Southern District of Florida
Press releases recorded for this federal judicial district.
Three Indicted in Florida for Using Stolen Ids to File Tax Returns Claiming More Than $6.8 Million in Fraudulent RefundsRead the Press Release
A federal grand jury returned an indictment on Feb. 9, which was unsealed today, charging three men in Florida, with conspiracy, wire fraud and aggravated identity theft, announced Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to the indictment, from approximately 2008 through January 2015, in Broward and Miami-Dade counties, Florida, Israel Tassy, Evens Julien, and Jean Leroy Destine, used stolen IDs, including the personal identifying information of deceased individuals, to file over 2,000 tax returns with the Internal Revenue Service (IRS) claiming more than $6.8 million in fraudulent refunds. The indictment alleges that Tassy, Julien and Destine recruited and paid others to obtain Electronic Filing Identification Numbers (EFINs) from the IRS, in their names and the names of businesses, and used these EFINs to file the fraudulent returns. The indictment also charges that in approximately February 2011, Julien registered A Tax Financial Services Inc., as a for-profit corporation with the state of Florida, and used it to file fraudulent returns as well.
Julien and Destine were arrested earlier today and Tassy is still being sought.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Tassy, Julien and Destine face a statutory maximum sentence of five years in prison on the conspiracy charge, a maximum sentence of 20 years in prison for each count of wire fraud and a mandatory sentence of two years in prison for each count of aggravated identity theft. In addition, all three defendants face a term of supervised release, restitution and monetary penalties.
Acting U.S. Attorney Greenberg and Acting Deputy Assistant Attorney General Goldberg thanked special agents of the IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Neil Karadbil and Assistant Chief Greg Tortella of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Serial Bank Robber Pleads Guilty to Robbing Treasure Coast, Space Coast and Daytona Beach BanksRead the Press Release
A Daytona Beach resident pleaded guilty yesterday before Chief U.S. Magistrate Judge Frank J. Lynch, Jr in Fort Pierce, Florida to committing four bank robberies.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida, W. Stephen Muldrow, Acting U.S. Attorney for the Middle District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and William D. Snyder, Sheriff, Martin County Sheriff’s Office.
Anthony William Carpino, 45, pled guilty to four counts of bank robbery, in violation of Title 18, United States Code Section 2113(a). For each count of conviction, Carpino faces up to 20 years’ imprisonment, to be followed by a term of supervised release. Sentencing is scheduled for June 27, 2017 before U.S. District Court Judge Robin L. Rosenberg.
According to the court record, including an agreed upon factual proffer, on March 5, 2016, Carpino robbed a Daytona Beach Wells Fargo Bank. Carpino handed the teller a bank deposit slip that read, “Give me money I have a gun”. Carpino also directed the teller to "Take the money out of the drawer, put it in a bag.” The teller then turned over the money. Carpino was arrested the next day and while out on bond committed three additional robberies.
On October 11, 2016, Carpino robbed a second Daytona Beach Wells Fargo Bank. The defendant approached the teller holding a note and demanded money. The teller complied and handed over the money. On October 14, 2016, Carpino robbed the Palm Bay TD Bank by demanding money from the teller, while holding his hand in his right front pants’ pocket. Believing the defendant had a weapon, the teller handed over the money. On October 17, 2016, Carpino robbed the Palm City Wells Fargo Bank. He demanded money from the teller, while holding his arm behind his back. Believing that the defendant was armed, the teller gave Carpino the money.
Mr. Greenberg thanked the U.S. Attorney’s Office for the Middle District of Florida for their assistance with this matter. Mr. Greenberg commended the investigative efforts of the FBI, Martin County Sheriff’s Office, Palm Bay Police Department, and the Daytona Beach Police Department for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Monroe County Resident Sentenced to Life in Prison for Attempting to Possess a Weapon of Mass Destruction and Provide Material Support to a Terrorist OrganizationRead the Press Release
A South Florida resident was sentenced to life in prison after having been convicted at trial of attempting to use a weapon of mass destruction, an explosive device, and attempting to provide material support to a terrorist organization.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Mary B. McCord, Acting Assistant Attorney General for National Security, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and members of the South Florida Joint Terrorism Task Force (JTTF), made the announcement.
Harlem Suarez, a/k/a “Almlak Benitez,” 26, a U.S. legal resident residing in Monroe County, Florida, was convicted at trial in Key West, Florida on January 27, 2017, for knowingly attempting to use a weapon of mass destruction against a person or property within the United States, in violation of Title 18, United States Code, Section 2332a(a)(2) and attempting to provide material support to a terrorist organization, in violation of Title 18, United States Code, Section 2339B. Suarez was sentenced by United States District Judge Jose E. Martinez in Key West to life in prison for the weapon of mass of mass destruction count of conviction and a concurrent term of 20 years in prison for attempting to provide material support.
According to evidence introduced at trial, in April 2015, Suarez’s Facebook postings contained extremist rhetoric and promoted the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. Evidence further indicated that Suarez told an FBI confidential human source that he wanted to make a “timer bomb.” Suarez purchased components for this device, which was to contain galvanized nails, be concealed in a backpack and be remotely detonated by a cellular telephone. Suarez intended to bury the device at a public beach in Key West and then detonate it.
Mr. Greenberg commended the investigative efforts of the FBI, JTTF, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Key West Police Department, Monroe County Sheriff’s Office, and Palm Beach County Sheriff’s Office. This case is being prosecuted by Assistant United States Attorneys Marc S. Anton and Karen E. Gilbert with assistance from the National Security Division’s Counterterrorism Section of the U.S. Department of Justice.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Florida Return Preparers Indicted for Using Stolen IDs to File Fraudulent Tax ReturnsRead the Press Release
A federal grand jury sitting in Fort Lauderdale, Florida, returned an indictment on Feb. 23, which was unsealed today, charging three Broward County return preparers with conspiracy, wire fraud and aggravated identity theft, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida.
According to the indictment, Luczor Fertilien, Frantz Petit-Dos and David Joseph owned two tax preparation businesses in Lauderhill, Florida: Imperial Taxation and Multi-Services Corp. and Aleluya Universal Accounting Services Inc. The indictment alleges that from approximately December 2009 through March 2016, Fertilien, Petit-Dos and Joseph sought fraudulent refunds from the Internal Revenue Service (IRS) by filing tax returns in the names of people whose IDs had been stolen, including a number of deceased individuals. The indictment further alleges that the three men filed fraudulent returns for their clients seeking refunds to which the clients were not entitled, both by reporting fictitious business income and by claiming dead individuals as dependents.
Fertilien self-surrendered and Joseph was arrested earlier today. Petit-Dos remains a fugitive and is being sought.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Fertilien, Petit-Dos and Joseph face a statutory maximum sentence of five years in prison on the conspiracy count, a maximum sentence of 20 years in prison for each count of wire fraud and a mandatory sentence of two years in prison for each count of aggravated identity theft. In addition, all three defendants face a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Greenberg thanked special agents of IRS–Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, who conducted the investigation, and Assistant U.S. Attorney Neil Karadbil and Assistant Chief Greg Tortella of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Florida Return Preparers Indicted for Using Stolen Ids to File Fraudulent Tax ReturnsRead the Press Release
A federal grand jury sitting in Fort Lauderdale, Florida, returned an indictment on Feb. 23, which was unsealed today, charging three Broward County return preparers with conspiracy, wire fraud and aggravated identity theft, announced Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to the indictment, Luczor Fertilien, Frantz Petit-Dos and David Joseph owned two tax preparation businesses in Lauderhill, Florida: Imperial Taxation and Multi-Services Corp. and Aleluya Universal Accounting Services Inc. The indictment alleges that from approximately December 2009 through March 2016, Fertilien, Petit-Dos and Joseph sought fraudulent refunds from the Internal Revenue Service (IRS) by filing tax returns in the names of people whose IDs had been stolen, including a number of deceased individuals. The indictment further alleges that the three men filed fraudulent returns for their clients seeking refunds to which the clients were not entitled, both by reporting fictitious business income and by claiming dead individuals as dependents.
Fertilien self-surrendered and Joseph was arrested earlier today. Petit-Dos remains a fugitive and is being sought.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Fertilien, Petit-Dos and Joseph face a statutory maximum sentence of five years in prison on the conspiracy count, a maximum sentence of 20 years in prison for each count of wire fraud and a mandatory sentence of two years in prison for each count of aggravated identity theft. In addition, all three defendants face a period of supervised release, restitution and monetary penalties.
Acting U.S. Attorney Greenberg and Acting Deputy Assistant Attorney General Goldberg thanked special agents of IRS–Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, who conducted the investigation, and Assistant U.S. Attorney Neil Karadbil and Assistant Chief Greg Tortella of the Tax Division, who 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
Cruise Line Ordered to Pay $40 Million for Illegal Dumping of Oil Contaminated Waste and Falsifying RecordsRead the Press Release
Princess Cruise Lines Ltd. (Princess) was sentenced to pay a $40 million penalty – the largest-ever for crimes involving deliberate vessel pollution – related to illegal dumping overboard of oil contaminated waste and falsification of official logs in order to conceal the discharges, announced Acting Assistant Attorney General Jeffrey H. Wood for the Department of Justice’s Environment and Natural Resources Division, and Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida in Miami, Florida. The sentence was imposed today by U.S. District Judge Patricia A. Seitz in Miami.
Judge Seitz also ordered that $1 million be awarded to a British engineer, who first reported the illegal discharges to the British Maritime and Coastguard Agency (MCA), which in turn provided the evidence to the U.S. Coast Guard. The newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England without the use of required pollution prevention equipment. The evidence gathered by the whistleblower, including photographs of the magic pipe, led to an inspection of the cruise ship both in England and then when it reached New York on Sept. 14, 2013. During each of the separate inspections certain crew members concealed the illegal activity by lying to the authorities in accordance with orders they had received from Caribbean Princess engineering officers.
The sentence imposed by Judge Seitz also requires that Princess remain on probation for a period of five years during which time all of the related Carnival cruise ship companies trading in the U.S. will be required to implement an environmental compliance plan that includes independent audits by an outside company and oversight by a court appointed monitor. As a result of the government’s investigation, Princess has already taken various corrective actions, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.
According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The August 2013 discharge approximately 23-miles off the coast of England involved approximately 4,227 gallons within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers ran clean seawater through the ship’s monitoring equipment in order to conceal the criminal conduct and create a false digital record for a legitimate discharge.
The case against Princess included illegal practices which were found to have taken place on five Princess ships – Caribbean Princess, Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from going into alarm mode and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste, and then pumped overboard anytime the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely. None of the discharges were recorded in the oil record books that are required to be maintained on board the ships.
“These violations of law were serious, longstanding and designed to conceal illegal discharges,” said Acting Assistant Attorney General Wood. “The sentence in this case should ensure that these crimes do not take place in the future and should also send a strong message to others that illegally polluting U.S. waters will not be tolerated.”
“Today's large criminal penalty makes it clear that businesses that operate in our oceans will be held accountable for violating their obligation to safeguard the marine environment,” stated Acting U.S. Attorney Greenberg. “The U.S. Attorney’s Office for the Southern District of Florida and our maritime partners are committed to ensuring that all vessel operators adhere to recognized standards in order to protect our open seas and coasts. We will continue to use the U.S. courts to pursue those who circumvent the law for their own personal gain.”
“Without the courageous act of a junior crewmember to alert authorities to these criminal behaviors of deliberately dumping oil at sea, the global environmental damage caused by the Princess fleet could have been much worse,” said Rear Admiral Scott Buschman, Commander of the U.S. Coast Guard Seventh District. “The selflessness of this individual exposed five different ships that embraced a culture of shortcuts and I am pleased at this outcome.”
As set forth in papers filed in court, Princess admitted to the following:
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After suspecting that the authorities had been informed, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
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Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.
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A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.
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Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.
Ten million of the $40 million criminal penalty imposed by the court is earmarked for community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will go for projects to benefit the marine environment in United Kingdom waters. Additionally, $1 million of the criminal penalty will be deposited in the Abandon Seafarer's Fund, a fund established to provide a mechanism for the U.S. Coast Guard to offer humanitarian relief and support of seafarers who are abandoned in the United States and are witnesses to maritime-related crimes.
The investigation was conducted by the U.S. Coast Guard Investigative Service with assistance from the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, Acting Assistant Attorney General Wood and Acting U.S. Attorney Benjamin G. Greenberg expressed their appreciation to the U.S. Coast Guard and to the U.K.’s MCA. The case is being prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice, Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida, and Special Assistant U.S. Attorney Lieutenant Commander Brendan Sullivan, U.S. Coast Guard.
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Cruise Line Ordered to Pay $40 Million for Illegal Dumping of Oil Contaminated Waste and Falsifying RecordsRead the Press Release
Princess Cruise Lines Ltd. (Princess) was sentenced to pay a $40 million penalty – the largest-ever for crimes involving deliberate vessel pollution – related to illegal dumping overboard of oil contaminated waste and falsification of official logs in order to conceal the discharges, announced Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida in Miami, Florida and Acting Assistant Attorney General Jeffrey H. Wood for the Department of Justice’s Environment and Natural Resources Division. The sentence was imposed today by U.S. District Judge Patricia A. Seitz in Miami.
Judge Seitz also ordered that $1 million be awarded to a British engineer, who first reported the illegal discharges to the British Maritime and Coastguard Agency (MCA), which in turn provided the evidence to the U.S. Coast Guard. The newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England without the use of required pollution prevention equipment. The evidence gathered by the whistleblower, including photographs of the magic pipe, led to an inspection of the cruise ship both in England and then when it reached New York on Sept. 14, 2013. During each of the separate inspections certain crew members concealed the illegal activity by lying to the authorities in accordance with orders they had received from Caribbean Princess engineering officers.
The sentence imposed by Judge Seitz also requires that Princess remain on probation for a period of five years during which time all of the related Carnival cruise ship companies trading in the U.S. will be required to implement an environmental compliance plan that includes independent audits by an outside company and oversight by a court appointed monitor. As a result of the government’s investigation, Princess has already taken various corrective actions, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.
According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The August 2013 discharge approximately 23-miles off the coast of England involved approximately 4,227 gallons within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers ran clean seawater through the ship’s monitoring equipment in order to conceal the criminal conduct and create a false digital record for a legitimate discharge.
The case against Princess included illegal practices which were found to have taken place on five Princess ships – Caribbean Princess, Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from going into alarm mode and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste, and then pumped overboard anytime the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely. None of the discharges were recorded in the oil record books that are required to be maintained on board the ships.
“Today’s large criminal penalty makes it clear that businesses that operate in our oceans will be held accountable for violating their obligation to safeguard the marine environment,” stated Acting U.S. Attorney Greenberg. “The U.S. Attorney’s Office for the Southern District of Florida and our maritime partners are committed to ensuring that all vessel operators adhere to recognized standards in order to protect our open seas and coasts. We will continue to use the U.S. courts to pursue those who circumvent the law for their own personal gain.”
“These violations of law were serious, longstanding and designed to conceal illegal discharges,” said Acting Assistant Attorney General Wood. “The sentence in this case should ensure that these crimes do not take place in the future and should also send a strong message to others that illegally polluting U.S. waters will not be tolerated.”
“Without the courageous act of a junior crewmember to alert authorities to these criminal behaviors of deliberately dumping oil at sea, the global environmental damage caused by the Princess fleet could have been much worse,” said Rear Admiral Scott Buschman, Commander of the U.S. Coast Guard Seventh District. “The selflessness of this individual exposed five different ships that embraced a culture of shortcuts and I am pleased at this outcome.”
As set forth in papers filed in court, Princess admitted to the following:
- After suspecting that the authorities had been informed, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
- Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.
- A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.
- Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.
Ten million of the $40 million criminal penalty imposed by the court is earmarked for community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will go for projects to benefit the marine environment in United Kingdom waters. Additionally, $1 million of the criminal penalty will be deposited in the Abandon Seafarer's Fund, a fund established to provide a mechanism for the U.S. Coast Guard to offer humanitarian relief and support of seafarers who are abandoned in the United States and are witnesses to maritime-related crimes.
