Southern District of Florida

Companies Agree to Pay Nearly $520 Million to U.S. Criminal and Regulatory Authorities, Representing the Largest Criminal Fine Imposed Against a Pharmaceutical Company for Violations of the FCPA

WASHINGTON – Teva Pharmaceutical Industries Ltd. (Teva), the world’s largest manufacturer of generic pharmaceutical products, and its wholly-owned Russian subsidiary, Teva LLC (Teva Russia), agreed to resolve criminal charges and to pay a criminal penalty of more than $283 million in connection with schemes involving the bribery of government officials in Russia, Ukraine and Mexico in violation of the Foreign Corrupt Practices Act (FCPA). 

            Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.

“Teva and its subsidiaries paid millions of dollars in bribes to government officials in various countries, and intentionally failed to implement a system of internal controls that would prevent bribery,” said Assistant Attorney General Caldwell.  “Companies that compete fairly, ethically and honestly deserve a level playing field, and we will continue to prosecute those who undermine that goal.”

“No matter where corruption occurs, the FBI and our global partners are committed to diligently rooting out the corruption that betrays the public trust and threatens a fair economy for all,” said Special Agent in Charge Piro.

According to the companies’ admissions, Teva executives and Teva Russia employees paid bribes to a high-ranking Russian government official intending to influence the official to use his authority to increase sales of Teva’s multiple sclerosis drug, Copaxone, in annual drug purchase auctions held by the Russian Ministry of Health.  The corrupt arrangement occurred at the same time that the Russian government was seeking to reduce the amount spent on costly foreign pharmaceutical products, such as Copaxone.  Between 2010 and at least 2012, pursuant to an agreement with a repackaging and distribution company owned by the Russian government official, Teva earned more than $200 million in profits on Copaxone sales to the Russian government.  Moreover, the Russian official earned approximately $65 million in corrupt profits through inflated profit margins granted to the official’s company.      

Teva also admitted to paying bribes to a senior government official within the Ukrainian Ministry of Health to influence the Ukrainian government’s approval of Teva drug registrations, which were necessary for the company to market and sell its products in the country.  Between 2001 and 2011, Teva engaged the official as the company’s “registration consultant,” paid him a monthly fee and provided him with travel and other things of value totaling approximately $200,000.  In exchange, the official used his official position and influence within the Ukrainian government to influence the registration in Ukraine of Teva pharmaceutical products, including Copaxone and insulins.

In addition, Teva admitted that it failed to implement an adequate system of internal accounting controls and failed to enforce the controls it had in place at its Mexican subsidiary, which allowed bribes to be paid by the subsidiary to doctors employed by the Mexican government.  Teva admitted that its Mexican subsidiary had been bribing these doctors to prescribe Copaxone since at least 2005.  Teva executives in Israel responsible for the development of the company’s anti-corruption compliance program in 2009 had been aware of the bribes paid to government doctors in Mexico.  Nevertheless, Teva executives approved policies and procedures that they knew were not sufficient to meet the risks posed by Teva’s business and were not adequate to prevent or detect payments to foreign officials.  Teva also admitted that its executives put in place managers to oversee the compliance function who were unable or unwilling to enforce the anti-corruption policies that had been put in place.

Teva entered into a deferred prosecution agreement (DPA) in connection with a criminal information, filed today in the Southern District of Florida, charging the company with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of failing to implement adequate internal controls.  Pursuant to its agreement with the department, Teva will pay a total criminal penalty of $283,177,348.  Teva also agreed to continue to cooperate with the department’s investigation, enhance its compliance program, implement rigorous internal controls and retain an independent corporate compliance monitor for a term of three years.

Teva Russia has signed a plea agreement in which it has agreed to plead guilty to a one-count criminal information, also filed today in the Southern District of Florida, charging the company with conspiring to violate the anti-bribery provisions of the FCPA.  The plea agreement is subject to court approval.  The case was assigned to U.S. District Judge Kathleen M. Williams of the Southern District of Florida and Teva Russia's initial court appearance has been scheduled for January 12, 2017.

In related proceedings, the U.S. Securities and Exchange Commission (SEC) filed a cease and desist order against Teva, whereby the company agreed to pay approximately $236 million in disgorgement to the SEC, including prejudgment interest.  Thus, the combined total amount of U.S. criminal and regulatory penalties to be paid by Teva is nearly $520 million.

The Criminal Division’s Fraud Section reached this resolution based on a number of factors, including the fact that Teva did not timely voluntarily self-disclose the conduct, but did cooperate with the department’s investigation after the SEC served it with a subpoena.  Teva received a 20 percent discount off the low end of the U.S. Sentencing Guidelines fine range because of its substantial cooperation and remediation.  The company, however, did not receive full cooperation credit because of issues that resulted in delays to the early stages of the Fraud Section’s investigation, including vastly overbroad assertions of attorney-client privilege and not producing documents on a timely basis in response to certain Fraud Section document requests.  Because many of the company’s compliance enhancements were more recent, and therefore have not been tested, the DPA imposes an independent compliance monitor for a term of three years. 

The FBI’s International Corruption Unit and Miami Field Office investigated the case.  Fraud Section Trial Attorneys Rohan A. Virginkar and John-Alex Romano prosecuted the case.  The Fraud Section appreciates the significant cooperation and assistance provided by the SEC in this matter.  The Criminal Division’s Office of International Affairs and the Mexican Attorney General’s Office (Procuradura General de la República or PGR) also provided assistance in this matter.        

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

Teva Pharmaceutical Industries Ltd. (Teva), the world’s largest manufacturer of generic pharmaceutical products, and its wholly-owned Russian subsidiary, Teva LLC (Teva Russia), agreed to resolve criminal charges and to pay a criminal penalty of more than $283 million in connection with schemes involving the bribery of government officials in Russia, Ukraine and Mexico in violation of the Foreign Corrupt Practices Act (FCPA).

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division, and Assistant Special Agent in Charge William J. Maddalena of the FBI’s Miami Field Office made the announcement.

“Teva and its subsidiaries paid millions of dollars in bribes to government officials in various countries, and intentionally failed to implement a system of internal controls that would prevent bribery,” said Assistant Attorney General Caldwell.  “Companies that compete fairly, ethically and honestly deserve a level playing field, and we will continue to prosecute those who undermine that goal.”

“No matter where corruption occurs, the FBI and our global partners are committed to diligently rooting out the corruption that betrays the public trust and threatens a fair economy for all,” said FBI Assistant Director Stephen Richardson.

“As demonstrated by this case, the Foreign Corrupt Practices Act has a long reach,” said William J. Maddalena, Assistant Special Agent in Charge, FBI Miami.  “Teva’s egregious attempt to enrich themselves failed and they will now pay a tough penalty.”

According to the companies’ admissions, Teva executives and Teva Russia employees paid bribes to a high-ranking Russian government official intending to influence the official to use his authority to increase sales of Teva’s multiple sclerosis drug, Copaxone, in annual drug purchase auctions held by the Russian Ministry of Health.  The corrupt arrangement occurred at the same time that the Russian government was seeking to reduce the amount spent on costly foreign pharmaceutical products, such as Copaxone.  Between 2010 and at least 2012, pursuant to an agreement with a repackaging and distribution company owned by the Russian government official, Teva earned more than $200 million in profits on Copaxone sales to the Russian government.  Moreover, the Russian official earned approximately $65 million in corrupt profits through inflated profit margins granted to the official’s company.      

Teva also admitted to paying bribes to a senior government official within the Ukrainian Ministry of Health to influence the Ukrainian government’s approval of Teva drug registrations, which were necessary for the company to market and sell its products in the country.  Between 2001 and 2011, Teva engaged the official as the company’s “registration consultant,” paid him a monthly fee and provided him with travel and other things of value totaling approximately $200,000.  In exchange, the official used his official position and influence within the Ukrainian government to influence the registration in Ukraine of Teva pharmaceutical products, including Copaxone and insulins.

In addition, Teva admitted that it failed to implement an adequate system of internal accounting controls and failed to enforce the controls it had in place at its Mexican subsidiary, which allowed bribes to be paid by the subsidiary to doctors employed by the Mexican government.  Teva admitted that its Mexican subsidiary had been bribing these doctors to prescribe Copaxone since at least 2005.  Teva executives in Israel responsible for the development of the company’s anti-corruption compliance program in 2009 had been aware of the bribes paid to government doctors in Mexico.  Nevertheless, Teva executives approved policies and procedures that they knew were not sufficient to meet the risks posed by Teva’s business and were not adequate to prevent or detect payments to foreign officials.  Teva also admitted that its executives put in place managers to oversee the compliance function who were unable or unwilling to enforce the anti-corruption policies that had been put in place.

Teva entered into a deferred prosecution agreement (DPA) in connection with a criminal information, filed today in the Southern District of Florida, charging the company with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of failing to implement adequate internal controls.  Pursuant to its agreement with the department, Teva will pay a total criminal penalty of $283,177,348.  Teva also agreed to continue to cooperate with the department’s investigation, enhance its compliance program, implement rigorous internal controls and retain an independent corporate compliance monitor for a term of three years.

Teva Russia has signed a plea agreement in which it has agreed to plead guilty to a one-count criminal information, also filed today in the Southern District of Florida, charging the company with conspiring to violate the anti-bribery provisions of the FCPA.  The plea agreement is subject to court approval.  The case was assigned to U.S. District Judge Kathleen M. Williams of the Southern District of Florida and Teva Russia's initial court appearance has been scheduled for January 12, 2017.

In related proceedings, the U.S. Securities and Exchange Commission (SEC) filed a cease and desist order against Teva, whereby the company agreed to pay approximately $236 million in disgorgement to the SEC, including prejudgment interest.  Thus, the combined total amount of U.S. criminal and regulatory penalties to be paid by Teva is nearly $520 million.

The Criminal Division’s Fraud Section reached this resolution based on a number of factors, including the fact that Teva did not timely voluntarily self-disclose the conduct, but did cooperate with the department’s investigation after the SEC served it with a subpoena.  Teva received a 20 percent discount off the low end of the U.S. Sentencing Guidelines fine range because of its substantial cooperation and remediation.  The company, however, did not receive full cooperation credit because of issues that resulted in delays to the early stages of the Fraud Section’s investigation, including vastly overbroad assertions of attorney-client privilege and not producing documents on a timely basis in response to certain Fraud Section document requests.  Because many of the company’s compliance enhancements were more recent, and therefore have not been tested, the DPA imposes an independent compliance monitor for a term of three years. 

The FBI’s International Corruption Unit and Miami Field Office investigated the case.  Fraud Section Trial Attorneys Rohan A. Virginkar and John-Alex Romano prosecuted the case.  The Fraud Section appreciates the significant cooperation and assistance provided by the SEC in this matter.  The Criminal Division’s Office of International Affairs and the Mexican Attorney General’s Office (Procuradura General de la República or PGR) also provided assistance in this matter.

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

A Palm Beach County Sheriff’s deputy was arrested yesterday for his role in an identity theft scheme. 

Wifredo A. Ferrer, 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, was arrested on a federal criminal complaint, which charged him with participating in an identity theft scheme, in violation of Title 18, United States Code, Sections 1028A (Aggravated Identity Theft); 1029(a)(2) (Access Device Fraud); 1030(a)(4) (Access of a Protected Computer in Furtherance of a Fraud); and 1029(b)(2) (Conspiracy to Commit Identity Theft). 

As alleged in the criminal complaint, over the span of approximately 18 months, Deputy Felisma used his police department issued laptop computer to access a law enforcement database in order to obtain personal identification information 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 made his initial appearance today before U.S. Magistrate Judge William Matthewman.  A pre-trial detention hearing is scheduled for Wednesday, December 28, 2016 at 10 a.m.

If convicted, 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; a maximum of ten years’ imprisonment as to the access device fraud charge; and a maximum of five years’ imprisonment as to each of the access of a protected computer in furtherance of a fraud and conspiracy to commit identity theft charges.  

Mr. Ferrer commended the investigative efforts of ICE-HSI, 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.

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

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

Miami – U.S. Attorney Wifredo A. Ferrer announced today that the U.S. Attorney’s Office for the Southern District of Florida collected $42,643,443  in criminal and civil actions in Fiscal Year 2016.  Of this amount, $31,939,398 was collected in criminal actions and $10,704,045 was collected in civil actions.

Additionally, the U.S. Attorney’s Office for the Southern District of Florida worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $30,323,384 in cases pursued jointly with these offices.  Of this amount, $1,673,163 was collected in criminal actions and $28,650,220 was collected in civil actions. 

Attorney General Loretta E. Lynch announced  on December 14, 2016 that the Justice Department collected more than $15.3 billion in civil and criminal actions in fiscal year (FY) 2016 ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the approximately $3 billion appropriated budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period. 

“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch.  “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment.  I want to thank the prosecutors and trial attorneys who made this year’s collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”

           The U.S. Attorney’s Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

            The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

            Additionally, the U.S. Attorney’s Office for the Southern District of Florida, working with partner agencies and divisions, collected $30,830,421 in asset forfeiture actions in FY 2016.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement programs.

     Six defendants, including owners, doctors, and an employee of sober homes and alcohol and drug addiction treatment centers were charged in a health care fraud scheme for filing fraudulent insurance claim forms and license applications and defrauding health care benefit programs.

Wifredo A. Ferrer, 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), Bryan Kummerlen, 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,  Joaquin Mendez, 52, of Miramar, Donald Willems, 40, of Weston, Fransesia Davis, a/k/a “Francine,”a/k/a “Francesa,” 44, of Lake Worth, Michael Bonds, 45, of Delray Beach, and Laura Chatman, 44, of Boynton Beach, are charged in a Criminal Complaint with conspiracy to commit health care fraud, in violation of Title 18, United States Code, Section 1349.  Kenneth and Laura Chatman are also charged with making false statements related to a health care matter, in violation of Title 18, United States Code, Section 1035(a)(1).

According to the Criminal Complaint, defendants Kenneth Chatman, Davis, and Bonds established sober homes, including Stay’n Alive, Inc., Redemption Sober House, Inc., and Total Recovery Sober Living LLC, and an unnamed facility at 962 West 43rd Street, West Palm Beach, in Palm Beach County, Florida, 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, some members of the conspiracy provided kickbacks and bribes, in the form of free or reduced rent and other benefits, to individuals with insurance who agreed to reside at the sober homes, attend drug treatment, and submit to regular drug testing that members of the conspiracy could bill to the residents’ insurance plans. Although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing.

Defendants Kenneth Chatman, Bonds, and Davis referred the sober homes’ residents with insurance to treatment centers owned by Kenneth Chatman but titled in the name of Laura Chatman. These treatment centers purportedly offered clinical treatment services for persons suffering from alcohol and drug addiction. In most instances, defendant Kenneth Chatman knew that the sober home residents referred to the treatment centers, Journey to Recovery LLC, in Lake Worth, Florida, and Reflections Treatment Center, LLC, in Margate, Florida, were using drugs.

