Southern District of Florida
Press releases recorded for this federal judicial district.
Defendant Sentenced for Providing Material Support to TerroristsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and the members of the South Florida Joint Terrorism Task Force (“JTTF”), announce today that Hafiz Muhammed Sher Ali Khan, 77, was sentenced to 25 years in prison by U.S. District Judge Robert N. Scola, Jr., for providing material support to terrorists, including the Pakistani Taliban. According to public records, defendant Hafiz Khan was the Imam at the Miami Masjid in Miami, Florida. The indictment did not allege that the masjid participated in the defendant’s scheme.
Khan was convicted by a jury on March 4, 2013, after two months of trial, on charges of conspiring to provide, and providing, material support to a conspiracy to murder, maim and kidnap persons overseas, 18 U.S.C. ? 2339A, and conspiring to provide material support to a foreign terrorist organization, specifically, the Pakistani Taliban, 18 U.S.C. ? 2339B.
U.S. Attorney Wifredo A. Ferrer stated, “The sentence today demonstrates that no matter who you are or what your motive may be, financing terrorism will not be tolerated by our criminal justice system, and will be punished severely. Today’s sentence sends a powerful message to anyone who thinks they have a reason to support terrorism: you cannot use the freedoms of this country to support terrorism. It will not be tolerated. You will be brought to justice.”
"Terrorists in Pakistan have lost a reliable source of funding and the man responsible for that funding, Hafiz Muhammed Sher Ali Khan, is now paying the price for his actions," said Xanthie Mangum, Assistant Special Agent in Charge of the FBI in Miami. "Terrorism remains the FBI's top priority."
The Pakistani Taliban, also known as Tehrik¬e Taliban Pakistan, Tehrik¬I¬Taliban, Tehrik-e-Taliban, and Tehreek¬e¬Taliban, is a Pakistan-based terrorist organization formed in or around December 2007 by an alliance of radical Islamist militants. On September 1, 2010, the United States Department of State formally designated the Pakistani Taliban as a Foreign Terrorist Organization, under Section 219 of the Immigration and Nationality Act.
According to the evidence at trial, Khan, with the help of persons in South Florida and Pakistan, sent money and other material support to Pakistani Taliban contacts and sympathizers overseas. The Pakistani Taliban?s objectives include resistance against the lawful Pakistani government, enforcement of strict Islamic law known as Sharia, and opposition to the United States and coalition armed forces fighting in neighboring Afghanistan. The Pakistani Taliban has committed numerous acts of violence in Pakistan and elsewhere, including suicide bombings which resulted in the death of civilians as well as Pakistani police, army, and government personnel, and also provided financing and training for the attempted bombing of New York City’s Times Square in May 2010.
According to the evidence at trial, Khan sought to aid the Pakistani Taliban?s fight against the Pakistani government and its perceived allies, including the United States, by supporting acts of murder, kidnapping, and maiming in Pakistan and elsewhere, in order to displace the lawful government of Pakistan and to establish Sharia. Khan transferred money from the United States to Pakistani Taliban supporters in Pakistan, primarily using bank accounts and wire transfer services in the United States and Pakistan. These funds were intended to purchase guns for the Pakistani Taliban, to sustain militants and their families, and generally to promote the Pakistani Taliban?s cause. Khan also solicited and collected money in the United States for that purpose, taking great care to conceal his activities. In one recorded conversation introduced as evidence at trial, Khan stated that money cannot be sent openly to the Pakistani Taliban, but must instead be sent covertly through its supporters. Khan also used a madrassa he founded in Pakistan (where he was born) to provide shelter and other support to Pakistani Taliban militants. In another recorded conversation introduced as evidence at trial, Khan claimed that children from his madrassa have gone to train to kill Americans in neighboring Afghanistan.
Mr. Ferrer commended the investigative efforts of the FBI, U.S. Customs and Border Protection, U.S. Department of State, Broward Sheriff’s Office, Miami-Dade Police, City of Miami Police, City of Miramar Police, City of Margate Police, and the Florida Department of Environmental Protection, and the members of the South Florida Joint Terrorism Task Force. The case is being prosecuted by Assistant U.S. Attorneys John Shipley, Sivashree Sundaram, and Michael Patrick Sullivan, from the U.S. Attorney’s Office for the Southern District of Florida, and Trial Attorney Bridget Behling from the Counterterrorism Section of the Justice Department’s National Security Division.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Customs Broker, Data Freight Corporation Pleads Guilty to Illegal Importing of Endangered WildlifeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Dave Pharo, Resident Agent in Charge, U.S. Fish and Wildlife Service, Office of Law Enforcement (OLE), announced today that Miami, Florida corporation Data Freight Corporation pled guilty today, pursuant to a plea agreement, to a single count Information, charging it with the illegal importation and possession of wildlife, in violation of the Lacey Act.
Sentencing for Data Freight Corporation (DATA) is scheduled for October 29, 2013, before United States District Judge K. Michael Moore.
According to Court documents and statements at the hearing, DATA permitted the importation and transportation into the United States of Siberian sturgeon (Acipenser baerii) without completing Declaration Form 3-177, declaring the importation of fish or wildlife, and obtaining a permit for the importation of the same pursuant to the Convention on International Trade in Endangered Species (“CITES”).
Information developed by U.S. Fish and Wildlife Service – OLE resulted in the charge against DATA in the Information. According to documents in the Court file, this case involved over four hundred and sixty-eight grams of caviar product.
The importation of said wildlife, such as caviar, is prohibited by the federal Lacey Act, 16 U.S.C. §§ 3372(a)(1), (a)(4), and 3373(d)(2). The Lacey Act, in pertinent part, makes it unlawful for a person to import and possess endangered species of wildlife which has been, or is intended to be, imported, sold, purchased, or received from any foreign country or transported in interstate or foreign commerce.
Mr. Ferrer commended the investigative efforts of U.S. Fish and Wildlife – OLE. This case is being prosecuted by Assistant U.S. Attorney Norman O. Hemming, III.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Texas-Based School Chain to Pay Government $3.7 Million for Submitting False Claims for Federal Student Financial AidRead the Press Release
Schools Located in Texas, Florida, New Mexico and Oklahoma
ATI Enterprises Inc. will pay the government $3.7 million to resolve False Claims Act allegations that it falsely certified compliance with federal student aid programs’ eligibility requirements and submitted claims for ineligible students, the Justice Department announced today.
“Federal financial aid is meant to help students obtain a quality education from an eligible institution, and the Department of Justice is committed to ensuring colleges comply with the rules to make certain that happens,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.
Allegedly, ATI Enterprises knowingly misrepresented to the Texas Workforce Commission and to the Accrediting Commission of Career Schools and Colleges its job placement statistics to maintain its state licensure and accreditation. To participate in federal student aid programs, as authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV), schools must enter into a contract with the Secretary of Education called a Program Participation Agreement, in which they agree to a number of terms. For example, if an institution advertises its job placement rates as a means of attracting students to enroll, it must make available to prospective students its most recent and accurate employment statistics to substantiate the truthfulness of its advertisements. The government alleged that, by misrepresenting its job placement statistics, ATI Enterprises fraudulently maintained its eligibility for federal financial aid under Title IV.
The government further alleged that ATI employees engaged in fraudulent practices to induce students to enroll and maintain their enrollment in the schools. This falsely increased the schools’ enrollment numbers, and consequently, the amount of federal dollars they received at the expense of taxpayers and students, who incurred long-term debt.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida said: “Federal financial aid is there to help students attain their dreams and goals, and misuse of these funds to increase corporate profits is unacceptable. We are committed to ensuring that federal student aid is used for the benefit of students.”
“Misuses of the federal student aid system must not be tolerated, for the sake of the taxpayers and of the innocent individuals who are seeking a quality education,” said Sarah R. Saldaña, U.S. Attorney for the Northern District of Texas, where some of the ATI campuses involved in the lawsuit are located.
The settlement amount will be paid from funds supporting three letters of credit that ATI provided to the Department of Education. In addition to the False Claims Act settlement, the Department of Education will disburse from the letter of credit funds $2 million for student loan refunds in relation to cases students filed against ATI in Texas state courts and other related arbitrations.
“Federal student aid exists so that students can make the dream of a higher education a reality. That’s why misuse in any way of these vital funds cannot be tolerated,” said Kathleen Tighe, Inspector General of the U.S. Department of Education. “I’m proud of the work of OIG special agents for holding ATI Enterprises accountable and for protecting the integrity of federal education dollars.”
The settlement resolves allegations made in two separate complaints against ATI Enterprises Inc., and related entities filed under the False Claims Act’s qui tam, or whistleblower, provisions, which permit a private individual to file suit for false claims to the government and to share in any recovery. The first complaint, U.S. ex rel. Aldridge, et al. v. ATI Enterprises Inc., et al., was filed in July 2009 in the U.S. District Court for the Northern District of Texas. The second complaint, U.S. ex rel. Ramirez-Damon v. ATI Enterprises Inc., was filed in July 2011 in the U.S. District Court for the Southern District of Florida.
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Texas, the U.S. Attorney’s Office for the Southern District of Florida, and the Department of Education’s Office of Inspector General and Office of General Counsel. The claims settled by this agreement are allegations only, and there has been no determination of liability.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Individual Charged with Brokering Uranium Deal Intended for Supply to IranRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), announce today that Patrick Campbell, 33, of Freetown, Sierra Leone, was arrested yesterday in Queens, NY as a result of an investigation conducted by the ICE-HSI. Campbell made his initial appearance earlier today in the Eastern District of New York.
According to the criminal complaint filed in the Southern District of Florida, Patrick Campbell was charged with brokering the supply of goods which the defendant knew were destined and intended for supply to Iran, in violation of the International Emergency Economic Powers Act (IEEPA) Title 50, United States Code, Section 1701, 1705 and the Iranian Transaction Regulations, 31 CFR 560.416, 560,204 and 560.203. If convicted, Campbell faces a possible statutory maximum sentence of up to 20 years in prison, followed by a term of three years of supervised release, and a possible $1,000,000 fine.
The criminal complaint alleges that on August 21, 2013, Campbell traveled to the United States from Sierra Leone and brought with him a sample of uranium, concealed in the soles of the shoes in his luggage, which he believed was to be provided to a representative of individuals seeking to obtain uranium for supply to Iran.
Mr. Ferrer commended the investigative efforts of ICE-HSI, the Port Authority of New York and the New Jersey Police Department. This case is being prosecuted by Assistant United States Attorney Michael Walleisa.
A criminal complaint is only an accusation and the defendant is presumed innocent until proven guilty.
Attachment:
Patrick Campbell Complaint (PDF)
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Florida Woman Sentenced for Role in Reverse Mortgage Fraud SchemeRead the Press Release
A Miami title agent and former mortgage broker was sentenced today for her role in a reverse mortgage loan fraud scheme.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, and Special Agent in Charge Lester Fernandez of the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG) made the announcement after sentencing by Senior Judge Richard W. Goldberg, sitting by designation in the Southern District of Florida.
Yesenia Pouparina, aka “Yesenia Campos,” 42, was sentenced today to 46 months in prison, followed by three years of supervised release, and was ordered to pay $207,810 in restitution. Pouparina was convicted in February 2013 of four counts of wire fraud and one count of mail fraud.
According to court documents and evidence presented at trial, Pouparina, a licensed title agent in the state of Florida, sought to obtain a reverse mortgage loan worth more than $400,000 on her own property in the name of her mother, an individual who failed to meet the requirements of the Home Equity Conversion Mortgage (HECM) program. She submitted a false loan application and doctored records in support of that application, misrepresenting her mother’s eligibility to participate in the program. Pouparina acted as the title agent for the loan and disbursed the loan proceeds directly to her own personal bank accounts. Pouparina also enriched herself by collecting fees generated by the loan, and further profited by using the loan proceeds in connection with her business as a hard-money lender in other mortgage deals.
Following Pouparina’s conviction on the fraud counts, the jury also found forfeitable three bank accounts controlled by the defendant, which were seized by the government during the course of the investigation.
Following Pouparina’s conviction on the fraud counts, the jury also found forfeitable three bank accounts controlled by the defendant, which were seized by the government during the course of the investigation.
This case was investigated by HUD-OIG. Trial Attorney Sandra L. Moser of the Criminal Division’s Fraud Section prosecuted the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Therapy Staffing Company Owner and Patient Recruiter Plead Guilty in $7 Million Health Care Fraud SchemeRead the Press Release
A patient recruiter and a therapy staffing company owner pleaded guilty today in connection with a $7 million health care fraud scheme involving the now defunct home health care company Anna Nursing Services Corp.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations’ Miami office made the announcement.
Ivan Alejo, 48, and Hugo Morales, 36, pleaded guilty before U.S. District Judge Jose E. Martinez in the Southern District of Florida to one count of conspiracy to commit health care fraud. At sentencing, scheduled for Nov. 5, 2013, Alejo and Morales each face a maximum penalty of 10 years in prison.
Alejo worked as a patient recruiter at Anna Nursing, a home health care agency in Miami Springs, Fla., that purported to provide home health and therapy services to Medicare beneficiaries but in reality billed Medicare for expensive physical therapy and home health care services that were not medically necessary and/or were not provided. Morales owned Professionals Therapy Staffing Services Inc., which provided therapists to Anna Nursing.
Alejo and his co-conspirators negotiated and paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health and therapy services that were medically unnecessary and/or not provided. He and others also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications, and other documentation. Alejo and his co-conspirators would use the prescriptions, medical certifications and other documentation to fraudulently bill the Medicare program for home health care services.
Morales and others created fictitious progress notes and other patient files indicating that therapists from Professionals Therapy had provided physical or occupational therapy services to particular Medicare beneficiaries, when in many instances those services had not been provided and/or were not medically necessary. Morales knew the falsified documents were used to support false claims for home health care services billed to Medicare by his co-conspirators at Anna Nursing.
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were not medically necessary and/or not provided.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
West Palm Beach Gang Associate Sentenced as Armed Career Criminal for Firearm PossessionRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and Ric L. Bradshaw, Sheriff, Palm Beach County Sheriff’s Office (PBSO), announce that Narces Benoit, 37, a documented gang associate from West Palm Beach, was sentenced by U.S. District Judge Robert N. Scola Jr. to 180 months (15 years) in prison, to be followed by two years of supervised release for being an armed career criminal in possession of a firearm.
On February 15, 2013, the Palm Beach County Sheriff’s Office Gang Unit and SWAT Team executed a residential search warrant in West Palm Beach, Florida. At the scene, agents discovered Benoit in possession of a loaded semi-automatic pistol, cocaine, methamphetamine and a bag containing individually packaged baggies of marijuana.
A federal grand jury indicted Benoit on March 21, 2013, charging him with being a felon in possession of a firearm and ammunition. In May 2013, Benoit pleaded guilty to being a felon in possession of a firearm in violation of federal gun laws
Benoit was sentenced under the Armed Career Criminal Act, which provides a sentencing range of fifteen years to life for individuals who have been convicted of federal gun crimes and have at least three prior felony convictions for crimes of violence and/or serious drug offenses.
Mr. Ferrer commended the investigative efforts of ATF and PBSO. This case was prosecuted by Assistant U.S. Attorney John McMillan.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Ft. Lauderdale Executive Sentenced to 15 Years for Money Laundering and Obstruction of Justice in Connection with Mutual Benefits Corporation FraudRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that on August 16, 2013, U.S. District Judge Kathleen M. Williams sentenced defendant Steven Steiner, a/k/a “Steven Steinger,” 61, to 15 years in prison (180 months) in connection with money laundering and obstruction of justice related to the use and concealment of more than $15 million dollars in proceeds derived from the Mutual Benefits Corporation (MBC) fraud.
Previously, on February 28, 2013, a federal jury in Miami convicted Steiner on 19 of 54 counts, including conspiracy to commit money laundering offenses, money laundering, conspiracy to commit offenses against the United States, and various obstruction of justice offenses. Steiner also was ordered to serve three-years supervised release upon the expiration of his prison sentence relating to Steiner’s participation in a scheme to launder and conceal proceeds from the MBC fraud, and Steiner’s obstruction of United States Securities and Exchange Commission (SEC), the court-appointed receiver for MBC, and the United States District Court, in their efforts to secure and recover assets traceable to the fraud. The jury acquitted Steiner’s co-defendant Henry Fecker, III, on all charges.
At trial the United States presented evidence that from approximately 1994 to May 2004, MBC purchased life insurance policies from persons suffering from AIDS, chronically ill, and elderly persons. Having purchased the life insurance policies, MBC sold fractionalized interests in the death benefits, known as “viatical settlements,” to approximately 30,000 investors. In promotional materials, MBC told investors that its viatical settlements offered a fixed rate of return with low risk, and that investors’ principal and returns were paid by the insurance companies. Evidence at trial established that MBC misrepresented various material facts relating to its viatical settlements, including: the estimated life expectancies of the insured persons, MBC’s title to certain life insurance policies, the risks associated with certain policies, the payment of premiums, and the source of funds used to pay investors. Witnesses testified that new investor money was used to pay premiums on life insurance policies purchased by earlier investors and to pay investors who requested their money back. The evidence established that as the fraud continued, investor money was required to prevent the MBC Ponzi-scheme from collapsing. Ultimately, investors lost more than $750 million.