The investigation was conducted by the U.S. Coast Guard Investigative Service with assistance from the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, Acting U.S. Attorney Benjamin G. Greenberg and Acting Assistant Attorney General Wood expressed their appreciation to the U.S. Coast Guard and to the U.K.’s MCA. The case is being prosecuted by Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida, Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice and Special Assistant U.S. Attorney Lieutenant Commander Brendan Sullivan, U.S. Coast Guard.
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
Three Indicted in Florida for Using Stolen IDs to File Tax Returns Claiming More Than $6.8 Million in Fraudulent RefundsRead the Press Release
A federal grand jury returned an indictment on Feb. 9, which was unsealed today, charging three men in Florida, with conspiracy, wire fraud and aggravated identity theft, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida.
According to the indictment, from approximately 2008 through January 2015, in Broward and Miami-Dade counties, Florida, Israel Tassy, Evens Julien, and Jean Leroy Destine, used stolen IDs, including the personal identifying information of deceased individuals, to file over 2,000 tax returns with the Internal Revenue Service (IRS) claiming more than $6.8 million in fraudulent refunds. The indictment alleges that Tassy, Julien and Destine recruited and paid others to obtain Electronic Filing Identification Numbers (EFINs) from the IRS, in their names and the names of businesses, and used these EFINs to file the fraudulent returns. The indictment also charges that in approximately February 2011, Julien registered A Tax Financial Services Inc., as a for-profit corporation with the state of Florida, and used it to file fraudulent returns as well.
Julien and Destine were arrested earlier today and Tassy is still being sought.
An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Tassy, Julien and Destine face a statutory maximum sentence of five years in prison on the conspiracy charge, a maximum sentence of 20 years in prison for each count of wire fraud and a mandatory sentence of two years in prison for each count of aggravated identity theft. In addition, all three defendants face a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Greenberg thanked special agents of the IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Neil Karadbil and Assistant Chief Greg Tortella of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Miami-Dade County Resident Pleads Guilty to Committing a Spree of Commercial Armed RobberiesRead the Press Release
A Miami-Dade County resident pled guilty in federal court yesterday to committing a spree of commercial armed robberies between April 28, 2016 and May 3, 2016.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida, Peter Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, Al Rolle, Chief, Homestead Police Department, and Juan P. Perez, Director, Miami-Dade Police Department (MDPD), made the announcement.
Humberto Herrera, 43, of Homestead, pled guilty before United States District Judge Kathleen M. Williams in Miami, Florida, to four counts of Hobbs Act robbery, and one count of possessing, using, and brandishing a firearm in furtherance of a crime of violence. Herrera faces a statutory maximum sentence of 20 years’ imprisonment for each robbery and a minimum sentence of seven years’ imprisonment as to the firearm count. Herrera is scheduled to be sentenced by Judge Williams on July 14, 2017 at 10:00 a.m.
According to the superseding indictment, Herrera committed armed robberies of a Little Caesar’s restaurant, Advance Auto Parts, RaceTrac gas station, and Kohl’s Department Store, in Miami-Dade County, on April 28, April 29, May 2, and May 3, 2016, respectively. As detailed in the agreed upon factual proffer, on each of these dates, Herrera entered the business, brandished a firearm, and threatened a store employee. From Little Caesar’s, Advance Auto Parts, and RaceTrac, Herrera took United States currency; whereas, from Kohl’s, Herrera took approximately $33,000 worth of jewelry.
Mr. Greenberg commended the investigative efforts of ATF, Homestead Police Department and MDPD. This case is being prosecuted by Assistant US Attorneys Jonathan K. Osborne and J. Mackenzie Duane.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Florida Resident Sentenced to Life in Prison for Attempting to Possess a Weapon of Mass Destruction and Provide Material Support to a Terrorist OrganizationRead the Press Release
Harlem Suarez, aka “Almlak Benitez,” 23, of Monroe County, Florida, was sentenced to life in prison for attempting to use a weapon of mass destruction, an explosive device, and attempting to provide material support to Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization.
The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and members of the South Florida Joint Terrorism Task Force (JTTF). Suarez was sentenced by U.S. District Judge Jose E. Martinez in Key West to life in prison for the weapon of mass of mass destruction count of conviction and a concurrent term of 20 years in prison for attempting to provide material support.
Suarez, a U.S. legal resident and citizen of Cuba, was convicted at trial in Key West, Florida on January 27, of knowingly attempting to use a weapon of mass destruction against a person or property within the U.S., in violation of Title 18, U.S. Code, Section 2332a(a)(2) and attempting to provide material support to a terrorist organization, in violation of Title 18, U.S. Code, Section 2339B.
According to evidence introduced at trial, in April 2015, Suarez’s Facebook postings contained extremist rhetoric and promoted ISIS. Evidence further indicated that Suarez told an FBI confidential human source that he wanted to make a “timer bomb.” Suarez purchased components for this device, which was to contain galvanized nails, be concealed in a backpack and be remotely detonated by a cellular telephone. Suarez intended to bury the device at a public beach in Key West and then detonate it.
Mr. Greenberg commended the investigative efforts of the FBI; South Florida JTTF, Bureau of Alcohol, Tobacco, Firearms, and Explosives; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; Key West Police Department, Monroe County Sheriff’s Office;s and Palm Beach County Sheriff’s Office. This case is being prosecuted by Assistant U.S. Attorneys Marc S. Anton and Karen E. Gilbert with assistance from the National Security Division’s Counterterrorism Section.
Miami-Dade County Resident Convicted of Running a Drug Enterprise and Possessing FirearmsRead the Press Release
Following a five-day jury trial, a jury convicted a Miami-Dade resident of conspiracy to possess with intent to distribute marijuana, promethazine with codeine, and alprazolam, commonly known as Xanax, maintaining a premises for the purpose of distributing marijuana and promethazine with codeine, possession with the intent to distribute alprazolam, and two counts of possession of a firearm in furtherance of a drug trafficking crime.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Troy Walker, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), Miami Regional Operations Center, and Ian A. Moffett, Chief, Miami-Dade Schools Police Department, made the announcement.
Harrison Garcia, 27, faces consecutive statutory mandatory minimum sentences of 5 and 25 years as to the armed narcotics trafficking charges. Sentencing is scheduled for June 3, 2017 before U.S. District Judge Patricia A. Seitz.
According to the court record, including evidence presented during the trial, between February 2013 and October 18, 2016, Garcia - with the assistance of at least two associates - distributed a variety of controlled substances, including marijuana, promethazine with codeine, commonly referred to as “lean” or “drank,” alprazolam, lorazepam, and Percocet. To that end, Garcia maintained two Miami residences: at the first, he possessed narcotics, namely marijuana and promethazine with codeine, digital scales, hand-written ledgers, narcotics packaging material, and multiple semi-automatic pistols, including an FN 5.7, which shoots armor-piercing ammunition; at the second, he possessed more than 3,000 alprazolam pills, an UZI submachine gun and AK47 pistol - loaded and readily accessible, hundreds of rounds of ammunition, and over one hundred thousand dollars worth of jewelry and merchandise with original receipts, all purchased with drug proceeds.
At trial, the evidence showed that Garcia, who went by the alias “muhammad_a_lean” often posed on Instagram with large amounts of “lean” and other drugs, cash, and firearms, and boasted of owning fancy cars, including a Porsche Panamera and a Polaris Slingshot.
Mr. Greenberg commended the investigative efforts of ICE-HSI, FDLE and the Miami-Dade Schools Police Department. This case was prosecuted by Assistant U.S. Attorneys Jonathan K. Osborne and Rilwan Adeduntan.
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.
Two Florida Men Plead Guilty to Conspiring to Provide Material Support to ISILRead the Press Release
Two Palm Beach County, Florida, residents pleaded guilty in federal court in West Palm Beach to conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. ISIL is also known by the acronym ISIS (the Islamic State of Iraq and al-Sham). Both defendants are U.S. citizens.
Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General for National Security Mary B. McCord, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and members of the South Florida Joint Terrorism Task Force (JTTF) made the announcement.
Dayne Antani Christian, aka Shakur, 32, of Lake Park, Florida, pleaded guilty on March 29, 2017 before United States District Judge Robin Rosenberg to conspiracy to provide material support to ISIL a designated foreign terrorist organization, in violation of Title 18, United States Code, Section 2339B(a)(1), and one count of being a felon in possession of a firearm, in violation of Title 18, United States Code, Section 922(g)(1). Darren Arness Jackson, aka Daoud, 51, of West Palm Beach, pleaded guilty on April 4, 2017 before Judge Rosenberg also to conspiracy to provide material support to ISIL. Both defendants face a statutory maximum sentence of 20 years in prison on the conspiracy plea. Christian faces an additional statutory maximum sentence of 10 years in prison for his plea to being a felon in possession of a firearm. No sentencing date has been scheduled for the two defendants.
On July 21, 2016, Christian, Jackson and co-defendant Gregory Hubbard, aka Jibreel, were arrested by the FBI, after Jackson drove Hubbard and an FBI confidential human source (CHS) to Miami International Airport for an overseas flight to Germany. According to the criminal complaint filed in the case, Hubbard had purchased a ticket to Berlin, Germany, and planned to travel later to Turkey by train and then cross into Syria to join ISIL.
On July 26, 2016, an indictment was returned by the Grand Jury charging the three defendants with conspiring, and attempting to provide material support to a designated foreign terrorist organization (ISIL), in violation of 18 U.S.C. § 2339B(a)(1). Christian was also charged with four counts of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1). According to the indictment, beginning in at least July 2015 and continuing until their arrests, Hubbard, Christian, and Jackson conspired to provide personnel to ISIL. According to admissions made as part of their guilty pleas, both Christian and Jackson talked with Hubbard and the CHS about their support of ISIL and various acts of terrorism committed by and attributed to ISIL and its supporters. Both Christian and Jackson expressed a desire to travel to Syria to join ISIL. At various times during the conspiracy both Christian and Jackson provided firearms (including an AK-47 style assault rifle provided by Christian) and firearms instruction so that Hubbard and the CHS could practice shooting at a remote area in Palm Beach County in preparation for their travel to Syria to join ISIL.
Hubbard is presently scheduled for trial in front of Judge Rosenberg for the trial period commencing October 30, 2017. All three defendants have been detained since their arrests.
The FBI and JTTF investigated the case with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives; Transportation Security Administration; Miami International Airport Police Department; Boca Raton, Florida, Police Department; Palm Beach Sheriff’s Office; City of West Palm Beach Police Department and Florida Fish and Wildlife Conservation Commission. This case is being prosecuted by Assistant U.S. Attorneys Karen E. Gilbert and Edward C. Nucci and Trial Attorney Larry Schneider of the National Security Division’s Counterterrorism Section.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Florida Men Plead Guilty to Conspiring to Provide Material Support to ISILRead the Press Release
Dayne Antani Christian, aka Shakur, 32, of Lake Park, Florida, pleaded guilty on March 29, to conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, in violation of Title 18, United States Code, Section 2339B(a)(1); and one count of being a felon in possession of a firearm, in violation of Title 18, United States Code, Section 922(g)(1). Darren Arness Jackson, aka Daoud, 51, of West Palm Beach, Florida, pleaded guilty on April 4, also to conspiracy to provide material support to ISIL. ISIL is also known by the acronym ISIS (the Islamic State of Iraq and al-Sham). Both defendants are U.S. citizens.
Acting Assistant Attorney General for National Security Mary B. McCord, Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and members of the South Florida Joint Terrorism Task Force (JTTF) made the announcement. Both pleas were entered before U.S. District Judge Robin Rosenberg.
On July 21, 2016, Christian, Jackson and co-defendant Gregory Hubbard, aka Jibreel, were arrested by the FBI, after Jackson drove Hubbard and an FBI confidential human source (CHS) to Miami International Airport for an overseas flight to Germany. According to the criminal complaint filed in the case, Hubbard had purchased a ticket to Berlin, Germany, and planned to travel later to Turkey by train and then cross into Syria to join ISIL.
On July 26, 2016, an indictment was returned by the Grand Jury charging the three defendants with conspiring and attempting to provide material support to a designated foreign terrorist organization (ISIL), in violation of 18 U.S.C. § 2339B(a)(1). Christian was also charged with four counts of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).
According to the indictment, beginning in at least July 2015 and continuing until their arrests, Hubbard, Christian and Jackson conspired to provide personnel to ISIL. According to admissions made as part of their guilty pleas, both Christian and Jackson talked with Hubbard and the CHS about their support of ISIL and various acts of terrorism committed by and attributed to ISIL and its supporters. Both Christian and Jackson expressed a desire to travel to Syria to join ISIL. At various times during the conspiracy both Christian and Jackson provided firearms (including an AK-47 style assault rifle provided by Christian) and firearms instruction so that Hubbard and the CHS could practice shooting at a remote area in Palm Beach County in preparation for their travel to Syria to join ISIL.
Hubbard is presently scheduled for trial in front of Judge Rosenberg for the trial period commencing October 30. All three defendants have been detained since their arrests.
Christian and Jackson face a statutory maximum sentence of 20 years in prison on the conspiracy plea. Christian faces an additional statutory maximum sentence of 10 years in prison for his plea to being a felon in possession of a firearm. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. No sentencing date has been scheduled for the two defendants.
The FBI and JTTF investigated the case with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives; Transportation Security Administration; Miami International Airport Police Department; Boca Raton, Florida, Police Department; Palm Beach Sheriff’s Office; City of West Palm Beach Police Department; and Florida Fish and Wildlife Conservation Commission. This case is being prosecuted by Assistant U.S. Attorneys Karen E. Gilbert and Edward C. Nucci for the Southern District of Florida, and Trial Attorney Larry Schneider of the National Security Division’s Counterterrorism Section.
Broward County School District Employee Pleads Guilty to Obstructing Drug InvestigationRead the Press Release
A Broward County School District employee has pled guilty to obstructing a drug investigation.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Porsha Session, 31, of Boynton Beach, Florida, pled guilty today before U.S. Magistrate Judge David Lee Brannon in West Palm, Florida, to the one-count Indictment charging her with obstructing an official proceeding, in violation of Title 18, United States Code, Section 1512(c)(2). Session faces a statutory maximum term of 20 years’ imprisonment and a fine up to $250,000.
According to the indictment, federal, state and local law enforcement agencies were investigating drug trafficking and other criminal offenses in Lauderhill, Florida. Session’s relative was one of the detectives from the Lauderhill Police Department assigned to the Lauderhill investigation. During the course of the Lauderhill investigation, law enforcement, including the defendant’s relative, received information, including details from a confidential informant, regarding individuals involved with drug trafficking, and vehicles used by and telephone numbers associated with, members of the criminal enterprise.
Session obtained information provided to her relative concerning the Lauderhill investigation. Session, while working as an employee of the Broward County School District, then made a series of telephone calls to a target of the drug trafficking investigation and warned the individual that he/she and other persons were being monitored by law enforcement. Session also warned the target that an inside source, an informant, was providing details of the criminal enterprise to law enforcement. As a result of Session’s disclosure, the target changed his/her telephone number in an attempt to avoid detection by law enforcement and the confidential informant was moved for his/her safety.
Mr. Greenberg commended the FBI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Drug Enforcement Administration, Lauderhill Police Department, and Sunrise Police Department for their investigative assistance with this matter. The case is being prosecuted by Assistant U.S. Attorney Jeffrey N. Kaplan.
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.
Nine People Sentenced in $172,000,000 Insurance Fraud SchemeRead the Press Release
Nine defendants were sentenced in federal court for participating in a massive insurance fraud scheme.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael J. Satz, Broward State Attorney, announced the sentencing of nine of sixteen defendants who were previously charged in a five-count Information.