Defendant Kenneth Chatman hired doctors, including defendants Mendez and Willems, to serve as medical directors of his treatment centers. The doctors 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. The defendants provided services meant solely to maximize insurance reimbursements. In some instances, defendants Kenneth Chatman and Davis submitted urine and saliva samples from employees instead of urine and saliva from patients. In other instances, defendant Kenneth Chatman caused confirmatory testing to be performed and billed for residents who left the sober homes and were no longer receiving treatment at the treatment centers. Defendants Mendez and Willems also falsely documented patient files to make it appear as though they reviewed the test results.

Defendants Kenneth Chatman and Davis engaged in various tactics to keep patients from being able to leave Reflections and Journey, including threatening violence, and confiscating their belongings, such as car keys, telephones, medications, and food stamps, in order to maintain the ability to continue fraudulently billing the insurance companies.

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 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.

If convicted, the defendants face a possible maximum statutory sentence of ten years in prison for conspiracy to commit health care fraud, and five years in prison for making a false statement related to a health care matter.

The charges and allegations contained in a Criminal Complaint are merely accusations.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. 

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. Ferrer 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.

A North Miami resident was sentenced to 47 months in prison, to be followed by three years of supervised release, for possessing 2,434 stolen identities.

Wifredo A. Ferrer, 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), Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and William Hernandez, Chief, North Miami Beach Police Department (NMBPD), made the announcement.

Camelin Junior Desrosiers, 28, previously pled guilty to one count of possession of fifteen 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 February 25, 2015, law enforcement initiated a traffic stop on a rental car leased by Desrosiers. The defendant, the driver, and a passenger were ordered to exit the vehicle. Because the vehicle contained after-market tinted windows, and because the tinted windows violated the rental car contract, law enforcement initiated a tow of the vehicle to return it to the rental car company.

An inventory search of the car was conducted prior to it being towed. In the trunk of the car, law enforcement found a laptop computer owned by Desrosiers. A forensic analysis of the computer revealed 2,434 pieces of personal identifying information (PII), including names, dates of birth and social security numbers.

Law enforcement spoke with one individual whose name, date of birth, and social security number were in the computer, and confirmed that he/she did not authorize Desrosiers to be in possession of the PII.  Desrosiers knew that the names, dates of birth, and social security numbers belonged to real persons.

Mr. Ferrer commended the investigative efforts of ICE-HSI, DOL-OIG, IRS-CI, and the NMBPD.  The case was prosecuted by Assistant U.S. 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.

The administrator of a Miami-area home health agency was convicted today for his role in a $2.5 million Medicare fraud scheme.

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

Raciel Leon, 42, of Miami, was convicted after a two-week jury trial of one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to defraud the United States and pay and receive health care bribes and kickbacks.

According to evidence presented at trial, between approximately October 2014 and June 2015, Leon was the manager of Mercy Home Care Inc. (Mercy) and a billing employee for D&D&D Home Health Care Inc. (DDD), both of which were home health agencies in Miami-Dade County, Florida.  The evidence showed that Leon and his co-conspirators used the companies to submit false claims to Medicare that were based on services that were not medically necessary, not actually provided and for patients that were procured through the payment of illegal kickbacks to doctors and patient recruiters.  In an attempt to support the false claims, Leon’s co-conspirators forged prescriptions and other medical records, and Leon submitted claims to Medicare based on the falsified documentation.

The evidence introduced at trial further established that between October 2014 and June 2015, Medicare paid approximately $2.5 million for false and fraudulent claims submitted by Mercy and DDD.

The 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 the U.S. Attorney’s Office for the Southern District of Florida.  Fraud Section Trial Attorneys Lisa Miller and Angela Adams are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force.  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.

Three Delray Beach tax return preparers pled guilty to unlawfully enriching themselves by submitting false federal income tax returns to the Internal Revenue Service (IRS) on behalf of their clients.

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement. 

Devonne Herrington, 64, her son, Lorenzo Wright, 49, and co-defendant Joyce Walker, 61, all of Delray Beach, pled guilty to one count of conspiracy to defraud the United States, in violation of Title 18, United States Code, Section 371. Herrington also pled guilty to one count of failure to file personal tax returns, in violation of Title 26, United States Code, Section 7203. Walker also pled guilty to one count of filing false personal tax returns, in violation of Title 26, United States Code, Section 7206(1).

Walker is scheduled to be sentenced on January 27, 2017, and Herrington and Wright are scheduled to be sentenced on February 17, 2017, all before United States District Judge Robin L. Rosenberg. At sentencing, the defendants face up to five years in prison for the conspiracy charge. Walker also faces up to three years in prison for filing false tax returns. Herrington also faces up to one year in prison for the failure to file tax returns charge.

According to court documents, Herrington established and operated a tax preparation business in Delray Beach, Florida, that was initially known as Devonne's LLC and later known as Wright's & Family LLC. Herrington hired tax preparers, including her son, Wright, and co-defendant Walker, to assist her with preparing tax returns for her clients. Herrington, Wright and Walker met with clients in person at the tax preparation office in order to conduct a cursory interview and collect required tax forms.

Although the clients did not claim to be eligible for, or provide documents in support of, certain tax credits or income deductions, the defendants prepared tax returns which falsely stated that the clients were eligible for such credits and deductions. The tax credits falsely claimed by the defendants included credits for first time home purchasers and education expenses. The income deductions falsely claimed by the defendants included deductions for business expenses and for being the head of household. These false and fraudulent credits and deductions reduced the clients' tax liability and increased their tax refunds.

The defendants claimed the false tax credits and deductions on IRS schedules and forms which were included in the clients' tax returns. Herrington, Wright, and Walker charged the clients extra fees for these additional fraudulent schedules. In most instances, the defendants did not review the returns with the clients prior to filing them with the IRS and did not provide copies of the returns to the clients.

Many clients have since been audited by the IRS and now have to pay back the refunds they received as a result of the fraudulent credits and deductions added to their tax returns by the defendants. 

Herrington did not file her personal income tax returns for calendar years 2010 and 2011. In addition, Walker filed her personal income tax returns for calendar years 2010 and 2011 containing false claims for the Education Expense Credit.

Mr. Ferrer commended the investigative efforts of IRS-CI.  The case is being prosecuted by Assistant U.S. Attorney Ellen L. Cohen.

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

Tampa resident indicted in the Southern District of Florida for his involvement in Tricare health care fraud scheme, money laundering, and the misbranding of drugs.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Southeast Field Office, Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Justin D. Green, Special Agent in Charge, U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations (OCI), Miami Field Office, and Frank Robey, Director, U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit, made the announcement.

Monty Ray Grow, 45, of Tampa, is charged by Indictment with conspiracy to defraud the United States and to pay and receive health care kickbacks, in violation of Title 18, United States Code, Section 371; health care fraud, in violation of Title 18, United States Code, Section 1347; receipt of kickbacks in connection with a federal health care program, in violation of Title 42, United States Code, Section 1320a-7b(b)(1)(A); payment of kickbacks in connection with a federal health care program, in violation of Title 42, United States Code, Section 1320a-7b(b)(2)(B); money laundering, in violation of Title 18, United States Code, Section 1957; and causing the misbranding of drugs while held for sale, in violation of Title 21, United States Code, Sections 331(k) and 331(a)(1).

According to allegations in the indictment, between September 2014 and June 2015, Grow received approximately $20 million in kickbacks from a Broward County, Florida compounding pharmacy in exchange for recruiting and referring patients that were covered by the Tricare health care insurance program.  The Tricare program is responsible for providing medical coverage for military personnel, military retirees and military dependents worldwide.  The Indictment further alleges that Grow and others defrauded Tricare by paying telemedicine companies to provide compounded medication prescriptions to the recruited patients without conducting any physical examination of the patients as required by law, and that these invalid prescriptions were issued without regard to the patients’ medical necessity.  The Indictment alleges Grow laundered cash proceeds of the fraud and kickback schemes through purchases of real estate, luxury vehicles and securities.    

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

Mr. Ferrer commended the investigative efforts of DCIS, HHS-OIG, FDA-OCI and U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit.  This case is being prosecuted by Assistant United States Attorneys Kevin J. Larsen and Jon Juenger.

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

A South Florida resident was sentenced to 18 months in prison, to be followed by three years of supervised release for his involvement in an identity theft scheme involving the cashing of over $140,000 in altered tax refund checks.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, made the announcement.

Contreas Faison, 44, previously pled guilty to one count of theft of government funds, in violation of Title 18, United States Code, Section 641. As part of his plea agreement, Faison agreed to restitution in the amount of $140,000.

According to court documents, in 2013 and 2014, Faison obtained U.S. Treasury tax refund checks that had been fraudulently altered so that the taxpayer's name did not appear on the check. Instead, the check contained the name of the defendant's company or the name of another bank account holder. Faison deposited these checks into bank accounts in his name or in the name of other people, and then Faison used the proceeds for his own benefit. In total, the defendant cashed over $140,000 from fifteen different altered U.S. Treasury tax refund checks that were stolen or otherwise fraudulently obtained.

Mr. Ferrer commended the investigative efforts of the IRS-CI and the USSS.  The case is being prosecuted by Assistant United States Attorney Vanessa S. Snyder.

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.

Between November 30 and December 7, 2016, seven defendants were sentenced for their role in a scheme to steal $36 million of federal funds intended for low-income housing.

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

Seven defendants previously pled guilty for their involvement in a $36 million housing fraud scheme and were sentenced as follows:

• Lloyd Boggio, 70, of Coconut Grove, was sentenced to 57 months in prison and ordered to forfeit approximately $7.1 million to the United States. 
• Matthew Greer, 38, of Miami Beach, was sentenced to 36 months in prison and ordered to forfeit approximately $16 million to the United States.
• Gonzalo DeRamon, of Coral Gables, was sentenced to 18 months in prison and ordered to forfeit approximately $4.4 million to the United States.
• Michael Cox, 48, of Miami, was sentenced to six months’ home confinement and ordered to forfeit approximately $4.4 million to the United States.
• Michael Runyan, 67, of Lighthouse Point, was sentenced to six months’ home confinement and ordered to forfeit approximately $1.1 million to the United States.
• Rene Sierra, 58 of Southwest Ranches, was sentenced to six months’ home confinement and ordered to forfeit approximately $1.2 million to the United States.
• Arturo Hevia, 64, of Miramar, was sentenced to three years of probation and ordered to forfeit approximately $20,000 to the United States. 

   

According to court documents, including the factual proffers in support of the defendants’ guilty pleas, Matthew Greer and Lloyd Boggio served, at alternating times, as CEO of Carlisle Development Group (CDG), a low-income housing developer in Miami, Florida.  CDG applied for federal tax credits and federal grant monies to build low-income housing developments through a program administered by the Florida Housing Finance Corporation (FHFC).  To obtain these federal funds, FHFC required developers to submit proposed development costs, including a construction contract signed by the developer and contractor.

The court records further indicate that Greer and Boggio conspired with contractor Michael Runyan to unjustly enrich themselves by submitting fraudulently inflated low-income housing construction contracts to FHFC’s representatives to obtain excess federal tax credits and grant monies to which they were not entitled, and then to use the proceeds for their personal use and benefit.  From 2006 to 2012, Greer, Boggio, and Runyan caused the submission of fraudulently inflated construction contracts on at least eight different low-income housing developments, which resulted in the allocation of at least $26 million in excess federal tax credits and grant monies.  Similarly, during the course of the scheme, the conspirators made kickback payments for the benefit of Greer and others totaling at least $26 million.

According to court documents, Gonzalo DeRamon and Michael Cox of Biscayne Housing Group (“BHG”) employed the same contract inflation scheme of submitting fraudulently inflated contracts to FHFC for the receipt of excess federal tax credits and grant monies.  CDG and BHG had a joint venture for two developments.  From 2009 to 2012, Cox and DeRamon conspired with contractors Rene Sierra and Arturo Hevia to unjustly enrich themselves by submitting fraudulently inflated construction contracts to FHFC’s representatives to receive excess tax credits and grants.  As a result of the fraudulent inflation scheme, there were more than $6.2 million in kickbacks from Sierra for the benefit of DeRamon, Cox, Greer, and Boggio; and more than $1 million in kickbacks from Hevia for the benefit of DeRamon and Cox.  

During the course of this investigation, through seizure warrants and voluntary payments by the defendants, the United States has collected over $22 million in proceeds connected to the thefts of government funds.  

Mr. Ferrer thanked the FBI, HUD-OIG, and IRS-CI for their work on this case.  This and all related cases are being prosecuted by Assistant U.S. Attorneys Michael R. Sherwin, Michael N. Berger, Karen Rochlin, Evelyn Sheehan, and Eloisa Fernandez. 

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 New York City resident pleaded guilty today in connection with a sophisticated global cellphone fraud scheme that involved compromising cellphone customers’ accounts and “cloning” their phones to make fraudulent international calls.

U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell 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. 

            Farintong Calderon, 37, pleaded guilty 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.  Sentencing was set for Feb. 21, 2017, before Senior U.S. District Judge Daniel T.K. Hurley of the Southern District of Florida.

            According to the plea agreement, Calderon and his 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.  Calderon formerly worked for Verizon Wireless installing cellphone towers and equipment and, after leaving his employer, moved to New York City and became involved in the fraud scheme as a “line” supplier.  Specifically, Calderon provided his co-conspirators with telecommunications identifying information associated with the accounts of customers of Verizon and other wireless companies.  His co-conspirators used that data—as well as other software and hardware—to reprogram cellphones that they controlled.  Calderon’s co-conspirators would then transmit thousands of international calls over the Internet through the re-programmed cellphones to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates.  The calls were billed to the customers’ compromised accounts. 

In addition, Calderon admitted that, from approximately 2010 to 2013, he sent or received emails to co-conspirators with at least 1,408 combinations of telecommunication identifying information for specific cellphone devices or accounts belonging to persons around the United States, and was personally responsible for at least $250,000 in loss resulting from the scheme.

Calderon is the third defendant to plead guilty in the case.  Edwin Fana and Jose Santana previously pleaded guilty to similar charges in this matter.  Fana is scheduled to be sentenced on Dec. 22, 2016, and Santana is scheduled to be sentenced on Jan. 4, 2017.

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 are prosecuting the case.

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

A New York City resident pleaded guilty today in connection with a sophisticated global cellphone fraud scheme that involved compromising cellphone customers’ accounts and “cloning” their phones to make fraudulent international calls.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement. 

Farintong Calderon, 37, pleaded guilty 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.  Sentencing was set for Feb. 21, 2017, before Senior U.S. District Judge Daniel T.K. Hurley of the Southern District of Florida.