Steiner was a founder, principal, and Vice President of MBC, and he received more than $15 million in proceeds from the MBC fraud through two shell corporations that he controlled: Camden Consulting, Inc., and SKS Consulting, Inc.
In May 2004, the SEC filed a civil enforcement action in the United States District Court for the Southern District of Florida, SEC v. Mutual Benefits Corp., et al., Case No. 04-60573-CIV-MORENO (the “SEC Fraud Action”), against MBC and various “relief defendants,” including Steiner’s shell corporations. On May 4, 2004, United States District Judge Federico A. Moreno entered an order appointing Coral Gables attorney Roberto Martinez as the receiver for MBC, with the mandate to identify, secure, trace, and recover the assets of MBC.
As the jury found, following the closure of MBC and the appointment of the MBC receiver, Steiner engaged in money laundering transactions designed to conceal the source, location, ownership, and control of his proceeds from the MBC fraud. At the same time, Steiner acted to obstruct the SEC, the MBC receiver, and the United States District Court.
Evidence at trial disclosed that in 2006 and early 2007, Steiner submitted false and misleading financial disclosure documents to the SEC to persuade the SEC to agree to a favorable settlement of the SEC claims against him and his shell corporations Camden Consulting and SKS Consulting, in the SEC Fraud Action. Based upon Steiner’s fraudulent financial disclosure, the SEC agreed to a reduced penalty of $3.9 million, and on April 10, 2007, the District Court entered a Final Judgment in the SEC Fraud Action ordering Steiner, SKS and Camden to pay $3.9 million to the court-appointed receiver for MBC. Evidence at trial established that Steiner acted to thwart the MBC receiver’s efforts to trace and recover MBC assets and recover on the final judgment. Among other things, Steiner repeatedly lied under oath during depositions and physically concealed documents, including checks representing proceeds from the MBC fraud.
Steiner is currently awaiting trial in two related cases in the Southern District of Florida. In United States v. Joel Steinger, et al., Case No. 08-21158-CR-Scola, Steiner and co-defendants Joel Steinger and Anthony Livoti are charged with conspiracy to commit mail and wire fraud and money laundering, in relation to the MBC fraud scheme. In United States v. Joel Steinger et al., Case No. 12-20123-CR-Rosenbaum, Steiner, Joel Steinger, and Henry Fecker III are charged with engaging in a multi-million dollar scheme to defraud insurance companies.
Mr. Ferrer commended the investigative efforts of the FBI and IRS-CI. This case was prosecuted by Assistant United States Attorneys Jerrob Duffy and Dwayne E. Williams.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Individual Arrested in Florida in Connection with A Lottery Scam in JamaicaRead the Press Release
A Jamaican citizen charged in connection with the operation of a fraudulent lottery was arrested Tuesday in Orlando, Fla., following his indictment by a federal grand jury in Fort Lauderdale, Fla., on Aug. 9, 2012, the Justice Department, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement's Homeland Security Investigations and U.S. Marshals Service announced today. Oneike Mickhale Barnett was arrested based on charges that he and his co-conspirators ran a lottery scam in Jamaica that fraudulently induced elderly victims in the United States to send them thousands of dollars to cover fees for lottery winnings that victims had not in fact won. The indictment unsealed with Barnett's arrest forms part of the government's crackdown on fraudulent lottery scams based in Jamaica.
Beginning in October 2008, Barnett and his co-conspirators are alleged to have contacted victims in the U.S., announced that the victims had won cash and prizes and persuaded the victims to send them thousands of dollars in fees to release the money. The victims never received cash or prizes. The defendant and his co-conspirators allegedly made calls from Jamaica using Voice Over Internet Protocol technology that allowed them to use a telephone number with a U.S. area code. According to the indictment, Barnett convinced victims to send money to middlemen in South Florida, who forwarded the money to Jamaica.
“The alleged lottery scheme in this case is most vile because it targeted the elderly, one of the most vulnerable members in our society,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida. “While the scam was based in Jamaica, it targeted victims in the United States, including South Florida. We will continue to pursue and prosecute those responsible for these illegal schemes in an effort to bring those responsible to justice and protect those in our society.”
“Lottery scams that target older Americans, such as the one alleged here, are the most pernicious kind of fraud - often swindling seniors out of their life savings,” said Stuart F. Delery, Assistant Attorney General for the Justice Department's Civil Division. “The Justice Department will continue to combat these schemes and bring those responsible to justice.”
Barnett was charged with conspiracy and 37 counts of wire fraud, and with committing these offenses via telemarketing. If convicted, he faces a statutory maximum sentence of 30 years per count, a possible fine and mandatory restitution.
“This arrest highlights the joint effort between U.S. and Jamaican law enforcement to prosecute those who prey on our nation's senior citizens,” said U.S. Postal Inspector in Charge for the Miami Division Ronald Verrochio. “The mission of the Postal Inspection Service is to protect consumers by ensuring the nation's mail system is not used as a tool for fraud.”
Special Agent in Charge for Homeland Security Investigations in Miami Alysa D. Erichs added, “These individuals are preying on some of the most vulnerable members in our communities. We will continue to work with our partners in Jamaica and other law enforcement agencies to put these criminal enterprises out of business.”
Acting U.S. Marshal Neil DeSousa said, “The U.S. Marshals Service in the Southern District of Florida, along with the Jamaica Foreign Field Office and the Organized Crime Drug Enforcement Task Force, remain committed to locating and apprehending criminals who defraud elderly Americans. We will continue to work with the U.S. Postal Inspection Service and Department of Homeland Security on the JOLT task force in the ongoing effort to combat lottery fraud targeting some of our most vulnerable citizens.”
U.S. Attorney Ferrer and Assistant Attorney General Delery both commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations, the U.S. Marshals Service and Jamaica's Major Organized Crime and Anti-Corruption Task Force. The case is being prosecuted by Assistant U.S. Attorney Bertha Mitrani and Consumer Protection Branch, Civil Division attorneys Jeffrey Steger and Kathryn Drenning.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Five Defendants Charged on Securities Fraud Related ViolationsRead the Press Release
153 Defendants Have Been Charged to Date as Part of the Southern District of Florida Securities and Investment Fraud Initiative
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Paula Reid, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, Ronald Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Eric I. Bustillo, Regional Director, Securities and Exchange Commission (SEC), Jon T. Rymer, Inspector General, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), David Meister, Director, Division of Enforcement for the U.S. Commodity Futures Trading Commission (CFTC), Cindy Liebes, Director, Federal Trade Commission, Southeast Region (FTC), and Drew J. Breakspear, Commissioner, State of Florida’s Office of Financial Regulation, announce the most recent charges filed in connection with the Southern District of Florida Securities and Investment Fraud Initiative (the Initiative). The Initiative was first announced in December 2010 and designed to combat securities fraud and protect the interests of the investing public.
The Initiative was established to address an increase in investment and securities fraud schemes in the Southern District of Florida. Participating agencies include the U.S. Attorney’s Office, FBI, IRS, USSS, U.S. Postal Inspection Service, SEC, CFTC, FTC, FDIC, and the Florida Office of Financial Regulation. These law enforcement and regulatory agencies have shared intelligence and combined their resources to combat securities and investment fraud, including Ponzi schemes, affinity fraud schemes, prime bank/high-yield investment scams, business opportunity fraud, promoter/micro-cap/“pump and dump” schemes, foreign exchange (FOREX) frauds, false bankruptcy petitions, and other schemes to defraud individual investors. Among the goals of the Initiative is to alert the public about the prevalence of these types of schemes, educate the public on how to avoid falling prey to these schemes, and to highlight the law enforcement response to the problem.
The Southern District of Florida ranks number one in the nation in charging securities and investment fraud defendants and only second in the number of cases charged. Using the strike force model successfully developed in the health care and mortgage fraud areas, the Initiative has yielded similar success. Since its inception in December 2010, the Initiative has resulted in charges against 153 defendants in the Southern District of Florida, resulting in more than $ 1,777,025,689 billion in restitution ordered.
U.S. Attorney Wifredo A. Ferrer stated, “Fraud in the microcap markets is of increasing concern to our community as these markets have proven to be fertile grounds for fraud and abuse. Fraudsters know that these microcap stocks are difficult for the average investor and regulator to monitor. The defendants charged today abused their knowledge of the capital markets hoping to misappropriate money held in pension fund and brokerage accounts to enrich themselves and their co-conspirators.”
“The FBI will continue to target individuals who attempt to undermine the integrity of the securities industry by defrauding innocent investors,” said William J. Maddalena, Assistant Special Agent in Charge, FBI Miami Division. “If you are an individual investor, exercise due diligence before you invest your first dime. Ask yourself: Does it seem too good to be true? If the answer is ‘Yes,” then it probably is!”
IRS Acting Special Agent in Charge Michael De Palma stated, “IRS Criminal Investigation will continue to lend financial expertise to this joint venture to unravel schemes in complex financial crimes. Together with our law enforcement partners, we will use every tool at our disposal to pursue, investigate and bring swindlers to justice.”
Secret Service Special Agent in Charge Paula Reid stated, “This is a great example of how the law enforcement community in the Southern District of Florida continues to identify and penalize those insiders who misuse an honest system for selfish, personal gains. Unfortunately, these types of criminals chose to compromise the integrity of their trade and manipulate the law, policies, and procedures with no regard to trusting investors.”
“These criminals go to great lengths to mask their criminal schemes,” said Postal Inspector in Charge Ronald Verrochio. “We will continue to work with our law enforcement partners to uncover these schemes in an effort to prevent future victimization.”
“Interested only in lining their own pockets, the company officers and promoters charged today used underhanded tactics to cheat investors and manipulate penny stocks,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “Their utter disregard for investors underscores the importance of stamping out microcap fraud.”
Today, we are announcing charges against five individuals in the following four cases:
United States v. Jack Freedman, Case No. 13-60204-CR-Hurley
Jack Freedman, 58, of Fort Lauderdale, was charged by an Information alleging that he conspired to commit securities fraud. Freedman was a promoter for Green Planet Group, Inc., (GNPG) a publicly traded company whose stock was registered with the Securities and Exchange Commission. The defendant is charged with engaging in a scheme to manipulate the publicly quoted share price and trading volume of GNPG common stock. The case is being prosecuted by Assistant U.S. Attorney H. Ron Davidson.
United States v. Richard Greene and Peter Santamaria, Case No. 13-60203-CR-Marra
Richard Greene, 57, and Peter Santamaria, 57, both of Broward County, were charged by an Information alleging that the two conspired to commit securities fraud. The defendants are charged with engaging in a scheme to manipulate the publicly quoted share price and trading volume of VDO-PH International (VDPH) common stock. VDPH was a Nevada corporation that purported to engage in developing software for business telephone applications. The case is being prosecuted by Assistant U.S. Attorney H. Ron Davidson.
United States v. Mark Balbirer, Case No. 13-20605-CR-Cooke
Mark Balbirer, 49, of Coral Springs, was charged by an Information today charging him with conspiracy to commit mail fraud. Balbirer, a promoter for the South Florida Film Fund (SFFF), located in Broward County, Florida, is alleged to have engaged in a scheme to send illegal kick-back payments to hedge fund fiduciaries in exchange for their investments in SFFF. The case is being prosecuted by Assistant U.S. Attorney Michael Sherwin.
United States v. Sheldon Simon, Case No. 13-60202-CR-Marra
Sheldon Simon, 58, of Palm Beach County, Florida, was charged by an Information alleging that he committed wire fraud involving the artificial inflation of the securities market. Simon was a stock promoter for Ecoemissions Solutions, Inc. (ECMZ), a publicly traded company whose stock was registered with the Securities and Exchange Commission. Simon is charged with engaging in a scheme to manipulate the publicly quoted share price and trading volume of ECMZ common stock. Beginning in February 2011, Simon provided another person with advance ECMZ press releases which, once released, were designed and issued to give the investing public the false impression that the fraudulent purchases of ECMZ stock were induced by positive news about the company and to conceal the defendant’s scheme from the regulatory authorities. The case is being prosecuted by Assistant U.S. Attorney Roger Cruz.
The following defendants recently pled guilty:
United States v. Jeffrey L. Schultz, Case No. 13-60075-CR-Rosenbaum
Jeffrey L. Schultz, 62, of Ft. Lauderdale, FL, was charged by an Information on April 9, 2013. Schultz was the President and Chief Executive Officer of Redfin Network, Inc.(RFNN), a Nevada corporation whose common stock was traded in the Pink Sheets over-the-counter securities market. He was charged with securities fraud for engaging in the manipulation of RFNN’s stock price by providing improper payments to others. After entering a guilty plea in June, he is scheduled to be sentenced on August 26, 2013. The case is being prosecuted by Assistant U.S. Attorney Michael Sherwin.
United States v. Stephen F. Molinari, Case No. 13-60105-CR-Rosenbaum
Stephen F. Molinari, 49, was charged by an Information on May 1, 2013. Molinari was a previously registered securities broker who was also the chairman, chief executive officer and controlling shareholder of a mail order prescription drug business. He was charged with mail fraud in connection with his company. After entering a guilty plea in June, he is scheduled to be sentenced on August 26, 2013. The case is being prosecuted by Assistant U.S. Attorney Harold Schimkat.
The following defendants were recently sentenced:
United States v. Thomas Gaffney, Case No. 12-60224-CR- Dimitrouleas
Thomas Gaffney, 47, of Satellite Beach, FL, was charged by an Information on September 21, 2012. Gaffney was the President and Chief Executive Officer of Health Sciences Group, Inc. (HESG), a Delaware corporation whose common stock was traded in the Pink Sheets. He was charged with mail fraud associated with his company. After entering a guilty plea earlier this year, on August 8, 2013, he was sentenced to time served, followed by three years of supervised release with a special condition of eight months of home confinement. The case is being prosecuted by Assistant U.S. Attorney H. Ron Davidson.
United States v. Scott Haire and Douglas P. Martin, Case No. 12-60133-CR-Williams(s)
Scott Haire, 48, of Coral Springs, FL, and Douglas P. Martin, 47, of Loxahatchee, FL, were charged by a Superseding Indictment on September 20, 2012. Haire was President of Wound Management Technologies, Inc. (WDMN) a Texas corporation whose common stock was traded on the Pink Sheets. Haire was also the Chief Financial Officer of VHGI Holdings, Inc. (VHGI), a Delaware corporation purportedly a diversified holding company which was also traded on the Pink Sheets, that identified and acquired business assets. Douglas P. Martin was the Chief Executive Officer of VHGI. Haire and Martin were both charged with conspiracy to commit securities fraud involving VHGI, and Haire was charged with mail fraud and securities fraud in connection with a kickback scheme involving WDMN. Both plead guilty earlier this year. On May 14, 2013, Martin was sentenced to 12 months’ probation. On August 1, 2013, Haire was sentenced to 30 months in prison, followed by three years of supervised release. The case is being prosecuted by Assistant U.S. Attorneys H. Ron Davidson and Jodi Anton.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, USSS, USPIS, SEC, Federal Deposit Insurance Corporation, Office of Inspector General, U.S. Commodity Futures Trading Commission, Division of Enforcement, Federal Trade Commission, and the State of Florida’s Office of Financial Regulation.
An Indictment or Information is merely an accusation and defendants are presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Ninth Individual Sentenced in Connection with Costa Rica-Based Business Opportunity Ventures That Defrauded AmericansRead the Press Release
Michael Kerry Deevy, a Canadian citizen, was sentenced today in connection with a series of business opportunity fraud ventures based in Costa Rica, the Justice Department and the U.S. Postal Inspection Service announced. Beginning in 2006, Deevy and his co-conspirators in Costa Rica are alleged to have fraudulently induced purchasers in the U.S. to buy business opportunities from companies known as Cards-R-Us Inc., Premier Cards Inc. and Nation West. The business opportunities cost purchasers thousands of dollars each, with most paying at least $10,000. Today’s sentencing forms part of the government’s continued nationwide crackdown on business opportunity fraud.
“Business opportunity schemes target believers in a system that rewards those who are willing to sacrifice and work hard in the hope of getting ahead,” said U.S. Attorney for the Southern District of Florida Wifredo Ferrer. “In this particular case, the business opportunity fraud ventures were based in Costa Rica and targeted purchasers in the United States, including South Florida. Today’s sentence will hopefully send a message to those who are contemplating engaging in schemes such as this that, no matter where you are, we will pursue and prosecute you and bring you to justice for these illegal schemes.”
“Business opportunity fraud schemes such as this one can crush the dreams – and wipe out the savings – of Americans who simply want to operate their own small businesses,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “The Department of Justice will continue to prosecute those who engage in these schemes, whether they set up shop here or abroad.”
Deevy was sentenced by U.S. District Court Judge Patricia A. Seitz in Miami to 60 months in prison and 5 years’ supervised release. Deevy also was ordered to pay $4,541,914 in restitution. Prior to Deevy’s sentencing today, 11 other individuals were charged in connection with related business opportunity fraud ventures based in Costa Rica. Deevy is the ninth of those individuals to be convicted and sentenced in the U.S.