The criminal Information charged sixteen defendants with their participation in a complex fraud scheme regarding the manufacture and distribution of compounded medications. The fraud involved material misrepresentations to health insurance providers and illegal payments to coconspirators and medical professionals, including physicians. The fraud generated in excess of $172,000,000 in criminal proceeds for the members of the criminal enterprise.
United States District Judge Daniel T. K. Hurley imposed the following sentences: Clifford Carroll, 36, of Boca Raton, 180 months’ imprisonment; Todd Stephens, 52, of West Palm Beach, 120 months’ imprisonment; Joel McDermott, 41, of Boca Raton, 72 months’ imprisonment; Michael Kenna, 30, of Delray Beach, 60 months’ imprisonment; Todd Hanson, 47, of Zephyr Cove, NV, 96 months’ imprisonment; Christopher Mucha, 30, of Davie, 30 months’ imprisonment; Ian Flaster, 34, of Delray Beach, 36 months’ imprisonment; William Earl, 73, of Boca Raton, 24 months’ imprisonment; and Dr. Peter Williams, 56, of New Port Richey, 60 months’ imprisonment. In addition, the defendants forfeited over $30 million in assets. Hearings will be held at a later date to determine the amount of restitution owed to the government by each of the defendants. All sixteen defendants charged in this case have pled guilty, and the remaining defendants will be sentenced in May.
According to the Information, the defendants participated in a two-year conspiracy, which used various business entities, including Numed Care, LLC, ClinicalCorp, LLC, RX of Boca, and American Custom Compound Pharmacy, to perpetrate a complex fraud on numerous health care insurance providers. The defendants prepared medications in bulk quantities, which they alleged to be compounded medications for specific individualized patient needs. The defendants falsely represented to the health insurance providers that these medications were prepared in limited quantities for individual patients and were exempt from FDA inspection.
The health insurance providers compensated the defendants for the alleged costs of the ingredients for such medications. The defendants concealed from the health insurance providers that the defendants paid illegal kickbacks to physicians for the issuance of the compounded medications. defendants unlawfully provided the physicians with pre-printed prescription pads. In order to facilitate the fraudulent scheme, the defendants used mass-marketing techniques and call centers, which made material misrepresentations in order to solicit potential patients. defendants induced owners of failing pharmacies throughout the United States to participate in the scheme in order to perpetuate the fraud.
Mr. Greenberg commended the investigative efforts of the DEA, IRS-CI, and the Broward State Attorney’s Office in connection with the investigation of this matter. The case is being prosecuted by Assistant U.S. Attorneys Paul F. Schwartz and Jeffrey N. Kaplan.
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.
Wellington Ringleader of Elaborate Fraud Schemes Sentenced to 11 Years in PrisonRead the Press Release
Kesner Joaseus, 47, of Wellington, Florida, was sentenced yesterday by U.S. District Judge Robin L. Rosenberg to a total of 11 years in prison for orchestrating two elaborate fraud schemes.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Sean Scheller, Chief, Town of Lantana Police Department, and Antonio J. Gomez, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, made the announcement.
On July 28, 2016, Joaseus pled guilty in two separate fraud cases that were consolidated for the sentencing hearing. In one case, Joaseus conspired to commit and did in fact commit mail fraud by engaging in a scheme to defraud for the purpose of obtaining money by means of false and fraudulent pretenses, in violation of Title 18, United States Code, Sections 1341 and 1349 (Case No. 16-80011-CR-Rosenberg). Joaseus was sentenced to 108 months in prison in this case.
According to court documents related to the first case, a legitimate real estate investment trust based in Georgia, RHA 2, LLC, owns dozens of properties in Palm Beach and Broward Counties that it leases out as residential single family homes. This company operates as HavenBrook Homes. From November 2014 through December 2016, defendant Joaseus used the similar company name “RHA Two, LLC,” to illegally take possession of and rent the homes lawfully owned by HavenBrook Homes by assuming the legitimate company’s identity, posting rental signs on the houses, changing the locks and then meeting with unsuspecting prospective tenants.
In addition, Joaseus and his co-defendants entered into bogus leases with a counterfeit “HavenBrook Homes” logo, and collected thousands of dollars in money orders or cash, purportedly for security deposit, first and last month’s rent for the houses. Joaseus collected purported lease payments of over $380,000 from dozens of unsuspecting tenants of houses owned by HavenBrook Homes which the defendants had no right to possess.
In a separate case, Joaseus committed aggravated identity theft and access device fraud, in violation of Title 18, United States Code, Sections 1028A and 1029(a)(2) (Case No. 16-80010-CR-Rosenberg). that case, Joaseus used the personal identifiers, including the date of birth and social security number, of numerous victims to obtain credit cards and then used the credit cards to purchase merchandise and withdraw cash at various locations in Palm Beach County and elsewhere. The merchandise included two Mercedes-Benz automobiles, with total losses of over $260,000. Joaseus was sentenced to 108 months in prison for access device fraud, in addition to a two year consecutive prison sentence on the aggravated identity theft charge. The 108-month sentences in the two cases will be served concurrently, and the two-year sentence for aggravated identity theft will be consecutive, for a total sentence of 132 months (11 years) in prison.
In a related case, defendant Frantz Felisma pled guilty to aggravated identity theft and access device fraud for providing Joaseus with the personally identifiable information that was used to commit the identity theft fraud scheme (Case No. 17-80008-CR-Middlebrooks). Felisma served as a Palm Beach County Sheriff’s Deputy and obtained the personal information from his police department issued computer.
Mr. Greenberg commended the investigative efforts of the ICE-HSI, Lantana Police Department and USPIS. This case is being prosecuted by Assistant U.S. Attorneys Lauren Jorgensen and Rinku Tribuiani in the West Palm Beach U. S. Attorney’s Office.
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.
Three Plead Guilty in Multi-Million Federal Prison Sentencing Reduction Fraud SchemeRead the Press Release
This month, three defendants pled guilty in the Southern District of Florida in connection with their participation in a $4.4 million dollar federal prison sentencing scheme. The fraudulent scheme targeted federal inmates and their families in Miami-Dade County and elsewhere by promising them assistance in obtaining a Rule 35 sentencing reduction, in exchange for money. Rule 35 of the Federal Rules of Criminal Procedure allows the court, upon the government’s motion, to reduce a defendant’s sentence if the defendant is found to have provided substantial assistance in investigating or prosecuting another person. Neither the government nor the court system charges inmates or their relatives a fee for requesting a sentencing reduction when an inmate provides substantial assistance.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Robert A. Bourbon, Special Agent in Charge, Department of Justice, Office of the Inspector General (DOJ-OIG), and Perrye K. Turner, Special Agent in Charge, Federal Bureau of Investigation (FBI), Houston Field Office, made the announcement.
“Sentencing reduction fraud schemes that prey on the desperation, vulnerability and trust of federal inmates and their families exploit both the victims and the justice system,” stated Acting U.S. Attorney Benjamin G. Greenberg. “The U.S. Attorney’s Office in South Florida and our federal partners across the nation will continue to target such schemes and prosecute the offenders.”
“Conning relatives of federal inmates into thinking that they must pay money for their loved ones to receive a sentence reduction that is actually based solely on how much an inmate assists the government is an outrageous way to defraud innocent victims,” said Special Agent in Charge Robert Bourbon. “Even more importantly, it runs the risk of soiling the reputation of our federal criminal justice system, which prides itself on delivering just results, regardless of an individual’s wealth or access to those in power.”
“If you are a victim, it is critical that you reach out to us,” said FBI Special Agent in Charge Perrye K. Turner. “This case highlights that justice is blind and underscores the FBI’s impartiality when investigating cases.”
Colitha Patrice Bush, 36, and Alvin James Warrick, 40, both of Beaumont, Texas, as well as Ronald Bennett Shepherd, 32, of Houston, Texas, each pled guilty to a single count of conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 1349, in connection with their participation in the multi-year fraud scheme. In addition to the Southern District of Florida matter (Case No. 16-CR-20698-JAL)), Warrick and Bush also pled guilty to one count of conspiracy to commit wire fraud in a related case originally brought in the Eastern District of Texas, and subsequently transferred to Florida (Case No. 17-CR-20194-JAL).
Bush’s sentencing for both cases is scheduled for June 7, 2017, at 3:00 p.m. before U.S. District Judge Joan A. Lenard. Warrick’s sentencing is scheduled for May 31, 2017, at 3:00 p.m., and Shepherd’s sentencing is scheduled for May 24, 2017, at 3:00 p.m., also before U.S. District Judge Joan A. Lenard. The defendants each face a statutory maximum penalty of 20 years in prison as to each count.
According to court documents, from 2009 through September 7, 2016, Warrick, Bush, Shepherd, and others held themselves out as owners and operators of Private Services, a company that reportedly worked with a network of informants and law enforcement personnel to identify and provide information and third party cooperation that could be credited to federal inmates in Rule 35 proceedings. Using aliases such as “Peter Candlewood,” “Diane Lane,” and “Diane Rice,” the defendants targeted federal inmates and their families by promising that they could provide substantial assistance services, which would be used to help secure the early release of the inmates. In return, the defendants required relatives of the federal inmates to make periodic payments via cash, check, wire, and electronic fund transfer, in order for the third party cooperation process to supposedly be conducted. Overall, more than $4.4 million was paid to the defendants by at least twenty-two victims.
As part of the scheme, Warrick and Bush also provided fake invoices and fraudulent documents allegedly showing agreements between various U.S. Attorney’s Offices, including the Eastern District of New York and the Southern District of New York, and a company affiliated with Private Services. In fact, the agreements were fake, the prosecutors’ signatures were forged, and no substantial assistance was provided on behalf of these inmates. Instead, Warrick, Bush and Shepherd simply received payments from relatives of federal inmates, and used the fraudulently obtained funds for their personal use and benefit, including the purchase of luxury automobiles, vacations, and gambling activities.
Mr. Greenberg commended the investigative efforts of the DOJ-OIG, the FBI, the Houston Police Department, and the U.S. Attorney’s Offices in the Eastern District of New York, Northern District of New York, Southern District of New York, Eastern District of Texas, and Eastern District of Virginia, who provided significant and valuable support to this joint investigation. The Southern District of Florida case is being prosecuted by Assistant United States Attorney Anne P. McNamara. The Eastern District of Texas case is being prosecuted by Assistant United States Attorney Robert L. Rawls.
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.
Ohio Native Pleads Guilty to Coercing Minors to Engage in Sexual Activity and Produce Child Pornography Through “Internet Sextortion”Read the Press Release
Today, an Ohio native living in Port St. Lucie, Florida pled guilty to using the internet to target and extort children through sexual exploitation (“sextortion”) and pornographic offenses.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) made the announcement.
Richard Eugene Fye, III, 24, of Ohio, pleaded guilty to Counts 1 to 4 in the Indictment charging: Use Of Means of Interstate Commerce to Persuade, Induce, Entice, or Coerce a Minor to Engage in Illegal Sexual Activity, in violation of Title 18, United States Code, Section 2422(b); Production of Material Containing Visual Depictions of Sexual Exploitation of Minors, in violation of Title 18, United States Code, Sections 2251(a) & (e); Receiving Material Containing Visual Depictions of Sexual Exploitation of Minors, in violation of Title 18, United States Code, Sections 2252(a)(2)&(b)(2); and Possession of Material Containing Visual Depictions of Sexual Exploitation of Minors (including those under age of 12), in violation of Title 18, United States Code, Sections 2252(a)(4)(B) & (b)(2). The defendant faces mandatory terms of incarceration and a possible statutory sentence of life imprisonment. The defendant also faces up to a lifetime of supervised release and must register as a sex offender. The defendant’s sentencing hearing is scheduled for June 8, 2017 at 10:00 a.m. before Judge Donald M. Middlebrooks in West Palm Beach.
According to a stipulated factual basis filed in this case, in December 2016, a 15-year-old female in Michigan made a complaint about online coercion. The victim stated an unknown subject, who identified himself as “MARCO”, a 14 year old male from Port St. Lucie, contacted her using a social networking application. “MARCO” convinced her to send him nude photographs using her cell phone. “MARCO” then threatened that if the minor female did not also send nude videos of herself, he would send the photographs to her friends and family. Fearing that the pictures would be disseminated the minor female sent “MARCO” the requested videos.
During the course of the investigation, law enforcement learned that “MARCO” was in fact defendant Richard Eugene Fye III.
On January 31, 2017, members of HSI executed a federal search warrant at a location where Fye was living and working and recovered the defendant’s cellular telephone and laptop. The electronic devices contained nude images of the victim, a profile of 14 year old “MARCO” (which included a picture of a teenage male), and over 200 suspected child pornography videos, including images of prepubescent minors under 12 years of age, sado-masochism, and bondage.
Law enforcement also discovered a number of videos and chats involving other minor girls that Fye met online and persuaded, induced, enticed, and/or coerced to produce sexually explicit images and send him via the internet. During a number of these chats, Fye distributed child pornography to minors, in order to illustrate the sexual acts the defendant wanted them to perform in the requested videos.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
Mr. Greenberg commended the investigative efforts of ICE-HSI and the Washtenaw County Sheriff’s Office in Michigan. This case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Vice President of Finance at Publicly Traded Company Charged with Accounting and Securities Fraud SchemeRead the Press Release
A former vice president of finance for Bankrate Inc., a publicly traded financial services and marketing company headquartered in New York City, was charged in an indictment filed yesterday for his alleged participation in a complex accounting and securities fraud scheme.
Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, and Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS) made the announcement today.
Hyunjin Lerner, 48, of Martin County, Florida, was charged in an indictment filed in the Southern District of Florida with one count of conspiracy to commit wire fraud, falsify a public company’s books, records and accounts and make false statements to a public company’s accountants; three counts of wire fraud; one count of securities fraud; four counts of false entries in a public company’s books, records and accounts; and three counts of false statements to a public company’s accountants. Lerner, who previously worked at Bankrate’s offices in Palm Beach Gardens, Florida, made his initial appearance earlier today before U.S. Magistrate Judge John J. O’Sullivan of the Southern District of Florida and was released on bond.
The indictment alleges that between 2011 and 2014, Lerner and his co-conspirators carried out a complex scheme to manipulate Bankrate’s financial statements and artificially inflate Bankrate’s earnings. According to the indictment, Lerner and his co-conspirators allegedly engaged in “cookie jar” or “cushion” accounting, meaning unsupported expense accruals were left on Bankrate’s books and then selectively reversed in later quarters to meet earnings goals. In addition, Lerner and his co-conspirators allegedly: misrepresented certain company expenses as “deal costs” in order to artificially inflate publicly reported adjusted earnings metrics; booked hundreds of thousands of dollars in unsupported revenue to further inflate Bankrate’s reported revenue and earnings; and made materially false statements to conceal the improper accounting entries from Bankrate’s auditors, shareholders and the investing public.
An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The USPIS Washington, D.C., Division investigated the case. Assistant Chief Henry Van Dyck and Trial Attorneys Rush Atkinson, Emily Scruggs and Somil Trivedi of the Criminal Division’s Fraud Section are prosecuting the case. The Securities and Exchange Commission and the U.S. Attorney’s Office of the Southern District of Florida provided assistance in this matter.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
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.
Owner of Florida Telecommunications Company and His Co-Conspirator Sentenced to Prison for Involvement in International Cellphone Fraud SchemeRead the Press Release
A federal court in West Palm Beach, Florida, today sentenced the owner and operator of a Florida-based telecommunications company to 75 months in prison and his co-conspirator, a resident of Bronx, New York to 36 months in prison in connection with a sophisticated global cellphone fraud scheme that involved compromising cellphone customers’ accounts and “cloning” their phones to make fraudulent international calls.
Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
Ramon Batista, 50, the owner and operator of Arymyx Inc., earlier pleaded guilty before Senior U.S. District Judge Daniel T.K. Hurley in the Southern District of Florida to one count of conspiracy to commit wire fraud; access device fraud; the use, production or possession of modified telecommunications instruments; and the use or possession of hardware or software configured to obtain telecommunications services, as well as one count of wire fraud and one count of aggravated identity theft. Batista’s co-conspirator, Farintong Calderon, 38, pleaded guilty to the same count of conspiracy.