According to the plea agreement, Calderon and his 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.  Calderon formerly worked for Verizon Wireless installing cellphone towers and equipment and, after leaving his employer, moved to New York City and became involved in the fraud scheme as a “line” supplier.  Specifically, Calderon provided his co-conspirators with telecommunications identifying information associated with the accounts of customers of Verizon and other wireless companies.  His co-conspirators used that data—as well as other software and hardware—to reprogram cellphones that they controlled.  Calderon’s co-conspirators would then transmit thousands of international calls over the Internet through the re-programmed cellphones to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates.  The calls were billed to the customers’ compromised accounts. 

In addition, Calderon admitted that, from approximately 2010 to 2013, he sent or received emails to co-conspirators with at least 1,408 combinations of telecommunication identifying information for specific cellphone devices or accounts belonging to persons around the United States, and was personally responsible for at least $250,000 in loss resulting from the scheme.

Calderon is the third defendant to plead guilty in the case.  Edwin Fana and Jose Santana previously pleaded guilty to similar charges in this matter.  Fana is scheduled to be sentenced on Dec. 22, 2016, and Santana is scheduled to be sentenced on Jan. 4, 2017.

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 are prosecuting the case.

Two South Florida residents charged with conspiring to misbrand and sell expired medical devices, Gastric Banding Systems, for profit.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Justin D. Green, Special Agent in Charge, United States Food and Drug Administration’s (FDA) Office of Criminal Investigations (OCI), Miami Field Office, made the announcement.

On December 8, 2016, Peter Lawrence Kafka, 57, of Parkland, Florida and Gregory Charles Grimm, 45, of Saint Petersburg, Florida were indicted on a single count of conspiracy to commit wire fraud in violation of Title 18, United States Code, Section 1349, three counts of wire fraud, in violation of Title 18, United States Code, Section 1343, a single count of conspiracy, in violation of Title 18, United States Code, Section 371, and six counts of misbranding devices after shipment in interstate commerce, in violation of Title 21, United States Code, Section 331(k). 

According to the indictment, between June 2014 and October 15, 2015, Kafka and Grimm engaged in a scheme to unlawfully enrich themselves by misbranding LAP-BAND Adjustable Gastric Banding Systems, changing the serial number and expiration date in order to sell expired medical devices for profit.  Between June 2014 and August 2015, Kafka and Grimm were employees of Apollo Endosurgery, Inc., where they served as Senior Account Executives.

The indictment alleges that Kafka would purchase expired or nearly expired LAP-BANDS through the internet.  Kafka would then supply Grimm with these expired or nearly expired LAP-BANDs.  Grimm created false labels with fraudulent serial numbers and expiration dates to hide the true expiration date of the LAP-BANDs.  Grimm would then provide Kafka the misbranded LAP-BANDs, the labeling of which bore false expiration dates.  Kafka then sold the misbranded LAP-BANDs to local physicians.

The investigation began as a result of a referral by Apollo Endosurgery to the FDA.

Mr. Ferrer commended the investigative efforts of the FDA-OCI in this matter.  This case is being prosecuted by Assistant United States Attorney Joshua S. Rothstein.

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

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

A Mexican national was sentenced yesterday to 24 years in federal prison for kidnapping a U.S. citizen in Mexico. 

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.

Felix Becerra Herrera, 35, of Mexico, was sentenced by United States District Judge Darrin P. Gayles to 288 months’ imprisonment.  On September 20, 2016, Becerra Herrera pled guilty to one count of hostage taking and one count of use of a firearm in the commission of a violent felony. 

“International borders do not shield foreign based kidnappers and violent offenders from U.S. prosecution,” stated U.S. Attorney Wifredo Ferrer. “The U.S. Attorney’s Office and our law enforcement partners will utilize the long-arm of our American legal system to seek justice on our soil for these egregious offenses.”

“The FBI arrested Felix Becerra Herrera at his place of work in Odessa, TX, in May 2016 after receiving a tip as to his whereabouts,” said Xanthie C. Mangum, Assistant Special Agent in Charge of FBI Miami.  “He participated in a gruesome shooting and kidnapping involving two naturalized U.S. Citizens in Mexico in December, 2012, and now faces a 288 month sentence for his crimes.”

According to the court record, Becerra Herrera was involved in the December 2012 armed assault of two nationals of the United States, in Veracruz, Mexico.  During the assault, Becerra Herrera and others used handguns to shoot at the truck containing the nationals, seriously wounding the driver.  Becerra Herrera and others then kidnapped one of the passengers and held her for ransom before finally releasing her, nearly a week later.  Becerra Herrera was ultimately apprehended in Texas, several years after he had illegally entered the United States following the violent kidnapping.

Mr. Ferrer commended the outstanding investigative efforts of the FBI.  The case was prosecuted by Assistant United States Attorney Adam Fels.

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 Tampa resident is indicted for threatening a Sandy Hook parent residing in the Southern District of Florida.

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.

Lucy Richards, 57, of Tampa, was indicted in the Southern District of Florida (Case No. 16-CR-80206) on four counts of transmitting threats in interstate commerce, in violation of Title 18, United States Code, Section 875(c).  If convicted, each count carries a maximum term of five years’ imprisonment.  Richards was arrested on December 5, 2016 and made her initial appearance before United States Magistrate Judge Mark Pizzo in the Middle District of Florida.  Richard is scheduled for an initial appearance in Fort Lauderdale on December 19, 2016. 

On December 14, 2012, the Sandy Hook School shooting occurred in Newtown, Connecticut, and resulted in the death of 20 children and 6 adults.  According to the court record in this case, including allegations made at the initial hearing, on or about January 10, 2016, Richards made a series of death threats to a parent of a child killed in the Sandy Hook School shooting.  The parent resides in South Florida.  Richards’ believed that the school shooting was a hoax and never happened allegedly motivated her to make the charged threats.

Mr. Ferrer commended the outstanding investigative efforts of the FBI.  Mr. Ferrer also thanked the U.S. Attorney’s Office for the Middle District of Florida for their assistance.  The case is being prosecuted in the Southern District of Florida by Assistant United States Attorney Karen E. Gilbert.

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

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

South Miami Hospital, a not-for-profit regional hospital located in South Miami, Florida has agreed to pay the United States approximately $12 million to settle allegations that it violated the False Claims Act by submitting false claims to federal healthcare programs for medically unnecessary electrophysiology studies and other procedures allegedly performed by John R. Dylewski, M.D., at South Miami Hospital. 

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Miami Region, John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Southeast Field Office, and Scott Rezendes, Special Agent in Charge, Office of Personnel Management, Office of Inspector General (OPM-OIG), made the announcement.

“This settlement shows our continued resolve to pursue institutional providers who turn a blind eye to the systematic overutilization of medical procedures and inflated billing practices resulting in significantly increased costs to the federal government,” said Wifredo A. Ferrer, United States Attorney for the Southern District of Florida.

“This settlement highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense (DoD) health care program known as TRICARE,” said DCIS Special Agent in Charge John F. Khin.  “DCIS aggressively investigates health care providers that defraud the DoD, to preserve American taxpayer dollars intended to care for our warfighters, their family members, and military retirees.”

“Performing medically unnecessary heart procedures is shocking to the conscience,” said Shimon R. Richmond, HHS-OIG Miami Special Agent in Charge. “Conducting cardiac catheterizations purely for profit, not patient care, seriously breaches the “do no harm” commitment physicians pledge. Together with our law enforcement partners, we will seek out, stop these practices and protect the Medicare patients who are victimized by physicians participating in these schemes.”

“It is absolutely unconscionable that anyone in the medical profession would place profit above a patient’s health and well-being,” said OPM-OIG Special Agent in Charge Rezendes.  “We remain firmly committed to ensuring that Federal employees, annuitants, and their families are protected and that such unscrupulous behavior is identified and stopped.”

The allegations arose from a lawsuit filed by two whistleblowers, James A. Burks, M.D., and James D. Davenport, M.D., under the qui tam provisions of the False Claims Act.  Relator Burks is a board-certified vascular surgeon and medical doctor who began his practice as a vascular surgeon at South Miami Hospital in 2003.  Relator Davenport is a board-certified cardiologist and medical doctor, who was an active member of various peer review committees at South Miami Hospital between 2010 and 2014.  Under the False Claims Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  Drs. Burks and Davenport will receive approximately $ 2,748,500 from the recovery announced today.

According to court documents, plaintiffs claimed to have personal knowledge of Dr. Dylewski and South Miami Hospital engaging in a number of unnecessary cardiac procedures, including echocardiograms, electrophysiology studies, head upright tilt tests, and other treatments of arrhythmia by ablation, cryoablation, or implantation of an electronic device, for the sole purpose of increasing the amount of physician and hospital reimbursements paid by Medicare and other federally-funded programs. 

The settlement was the result of a coordinated effort by the United States Attorney’s Office for the Southern District of Florida, HHS-OIG, DCIS, and OPM-OIG.  The case was investigated and the settlement negotiated by Assistant U.S. Attorney John C. Spaccarotella.

The case is captioned United States of America ex. rel. James A. Burks, M.D. and James D. Davenport, M.D. v. John R. Dylewski, M.D., et al., Case No. 14-CV-22079 (S.D. Fla.).  The claims settled by the lawsuit are allegations only, and there has been no determination of liability.

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 Broward County resident was sentenced to 24 months in prison, to be followed by three years of supervised release for his involvement in an identity theft tax fraud scheme involving the trafficking in, use, and possession of unauthorized debit card account numbers. 

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Dan Giustino, Chief, Pembroke Pines Police Department, made the announcement.  

Maraldy Necker Jean, 39, previously pled guilty to one count of trafficking in and using one or more unauthorized access devices, 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, fraudulent tax returns were filed using the names and Social Security numbers of individuals without their permission.  On February 6, 2014, Jean and co-defendant Wilna Joseph, 36, of Broward County, drove to a Wells Fargo Bank in Pembroke Pines, and Joseph attempted to withdraw cash from the ATM using a debit card encoded with an account number belonging to one of the tax return victims.  The defendants then drove to a Citibank, located in Pembroke Pines, where Joseph made four withdrawals, totaling approximately $1,200.00, using a debit card encoded with an account number belonging to another one of the tax return victims. 

At the time of their arrest, on February 6, 2014, the defendants, between them, had fifteen unauthorized debit cards registered in the names of other persons. The debit cards had been funded with fraudulently obtained federal income tax refunds totaling approximately $76,249.20.

Wilna Joseph was sentenced on November 18, 2016 to 10 months in prison, to be followed by one year of supervised release.

Mr. Ferrer commended the investigative efforts of IRS-CI, the FBI, and the Pembroke Pines Police Department. The case is being prosecuted by Assistant United States Attorneys Daya Nathan and Jonathan K. Osborne and Special Assistant United States Attorney Tyler Jett. 

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

A South Florida resident was ordered to pay $607,566 for her involvement in the filing of false claims in connection with the Deepwater Horizon explosion and pollution incident in the Gulf of Mexico in April 2010.

Wifredo A. Ferrer, 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 Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.

On November 30, 2016, in the Key West Federal Courthouse, United States District Judge Jose E. Martinez entered the restitution order against Caridad Rioseco Alejandrez, 51, of Key West, Florida, who previously pled guilty to one count of mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2 and was sentenced to serve forty-eight months in prison, to be followed by three years of supervised release. The restitution payment reflected the actual losses suffered by the Gulf Coat Claims Facility (GCCF) trust fund as a result of false claims handled by Caridad Rioseco Alejandrez for her own family members and for hundreds of Key West area residents.

Her father, Raul Rioseco, 74, of Stock Island, Florida, previously pled guilty to one count of mail fraud and was sentenced in April 2016 to one year and a day in prison in connection with his involvement in a similar false claim.  He was also ordered to serve a three-year term of supervised release. Raul Rioseco was ordered to make restitution payments to the Deepwater Horizon Fund in the amount of $144,606.57, which represented the money he unlawfully received from the GCCF and the amounts received by certain other individuals based on fraudulent documents Raul Rioseco provided in support of other fraudulent claims. Additionally, Raul Rioseco was ordered to surrender to the State of Florida and the federal government all his permits and licenses associated with commercial fishing activities. 

According to court filings and proceedings, in June 2010, BP plc established the GCCF for the purpose of administering and settling certain claims of individuals and businesses for costs, damages, and other losses incurred as a result of oil discharges due to the April 20, 2010 explosion and fire on the Deepwater Horizon, an oil exploration rig operating in the Gulf of Mexico.  In August 2010, the GCCF began receiving and processing such claims of individuals and businesses for costs, damages, and other losses they had incurred as a result of the Deepwater Horizon incident, paying the claims from a $20 billion private trust fund established for that purpose.

Caridad Rioseco Alejandrez, and her father, Raul Rioseco, filed fraudulent claims against the fund, in their own names, which resulted in them receiving $35,900 and $55,000, respectively, from the GCCF.  The scheme to defraud the GCCF was carried out through mailings and through the use of the Internet, to open the claims and to provide required forms and documentation, including employment verification letters and tax return documents.  Alejandrez produced and provided the documents to the GCCF on behalf of herself and her father which were materially false and fraudulent and claimed Alejandrez and Rioseco were adversely affected by the spill and lost income in the months following the incident, when this was not the truth.

Additionally, Caridad Rioseco Alejandrez Rioseco, who had long served as a “facilitator” for local area residents, preparing tax returns, handling immigration paperwork,  and providing other accounting services, facilitated the filing of hundreds of other false claims, by completing claims paperwork and producing fraudulent tax returns, wage statements, and “loss statements,” to support claims for compensation which were filed by her with the GCCF, for economic losses purported to have been suffered as a result of the Deepwater Horizon incident, despite the fact that none of the individuals had suffered the claimed losses.

The United States advised the Court that records established that the amounts claimed, approached $1.5 million, although the actual amounts paid out by the GCCF on the claims was $607,566.

Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, the Department of Commerce, National Oceanic and Atmospheric Administration, Office of Law Enforcement, the United States Coast Guard Investigative Service, U.S. Immigration and Customs Enforcements Homeland Security Investigations and the support provided by the United States Postal Inspection Service. This case was prosecuted by Assistant United States Attorney Thomas Watts-FitzGerald, Deputy Chief of the Economic and Environmental Crimes Section. 

Members of the public can report fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, including the 2010 Deepwater Horizon oil spill, to the National Center for Disaster Fraud (NCDF) by calling 877-NCDF-GCF (877-623-3423), sending a fax to (225) 334-4707, or emailing [email protected].         

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

On December 1, 2016, a medical device saleswoman was sentenced to three years in prison for her involvement in a stolen medical device and money laundering conspiracy.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Justin D. Green, Special Agent in Charge, United States Food and Drug Administration (FDA), Office of Criminal Investigations, Miami Field Office, made the announcement.