On April 11, Deevy pleaded guilty to one count of conspiracy, three counts of mail fraud and nine counts of wire fraud in connection with the business opportunity scheme. Deevy was arrested in Costa Rica in 2011 and extradited to the U.S. in 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011. The indictment alleged that Deevy and his co-conspirators purported to sell greeting card and vending machine business opportunities, including assistance in establishing, maintaining and operating these businesses. Each company operated for several months, and after one company closed, another one opened.
Co-conspirators at the companies made numerous false statements to potential purchasers of the business opportunities. They indicated that purchasers likely would earn substantial profits; prior purchasers of the business opportunities were earning substantial profits; purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards and beverages; and that the companies worked with third party “locators” familiar with the potential purchasers’ areas who would secure, or had already secured, high-traffic locations for the prospective buyers’ merchandise display racks or machines.
In addition to these “locators,” the companies also employed various other types of sales representatives, including fronters, references and closers. Fronters spoke to prospective purchasers when they initially contacted the company in response to an advertisement. References told potential buyers that they had purchased one of the business opportunities and were making a profit. Closers subsequently spoke to potential purchasers to finalize deals. In pleading guilty, Deevy admitted that he was a fronter and reference for Cards-R-Us Inc., Premier Cards Inc. and Nation West.
“This investigation shows the resolve of the U.S. Postal Inspection Service to protect the American public from predatory business opportunity frauds,” said Ronald Verrochio, U.S. Postal Inspector in Charge, Miami Division. “We will continue to work with our law enforcement partners in the United States and overseas to root out these schemes.”
Assistant Attorney General Delery commended the investigative efforts of the U.S. Postal Inspection Service. The case was prosecuted by Assistant Director Jeffrey Steger and Trial Attorney Alan Phelps with the Consumer Protection Branch of the U.S. Department of Justice’s Civil Division.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Health Care Clinic Owners Plead Guilty in Miami for Roles in $8 Million Health Care Fraud SchemeRead the Press Release
Two health care clinic owners pleaded guilty today in connection with an $8 million health care fraud scheme involving the now-defunct home health care company Flores Home Health Care Inc.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Special Agent in Charge Michael B. Steinbach of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the Miami office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations made the announcement.
Miguel Jimenez, 43, and Marina Sanchez Pajon, 29, of Miami, pleaded guilty before U.S. District Judge Ursula Ungaro in the Southern District of Florida, each to one count of conspiracy to commit health care fraud. At sentencing, scheduled for Oct. 30, 2013, Jimenez and Pajon each face a maximum penalty of 10 years in prison.
Jimenez and Pajon, who are married, were owners and operators of Flores Home Health, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.
According to court documents, Jimenez and Pajon operated Flores Home Health for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided. Jimenez’s primary role at Flores Home Health involved controlling the company and running and overseeing the schemes conducted through Flores Home Health. Both Jimenez and Pajon were responsible for negotiating and paying kickbacks and bribes, interacting with patient recruiters, and coordinating and overseeing the submission of fraudulent claims submitted to the Medicare program.
Jimenez, Pajon and their co-conspirators paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Flores Home Health for home health and therapy services that were medically unnecessary and/or not provided. They also paid kickbacks and bribes to co-conspirators in doctors’ offices and clinics in exchange for home health and therapy prescriptions, medical certifications, and other documentation. Jimenez, Pajon, and their co-conspirators used the prescriptions, medical certifications, and other documentation to fraudulently bill Medicare for home health care services that Jimenez and Pajon knew were in violation of federal criminal laws.
From approximately October 2009 through approximately June 2012, Flores Home Health was paid approximately $8 million by Medicare for fraudulent claims for home health services that were not medically necessary and/or not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case was prosecuted by Trial Attorney A. Brendan Stewart of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former CEO of Miami Lakes Tax Preparation Business Charged in Structuring SchemeRead the Press Release
Wifredo A Ferrer, United States Attorney for the Southern District of Florida, and Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announce that defendant Carlos Rodriguez, 40, of Miami Lakes, was charged in a 19 count indictment with structuring financial transactions with the intent to evade currency reporting requirements, in violation of Title 31, United States Code, Sections 5324(a)(3) and 5324(d)(2). The indictment also seeks the forfeiture of $558,516.80, the amount of currency involved in the structuring violations, pursuant to Title 31, United States Code, 5317(c)(1). Defendant Rodriguez had his initial appearance today before U.S. Magistrate Judge John O’Sullivan.
According to the indictment, financial institutions are required to report cash transactions in amounts over $10,000.00 to the IRS. The indictment alleges that between January 4, 2012 and March 22, 2012, Rodriguez intentionally cashed fifty-six checks from his business account in amounts just under $10,000.00 at a financial institution in order to evade the cash reporting requirements. As further alleged in the indictment, the total amount of money involved in the structuring violations was $558,516.80. If convicted, the defendant faces up to 10 years in prison for each count.
According to statements made in court, Rodriguez was Chief Executive Officer of Rodri Rodri & Associates, Inc., a tax preparation business, during the time of the alleged structuring violations and currently is the Chief Financial Officer of Ayudame Financial Services, Inc.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Elijah A. Levitt.
An indictment is only an accusation and the defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Four More Defendants Plead Guilty in Staged Automobile Accident SchemeRead the Press Release
92 defendants have been charged to date in Operation Sledgehammer I-VI
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, and Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, announced that defendants Dr. Aaron Freedlander, 50, of Weston, a chiropractic doctor, Abner Llenderrozo, 30, of Hollywood, a licensed massage therapist, Daviel Castro Martinez, 26, of West Palm Beach, and Elias Munguia, 41, of Miami, pled guilty this week for their participation in a staged automobile accident scheme and fraudulent chiropractic clinic scheme that resulted in the theft of millions of dollars from Florida’s automobile insurance companies and Florida drivers.
The sentencings for all four defendants will occur at a later date to be set by U.S. District Judge Kenneth A. Marra in West Palm Beach.
Each of the defendants pled guilty to one count of conspiring to commit mail fraud, in violation of Title 18, United States Code, Section 1341, all in violation of Title 18, United States Code, Section 1349, and a number of counts of mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2. Some of the defendants also pled guilty to conspiring to commit money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1), all in violation of Title 18, United States Code, Section 1956(h); and money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), and 2.
For each count of conspiracy to commit mail fraud, substantive mail fraud, conspiracy to commit money laundering, and substantive money laundering the defendants face a possible maximum statutory sentence of 20 years in prison. Restitution to the victims of the offenses is mandatory, and the four defendants have agreed that they must pay in excess of $2,000,000 of restitution, beginning with partial payments totaling $33,750 at the time of sentencing.
According to court documents, between approximately October 2006 and December 2012, members of the conspiracy staged automobile accidents and thereafter caused the submission of false insurance claims through chiropractic clinics they controlled. To execute the scheme, the true owners of the chiropractic clinics, including defendant Munguia, recruited individuals, who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics. Members of the conspiracy, including defendant Castro Martinez, also served as recruiters, who found individuals, whom they referred to as “Perro” and “Perra,” to participate in the staged accidents. Members of the conspiracy, including defendant Castro Martinez, also were used to help the clinics launder the insurance proceeds. The defendants also hired complicit chiropractors and therapists, including defendants Freedlander and Llenderrozo, who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Thereafter, complicit clinic employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services. Twenty-one clinics participated in this scheme.
Starting with Operation Sledgehammer I in June 2011 and including the defendants charged in Operation Sledgehammer VI, 92 defendants have been charged for their participation in this automobile insurance fraud scheme. Of those 92 defendants, 56 have been charged federally by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $5 million to the defrauded insurance companies. Thirty-six defendants have been arrested by the Florida Department of Insurance Fraud for prosecution by the Palm Beach County State Attorney’s Office.
Mr. Ferrer commended the efforts of the FBI, IRS-CI, the Florida Department of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force for their outstanding work in this case. Mr. Ferrer also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance in this investigation. The federal cases are being prosecuted by Assistant U.S. Attorney A. Marie Villafaña and the state cases are being prosecuted by the Palm Beach County State Attorney’s Office.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Individuals Charged with Material Support Offenses Involving Al-Qa’ida, Al-Qa’ida in Iraq/Al-Nusrah Front, and Al-ShabaabRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John P. Carlin, Acting Assistant Attorney General for National Security, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and the members of the South Florida Joint Terrorism Task Force (JTTF), announce that today two individuals, one a United States citizen, made their initial appearance in federal court in Miami on an indictment returned in the Southern District of Florida.
The fifteen-count indictment charges Gufran Ahmed Kauser Mohammed, 30, a naturalized United States citizen and resident of Dammam, Saudi Arabia, and Mohamed Hussein Said, 25, a Kenyan national and resident of Nairobi and Mombasa, with conspiring to provide, and attempting to provide, material support to three separately designated Foreign Terrorist Organizations, al-Qa’ida, al-Qa’ida in Iraq/al-Nusrah Front (“AQI/al-Nusrah Front”), and al-Shabaab. If convicted, each defendant faces a possible statutory maximum sentence of up to 15 years in prison for each count of the Indictment.
The indictment alleges that Mohammed and Said conspired to provide money and recruits to al-Qa’ida, AQI/al-Nusrah Front in Syria and al-Shabaab in Somalia. The charges allege that Mohammed sent a series of wire transfers to Said for the purpose of supporting al-Shabaab, and to an individual whom he believed was a fundraiser, recruiter, and supplier for al-Qa’ida and AQI/al-Nusrah Front for the purpose of supporting al-Qa’ida and AQI/al-Nusrah Front. In addition, Mohammed and Said agreed to support al-Qa’ida and AQI/al-Nusrah Front by recruiting and moving experienced al-Shabaab fighters to the conflict in Syria.
Mr. Ferrer commended the investigative efforts of the FBI, U.S. Customs and Border Protection, Miami-Dade Police Department, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the South Florida Joint Terrorism Task Force. The case is being prosecuted by Assistant U.S. Attorneys Brian Frazier and Ricardo Del Toro and Trial Attorney Jolie Zimmerman from the Counterterrorism Section of the Justice Department’s National Security Division.
An indictment is only an accusation and a defendant is presumed innocent until and unless proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Ten Overtown Defendants Indicted on Drug Conspiracy and Distribution ChargesRead the Press Release
Indictment Stems from USAO’s Overtown Violence Reduction Partnership
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark R. Trouville, Special Agent in Charge, Drug Administration Enforcement (DEA), Miami Field Division, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Miami Field Office, Manuel Orosa, Chief, City of Miami Police Department, John E. Brooks, Chief, City of Sunrise Police Department, and announce the indictment of ten individuals for their alleged participation in various heroin, cocaine, crack cocaine, and marijuana distribution conspiracies. Some of the defendants are expected to make their initial appearances today at 1:30 p.m. in front of U.S. Magistrate Andrea M. Simonton.
This indictment is, in large part, the result of the Overtown Violence Reduction Partnership, launched by the U.S. Attorney’s Office in October 2011. Through this Partnership, the U.S. Attorney’s Office and its federal and local law enforcement allies have sought to dismantle the most violent criminal networks in the Overtown neighborhood, while simultaneously working with community leaders and concerned citizens to mentor at-risk youths, provide jobs and job training to young families, and help probationers and parolees successfully re-enter society.
The 21-count indictment, returned on August 6, 2013, and unsealed today, charges the defendants with conspiracy to possess controlled substances with the intent to distribute, in violation of Title 21, United States Code, Section 846 (Counts 1, 17, 18, and 19); and possession of controlled substances with the intent to distribute, in violation of Title 21, United States Code, Section 841(a)(1) (Counts 2-16, 20, and 21). The indictment charges the following ten individuals:
Mark Brown, 29, of Overtown;
Anthony Donnell Mcclain, 29, of Overtown;
Omar Abdul Lewis, 39, of Overtown;
Oliver Salguero, 24, of Overtown;
Gregory Timothy Robinson, 27, of Overtown;
Eldridge Raynard White, Jr., 23, of Overtown;
Edward Keith Mcclain, 23, of Overtown;
Javon Jones, 29, of Overtown;
John Jones, Jr., 22, of Overtown;
Marcus Marcell Brown, 23, of Overtown.U.S. Attorney Wifredo A. Ferrer stated, “Today, for the second time in the last eight months, we announce the results of the Overtown Violence Reduction Partnership, which has yet again brought together federal, state, and local law enforcement to combat violent crime in the historic Overtown neighborhood. This indictment effectively removed from Overtown’s streets violent and notorious drug traffickers that had been entrenched in that area. Federal law provides stiff penalties for narcotics traffickers and career offenders. Through the Overtown Violence Reduction Partnership, we stand committed to reducing street violence and narcotics trafficking, with the goal of helping to make our communities safer.”
DEA Special Agent in Charge Mark R. Trouville stated, “Whether you live in the suburbs or the inner city, residents should be able to walk the streets and go about their lives without fear or exposure to drugs and violence. These indictments stand as a warning to those individuals whose greed drives them to pollute our streets with poison and bully the community. This collaborative effort between law enforcement and community leaders is a step in the right direction for a neighborhood that is considered one the most dangerous in Miami.”
ATF Special Agent in Charge Hugo Barrera stated, “The citizens of the Overtown can breathe a little easier tonight. Violence should never become the order of the day. The message is clear that if you choose to use a firearm to inflict violence on the innocent people of this or any other community in South Florida, you will be dealt with swiftly. Together with this seamless integration of federal, state and local law enforcement we can ensure solid investigations, successful prosecutions and long stays in prison for these predators.”
“This indictment is part of our continuing efforts to help the Overtown Community, by ridding the streets of violent crime, illegal drugs and the ill effects that they have,” said Miami Police Chief Manuel Orosa. “We will continue to partner with members of the community and our partners in law enforcement at all levels to work for the betterment of Overtown and all of Miami.”
Chief John Brook of the Sunrise Police Department stated, “Acknowledging that crime in the 21st century knows no boundaries, the Sunrise Police Department is always willing to assist our partners in the Federal Government in combating violent crime and drug trafficking across South Florida. We take pride in our role in the indictments obtained by this partnership.”
This year-long, multi-agency investigation into Mark Brown’s alleged drug trafficking network was the result of the unparalleled, cooperative, investigative efforts of five different law enforcement agencies, including the DEA, the FBI, ATF, the City of Miami Police Department, and the City of Sunrise Police Department. These separate investigations were merged into a single operation under the auspices of the USAO’s Overtown Violence Reduction Partnership, resulting in today’s charges.
If convicted of the charges, the defendants face a possible statutory maximum sentence of up to forty years in prison.
Mr. Ferrer commended the investigative efforts of the DEA, FBI, ATF, City of Miami Police Department, and the City of Sunrise Police Department. This case is being prosecuted by Assistant U.S. Attorney Roy Altman.
An indictment is only an accusation and a defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Port St. Lucie Securities Broker Charged in Wire Fraud Embezzlement SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Addy Villanueva, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), announce the indictment of Paul Elvidge, Jr., 53, of Port St. Lucie, for embezzling more than $1,000,000 from client investment accounts while acting as a securities broker for Cape Securities, Inc. and Seacoast Investor Services, Inc.
The indictment charges Elvidge Jr. with thirty-six counts of wire fraud and six counts of aggravated identity theft. Elvidge Jr. had a first appearance in federal court in Fort Pierce on August 8, 2013 before U.S. Magistrate Judge Frank Lynch, Jr. If convicted, he faces a maximum statutory sentence of up to twenty years in prison on each of the wire fraud counts, and a consecutive penalty of two years on the aggravated identity theft counts.
According to the indictment, Elvidge Jr. managed and operated Seacoast Investor Services, Inc., which later became Cape Securities, Inc., as a brokerage and investment firm in Port St. Lucie. As a registered representative and investment advisor, Elvidge, Jr. had access to clients’ brokerage accounts and was able to direct wire transfers from these brokerage accounts. From July 2010 to October 2012, Elvidge Jr. embezzled approximately $1,113,594 from client accounts by preparing fraudulent forms and forging account holders’ signatures. Elvidge Jr. used the fraudulently obtained monies to pay for personal and business expenses, and to fund his personal day-trading activities.
Mr. Ferrer commended the investigative efforts of the FBI and FDLE. This case is being prosecuted by Assistant U.S. Attorney Shaniek Maynard.
An indictment is only an accusation and the defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Wilton Manors Resident Sentenced for Defrauding the State of Florida Unemployment Compensation ProgramRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Richard Walker, Special Agent in Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, and Cynthia R. Lorenzo, Interim Executive Director, Florida Department of Economic Opportunity, announce that defendant Denny Ray Hughes, 40, formerly of Wilton Manors, FL, was sentenced before U.S. District Court Judge William P. Dimitrouleas, in connection with his previous conviction for wire fraud, in violation of Title 18, United States Code, Section 1343, and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A for his role in defrauding the Unemployment Compensation Programs of both the State of Florida and the Commonwealth of Massachusetts.
At the hearing, Judge Dimitrouleas sentenced defendant Hughes to 41 months in prison for the wire fraud and a consecutive 24 months in prison for the aggravated identity theft, for a total imprisonment of 65 months, to be followed by three years of supervised release, and ordered that he pay $219,970 in restitution to the State of Florida and $70,524 in restitution to the Commonwealth of Massachusetts.