According to the plea agreements, Batista, Calderon and their co-conspirators participated in a scheme to steal access to and fraudulently open new cellphone accounts using the personal information of individuals around the United States. Batista and others also operated “call sites” in South Florida and elsewhere, where they would receive telecommunications identifying information associated with customers’ accounts from Calderon and additional co-conspirators, and use that data, as well as other software and hardware, to reprogram cellphones that they controlled. Batista and other co-conspirators would then transmit thousands of international calls over the internet to the call sites, where Batista and others would route them through the re-programmed cellphones to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates. The calls were billed to the customers’ compromised accounts.
Batista admitted that his role in the scheme included selling fraudulent telecommunications services through Arymyx; acting as a “call site operator” which involved maintaining and re-programming cellphones through which he routed phone calls as part of the fraud scheme; and using and providing other co-conspirators with stolen or compromised telecommunications identifying information that was then employed to reprogram cellphones. Moreover, Batista admitted that he sent or received 1,132 “lines,” that is, combinations of telecommunications identifying numbers for specific devices or accounts associated with U.S. cellphone customers, and that the fraudulent use of these “lines” caused almost $800,000 in losses to Sprint and Verizon.
In addition, Calderon admitted that he was a “line supplier” based in New York City, who provided stolen or compromised telecommunications identifying information to Batista and other co-conspirators in Florida and elsewhere. Among other things, Calderon admitted that he sent or received about 1,408 “lines” and was personally responsible for more than $250,000 in losses resulting from the scheme.
Batista and Calderon are the third and fourth defendants to be sentenced in the case by Senior Judge Hurley. Edwin Fana was sentenced on Dec. 22, 2016, to 48 months in prison and Jose Santana was sentenced on Jan. 4, 2017, to 52 months in prison.
The FBI investigated the case, dubbed Operation Toll Free, which is part of the Bureau’s ongoing effort to combat large-scale telecommunications fraud. Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida and Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section prosecuted the case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Owner of Florida Telecommunications Company and His Co-Conspirator Sentenced to Prison for Involvement in International Cellphone Fraud SchemeRead the Press Release
A federal court in West Palm Beach, Florida, today sentenced the owner and operator of a Florida-based telecommunications company to 75 months in prison and his co-conspirator, a resident of Bronx, New York to 36 months in prison in connection with a sophisticated global cellphone fraud scheme that involved compromising cellphone customers’ accounts and “cloning” their phones to make fraudulent international calls.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
Ramon Batista, 50, the owner and operator of Arymyx Inc., earlier pleaded guilty before Senior U.S. District Judge Daniel T.K. Hurley in the Southern District of Florida to one count of conspiracy to commit wire fraud; access device fraud; the use, production or possession of modified telecommunications instruments; and the use or possession of hardware or software configured to obtain telecommunications services, as well as one count of wire fraud and one count of aggravated identity theft. Batista’s co-conspirator, Farintong Calderon, 38, pleaded guilty to the same count of conspiracy.
According to the plea agreements, Batista, Calderon and their co-conspirators participated in a scheme to steal access to and fraudulently open new cellphone accounts using the personal information of individuals around the United States. Batista and others also operated “call sites” in South Florida and elsewhere, where they would receive telecommunications identifying information associated with customers’ accounts from Calderon and additional co-conspirators, and use that data, as well as other software and hardware, to reprogram cellphones that they controlled. Batista and other co-conspirators would then transmit thousands of international calls over the internet to the call sites, where Batista and others would route them through the re-programmed cellphones to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates. The calls were billed to the customers’ compromised accounts.
Batista admitted that his role in the scheme included selling fraudulent telecommunications services through Arymyx; acting as a “call site operator” which involved maintaining and re-programming cellphones through which he routed phone calls as part of the fraud scheme; and using and providing other co-conspirators with stolen or compromised telecommunications identifying information that was then employed to reprogram cellphones. Moreover, Batista admitted that he sent or received 1,132 “lines,” that is, combinations of telecommunications identifying numbers for specific devices or accounts associated with U.S. cellphone customers, and that the fraudulent use of these “lines” caused almost $800,000 in losses to Sprint and Verizon.
In addition, Calderon admitted that he was a “line supplier” based in New York City, who provided stolen or compromised telecommunications identifying information to Batista and other co-conspirators in Florida and elsewhere. Among other things, Calderon admitted that he sent or received about 1,408 “lines” and was personally responsible for more than $250,000 in losses resulting from the scheme.
Batista and Calderon are the third and fourth defendants to be sentenced in the case by Senior Judge Hurley. Edwin Fana was sentenced on Dec. 22, 2016, to 48 months in prison and Jose Santana was sentenced on Jan. 4, 2017, to 52 months in prison.
The FBI investigated the case, dubbed Operation Toll Free, which is part of the Bureau’s ongoing effort to combat large-scale telecommunications fraud. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida prosecuted the case.
Hollywood Resident Sentenced to 30 Years in Federal Prison for Attempting to Entice a Child to Engage in Sexual ActivityRead the Press Release
Patrick Antczak, 25, of Hollywood, Florida, was sentenced today to 30 years in prison by U.S. District Court Judge Robert N. Scola Jr in Miami, after having been convicted at trial of attempting to entice a child to engage in sexual activity.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida, Special Agent in Charge George L. Piro of the Federal Bureau of Investigation (FBI), Miami Field Office, and Sheriff Scott Israel, Broward County Sheriff’s Office, made the announcement.
On January 11, 2017, a jury convicted Defendant Antczak of attempted enticement of a child. According to the court record, including trial evidence, Antczak contacted an undercover agent, in an on-line forum, regarding a meeting with a father and his minor daughter for the purposes of engaging in sexual conduct with the child. Upon making contact with the undercover, whom the defendant believed was the child’s father, he asked the age of the child and provided graphic details of his intended sexual abuse of the minor. The defendant exchanged over 500 text messages. During his chats with the child, the defendant promised that he would bring her an iTunes gift card when they met in person. The defendant arranged to meet the father and his minor daughter at a hotel in Broward County and arrived carrying the gift card and a condom.
Evidence at trial also included the defendant’s prior obscenity conviction for the exchange of child pornography.
Mr. Greenberg commended the investigative efforts of the FBI and the Broward County Sheriff’s Office and thanked the FBI Child Exploitation Task Force for their assistance. Assistant U.S. Attorneys Francis Viamontes and M. Catherine Koontz prosecuted this case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami Beach Sex Trafficker Sentenced to 30 Years in PrisonRead the Press Release
Defendant Lured Foreign Students on False Promises
in Furtherance of Interstate Prostitution and Erotic Massage Enterprise
Chief United States District Court Judge K. Michael Moore of the Southern District of Florida sentenced Jeffrey Jason Cooper, 47, of Miami Beach, Florida, to 30 years in prison for sex trafficking and related violations arising from the defendant’s scheme to recruit foreign students on false promises of legitimate summer jobs, and then to advertise them to customers of his prostitution and erotic massage enterprise. Chief Judge Moore also ordered Cooper to pay $8,640.00 in restitution to the victims.
A jury convicted Cooper on Nov. 17, 2016, of five counts of sex trafficking and attempted sex trafficking by fraud, three counts of wire fraud, two counts of importing and attempting to import aliens for prostitution or immoral purposes, and one count of using a facility of interstate commerce to operate a prostitution enterprise. According to evidence presented during the four-day trial, Cooper recruited foreign university students from Kazakhstan through the Department of State’s Summer Work Travel Program, falsely promising them clerical jobs at his fictitious yoga studio. In addition to defrauding the students, Cooper fraudulently induced an educational exchange agency to sponsor the victims’ visas, and caused government officials to issue the victims temporary, non-immigrant “J-1” visas based on Cooper’s false and fraudulent offer of legitimate summer jobs.
After the victims arrived in Miami, Cooper revealed to them for the first time that the yoga studio did not exist and that he expected them to perform erotic massages for customers of his erotic massage and prostitution enterprise. Witnesses testified that the victims, shocked and upset, tried to find work elsewhere but eventually gave up and began working for the defendant.
As established at trial, police began investigating Cooper after neighbors complained he was prostituting women from his apartment complex, and conducted an undercover operation that led to the recovery of the victims, one day before Cooper had scheduled them to travel to Los Angeles, California, where Cooper also operated his prostitution and erotic massage enterprise. When questioned by law enforcement, Cooper claimed that the victims cleaned apartments for him, and characterized his relationship with them as that of an “older brother.”
Evidence at trial included records from Backpage.com advertising the victims’ services, and Facebook communications confirming that Cooper recruited the victims on false and fraudulent pretenses, revealing the true nature of his erotic massage and prostitution enterprise only after the victims arrived in the United States.
“Cooper brazenly manipulated and deceived vulnerable young students so he could profit by selling them for sex, with no regard for their fundamental human dignity,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “The Civil Rights Division and its partners on the Anti-Trafficking Coordination Team (ACTeam) Initiative will continue to vigorously pursue traffickers who operate internationally in order to bring them to justice and vindicate the rights of vulnerable victims.”
“The successful prosecution and decades-long sentence imposed on Jeffrey Cooper illustrate the international impact of law enforcement’s united efforts to combat human trafficking – whether by fraud, force or otherwise,” said Acting U.S. Attorney Benjamin G. Greenberg. “The U.S. Attorney’s Office will continue to bring to justice those individuals who knowingly exploit others for their own personal profit.”
“We are committed to working with our law enforcement partners to prevent situations where vulnerable individuals are exploited in human trafficking schemes such as this,” said Christian Schurman, acting director of the State Department’s Diplomatic Security Service (DSS). “Because of our global presence, DSS is positioned to work with U.S. and foreign law enforcement to stop those that would manipulate instruments of international travel to profit from selling human beings in this way.”
The case was investigated by HSI and DSS, with assistance from the Prosecutor General’s Office in Kazakhstan; the FBI Legal Attaché Office in Astana, Kazakhstan; the Justice Department’s Office of International Affairs, the Miami Dade Police Department and the North Bay Village, Florida, Police Department. The case was prosecuted by Assistant U.S. Attorney Seth M. Schlessinger, who was previously with the Southern District of Florida and is now with the Eastern District of Pennsylvania, and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
The Southern District of Florida was selected as one of six Phase I Anti-Trafficking Coordination Teams (ACTeams) through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security, and Labor. Designated ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking, and sex trafficking by force, fraud, or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
Miami Beach Sex Trafficker Sentenced to 30 Years in Prison for International Trafficking Scheme Targeting Foreign University StudentsRead the Press Release
Defendant Lured Foreign Students on False Promises
in Furtherance of Interstate Prostitution and Erotic Massage Enterprise
Chief United States District Court Judge K. Michael Moore of the Southern District of Florida sentenced Jeffrey Jason Cooper, 47, of Miami Beach, Florida, to 30 years in prison for sex trafficking and related violations arising from the defendant’s scheme to recruit foreign students on false promises of legitimate summer jobs, and then to advertise them to customers of his prostitution and erotic massage enterprise. Chief Judge Moore also ordered Cooper to pay $8,640.00 in restitution to the victims.
A jury convicted Cooper on Nov. 17, 2016, of five counts of sex trafficking and attempted sex trafficking by fraud, three counts of wire fraud, two counts of importing and attempting to import aliens for prostitution or immoral purposes, and one count of using a facility of interstate commerce to operate a prostitution enterprise. According to evidence presented during the four-day trial, Cooper recruited foreign university students from Kazakhstan through the Department of State’s Summer Work Travel Program, falsely promising them clerical jobs at his fictitious yoga studio. In addition to defrauding the students, Cooper fraudulently induced an educational exchange agency to sponsor the victims’ visas, and caused government officials to issue the victims temporary, non-immigrant “J-1” visas based on Cooper’s false and fraudulent offer of legitimate summer jobs.
After the victims arrived in Miami, Cooper revealed to them for the first time that the yoga studio did not exist and that he expected them to perform erotic massages for customers of his erotic massage and prostitution enterprise. Witnesses testified that the victims, shocked and upset, tried to find work elsewhere but eventually gave up and began working for the defendant.
As established at trial, police began investigating Cooper after neighbors complained he was prostituting women from his apartment complex, and conducted an undercover operation that led to the recovery of the victims, one day before Cooper had scheduled them to travel to Los Angeles, California, where Cooper also operated his prostitution and erotic massage enterprise. When questioned by law enforcement, Cooper claimed that the victims cleaned apartments for him, and characterized his relationship with them as that of an “older brother.” Evidence at trial included records from Backpage.com advertising the victims’ services, and Facebook communications confirming that Cooper recruited the victims on false and fraudulent pretenses, revealing the true nature of his erotic massage and prostitution enterprise only after the victims arrived in the United States.
“The successful prosecution and decades-long sentence imposed on Jeffrey Cooper illustrate the international impact of law enforcement’s united efforts to combat human trafficking – whether by fraud, force or otherwise,” said Acting U.S. Attorney Benjamin G. Greenberg. “The U.S. Attorney’s Office will continue to bring to justice those individuals who knowingly exploit others for their own personal profit.”
“Cooper brazenly manipulated and deceived vulnerable young students so he could profit by selling them for sex, with no regard for their fundamental human dignity,” said Acting Assistant Attorney General Tom Wheeler of the Justice Department’s Civil Rights Division. “The Civil Rights Division and its partners on the Anti-Trafficking Coordination Team (ACTeam) Initiative will continue to vigorously pursue traffickers who operate internationally in order to bring them to justice and vindicate the rights of vulnerable victims.”
“We are committed to working with our law enforcement partners to prevent situations where vulnerable individuals are exploited in human trafficking schemes such as this,” said Christian Schurman, acting director of the State Department’s Diplomatic Security Service (DSS). “Because of our global presence, DSS is positioned to work with U.S. and foreign law enforcement to stop those that would manipulate instruments of international travel to profit from selling human beings in this way.”
The case was investigated by HSI and DSS, with assistance from the Prosecutor General’s Office in Kazakhstan; the FBI Legal Attaché Office in Astana, Kazakhstan; the Justice Department’s Office of International Affairs, the Miami Dade Police Department and the North Bay Village, Florida, Police Department. The case was prosecuted by Assistant U.S. Attorney Seth M. Schlessinger, who was previously with the Southern District of Florida and is now with the Eastern District of Pennsylvania, and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
The Southern District of Florida was selected as one of six Phase I Anti-Trafficking Coordination Teams (ACTeams) through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security, and Labor. Designated ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking, and sex trafficking by force, fraud, or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
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 Pharmaceutical Salesman Sentenced to More than 5 Years in Prison for Role in $13 Million Dollar Conspiracy Involving OxycodoneRead the Press Release
A former pharmaceutical salesman was sentenced today to 70 months in prison for his role in a $13 million dollar money laundering conspiracy involving more than 2 million dosage units of oxycodone.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Ric L. Bradshaw, Sheriff, Palm Beach Sheriff’s Office, Albert Arenal, Chief, Coconut Creek Police Department, and Daniel C. Alexander, Chief, Boca Raton Police Department, made the announcement.
Jonathan Sendor, 60, of Aurora, Colorado, pled guilty to one count of conspiracy to commit money laundering involving criminally derived property valued greater than $10,000, in violation of Title 18, United States Code, Sections 1956(h) and 1957.
According to court documents, between March 2010 and June 2011, Sendor’s co-conspirators operated six pain clinics in Broward and Palm Beach counties with the purpose of unlawfully dispensing oxycodone that had not been prescribed for a legitimate medical purpose. Approximately 2,007,695 oxycodone 30 mg pills were dispensed and distributed through the pain clinics before they were closed following the execution of search warrants in June 2011. The co-conspirators operated the clinics to ensure that the maximum amount of oxycodone would be prescribed without regard to a legitimate medical need, and purely for the sake of profit. The pain clinics failed to comply with Florida standards for the use of controlled substances. The pain clinics generated approximately $13,466,598 from the unlawful prescribing and dispensing of oxycodone.
