Northern District of Georgia
Press releases recorded for this federal judicial district.
Unregistered commodity pool operator arraigned on fraud chargeRead the Press Release
ATLANTA –Kevin Perry has been arraigned on charges that he ran a foreign currency investment fraud scheme.
“This defendant allegedly defrauded investors who trusted him with their hard-earned money,” said U.S. Attorney Byung J. “BJay” Pak. “Even after regulators took action against Perry, he allegedly continued to seek to defraud investors, including at one point attempting to defraud an undercover FBI agent.”
“Instead of living off well-earned investments, Perry’s alleged victims now have to worry about their financial futures,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Nothing can make victims of investment fraud whole again, but the FBI will continue to make it a priority to investigate and punish anyone who preys on investors for their own personal greed.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Perry allegedly led investors to believe that his investment company, Lucrative Pips, was successfully earning substantial profits by investing in the foreign currency (or “forex”) market. Perry induced investors into sending money by signing agreements that claimed the investors’ initial investments were secure from loss. In actuality, Lucrative Pips was never registered as a “commodity pool operator” with the Commodity Futures Trading Commission. Also, Perry had never generated the historical returns represented to investors, and he was using investor money to enrich himself or to pay off other investors, with the goal of enticing others to invest with him.
The indictment further alleges that even after the Commodity Futures Trading Commission filed a civil complaint against Perry, he continued to make fraudulent investment pitches to potential investors. In December 2018, Perry made a series of fraudulent investment pitches to an undercover FBI agent, who was posing as a potential investor. Perry told the undercover FBI agent that an investment of $10,000 would return a profit of $19,000 to $25,000 per month and that he minimized any risk by doing a “100% money-back guarantee.”
Kevin Perry, 21, of Cartersville, Georgia was arraigned Monday, February 25, 2019 before U.S. Magistrate Judge Catherine M. Salinas. A federal grand jury returned an indictment on December 12, 2018, alleging that Perry committed wire fraud.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the FBI.
Assistant U.S. Attorney Thomas J. Krepp and Nathan P. Kitchens, Deputy Chief of the Cyber and Intellectual Property Crime Section, are prosecuting the case. The Commodity Futures Trading Commission provided invaluable assistance throughout the course of the investigation.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
U.S. Attorney’s Office for the Northern District of Georgia helps to collect over $77 million in civil and criminal actions in fiscal year 2018Read the Press Release
ATLANTA – U.S. Attorney Byung J. “BJay” Pak announced today that the Northern District of Georgia helped to collect over $77 million in civil and criminal restitution and financial penalties for Fiscal Year 2018, ending September 30, 2018. Of this amount, the Northern District of Georgia directly collected $29,899,597, of which $10,536,937 was collected in criminal actions and $19,362,660 was collected in civil actions. Also, the Northern District of Georgia worked with other U.S. Attorney’s Offices and components of the Department of Justice in joint cases to collect an additional $47,846,632. Of the amount collected jointly, $12,825 was collected in criminal actions and $47,833,807 was collected in civil actions.
As a whole, the Justice Department collected nearly $15 billion in civil and criminal actions in FY 2018. The $14,839,821,650 in collections in FY 2018 represents nearly seven times the appropriated $2.13 billion ($2,136,750,000) budget for the 94 U.S. Attorneys’ offices.
“Recovery of restitution and the imposition of financial penalties are a critical part of enforcement in criminal and civil fraud cases,” said U.S. Attorney Byung J. “BJay” Pak. “This announcement shows that through financial enforcement efforts, our office has delivered a significant financial benefit to the citizens of our district and the country.”
The largest collections were from affirmative civil enforcement actions, in which the United States recovered government funds lost to fraud or other misconduct, or collected fines imposed on individuals and corporations for violations of federal health, safety, civil rights or environmental laws. For example, the Northern District of Georgia investigated and recovered $3.2 million from Georgia Bone & Joint; Southern Bone & Joint; Southern Crescent Anesthesiology, PC; Sentry Anesthesia Management, LLC; and David LaGuardia for allegations of kickbacks and submission of false claims to Medicare for prescription drugs purchased outside of the United States which were not approved by the U.S. Food and Drug Administration (FDA) https://www.justice.gov/usao-ndga/pr/orthopaedic-and-anesthesia-providers-pay-32-million-settle-false-claim-act-allegations. Similarly, over $30 million was recovered this year from Signature HealthCARE LLC in an investigation which began in this district and became national in scope following a whistleblower allegation filed in another district https://www.justice.gov/usao-ndga/pr/signature-healthcare-pay-more-30-million-resolve-false-claims-act-allegations-related. This Office worked jointly with the U.S. Attorney’s Office for the Middle District of Tennessee and the Department of Justice Civil Frauds Section to investigate and ultimately settle violations of the False Claims Act for knowingly submitting false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary, and skilled. In addition, the Northern District of Georgia recovered debts owed to federal agencies, including the Departments of Housing and Urban Development, Health and Human Services, Treasury and Education, as well as the Small Business Administration.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are also responsible for enforcing and collecting criminal debts owed to the U.S. and to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs. Examples of recoveries by the Northern District of Georgia include garnishments and other collection efforts that led to recovery of criminal restitution in the amounts of $290,493 in United States v. Justin Herring, and $328,784 in United States v. Paul Anderson, both fraud cases prosecuted by the office.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Violent felon convicted of serial armed robberies of Waffle House restaurants and other businesses in DeKalb CountyRead the Press Release
ATLANTA – Joseph Orlando Hood, a previously convicted felon, has been convicted by a federal jury of several armed commercial robberies, including three Waffle House Restaurants and a United Inn and Suites Motel.