According to the indictment and court documents, between January 2011 and April 2012, defendant Hughes obtained the personal identifying information of approximately 21 individuals, including their names, dates of birth, and social security numbers, and in order to obtain and build wage credits for the purported employees filed or caused to be filed fraudulent quarterly UCT-6 forms with the Florida Department of Revenue classifying them as employees of Mortgage Relief America, LLC (MRA). Alternatively, defendant Hughes submitted falsified W-2’s to the Florida Department of Economic Opportunity to create the appearance that these individuals had previously worked for MRA. The defendant thereafter classified these individuals as laid off employees and fraudulently filed applications with the Florida Department of Economic Opportunity seeking unemployment compensation benefits on their behalf utilizing their personal identifying information. Once these fraudulent unemployment compensation applications had been submitted to the Florida Department of Economic Opportunity, the defendant made materially false, misleading, and fraudulent claims to the Florida Department of Economic Opportunity Unemployment Compensation Program over the internet and/or over the telephone on either a weekly or bi-weekly basis, and thereby caused unemployment compensation funds from the Florida Department of Financial Services to be deposited directly into the defendant’s bank account via electronic funds transfers. Moreover, the investigation also disclosed that Hughes devised a similar scheme by creating another fictitious company under the name of Commonwealth Global Corp (CWGC) located in Massachusetts. In that scheme, Hughes utilized personal identifying information of at least 23 individuals to fraudulently apply for and receive approximately $70,524.00 in Massachusetts UI benefits.
Mr. Ferrer commended the investigative efforts of the U.S. Department of Labor, Office of the Inspector General and the Florida Department of Economic Opportunity. This case is being prosecuted by Assistant U.S. Attorney Marc Anton.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Mayors and Two Lobbyists Charged in Separate Corruption InvestigationsRead the Press Release
Mayor of Sweetwater Received More Than $40,000 in Bribes; Mayor of Miami Lakes Received $6,750 in Bribes
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that four individuals have been charged in two separate complaints involving public corruption allegations. The first complaint charges Manuel L. Maroño, 41, the Mayor of Sweetwater, and two lobbyists, Jorge L. Forte, 41, and Richard F. Candia, 49, all of Miami, for their alleged participation in a kickback and bribery scheme (the Maroño complaint) in connection with purported federal grants for the City of Sweetwater. The second complaint charges Michael A. Pizzi, 51, the Mayor of Miami Lakes and Town Attorney for the Town of Medley, and Richard F. Candia, in a separate kickback and bribery scheme in connection with purported federal grants for both Miami Lakes and Medley (the Pizzi complaint). Both complaints charge the defendants with conspiracy to commit extortion under color of official right, in violation of Title 18, United States Code, Section 1951(a).
U.S. Attorney Wifredo A. Ferrer stated, “Our democracy suffers when, as in these cases, elected officials use their power and political influence for personal gain instead of for the public good. Public corruption, at any level of government, corrodes and undermines the public’s confidence in our system of government. We are committed to stopping this corrosion and to help restore transparency to local government.”
“For the public to have confidence in their government, they must be certain that their elected officials will not use their position for personal gain,” said Michael B. Steinbach, Special Agent in Charge, FBI Miami. “We encourage anyone who may have information about corruption to come forward and report it. This information is critical to our work. The South Florida community can be assured that public corruption will remain a top priority for the FBI.”
The defendants made their initial appearances in federal court today at 1:30 p.m. before U.S. Magistrate Judge Andrea Simonton. If convicted, the defendants face a maximum statutory penalty of up to twenty years in prison.
Investigation Background
The investigation began in approximately June 2011, when Candia began dealing with an FBI confidential source and two undercover FBI agents posing as the owners of a Chicago-based grant administration business. During meetings, the undercover agents represented to Candia that, with the aid of corrupt local public officials, they could obtain federal grant moneys, which they would then keep and distribute among themselves. After listening to the undercover agents’ proposal, Candia identified Maroño and Pizzi as potential participants in the scheme.
The Sweetwater Deal—Manuel Maroño
According to the Maroño complaint affidavit, after identifying Maroño as a potential participant in the proposed scheme, Candia introduced Maroño to the undercover agents. Maroño caused the passage of a resolution in Sweetwater that authorized the undercover agents’ company to apply for federal grant moneys on behalf of the City of Sweetwater. After the resolution was passed, Maroño and Forte personally met and negotiated with the undercover agents and accepted a series of cash payments in exchange for Maroño’s official action in support of the grant scheme. During these negotiations and meetings, Forte acted as the front man for Maroño.
To further the scheme and avoid detection, Maroño also participated in what he believed to be audit telephone calls from a federal grant auditor to confirm the grantee’s performance on the grant. During two separate audit calls, both of which were recorded, Maroño lied to and misled the auditor, who was in fact an undercover FBI agent, about the actual use of the grant money and the grantee’s performance. For their actions, Maroño and Forte received $40,000 and Candia received at least $5,000 in kickbacks in connection with the Sweetwater deal.
Lastly, Maroño, Forte and Candia received additional payments for their assistance in identifying other public officials whom they claimed might also be interested in participating in similar grant schemes in their cities. To this end, Maroño, Forte, and Candia used Maroño’s position as President of the Florida League of Cities to introduce the scheme to other officials. Maroño and Forte received an additional $20,000 in cash for these introductions, but no other public officials ultimately participated in the scheme.
The Miami Lakes/Medley Deals—Michael Pizzi
The second complaint charges Michael Pizzi and Candia with engaging in a similar grant scheme in Miami Lakes and Medley. As more fully explained in the affidavit filed in support of the Pizzi complaint, Candia introduced Pizzi to the undercover FBI agents to help implement the grant scheme in Medley, where Pizzi was the Town Attorney. After a series of meetings with Candia and the undercover agents, Pizzi initially agreed to participate in the scheme in exchange for $750 in campaign contributions, which he received in three separate checks delivered to his office by the FBI confidential source.
Thereafter, to aid in the grant scheme’s success, Pizzi backdated a document that endorsed the undercover agents’ company. Pizzi also handled what he believed to be an audit telephone call from a federal grant auditor to confirm the grantee’s performance on the grant. During that call, which was recorded, Pizzi lied to and misled the auditor, who was in fact an undercover FBI agent, about the actual use of the grant money and the grantee’s performance. In return for Pizzi’s help in Medley, Pizzi received a $1,000 cash kickback and other things of value.
Later, with the intent of expanding the grant scheme to Miami Lakes, Pizzi worked to get a resolution passed in Miami Lakes that would authorize the undercover FBI agents’ company to seek additional grant funds for the City of Miami Lakes. In exchange for his work in Miami Lakes, Pizzi received additional $2,000 and $3,000 cash pay-offs.
These cases were investigated by the FBI Miami Area Public Corruption Task Force with assistance from the City of Miami Police Department, Hialeah Police Department, Miami Beach Police Department, Miami Dade Police Department and Customs and Border Protection – Internal Affairs. The cases are being prosecuted by Assistant U.S. Attorney Jared E. Dwyer.
A complaint is only an accusation and a defendant is presumed innocent until and unless proven guilty.
Attachment:
Manuel Marono etal Complaint (PDF)
Michael Pizzi etal Complaint (PDF)
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mortgage Company Executive Pleads Guilty in Fraud CaseRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Steve Linick, Inspector General, Federal Housing Finance Agency, Office of Inspector General, and Drew J. Breakspear, Commissioner, State of Florida’s Office of Financial Regulation, announce that Patrick J. Mansell, 68, of Boca Raton, FL, Vice President of Coastal States Mortgage Corporation (Coastal), pled guilty to conspiracy to commit wire fraud to defraud government sponsored entities, Fannie Mae and Freddie Mac.
According to the Information, from April 2007 through November 2008, in the Southern District of Florida, Coastal was a licensed mortgage brokerage whose primary business activity was the selling and servicing of mortgage loans for both Freddie Mac and Fannie Mae. At the change of plea hearing, Mansell admitted that Coastal failed to remit some of the mortgage loan payoffs it received and processed from borrowers to Freddie Mac and Fannie Mae, as required by the contractual agreement entered into between them. This resulted in an $18,735,903.77 loss to Freddie Mac and Fannie Mae. The misappropriation was concealed by the regular submission of false financial reports and monthly mortgage payments by Coastal, via an interstate internet portal, to Freddie Mac and Fannie Mae. These monthly mortgage payments by Coastal misled the lenders into believing the loans were still performing.
The defendant faces a statutory maximum penalty of five years’ in prison, followed by a three year period of supervised release, and a fine of up to $250,000 and restitution. Sentencing is scheduled for October 15, 2013 before U.S. District Judge Robin Rosenbaum.
Mr. Ferrer commended the investigative efforts of the Federal Housing Finance Agency, Office of the Inspector General and State of Florida’s Office of Financial Regulation. The case is being prosecuted by Assistant U.S. Attorney Thomas P. Lanigan.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Loxahatchee Pair Indicted in Conspiracy to Defraud Banks and Federal Benefit ProgramsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Lester Fernandez, Special Agent in Charge, United States Department of Housing and Urban Development (HUD), Office of Inspector General, Ric L. Bradshaw, Sheriff, Palm Beach County Sheriff’s Office, Thomas Caul, Acting Special Agent in Charge, Social Security Administration (SSA), Office of Inspector General, Karen Citizen-Wilcox, Special Agent in Charge, United States Department of Agriculture (USDA), Office of Inspector General, and Christopher B. Dennis, Special Agent in Charge, United States Department of Health and Human Services (HHS), Office of Inspector General, Miami Region, announced the indictment of defendants Gloria Nereida Valle-Clas, 48, and Alexander Gonzalez, 40, of Loxahatchee, Florida.
According to the indictment, Valle-Clas obtained two social security numbers (SSN), one which was originally associated with her birth name, “Nereida Valle,” and one of which was originally associated with the name “Gloria Lopes Clas.” From at least December, 2003, to January, 2013, she used the SSN for “Nereida Valle” to obtain federal housing, social security, food, cash, and medical benefits from HUD, SSA, USDA and HHS. At the same time, she used the SSN for “Gloria Lopes Clas” to buy real estate in both Broward and Palm Beach Counties, including over an acre of property in Loxahatchee, Florida on which she built an approximately 2,700 square foot residence. Her husband, Gonzalez, also bought real estate in Broward County. When applying for federal benefits, she failed to disclose her or her husband’s ownership of property, as well as other assets and income. In 2009, after obtaining over $330,000 in mortgages on the Loxahatchee Property, Valle-Clas failed to disclose her receipt of federal benefits in obtaining a $145,000 loan charge-off.
Valle-Clas, who formally changed her name from “Nereida Valle” to “Gloria Nereida Valle-Clas” in 2003, used approximately 12 aliases in perpetrating the scheme, most of which were variations on “Nereida Valle” and “Gloria Lopes Clas.” Gonzalez used approximately eight aliases, most of which were variations on his birth name, “Alexander Jose Gonzalez Flores.”
Both Valle-Clas and Gonzalez are charged with one count of conspiracy, in violation of Title 18, United States Code, Section 371; six counts of theft of government funds, in violation of Title 18, United States Code, Section 641; four counts of making a false statement to HUD, in violation of Title 18, United States Code, Section 1001; and one count of making a false statement to an FDIC insured financial institution, in violation of Title 18, United States Code, Section 1014. In addition, Valle-Clas is charged separately with twenty-three counts of theft of government funds, in violation of Title 18, United States Code, Section 641. The maximum penalties for each of the Section 371 conspiracy and Section 1001 HUD false statement counts are five years’ imprisonment, up to three years supervised release, and a fine of $250,000 or not more than twice the gross gain or loss form the offense, whichever is greater. The maximum penalty for each of the Section 641 theft of government funds charges is ten years imprisonment, up to three years supervised release, and a fine of $250,000 or not more than twice the gross gain or loss from the offense, whichever is greater. For the Section 1014 false statement to a bank charge, the maximum penalty is thirty years imprisonment, up to five years supervised release, and a fine of $1,000,000 or not more than twice the gross gain or loss form the offense, whichever is greater.
U.S. Attorney Wifredo A. Ferrer stated, “Those who defraud our federal benefit programs take resources from the neediest members of our society. The U.S. Attorney’s Office is committed to working with law enforcement to investigate and prosecute those who perpetrate these frauds.”
HUD-OIG Special Agent in Charge Lester Fernandez stated, “The United States Department of Housing & Urban Development - Office of Inspector General is dedicated to ensuring these rental assistance funds are properly accounted for and made available to needy recipients. I am proud of the combined investigative efforts which led to this indictment. We will continue to work with our law enforcement partners toward eliminating public assistance fraud in HUD’s programs.”
Special Agent in Charge Citizen-Wilcox stated, “The Office of Inspector General at USDA is determined to prevent and uncover potential criminal activity in the SNAP program. Strengthening the integrity of SNAP is a priority for our Investigations division. The resources taxpayers provide for vital Federal Nutrition programs should be reserved for those truly in need.”
“Conspiring to steal tax dollars at the expense of needy Americans is offensive,” said Christopher B. Dennis, Special Agent in Charge, Office of Inspector General, Department of Health and Human Services, Miami Region. “Valle-Clas and Gonzalez shamelessly stole government benefits even as they accumulated substantial real estate holdings.”
Valle-Clas and Gonzalez made their initial appearances in federal district court in West Palm Beach, Florida before the Honorable United States Magistrate Judge Dave Lee Brannon earlier today. Arraignments and detention hearings are scheduled for Friday, August 9, 2013 in West Palm Beach before Judge Brannon.
Mr. Ferrer commended the investigative efforts of HUD Office of the Inspector General, the Palm Beach County Sheriff’s Office, the SSA Office of the Inspector General, the USDA Office of the Inspector General, and the HHS Office of the Inspector General. This case is being handled by Assistant United States Attorney Carolyn Bell.
An indictment is only an accusation and the defendants are presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Jury Convicts Two Doctors of Conspiracy to Commit Money Laundering Resulting from Pill Mill Operation in Broward and Palm Beach CountiesRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, and Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), announce the conviction of two doctors, Cynthia Cadet, 43, of Parkland, FL, and Joseph Castronuovo, 73, of Key Largo, FL. After a two month trial, a West Palm Beach jury found the defendants guilty of conspiracy to commit money laundering. The jury also returned a forfeiture verdict in the amount of $10,001, as to each defendant. The defendants were acquitted of the remaining charges. Sentencing has been scheduled for November 4, 2013 at 1:30 p.m. before U.S. District Court Judge Kenneth A. Marra.
The charges against the defendants stem from Operation Oxy Alley, a coordinated investigation into pill mills in Broward and Palm Beach Counties. In August 2011, thirty-two defendants, including Cadet and Castronuovo, were charged with racketeering conspiracy, money laundering conspiracy, possession with intent to distribute controlled substances and other offenses. Twenty-eight defendants have entered guilty pleas and been sentenced in connection with the August 2011 Indictment.
According to the August 2011 Superseding Indictment and evidence presented in court, defendants Christopher and Jeffrey George, twin brothers, operated, managed and financed four pain management clinics in Broward and Palm Beach Counties. According to the August 2011 Superseding Indictment, the Second Superseding Indictment filed on July 19, 2012, and statements made in court, from 2007 to early 2010, these clinics distributed approximately 20 million oxycodone pills and made more than $40 million from the illegal sales of controlled substances. Thirteen of the thirty-two defendants were doctors, including Cadet and Castronuovo.
The Second Superseding Indictment charged Cadet and Castronuovo with conspiring to possess with the intent to distribute controlled substances (punishable by up to 20 years’ imprisonment) and money laundering conspiracy (punishable by up to ten years’ imprisonment). Cadet was also charged with dispensing oxycodone and other controlled substances that resulted in the death of seven individuals (each count punishable by up to life imprisonment) and conspiracy to unlawfully distribute steroids (punishable by up to ten years’ imprisonment). Castronuovo was also charged with dispensing oxycodone and other controlled substances that resulted in the death of two individuals, and conspiracy to distribute oxycodone to persons under the age of twenty-one (punishable by up to forty years’ imprisonment).
Operation Oxy Alley is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
The investigation and prosecution was the result of work by federal, state and local law enforcement agencies. The FBI, DEA, IRS-CID were assisted by the Palm Beach County Sheriff’s Office, the Broward Sheriff’s Office, the Hollywood Police Department, the Boca Raton Police Department, and the Davie Police Department. Coordination efforts also included cooperation by the Palm Beach State Attorney’s Office and the Delray Beach Police Department, Jupiter Police Department, West Palm Beach Police Department, Boynton Beach Police Department, Medley Police Department, Homestead Police Department, North Miami Beach Police Department, and Sunny Isles Police Department. This case is being prosecuted by Assistant U.S. Attorneys Paul F. Schwartz and Lawrence D. LaVecchio.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Michigan Man Sentenced to 165 Years for Child Sex Tourism OffensesRead the Press Release
A former Michigan resident was sentenced today in Miami to 165 years in prison, followed by a lifetime of supervised release, for child sex tourism offenses, announced U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Immigration and Customs Enforcement (ICE) Deputy Director Daniel Ragsdale, and Special Agent in Charge Alysa D. Erichs of the ICE Homeland Security Investigation’s (HSI) Miami Office.