For his role in the scheme, Sendor created multiple companies, building upon the connections he had formed as a pharmaceutical salesman, to act as a quasi-broker between the doctors of the pain clinics needing oxycodone and the wholesalers. Sendor misled the wholesale pharmaceutical companies and told them that he would function as an inspector and check whether any prospective customer pain clinic was operating a pill mill by conducting site visits and by requiring the clinic manager/doctor to complete a site survey. Sendor misrepresented the results of the site survey and directed the doctors, pain clinic managers, owners and other coconspirators to lie on the survey form.
In October 2010 the law changed and clinics were prohibited from dispensing oxycodone on-site. Sendor then assisted in opening two pharmacies – one in Boca Raton, Florida and another pharmacy in Orlando, Florida. Patients of the pain clinics were then directed to these pharmacies for oxycodone.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Mr. Greenberg commended the investigative efforts of IRS-CI, the DEA, PBSO, Coconut Creek Police Department, and Boca Raton Police Department. Mr. Greenberg also recognized the South East Regional Task Force (SERTF) and the Palm Beach Sheriff’s Office Multi-Agency Diversion Task Force (PBSO MAADTF). SERTF is headed by the DEA and includes representatives from the Fort Lauderdale Police Department, Pembroke Pines Police Department, Hallandale Beach Police Department, Lauderhill Police Department, Margate Police Department, and Coconut Creek Police Department. PBSO MAADTF is headed by the Palm Beach County Sheriff’s Office and includes representatives from the Boca Raton Police Department, Boynton Beach Police Department, DEA, Delray Beach Police Department, Florida Department of Health, Greenacres Police Department, IRS-CI, Jupiter Police Department, Riviera Beach Police Department, Palm Beach County State Attorney’s Office, PBSO, Palm Beach Gardens Police Department and West Palm Beach Police Department. This case was prosecuted by Assistant U.S. Attorney Donald F. Chase, II.
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.
Palm Beach County Sheriff’s Deputy Pleads Guilty to Aggravated Identity TheftRead the Press Release
A Palm Beach County Sheriff’s deputy pled guilty today, before United States District Judge Donald M. Middlebrooks, to providing personally identifying information to another individual who used that information in an identity theft scheme.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Sean Scheller, Chief, Town of Lantana Police Department, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office, made the announcement.
Frantz Felisma, 42, of Boynton Beach, a deputy with the Palm Beach County Sheriff’s Office, pled guilty to access device fraud in connection with the identity theft scheme, in violation of Title 18, United States Code, Section 1029(a)(2) and aggravated identity theft Title 18, United States Code, Section 1028A(a)(1) (Case No. 17-CR-80008). Felisma faces a mandatory minimum of two years’ imprisonment, to run consecutive to any other term of imprisonment imposed, as to the aggravated identity theft charge; and a maximum of ten years’ imprisonment as to the access device fraud charge. Felisma is scheduled to be sentenced on June 7, 2017 at 11:00 a.m. before Judge Middlebrooks.
According to the court record, over the span of approximately eighteen months, Deputy Felisma used his police department issued laptop computer to access a law enforcement database in order to obtain personally identifying information (PII) belonging to numerous individuals. Felisma sold this information to his co-conspirator, who then used the identities of at least 15 of these victims to set up credit card and bank accounts, stealing tens of thousands of dollars in the names of the victims. Felisma’s criminal conduct caused over $135,000 in financial losses.
Mr. Greenberg commended the investigative efforts of ICE-HSI, the Lantana Police Department, IRS-CI and Palm Beach County Sheriff’s Office. This case is being prosecuted by Assistant United States Attorneys Lauren Jorgensen and Rinku Tribuiani.
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.
Osteopathic Doctor Pleads Guilty in Multi-Million Dollar Health Care Fraud and Money Laundering Scheme Involving Sober Homes and Alcohol and Drug Addiction Treatment CentersRead the Press Release
An osteopathic doctor pled guilty for his participation in a multi-million dollar health care fraud and money laundering scheme that involved the filing of fraudulent insurance claim forms and defrauded health care benefit programs.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Dave Aronberg, State Attorney, Palm Beach County State Attorney’s Office, Jeff Atwater, Florida Chief Financial Officer, William D. Snyder, Sheriff Martin County Sheriff's Office, Robert Koons, Special Agent in Charge, Amtrak Office of Inspector General, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), Isabel Colon, Regional Director, United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA), Dennis Russo, Director of Operations, National Insurance Crime Bureau (NICB), Ric Bradshaw, Sheriff, Palm Beach County Sheriff's Office (PBSO), Sarah Mooney, Chief, West Palm Beach Police Department, Jeffrey S. Goldman, Chief, Delray Beach Police Department, Pam Bondi, Florida Attorney General, and Scott Rezendes, Special Agent in Charge, Office of Personnel Management, Office of Inspector General (OPM-OIG), made the announcement.
Donald Willems, 41, of Weston, pled guilty to one count of conspiring to commit health care fraud, in violation of Title 18, United States Code, Section 1347; all in violation of Tile 18, United States Code, Section 1349. Sentencing is scheduled for June 7, 2017 at 10:00 a.m. before U.S. District Judge Donald M. Middlebrooks. At sentencing, Willems faces up to 10 years in prison.
According to court documents, Willems’ co-defendants established sober homes which were purportedly in the business of providing safe and drug-free residences for individuals suffering from drug and alcohol addiction. To obtain residents for the sober homes, members of the conspiracy provided kickbacks and bribes, in the form of free or reduced rent and other benefits, to individuals with insurance who agreed to reside at the sober homes, attend drug treatment, and submit to regular drug testing that members of the conspiracy could bill to the residents’ insurance plans. Although the sober homes were purportedly drug-free residences, the co-defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing. The sober homes’ residents were referred to treatment centers that purportedly offered services for persons suffering from alcohol and drug addiction. In most instances, the co-defendants knew that the sober home residents referred to the treatment centers, Journey to Recovery LLC, in Lake Worth, Florida, and Reflections Treatment Center, LLC (Reflections), in Margate, Florida, were using drugs.
Willems was a licensed osteopathic doctor in the State of Florida, and was the medical director of Reflections from October 2015 to May 2016. Instead of defendant Willems using his medical expertise and his individual assessments of patients to decide what type of laboratory testing was needed by each patient, Willems ordered drug treatment and drug testing for the sober home residents, specifically expensive urine and saliva drug screens and allergy testing, regardless of whether such treatment and testing were medically necessary. Willems also falsely documented patient files to make it appear as though he reviewed the test results. If Willems had, in fact, closely monitored the drug test results, he would have realized that most of the patients at Reflections were continuing to abuse drugs and that urine and saliva samples from other people were being substituted for the patients’ urine and saliva samples.
Willems surrendered his DEA number to the Drug Enforcement Administration following his arrest in 2012 for improperly prescribing controlled pain medications, yet defendant Willems prescribed controlled substances, including opioids, to patients at Reflections using DEA numbers assigned to other physicians and prescriptions that contained the forged signatures of another physician.
Willems knew that insurance claims based on his unlawful prescriptions for lab testing, prescription opioids, and other controlled substances, as well as the unlawful claims based upon the treatment occurring at Reflections and Willems’ examinations were submitted to patients’ health insurance plans. During the period of Willems’ term as Medical Director at Reflections, clinical labs and Reflections billed insurance companies in excess of $28 million and received reimbursements from insurance companies in excess of $6.5 million.
Potential victims should call (561) 822-5114 or submit complaints through the IC3 Complaint Form - https://www.ic3.gov/complaint/default.aspx and use the key word “Chatman Reflections” in the “Description of the Incident” field when submitting complaints related to this case.
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, the Palm Beach County State Attorney's Office Sober Homes Task Force, Florida Division of Investigative and Forensic Services, Martin County Sheriff's Office, Amtrak OIG, DOL-OIG, DOL-EBSA, National Insurance Crime Bureau, Palm Beach County Sheriff's Office, West Palm Beach Police Department, Delray Beach Police Department, Florida Attorney General Office of Statewide Prosecution, and OPM-OIG. The cases are being prosecuted by Assistant United States Attorney A. Marie Villafaña.
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.
Miami-Based Physician Charged for Role in Pain Pill Diversion and Medicare Fraud SchemeRead the Press Release
A physician licensed in Puerto Rico, who was practicing medicine in Miami, was charged in a 16-count indictment unsealed today for his alleged participation in a multi-faceted $20 million health care fraud scheme involving the submission of false and fraudulent claims to Medicare and Medicaid and the illegal distribution of oxycodone and other controlled substances.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent in Charge Brian Swain of the United States Secret Service’s (USSS) Miami Field Office made the announcement.
Roberto A. Fernandez, M.D., 51, of Miami, was charged with one count of conspiracy to commit health care fraud and wire fraud, 11 counts of health care fraud, one count of conspiracy to defraud the United States and pay and receive health care bribes and kickbacks, one count of conspiracy to distribute controlled substances and two counts of distribution of controlled substances. Fernandez was arrested on March 22, 2017, and made his initial appearance today before U.S. Magistrate Judge Andrea M. Simonton of the Southern District of Florida.
According to the indictment, from approximately December 2009 to March 2017, Fernandez owned and operated Florida-based Latin Foundation for Health Inc. and purported to practice medicine as an “area of critical need” doctor at Latin Foundation for Health and other facilities in Miami-Dade County.
The indictment alleges that from approximately January 2011 through February 2017, Fernandez referred Medicare beneficiaries and Medicaid recipients who were purportedly under his care to Calan Pharmacy & Discount Service LLC, a Medicare Part D provider, and several Miami-area home health agencies in exchange for illegal bribes and kickbacks from his co-conspirators. The indictment further alleges that Fernandez submitted false and fraudulent claims through Medicare Part B for services, office visits and procedures that he never provided, such as therapeutic injections and removal of lesions from patients’ faces, and provided prescriptions for home health services and medications regardless of whether they were medically necessary.
The indictment further alleges that Fernandez illegally dispensed controlled substances, including but not limited to the Schedule II controlled substances Oxycodone and Hydrocodone and the Schedule IV controlled substance Alprazolam, to his co-conspirators.
According to the indictment, Fernandez and his co-conspirators caused Medicare to pay at least approximately $4.4 million based on false and fraudulent claims that they caused to be submitted. The indictment also alleges that Medicare, through Part D, paid a total of approximately $20 million as a result of claims submitted listing Fernandez as the prescribing physician.
An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI, HHS-OIG and USSS investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. Former Fraud Section Trial Attorney and current Assistant U.S. Attorney Lisa H. Miller of the Southern District of Florida and Fraud Section Trial Attorney Adam G. Yoffie are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Miami-Based Physician Charged for Role in Pain Pill Diversion and Medicare Fraud SchemesRead the Press Release
A physician licensed in Puerto Rico, who was practicing medicine in Miami, was charged in a 16-count indictment unsealed today for his alleged participation in a multi-faceted $20 million health care fraud scheme involving the submission of false and fraudulent claims to Medicare and Medicaid and the illegal distribution of oxycodone and other controlled substances.
Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent in Charge Brian Swain of the United States Secret Service’s (USSS) Miami Field Office made the announcement.
Roberto A. Fernandez, M.D., 51, of Miami, was charged with one count of conspiracy to commit health care fraud and wire fraud, 11 counts of health care fraud, one count of conspiracy to defraud the United States and pay and receive health care bribes and kickbacks, one count of conspiracy to distribute controlled substances and two counts of distribution of controlled substances. Fernandez was arrested on March 22, 2017, and made his initial appearance today before U.S. Magistrate Judge Andrea M. Simonton of the Southern District of Florida.
According to the indictment, from approximately December 2009 to March 2017, Fernandez owned and operated Florida-based Latin Foundation for Health Inc. and purported to practice medicine as an “area of critical need” doctor at Latin Foundation for Health and other facilities in Miami-Dade County.
The indictment alleges that from approximately January 2011 through February 2017, Fernandez referred Medicare beneficiaries and Medicaid recipients who were purportedly under his care to Calan Pharmacy & Discount Service LLC, a Medicare Part D provider, and several Miami-area home health agencies in exchange for illegal bribes and kickbacks from his co-conspirators. The indictment further alleges that Fernandez submitted false and fraudulent claims through Medicare Part B for services, office visits and procedures that he never provided, such as therapeutic injections and removal of lesions from patients’ faces, and provided prescriptions for home health services and medications regardless of whether they were medically necessary.
The indictment further alleges that Fernandez illegally dispensed controlled substances, including but not limited to the Schedule II controlled substances Oxycodone and Hydrocodone and the Schedule IV controlled substance Alprazolam, to his co-conspirators.
According to the indictment, Fernandez and his co-conspirators caused Medicare to pay at least approximately $4.4 million based on false and fraudulent claims that they caused to be submitted. The indictment also alleges that Medicare, through Part D, paid a total of approximately $20 million as a result of claims submitted listing Fernandez as the prescribing physician.
An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI, HHS-OIG and USSS investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Florida and the Criminal Division’s Fraud Section. Former Fraud Section Trial Attorney and current Assistant U.S. Attorney Lisa H. Miller of the Southern District of Florida and Fraud Section Trial Attorney Adam G. Yoffie are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
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.
South Florida Man Pleads Guilty to Mail Fraud in Connection with Jamaican-Based Fraudulent Lottery SchemeRead the Press Release
A South Florida resident pleaded guilty for his role in a Jamaican-based fraudulent lottery scheme, the Department of Justice announced today.
Claude Shaw, 49, pleaded guilty in the Southern District of Florida to one count of mail fraud. Shaw was charged in connection with a fraudulent lottery scheme based in Jamaica that induced victims in the United States to send Shaw over $100,000 to cover purported fees for lottery winnings that victims had not won and never received. Sentencing is scheduled on May 31, 2017.
“This case demonstrates the Justice Department’s commitment to combating international lottery fraud schemes based in Jamaica targeting potentially vulnerable individuals,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Financial fraud schemes directed at unsuspecting victims will be prosecuted to the fullest extent of the law.”
This prosecution is part of the Department of Justice’s effort working with federal and local law enforcement to combat fraudulent lottery schemes preying on American citizens.
Shaw pleaded guilty to one count of mail fraud. As part of his guilty plea, Shaw agreed that if this case proceeded to trial, the United States would have proved beyond a reasonable doubt that, from in or around September 2013, through in or around August 20l5, Shaw participated in a scheme to defraud victims in the United States and unlawfully enrich himself. Victims throughout the United States received telephone calls in which they were falsely informed that they had won over a million dollars in a lottery and needed to pay money in advance to claim their winnings. The victims were instructed on how, and to whom, to send their money.
As part of the scheme, victims were instructed to send their money to Shaw. Victims sent over $100,000 to Shaw, who then forwarded a portion of the money to Jamaica. Victims never received any lottery winnings.
“The Postal Inspection Service is committed to investigating fraudulent lottery schemes based in Jamaica directed at ripping off individuals in the United States,” said Inspector in Charge Antonio Gomez of the U.S. Postal Inspection Service’s Miami, Florida Division. “Lottery fraud scams tied to Jamaica are targeting victims in the United States, and we will not allow them to use the U.S. mail to commit their crime.”
Acting Assistant Attorney General Readler commended the investigative efforts of the U.S. Postal Inspection Service. The case is being prosecuted by Trial Attorney Arturo DeCastro of the Civil Division’s Consumer Protection Branch.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Southern District of Florida, visit its website at https://www.justice.gov/usao-sdfl.
A North Miami Resident was Sentenced to More than 3 Years in Prison for Identity TheftRead the Press Release
A North Miami resident was sentenced yesterday by United States District Judge Kathleen M. Williams to 40 months in prison, to be followed by three years of supervised release, for possessing over 1,000 pieces of personal identifying information of other individuals.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), and Nonie Manion, Acting Commissioner, New York State Department of Taxation and Finance made the announcement.