Kerri L. Kaley, 50 of Cold Spring Harbor, New York, was sentenced in Miami on eight felony counts in a criminal case arising out of a Miami-based FDA investigation that has led to convictions in over twenty-five cases of medical device theft and has resulted in forfeitures, fines, and restitution totaling over $5 million.  U.S. District Court Judge Darrin P. Gayles presided over a trial of seven of Kaley’s charges of conviction in September, for her role in a conspiracy to transport and sell in interstate commerce various stolen prescription medical devices, the actual transport and sale of stolen medical devices, and money laundering associated with that activity.  In November 2014, Kaley was tried and convicted on charges of obstructing justice in connection with the same activity.  At sentencing, Kaley was ordered to serve a term of thirty-six months in prison, to be followed by a similar term of supervised release. In connection with the criminal trial, Kaley agreed to, and was ordered to forfeit $500,000 to the United States, with the possibility of a further money judgment to be resolved at a later ring.                                           

According to court records and testimony at trial, from approximately 1995 through February 2005, Kaley participated in a conspiracy with a group of individuals based in Long Island, New York. The entire group, including Kaley, were medical device sales representatives for subsidiaries of Johnson & Johnson.  While based in Miami, Kaley solicited sales representatives and other employees of medical device manufacturers, seeking to purchase medical devices for re-sale. As part of the conspiracy, Kaley and others working with her would secure possession of significant quantities of prescription medical devices from hospitals they serviced for their employer, which were then forwarded to a conspirator in Delray Beach, Florida.  These devices were often state-of-the-art equipment used for minimally invasive surgeries and suture materials used by hospitals.  The devices were acquired by theft and fraud from customer medical facilities, New York non-profit hospitals. During the course of the illicit activity Kaley laundered over $2.2 million in payments through two sham construction corporations and used the funds to pay the co-conspirators, their home mortgages, home-renovations, and child care expenses.

Charges remain pending against co-conspirator Brian K. Kaley, but no trial date has been set.  An indictment is merely an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.

Mr. Ferrer commended the investigative efforts of the U.S. Food and Drug Administration in this matter.  The current case is being prosecuted by Assistant United States Attorneys Thomas Watts-FitzGerald, Brooke Watson, 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

Alexander Robert Xavier, 52, of Boca Raton, Florida, was sentenced to twelve-and-a-half years in prison.  Previously, a jury found Xavier guilty of defrauding federal agencies by issuing worthless bonds to insure government construction projects.  U.S. District Judge Kenneth A. Marra imposed the sentence and ordered Xavier to pay over $4 million in restitution to the victims of the fraud.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paul Brezinski, Special Agent in Charge, United States Environmental Protection Agency, Office of the Inspector General (EPA-OIG), Atlanta Field Office, and Monty Stokes, Special Agent in Charge, United States Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division (VA-OIG), Southeast Field Office, made the announcement.

          According to public documents and evidence introduced in court, from approximately May 2008 to October 2010, Xavier devised a scheme to unlawfully enrich himself by claiming to be an “individual surety” on various performance and payment bonds – a type of insurance required on major government construction contracts.   During the course of the fraud, Xavier pledged millions of dollars in assets to at least eighteen different federal agencies.  In truth, and as Xavier well knew, there were no such assets.

A jury previously found Xavier guilty, on July 14, 2016, of mail fraud, in violation of Title 18, United States Code, Section 1341, major fraud, in violation of Title 18, United States Code, Section 1031, and making a false statement to the United States Department of the Army, in violation of Title 18, United States Code, Section 1001. 

The evidence at trial showed that Xavier issued a large number of worthless bonds to various contractors performing work for government agencies.   During the course of the fraud scheme, Xavier and his confederates were paid over $4.3 million in fees.  The defrauded federal agencies included, among others, the United States Department of the Army and the United States Department of Labor.

Mr. Ferrer commended the investigative efforts of the EPA-OIG, VA-OIG.  Mr. Ferrer also thanked the Criminal Investigation Command of the Department of the Army, the Defense Criminal Investigative Services of the OIG of the Department of Defense, the OIG of the General Services Administration, the OIG of the Department of Housing and Urban Development, and the OIG of the Department of State. 

This case was prosecuted by Assistant U.S. Attorneys Christopher B. Browne and Wilfredo Fernandez.

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.

Christopher Sharod Massena, 25, of Palm Beach County, was sentenced today to 360 months in prison to be followed by three years supervised release for the distribution of Fentanyl, resulting in the death of a 23 year old man.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office (PBSO), and Bryan Kummerlen, Chief, West Palm Beach Police Department (WPBPD), made the announcement. 

Massena was previously convicted for unlawfully distributing a controlled substance, Fentanyl, which resulted in death. 

According to the court record, on February 18, 2016, Massena distributed Fentanyl, a Schedule II controlled substance, to a 23 year old man.  The man died of acute Fentanyl toxicity shortly after ingesting the controlled substance.  Thereafter, on four separate dates Massena distributed other controlled substance (heroin and heroin mixed with Fetanyl) to an undercover police officer.  On the date of his arrest, Massena possessed with the intent to distribute heroin.

Mr. Ferrer commended the investigative efforts of the DEA, PBSO, WPBPD, and the Palm Beach Narcotics Task Force for their assistance in this matter.  This case was prosecuted by Assistant U.S. Attorney Jennifer C. Nucci.

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

On November 29, 2016, a West Palm Beach man was ordered to repay $1 million to the United States Coast Guard for communicating a false distress call.   

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Rear Admiral Scott Buschman, United States Coast Guard, District 7, made the announcement. 

          Richard Ohrn, 46, pled guilty to willfully communicating a false distress message to the United States Coast Guard, causing the Coast Guard to attempt to save lives and property when no help was needed, in violation of Title 14, United States Code, Section 88(c).  

          According to court records, Ohrn rented a recreational vessel on March 31, 2015, before abandoning it at sea.  The vessel was later discovered by a concerned boater, who spotted several patches of blood and a broken pair of eyeglasses onboard.  The United States Coast Guard was notified and launched a search and rescue effort over a three-day period.  The search utilized both air and sea assets, and cost over $1 million.  The investigation revealed that while the Coast Guard was searching for Ohrn he fled to Georgia, where he hid in an unfurnished apartment before returning to the West Palm Beach area on April 12, 2015.  

Ohrn was sentenced to a year of probation and was ordered to pay $1 million in restitution to the Coast Guard.   

          Mr. Ferrer commended the investigative efforts of the United States Coast Guard, United States Coast Guard Investigative Service, and the Palm Beach Sheriff’s Office.  This case was prosecuted by Special Assistant U.S. Attorney Jeremy McCall.    

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.

Company to Pay $40 Million and Implement Remedial Measures on All Carnival Companies Visiting U.S. Ports

Princess Cruise Lines Ltd. (Princess) has agreed to plead guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up.  Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship.  The plea agreement was announced today by U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida in Miami, Florida and Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division.

Princess, headquartered in Santa Clarita, California, is a subsidiary of Carnival Corporation (Carnival), which owns and operates multiple cruise lines and collectively comprises the world’s largest cruise company.  Carnival is headquartered in Miami.  As part of the plea agreement with Princess, cruise ships from eight Carnival cruise line companies (Carnival Cruise Line, Holland America Line N.V., Seabourn Cruise Line Ltd. and AIDA Cruises) will be under a court supervised Environmental Compliance Program (ECP) for five years.  The ECP will require independent audits by an outside entity and a court appointed monitor.

The charges to which Princess will plead guilty concern the Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia.  The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a 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.  The whistleblowing engineer quit his position when the ship reached Southampton, England.  The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie.  The MCA shared evidence with the U.S. Coast Guard, including before and after photos of the bypass used to make the discharge and showing its disappearance.  The U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York City, New York, on Sept. 14, 2013, during which certain crew members continued to lie in accordance with orders they had received from Princess employees. 

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 discharge on Aug. 26, 2013, involved approximately 4,227 gallons, 23 miles off the coast of England within the country’s Exclusive Economic Zone.  At the same time as the discharge, engineers simultaneously ran clean seawater through the ship’s overboard equipment in order to create a false digital record for a legitimate discharge.

Caribbean Princess used multiple methods over the course of time to pollute the seas.  Prior to the installation of the bypass pipe used to make the discharge off the coast of England, a different unauthorized valve was used.  When the Department of Justice investigative team conducted a consensual boarding of the ship in Houston, Texas, on March 8, 2014, they found the valve that crew members had described.  When it was removed by Princess at the department’s request, it was found to contain black oil. 

In addition to the use of a magic pipe to circumvent the oily water separator and oil content monitor required pollution prevention equipment, the U.S. investigation uncovered two other illegal practices which were found to have taken place on the Caribbean Princess as well as four other Princess ships – 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 otherwise alarming 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.  Neither of these practices were truthfully recorded in the oil record book as required.  All of the bypassing took place through the graywater system which was discharged when the ship was more than four nautical miles from land.  As a result, discharges within U.S. waters were likely. 

“The conduct being addressed today is particularly troubling because the Carnival family of companies has a documented history of environmental violations, including in the Southern District of Florida,” said U.S. Attorney Ferrer.  “Our hope is that all companies abide by regulations that are in place to protect our natural resources and prevent environmental harm.  Today’s case should send a powerful message to other companies that the U.S. government will continue to enforce a zero tolerance policy for deliberate ocean dumping that endangers the countless animals, marine life and humans who rely on clean water to survive.”

“The pollution in this case was the result of more than just bad actors on one ship,” said Assistant Attorney General Cruden.  “It reflects very poorly on Princess’s culture and management.  This is a company that knew better and should have done better.  Hopefully the outcome of this case has the potential not just to chart a new course for this company, but for other companies as well.”

“The safety, security and environmental stewardship of our ports, waterways and oceans is an important Coast Guard mission set and the complexity of the challenges we face today requires a global unity of effort among law enforcement partners,” said Rear Admiral Scott Buschman Commander, Coast Guard District Seven.  “I sincerely thank the U.S. Attorney and the United Kingdom Maritime and Coastguard Agency for your leadership, your collaboration and the hard work put forth to reach a plea agreement with significant penalties that serve as a clear warning to all polluters.”

“This shows just how well the U.K. and U.S. can work together on these kind of cases,” said Jeremy Smart, head of enforcement at the Maritime & Coastguard Agency of the United Kingdom.  “It also sends a clear message to the industry that this kind of pollution practice will not be tolerated anywhere in the world.  It also shows that we will always take any information we are given by those who report such practices to us very seriously and will act upon it.”

In addition to the criminal information, a plea agreement and joint factual statement were today filed in court in Miami.  Photographs of some of the evidence provided by the whistleblower and obtained by the government were also filed in federal court.  In the factual statement, Princess also admitted to the following:

• Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.

   

• Different bypass methods were used over the course of time, including a “magic pipe” used to transfer oily waste overboard.

   

• After learning that an engineer had blown the whistle, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
   

• Prior to the MCA boarding, the chief engineer and senior first engineer ordered 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. 

• When using the magic pipe, engineers processed sea water through the oily water separator in order to create a digital record to account for the missing waste.

   

• Shore-side management failed to provide and exercise sufficient supervision and management controls to prevent or detect criminal violations by Caribbean Princess crew members.
   

• 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.
   
• Princess engineers on the Caribbean Princess indicated that the chief engineer responsible for the discharge on Aug. 26, 2013, was known as “broccino corto” (a person with short arms), an Italian expression for a cheap person whose arms are too short to reach his wallet. Some expressed the same opinion of the shore-side superintendent. 
   
• 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. 
   
• Princess discovered “stub pipes” along the entire length of the ship for the apparent purpose of pumping graywater overflows into the bilges back into the graywater system and subsequently overboard.

According to papers filed in court, Princess has undertaken remedial measures in response to the government’s investigation, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.   

If approved by the court, $10 million of the $40 million criminal penalty will be devoted to 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 be earmarked for projects to benefit the marine environment in United Kingdom waters. 

Today’s prosecution was made possible through the combined efforts of the U.S. Coast Guard Investigative Service, 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, U.S. Attorney Ferrer  and Assistant Attorney General Cruden expressed their appreciation to the U.K.’s MCA for their cooperation and assistance.  The case was prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice and Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section 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.

A Palm Beach resident pled guilty for his participation in a stolen identity tax fraud scheme.

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.

Raphael Oswald, a/k/a Mackenson R. Olibrice,37 Rivera Beach, Florida, pled guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343, one count of theft of public money, in violation of Title 18, United States Code, Section 641, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.

According to court documents, in August 2013, law enforcement began investigating Oswald for identity theft charges related to his use of the stolen identity of a woman to purchase and finance a 2006 Porsche and BMW X-5 in New York. Specifically, the defendant walked into two separate car dealerships and presented a fraudulent passport and fraudulent Florida driver’s license in the name of the woman but bearing Oswald’s photo.

During the course of the initial identity theft investigation, a separate tax refund fraud scheme involving Oswald was discovered. Oswald possessed and used stolen personal identifying information of numerous individuals, and used the information to file fraudulent tax returns and collect tax refunds in the name of those individuals. More than one hundred fraudulent federal tax returns were filed, and the fraudulent refunds totaling $139,308 were directed into bank accounts in the name of Oswald’s company. Oswald then made a series of cash withdrawals and made several purchases for personal items from the bank accounts.

Oswald is scheduled to be sentenced on February 7, 2017 before United States District Judge Cecilia M. Altonaga. At sentencing, the defendant faces up to twenty years in prison for the wire fraud charge, up to ten years in prison for the theft of public money charge, and two years’ imprisonment, consecutive to any other prison term, for the aggravated identity theft charge.

Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Cynthia R. Wood.

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

A Florida Keys boat lift installation company and a South Florida resident pled guilty and were sentenced in connection with the installation of illegal boat lifts without the requisite federal permits from the United States Army Corp of Engineers (ACOE).

            Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Colonel Jason Kirk, District Engineer, United States Army Corps of Engineers, Jacksonville District; John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Southeast Field Office; Frank Robey, Director, United States Army Criminal Investigation Command, Major Procurement Fraud Unit; and Andy Castro, Special Agent in Charge, United States Environmental Protection Agency (EPA), Criminal Investigation Division, Atlanta Area Office.  

Florida Keys company Kevin P. Mason Builder, LLC (Mason) and Jennifer Ashlee Davis, 32, of Tavernier, pled guilty and were sentenced today in federal court in Key West before United States District Court Judge Jose E. Martinez.  Mason and Davis pled guilty for their involvement in the building of approximately twelve boat lifts and associated structures without federal permits issued by the ACOE, in violation of Title 33, United States Code, Sections 403 and 406.   Mason was sentenced to five years of probation, ordered to pay a $15,000 fine, and required to implement and enforce an Environmental Compliance Plan.  Davis was sentenced to one year of probation and ordered to pay a $2,000 fine.