Matthew Andrew Carter, 68, aka “William Charles Harcourt” and “Bill Carter,” formerly of Brighton, Mich., was sentenced by U.S. District Judge Joan A. Lenard of the Southern District of Florida. On Feb. 28, 2013, a jury found Carter guilty of five counts of traveling in foreign commerce from the United States to Haiti for the purpose of engaging in illicit sexual conduct with children and one count of attempting to do so.
“Today’s sentence brings to a close a horrific chapter in the lives of these victims,” said U.S. Attorney Ferrer. “While nothing can ever undo the abuse these victims endured throughout the years, we hope that today’s sentence restores them with some sense of confidence and trust, and satisfaction that justice has been served.”
“For 15 years, Matthew Carter, under the guise of serving as an international humanitarian, sexually abused more than 50 Haitian children,” said Acting Assistant Attorney General Raman. “He held himself out as a savior to vulnerable children in Haiti, but in fact cruelly forced those children to choose between poverty and submitting to repeated sexual abuse. Child sex tourism is a heinous crime, and today's sentence demonstrates our commitment to bringing the weight of justice on anyone who seeks to exploit our most vulnerable citizens, wherever they reside.”
“Crimes against children are some of the most heinous our agency investigates,” said ICE Deputy Director Daniel Ragsdale. “It is even more despicable that Mr. Carter used his position of trust to abuse children who relied on him for care. Today’s sentence should serve as notice to other child predators. We will find you, arrest you and make sure that you are prosecuted to the fullest extent of the law.”
According to court documents and evidence presented at trial, from 1995 to 2011, Carter resided at and operated the Morning Star Center near Port-au-Prince, Haiti, prior to his arrest on May 8, 2011. The Morning Star Center was a residential facility that provided shelter, food, clothing and school tuition to Haitian children. The children who lived at the Morning Star Center were from impoverished families that could not feed, educate or otherwise support their children. The evidence at trial showed that Carter specifically targeted children in need and preyed on their vulnerability. Between 1995 and 2011, Carter frequently traveled between the United States and Haiti in order to raise funds from churches and donors for the continued operation of the center. Carter sexually and physically abused the children in his care and custody at the center during this period of time. According to court documents and evidence presented at trial, Carter used force to get these children to comply with his sexual demands and required the children to participate in sexual acts in order to receive food, remain at the center and/or continue to receive school tuition payments.
At trial, 16 Haitian victims who resided at the Morning Star Center between 1995 and 2011 testified. Additionally, four witnesses testified that they were sexually abused by Carter in London during the 1970s. Carter previously was charged with and acquitted of charges related to the sexual abuse of children in London, Cairo and Winter Haven, Fla.
The case was investigated by HSI Miami, HSI Country Attaché Santo Domingo, Dominican Republic, and the HSI Santo Domingo Transnational Criminal Investigative Unit. Substantial assistance was provided by the U.S. Secret Service Miami field office; Haitian National Police Brigade for the Protection of Minors; Haitian Social Services; Ministry of the Interior for Haiti; Bureau of Diplomatic Security, Regional Security Office for the U.S. Embassy in Port-au-Prince; Consular Section of the U.S. Embassy in Port-au-Prince; London Metropolitan Police Service; FBI’s Washington, Boston and Miami Field Offices; ICE-HSI Attaché’s Offices in London and Cairo; U.S. Coast Guard; and U.S. Citizenship and Immigration Service in Port-au-Prince.
The case was prosecuted by Assistant U.S. Attorney Maria K. Medetis of the Southern District of Florida and Trial Attorney Bonnie L. Kane of the Criminal Division’s Child Exploitation and Obscenity Section.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Five Arrested for Methamphetamine Manufacturing in Vero BeachRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, and Deryl Loar, Sheriff, Indian River County Sheriff’s Office, announce the arrest of five Vero Beach residents: Edward McElhenny, 50, Clinton Story, 30, Paul Richardson, 27, Angela Story, 32, and Kelly McCartney, 36. The five defendants made their initial appearance yesterday before U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce and were detained pending trial. A pre-trial detention hearing has been set for Thursday, August 1, 2013.
The criminal complaint charges the five defendants with conspiracy to manufacture, distribute and possess with intent to distribute a controlled substance, over fifty (50) grams of methamphetamine in violation of Title 21, United States Code, Section 841 (a) (1) and (b)(1)(A)(viii); all in violation of Title 21, United States Code, Section 846. If convicted, the defendants face a mandatory minimum of ten years in prison, and a possible maximum sentence of life, followed by five years of supervised release, and up to $10 million in fines.
According to the criminal complaint, during the third week of April 2013, the Indian River County Sheriff’s Office (IRCSO), Multi-Agency Criminal Enforcement (MACE) Unit conducted an investigation, which led to the execution of a search warrant. On May 9, 2013, members of the DEA-Clandestine Laboratory Enforcement Team (CLET) executed a state search warrant at 1913 22nd Avenue, Vero Beach, Florida (residence). At the time of entry, Clinton Story, Edward McElhenny, Paul Richardson and Angela Story were at the residence and were detained. Clinton Story, Angela Story, and Paul Richardson admitted to purchasing pseudoephedrine, knowing it was for the manufacture of methamphetamine.
Edward McElhenny admitted that he has manufactured methamphetamine in the past. The DEA CLET team members searched the home and surrounding property. A search of the residence led to the discovery of pre-cursor chemicals and laboratory equipment which were utilized in and comprised a fully operational methamphetamine laboratory. A fingerprint specialist processed the scene and physical evidence, and discovered the fingerprints of Clinton Story, Edward McElhenny, and Kelly Maureen McCartney. McCartney admitted that she visited 1913 22nd Avenue on multiple occasions, and was aware of the methamphetamine manufacturing and use that took place at the residence. She also acknowledged that she purchased pseudoephedrine packets on multiple occasions with the knowledge that it was being used to manufacture methamphetamine.
Mr. Ferrer commended the investigative efforts of the DEA and the Indian River County Sheriff’s Office for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Five Arrested for Bank Robberies on the Treasure CoastRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, John A. Bolduc, Chief, Port St. Lucie Police Department, Kenneth Mascara, St. Lucie County Sheriff’s Office, J. Michelle Morris, Chief, Sebastian Police Department, Deryl Loar, Sheriff, Indian River Sheriff’s Office, and Sean Baldwin, Chief, Ft. Pierce Police Department, announce the arrest of Anthony Isaac Johnson, 24, of West Palm Beach, Allan Demetrius Bradford, 22, of West Palm Beach, Ivory Lee Robinson, III, 22, of West Palm Beach, Tomaleesha Jeffie Laqua McKeliver, 22, of Ft. Pierce, and Paul Edward Moore, 25, of Green Acres. The five defendants made their initial appearance today before U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce and were detained pending trial. A pre-trial detention was set for Friday, August 2, 2013.
The criminal complaint charges the five defendants with violating Title 18, United States Code, Section 1951, conspiracy to obstruct, delay, or affect commerce or the movement of any article or commodity in commerce by robbery (Hobbs Act); and Title 18, United States Code, Sections 924(o) and 924(c), conspiracy to use and carry a firearm during and in relation to a crime of violence. If convicted of the Hobbs Act robbery conspiracy, the defendants face a possible maximum statutory sentence of 20 years in prison. If convicted of the conspiracy to use and carry a firearm during and in relation to a crime of violence, the defendants face a mandatory minimum of seven years, and a possible maximum sentence of life, in prison, consecutive to any other sentence imposed.
According to the criminal complaint, on July 8, 2013, at approximately 9:28 a.m., PNC Bank, located at 4156 Okeechobee Road, Fort Pierce, Florida, was robbed by three black males wearing white clothing and white cloth masks. At least one of the males was armed with a hand gun. All three subjects then fled in a silver mini-van, which was subsequently recovered. Shortly thereafter, law enforcement attempted to conduct a traffic stop of a white Chrysler sedan, operated by a female driver, but the driver failed to pull over and a high speed pursuit ensued. This vehicle was soon disabled near the intersection of Port St. Lucie Boulevard and Aster Road in Port St. Lucie, Florida. Upon execution of a state search warrant on the white Chrysler sedan, a large amount of currency, a semi-automatic handgun, several cellular phones, cloth gloves, and numerous articles of clothing, consistent with what the bank robbers wore during the robbery of the PNC Bank in Fort Pierce, Florida, was recovered. The driver Tomaleesha Jeffie Laqua McKeliver, and the three passengers, Anthony Isaac Johnson, Allan Demetrius Bradford, and Ivory Lee Robinson, III were arrested and transported to the Port St. Lucie Police Department.
The criminal complaint also states that on July 8, 2013, at approximately 9:14 a.m., the PNC Bank, located at 5493 NW St. James Drive, Port St. Lucie, Florida, was robbed by three black males wearing head coverings. At least one of the males was armed with a hand gun. Shortly after two of the males fled the PNC Bank, the third became momentarily trapped inside. He later fled the PNC Bank on foot removing clothing as he fled. A bag containing money was recovered near the PNC Bank, and Paul Edward Moore was arrested nearby, and transported to the Port St. Lucie Police Department.
Mr. Ferrer commended the investigative efforts of the FBI, Port St. Lucie Police Department, St. Lucie County Sheriff’s Office, the Sebastian Police Department and the Ft. Pierce Police Department for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen Lineberger.
A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Previously Convicted Felon Pleads Guilty to Stolen Identity Tax Refund Scheme and Possession of A FirearmRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paula Reid, Special Agent in Charge, U.S. Secret Service (USSS), Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Miami Field Office, announce that defendant David Joseph, 27, of Ft. Lauderdale, pled guilty on Friday, July 26, 2013, to one count of filing false claims with the IRS, in violation of 18 U.S.C. § 287, one count of access device fraud, in violation of 18 U.S.C. § 1029(a) (3), one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A (a) (1), and one count of possession of a firearm by a convicted felon, in violation of 18 U.S.C. §§ 922(g)(1) and 924(a)(2).
Sentencing is scheduled for October 4, 2013 before U.S. District Judge William J. Zloch. At sentencing, the defendant faces a maximum of five years in prison on the fraudulent claim count, a maximum of 10 years in prison on the access device fraud count, a maximum of two years on the aggravated identity theft count, and a maximum of 10 years in prison on the count of possession of a firearm by a convicted felon.
According to court documents, on April 25, 2013, USSS and IRS-CI agents executed a search warrant at a residence in West Park, Florida, regarding possible stolen identities and tax refund fraud (SIRF) activities at the subject location. SIRF involves the unauthorized use of victims’ identities and personal information to file fraudulent tax returns requesting fraudulent refunds. During the search, the agents recovered numerous notebooks, medical printouts, IRS correspondence, prepaid debit cards, bank documents, and various other documents that contained thousands of access devices — victims’ names with corresponding social security numbers and dates of birth. A fully loaded semi-automatic MasterPiece Arms 9 mm pistol and additional ammunition belonging to Defendant Joseph, a previously convicted felon, was also recovered.
Mr. Ferrer commended the investigative efforts of the USSS, IRS-CI, and ATF. The case is being prosecuted by Assistant U.S. Attorney Bertha R. Mitrani.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
More Defendants Sentenced for Murder/Marijuana Grow House ConspiracyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. De Palma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and J.D. Patterson, Director, Miami-Dade Police Department, announced the sentencings of defendants Gilberto Santiesteban Jr., Darvis Santiesteban, Gilberto Santiesteban, Sr., Tomy Gonzalez and Lisa Gonzalez all of Miami, and Norge Manduley, of Hialeah, before U.S. District Judge K. Michael Moore.
According to court documents and statement, the defendants and other co-conspirators operated an extensive network of hydroponic marijuana grow houses throughout South Florida. In 2009, a large quantity of marijuana belonging to the organization was stolen. Members of the organization set out to find the people responsible for the theft. On June 28, 2009, Gilberto Santiesteban, Jr., Norge Manduley, along with co-conspirators Derrick Santiesteban, and Juan Felipe Castañeda kidnapped the individual who they thought was responsible for the theft of the marijuana. During the abduction, the individual was shot and killed.
Gilberto Santiesteban Jr. was sentenced to 360 months in prison, to be followed by 5 years of supervised release after having previously pled guilty to conspiracy to possess with the intent to distribute marijuana, conspiracy to commit money laundering, and conspiracy to commit kidnapping (Counts 1, 2, and 3).
Darvis Santiesteban was sentenced to 262 months in prison, to be followed by 5 years of supervised release after having previously pled guilty to Counts 1 and 2 of the indictment. Count 1 charged him with conspiracy to possess one thousand (1,000) or more marijuana plants with the intent to distribute and Count 2 charged him with conspiracy to commit money laundering.
Gilberto Santiesteban, Sr., was sentenced to 120 months in prison, to be followed by 5 years of supervised release after having previously pled guilty to Count 1 of the indictment charging him with conspiracy to possess 1,000 or more marijuana plants with the intent to distribute.
Norge Manduley was sentenced to 240 months in prison, to be followed by 5 years of supervised release after having previously been convicted at trial of one count of conspiracy to possess less than one hundred (100) marijuana plants with the intent to distribute.
Tomy Gonzalez was sentenced to 195 months in prison, to be followed by 5 years of supervised release after having previously pled guilty to one count of conspiracy to possess one thousand (1000) or more marijuana plants with the intent to distribute.
Lisa Gonzalez was sentenced to 146 months in prison, to be followed by 5 years of supervised release after having previously pled guilty to one count of conspiracy to possess one thousand (1000) or more marijuana plants with the intent to distribute.
The following individuals were previously sentenced for their participation in the conspiracy:
Derrick Santiesteban was sentenced to life in prison on charges of drug, money laundering, and kidnapping with death resulting.
Juan Felipe Castañeda was sentenced to 360 months in prison, to be followed by 5 years of supervised release, on charges of conspiracy to possess with the intent to distribute marijuana.
Alexander Santiesteban was sentenced to 262 months in prison, to be followed by 5 years of supervised release, on charges of conspiracy to possess one thousand (1,000) or more marijuana plants with the intent to distribute and conspiracy to commit money laundering.
German Silvestro was sentenced to 144 months in prison, to be followed by 5 years of supervised release. David Silva, Francisco Javier Diaz, Alejandro Pimentel, and John Villalonga were each sentenced to 120 months in prison, to be followed by 5 years of supervised release. Raul Fabian Ramirez, Jr. was sentenced to 46 months in prison, to be followed by 2 years of supervised release. Each of these defendants previously pled guilty to Count 1 of the indictment, charging them with conspiracy to possess 1,000 or more marijuana plants with the intent to distribute.
Yadira Santiesteban was sentenced to 70 months in prison, to be followed by 3 years of supervised release. Dayana Castellanos was sentenced to 37 months in prison, to be followed by 2 years of supervised release. Estrella J. Mijares was sentenced to 37 months in prison, to be followed by 1 year of supervised release. Each of these defendants pled guilty to one count of conspiracy to commit money laundering.
Mr. Ferrer commended the investigative efforts of the FBI, IRS-CI, and Miami-Dade Police Department. The case is being prosecuted by Assistant U.S. Attorneys William Athas and Pat Sullivan.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Hospital Employee and Accomplice Sentenced for Tax Refund Fraud Using Stolen Patient InformationRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, Ronald Verrochio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), and Scott J. Israel, Sheriff, Broward Sheriff’s Office, announce that defendant Shalamar Major, 32, of Deerfield Beach, Florida, was sentenced today before U.S. District Judge Robin S. Rosenbaum, in connection with her previous conviction for unauthorized HIPAA disclosures, in violation of Title 42, United States Code, Section 1320d-6, and conspiracy to commit false claims, in violation of Title 18, United States Code, Section 286, in connection with a tax refund scheme that used stolen social security and other personal identifying information to file on-line tax returns claiming fraudulent tax refunds from the IRS.
At today’s hearing, Judge Rosenbaum sentenced defendant Major to 18 months in prison to be followed by three years of supervised release and ordered that she pay $15,795 in restitution to the IRS. Previously, on July 22, 2013, Judge Rosenbaum sentenced co-defendant Tanisha Wright, 27, of Deerfield Beach, Florida, to 40 months in prison followed by three years of supervised release and ordered that she pay $174,130 in restitution to the IRS. Defendant Wright had previously plead guilty to three counts of identity theft, in violation of Title 18, United States Code, Section 1028(a)(7), three counts of theft of public money, in violation of Title 18, United States Code, Section 641, one count of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(3), one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A, one count of theft of mail, in violation of Title 18, United States Code, Section 1708, and one count of conspiracy to commit false claims, in violation of Title 18, United States Code, Section 286.