“Hood terrorized and nearly killed several people during his lengthy robbery spree,” said U.S. Attorney Byung J. “BJay” Pak. “Thanks to the courage of the many victims in this case who testified at trial despite suffering ongoing trauma, and the diligence of our federal and local law enforcement partners, this violent serial robber will be kept off the streets of our district for many years.”
“This case is the product of a concerted collaborative effort on the part of ATF and its local partners to target, investigate, and eliminate the perpetrators of violent crime,” said Assistant Special Agent in Charge Beau Kolodka of the ATF Atlanta Field Division.
“We are very thankful that the partnership between state local and federal agencies have proven to be effective in making our communities safe. In this case, it has taken a very violent felon off the streets. It is successful prosecutions of cases like this, that strengthens our collaboration between law enforcement and citizens to address crime and the fear of crime in our communities,” said Chamblee Police Chief Kerry Thomas.
According to U.S. Attorney Pak, the charges and other information presented in court: Between November 12, 2016, and November 17, 2016, Hood committed commercial armed robberies at Waffle House restaurants in Chamblee, Lithonia, and Tucker, Georgia, at the United Inn and Suites in Decatur, and the Raymok Bar and Grill in Scottsdale. All of the businesses were located in Georgia.
During one of the Waffle House robberies, Hood shot at a customer who tried to escape. He also pistol-whipped the manager of United Inn and Suites motel during the armed robbery of that business. Hood’s armed robbery spree ended after he robbed Raymok Bar and Grill. While Hood fired several rounds at a customer who tried to escape during the robbery, the manager of the bar shot Hood in the leg. Hood fled but was quickly located by law enforcement officers in a nearby apartment complex.
Joseph Orlando Hood, 32, of Scottdale, Georgia, will be sentenced before U.S. District Steve C. Jones on May 20, 2019 at 10:00 a.m. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the DeKalb Police Department, and the Chamblee Police Department.
Assistant U.S. Attorneys Dash A. Cooper and Joseph Plummer prosecuted the case.
This case was brought as part of Project Safe Neighborhoods (PSN). In keeping with the Attorney General’s mission to reduce violent crime, the Northern District of Georgia’s PSN program focuses on prosecuting those individuals who most significantly drive violence in our communities, and supports and fosters partnerships between law enforcement and schools, the faith community, and local community leaders to prevent and deter future criminal conduct.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected].
Former MARTA administrator sentenced to prison for taking more than $520,000 in fraud schemeRead the Press Release
ATLANTA – Jhonnita L. Williams, a former department administrator at the Metropolitan Atlanta Rapid Transit Authority (MARTA), has been sentenced for her part in a false-invoice scheme that resulted in MARTA paying more than $520,000 for maintenance projects where no worked was actually performed.
“Williams sold the public’s trust for self-enrichment when she chose to participate in a half of million dollar theft of MARTA funds,” said U.S. Attorney Byung J. “BJay” Pak. “Her sentence sends a clear message to others who may choose to misuse taxpayer dollars that they will be prosecuted to the fullest extent of the law.”
“Government employees who use their positions to steal money from taxpayers to subsidize their own personal greed, are one of the FBI’s top investigative priorities,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Public corruption erodes public confidence and the first step toward restoring that confidence is sending a message that crimes like this will not go unpunished.”
“The sentencing of Ms. Jhonnita Williams concludes a coordinated investigation with our federal law enforcement partners, and we are satisfied with the results,” said MARTA Police Chief Wanda Y. Dunham. “This sentencing will send a clear message to any MARTA employee who thinks they are above the law and would act to erode the trust the public has given us. We would like to thank members of the FBI and U.S. Attorney’s Office for their efforts in assisting the MARTA Police Department with bringing all of the major players involved in this fraud scheme to justice and for seeking restitution of taxpayer dollars.”
According to U.S. Attorney Pak, the indictment, and other information presented in court: MARTA is the principal public transportation operator in the Atlanta area, providing fixed rail and bus service to more than 500,000 passengers per weekday. Formed by Metropolitan Atlanta Rapid Transit Authority Act of 1965, MARTA is a multi-county local governmental agency with a 2016 annual budget of more than $880 million.