According to court records, including a joint factual statement, the Rivers and Harbors Act prohibits commencing building any structure in any navigable water of the United States without authorization from the ACOE.  Mason was in the business of installing boat lifts and other associated structures in navigable waters and was subject to ACOE permitting.  Davis was the permitting agent, acting on behalf of Mason and the individual property owners.  Both Mason and Davis were responsible for applying for and obtaining all necessary authorization including, but not limited to, ACOE permits.  Mason and Davis knew that permits were required, prior to commencing all work.  Between February 1, 2015 and September 30, 2015, the Mason and Davis commenced and/or completed 12 boat lift installations knowing no ACOE authorization had been granted. 

U.S. Attorney Wifredo Ferrer stated, “It is imperative that companies and their agents abide by all compliance programs, including permit regulations, to ensure the protection of our environment.”

“The United States Army Corps of Engineers, Department of Defense, is charged with managing the Intracoastal Waterways to protect vital resources,” said Special Agent in Charge John F. Khin, Defense Criminal Investigative Service (DCIS) Southeast Field Office.  “DCIS will investigate those who defraud the Government by circumventing United States law intended to protect our waterways, and hold them accountable for their actions.  This resolution sends a clear message that preserving the environment of the Florida Keys is taken very seriously.”

“The United States Army Corps of Engineers, is responsible for regulating construction activities, which affect the navigable waters of the United States,” said Director Frank Robey, Major Procurement Fraud Unit (MPFU), United States Army Criminal Investigation Command (USACIDC).  “USACIDC will investigate those who defraud the Government to circumvent United States laws intended to protect our navigable waters, and hold them accountable for their actions.  This resolution sends a clear message that preserving the environment of the Florida navigable waters is a priority for the United States Army.”

Mr. Ferrer commended the investigative efforts of the U.S. Army Corps of Engineers, DCIS, U.S. Army Criminal Investigation Command’s, Major Procurement Fraud Unit, and EPA.  The case was prosecuted by Special Assistant U.S. Attorney Jodi A. Mazer of the Economic & Environmental Crimes 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. 

Aquarium operator re-sentenced to eight additional months of incarceration, after violating conditions of his release.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Tracy Dunn, Assistant Director, NOAA Fisheries Office of Law Enforcement, and David Pharo, Resident Agent in Charge U.S. Fish & Wildlife Service, Miami, made the announcement. 

Ammon Covino, 43, formerly of Meridian, Idaho, was ordered to return to prison today for eight months and to serve an additional one-year term of supervised release, following a re-sentencing hearing before U.S. District Judge Jose E. Martinez in Key West.  Covino violated court-imposed employment restrictions as a result of his 2013 conviction for conspiring to harvest, transport, and sell spotted eagle rays and lemon sharks, knowing the marine life were taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida, contrary to the federal Lacey Act, all in violation of Title 18, United States Code, Section 371.

According to the original charging Indictment, during the period of March 2012 through approximately November 2012, Covino and others purchased and transported wildlife from the Florida Keys to Idaho for exhibit at the Idaho Aquarium in Boise. The wildlife included spotted eagle rays and lemon sharks, which required Florida licenses and permits never acquired by the participants in the deals. Covino at the time was an officer of the Aquarium, had been advised of the requirements of the law, and nevertheless directed his Florida-based suppliers to ignore the law and make the shipments. Unknown to Covino at the time of the phone calls, that business owner was cooperating with federal authorities and the phone conversations and text messages were recorded. Payment for the various specimens was made by credit cards held in the Aquarium?s name. In the same case, Idaho Aquarium, Inc. pled guilty to the same conspiracy count and was ordered to pay a $50,000 penalty.

Covino was originally sentenced in December 2013 by United States District Court Judge Jose E. Martinez to a term of imprisonment of one year and a day, followed by a term of supervised release of 2 years, and was barred from any employment during that period that involved the possession, display, transportation, exhibition, purchase, or sale of marine life.

In February 2016, Covino was sentenced to an additional 3 months in prison and a $50,000 financial penalty, for violating the special employment restrictions after agents discovered that he had secretly become involved in the development and construction of two aquarium facilities in the State of Texas, using false names and false claims of employment.

According to statements made in court during today’s hearing, within five days of Covino’s release from his most recent prison sentence, he again became involved in consulting and directing the development, construction, and exhibition details for two new aquarium facilities, located in Layton, Utah and Las Vegas, Nevada.  Covino traveled to visit the facilities several times and lied to his probation officer regarding his travels. 

Mr. Ferrer commended the joint investigative efforts of the Special Agents of the NOAA Office of Law Enforcement and the Fish & Wildlife Service Office of Law Enforcement who participated in the long-term investigation into the illegal harvesting and sale of marine life resources from the Florida Keys.  This matter was prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald of the Economic & Environmental Crimes 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.   

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Antonio J. Gomez, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, announced federal money laundering charges against Miami-Dade County resident Luis Hernandez-Gonzalez.

Hernandez-Gonzalez, 45, of Miami Lakes, appeared in federal court today before U.S. Magistrate Judge Patrick A. White and was arraigned on an Indictment charging:

• 18 U.S.C. § 1956(h) - Conspiracy to Commit Money Laundering
• 18 U.S.C. §§ 1956(a)(1)(B)(ii) and 1957 - Money Laundering
• 31 U.S.C. § 5324(a)(1) - Structuring to Avoid Reporting Requirements

The Indictment alleges that Mr. Hernandez-Gonzalez avoided and attempted to avoid currency reporting rjavascript:void('Copy')equirements that apply to currency deposits exceeding $10,000 at financial institutions and to the purchase of money orders in amounts in excess of $3,000 at United States post offices.  The Indictment further alleges that Mr. Hernandez-Gonzalez committed money laundering by conducting financial transactions in amounts over $10,000 using the proceeds of the manufacture, importation, and distribution of a controlled substance and by conducting financial transactions designed to avoid currency reporting requirements with proceeds of the manufacture, importation, and distribution of a controlled substance. 

An Indictment is merely an accusation and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. 

Mr. Ferrer commended the investigative efforts of USPIS, the U.S. Drug Enforcement Administration (DEA), Internal Revenue Service, Criminal Investigation (IRS-CI), and Miami-Dade Police Department (MDPD).  The case is being prosecuted by Assistant United States Attorney Elijah Levitt.

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.

Preston Alexander McWaters was sentenced by United States District Judge James I. Cohn, in Fort Lauderdale, Florida, to forty-two months in prison for sending threatening communications to several Palm Beach County locations.

Wifredo A. Ferrer, 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 Lawrence Leon, Chief, Palm Beach County School District Police Department, made the announcement.

McWaters, 26, of Athens, Georgia, previously pled guilty before U.S. District Judge James I. Cohn to four counts of transmitting a threat in interstate commerce to injure another person, in violation of Title 18, United States Code, Section 875(c), and two counts of conveying false and misleading information indicating that a bombing of a place of public use would take place, in violation of Title 18, United States Code, Section 1038(a)(1)(A) and (c). 

According to the factual proffer accompanying his plea, McWaters, over the course of several months in late 2015 and early 2016, sent numerous e-mails and other communications threatening to bomb various locations in Palm Beach County, including schools, a hospital, a business and the Palm Beach International Airport.  McWaters also posted a number of threats to injure a woman who had previously obtained a protective order against him as well as to injure the family of a high school principal in Palm Beach County.  McWaters used tools to prevent law enforcement from tracing the online threats back to him, and exerted substantial effort to implicate a romantic rival and, later, his rival’s then-girlfriend in an attempt to conceal his identity.  The FBI ultimately was able to trace the threats back to McWaters, who was arrested in March 2016.

While awaiting sentencing McWaters sent and attempted to send additional threating communications to others.  The subsequent criminal conduct increased McWaters’ sentencing guidelines.

Mr. Ferrer commended the outstanding investigative efforts of the FBI, Palm Beach County School District Police Department and the Jupiter Police Department.  Mr. Ferrer also thanked the myriad of law enforcement partners in Florida and Georgia, including the Palm Beach County Sheriff's Office, the Palm Beach County State Attorney's Office, the Jupiter Police Department, the West Palm Beach Police Department, the University of Georgia Police Department, the Clarke County Georgia Police Department, and the United States Attorney's Office for the Middle District of Georgia, for their assistance.  The case is being prosecuted by Assistant U.S. Attorneys Edward Nucci, Karen Gilbert, and Adam Fels.

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

Representatives from the Human Rights and Special Prosecutions Section of the U.S. Department of Justice traveled to Miami for a roundtable meeting with community stakeholders to combat and encourage reporting of, human rights violations.

U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer, Deputy Chief Kathleen O’Connor, Human Rights and Special Prosecutions Section of the U.S. Department of Justice, and Special Agent in Charge Xanthi C. Mangum, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.

“The U.S. Attorney’s Office and our federal law enforcement partners have taken an aggressive stance against perpetrators of human rights violations,” stated U.S. Attorney Wifredo Ferrer “Although we have successfully brought to justice a number of human rights violators, there is still much more work to be done to protect our nation’s residents, refugees and asylum seekers.  We implore the community to report human rights violators who are living among us in the South Florida community.”

On November 3, 2016, as part of an effort to foster dialogue between those who investigate and enforce human rights laws in the United States and members of the community, the U.S. Attorney’s Office for the Southern District of Florida, the Human Rights and Special Prosecutions Section of the U.S. Department of Justice, the FBI, and U.S. Immigration and Custom Enforcement’s Homeland Security Investigations hosted a roundtable meeting with community groups in the South Florida region that provide services to immigrants.  This forum, titled No Safe Haven: Keeping Immigrants Safe from Human Rights Violators, brought together stakeholders, including immigrant and refugee service providers, immigration attorneys, non-governmental organizations, local and state law enforcement, medical service providers, educators, and representatives from other federal agencies.

The Human Rights and Special Prosecutions Section of the U.S. Department of Justice works with other federal government agencies and community stakeholders to identify and prosecute human rights violators and other international criminals.  Offenses such as murder, rape, physical or mental torture, and the recruitment or use of children as soldiers, are considered human rights violations and are a priority for the Department of Justice.  Our united mission is to ensure that the United States is not a haven to those who commit such atrocities.  The U.S. Attorney’s Office for the Southern District of Florida seeks to bring the perpetrators to justice, while striving to protect and improve lives.  The U.S. Attorney’s Office has a specialized section that focuses on the protection of some of the most vulnerable segments of our communities, that have fallen victim to human rights atrocities.  The U.S. Attorney’s Office has utilized immigration fraud statutes and other legal provisions to hold those accountable who carry out international rights violations.  In, U.S. v. Eriberto Mederos, the defendant hid the fact that he had tortured political prisoners on behalf of Cuba’s communist government and was convicted of making false statements to obtain U.S. citizenship.  In U.S. v. Charles “Chuckie” Taylor, the Southern District of Florida obtained the nation’s first conviction for overseas torture and the defendant was sentenced to 97 years in prison.

Members of the public who have information about former human rights violators in the United States are urged to contact U.S. law enforcement through the Human Rights and Special Prosecutions Section at [email protected] or toll-free at 1-800-813-5863, or through the HSI tip line at 1-866-DHS-2-ICE or to complete their online tip form at www.ice.gov/exec/forms/hsi-tips/tips.asp.

On November 21, 2016, Todd Erling Becker, 46, of Stuart, Florida, was convicted of committing and conspiring to commit fives robberies with a firearm at business located in Stuart, Vero Beach, and Orlando, Florida and Lexington, Kentucky. 

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge for the Federal Bureau of Investigation (FBI), Miami Field Office, Ken Mascara, Sheriff, St. Lucie County Sheriff’s Office, William Snyder, Sheriff, Martin County Sheriff’s Office, Deryl Loar, Sheriff, Indian River County Sheriff’s Office, Jerry Demings, Sheriff, Orange County Sheriff’s Office, and Mark Barnard, Police Chief, Lexington Police Department, Kentucky, made the announcement.

A federal jury in the Southern District of Florida convicted Becker of one count of conspiracy to commit robbery affecting interstate and foreign commerce, three counts of robbery affecting interstate commerce, and three counts of using a firearm in the furtherance of a crime of violence.  Becker faces a minimum of 57 years’ and a maximum of life imprisonment.  Becker is scheduled to be sentenced on February 3, 2017 before U.S. District Judge Donald L. Graham.  

According to the court record, including evidence presented at trial, between August 13, 2013 and August 21, 2014, Becker and various accomplices robbed four convenience stores catering to Latin communities in Stuart and Vero Beach, Florida and Lexington, Kentucky. Additionally, Becker and an accomplice robbed a cash exchange business in Orlando, Florida.  On all five occasions, a disguised gunman entered the stores with a semi-automatic handgun and demanded money from the store clerks. For four of the five robberies, Becker served as the lookout and the driver of the vehicle used to flee from the crime scenes.  During the robbery in Vero Beach, Florida Becker entered the store with the gunman and bound the store clerk before fleeing.

During the robbery in Lexington, Kentucky, during business hours, the gunman entered the Latin market and demanded money while pointing his semi-automatic handgun at multiple customers, including young children. The gunman fired two shots at employees.  Shortly after the shots were fired, Becker drove to the location, picked up the gunman, and fled back to Florida.

Mr. Ferrer commended the investigative efforts of the FBI, St. Lucie County Sheriff’s Office, Martin County Sheriff’s Office, Indian River County Sheriff’s Office, Orange County Sheriff’s Office, and Lexington Police Department in Kentucky.  The case is being prosecuted by Assistant U.S. Attorney Daniel E. Funk and Special Assistant U.S. Attorney Ryan Butler.

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

Today, U.S. Attorney Wifredo A. Ferrer, U.S. Deputy Assistant Attorney General Kenneth A. Blanco, U.S. Ambassador to Colombia Kevin Whitaker, Attorney General of Colombia Nestor Humberto Martinez Neira and Colombia National Police Director General Jorge Hernandez Nieto Rojas met in Cartagena, Colombia for a summit to combat organized transnational crime.

During the meeting, the delegations from the United States and Colombia agreed to strengthen bilateral cooperation in dismantling the financial structures of the criminal organizations, the fight against drug trafficking and the use of asset forfeiture against organized crime.

Colombia and the United States seek to exchange the understandings, visions and interests with respect to the objectives of both countries in order to combat transnational organized crime. In addition, in order to strengthen the commitment of both nations, the parties reached an agreement concerning the sharing of assets confiscated in connection with criminal conduct. The agreement aims to allow Colombia and the United States to share assets - including money and goods of any kind - that have been confiscated by the respective authorities of the parties, and are subject to forfeiture in either of the two jurisdictions.  The main purpose of this agreement is to collectively impact the financial structures of the criminal organizations.  The recoveries will be used to cover the costs of the investigations and the prosecution of offenses by the respective authorities.