According to documents filed and statements made in court, from January through June 2012, Wright and Major possessed and used stolen personal identifying information of others to file federal income tax returns claiming tax refunds to which they were not entitled. Specifically, defendant Shalamar Major was employed as a scheduler at the Boca Raton Regional Hospital in Boca Raton, Florida. As a scheduler, she had access to personal identification information of Boca Raton Regional Hospital patients, including their names, dates of birth, social security numbers, and other sensitive personal information. In exchange for the promise of future payments, Shalamar Major unlawfully provided Tanisha Wright sensitive personal identifying information, including names, dates of birth, and social security numbers, of numerous Boca Raton Regional Hospital patients. Tanisha Wright, upon receipt of the sensitive personal identifying information of the Boca Raton Regional Hospital patients, used this information to electronically file fraudulent federal income tax returns without the knowledge or authorization of the victims and claimed refunds to which she was not entitled from the IRS.
Tanisha Wright thereafter instructed the IRS to direct-deposit the refunds onto pre-paid reloadable debit cards that were already in her possession and had been previously stolen out of the U.S. mail. Once the debit cards had been funded by the Department of the Treasury, Tanisha Wright would convert the funds on the debit cards to cash by making withdrawals at local automated teller machines or would make personal purchases at various local businesses. Once Tanisha Wright obtained cash from the fraudulently funded debit cards, she would split the proceeds with Shalamar Major. In total, at least 57 fraudulent tax returns were filed with the IRS, requesting $306,720 in federal tax refunds.
Mr. Ferrer commended the investigative efforts of IRS-CI, the U.S. Postal Inspection Service, and the Broward Sheriff’s Office. This case is being handled by Assistant U.S. Attorney Marc Anton.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Eleven More Defendants Plead Guilty in Staged Automobile Accident SchemeRead the Press Release
92 defendants have been charged to date in Operation Sledgehammer I-VI
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Jeff Atwater, Florida Chief Financial Officer, and Dave Aronberg, State Attorney, Office of the State Attorney for Palm Beach County, announced that defendants Helenne Vazquez, 30, of West Palm Beach, Maykel Marquez, 32, of West Palm Beach, and Juan Francisco Avon, 61, of Miami, pled guilty today for their participation in a staged automobile accident and fraudulent chiropractic clinic scheme that resulted in the theft of millions of dollars from Florida’s automobile insurance companies and Florida drivers. Defendants Yenisleydi Ramos, 26, of West Palm Beach, and Noelia Marichal, 52, of West Palm Beach, pled guilty yesterday; defendants Nelson Felix Martinez Torres, 47, of West Palm Beach, Yanet Hernandez Marichal, a/k/a Yanet Hernandez, 26, of West Palm Beach, and Oscar Montiel Martinez, 34, of Lake Worth, pled guilty on July 23, 2013; defendant Wilfredo Sauceda, 33, of West Palm Beach, pled guilty on July 22, 2013; defendant Alien Moya, 29, of West Palm Beach, pled guilty on July 19, 2013; and Yeisy Chouza, 31, of Miami, pled guilty on July 9, 2013.
Defendant Chouza is scheduled to be sentenced on September 30, 2013, at 9:00 a.m. before U.S. District Judge Kenneth A. Marra in West Palm Beach along with three other defendants who entered guilty pleas in June. Defendants Alien Moya, Wilfredo Sauceda, Oscar Montiel Martinez, Nelson Felix Martinez Torres, and Yanet Hernandez Marichal are scheduled to be sentenced on October 21, 2013, beginning at 9:00 a.m. before Judge Marra. Defendants Yenisleydi Ramos, Noelia Marichal, Helenne Vazquez, Maykel Marquez, and Juan Francisco Avon are scheduled to be sentenced on October 28, 2013, beginning at 9:00 a.m. before Judge Marra.
Each of the defendants pled guilty to one count of conspiring to commit mail fraud, in violation of Title 18, United States Code, Section 1341, all in violation of Title 18, United States Code, Section 1349. Some of the defendants also pled guilty to mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2; conspiring to commit money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1), all in violation of Title 18, United States Code, Section 1956(h); and money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), 1956(a)(1)(B)(ii), and 2.
For each count of conspiracy to commit mail fraud, substantive mail fraud, conspiracy to commit money laundering, and substantive money laundering the defendants face a possible maximum statutory sentence of 20 years in prison. Restitution to the victims of the offenses is mandatory.
According to court documents, between approximately October 2006 and December 2012, the defendants staged automobile accidents and thereafter caused the submission of false insurance claims through chiropractic clinics they controlled. To execute the scheme, the true owners of the chiropractic clinics recruited individuals, who had the medical or chiropractic licenses required by the state to open a clinic, to act as “nominee owners” of the clinics. The defendants also recruited individuals, whom they referred to as “Perro” and “Perra,” to participate in the accidents, and others to help the clinics launder the insurance proceeds. The defendants also hired complicit chiropractors and therapists who prescribed and billed for unnecessary treatments and/or for services that had not been rendered. Thereafter, complicit clinic employees prepared and submitted claims to the automobile insurance companies for payment for these unnecessary or non-rendered services. Twenty-one clinics participated in this scheme.
Starting with Operation Sledgehammer I in June 2011 and including the defendants charged in Operation Sledgehammer VI, 92 defendants have been charged for their participation in this automobile insurance fraud scheme. Of those 92 defendants, 56 have been charged federally by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $5 million to the defrauded insurance companies. Thirty-six defendants have been arrested by the Florida Department of Financial Services – Insurance Fraud Division for prosecution by the Palm Beach County State Attorney’s Office.
Mr. Ferrer commended the efforts of the FBI, IRS-CI, the Florida Department of Insurance Fraud, the Palm Beach County State Attorney’s Office, and the Greater Palm Beach County Health Care Fraud Task Force for their outstanding work in this case. Mr. Ferrer also recognized the National Insurance Crime Bureau (NICB) for its collaboration and assistance in this investigation. The federal cases are being prosecuted by Assistant U.S. Attorney A. Marie Villafaña and the state cases are being prosecuted by the Palm Beach County State Attorney’s Office.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Florida Residents Indicted on Charges of Scheming to Defraud and Threaten Spanish-Speaking ConsumersRead the Press Release
A grand jury in the Southern District of Florida issued an indictment for two individuals on charges of conspiracy, fraud and extortion alleging they operated a series of fraudulent businesses targeting Spanish-speaking consumers, the Justice Department and the U.S. Postal Inspection Service (USPIS) announced today. The indictment charges Daniel Carrasco, 54, and Federico Martin Gioja, 45, both of Miramar, Fla., with incorporating, owning and operating Florida companies that used telemarketers in a phone room in Argentina to extract money from consumers, using lies and extortion.
Carrasco and Gioja were charged by criminal complaint and arrested on June 26, 2013. They have remained incarcerated since that time. Carrasco and Gioja, and a third individual, Romino Tasso, also were named in a civil suit filed by the Justice Department. In the civil case, the Justice Department requested that the court issue an injunction, and, subsequently, Judge Cecilia Altonaga issued a temporary restraining order barring further lies to consumers and freezing the assets of Carrasco, Gioja, Tasso and companies under their control.
U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer stated, “These defendants specifically targeted Spanish-speaking victims, pretending to be affiliated with Univision, to sell their products from their phone room in Argentina, when in fact, they had absolutely no connection to Univision, and their companies did not deliver the products consumers ordered. “We are committed to investigating and prosecuting such fraudsters, both domestic and international, whose schemes defraud consumers.”
“We will use every tool at our disposal, including asset freezes, injunctive relief and criminal prosecution, against companies that lie to, extort, threaten and defraud consumers,” said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Protecting Americans from fraud continues to be a top priority for the Department of Justice.”
According to the civil complaint and the affidavit filed in support of the criminal complaint, the case resulted from a referral by Spanish-language television station, Univision. Companies belonging to Carrasco and Gioja are alleged to have falsely claimed an affiliation with Univision and purported to sell products such as vitamins, lotions, medical insurance and English-language training products. However, the companies frequently did not deliver products ordered by consumers. Since the companies allegedly did not have many of the products they promised to send to consumers, consumers received other products instead. Then, according to the indictment, after consumers refused delivery of the companies’ shipments, the Argentinian phone room telemarketers called and falsely threatened consumers with arrest, deportation or fines on their gas and electric bills.
According to the criminal and civil complaints, Carrasco and Gioja routinely changed the names of the companies under which they did business to evade consumer complaints, regulators and law enforcement. Allegedly, a variety of state agencies contacted the businesses regarding their illicit practices. Those working with Carrasco and Gioja, in emails cited in the affidavit in support of arrest, referred to these companies tainted by complaints as “burnt.” Rather than changing the “burnt” companies’ practices, Carrasco and Gioja allegedly incorporated new companies and started the same illegal practices again.
The alleged fraud first came to light when the Spanish language network Univision informed the USPIS that they believed a company was involved in a fraud scheme in which it misrepresented its affiliation with the network. Subsequently, the USPIS investigated the case, submitted the affidavit in support of the criminal complaint and arrested the defendants.
“Postal inspectors will continue to investigate cases involving fraud against consumers and will vigorously pursue those individuals who use the mail to further their criminal schemes,” said Ronald Verrochio, U.S. Postal Inspector in Charge in Miami.
Acting Assistant Attorney General Delery commended the Postal Inspection Service for their investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the civil case. The criminal case is being prosecuted by Assistant Director Richard Goldberg with the Department of Justice’s Consumer Protection Branch.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Gymnastics Coach Sentenced to Twenty Years in Prison for Attempted Receipt of Child PornographyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced the sentencing of defendant Raymond Adams, 42, of Boca Raton, in connection with his conviction for attempted receipt of child pornography, in violation of Title 18, United States Code, Section 2252(a)(2). After finding that Adams had a twenty year history of sexually molesting his gymnastics students, the Honorable Donald M. Middlebrooks sentenced Adams to 20 years, the maximum statutory term of imprisonment, to be followed by lifetime supervised release. In addition, Adams will have to register as a sex offender.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Project Safe Childhood was launched in May 2006 by the Department of Justice and is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Mr. Ferrer commended the investigative efforts of the FBI. The case was prosecuted by Assistant U.S. Attorney Brandy Galler.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Three North Miami Residents Charged with Filing Fraudulent Tax Returns and Receiving over $1.8 Million in Fraudulent RefundsRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Ronald Verrocchio, Inspector in Charge, U.S. Postal Inspection Service (USPIS), and Paula Reid, Special Agent in Charge, United States Secret Service (USSS), Miami Field Office, announced the filing of an indictment charging defendants Gerald Duverger, 34, and Jean Louis, 40, both of North Miami, with filing false, fictitious, and fraudulent claims and with wire fraud. A separate indictment was filed charging Jeaneno Florent, 37, also of North Miami, with filing false, fictitious, and fraudulent claims. Defendants Duverger and Louis were arraigned today in federal court in Miami before U.S. Magistrate Judge Barry L. Garber at 10:00 a.m. Defendant Florent will be arraigned at a later date.
Defendant Louis is charged with one count and defendants Duverger and Florent are each charged with two counts of filing false, fictitious, and fraudulent claims, in violation of Title 18, United States Code, Section 287. Defendants Duverger and Louis are each charged with one count of wire fraud, in violation of Title 18, United States Code, Section 1343.
According to the charging documents, in 2012, the USSS received information that two large tax refund checks had been paid on tax returns filed by Duverger and Florent. With respect to Duverger, the tax return fraudulently indicated that Duverger made $8 million in wages from Capitol Records, Inc. and was entitled to a refund of approximately $613,043. The Department of Treasury sent the tax refund to a bank account controlled by Duverger.
As further alleged in the charging documents, in January 2013, a tax return was submitted in the name of Louis claiming over $9 million in wages from Warner Bros Distribution Corporation and seeking a refund of approximately $600,281. On July 3, 2013, the Department of Treasury sent the tax refund of approximately $603,883 to Louis’ bank account.
If convicted, the defendants face a possible maximum statutory sentence of five years in prison for each count of filing false, fictitious and fraudulent claims and 20 years in prison for each count of wire fraud.
Mr. Ferrer thanked IRS-CI, USPIS, USSS, and Miami Beach Police Department for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
An indictment is only an accusation and the defendants are presumed innocent until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Idaho Man Convicted of Obstruction of Justice in Key West Marine Life CaseRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Otha Easley, Acting Special Agent in Charge, NOAA Fisheries Office of Law Enforcement, and David Pharo, Resident Agent in Charge, U.S. Fish & Wildlife Service, Miami Field Office, announced that Peter C. Covino, IV, 20, of Eagle, Idaho, was convicted today after a jury trial, for knowingly and corruptly attempting to persuade another to alter, destroy, mutilate, or conceal an object with the intent to impair the object’s integrity and availability for use in an official proceeding, in violation of Title 18, United States Code, Sections 1512(b)(2)(B) and 2.
According to testimony presented in Court, and documents in the case file, in February 2013 Covino made two phone calls to a business in the Florida Keys involved in the wholesale marine life trade. His purpose in doing so was in part to direct one of the business owners “to erase all the text messages, and emails, or any other evidence” linking the Florida business to Ammon Covino, the uncle of defendant Peter Covino.
In a separate criminal proceeding, United States v. Ammon Covino, et al., Case No. 12-10020-CR-Martinez, Ammon Covino had been arrested on February 21, 2013, in connection with allegations that he engaged in conspiracy and various violations of the federal Lacey Act by purchasing and transporting wildlife from the Florida Keys to Idaho for exhibit at the Idaho Aquarium in Boise, Idaho. According to the charges, the wildlife included spotted eagle rays and lemon sharks, for which the required Florida licenses and permits were never acquired. Testimony established at trial that Ammon Covino had made the arrangements for the illegal purchases by emails, text messages, and telephone calls.
Prior to the two calls made by defendant Peter Covino on February 21, 2013, and before the arrest and initial court appearance of Ammon Covino, Peter Covino had never been involved with the acquisition of wildlife from Florida and had no prior direct dealings with the Florida-based supplier. Unknown to Peter Covino, the business owner was cooperating with federal authorities and his phone conversations were recorded. During his trial testimony, Peter Covino admitted that he made the calls at the direction of Ammon Covino.
Peter Covino faces a possible sentence of up to 20 years imprisonment, a fine of up to $250,000, and a term of supervised release of up to three years. United States District Judge Jose E. Martinez, who presided over the trial, set sentencing in this matter for September 24, 2013 at 1:00 p.m. in the Key West Courthouse.
Mr. Ferrer commended the investigative efforts of NOAA Office for Law Enforcement and the U.S. Fish & Wildlife Service, Office of Law Enforcement. Mr. Ferrer also thanked the Officers of the Idaho Department of Fish & Game. This case was prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Accountant Charged with Filing False Tax ReturnRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced today Edda Obando, 65, of Miami, pled guilty to a two count Information charging her with making and subscribing a false tax return, in violation of Title 26, United States Code, Section 7206(1).
According to the Information, Obando, who worked as an accountant, prepared a false and fraudulent tax return and significantly underreported income on her personal tax return.
Obando is scheduled for sentencing on September 30, 2013 before U.S. District Judge Frederico A. Moreno. She faces a maximum statutory sentence of up to three years in prison.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Norman O. Hemming, III.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
U.S. Intervenes in False Claims Act Lawsuit Against Fla. Home Health Care Company and Its OwnerRead the Press Release
The government has intervened in a whistleblower lawsuit against A Plus Home Health Care, Inc., a home health care company in Fort Lauderdale, Fla., and its owner, Tracy Nemerofsky, the Justice Department announced today. The government alleges that A Plus offered referring physicians’ spouses sham marketing positions with the company to induce the physicians to refer Medicare patients for home health care services.
“We will not relent in our efforts to combat fraudulent kickback schemes, such as the no-show jobs scheme used in this case, and return dollars to the Medicare program,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. “These schemes are classic examples of the fraud and abuse that plague and threaten the financial stability of Medicare, which provides much needed services to the sick and elderly.”
“Kickback schemes subvert the home health care market place and undermine the integrity of consumer choice,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “We will continue to hold accountable those who abuse our public health care programs at the expense of patients and taxpayers.”
The government alleges that, beginning in 2006, A Plus Home Health Care engaged in a scheme to increase Medicare referrals in the heavily saturated home health care market of southern Fla. The company allegedly hired at least seven physicians’ spouses and one physician’s boyfriend to perform marketing duties but required them to perform few, if any, actual job duties. To cover up the scheme, the government alleges, Ms. Nemerofsky generated sham personnel files, which included lists of job duties the spouses and boyfriend did not perform and performance reviews of job functions they did not complete, to give the false impression that the spouses and boyfriend were legitimate employees.
The government’s complaint also alleges that the spouses’ and boyfriend’s salaries were an inducement and reward for the physicians’ referrals of Medicare patients to A Plus Home Health Care. In fact, the government alleges the physicians’ referrals to A Plus Home Health Care spiked dramatically when the spouses and boyfriend began receiving paychecks from A Plus, allowing A Plus to receive millions of dollars in Medicare reimbursements. For example, in 2005, before A Plus hired any referring physicians’ spouses, A Plus was allegedly reimbursed $1.1 million from Medicare for home health care services. Conversely, in 2011, when A Plus was paying salaries to the seven referring physicians’ spouses and one physician’s boyfriend, A Plus’ Medicare reimbursement allegedly reached an all-time high of $6.6 million.
