017.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Scott Israel, Sheriff, Broward County Sheriff’s Office (BSO), made the announcement.

“While nothing can ever heal the wounds inflicted by the defendant’s unspeakable and horrific acts of violence, we hope that the life sentence imposed today provides at least some sense of justice for the victims and their loved ones,” said U.S. Attorney Benjamin G. Greenberg.  “Though we all hope that such tragedy never again occurs, law enforcement remains committed to making our community safer and caring for victims of crime when tragedy strikes.”

“My thoughts are with the victims, their loved ones and everyone affected by this senseless and cowardly act of violence,” said Robert F. Lasky, Special Agent in Charge, FBI Miami.  “While this sentence cannot erase what happened, may it serve to demonstrate society’s commitment to honor and remember those who suffered that day.”

“Since this horrible tragedy first occurred, my prayers have remained with the families,” Sheriff Scott Israel said. “Though this sentencing won’t change the outcome, I hope everyone affected by this killer’s heinous actions can find a way to move forward and heal.”

On May 23, 2018, Santiago pled guilty to five counts of committing acts of violence at an international airport causing death (Counts 1-5) and six counts of committing acts of violence at an international airport causing serious bodily injury (Counts 6-11), all in violation of Title 18, United States Code, Section 37(a)(1).  Judge Bloom sentenced Santiago to five consecutive terms of life imprisonment on Counts 1-5, and consecutive terms of 20 years imprisonment on Counts 6-11.

According to court documents, shortly before 1 p.m. on January 6, 2017, Santiago carried out an armed attack on newly-arrived passengers retrieving their luggage in the Terminal 2 baggage claim area of the Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida.  Santiago pulled out a handgun and started shooting at numerous victims, aiming at the victims’ heads and bodies until he was out of ammunition. Santiago killed five people and seriously wounded six more.  Moments later, Santiago was confronted by a BSO deputy.  He dropped his handgun on the ground and was arrested by BSO deputies.  The FBI investigated the case along with the U.S. Attorney’s Office.

Mr. Greenberg commended the investigative assistance of FBI and BSO in this matter.  This case was prosecuted by Assistant United States Attorneys Ricardo A. Del Toro and Lawrence D. LaVecchio.

Court documents and information related to this case 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.

Edward R. Daniel, a/k/a Edward Daniels, Judy Daniel, and the Edward R. Daniel Revocable Living Trust (collectively “Daniel”), a landlord participating in the United States Department of Housing and Urban Development’s (HUD) Housing Choice Voucher/Section 8 (HCV) Program has paid the United States $50,000.00 to resolve civil claims.  The claims against Daniel, pursued under the False Claims Act, arise from the landlord’s alleged impermissible charging of parking fees as well as excessive rents to certain HCV Recipient tenants, while accepting federally subsidized Housing Assistance Payments (“HAP”).

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

Through Section 8 of the United States Housing Act of 1937, as amended, HUD distributes federal funds to local public housing agencies to assist eligible low income families in obtaining decent, safe, and sanitary housing in the private rental market.  To receive federally subsidized rents, landlords participating in the HCV Program contractually agree to comply with HUD requirements, to charge only the rent authorized by the local public housing agency and to not raise rents or change lease terms without the written approval of the local public housing agency.

“The U.S. Attorney’s Office and our partners take very seriously any abuses of our federal housing programs that may deprive those in need of access to affordable homes,” stated U.S. Attorney Benjamin G. Greenberg.  “We will continue to investigate and prosecute False Claims Act allegations in order to ensure that all landlords comply with federal housing requirements and protect our local tenants and taxpayers.”

“HUD will not tolerate landlords who violate the rules and seek to gain at the expense of the very low income families we serve through the Section 8/HCV Program,” said David Woll, HUD’s Deputy General Counsel for Enforcement.  “Taxpayers have every reason to be outraged when those choosing to do business with the government and receiving federally subsidized rent by entering into HAP Contracts and agreeing to abide by federal regulations, violate those obligations by overcharging impoverished, elderly and disabled tenants.”

“This settlement demonstrates the United States Department of Housing and Urban Development, Office of Inspector General’s continuing efforts to hold individuals accountable whose practices victimize America’s most vulnerable communities. HUD-OIG is committed to collaborating with the Department of Justice to ensure government rules are not manipulated for personal gain,” said Nadine Gurley, Special Agent in Charge, HUD-OIG.

The rents of most of Daniel’s tenants in over 12 apartment buildings in Miami, are subsidized through the HCV Program.  Presently, over 120 federally subsidized HCV Tenants reside in Daniel’s residential units in Miami under the administration of five HCV Programs in Miami-Dade County, Florida: Miami-Dade County’s Public Housing & Community Development (“PHCD”), Hialeah Housing Authority (“HHA”), the Housing Authority of the City of Miami Beach (“HACMB”), Carrfour Supportive Housing, Inc. and Citrus Health Network, Inc.