Randy Jacques, 28, previously pled guilty to one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, on August 20, 2015, pursuant to a search warrant, law enforcement searched Jacques’ residence in connection with an investigation related to the more than 200 fraudulent telephone calls made to the New York State Department of Taxation and Finance. During the search of the residence, law enforcement recovered a laptop from the defendant’s room. A forensic analysis of the laptop revealed documents containing the personal identifying information (PII) of other individuals, including their names, dates of birth and social security numbers. The forensic analysis identified 1,147 unique pieces of PII. In addition, approximately 47 New York State tax forms were recovered from the laptop.
Law enforcement spoke with an individual victim whose name, date of birth, and social security number were located on Jacques’ laptop, and confirmed that he/she did not authorize the defendant to be in possession of the PII.
“The U.S. Attorney’s Office in the Southern District of Florida is committed to combatting identity theft fraud schemes that compromise local and national taxpayer identities,” said Acting U.S. Attorney Benjamin G. Greenberg. “Prosecuting the offenders who unlawfully steal and possess the personal identification information of others remains a top priority for the Office and our partners.”
“The U.S. Department of Labor, Office of Inspector General collaborated with investigative partners at the New York State Department of Taxation and Finance to dismantle an identity theft scheme based in South Florida. We will continue working diligently to combat these types of schemes,” stated Rafiq Ahmad, Special Agent in Charge, Atlanta Region, DOL-OIG.
"Criminals who steal private taxpayer information will be prosecuted to the fullest extent of the law," said Acting Commissioner of the New York State Department of Taxation and Finance Nonie Manion. "New York State goes to great lengths to protect honest taxpayers from being victimized by identity thieves using stolen data for their own personal gain. We will continue to track down these criminals, wherever they may be, and stop their illegal schemes."
Mr. Greenberg commended the investigative efforts of DOL-OIG and the New York State Department of Taxation and Finance. This case was prosecuted by Assistant United States Attorney Joshua S. Rothstein.
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 Resident was Sentenced to Two Years in Prison for Child PornographyRead the Press Release
A Homestead resident was sentenced yesterday by U.S. District Judge William P. Dimitrouleas to 24 months in prison, to be followed by five years of supervised release, for possessing child pornography.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI) made the announcement.
Bismarck Antonio Vargas, 43, of Homestead, previously pled to guilty to one count of possession of child pornography, in violation of Title 18, United States Code, Section 2252(a)(4)(B).
According to court documents, on or about September 22, 2011, in Broward County, in the Southern District of Florida, Vargas possessed an Apple iPhone containing 67 photos depicting child pornography. Among these images were pictures of prepubescent minors. Based on a forensic examination, the images of child pornography were uploaded to the iPhone between July 26, 2011 and September 19, 2011. Vargas viewed images of minor females and saved some of the images to his cellular telephone.
Mr. Greenberg commended the investigative efforts of the FBI. This case was prosecuted by Assistant United States Attorney Joshua S. Rothstein.
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.
Broward County Resident Sentenced to Three Years in Prison for Identity TheftRead the Press Release
A Hallandale resident was sentenced yesterday, by United States District Court Senior Judge William J. Zloch, to 36 months in prison, to be followed by three years of supervised release.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida, and Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), made the announcement.
Tarik Jean-Jourdian, 25, previously pled guilty to one count of use of one or more unauthorized access devices to obtain anything of value aggregating $1,000 or more, in violation of Title 18, United States Code, Section 1029(a)(2), and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).
According to court documents, an analysis of ATM video footage revealed that, between April 15and May 15, 2015, the PNC Bank account issued to a victim was accessed on at least six different occasions, to withdraw a total of $2,800, from various PNC Bank ATMs by defendant Jourdian. On February 8, 2016, law enforcement executed a search warrant on Jourdian’s Hallandale residence and vehicle. During the course of the search of defendant’s car, agents seized numerous handwritten and typed pieces of paper containing the personal identifying information (PII) of other individuals, including names, dates of birth and social security numbers. In total, there were approximately 200 pieces of distinct PII found in the defendant’s vehicle.
Law enforcement spoke with the individual whose name, date of birth, and social security number were used to open the PNC Bank account, and confirmed that he/she did not authorize Jean-Jourdian to be in possession of the PII.
Mr. Greenberg commended the investigative efforts of DOL-OIG. The case was prosecuted by Assistant United States Attorneys Joshua S. Rothstein and Breezye Telfair.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida atwww.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Pinnacle Housing Group’s Affiliate Charged in $4 Million Government Theft Involving Low-Income Housing DevelopmentsRead the Press Release
Randy A. Hummel, Executive Assistant United States Attorney, U.S. Attorney’s Office for the Southern District of Florida; Nadine Gurley, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG); and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced the filing of charges against DAXC, LLC (“DAXC”), an affiliated entity of Pinnacle Housing Group, Inc. (“PHG”), a low-income housing developer operating in Miami, Florida.
DAXC is charged by Criminal Information with theft of government money, in violation of Title 18, United States Code, Section 641. According to allegations contained in the Information, and statements made in Court, the DAXC theft scheme involved low-income housing developments built by PHG in Florida, specifically Vista Mar, an apartment complex in Miami; Pinnacle at Avery Glenn, an apartment complex in Sunrise; Orchid Grove, an apartment complex in Homestead; and Cypress Cove, an apartment complex in Winter Haven.
According to the Criminal Information, Florida Housing Finance Corporation (“FHFC”) issued federal tax credits and grant monies to developers for the construction of low-income housing in Florida. To obtain these federal funds, FHFC required developers to submit proposed development costs, including a construction contract signed by the developer and contractor.
2009 to 2011, PHG’s affiliated contractor solicited bids for concrete shell work for the housing developments. The affiliated contractor received a final bid for concrete shell work from Shell Subcontractor A. Instead of signing contracts with Shell Subcontractor A at its final bid price, the affiliated contractor signed contracts for concrete shell work with their affiliated subcontractor, DAXC, at prices inflated from $200,000 to $1.5 million higher than Shell Subcontractor A’s price. DAXC did not have the personnel or equipment to complete concrete shell work and in fact did not complete any shell work on these projects. Rather, DAXC subcontracted with Shell Subcontractor A to complete the concrete shell work at Shell Subcontractor A’s final bid price.
PHG then submitted the inflated construction contracts to FHFC’s representatives for the receipt of federal tax credits and grant monies for the housing developments. As a result of DAXC’s fraudulent inflation scheme, FHFC allocated approximately $4.2 million in excess federal funds. On or about November 8, 2011, among other wire transfers, the five principals of the affiliated contractor received payments totaling approximately $2.5 million from this contract inflation scheme from DAXC’s bank account.
The United States and DAXC entered into a deferred prosecution agreement filed today pursuant to which DAXC has paid $5.2 million in forfeiture and fines to the United States.
This is the third in a series of prosecutions by the United States Attorney’s Office for the Southern District of Florida involving theft of government funds relating to low-income housing developments. The Office previously charged the principals of Carlisle Development Group, Inc. for a $25 million contract inflation scheme as well as the principals of Biscayne Housing Group, Inc. for a $10 million contract inflation scheme.
A Criminal Information merely contains allegations and every defendant is presumed innocent unless and until proven guilty in a court of law.
Hummel commended the investigative efforts of HUD-OIG and IRS-CI. This case is being prosecuted by Assistant U.S. Attorneys Michael R. Sherwin, Michael N. Berger, and Evelyn B. Sheehan. As a result of a recusal by Acting U.S. Attorney Benjamin G. Greenberg, Hummel is the Attorney for the Government.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Hialeah Police Department Officer Arrested on Corruption and Identity Fraud ChargesRead the Press Release
Hialeah Police Department Officer Raul Castellon was arrested on Friday, March 17, 2017, on corruption and identify fraud charges.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Peter Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, made the announcement.
Raul Castellon, 38, of the Hialeah Police Department, was charged by indictment with affecting commerce by extortion under color of official right, in violation of Title 18, United States Code, Section 1951(a), punishable by up to twenty years in prison. He was also charged with conspiracy to commit access device fraud, in violation of Title 18, United States Code, Section 1029(b)(2), aggravated identity fraud, in violation of Title 18, United States Code, Section 1028A, and possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3). Castellon is scheduled for an initial appearance today, at 1:30 p.m., before a United States Magistrate Judge in Miami.
According to the allegations contained in the indictment, as an officer for the Hialeah Police Department and as part of his regular duties, Castellon had access to Florida’s Driver and Vehicle Information Database (“DAVID”). DAVID is a confidential database that provides law enforcement officers with the driver and motor vehicle information of other persons, including personal identifying information, such as drivers’ license numbers, social security numbers, and dates of birth.
The indictment further alleges that from on or about June 1, 2016, and continuing through on or about October 19, 2016, Castellon used his law enforcement access to DAVID to log into the system, search for other persons, and take screen shots of other persons’ personal identifying information. The indictment also claims that Castellon sent over 25 of these DAVID screen shots to his codefendant Neilin Gonzalez Diaz in exchange for gifts.
Mr. Greenberg commended the investigative efforts of the FBI, including the Miami Area Corruption Task Force, ATF, Miami-Dade Police Department, and Hialeah Police Department. This case is being prosecuted by Assistant U.S. Attorneys Daniel Cervantes and Elina Rubin-Smith.
An indictment is a formal charging document notifying the defendant of the allegations that have been filed with the court. All persons charged by indictment are 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 atwww.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
South Florida Resident Pleads Guilty to Committing Armed Robbery of Jewelry Store in Downtown MiamiRead the Press Release
A South Florida resident pled guilty in federal court yesterday for committing an armed robbery of a jewelry store in the Seybold Building in downtown Miami.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida; Katherine Fernandez Rundle, Miami-Dade State Attorney; George L. Piro, Special Agent in Charge (FBI), Miami Field Division; and Rodolfo Llanes, Chief, City of Miami Police Department (MPD), made the announcement.
Jessie Wooden, 29, of Miami, pled guilty to conspiring to commit an armed robbery, armed robbery, and possession of a firearm in furtherance of a crime of violence. Wooden faces a maximum statutory sentence of life in prison. He is scheduled to be sentenced before U.S. District Court Donald L. Graham on May 25, 2017.
According to the court record, including the agreed upon factual proffer, on October 29, 2016, Wooden and his co-conspirator robbed a jewelry store located in the Seybold Building in downtown Miami. Once inside the jewelry store, Wooden brandished a firearm while the co-conspirator bound the victim’s hands and feet. The defendant and his co-conspirator stole approximately 35 watches and over $250,000 in U.S. currency.
On January 11, 2017, law enforcement officers attempted to conduct a traffic stop on the vehicle Wooden was driving. Wooden refused to stop and sideswiped an officer’s vehicle in an attempt to evade capture. Ultimately, Wooden crashed his vehicle and was taken into custody. A search of the vehicle revealed a loaded firearm. An additional search of Wooden’s residence revealed over 100 rounds of ammunition.
Mr. Greenberg commends the FBI and MPD for their collaborative work as part of the South Florida Violent Crime Task Force. This case was prosecuted by Special Assistant U.S. Attorney Marianne Curtis from the Miami-Dade State Attorney’s Office.
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.
Justice Department Asks Federal Court to Shut Down Tax Return Preparers in Southern Florida and Require Them to Give Their Fees to the United StatesRead the Press Release
Jean-Philippe Boursiquot, B&C Royalty Multi-Services Inc., Roberton Boursiquot, and RBS Flamboyant Solutions Inc. prepare false federal income tax returns for their customers, according to a new civil suit filed by the Department of Justice. The complaint filed in federal court in Ft. Lauderdale, Florida, asks a federal judge to bar the Boursiquots and their businesses from preparing tax returns for others. The complaint also requests a court order requiring the Boursiquots and their businesses to disgorge the gross receipts they obtained from the preparation of federal tax returns that made false or fraudulent claims.
According to the complaint, Jean-Phillipe Boursiquot of Margate, Florida, owns and operates B&C Royalty Multi-Services, a tax return preparation business located in Oakland Park, Florida. Roberton Boursiquot of Tamarac, Florida, owns and operates RBS Flamboyant Solutions Inc., a tax return preparation business that is located in Hollywood, Florida.
The complaint alleges that the defendants prepare tax returns for customers that understate liabilities and overstate refunds by falsifying information, fabricating deductions, and claiming bogus credits. The complaint alleges that just one of the defendants’ schemes — bogus federal education credits claimed in 2016 — cost the United States over $470,000 in tax revenue. The complaint further alleges that the defendants tell customers they are due a certain refund amount, file returns on their behalf requesting a larger amount, and keep the excess as preparation fees without the customers’ knowledge or consent.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Baseball Agent and Trainer Convicted of Conspiring to Make False Statements and Unlawfully Bringing Aliens into the United StatesRead the Press Release
Yesterday afternoon a federal jury convicted two South Florida men for their participation in an alien smuggling ring that moved Cuban-born baseball players and their families to third countries and then the United States, without official authorization from the U.S. Government.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), made the announcement.
Bartolo Hernandez, of Weston, and Julio Estrada, of Miami, were convicted at trial of conspiring to commit an offense against the United States, in violation of Title 18, United States Code, Section 371, and bringing an alien who has not received official authorization to the United States, in violation of Title 8, United States Code, Section 1324(a)(2)(B)(ii). Hernandez faces a mandatory minimum term of 3 years and a maximum term of 15 years’ imprisonment. Estrada faces a mandatory minimum term of 5 years and a maximum term of 35 years’ imprisonment. The defendants are scheduled to be sentenced by U.S. District Judge Kathleen M. Williams on July 11, 2017 at 10 a.m.
According to the court record, including evidence introduced during the six-week trial, Hernandez and Estrada conspired with a criminal organization involving boat captains, document forgers and illicit transporters to smuggle Cuban baseball players and those players’ family members out of Cuba into other countries, including Mexico, the Dominican Republic and Haiti, before then transporting them to the United States. To expedite obtaining permanent residency in these third countries, Hernandez and Estrada procured residency documents by falsifying employment information and bribing foreign officials. After obtaining the fraudulent foreign residency documents, Hernandez and Estrada submitted those documents to the United States Department of Treasury’s Office of Foreign Assets Control (OFAC). Those same fraudulent foreign residency documents were also provided to the United States Department of State, when the Cuban-born baseball players applied for visas to play baseball in the United States.
In some instances, Hernandez and Estrada refused to wait for licenses and visas and instead brought Cuban-born baseball players directly to the United States, without prior official authorization.
Hernandez conspired with alien smugglers to bring Cuban baseball player Leonys Martin Tapanes illegally into the United States across the Texas-Mexico border. Estrada brought Cuban baseball players Omar Luis and Alejandro Piloto into the United States from Haiti, through other countries, into Mexico and then met them after they unlawfully crossed into the United States. Estrada also illegally brought Cuban baseball players Dalier Hinojosa and Jose Abreu into the United States. Hinojosa and Abreu were provided fake passports with fraudulent visas to board flights from Port-au-Prince, Haiti to Miami International Airport by a conspirator of the defendants and were instructed to destroy evidence of those fake passports before arriving in the United States.
Mr. Greenberg commended the investigative efforts of the FBI and ICE-HSI. Mr. Greenberg also thanked the United States State Department and OFAC for their assistance. This case is being prosecuted by Assistant United States Attorneys Patrick Sullivan and H. Ron Davidson.
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.
Babysitter Sentenced to 60 Years in Federal Prison for Producing Child Pornography Depicting His Abuse of a ToddlerRead the Press Release
Jason Barber, 39, of Las Vegas, Nevada, was sentenced today to a total of 60 years in prison by U.S. District Court Judge Robert N. Scola Jr in Miami, Florida, for producing child pornography that depicted his abuse of a toddler he was babysitting. Barber previously pled guilty to all counts in the Indictment.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida, Special Agent in Charge George L. Piro of the Federal Bureau of Investigation (FBI), Miami Field Office, Rick Maglione, Chief, Fort Lauderdale Police Department, and Alexander Perez, Chief, North Las Vegas Police Department, made the announcement.