According to an August 2012 Department of Health and Human Services’ Office of Inspector General report, home health services are particularly vulnerable to fraud, waste and abuse. In 2010, Medicare paid a reported $19.5 billion to 11,203 home health care agencies for services provided to 3.4 million beneficiaries.
The lawsuit was filed by a former A Plus Home Health Care director of development, William Guthrie, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government and receive a share of any recovery. The act also authorizes the government to intervene in and assume primary responsibility for litigating the lawsuit, as the government has done in this case. The government previously settled with two of the couples that accepted payments from A Plus Home Health Care.
The government’s intervention in this lawsuit illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $14.7 billion through False Claims Act cases, with more than $10.7 billion of that amount recovered in cases involving fraud against federal health care programs.
The A Plus Home Health Care investigation reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Southern District of Florida, the Department of Health and Human Services’ Office of Inspector General, and the Federal Bureau of Investigation.
The lawsuit is U.S. ex rel. Guthrie v. A Plus Home Health Care, Inc., 12 CV 60629 (S.D. Fla.). The claims asserted against the defendants are allegations only, and there has been no determination of liability.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Broward Residents Sentenced for Identity Theft SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced that defendants Nathaniel Troy Maye, a/k/a Troy May, 44, and Tiwanna Tenise Thomason, 40, both of Ft. Lauderdale, were sentenced today before U.S. District Judge William J. Zloch. Maye was sentenced to 66 months in prison, followed by 3 years of supervised release. Thomason was sentenced to 5 years’ probation.
Both defendants previously pled guilty to one count of possession of 15 or more unauthorized access devices, in violation of Title 18, United States Code, Sections 1029(a)(3) and 2, and one count of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1) and 2.
According to court documents, on January 5, 2013, a cooperating source (CS) met with Thomason and Maye. During the meeting, Maye told the CS that he had a large number of stolen identities on a flash drive, and discussed using the stolen identities to file fraudulent tax returns and get refunds from those returns. On January 7, 2013, Maye gave the CS a flash drive containing 50 names, dates of birth, and accompanying social security numbers.
On January 8, 2013, the IRS executed a search warrant at Thomason’s apartment. During the search, the IRS recovered numerous electronic storage devices, including computers and flash drives. On two of the flash drives, the IRS found the personal identifying information of thousands of individuals, most of whom were from outside the state of Florida. The personal identifying information included the names, dates of birth, addresses, and social security numbers of numerous individuals.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney Strider Dickson.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Elementary School Principal in Texas Arrested for Attempting to Entice A Minor to Engage in Unlawful Sexual ActivityRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), and Jeffrey S. Katz, Interim Chief, Boynton Beach Police Department (BBPD), announce the arrest of Stephen Anthony Paulsen, 54, of Fort Worth, Texas, for attempting to entice a minor to engage in an illegal sexual activity, in violation of Title 18, United States Code, Section 2422(b). Paulsen had his initial appearance this morning before U.S. Magistrate Judge James M. Hopkins. The United States requested that Paulsen be detained and a Pretrial Detention hearing has been set for Tuesday, July 23, 2013, at 10:00 a.m. If convicted, the defendant faces a ten year mandatory term of imprisonment and a maximum term of life.
According to the criminal complaint, Paulsen sent numerous sexually explicit messages via a web-based social media application to an undercover officer who posed as a 15 year old boy. Paulsen then attempted to meet the minor to engage in illegal sexual activity when Paulsen believed the boy was home alone, at which point he was arrested. At the time of his arrest, Paulsen was in South Florida visiting family.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Mr. Ferrer commended the investigative efforts of ICE-HSI and BBPD. This case was adopted from the state in cooperation with Dave Aronberg, State Attorney, Palm Beach County, and the South Florida Internet Crimes Against Children (ICAC) Task Force. The case is being prosecuted by Assistant U.S. Attorney Adam McMichael.
A criminal complaint is only an accusation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Key West Residents Sentenced for Making False Claims on BP Spill FundRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that David Bacon, 53, and Donald Sargent, 37, both former residents of Key West, Florida, were sentenced today in United States District Court in Key West on their convictions on charges arising from false claims filed in connection with the Deepwater Horizon explosion and pollution incident in the Gulf of Mexico. Both defendants, and a third individual, Cleon Major, previously had entered guilty pleas to charges of wire fraud in the submission of fraudulent claims for lost income against the Gulf Coast Claims Facility, in violation of Title 18, United States Code, Section 1343.
U.S. District Court Judge Jose E. Martinez sentenced Bacon to a term of imprisonment of 21 months followed by a three year term of supervised release, and ordered he pay restitution to the fund in the amount of $16,000. Judge Martinez sentenced Sargent to a prison term of 33 months, also followed by a three year term of supervision, and restitution in the amount of $77,215 to the Gulf Coast Claims Facility. Defendant Major was sentenced on May 16, 2013 to a term of imprisonment of 110 months on the wire fraud charges and ordered to pay restitution in the amount of $306,228, as well as a period of supervised release of three years.
According to the Indictment, Joint Factual Statements filed by the parties, and other court records, on April 20, 2010, an explosion and fire occurred on the Deepwater Horizon, an oil rig in the Gulf of Mexico that had been drilling an exploration well. In June 2010, BP established the Gulf Coast Claims Facility (GCCF) for the purpose of administering, mediating, and settling certain claims of individuals and businesses for costs, damages, and other losses incurred as a result of the oil discharges due to the Deepwater Horizon incident. In August 2010, the GCCF began receiving and processing such claims, and BP ceased receiving and processing claims of individuals and businesses for costs, damages, and other losses incurred as a result of the oil discharges due to the Deepwater Horizon incident.
Major confessed in Court that on October 27, 2010, in furtherance of a scheme to obtain money from the GCCF, he filed a fraudulent electronic claim via the internet for approximately $10,000, in lost income, knowing the representations in his claim were false. To substantiate his claim of lost income, Major provided the GCCF fraudulent employment and income documents, which he transmitted via the internet from Monroe County, Florida, to the GCCF offices in Dublin, Ohio to support his demand for compensation.
In addition to his own claim, Major secured the personal identifying information, including social security numbers, of Bacon, Sargent, and others, and filed claims under their names with false supporting documentation. Major was held accountable as part of the relevant sentencing conduct for filing fraudulent claims for nine other Key West residents, in addition to Bacon and Sargent, which included false verifications of employment, fraudulent payroll records, and fictitious supporting tax forms. Compensation paid out under the false claims was shared between the individual claimant and Major.
Mr. Ferrer commended the investigative efforts of the FBI. The case was prosecuted by Assistant U.S. Attorney Thomas Watts-FitzGerald.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Food Exporter Employee Pleads Guilty and Is Sentenced for Forging USDA CertificateRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Samuel Santiago, Caribbean Area Manager, U.S. Department of Agriculture, Animal and Plant Health Inspection Service, Investigation and Enforcement Services (USDA-APHIS-IES), announced that Raquel Molina, 55, of Miami, pled guilty to the offense of Forging an Official Certificate, in violation of Title 7, United States Code, Section 1622(h)(4). Molina waived a Pre-Sentence Investigation Report and was simultaneously sentenced to a $500 fine.
According to the allegations of the charging instrument, Raquel Molina, an employee of a Miami, Florida food supply company, caused the export of a container of food to French Polynesia, Tahiti, which included ice cream, an animal product, milk. Merchandise containing animal products exported from the United States require the issuance and accompaniment of a Health Certificate issued by the United States Department of Agriculture Animal and Plant Inspection Service.
On May 22, 2009, Molina faxed a fraudulent Health Certificate for the cartons of ice cream, bearing the forged signature of a U.S. Export/Import Veterinary Medical Officer, to French Polynesia, Tahiti. Later that same day, Molina fraudulently filled out and signed another form, again using a false signature, under the title of Dairy Grader, bearing the seal of the United States Department of Agriculture Animal and Plant Inspection Service.
Raquel Molina pled guilty and was immediately sentenced for her role on July 17, 2013, before U.S. District Judge Robert N. Scola, Jr.
Mr. Ferrer commended the investigative efforts of the USDA-APHIS-IES. This case is being prosecuted by Assistant U.S. Attorney Norman O. Hemming, III.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Broward County Resident Sentenced for Importing Marijuana from the BahamasRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), announced that Broward resident Jaime Omar Sotomayor was sentenced on Friday, July 12, 2013 to 84 months imprisonment and four years of supervised release by United States District Judge William J. Zloch on charges of importing marijuana from the Bahamas.
Sotomayor was adjudicated guilty of the following offenses: conspiracy to import 100 kilograms or more of marijuana in violation of Title 21, United States Code, Section 963 (count one), importation of 100 kilograms of marijuana in violation of Title 21, United States Code, Section 952(a) (count two), conspiracy to possess with intent to distribute 100 kilograms or more of marijuana in violation of Title 21, United States Code, Section 846 (count three), and possession with intent to distribution 100 kilograms of marijuana in violation of Title 21, United States Code, Section 841(a)(1) (count four).
This case stemmed from an interdiction of marijuana by the Palm Beach Police Department and Department of Homeland Security from a boat that traveled from Bimini, Bahamas to West Palm Beach loaded with 667 pounds of marijuana in the center console and coolers located on the vessel.
Mr. Ferrer commended the investigative efforts of ICE-HSI and the Palm Beach Police Department. The case was prosecuted by Assistant United States Attorney Lothrop Morris.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Respiratory Therapist Pleads Guilty in Identity Theft Tax Refund Fraud Scheme Involving Theft of Hundreds of Patients’ Personal Identity InformationRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Paula Reid, Special Agent in Charge, U.S. Secret Service, announced that defendant Betty Cole, 34, of Miami, pled guilty yesterday for her participation in a stolen identity tax refund scheme. Sentencing is scheduled for September 23, 2013 at 11:15 a.m. before U.S. District Judge Robin Rosenbaum.
Cole pled guilty to one count of conspiracy to possess fifteen or more unauthorized access devices in violation of Title 18, United States Code, Section 1029(b)(2), and one count of aggravated identity theft in violation of Title 18, United States Code, Section 1028A. At sentencing, the defendant faces a maximum term of imprisonment of seven years.
According to the plea documents, from in or around June 2011, continuing through February 2012, Cole worked as a respiratory therapist at South Miami Hospital (“SMH”) in Miami, Florida. The defendant had access to names, dates of birth, and Social Security numbers (together, personal identity information or “PII”) of patients in the course of her job duties. In or around June 2011, Alci Bonannee asked the defendant to provide Bonannee with PII of SMH patients. In or around June 2011, and again in or around February 2012, Cole obtained the PII of SMH patients and provided that information to Bonannee.
Bonanee used the personal identity information to file fraudulent tax returns with the Internal Revenue Service seeking refunds. Cole knew that Bonannee would use the personal identity information to submit fraudulent tax returns. Bonannee paid Cole thousands of dollars for over 800 patients’ personal identity information.
Mr. Ferrer commended the investigative efforts of IRS-CI and the U.S. Secret Service. The case is being prosecuted by Assistant U.S. Attorney Michael N. Berger.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Pill Mill Doctor Pleads Guilty to Oxycodone ConspiracyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, and Mark R. Trouville, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, announced today that Dr. Scott Becker, 54, of Pembroke Pines, Florida, pleaded guilty to conspiring to distribute and dispense large amounts of oxycodone without a legitimate medical purpose and outside the usual course of professional practice. Dr. Becker also pleaded guilty to money laundering. Becker faces maximum terms of imprisonment of five years on the drug conspiracy charge and ten years on the money laundering charge.
According to the terms of the plea agreement, Becker agreed to forfeit $470,400 in money and property representing the illegal narcotics proceeds he earned as a result of his involvement as a physician at All Pain Management in Dania Beach. As set forth in the plea agreement, between February 16 and September 17, 2010, Becker was employed as a clinic doctor at All Pain Management which, at the time, was owned by co-conspirators Vincent Colangelo and several other unnamed individuals. Colangelo pleaded guilty to narcotics, money laundering and federal income tax offenses on April 2, 2012, arising from his ownership of six pill mill clinics and a pharmacy in Broward and Miami-Dade Counties. According to a review of medical records, while at All Pain Management, Becker prescribed 932,259 oxycodone, 30 milligram pills during the course of 4,821 patient visits and more than 98% of Becker’s patients received prescriptions for oxycodone. Becker also laundered approximately $24,142 in illegal narcotics proceeds.
Today’s case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Ferrer thanked the DEA, IRS-CI and the Broward Sheriff’s Office, as well as the many other state and local agencies for their investigative work. This case is being prosecuted by Assistant U.S. Attorneys Scott Behnke and Roger Powell and Tax Division Trial Attorney Greg Tortella.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Florida Health Care Medical Director and Six Therapists Arrested for Alleged Roles in $63 Million Fraud SchemeRead the Press Release
The former medical director at defunct health provider Health Care Solutions Network (HCSN) and six therapists were arrested today, accused of conspiring to fraudulently bill Medicare and Florida Medicaid more than $63 million.
U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; Special Agent in Charge Michael B. Steinbach of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office, made the announcement after the indictment was unsealed following the arrests.
The former HCSN medical director, Roger Rousseau, 71, of Miami, was indicted on July 11, 2013, and charged with conspiracy to commit health care fraud and two counts of health care fraud. In addition, six therapists from Miami – Doris Crabtree, 61; Angela Salafia, 65; Liliana Marks, 46; Ruben Busquets, 49; Alina Fonts, 47; and Blanca Ruiz, 59 – were also charged in the same indictment with conspiracy to commit health care fraud. Fonts was also charged with two counts of health care fraud, and Crabtree, Salafia, Marks and Busquets were each charged with two counts of making false statements related to health care matters. The indictment also seeks forfeiture of proceeds from the alleged healthcare fraud offenses.
According to the indictment, HCSN purported to provide intensive mental health treatment to Medicare and Medicaid beneficiaries in Miami and Hendersonville, N.C., from approximately 2004 through 2011 for purported mental health services that were not medically necessary and often never provided. The indictment also alleges that in Miami, HCSN paid kickbacks to assisted living facility owners and operators who, in exchange, referred beneficiaries to HCSN. In total, HCSN is alleged to have fraudulently billed Medicare and Medicaid approximately $63.7 million, from which HCSN allegedly received payments totaling approximately $28 million.
Rousseau served as the medical director for HCSN in Florida, and the indictment alleges that he routinely signed what he knew to be fabricated and altered medical records without ever reviewing the materials, and, in most instances, without ever meeting with the patient. The indictment also alleges that Crabtree, Salafia, Marks, Busquets, Fonts and Ruiz fabricated HCSN medical records to support false and fraudulent claims for partial hospitalization program services that were not medically necessary and were not provided.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. The case is being prosecuted by Fraud Section Trial Attorney Allan J. Medina.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Boca Raton Resident Convicted of Filing False Tax Returns, Access Device Fraud, and Aggravated Identity TheftRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Harvey Zitron, of Boca Raton, was convicted by a federal grand jury on all ten counts charged in the indictment.
According to the indictment, Zitron was charged with filing fraudulent IRS United States Individual Income Tax Returns, Forms 1040, for 2004 and 2005 (Counts 1 and 2), and Amended Individual Income Tax Returns, Forms 1040X for 2003, 2004 and 2005 (Counts 3-5), all in violation of Title 26, United States Code, Section 7206(1). In addition, he was charged with three counts of access device fraud, in violation of Title 18, United States Code, Section 1029(a)(2) (Counts 6, 8 and 10), and two counts of aggravated identity theft, in violation of Title 18 United States Code, Section 1028A(a)(1) (Counts 7 and 9). The trial was held before the Honorable Robert N. Scola, U.S. District Court Judge. Sentencing is set for October 8, 2013.
According to the evidence presented at trial, Zitron used companies to write checks to friends or acquaintances who cashed the checks and returned the cash to Zitron. Zitron then failed to declare this income on his tax returns. He also opened credit card accounts in the names of his son and ex-wife, and charged more than $1,000 in a single year on those accounts without their authorization or knowledge.
Zitron faces a maximum sentence of three years for each count of tax fraud, ten years for each count of access device fraud, and two consecutive years for each count of aggravated identity theft.
Mr. Ferrer commended the investigative efforts of the IRS-CI and the FBI. This case was prosecuted by Assistant U.S. Attorney Harry Wallace and Department of Justice Tax Division Attorney Kevin J. Lombardi.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami Woman Sentenced in Identity Theft Tax Refund Fraud SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Tom Caul, Acting Special Agent in Charge, Social Security Administration, Office of Inspector General (SSA-OIG), and Steven Steinberg, Chief, Aventura Police Department, announced today that Natoya Mashea Handy, 30, of Miami, was sentenced for her participation in a tax refund scheme using stolen identities to convert government monies for her own use. Handy was sentenced to 51 months in prison to be followed by two years of supervised release. A restitution hearing was also ordered but will be determined at a later hearing.
On April 12, 2013, Handy was convicted by a jury of one count of access device fraud in violation of Title 18, United States Code, Section 1029(a)(3), and five counts of aggravated identity theft in violation of Title 18, United States Code, Section 1028A, in connection with an identity theft tax refund fraud scheme.