Leaders of the international law enforcement community attended the summit, including representatives from the Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), U.S. Immigration and Customs Enforcement (ICE) and Internal Revenue Service (IRS).  The Colombian government was also represented by the Assistant Attorney General María Paulina Riveros Dueñas, the National Director of the Prosecutor’s Office, the Ministry of Defense, the Ministry of Finance and Public Credit, the National Police and the Financial Analysis and Information Unit.

On November 14, 2016, two individuals pled guilty to smuggling over $2.4 million into the United States from the Dominican Republic.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Miami Field Office, David P. D’Amato, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Professional Responsibility (ICE-OPR), Jay Donly, Special Agent in Charge, Department of Homeland Security, Office of the Inspector General (DHS-OIG), Brian Swain, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, Diane J. Sabatino, Director, Field Operation, U.S. Customs and Border Protection, Miami Field Office, and Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Miami Region, made the announcement.

Mildrey De La Caradid Gonzalez, 61, and Milka Yarlin Alfaro, 40, pled guilty before Chief U.S. District Judge K. Michael Moore, in Miami, Florida to charges of bulk cash smuggling, in violation of Title 31, United States Code, Section 5332(a).  Alfaro and Gonzalez face a statutory maximum sentence of five years’ imprisonment.  They are scheduled to be sentenced on February 2, 2017, before U.S. Chief District Judge K. Michael Moore.

According to court records, including a stipulated factual basis in support of Alfaro and Gonzalez’s guilty plea, on June 4, 2016, Alfaro, Gonzalez, and co-defendant Luis de Jesus Alonzo, Jr. (collectively, the “Defendants”), arrived at Miami International Airport in Miami, Florida from the Dominican Republic.  The Defendants presented at least seven pieces of luggage for entry into the United States.  Alonzo filled out the required United States Customs and Border Protection Form 6059B (the “Declaration Form”) as the “responsible family member” on behalf of the Defendants.  Alonzo declared that he and his co-defendants were not carrying in excess of ten thousand dollars in United States currency and presented the Declaration Form to Passport Control officers. 

However, at the time Alonzo presented the Declaration Form, Alfaro and Gonzalez knew that the Defendants had in excess of ten thousand dollars hidden within their luggage.  During a subsequent search of the Defendants’ luggage, approximately $2,463,759.00 in United States currency was discovered concealed within the luggage in diapers, baby wipes, makeup pouches, and purses, among other things.  Alfaro and Gonzalez both admitted to United States Customs and Border Patrol Officers that the luggage with the concealed currency was theirs, and that Alfaro and Gonzalez had packed the luggage together. 

The Defendants misrepresented that they were not carrying in excess of ten thousand dollars in United States currency in order to evade a currency reporting requirement under Title 31, United States Code, Section 5316. 

Alonzo pled guilty to bulk cash smuggling on September 15, 2016.  He is scheduled to be sentenced on November 30, 2016, before U.S. Chief District Judge K. Michael Moore.

Mr. Ferrer commended the investigative efforts of ICE-HSI, ICE-OPR, DHS-OIG, USSS, CBP and HHS-OIG.  The case is being prosecuted by Assistant U.S. Attorney 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.

The former Opa Locka City Manager was sentenced to over three years in federal prison for accepting bribes in furtherance of an illegal municipal corruption scheme.

Wifredo A. Ferrer, 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. 

David Chiverton previously pled guilty to participating in a conspiracy against the laws of the United States, that is, Federal programs bribery and extortion under color of official right, in connection with his official duties as Opa Locka’s Assistant City Manager, and subsequently as City Manager, in violation of Title 18, United States Code, Section 371.  U.S. District Court Judge Cecilia M. Altonaga sentenced Chiverton to 38 months’ imprisonment, to be followed by 3 years of supervised release to include 8 months of home detention.  Chiverton was also ordered to forfeit $7,600 to the United States.

According to the court record and statements made in open court, between March 2014 and March 2016, Chiverton agreed with an unnamed Opa Locka elected official (“Public Official A”), former Opa Locka Assistant Public Works Director Gregory Harris, and others, to use their official positions and authority with the City of Opa Locka to solicit, demand, and obtain thousands of dollars in illegal cash payments from businesses and individuals in exchange for taking official actions to assist and benefit those businesses and individuals in their dealings with the City of Opa Locka.

Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force.  This case was prosecuted by Senior Litigation Counsel Edward Stamm and Assistant United States Attorney Kimberly Selmore.

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 Broward County resident was sentenced to 36 months in prison, to be followed by three years of supervised release, for his participation in a stolen identity tax fraud scheme.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.

Clifford Blain, 28, was previously convicted of one count of uttering a forged United States Treasury check, in violation of Title 18, United States Code, Section 510(a)(2), one count of bank fraud, in violation of Title 18, United States Code, Section 1344, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.

According to evidence presented at trial, Blain deposited a United States Treasury check containing a forged endorsement and signature of another individual into a bank account he controlled. An image of the defendant making the deposit was captured by ATM cameras and introduced during the trial proceedings.

Mr. Ferrer commended the investigative efforts of IRS-CI.  The case was prosecuted by Assistant U.S. Attorney Russell Killinger.

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.

Doraisy Martinez, 39, of West Palm Beach, pled guilty to one count of attempted removal of property to prevent seizure.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), made the announcement.

According to the court record, including facts admitted at the plea hearing, in March 2016, Martinez was living with her boyfriend, Osvaldo Rizo Santana, in Boynton Beach.  On March 16, 2016, DEA agents executed a search warrant at the house, seized almost a kilogram of cocaine, and arrested Santana. On March 17 and 18, 2016, Santana called Martinez several times from jail.  In the recorded calls, Santana and Martinez discussed an item that was buried in their yard.  On March 18, 2016, DEA agents went to Santana and Martinez’s house.  There they observed Martinez digging a hole in the ground and new holes on the property.  Agents then obtained a search warrant for the premises.  There they discovered, buried at the location where Ms. Martinez had been digging when the agents arrived, $20,000 in a vacuum sealed package.  Martinez had attempted to remove the money to prevent it from being seized by law enforcement.

In a separate case, Santana pled guilty to conspiracy to possess with the intent to distribute cocaine and was sentenced to 37 months’ incarceration.

Martinez faces a maximum possible statutory sentence of five years in prison.

Mr. Ferrer and Mr. Wright commended the investigative efforts of the DEA. This case is being prosecuted by Assistant U.S. Attorney Marc Osborne.

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

The former owner of a Miami based retail pharmacy was convicted, following a three-day trial, for his participation in a scheme that involved the fraudulent submission of approximately $700,000 dollars in false billing to Medicare.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), made the announcement.

Andres Alfonso, 54, of Miami, was convicted of three substantive counts of health care fraud.  Alfonso faces a maximum possible sentence of ten years in prison for each count of conviction.  Alfonso is scheduled to be sentenced on January 27, 2017, by United States District Judge James I. Cohn in Fort Lauderdale.

Evidence presented at trial showed that, for less than six months in 2014, Andres Alfonso owned a retail pharmacy called La Gloria Pharmacy, in Miami.  During that time, Alfonso stole approximately $700,000 from Medicare Part D, by stealing the identities of doctors and Medicare beneficiaries and billing for prescription drugs he never purchased nor dispensed.  The beneficiaries testified at trial that, although La Gloria Pharmacy had submitted claims for prescription drugs in their names, they had never heard of La Gloria Pharmacy, never received the drugs for which the pharmacy had submitted claims, and had never been treated by the doctor listed in the claim.  The doctors testified that, although their names were listed as the prescribing physician in La Gloria Pharmacy’s claims submissions, they had never treated, nor prescribed medication for, any of those beneficiaries.

Mr. Ferrer commended the investigative efforts of HHS-OIG.  This case is being prosecuted by Assistant U.S. Attorneys Amanda Perwin and James V. Hayes, in coordination with the Fraud Section of the Justice Department’s Criminal Division and the Medicare Strike Force.

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.

Defendant Used False and Fraudulent Promises to Recruit Foreign Students to Further a Prostitution and Erotic Massage Enterprise

Jeffrey Jason Cooper, 46, of Miami Beach, Florida, was convicted late yesterday on all 11 counts for organizing a scheme to lure foreign university students into the United States under false pretenses of legitimate summer jobs, only to advertise the students to customers of his prostitution and erotic massage enterprise. 

Cooper was convicted of sex trafficking and attempted sex trafficking by fraud, wire fraud, importation of persons for prostitution or immoral purposes and use of a facility of interstate commerce to operate a prostitution enterprise.  A jury in the Southern District of Florida returned the verdict after four days of trial.

According to evidence presented in court, Cooper recruited foreign students from Kazakhstan through the State Department’s J-1 Summer Work Travel Program, using false and fraudulent promises of clerical jobs in a fictitious yoga studio in order to bring the students into the United States.  After the students arrived in Miami in May 2011, Cooper revealed that the yoga studio did not exist and that he expected the students to perform erotic massages and commercial sex acts as part of his prostitution and erotic massage enterprise.  According to testimony and evidence presented at trial, the students were advertised to customers from June 2011 until they were recovered by law enforcement in August 2011.  

“Jeffrey Cooper used deception to lure unsuspecting foreign university students across the globe, only to be exploited for the defendant's own personal profit,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.  “The U.S. Attorney’s Office is fully committed to our international efforts to combat human trafficking - whether by fraud, force or otherwise.”

“Cooper preyed on students seeking to broaden their opportunities through an educational exchange program, using fraud and false promises to sell their bodies for his own profit,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “As this case demonstrates, the Civil Rights Division will continue to work vigorously with our Anti-Trafficking Coordination Team partners to bring traffickers to justice and vindicate the rights of vulnerable victims.” 

“This case is the perfect example of how victims can travel half way around the world in an effort to better themselves only to be defrauded and exploited sexually,” said Special Agent in Charge Mark Selby of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami.  “HSI along with our federal and international law enforcement partners will continue to work diligently to ensure that individuals like Cooper do not exploit educational work programs for their own profit.”

“Diplomatic Security is committed to using all of the tools at our disposal to prevent human trafficking,” said Director Bill A. Miller of the State Department’s Diplomatic Security Service (DSS).  “Our global presence enables our agency to serve as a liaison between U.S. and foreign law enforcement counterparts assisting both in their efforts to stop those that would manipulate instruments of international travel in order to exploit international students in this way.”

Cooper faces a maximum sentence of life in prison, a fine of up to $2,750,000 and an order to pay mandatory restitution to the victims.  U.S. District Court Judge K. Michael Moore of the Southern District of Florida will sentence Cooper on Feb. 16, 2017.

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 is being prosecuted by Assistant U.S. Attorney Seth M. Schlessinger of the Southern District of Florida and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.

The Southern District of Florida is one of six Phase I Pilot Anti-Trafficking Coordination Teams (ACTeams) convened through an interagency collaboration of the Departments of Justice, Labor and Homeland Security to develop high-impact federal human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking of adults by force, fraud and coercion.

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.

Defendant Used False and Fraudulent Promises to Recruit Foreign Students to Further a Prostitution and Erotic Massage Enterprise

Jeffrey Jason Cooper, 46, of Miami Beach, Florida, was convicted late yesterday on all 11 counts for organizing a scheme to lure foreign university students into the United States under false pretenses of legitimate summer jobs, only to advertise the students to customers of his prostitution and erotic massage enterprise.  

Cooper was convicted of sex trafficking and attempted sex trafficking by fraud, wire fraud, importation of persons for prostitution or immoral purposes and use of a facility of interstate commerce to operate a prostitution enterprise.  A jury in the Southern District of Florida returned the verdict after four days of trial.
 
According to evidence presented in court, Cooper recruited foreign students from Kazakhstan through the State Department’s J-1 Summer Work Travel Program, using false and fraudulent promises of clerical jobs in a fictitious yoga studio in order to bring the students into the United States.  After the students arrived in Miami in May 2011, Cooper revealed that the yoga studio did not exist and that he expected the students to perform erotic massages and commercial sex acts as part of his prostitution and erotic massage enterprise.  According to testimony and evidence presented at trial, the students were advertised to customers from June 2011 until they were recovered by law enforcement in August 2011.   
 
“Cooper preyed on students seeking to broaden their opportunities through an educational exchange program, using fraud and false promises to sell their bodies for his own profit,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “As this case demonstrates, the Civil Rights Division will continue to work vigorously with our Anti-Trafficking Coordination Team partners to bring traffickers to justice and vindicate the rights of vulnerable victims.”
 
“Jeffrey Cooper used deception to lure unsuspecting foreign university students across the globe, only to be exploited for the defendant's own personal profit,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.  “The U.S. Attorney’s Office is fully committed to our international efforts to combat human trafficking – whether by fraud, force or otherwise.”
 
“This case is the perfect example of how victims can travel half way around the world in an effort to better themselves only to be defrauded and exploited sexually,” said Special Agent in Charge Mark Selby of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Miami.  “HSI along with our federal and international law enforcement partners will continue to work diligently to ensure that individuals like Cooper do not exploit educational work programs for their own profit.”
 
“Diplomatic Security is committed to using all of the tools at our disposal to prevent human trafficking,” said Director Bill A. Miller of the State Department’s Diplomatic Security Service (DSS).  “Our global presence enables our agency to serve as a liaison between U.S. and foreign law enforcement counterparts assisting both in their efforts to stop those that would manipulate instruments of international travel in order to exploit international students in this way.”
 
Cooper faces a maximum sentence of life in prison, a fine of up to $2,750,000 and an order to pay mandatory restitution to the victims.  U.S. District Court Judge K. Michael Moore of the Southern District of Florida will sentence Cooper on Feb. 16, 2017.
 
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 is being prosecuted by Assistant U.S. Attorney Seth M. Schlessinger of the Southern District of Florida and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
 
The Southern District of Florida is one of six Phase I Pilot Anti-Trafficking Coordination Teams (ACTeams) convened through an interagency collaboration of the Departments of Justice, Labor and Homeland Security to develop high-impact federal human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking of adults by force, fraud and coercion.

A South Florida resident was sentenced to three years in prison and ordered to pay $187,997 in restitution for stealing housing and food assistance benefits and committing aggravated identity theft.

Wifredo A. Ferrer, United States Attorney 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), Karen Citizen-Wilcox, Special Agent in Charge, U.S. Department of Agriculture, Office of Inspector General (USDA-OIG), Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Ann Deibert, Chief Executive Officer,  Broward County Housing Authority (BCHA), made the announcement.