The False Claims Act investigation into Daniel began in September 2015, when representatives of PHCD and PHCD’s HCV Program Contractor reported alleged abuses of the HCV Program within certain federally assisted units Daniel owned.  Investigators initially received reports that one or more of Daniel’s HCV subsidized tenants were not occupying the properties and at least one unit was allegedly occupied by an individual other than the authorized tenant, even though Daniel was receiving HAP payments for those units.  As the investigation expanded, investigators received information that Daniel allegedly also received unlawful excessive rent subsidies and in several instances, double subsidies from different Public Housing Authorities (PHAs) for overlapping periods, for different tenants.  During the investigation, the double subsidy payments were recovered from Daniel.  In addition, investigators uncovered evidence that Daniel allegedly charged at least 36 HCV tenants excessive rent and unauthorized parking fees.

Although Daniel did not admit liability, Daniel entered into a Settlement Agreement with the United States wherein the landlord agreed to and has paid the United States $50,000 to settle the allegations that Daniel violated the False Claims Act by accepting federally subsidized HAP Payments while charged parking fees and rents in excess of those permitted. Daniel also represented to the United States Attorney’s Office that he reimbursed certain tenants that were charged higher than approved rents. In addition, through the Settlement Agreement, Daniel agreed to comply with all laws, regulations, rules, directives, ordinances, agreements, certifications and contracts governing the HCV Program.  Moreover, Daniel is prohibited from charging a tenant a parking fee or more than the amount a PHA approves as the Tenant’s appropriate share of rent.  The investigation was hindered by Daniel’s poor record-keeping, including failure to maintain certain records.  The Settlement Agreement requires Daniel to maintain tenant records, including receipts, for a specified period of time and to retain a bookkeeper or accountant to maintain a ledger or account for each of the Dwelling Units leased through the assistance of the HCV Program.  Further, in addition to annually providing each federally subsidized Tenant with a Statement of Account of amounts Daniel charged to the HCV Tenant in the prior calendar year and amounts collected from the Tenant, together with the Security Deposit held, Daniel is required to provide annual notifications to Tenants that they should not pay more than the amount determined by the PHAs.

The settlement was the result of a coordinated effort by the United States Attorney’s Office for the Southern District of Florida, HUD-OIG, and HUD.  Mr. Greenberg also commended the significant assistance provided by Miami-Dade County’s Public Housing and Community Development office, Miami-Dade Police Department, Hialeah Housing Authority, and the City of Miami Beach Housing Authority.  Assistant United States Attorney James A. Weinkle investigated this matter and negotiated the settlement.

A copy of this press release and the Settlement Agreement may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.

Three Miami-based wildlife traffickers were recently sentenced to prison for trapping and selling migratory birds.

Benjamin G. Greenberg, United States Attorney for the Southern District of Florida; Edward Grace, Acting Assistant Director of the Office of Law Enforcement, United States Fish and Wildlife Service (USFWS), Office of Law Enforcement, Southeast Region; Alfredo Escanio, Major/Regional Commander, Florida Fish and Wildlife Conservation Commission (FWC), Division of Law Enforcement, South B Region; Martin G. Wade, Director, U.S. Customs and Border Protection (CBP) Air and Marine Operations, Miami Air and Marine Branch; Pedro Ramos, Superintendent, Everglades and Dry Tortugas National Parks (NPS); and Antonio J. Gomez, Postal Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division made the announcement.

In April of this year, law enforcement announced the filing of federal charges against six individuals, in six separate cases, for their involvement with the trafficking of over 400 migratory birds.   Each of the six defendants pled guilty to various criminal offenses involving migratory birds.  Three of the defendants, Juan Carlos Rodriguez, a/k/a “El Doctor,” Miguel Loureiro and Hovary Muniz were recently sentenced to prison for their crimes.  The three other defendants, Corbo Martinez (Case No. 17-CR-20596-WILLIAMS), Reynaldo Mederos (Case No. 18-CR-20140-LENARD) and Carlos Hernandez (Case No. 17-CR-20759-MARTINEZ), are pending sentencing. 

1. United States v. Juan Carlos Rodriguez, a/k/a “El Doctor,”
   Case No. 18-CR-20141-MOORE

On July 30, 2018, Juan Carlos Rodriguez, 54, of Homestead, was sentenced to six months in prison.  Previously, he pled guilty to three counts of selling, offering for sale, bartering, and offering to barter migratory birds.

According to court documents, between May 2014 and November 2016, Rodriguez trafficked in migratory birds, including Puerto Rican Spindalises (Spindalis portoricensis), Northern Cardinals (Cardinalis cardinalis), Puerto Rican Bullfinches (Loxigilla portoricensis), Yellow-faced Grassquits (Tiaris olivaceus), Blue Grosbeaks (Passerina caerulea), Indigo Buntings (Passerina cyanea), Cooper’s Hawks (Accipiter cooperii), Bobolinks (Dolichonyx oryzivorus), Red-shouldered Hawks (Buteo lineatus), Gray Catbirds (Dumetella carolinensis), Painted Buntings (Passerina ciris), Summer Tanagers (Piranga rubra), Screech-Owls (genus Megascops), and Sharp-shinned Hawks (Accipiter striatus).  