According to testimony and evidence presented at trial, on or about April 5, 2012, the defendant was found with at least fifteen (15) social security numbers, names, and dates of birth belonging to persons who were formerly or presently incarcerated by the state of Florida. The trial testimony and evidence further showed that fraudulent tax returns were filed for tax year 2011 for seventeen (17) of the individuals whose social security numbers the defendant possessed. Each of these fraudulent tax returns fraudulently claimed entitlement to a refund, amounting to thousands of dollars in fraud.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to the City of Aventura Police Department, the City of Miami Gardens Police Department, and IRS-CI, with assistance from the SSA-OIG. The case is being prosecuted by Assistant U.S. Attorneys Alexandra Hui and Amanda Perwin.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Top Executive of Miami Beach Manufacturing Company Convicted in Multi-Million Dollar Investment SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce that Craig Stanley Toll, 64, of Pembroke Pines, was convicted today by a federal jury. Specifically, Toll was convicted of two counts of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349; three counts of substantive wire fraud, in violation of Title 18, United States Code, Section 1343; one count of major fraud against the United States, in violation of Title 18, United States Code, Section 1031; one count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1957; and three counts of making false statements to a United States government agency, in violation of Title 18, United States Code, Section 1001. Toll was acquitted of 12 counts of wire fraud.
According to allegations in the indictment and the evidence presented at trial, Innovida Holdings, LLC, was a Florida limited liability company located in Miami Beach. Innovida manufactured fiber composite panels for the construction industry for use in the construction of residential, commercial, governmental, and other structures without the need for cement, steel or wood. Innovida purported to be a rapidly expanding and financially strong international operation with facilities in the United States, the United Arab Emirates, Germany, Angola, Tanzania, and other countries. Co-defendant Claudio Osorio was the president, owner and majority shareholder of Innovida. Defendant Craig Toll, a licensed CPA, was the company’s Chief Financial Officer.
According to the indictment and as shown at trial, between March 2007 and March 2011, Osorio, Toll and others offered and sold shareholder interests and joint-venture partnerships in Innovida to select individuals and groups, raising more than $40,000,000 from approximately ten (10) investors and investment groups located in the United States and other countries. Osorio, Toll and others solicited and recruited investors by making materially false representations and concealing and omitting material facts regarding, among other things, the profitability of the company, the rates of return on investment funds, the use of investors’ funds and the existence of a pending lucrative contract with a third-party entity. Osorio received moneys from investors based on these misrepresentations. In addition, Osorio used investor monies for his and his co-conspirators’ personal benefit and to maintain and further the fraud scheme.
The indictment further alleges that between January 2010 and March 2011, Osorio, Toll and others applied for and obtained a $10,000,000 loan from the Overseas Private Investment Corporation (“OPIC”), a U.S. government agency that promotes U.S. government investments abroad to foster the development and growth of free markets. The purported purpose of the loan was to build a manufacturing facility and 500 homes in Haiti for displaced families in the aftermath of the January 2010 earthquake. The indictment alleges and the jury found that Osorio, Toll and others made materially false representations and omissions concerning, among other things, the profitability of Innovida, the purported use of the loan proceeds, an equity contribution to be made by Innovida, and contracts that Innovida purportedly had obtained with third-party vendors. Osorio used the OPIC loan proceeds to repay investors and for his and his co-conspirators’ personal benefit and to further the fraud scheme.
Codefendant Claudio Osorio pled guilty earlier to two counts of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
Mr. Ferrer commended the investigative efforts of the FBI. Mr. Ferrer also commended the efforts of the SEC-Miami Regional Office, for their cooperation and assistance during this investigation. The case was prosecuted by Assistant U.S. Attorneys Lois Foster-Steers and Kimberly Selmore.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mortgage Company Executive Charged in Fraud CaseRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Steve Linick, Inspector General of the Federal Housing Finance Agency Office of Inspector General, announced the filing of a federal Information charging Patrick J. Mansell, 68, of Boca Raton, FL, Vice President of Coastal States Mortgage Corporation (Coastal) with conspiracy to commit wire fraud to defraud government sponsored entities, Fannie Mae and Freddie Mac.
According to the Information, from April 2007 through February 2012, in the Southern District of Florida, Coastal was a licensed mortgage brokerage whose primary business activity was the selling and servicing of mortgage loans for Freddie Mac and Fannie Mae. As alleged in the Information, Coastal processed payments and payoffs received from borrowers on behalf of Freddie Mac and Fannie Mae, according to the contractual agreements entered into between them. As further alleged in the Information, Coastal failed to remit some of the mortgage loan payoffs that it received from borrowers to Freddie Mac and Fannie Mae, resulting in a loss to Freddie Mac and Fannie Mae. This misappropriation was concealed by the regular submission of false financial reports by Coastal, via an internet portal, to Freddie Mac and Fannie Mae. If convicted, the defendant faces a statutory maximum penalty of five years’ incarceration, followed by a three year period of supervised release, a fine of up to $250,000 and restitution.
Mr. Ferrer commended the investigative efforts of the Federal Housing Finance Agency Office of the Inspector General. The case is being prosecuted by Assistant U.S. Attorney Thomas P. Lanigan.
An information is only an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Weston Man Indicted for Production and Possession of Child PornographyRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s, Homeland Security Investigations (ICE-HSI) and Scott Israel, Broward Sheriff’s Office, announce the indictment of Thomas Edler, 48, of Weston, on child pornography charges. Edler has appeared before U.S. Magistrate Judge Patrick M. Hunt in Fort Lauderdale and was detained pending trial.
The four-count indictment charges Edler with three counts of production of child pornography and one count of possession of child pornography, in violation of Title 18, United States Code, Sections 2251(a) and 2252(a). If convicted, Edler faces a mandatory minimum sentence of 15 years in prison and a maximum sentence of up 30 years. Edler would also be required to register as a sex offender in any jurisdiction in which he lives, works or attends school.
According to documents filed with the court, in February 2013, the National Center for Missing and Exploited Children (NCMEC) requested the assistance of the South Florida Internet Crimes against Children (ICAC) Task Force to help identify a child who appeared in numerous images of child pornography that had been recovered across the county. These images had been previously identified and categorized by NCMEC as the “Dave” series. During the investigation that followed, detectives assigned to the South Florida ICAC Task Force determined that the images in the “Dave” series were taken at Edler’s Weston residence.
On April 9, 2013, law enforcement executed a federal search warrant at Edler’s residence and seized several items of electronic media. A forensic analysis revealed numerous images of children under the age of 12 in sexually suggestive poses. These images were taken with a camera belonging to Edler. Subsequent forensic investigation revealed that a camera belonging to Edler was also used to photograph a series of child pornography images categorized by NCMEC as the “Lil Charlie” series and at least one additional child who is still unidentified.
Mr. Ferrer commended the investigative efforts of ICE-HSI and the South Florida ICAC. The case is being prosecuted by Assistant U.S. Attorneys Corey Steinberg and Francis Viamontes.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami, Manhattan, and Brooklyn U.S. Attorneys Announce Extradition of Colombian Narcotics KingpinRead the Press Release
Wifredo A. Ferrer, Preet Bharara, Loretta E. Lynch – the United States Attorneys for the Southern District of Florida (SDFL), Southern District of New York (SDNY), and Eastern District of New York (EDNY), respectively – Michele M. Leonhart, Administrator of the U.S. Drug Enforcement Administration (DEA), James Dinkins, Executive Assistant Director of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Raymond W. Kelly, the Police Commissioner of the City of New York (NYPD), announced today the extradition of Daniel Barrera Barrera, also known as “Loco,” a citizen of Colombia, to the U.S. on charges that for decades he manufactured hundreds of tons of cocaine annually in Colombia and trafficked it to various parts of the world, including the U.S., and laundered tens of millions of dollars in proceeds from that narcotics trafficking activity. Barrera arrived in the Southern District of New York this afternoon. He will be presented and arraigned in the Southern District of New York before U.S. District Judge Alvin K. Hellerstein on July 10, 2013, at 11:00 a.m., and in the Eastern District of New York before U.S. District Judge I. Leo Glasser on July 11, 2013, at 3:30 p.m. Following his prosecution in New York, Barrera will be presented and arraigned in the Southern District of Florida.
In March 2010, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated Barrera as a “Special Designated Narcotics Trafficker,” pursuant to the Foreign Narcotics Kingpin Designation Act. Barrera was arrested in Venezuela on September 18, 2012. Thereafter, he was sent to Colombia, from where the U.S. sought Barrera’s extradition. The extradition of Barrera is the result of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) investigation led by DEA and HSI. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
U.S. Attorney Wifredo A. Ferrer said, “Daniel “Loco” Barrera Barrera’s arrest and extradition is the direct result of strong international cooperation with Colombian authorities. It also reflects the hard work and perseverance of our law enforcement partners – both at home and abroad – whose dedicated efforts led to the capture of one of the world’s most notorious drug traffickers. While Barrera evaded capture for several years, the time has finally come for him to answer for his crimes and face justice. As this case confirms, the United States will never tire in its pursuit of those who profit from the illegal drug trade.”
U.S. Attorney Preet Bharara said, “For more than a decade, as alleged, Daniel Barrera Barrera has operated at the center of a truly evil web spun between his narcotics trafficking organization and two violent and sworn enemy terrorist organizations – the AUC and the FARC. By purchasing raw cocaine paste from the FARC, which he processed in laboratories in areas controlled by the AUC, to whom he paid fees, Barrera’s behemoth cocaine organization reached an annual production rate of upwards of 400 tons, enriching itself and the two terrorist organizations it paid off, as the indictment describes. This was truly cocaine with blood in its background. With his arrival in the U.S., Barrera must now answer for his alleged crimes, and we will continue to work with our law enforcement partners, both here and abroad, to prosecute him and other alleged titans of the transnational drug trade.”
U.S. Attorney Loretta E. Lynch said, “As alleged in the three indictments on which he was extradited, Daniel “Loco” Barrera Barrera was the kingpin of a stunningly prolific Colombian drug cartel, which flooded the globe with its deadly product. Barrera also allegedly wrought destruction closer to home, working with not one but two terrorist organizations responsible for decades of death and destruction in Colombia, all to ensure his deadly business ran smoothly. His extradition to the United States marks the fall of the last don of an organization marked by its worldwide reach, ruthless criminality, and staggering profits. This investigation exemplifies the global cooperation necessary to combat international drug traffickers and our commitment to dismantle these criminal organizations from the highest levels down.”
DEA Administrator Michele M. Leonhart said, “Daniel Barrera allegedly worked with both the FARC and AUC terrorist organizations in operating his drug trafficking syndicate, becoming one of the most prolific drug traffickers of the past twenty years. Charged with manufacturing upwards of 400 tons of cocaine a year, Barrera’s alleged impact on the global trade of cocaine was immense – but so was DEA’s response. Thanks to the cooperative efforts of our Colombian and U.S. law enforcement counterparts, Barrera’s criminal career is over as he now faces charges that may bring him a life behind bars.”
ICE HSI Executive Assistant Director James Dinkins said, “Mr. Barrera and his co- conspirators stand accused of running one of the largest cocaine trafficking operations in history. His extradition to the United States represents a major victory for the rule of law. While Mr. Barrera may have thought he was safe hiding and conducting his illicit activities in South American countries, an international team of law enforcement agencies worked tirelessly and cooperatively towards bringing him to justice.”
As alleged in the Superseding Indictment filed in the Southern District of New York (S107 Cr. 862 (AKH)), the Superseding Indictment filed in the Eastern District of New York (S2 10 Cr. 288 (ILG)), the Superseding Indictment filed in the Southern District of Florida (S1 10 Cr. 20587 (DLG)), other documents filed in these cases, and information in the public record:
Since 1998, Barrera has run a cocaine manufacturing and trafficking syndicate which each month processed approximately 30,000 kilograms of raw cocaine base into about the same amount of cocaine powder – in total, up to approximately 400 tons of cocaine annually.
Barrera purchased the raw cocaine base or paste from the designated terrorist group Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia, or the “FARC”), which has been the world’s largest supplier of cocaine and which has engaged in bombings, massacres, kidnappings, and other acts of violence within Colombia.
Barrera converted the raw cocaine into powder at laboratories he owned and operated in an area of Colombia controlled by the since demobilized terrorist group, Autodefensas Unidas de Colombia (the “AUC”). For years, the AUC’s main political objective was to defeat the FARC in armed conflict, and it financed its terrorist activities through the proceeds of cocaine trafficking in AUC-controlled regions of Colombia.
Although Barrera purchased raw materials for cocaine production from the FARC, he was able to maintain his network of cocaine-processing laboratories in AUC-controlled territory, in part by paying monthly “taxes” to the AUC. The fees Barrera paid to the AUC also allowed him to safely move the processed cocaine through and out of Colombia, into locations on four continents – including into the U.S.
Barrera reaped tens of millions of dollars of profits from cocaine trafficking, which the laundered through illicit means.
The FARC and the AUC are both designated by the U.S. Department of State as Foreign Terrorist Organizations.
Barrera, 44, is charged in the Southern District of New York with one count of conspiring to distribute and manufacture cocaine knowing it would be unlawfully imported into the U.S. On that count, Barrera faces a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison.
Barrera is charged in the Eastern District of New York with one count of conspiracy to launder money. On that count, Barrera faces a maximum sentence of 20 years in prison.
Barrera is charged in the Southern District of Florida with one count of conspiring to import cocaine into the U.S. and one count of conspiring to manufacture and distribute cocaine knowing that it would be unlawfully imported into the U.S. On those counts, Barrera faces a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison.
Mr. Ferrer, Mr. Bharara, and Ms. Lynch praised the outstanding work of the OCDETF, working in cooperation with HSI New York’s El Dorado Task Force, the DEA’s Bogota Country Office, the DEA’s Caracas Country Office, the DEA’s Miami Field Division, the DEA’s New York Drug Enforcement Task Force – which is comprised of agents and officers of the DEA, the New York City Police Department, and the New York State Police – as well as HSI Bogota. Mr. Ferrer, Mr. Bharara, and Ms. Lynch, also thanked the Colombian National Police, the U.S. Marshals Service, and the U.S. Department of Justice’s Office of International Affairs for their ongoing assistance.
The Southern District of Florida case is being handled by that office’s Narcotics Unit. Assistant United States Attorney Adam Fels is in charge of the prosecution. The Southern District of New York case is being handled by that office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Jenna Dabbs, Benjamin Naftalis, and Andrea Surratt are in charge of the prosecution. The Eastern District of New York case is being handled by that office’s International Narcotics Strike Force. Assistant United States Attorneys Justin Lerer, Soumya Dayananda, and Amir Toossi are in charge of the prosecution.
The charges and allegations contained in the Indictments are merely accusations and the defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami Man Sentenced in $3.3 Million Identity Theft Tax Refund Fraud SchemeRead the Press Release
Defendant Filed Approximately 400 Fraudulent Tax Returns Seeking Refunds
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Michael J. DePalma, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, and Rafael P. Hernandez, Jr., Chief, North Miami Beach Police Department, announced that Charlton Escarmant, 29, of Miami, was sentenced yesterday on identity theft tax refund charges. At the sentencing hearing, U.S. District Judge Joan A. Lenard sentenced Escarmant to 94 months in prison, to be followed by 3 year of supervised release. A restitution hearing is scheduled for August 26, 2013 at 3:00 PM.
Escarmant was charged with co-defendant Arthy Icart for their participation in an identity theft tax refund scheme. On March 19, 2013, a jury convicted defendant Escarmant of one count of conspiracy to submit false claims to the Internal Revenue Service, one count of access device fraud, and two counts of aggravated identity theft. According to testimony and evidence presented at trial, some of the personal identification information used by Escarmant and Icart to file fraudulent tax returns was stolen from Tallahassee Community College’s (TCC) financial aid office. In fact, more than 3,200 names found on a computer in Escarmant’s possession came from TCC.
According to the evidence presented during trial, Escarmant filed tax returns using the stolen identification information and also in his own name and created false W-2 forms with fictitious employer information. Escarmant’s W-2 form falsely claimed that he was a veterinarian at Central Broward Animal Hospital. In fact, however, Escarmant never worked at the Central Broward Animal Hospital.
At the time of their arrest, Escarmant and Icart unlawfully possessed approximately 22 pre-paid tax debit cards in the names of other individuals. In total, during the course of the scheme, the defendant and his co-conspirator submitted approximately 400 fraudulent tax returns to the Internal Revenue Service, seeking more than $3.3 million in tax refunds.
Co-conspirator Arthy Icart was sentenced on April 5, 2013, after having pled guilty to charges of conspiracy to file fraudulent claims, access device fraud, and aggravated ID theft. U.S. District Judge Lenard sentenced Icart to a total of 70 months’ imprisonment followed by one year of supervised release. In addition, Icart was ordered to pay restitution of $1,387,774.
Mr. Ferrer commended the investigative efforts of the Identity Theft Tax Refund Strike Force, with special commendation to IRS-CI and the North Miami Beach Police Department. Mr. Ferrer also thanked the Tallahassee Community College for their cooperation during this investigation. The case is being prosecuted by Assistant U.S. Attorneys Michael B. Nadler and Elina Rubin-Smith.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.