Jamye Sharne Barnes, a/k/a Jamye Barnes Sawyers, 36, of South Florida, previously pled guilty to two counts of theft of government money for taking HUD funded Section 8 program assistance and USDA Supplemental Nutrition Assistance Program benefits to which she was not entitled, in violation of Title 18, United States Code, Section 641; and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).   Barnes was sentenced to 36 months in prison, to be followed by two years of supervised release, and was ordered to pay restitution in the amount of $187,997.

According to court documents, on May 17, 2011, Barnes applied to receive Section 8 housing benefits in Broward County, Florida through the Broward County Housing Authority (BCHA), which administers United States Department of Housing & Urban Development (HUD) Section 8 housing benefits. Barnes was approved by BCHA to live at a house in Miramar, Florida, and HUD, through BCHA, paid $1,154 in rent per month from July 26, 2011 through November 8, 2012 for this residence on behalf of Barnes. From May 2012 up to 2016, Barnes received a total of $38,000 in benefits. Throughout that period, Barnes filed annual applications certifying under oath information relating to her income, employment, and bank accounts held, but failed to disclose income that would have disqualified her from receiving HUD Section 8 benefits.

On or about December 16, 2008, Barnes applied to receive United States Department of Agriculture (USDA) Supplemental Nutrition Assistance Program (SNAP) benefits, formerly known as food stamps. Barnes was approved by the USDA, and from May 2012 through 2016, she received benefits ranging from $313 to $526 per month based upon the information she provided to the Florida Department of Children and Families (DCF). Throughout that period, Barnes filed annual applications certifying under oath her income, employment, and bank account records, but failed to disclose income that would have disqualified her from receiving USDA SNAP benefits.

From May 2012 through 2016, Barnes worked at Loyalty Financial, Inc., a tax preparation business in the Southern District of Florida. Barnes was the authorized signee of several bank accounts for Loyalty Financial, and Barnes used the bank accounts to pay the company’s employees and for her personal benefits. In 2012, over 30 fraudulently obtained United States Treasury income tax refund checks were deposited into one of Loyalty Financial's bank accounts. The total amount of the checks deposited was $188,746.70. Barnes personally withdrew at least $127,327 from the account.

Mr. Ferrer commended the investigative efforts of HUD-OIG, USDA-OIG, IRS-CI, and the BCHA. The case was prosecuted by Assistant U.S. Attorney Cary O. Aronovitz. 

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.

In two related cases, seven residents of Miami-Dade County pled guilty to conspiracy charges arising from their involvement in a complex mortgage fraud scheme involving two condominium conversion projects in central Florida.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Timothy Mowery, Special Agent in Charge, Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Juan J. Perez, Director, Miami-Dade Police Department (MDPD), made the announcement.

On November 10, 2016, Orlando Ortiz, 53, Luis Enrique Tur, 47, Jeffrey Todd Canfield, 49, Rafael Amador, 34, and Osvaldo Sanchez, 40, pled guilty to one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, before U.S. District Judge Federico A. Moreno.  The defendants are scheduled to be sentenced on January 19, 2017.

On November 16, 2016, Mirna Pena, 54, and Pedro Reynaldo Allende, 66, pled guilty to one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, before U.S. District Judge Patricia A. Seitz.  The defendants are scheduled to be sentenced on March 28, 2017.

According to court documents, including the agreed upon factual statements:

In 2007 and 2008, Ortiz, Tur, Canfield, Amador, and Sanchez participated in a mortgage fraud scheme involving two condominium projects: “Portofino at Largo,” in Largo, Florida, and “Bayshore Landing,” in Tampa, Florida.  Pena and Allende were involved in the same mortgage fraud scheme; however, their involvement was limited to units in the Portofino at Largo project.

During the course of the conspiracy, Pena, Allende, and other individuals recruited straw buyers and unqualified buyers, including Ortiz, Tur, and Canfield, to purchase units in the two condominium projects.  Among other things, the recruiters told certain prospective buyers that: buyers did not have to contribute any money to purchase a unit; buyers would receive a cash-back incentive or “kick-back” after closing; and buyers would receive several months’ mortgage payments.

The co-conspirators prepared and submitted false and fraudulent mortgage loan applications and related documents to various lenders including Bank of America, BankUnited, Chase Bank USA, CitiMortgage, First National Bank of Arizona, IndyMac Bank, JPMorgan Chase Bank, and Washington Mutual Bank.  Among other things, the loan applications and related documents contained false and fraudulent statements and omissions regarding: the borrower’s intention to reside in the unit; the borrower’s employment and income; the borrower’s assets and liabilities; the borrower’s payment of an earnest money deposit and cash-to-close; and the use of mortgage loan proceeds to pay “marketing fees” to various “marketing companies.”  In truth and in fact, the marketing companies were fraudulent businesses that did not provide any marketing services.  Instead, the “fraudulently induced marketing fees” were a means of diverting proceeds from the fraud scheme to the marketing companies.  The fraudulent marketing companies would then use the fraud proceeds to pay undisclosed kick-backs to the buyers.

Pena and Allende operated two Miami-based businesses, which were used to perpetrate the mortgage fraud scheme: Mortgage Bankers Lenders, Inc., a mortgage broker business, which submitted false and fraudulent loan applications and related documents to the lenders; and United Title Services & Escrow, Inc., which closed mortgage loan transactions even though the buyers had not paid earnest money deposits or cash-to-close, and used loan proceeds to pay “marketing fees” to a marketing company operated by unindicted co-conspirators.

Ortiz, Canfield, and Tur purchased units in Portofino at Largo.  Tur also purchased units in Bayshore Landing.  Ortiz, Canfield, and Tur engaged a Miami-based mortgage broker business operated by an unindicted co-conspirator to prepare and submit mortgage loan applications for their units.  On their behalf, the co-conspirator prepared and submitted fraudulent loan applications and other documents to various lenders.  The fraudulent loan documents included fabricated W-2 Wage and Tax Statements and pay stubs.  After closing on their units, Ortiz, Canfield, and Tur received substantial undisclosed kick-backs from a marketing company operated by an unindicted co-conspirator.  The kick-backs were funded with fraud proceeds, which had been paid to the marketing company as “marketing fees.”

Amador and Sanchez operated Allegiance Title of America, Inc., which served as the closing agent for mortgage loans involving condominium units in Portofino at Largo and Bayshore Landing.  Among other things, Amador and Sanchez caused Allegiance Title of America to disburse loan proceeds even though the buyers had not paid the earnest money deposits or cash to close, that was required by their loan applications and settlement statements.  Amador and Sanchez also caused Allegiance Title of America to pay fraudulent “marketing fees” to marketing companies.

The defendants face a maximum statutory term of thirty years’ imprisonment for their participation in the mortgage fraud conspiracy.

Mr. Ferrer commended the investigative efforts of the FHFA-OIG, FBI and MDPD.  Both cases are being prosecuted by Assistant United States Attorney Dwayne E. Williams.

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 North Miami check casher was sentenced to more than 17 years in prison, after having been convicted by a federal jury, for cashing over $11 million in fraudulent tax refund checks obtained from the filing of stolen identities. 

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), made the announcement. 

Junior Jean Baptiste, 36 of North Miami, Florida, was convicted on charges of conspiracy to commit money laundering, money laundering, possession of five or more false identification documents, theft of government money, and aggravated identity theft.  Baptiste was sentenced to a total of 212 months’ imprisonment, to be followed by three years of supervised release, by United States District Judge Jose E. Martinez.

According to the evidence presented in court, from 2009 to 2011, the defendant operated a check cashing store called Surveillance Masters LLC in North Miami, Florida.  During this period, trial evidence demonstrated that the defendant knowingly cashed over $11 million from over 2,000 fraudulent tax refund checks that had been issued in the names of dead people, disabled people, and other people who do not typically file tax returns.  Furthermore, trial evidence showed that the defendant typically took a fee of half of the value of the checks and made false identification documents for his files.  Trial evidence demonstrated that, in connection with the cashing of these fraudulent checks, the defendant possessed over 900 false driver’s licenses, work permits, and green cards. 

Finally, the evidence at trial showed that the defendant used the fraudulently obtained funds for, among other things, a cargo ship, multiple vehicles, and rights to an album of a prominent hip-hop artist.  

Mr. Ferrer commended the investigative efforts of IRS-CI and ICE-HSI.  This was prosecuted by Assistant U.S. Attorneys Michael N. Berger and Michael B. Nadler. 

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 Attorney for the Southern District of Florida Wifredo A. Ferrer will participate and deliver remarks at a special naturalization ceremony conducted by the U.S. Citizenship and Immigration Services (USCIS) at the USCIS office in Miami, Florida on FRIDAY, NOV. 18, AT 11:00 A.M. EST.  District Director Linda Swacina of the USCIS will administer the Oath of Allegiance to 170 candidates from 27 countries who will become America’s newest citizens. 

The 170 naturalization candidates originate from the following 27 countries: Argentina, Bahamas, Brazil, Canada, Colombia, Cuba, Dominican Republic, Ecuador, El Salvador, France, Guatemala, Haiti, Honduras, Hungary, Israel, Italy, Jamaica, Mexico, Morocco, Nicaragua, Nigeria, Peru, Russia, Spain, Thailand, Uruguay, and Venezuela.

USCIS is asking new citizens and their families and friends to share the experiences and photos from their ceremonies via Twitter using the hashtag #newUScitizen.  For more information about USCIS visit www.uscis.gov.

WHAT:          

U.S. Citizenship and Immigration Services conducting a special naturalization ceremony

WHO:            

U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer

USCIS Miami and Caribbean District Director Linda Swacina 

USCIS Miami Field Office Director Yeseira Diaz

USCIS Senior Immigration Services Officer Melissa Andrews

WHEN:          

FRIDAY, NOVEMBER 18, 2016

11:00 a.m. EST

WHERE:        

Department of Homeland Security

United States Citizenship and Immigration Services

8801 NW 7th Avenue, Miami FL 33150

OPEN PRESS

NOTE: 

Media should RSVP to USCIS Public Information Officer Ana Santiago at [email protected].  All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. 

Yesterday, a mother and her son from Sebring were sentenced to federal prison, by U.S. District Judge Jose E. Martinez in Fort Pierce, for conspiring to import Ecstasy from the Netherlands into the United States. 

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Antonio J. Gomez, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, and Diane J. Sabatino, Director, Office of Field Operations, U.S. Customs and Border Protection (CBP), Miami Field Office, made the announcement. 

Annalisa Anfuso Patterson, 56, and her son Jake Elwyn Patterson, 19, previously pleaded guilty to conspiracy to import a controlled substance 3,4-methylenedioxy-methamphetamine (MDMA), also known as “Ecstasy,” in violation of Title 21, United States Code, Section 963; and attempted possession with intent to distribute a controlled substance- 3,4-methylenedioxy-methamphetamine (MDMA), also known as “Ecstasy” in violation of Title 21, United States Code, Section 846 and Title 18, United States Code, Section 2.  Annalisa Patterson was sentenced to 24 months’ imprisonment, to be followed by 3 years of supervised release.  Jake Patterson was sentenced to 18 months’ imprisonment, to be followed by 3 years of supervised release.

According to the court record, including the stipulated factual proffer, U.S. Customs and Border Protection (CBP) Officers in Miami identified, searched and detained two U.S. Postal Service parcels, destined for Highlands County.  The parcels were found to contain approximately 525 tablets of 3,4-methylenedioxy-methamphetamine (MDMA), also known as “Ecstasy,” a schedule I controlled substance.  On May 17, 2016, HSI agents, with the assistance of United States Postal Inspectors, conducted a controlled delivery of one of the parcels to Sebring, Florida.  Annalisa Patterson accepted and opened the parcel.  Law enforcement then executed a search warrant at the residence and observed, next to the opened parcel, a laptop computer with images of MDMA on the screen. 

The court record indicates that Annalisa and Jake Patterson used Bitcoins to place orders for MDMA from the Netherlands, using internet websites (the “dark web”).  Jake Patterson used a test kit to ensure that the substances they had purchased were in fact Ecstasy.  Annalisa and Jake Patterson supplied other individuals with Ecstasy, from their Sebring residence.

Mr. Ferrer commended the investigative efforts of ICE-HSI, CBP, and USPIS.  This case was prosecuted by Assistant U.S. Attorney Carmen Lineberger.

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.

A Miami-Dade County resident was sentenced to 15 months in prison, by U.S. District Judge Robert N. Scola, Jr., for distributing contaminated cheese. 

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Justin Green, Special Agent in Charge, U.S. Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), Miami Field Office, made the announcement. 

Christian Rivas, the owner of Oasis Brands, Inc. (“Oasis”), located in Miami, Florida, previously pled guilty to a two-count criminal Information.  Pursuant to Count 1, a felony, Rivas, with the intent to defraud and mislead, delivered cheese processed and packed at the Oasis facility into interstate commerce that was “adulterated . . . in that it contained lysteria monocytogenes (“listeria”) a deleterious substance, which may render the food injurious to health,” in violation of Title 21, United States Code, Section 331(a) and 333(a)(2).  Pursuant to Count 2, a misdemeanor, Rivas, as the responsible corporate official of Oasis, delivered cheese into interstate commerce, “which was prepared, packed and held [at the Oasis facility] under insanitary conditions whereby it may have been rendered injurious to health,” in violation of Title 21, United States Code, Section 331(a) and 333(a)(1).

“Consumer protection is a top priority for the U.S. Attorney’s Office,” stated U.S. Attorney Wifredo Ferrer. “The Southern District of Florida will continue to work with the FDA to identify for prosecution cases where consumers are exposed to the risk of serious harm from contaminated food purchased in the marketplace, while being fraudulently led to believe that it is safe.”

“U.S. consumers rely on the FDA to ensure that the food they eat is safe and wholesome,” said Justin D. Green, Special Agent in Charge, FDA Office of Criminal Investigations’ Miami Field Office. “We will continue to pursue and bring to justice those who put the public’s health at risk by allowing contaminated foods to enter the U.S. marketplace.” 

            According to the court record, including the sentencing hearing and stipulated statement of facts in support of Rivas’ guilty plea, the Virginia Department of Agriculture and Consumer Services had alerted the FDA to the fact that cheese supplied by Oasis and located at a Virginia grocery store had been randomly sampled on July 26, 2014 and had tested positive for the presence of listeria.  A resulting FDA inspection of the Oasis processing facility revealed “numerous failures to comply with current Good Manufacturing Practice federal regulatory standards,” as well as several environmental swab samples taken from within the facility which tested positive for the presence of listeria.

At the close of the first inspection on August 22, 2014, Rivas agreed to do the following: (1) suspend manufacturing of new cheese products; (2) hire a consultant to inform the firm how to clean its facility; (3) stop distribution of finished food products in its inventory until a laboratory (retained by Oasis at its cost) could confirm that Oasis’ cheese products and its facility were negative for listeria; and (4) place all in-process product which was in the process of being manufactured or packaged and on the verge of distribution on hold until further discussions with FDA officials. 