According to court documents and statements made in court, on November 25, 2013, the South Florida Internet Crimes against Child Task Force (ICAC), located in Broward County, Florida, received two cyber tips regarding several email accounts suspected of trading dozens of images depicting child pornography. Upon receiving the tip, The South Florida ICAC began their investigation to determine who was responsible for sending and receiving the email. After identifying an IP address used to access one of the email accounts, law enforcement obtained and executed a search warrant at the residence of co-defendant Benedict Shaw, a Lauderhill, Florida resident.
Law enforcement confirmed that Shaw was communicating with Barber, a Nevada resident and boyfriend of the victim’s mother. Barber had convinced the two-year old child’s mother to allow him to babysit the toddler while the mother was at work. Barber had previously met Shaw in an online chatroom for individuals with a diaper fetish. During their month of email communications, Barber requested that Shaw send him a cellphone and diapers. Shaw sent Barber a package containing the requested cellphone, diapers, and other items to use in the child pornography videos. Barber used the cell phone to record himself sexually abusing the child in his care. Barber then sent the video and several still images to Shaw via email.
Shaw previously pled guilty for his involvement with the production of child pornography and was sentenced in October of 2014 to 45 years’ imprisonment by U.S. District Judge Scola (Case No. 14-CR-60011-Scola).
Mr. Greenberg commended the investigative efforts of the FBI, Fort Lauderdale Police Department, South Florida ICAC, and North Las Vegas Police Department. Assistant U.S. Attorneys Francis Viamontes and Jodi Anton prosecuted this case.
A copy of this press release 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. 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.
Two Defendants Plead Guilty in Multi-Million Dollar Health Care Fraud and Money Laundering Scheme Involving Sober Homes and Alcohol and Drug Addiction Treatment CentersRead the Press Release
Two owners of sober homes and alcohol and drug addiction treatment centers pled guilty for their participation in a multi-million dollar health care fraud and money laundering scheme that involved the filing of fraudulent insurance claim forms and defrauded health care benefit programs.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Dave Aronberg, State Attorney, Palm Beach County State Attorney’s Office, Jeff Atwater, Florida Chief Financial Officer, William D. Snyder, Sheriff Martin County Sheriff's Office, Robert Koons, Special Agent in Charge, Amtrak Office of Inspector General, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), Isabel Colon, Regional Director, United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA), Dennis Russo, Director of Operations, National Insurance Crime Bureau (NICB), Ric Bradshaw, Sheriff, Palm Beach County Sheriff's Office (PBSO), Sarah Mooney, Chief, West Palm Beach Police Department, Jeffrey S. Goldman, Chief, Delray Beach Police Department, Pam Bondi, Florida Attorney General, and Scott Rezendes, Special Agent in Charge, Office of Personnel Management, Office of Inspector General (OPM-OIG), made the announcement.
Kenneth Chatman, a/k/a “Kenny,” 46, of Boynton Beach, pled guilty to one count of conspiracy to commit health care fraud in violation of Title 18, United States Code, Section 1349; one count of conspiracy to commit money laundering in violation of Title 18, United States Code, Section 1956(h); and one count of sex trafficking conspiracy, in violation of Title 18, United States Code, Section 1594(c). Laura Chatman, 44, of Boynton Beach, pled guilty to two counts of making a false statement related to a health care matter, in violation ofTitle18, United States Code, Section 1035(a)(1). Sentencings for the Chatmans are scheduled for May 17, 2017 at 10:00 a.m. before U.S. District Judge Donald M. Middlebrooks.
According to court documents, defendant Kenneth Chatman established a series of sober homes, including Stay’n Alive, Inc., Total Recovery Sober Living LLC, and several other multi-bed residences operating as sober homes in Palm Beach and Broward Counties. These sober home facilities were purportedly in the business of providing safe and drug-free residences for individuals suffering from drug and alcohol addiction. Kenneth Chatman conspired with others to obtain patients who would receive ineffective and medically unnecessary substance abuse treatment and testing that could be billed to the patients’ insurance in order to enrich Chatman and the members of the conspiracy.
To achieve this goal, defendant Kenneth Chatman paid kickbacks and bribes to the sober home owners for referring their residents to Reflections Treatment Center LLC in Margate, Florida and Journey to Recovery LLC in Lake Worth, Florida for treatment, and disguised these kickbacks and bribes as “case management fees,” “consulting fees,” “marketing fees,” and “commissions.” The co-defendants met with Kenneth Chatman on a weekly basis to collect their kickbacks and bribes, which were based on the number of insured patients that received treatment each week.
To obtain residents for the sober homes, defendant Kenneth Chatman and others involved in the conspiracy provided kickbacks and bribes, in the form of free or reduced rent and other benefits, to individuals with insurance who agreed to reside at the sober homes, attend drug treatment, and submit to regular drug testing that members of the conspiracy could bill to the residents’ insurance plans. Although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing.
Defendants Kenneth and Laura Chatman submitted to the Florida Department of Children and Families fraudulent applications for licensure for Journey to Recovery and Reflections Treatment Center, stating that Laura Chatman was the sole owner of those entities and hiding the fact that Kenneth Chatman owned and operated the treatment centers and was a convicted felon and therefore unable to operate the facilities in his own name.
Defendant Laura Chatman appeared at Reflections and Journey for audits and inspections by DCF and other accrediting agencies to make it seem that she was the sole owner and officer of the companies. Defendant Laura Chatman also filed corporate documents and opened bank accounts in the name of Reflections and Journey to allow co-defendant Kenneth Chatman access to deposit proceeds from the health care fraud scheme and to conduct transactions meant to promote the scheme. Defendant Kenneth Chatman managed all aspects of these facilities including the hiring and firing of personnel; admitting and discharging patients and making financial decisions.
Defendant Kenneth Chatman dictated which patients were admitted and discharged and the type and frequency of different types of lab testing that would be performed based the kickbacks and bribes that he was receiving from different clinical laboratories rather than based upon the individual patients’ needs. Kenneth Chatman dictated that confirmatory urine drug testing; duplicative saliva drug testing, DNA and allergy testing regardless of whether patients complained of allergies. These tests were medically unnecessary and not used to direct the treatment of patients. Many of the test results were never reviewed and new samples were submitted before older tests were received and reviewed.
Defendant Kenneth Chatman also recruited and coerced female patients and residents into prostitution, telling them that they would not have to pay rent or participate in treatment or testing so long as they would allow him to continue to bill their insurance companies for substance abuse treatment and testing that the patients did not receive.
Defendants Kenneth Chatman and other co-conspirators recruited, enticed, harbored, transported, provided, obtained, and maintained some female patients into performing commercial sex acts. The defendant provided housing for the female patients, who would be made to perform sex acts in exchange for money that would then have to be paid to defendant Kenneth Chatman as “rent.” The commercial sex activity occurred at some of the sober homes controlled by the defendant or at hotels and motels. Kenneth Chatman provided condoms and advertised and caused the advertisement of the commercial sexual activity. Kenneth Chatman and other co-conspirators provided controlled substances to these addicted patients to induce them to perform sexual acts.
Kenneth Chatman also used intimidation tactics and threats of legal process, including evicting the patients from his sober homes to maintain their compliance. These patients were not required to attend treatment at Reflections or provide bodily fluid samples for testing but he submitted and caused the submission of claims to the patients’ Insurance Plans for substance abuse treatment and testing that they did not receive.
Kenneth Chatman further maintained control over patients who attended Reflections and Journey by threats and confiscating their belongings, car keys, telephones, medications, and food stamps, in order to maintain the ability to continue billing their Insurance Plans.
The proceeds of the health care fraud scheme were deposited into bank accounts that Kenneth Chatman and co-defendant Laura Chatman opened at Wells Fargo Bank in the name of Reflections and Journey. Kenneth Chatman and the co-conspirators agreed to use the proceeds to promote the ongoing fraud scheme including the making of kickback and bribe payments in the form of checks to sober home owners. These checks were for the referral of insured clients to Reflections for treatment and often noted that they were for “case management.” Kenneth Chatman, Laura Chatman and their co-conspirators also made payments to the medical directors, clinical directors, employees and others to continue their involvement with the fraud. Monies from these accounts were also used to pay kickbacks and bribes to patients, including providing prescription and illicit drugs to patients and potential patients.
Potential victims should call (561) 822-5114 or submit complaints through the IC3 Complaint Form - https://www.ic3.gov/complaint/default.aspx and use the key word “Chatman Reflections” in the “Description of the Incident” field when submitting complaints related to this case.
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, the Palm Beach County State Attorney's Office Sober Homes Task Force, Florida Division of Investigative and Forensic Services, Martin County Sheriff's Office, Amtrak OIG, DOL-OIG, DOL-EBSA, National Insurance Crime Bureau, Palm Beach County Sheriff's Office, West Palm Beach Police Department, Delray Beach Police Department, Florida Attorney General Office of Statewide Prosecution, and OPM-OIG. The cases are being prosecuted by Assistant United States Attorney A. Marie Villafaña.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. 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 at http://www.usdoj.gov/usao/fls.
Title Agent and Co-Conspirator Plead Guilty in $10 Million Mortgage Fraud SchemeRead the Press Release
A title agent and a co-conspirator pled guilty today to federal charges related to their participation in a $10 million mortgage fraud scheme.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Defendants Michelle Cabrera, 48, of Miami Lakes, and Pedro Melian, 39, of Hialeah, pled guilty to one count of conspiracy to commit wire fraud affecting a financial institution, in violation of Title 18, United States Code, Section 1349 (Case No. 16-60349-CR-DIMITROULEAS). At sentencing, each defendant faces up to thirty years? imprisonment.
Defendants Marco Laureti, 45, of Sunny Isles Beach, and Felix Mostelac, 44, of Miami Beach, were charged by Indictment with one count of conspiracy to commit wire fraud affecting a financial institution, in violation of Title 18, United States Code, Section 1349 and multiple counts of wire fraud affecting a financial institution, in violation of Title 18, United States Code, Section 1343 (Case No. 16-60340-CR-ZLOCH), for conduct allegedly related to the fraud scheme, and are awaiting trial.
to court documents, defendants Laureti, Mostelac, Cabrera and Melian were involved with a $10 million mortgage fraud scheme. Laureti was a former newspaper publisher and owner of Laureti Publishing Company, in addition to being a licensed real estate sales associate and mortgage broker. Mostelac was Laureti’s associate and also the owner of several companies. Cabrera owned Florida Elite Title & Escrow in Davie and served as the title agent for these transactions. Melian also owned several companies.
According to information presented in court and accompanying documents, the defendants engaged in a fraud scheme involving a condominium complex located at 45 Hendricks Isle in Fort Lauderdale. Defendants Laureti, Mostelac and Melian made false and fraudulent statements to a financial institution on loan applications and closing statements for the multi-million dollar condominiums. Once the loans were approved, defendant Cabrera, at Laureti’s direction, diverted the loan proceeds to fund the cash the borrower was expected to bring to the property’s closing, as well as diverting additional monies from the loan proceeds to various companies owned by Laureti and Mostelac. Furthermore, according to court documents, Laureti and Mostelac utilized the same scheme on the loan applications and closing statements to purchase their own multi-million dollar residential properties in Miami Beach, in addition to Laureti directing Cabrera to divert funds. The defendants’ scheme defrauded the financial institution of approximately $10 million.
Mr. Greenberg commended the investigative efforts of the FBI. This case is being prosecuted by Assistant U.S. Attorney Randy Katz.
An Indictment merely contains allegations and every defendant is presumed innocent unless and until proven guilty in a court of law.
A copy of this press release 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. 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.
South Florida Home Health Owner Charged for Role in $15 Million Medicare Fraud SchemeRead the Press Release
A South Florida home health care owner was charged in an indictment unsealed today for his alleged participation in a $15 million health care fraud scheme involving fraudulent claims for home health services.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent-in-Charge Brian Swain of the U.S. Secret Service’s (USSS) Miami Field Office made the announcement.
Yunesky I. Fornaris, 38, of Miami, was charged with one count of conspiracy to commit health care fraud and wire fraud, two counts of health care fraud and one count of conspiracy to defraud the United States and pay health care kickbacks. Fornaris was arrested today and made his initial appearance before U.S. Magistrate Judge William C. Turnoff of the Southern District of Florida.
The indictment alleges that from in or around April 2010 through July 2016, Fornaris and his co-conspirators hid their ownership in Elite Home Care LLC (Elite), a Miami-area home health clinic, in the name of a nominee owner in an effort to conceal their participation in the fraudulent scheme. According to the indictment, Fornaris and his co-conspirators allegedly submitted false and fraudulent application documents, causing Medicare to give and continue to reauthorize Elite’s Medicare provider number. As a result, the number enabled Fornaris and his co-conspirators to allegedly submit fraudulent claims for services that were not medically necessary or never provided. In addition, Fornaris allegedly signed portions of Elite’s Medicare applications and re-certifications committing Elite to comply with Medicare’s rules and regulations, as well as the Federal Anti-Kickback Statute. Notwithstanding these certifications, Fornaris and his co-conspirators allegedly caused kickbacks to be paid to Medicare beneficiaries and patient recruiters in exchange for the referral of Medicare beneficiaries to Elite.
According to the indictment, Medicare paid approximately $15 million as a result of false and fraudulent claims submitted by Elite.An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI, HHS-OIG and USSS investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Former Fraud Section Attorney and current Assistant U.S. Attorney Lisa H. Miller of the Southern District of Florida and Fraud Section Attorney Adam G. Yoffie are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
South Florida Home Health Owner Charged for Role in $15 Million Medicare Fraud SchemeRead the Press Release
A South Florida home health care owner was charged in an indictment unsealed today for his alleged participation in a $15 million health care fraud scheme involving fraudulent claims for home health services.
Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office and Special Agent in Charge Brian Swain of the U.S. Secret Service’s (USSS) Miami Field Office made the announcement.
Yunesky I. Fornaris, 38, of Miami, was charged with one count of conspiracy to commit health care fraud and wire fraud, two counts of health care fraud and one count of conspiracy to defraud the United States and pay health care kickbacks. Fornaris was arrested today and made his initial appearance before U.S. Magistrate Judge William C. Turnoff of the Southern District of Florida.
The indictment alleges that from in or around April 2010 through July 2016, Fornaris and his co-conspirators hid their ownership in Elite Home Care LLC (Elite), a Miami-area home health clinic, in the name of a nominee owner in an effort to conceal their participation in the fraudulent scheme. According to the indictment, Fornaris and his co-conspirators allegedly submitted false and fraudulent application documents, causing Medicare to give and continue to reauthorize Elite’s Medicare provider number. As a result, the number enabled Fornaris and his co-conspirators to allegedly submit fraudlent claims for services that were not medically necessary or never provided. In addition, Fornaris allegedly signed portions of Elite’s Medicare applications and re-certifications committing Elite to comply with Medicare’s rules and regulations, as well as the Federal Anti-Kickback Statute. Notwithstanding these certifications, Fornaris and his co-conspirators allegedly caused kickbacks to be paid to Medicare beneficiaries and patient recruiters in exchange for the referral of Medicare beneficiaries to Elite.
According to the indictment, Medicare paid approximately $15 million as a result of false and fraudulent claims submitted by Elite.
An indictment is merely an allegation and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI, HHS-OIG and USSS investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Former Fraud Section Attorney and current Assistant U.S. Attorney Lisa H. Miller of the Southern District of Florida and Fraud Section Attorney Adam G. Yoffie are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
A copy of this press release 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. 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.
United States Postal Service Letter Carrier Convicted of Access Device Fraud and Aggravated Identity TheftRead the Press Release
A United States Postal Service letter carrier was convicted at trial of access device fraud and aggravated identity theft.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), Max Eamiguel, Special Agent in Charge, U.S. Postal Service, Office of Inspector General (USPS-OIG), Antonio J. Gomez, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, and Cissy Proctor, Executive Director, Florida Department of Economic Opportunity (DEO), made the announcement.