Rodriguez used an array of methods to trap migratory birds.  Rodriguez deployed wooden-and-wire bird traps with multiple pitfall doors baited with seed and a “bait bird.” Rodriguez positioned these traps at numerous regional collection points throughout Miami-Dade County.  Rodriguez employed limesticks coated in adhesive materials known as “pega” to catch particular species of birds.  Rodriguez also erected ten-foot high, 100-foot long mist nets at the edge of fields during migration season.  He flushed birds into the mist net by driving his truck across the field towards the nets, and, while many of the birds did not survive this process, the mist nets captured large numbers of migratory birds.  Rodriguez captured these migratory birds to sell them.  He sold hundreds of birds to undercover agents.  After a determination that the release of the seized wildlife was safe and appropriate, USFWS released the birds into the wild.  Rodriguez also shot hawks and sold their frozen corpses.  In total, undercover agents purchased approximately 181 birds from Rodriguez. 

Mr. Greenberg commended the investigative efforts of the USFWS, FWC, CBP, CBP Air and Marine Operations and USPIS in this matter.  This case was prosecuted by Assistant U.S. Attorney Jaime Raich.

1. United States v. Miguel Loureiro,
   Case No. 18-CR-20164-MARTINEZ

On August 10, 2018, Miguel Loureiro, 27, was sentenced to nine months in prison.  Previously, he pled guilty to one count of conspiracy to traffic in migratory birds.

According to court documents, beginning in January 2016 and ending in December 2017, Loureiro and a co-conspirator trafficked in migratory birds, including Indigo Buntings (Passerina cyanea), Blue Grosbeaks (Passerina caerulea), Rose-breasted Grosbeaks (Pheucticus ludovicianus), Painted Buntings (Passerina ciris), White-crowned Sparrows (Zonotrichia leucophrys), Clay-colored Sparrows (Spizella palida), and Grasshopper Sparrows (Ammodramus savannarum).  Loureiro deployed sixteen wire and wooden bird traps augmented by solar-powered electronic birdcall broadcasting systems in order to trap migratory birds.  Three of those traps were in secluded areas of forest near Everglades National Park.  He sold his illegally captured migratory birds to buyers throughout the United States.  During the execution of a search warrant at Loureiro’s residence, law enforcement discovered over 100 illegally-captured migratory birds in cages.  After a determination that the release of the seized wildlife was safe and appropriate, USFWS returned these birds into the wild. 

In the course of his migratory bird trafficking, Loureiro forcefully threw a Loggerhead Shrike (Lanius ludovicianus) against a wall because he believed it was a threat to his inventory of migratory birds for sale.  He then affixed it to a wooden cross.  Loueriro filmed this activity and uploaded the images onto a private internet chat group that he used to advertise migratory birds for sale.

Mr. Greenberg commended the investigative efforts of the USFWS, FWC, and NPS.  This case was prosecuted by Assistant U.S. Attorney Jaime Raich.

1. United States v. Hovary Muniz,
   Case No. 18-CR-20355-UNGARO 

On July 23, 2018, Hovary Muniz, 42, of Miami, was sentenced to a total of fifteen months in prison.  Previously, he pled guilty to five counts of knowingly selling and offering migratory birds for sale.

According to court documents, Muniz pled guilty in 2016 to smuggling migratory birds from Cuba into the United States in a fanny pack.  In 2017 and 2018, while on probation for that wildlife trafficking offense, Muniz offered Yellow-faced Grassquits (Tiaris olivacea) and other migratory birds for sale. 

Mr. Greenberg commended the investigative efforts of the USFWS and CBP in this matter.  This case was prosecuted by Assistant U.S. Attorneys Jaime Raich and Tom Watts-FitzGerald.

The public is encouraged to report any instances of illegal wildlife trapping and trafficking to the U.S. Fish & Wildlife Service at (305) 526-2610 or the Florida Fish and Wildlife Conservation Commission (FWC) at 888-404-3922 or by email or text to [email protected].

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.

The former National Director of Anti-Corruption in Colombia and a foreign attorney pled guilty today in federal court in Miami for their participation in a conspiracy to launder money with the intent to promote foreign bribery.

Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida and Adolphus P. Wright, Special Agent in Charge, United States Drug Enforcement Administration (DEA), Miami Field Division, made the announcement.

Luis Gustavo Moreno Rivera, 35, the former National Director of Anti-Corruption in Colombia and Leonardo Luis Pinilla Gomez, 31, an attorney practicing in Colombia, pled guilty to conspiracy to launder money in order to promote foreign bribery. The defendants entered their guilty pleas before U.S. District Judge Ursula Ungaro in Miami.  Moreno and Pinilla are scheduled to be sentenced by Judge Ungaro on November 19, 2018 at 11:00 a.m. 

According to the court docket, including the agreed upon factual proffer, 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.

Mr. Greenberg commends the DEA for their investigative assistance with this case.  Mr. Greenberg 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 are prosecuting 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.