            From October 7 through December 16, 2014, the FDA conducted a follow-up inspection at the Oasis facility and collected product samples of “Lacteos Santa Martha Cuajada en Hoja Fresh Curd,” then in storage at the facility, one of which later tested positive for listeria.

The court record indicates that subsequent to the first inspection and during the period September 24, 2014 through October 1, 2014, Rivas had, in violation of his agreement with the FDA, finished packaging multiple trays of cheese then held in-processing and had gone on to ship and distribute these items.  The cheese in question also consisted of numerous cases of individually packaged “Lacteos Santa Martha Cuajada en Hoja Fresh Curd.”  Rivas had initiated these shipments after he had learned from his testing laboratory, on September 24, 2014, that a sample of this same product had tested positive for the presence of listeria. 

During the course of the sentencing hearing, the Court was informed that the Centers for Disease Control (CDC) had determined through DNA testing that an identified number of individuals were physically harmed as a consequence of having consumed contaminated cheese from Oasis during the summer and fall of 2014. 

Mr. Ferrer commended the investigative efforts of the FDA-OCI.  This case was prosecuted by Assistant U.S. Attorney Peter Outerbridge.

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.

VRP Program Reaches 23 Schools in Miami-Dade and Over 12,000 Students Every Month

WHO:  U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer, City Year Miami Executive Director Keith “Fletch” Fletcher, and elementary students at Charles R. Drew K-8 Center for the Visual and Performing Arts.

WHAT:  To celebrate the National Education Association’s American Education Week, Director Fletcher and U.S. Attorney Ferrer will read to students as part of the Violence Reduction Partnership’s monthly readings to more than 1,200 pre-kindergarten and elementary school students in 23 schools across the Southern District of Florida. The joint effort brings books and the joy of reading into the lives of students in many of Miami’s highest-need schools, in order to combat the potential correlation between low literacy levels and poverty, crime and unemployment. Following each reading session, the children receive books to take home – often the only books they have ever owned. Since 2014, the program has distributed more than 11,000 books.

WHERE:  Charles R. Drew K-8 Center for the Visual and Performing Arts

1775 NW 60th St.

Miami, Fla. 33142

(Media, please meet in the front lobby of the school)

WHEN:  Tomorrow, Tuesday, November 15th

9:15 a.m. – 9:45 a.m.

About City Year: 

City Year is an education-focused organization, founded in 1988 dedicated to helping students and schools succeed. City Year partners with public schools in 26 urban, high-poverty communities across the U.S. and through international affiliates in the U.K. and Johannesburg, South Africa. Diverse teams of City Year AmeriCorps members provide high-impact student, classroom and school-wide support to help students stay in school and on track to graduate from high school and prepare for college and career success. A member of the AmeriCorps national service network, City Year is made possible by support from the Corporation for National and Community Service, school district partnerships, and private philanthropy from corporations, foundations and individuals. More information about City Year is available at  www.cityyear.org/miami.

To learn how you can partner with the VRP, please contact the United States Attorney’s Office Community Outreach Team at (305) 961-9134 or [email protected]. 

To partner with City Year Miami and sponsor a Miami-Dade County School, you can contact Keith “Fletch” Fletcher at (305) 778-5579 or [email protected].

Interviews are available after the event.  Photograph and video opportunities are available before, during and after the event.

Commentary by Wifredo Ferrer, Daily Business Review

November 7, 2016

Though it was a long time ago, I vividly remember the day I met the woman who would eventually become my boss, my colleague, my friend and my mentor.

As a high school student at Hialeah-Miami Lakes, Janet Reno came to our class to talk about community safety and the value of public service. At the time, Reno was the Miami-Dade state attorney. Despite the demands of her job, Reno always made it a priority to connect with our community's youth. Her accessibility and core belief in the principle of justice for all was as clear to me that day as it was when I had the honor to work closely with her when she was the attorney general of the United States.

Though she would ultimately return to the community she loved, Reno left Miami to begin her tenure as U.S. attorney general in 1993. In 1995 I was fortunate enough to begin working with her, serving as her counsel and deputy chief of staff. She was the ideal and consummate public servant who believed deeply in the mission of the Department of Justice. She was tough and believed that those who violate our nation's laws must be punished and deterred.

But her view of justice transcended the role of the nation's top prosecutor. Reno also firmly believed that all Americans should have true and meaningful access to the law, and she demanded that we always remember that those in need, especially children, deserve a voice. The country witnessed these traits over and over again during her tenure. Indeed, as a member of the president's Cabinet, much of what she did played out in the public eye.

But I was blessed to also work with Reno behind closed doors, out of the glaring lights that she became accustomed to as attorney general. It is hard to appreciate the number of decisions an attorney general must make on a daily basis. Some are small and some are large, but each one is important to someone.

And regardless of the magnitude of the issue before her, the players involved or the gravity of the decision with which she was faced, her approach was consistent – she was guided by the evidence and the law and called it as she saw it.

As a young lawyer navigating the halls of Justice, I saw Reno lead by her values and principles. She was guided by an unwavering sense of right and wrong, and that was a powerful thing to witness. She was firm and decisive but never arrogant. Reno was a good listener but never allowed herself to be swayed by popular opinion. Reno was never tempted to take the easy way out simply to avoid hard choices. Her character and integrity would not allow that.

In addition to witnessing her leadership and character as attorney general, I also had the great fortune to be touched by her warmth, humanity and sense of humor.

Many Americans fondly recall Reno dancing with Will Ferrell on "Saturday Night Live." She reminded us to always take our responsibilities seriously but never to take ourselves too seriously.

Reno cared deeply about the professional and personal lives of all of her colleagues and tried to know everyone's name and life story. Reno taught me and so many others what it means to be a leader.

When I had the privilege to be sworn in as U.S. attorney, Reno was there. Although she was in very poor health, it meant so much to have her by my side.

Though she has left us, in many ways she will always be by my side, and her life and work will continue to inspire us all.

Attorney General Loretta E. Lynch recognized 376 department employees for their distinguished public service today at the 64th Annual Attorney General’s Awards Ceremony.  Forty-seven other individuals outside of the department were also honored for their work.  This annual ceremony recognizes individuals for their outstanding service and dedication to carrying out the missions of the Department of Justice. 

Nineteen individuals from the Southern District of Florida are honored with an award.

“The honorees from the Southern District of Florida represent federal prosecutors and their law enforcement partners whose steadfast commitment to public service has had an international impact on the illicit narcotics trade and resulted in justice for defrauded investors,” stated U.S. Attorney Wifredo A. Ferrer. “These award recipients have made invaluable contributions to the mission of the Department of Justice and their respective agencies.  I am incredibly proud of their work and applaud their well-deserved recognition.”

“The Attorney General’s Awards provide us with a rare opportunity to honor the efforts of outstanding department employees and our invaluable partners across the federal government and at the state and local levels,” said Attorney General Lynch.  “Their work has made our nation – and our world – stronger, safer and more just, and I am proud of and inspired by each and every one of them.”

The following individuals from the Southern District of Florida were recognized for the following awards:

The Attorney General’s Award for Excellence in Law Enforcement recognizes outstanding professional achievements by law enforcement officers of the Department of Justice.  Two Awards for Excellence in Law Enforcement were presented this year.

One award recognized, from the U.S. Attorney’s Office of the Southern District of Florida, Assistant U.S. Attorney Marton Gyires; from the DEA’s Miami Field Office, Group Supervisor Jarod A. Forget, Special Agents John P. Garcia, Amber M. McKeone and Robert J. Roth and Intelligence Analyst Christine M. Galluccio; from the Fort Lauderdale Police Department, Detective Karin Alvarez; from the city of North Miami Beach Police Department, Sergeant William Beauparlant; from the Davie Police Department, Detective Lisa V. Choquette; from the Coconut Creek Police Department, Detective Angela L. Hofer; from the city of Coral Springs Police Department, Detective Chad L. Kuschel; and from the Miami-Dade Police Department, Detective Robert D. Love.

Operation Driving Dirty dismantled the Consolidated Priority Organization Target linked to transnational drug trafficking organizations, to include Los Urabeños, at an unprecedented rate.  The recipients worked extensively with foreign DEA offices and host country counterparts in China, Hong Kong, Guatemala, Venezuela, Chile, Colombia, Mexico, Spain, Panama, Canada and the Netherlands.  The international partnerships were unparalleled as Operation Driving Dirty led to significant worldwide seizures, arrests and prosecutions.  As a result of leads provided to the DEA Caracas Country Office, Venezuelan counterparts seized $7 million, deemed one of the largest currency seizures in that country’s history.  Additionally, while working with its partners at the U.S. Attorney’s Office, the team conducted a substantial financial investigation into the drug trafficking organization’s money laundering operations, which led to the civil forfeiture of numerous bank accounts.  This cooperative effort with the U.S. Attorney’s Office led to the arrest and prosecution of over 50 high-level defendants to include the regional priority organization target, Ronen Nahmani, who was identified as one of the largest synthetic marijuana distributors in the United States.  To this end, Operation Driving Dirty led to seizures totaling 6,349 kilograms of cocaine, 28 kilograms of heroin, 15 pounds of methamphetamine, 100 pounds of synthetic marijuana and precursor chemicals, 21 weapons and $30 million.

The Attorney General’s Award for Distinguished Service is the Justice Department’s second-highest award for employee performance.  The recipients of this award exemplify the highest commitment to the department’s mission.  Seventeen Distinguished Service Awards were presented this year to individuals or teams of people.

A Distinguished Service Award was presented to Assistant U.S. Attorneys Michelle B. Alvarez, Jeffrey N. Kaplan, Lawrence D. LaVecchio, Alison W. Lehr, Paul F. Schwartz, Evelyn B. Sheehan and Madeleine Shirley of the U.S. Attorney’s Office for the Southern District of Florida.

In October 2009, it was discovered that attorney Scott Rothstein was conducting one of the largest Ponzi schemes in American history through the operation of the Ft. Lauderdale, Florida, law firm of Rothstein Rosenfeldt & Adler P.A. (RRA).  The basis of the scheme was the sale of securities in which investors purchased the rights to a stream of payments from corporate entities which ostensibly had reached confidential settlements with purported plaintiffs in sexual harassment, employment discrimination and whistleblower cases.  Settlements were available for purchase in amounts ranging from hundreds of thousands to tens of millions of dollars.  During the operation of the scheme, hundreds of investors remitted more than $1.2 billion to RRA, which funds were utilized to pay previous investors in the scheme to finance a lavish lifestyle for the participants, and to make political and charitable contributions which enhanced the prestige and visibility of RRA, thereby enhancing RRA’s ability to attract new investors.  During the ensuing six years of litigation, 29 defendants, including attorneys and public officials, were convicted and sentenced on charges including racketeering, wire fraud, money laundering, income tax fraud, campaign finance violations, obstruction of justice, extortion and civil rights violations.  Additionally, through forfeiture proceedings instituted by the government, coupled with proceedings in bankruptcy court and other ancillary civil proceedings, more than $400 million in assets were ultimately recovered, resulting in full restitution to the defrauded investors.

Nine South Florida residents are charged with stealing more than $800,000 from the United States Department of Veterans Affairs.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Monty Stokes, Special Agent in Charge, United States Department of Veteran Affairs, Office of Inspector General, Criminal Investigations Division (VA OIG), made the announcement.

Mary Flynn, 67, of Miami; George Byrnes, 55, of Coral Springs; Marta Correa, 58, of Miami; Judy Jasiecki, 54, of Davie; Gregory Kramer, 64, of Fort Pierce; Leroy Weston, 58, of Pembroke Pines; Devorah Rosello, 52, of Miami; Beverly Anne Garcia, 62, of Lake Worth; and Peggy Karrh, 61, of Royal Palm Beach are each charged with theft of government funds, in violation of Title 18, United States Code, Section 641.  If convicted, the defendants each face a statutory maximum penalty of up to 10 years in prison.

According to allegations in the Indictments, Mary Flynn, George Byrnes, Marta Correa, Judy Jasiecki, Gregory Kramer, Leroy Weston, Devorah Rosello, Beverly Anne Garcia, and Peggy Karrh obtained and utilized, for their own unauthorized personal use, federal government benefit funds of deceased veterans or their beneficiaries.  All nine defendants failed to notify the U.S. Department of Veterans Affairs (VA) of the benefit recipients’ death; thereby, enabling continued payments for several years and in one case up to 14 years.  In total, the VA made over $800,000 in fraudulently induced payments to the defendants.

Mr. Ferrer commended the investigative efforts of the VA OIG, Criminal Investigations Division.  These cases are being prosecuted Assistant U.S. Attorneys Gera Peoples, Jonathan Stratton, Breezye Telfair, Rilwan Adeduntan, and Matthew Langley. 

The charges contained in the Indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.      

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

A Jupiter trust and estate attorney, who filed false personal income tax returns with the Internal Revenue Service (IRS), was ordered to pay $923,695 in restitution.

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.

Kathleen Kozinski, previously pled guilty to a criminal information charging her with two counts of filing a false tax return, in violation of Title 26, United States Code, Section 7206(1), for tax years 2008 and 2011.  United States District Judge Robin L. Rosenberg in West Palm Beach sentenced Kozinski to eight months’ incarceration, to be followed by a year of supervised release and ordered her to pay $923,695 in restitution to the IRS to reflect unpaid and underreported taxes due and owing for tax years 2007-2102. 

According to court documents, Kozinski was an attorney with a solo estate planning and probate practice, Kathleen G. Kozinski, PA, located in Jupiter, Florida. For tax years 2007 through 2012, Kozinski failed to report all of her income on her individual Form 1040 tax returns.

Specifically, Kozinski willfully failed to report all of the gross receipts from Kathleen G. Kozinski, PA on her Form 1120S, Income Tax Return for an S Corporation. Shareholders of S corporations are required to report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.  Kozinski underreported her income on her individual Form 1040 tax returns by not reporting all of the gross receipts from her law practice on her Form 1120S.

In addition to not including all of the gross receipts, Kozinski also falsely claimed “mortgage write-off” losses in the amount of $137,293.00 in tax year 2007, while she knew she had not provided an actual loan to another individual and was not entitled to this deduction. In tax year 2011, Kozinski claimed a loss of $113,745 on a “Schedule F Farm Loss” by falsely claiming that she paid labor expenses and insurance expenses, but the defendant did not operate a farming business and knew she was not entitled to these deductions. In 2012, Kozinski claimed a “Home Office” expense of $39,001, but the defendant knew that she was not entitled to claim this deduction because she did not have a home office.  

Mr. Ferrer commended the investigative efforts of IRS-CI. This case was prosecuted by Assistant U.S. Attorney Aurora Fagan.

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.