Yvenel Clotaire, of West Palm Beach, was convicted yesterday, following a four-day federal jury trial in West Palm Beach, Florida of conspiring to commit access device fraud, access device fraud, and five counts of aggravated identity theft. Sentencing is scheduled for May 19, 2017, before United States District Court Judge Robin L. Rosenberg.
According to the court record, including evidence introduced at trial, Clotaire engaged in a scheme to obtain fraudulent unemployment benefits from the Florida Department of Economic Opportunity (DEO), while the defendant was working as a letter carrier for the United States Postal Service. Clotaire provided coconspirators with the residential addresses of approximately 50 to 60 individuals on his postal route, to be used in furtherance of the scheme. Fraudulent unemployment applications, using the addresses and stolen identities of postal customers, were then submitted to DEO and resulted in the issuance of Florida Visa debit cards. The debit cards were mailed through interstate commerce to the residential addresses on the defendant’s postal route. The cards were ultimately transferred to at least one other co-conspirator and used to make withdrawals from ATMs. As a result of the fraudulent scheme, the State of Florida sustained approximately $90,000 in financial losses.
Mr. Greenberg commended the investigative efforts of the DOL-OIG, USPS-OIG, USPIS and DEO. This case is being prosecuted by Assistant U.S. Attorney Adam McMichael.
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.
Two Broward County Residents Indicted on Federal Explosives ChargesRead the Press Release
Two Broward County residents were indicted on federal explosives charges.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida and Peter Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, made the announcement.
Bruce McFadden Sr., 50, of Lauderdale Lakes, and Bruce McFadden Jr., 33, of Fort Lauderdale, were charged by Indictment with receiving explosive materials, in violation of Title 18, United States Code, Section 842(a)(3)(A), and improper storage of explosives, in violation of Title 18, United States Code, Section 842(j). Bruce McFadden Sr. was also charged with being a felon in possession of explosives, in violation of Title 18, United States Code, Section 842(i)(1).
According to the court record, including allegations contained in the indictment, on or about June 30, 2016, in Broward County, Bruce McFadden Sr. and Bruce McFadden Jr. did knowingly cause to be transported and receive, and did knowingly store explosives, that is, 1.3G fireworks containing black powder, flash powder, a safety fuse, perchlorate explosive mixtures, pyrotechnic compositions, without the required license and permit and not in conformity with regulations. McFadden Sr. was previously convicted of a felony and as such was not lawfully permitted to possess the explosives.
The defendants had their initial appearances today before U.S. Magistrate Judge Patrick M. Hunt. McFadden Sr. is scheduled to have a pre-trial detention hearing on March 14, 2017. McFadden Jr. is scheduled for a bond hearing on March 10, 2017.
An Indictment merely contains allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mr. Greenberg commended the investigative efforts of the ATF in this matter. Mr. Greenberg also thanked the Lauderhill Fire Department, Lauderhill Police Department and Broward County Sheriff’s Office for their assistance. The case is being prosecuted by Assistant U.S. Attorney Rilwan Adeduntan.
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.
Miami-Dade Resident Pleads Guilty to Six Armed Commercial RobberiesRead the Press Release
A Miami-Dade County resident pled guilty, on February 28, 2017, to committing six armed commercial robberies throughout Pinecrest, South Miami, and Coral Gables.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida; Katherine Fernandez Rundle, Miami-Dade State Attorney; Peter Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division; Juan Perez, Director, Miami-Dade Police Department (MDPD); Daniel Oates, Chief, Miami Beach Police Department (MBPD); Rene Landa, Chief, South Miami Police Department; Edward Hudak Jr., Chief, Coral Gables Police Department; Samuel Ceballos, Jr., Chief, Pinecrest Police Department; and Rodolfo Llanes, Chief, City of Miami Police Department (MPD), made the announcement.
Zeddrick Smith, 46, pled guilty to all six robbery counts that were charged in the indictment, in addition to one count of possession of a firearm by a convicted felon, and a single count of possession of a firearm in furtherance of a crime of violence. Smith faces a maximum statutory sentence of life in prison. He is scheduled to be sentenced before U.S. District Court Chief Judge K. Michael Moore on May 11, 2017.
According to the court record, including the agreed upon factual proffer, defendant Smith committed six armed robberies of commercial establishments. On November 24, 2016, November 27, 2016, November 29, 2016, December 6, 2016, December 8, 2016, and December 11, 2016, Smith robbed various victims at gunpoint at restaurants and food stores in South Florida. Pursuant to the investigation, officers recovered the loaded firearm that had been used in the robberies, in Smith’s vehicle. At the time of the robberies, Smith was a convicted felon who was prohibited from possessing a firearm and ammunition.
Mr. Greenberg commends the investigative efforts of ATF, MDPD, Miami Beach Police Department, South Miami Police Department, Coral Gables Police Department, Pinecrest Police Department, and MPD in relation to this case. This case was prosecuted by Special Assistant U.S. Attorney Marianne Curtis from the Miami-Dade State Attorney’s Office.
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.
Government Contractor Convicted of Sex Trafficking and Sexually Exploiting Minors AbroadRead the Press Release
Today, following a month-long jury trial before U.S. District Judge Robert N. Scola Jr., a government contractor was convicted of sexually exploiting and trafficking in minors, while working overseas.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Christopher Rennie Glenn, 37, with ties to West Palm Beach, Florida was convicted of eight out of ten charges submitted to the federal jury: one count of conspiracy to commit sex trafficking by fraud and of a minor in violation of Title 18, United States Code, Section 1594(c); one count of sex trafficking by fraud and of a minor, in violation of Title 18, United States Code, Section 1591(a)(1); four counts of attempting to engage in sex trafficking by fraud and of a minor, in violation of Title 18, United States Code, Section 1594(a); one count of traveling overseas with the intent to engage in illicit sexual conduct, in violation of Title 18, United States Code, Section 2423(b); one count of sexually assaulting a minor, in violation of Title 18, United States Code, Section 2243(a); and one count of possession of child pornography, in violation of Title 18, United States Code, Section 2252(a)(4)(A) (Case No. 15-CR-20632). Glenn was acquitted on the two remaining charges of conspiracy and sex trafficking. All of the charged conduct occurred outside of the United States, in either Iraq or Honduras, and largely while Glenn, a United States citizen, was working as a network system administrator contracted by the United States Department of Defense. Title 18, United States Code, Sections 1596, 3261, and 3271, provide for extraterritorial jurisdiction in the sex trafficking and child exploitation offenses charged.
Glenn engaged in an elaborate scheme to sexually exploit young girls between the ages of 13 and 16 years of age in 2010 and from 2012 through 2014 in Honduras, where he had moved to work at the U.S. Army Southern Command’s Joint Task Force Bravo, in Soto Cano Air Base. Evidence at trial revealed that Glenn, with the aid of coconspirators, fraudulently recruited young girls living in very poor rural villages to work as housekeepers at his home. In exchange, Glenn promised to pay a significant amount of money to the families. Shortly after the girls’ arrival to Glenn’s home in Honduras, he sexually assaulted the girls, or sought to “marry” the minors to engage in sexual acts with them. Some victims testified that Glenn gave them pills that made them sleepy and dizzy before engaging in sexual acts with them. A government expert witness testified that some pills seized by law enforcement from Glenn’s Honduras residence in March of 2014 were determined to be drugs that can be used as sedatives and date rape drugs. At trial, the Government also introduced evidence that Glenn had engaged in sexual acts with a minor female from Mexico beginning in 2002, when the minor was only 13-years-old. The minor resided with the defendant in California until 2006. In 2005, Glenn possessed electronic images of this sexual abuse in Iraq while working as a government contract worker. These images of child pornography were also recovered from Glenn’s residence in Honduras in 2014 and were the subject of the possession of child pornography charge.
Glenn was initially arrested in February 2014, and charged in the Southern District of Florida with national-security and espionage related violations (Case No. 14-CR-80031-Marra). In 2015, Glenn pled guilty to charges in that case and was sentenced to a ten-year term of imprisonment.
The child exploitation charges are the culmination of a three-year long investigation led by the FBI Miami Field Office’s Violent Crimes Against Children Squad. The case was prosecuted by Special Prosecutions Assistant United States Attorneys Barbara A. Martinez and Vanessa Singh Johannes from the United States Attorney’s Office for the Southern District of Florida.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Jury Convicted Former Cay Clubs Chief Financial Officer of Conspiracy, Bank Fraud and Tax OffensesRead the Press Release
The former Chief Financial Officer of Cay Clubs Resorts and Marinas (Cay Clubs) was convicted Friday evening by a federal jury of conspiracy, bank fraud, and tax offenses. The jury verdict was returned after a two-week trial before Chief U.S. District Judge K. Michael Moore.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Timothy Mowery, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), made the announcement.
David W. Schwarz, 60, of Orlando, was convicted of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349, two counts of bank fraud, in violation of 18 U.S.C. § 1344, and one count of interference with the administration of the IRS, in violation of 26 U.S.C. § 7212(a). Schwarz faces a statutory maximum of 30 years in prison for each of the conspiracy and bank fraud offenses, and 3 years for the tax offense. Sentencing is scheduled for May 1, 2017, at the federal courthouse in Key West.
According to evidence at trial, Schwarz was the Vice President and Chief Financial Officer (CFO) of Cay Clubs, which operated purported luxury resorts in the Florida Keys, Clearwater, Orlando, Las Vegas, and elsewhere. Between 2004 and 2008, Cay Clubs grew to more than 1,000 employees and became one of the largest employers in the Florida Keys. Schwarz, who was the one-third owner, and Fred Davis Clark, Jr., a/k/a Dave Clark, who was the two-thirds owner, began Cay Clubs in 2004 with fraudulent sales of Cay Clubs units to insiders, using money from Cay Clubs bank accounts to fund the cash to close for purchases, while obtaining mortgage financing from lending institutions. These fraudulent sales were used in marketing materials to falsely show demand for Cay Clubs units and to inflate prices, as Cay Clubs was in reality purchasing units from itself. Proceeds of these sales were diverted to Schwarz and Clark.
Trial evidence established that Cay Clubs raised more than $300 million from approximately 1,400 investors, who purchased units in Cay Clubs developments. Schwarz and Clark failed to remodel the dilapidated properties as they promised investors, while taking millions of dollars out of the company for their own benefit. During the operation of Cay Clubs from 2004 through 2008, Schwarz and Clark diverted more than $30 million in proceeds for themselves, including millions of dollars in cash transfers, that was used to purchase property and other businesses, including a gold mine, a rum distillery, aircraft, and a coal reclamation business.
Trial evidence further showed that as Cay Clubs faced dwindling sales due to its failure to upgrade the dilapidated properties in 2006, Schwarz, Clark, and others engaged in additional fraudulent sales of Cay Clubs units to insiders, including Clark’s family members. These mortgage loans were used to prevent Cay Clubs from defaulting on commercial debts. The documents used to obtain these mortgages included falsified signatures and notary attestations, and had Cay Clubs acting as the seller while Schwarz provided the cash to close so that mortgage loans could be obtained to fund the sales.
During the course of this scheme, Schwarz and Clark did not file any corporate tax return for $74 million in income generated by the Cay Clubs entities. Furthermore, neither Schwarz or Clark filed any individual tax return for these years until after an investigation of Cay Clubs by the U.S. Securities and Exchange Commission (SEC). In 2010 and 2011, Schwarz filed false individual tax returns for tax years 2004, 2005 and 2006, respectively, in which he substantially underreported his income for these tax years and concealed his receipt of millions of dollars in proceeds.
On December 11, 2015, Dave Clark, 59, formerly a resident of Tavernier, was convicted by a federal jury in connection with related bank fraud charges and obstruction of the SEC. He was sentenced on February 21, 2016, to 40 years in prison by U.S. District Judge Jose E. Martinez. Former Cay Clubs sales executives Barry Graham, 59, and Ricky Lynn Stokes, 54, both formerly of Ft. Myers, previously pled guilty to conspiracy to commit bank fraud in related cases and were sentenced to 60 months, and 30 months, respectively.
Mr. Greenberg commended the investigative efforts of the IRS-CI and FHFA-OIG, and the extensive assistance of the SEC’s Miami Regional Office. This matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy, James V. Hayes, and Alison Lehr.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Women Plead Guilty to Orchestrating $20 Million Medicare Fraud Scheme at Seven Miami Area Home Health AgenciesRead the Press Release
Two Miami residents pleaded guilty today to fraud charges stemming from their roles in a $20 million home health care fraud scheme.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office, and Special Agent-in-Charge Brian Swain of the U.S. Secret Service (USSS)’s Miami Field Office made the announcement.
Mildrey Gonzalez, 61, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud and one count of health care fraud before U.S. District Judge Jose E. Martinez of the Southern District of Florida. Milka Alfaro, 40, also of Miami, pleaded guilty to one count of conspiracy to commit health care fraud and wire fraud before Judge Martinez. Sentencing for both defendants has been scheduled for May 11 before Judge Martinez.
As part of their guilty pleas, Gonzalez and Alfaro admitted that they were co-owners and operators of seven home health care agencies purported to do business in Miami-Dade County: Inar Home Care Service Corp., MA Home Health Inc., Golden Home Health Care Inc., Nova Home Health Care Inc., Finetech Home Health Inc., Homestead Home Health Care LLC and Metro Dade Home Health Inc. According to admissions made as part of their guilty pleas, Gonzalez and Alfaro recruited and paid nominees to falsely represent themselves as the owners of the home health care agencies, thereby concealing their ownership interests from Medicare and the general public. Gonzalez and Alfaro further admitted that they paid bribes and kickbacks to medical professionals, including doctors, in return for the provision of prescriptions for home health care services and referrals of Medicare beneficiaries to their home health care agencies; that they paid patient recruiters bribes and kickbacks in return for referrals of Medicare patients to the home health care agencies; and that in some cases, the Medicare beneficiaries did not need the home health care services for which Medicare paid.
Gonzalez and Alfaro admitted that as a result of the fraudulent scheme, Medicare paid approximately $20 million to the above-referenced home health care agencies.
and Alfaro were charged in a superseding indictment returned on July 20, 2016, along with Adriana Jalil, 66, of Miami, who served as a patient recruiter, and Luis Luzardo, 48, also of Miami, who utilized sham staffing companies to launder money. Jalil and Luzardo pleaded guilty and were sentenced by Judge Martinez earlier this year to 24 and 37 months in prison, respectively.
The USSS, FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Southern District of Florida. Assistant U.S. Attorneys Lisa H. Miller, Evelyn B. Sheehan and Alison W. Lehr of the Southern District of Florida, and Fraud Section Trial Attorney L. Rush Atkinson, are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
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.
Palm Beach County Resident Sentenced to 32 Years in Prison for Producing Child PornographyRead the Press Release
Palm Beach County resident Frank Earle Noyes III was sentenced today to 384 months’ imprisonment by United States District Judge Kenneth A. Marra, after previously pleading guilty to the production of child pornography, in violation of Title, United States Code, Section 2251(a)(e) and enticing a minor to engage in an illegal sexual activity, in violation of Title 18, United States Code, Section 2422(b).
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
According to the court record, Noyes entered into an online chat with a 12-year old minor female who lived in Minnesota. During the chat, Noyes sent the minor child pornographic images that he produced of a 5-year old minor engaged in illegal sexual conduct. Noyes was arrested and law enforcement found additional child pornographic images that he produced on his phone of a 3-year old minor female engaged in illegal sexual conduct. During the chat session with the 12-year old child, Noyes repeatedly enticed her to send him pornographic images of herself.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (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. Ferrer commended the investigative efforts of the FBI, Plymouth Police Department, Minnesota, the FBI Safe Streets Task Force, and the South Florida Minor Vice Task Force. The case is being prosecuted by Assistant U.S. Attorneys Lothrop Morris and Ellen Cohen.
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.