Williams worked for MARTA from 1999 to 2017. From 2010 to 2017, Williams worked as an assistant and department administrator for Joseph J. Erves. During most of the conspiracy, Erves served as MARTA’s senior director of operations and oversaw the maintenance of all of its buses and rail cars.
From approximately June 2010 to December 2016, Williams and Erves had more than 40 fake invoices prepared on behalf of three vendors for MARTA maintenance projects for which no work was performed. Williams and Erves used the false invoices as bases to authorize payments to the three vendors – including fake invoices submitted by a business owned by Ferrell Williams (who was romantically involved with Jhonnita Williams). After being paid, all three of the vendors funneled most of the money received from MARTA back to Erves and Williams. In total, MARTA paid more than $520,000 for maintenance projects when no work was actually performed.
Williams used her portion on the money to pay various personal expenses, including the purchase/financing of an approximately 3,000 square foot single-family home with 4 bedrooms and 2.5 bathrooms.
The sentences for all defendants in this case are as follows:
- On September 20, 2017, Joseph J. Erves, 54, of Lithonia, Georgia pleaded guilty to federal program theft. On January 16, 2018, Erves was sentenced to two years and nine months in federal prison, and was ordered to pay $522,825.45 in restitution.
- On March 29, 2018, Ferrell Williams, 63, of Cincinnati, Ohio, pleaded guilty to conspiring to commit federal program theft. On August 1, 2018, Ferrell Williams was sentenced to eight months in federal prison, and was ordered to pay $41,539.10 in restitution.
- On November 28, 2018, Jhonnita Williams, 48, of Atlanta, Georgia pleaded guilty to one-count of conspiratorial federal program theft. For her crime, Williams was sentenced to one year, four months in prison, three years of supervised released, and ordered to pay $522,825.45 in restitution.
This case was investigated by the Federal Bureau of Investigation and the MARTA Police Department.
Assistant U.S. Attorneys Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section, and Alison B. Prout prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Calhoun man sentenced to prison for violating federal gun lawsRead the Press Release
ATLANTA – Matthew Meadows, a convicted felon, has been sentenced to federal prison for possession of a stolen firearm.
“A felon in possession of a firearm presents unnecessary risks to public safety,” said U.S. Attorney Byung J. “BJay” Pak. “The illegal possession of firearms is part of the larger cycle of illegal guns that fuels gun violence and victimizes all residents of North Georgia.”
“This case reflects the importance of a strong working relationship between federal and local law enforcement agencies,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Because of the diligence of Gordon County Sheriff Deputies, this violent offender is no longer a threat to the community and because of federal charges he will have to serve his entire sentence in prison.”
“I am very satisfied with the conclusion of this joint investigation which resulted in a guilty plea. This conviction will help make Gordon County a safer community, and we are proud of the relationship that we enjoy with our federal colleagues,” said Gordon County Sheriff Mitch Ralston.
According to U.S. Attorney Pak, the charges, and other information presented in court: On November 30, 2017, the Gordon County Sheriff’s Office responded to a report and encountered Meadows, a convicted felon, asleep in a vehicle. A deputy observed two firearms in the defendant’s immediate possession, one of which Meadows stole from a residence. Meadows, who has prior felony convictions for the sale of methamphetamine, burglary, and making terroristic threats, was also in possession of methamphetamine at the time he was arrested.
Matthew Meadows, 32, of Calhoun, Georgia, was sentenced to four years, three months in prison to be followed by three years of supervised release. Meadows pleaded guilty and was convicted of possessing a stolen firearm on November 16, 2018.
This case was investigated by the FBI and the Gordon County Sheriff’s Office.
Assistant U.S. Attorney Ryan J. Huschka prosecuted the case.
Project Safe Neighborhoods (PSN) is the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former postal worker imprisoned for mail theftRead the Press Release
ATLANTA - Zachary Adam Johnson has been sentenced for aggravated identity theft and mail theft. The defendant was previously a part-time mail carrier for the postal service.
“This case shows the importance of concerned citizens reporting suspicious conduct to law enforcement,” said U.S. Attorney Byung J. “BJay” Pak. “Without that call, the police never would have obtained a search warrant for Johnson’s car and found the large amount of stolen mail there. We ask all citizens to remain vigilant and if you see something, say something.”
“The Postal Inspection Service applauds the efforts of the bank employees who reported the suspicious activity of their customer’s account to law enforcement officials,” said David M. McGinnis, Inspector in Charge of the Charlotte Division. “Postal Inspectors will remain vigilant in pursuing criminals, like Johnson, to ensure the public's trust in a safe and secure mail system.”
According to U.S. Attorney Pak, the charges and other information presented in court: Johnson repeatedly broke into the U.S. Post Office in Snellville, Georgia, and stole mail. After stealing the mail, Johnson would look through it for checks and money orders, then change the payees on those instruments to make them payable to himself, and cash them at local banks. On one occasion, Johnson also forged the signature of the account owner on a check.
On June 28, 2018, Johnson was arrested by the Snellville police department after an alert bank teller at Regions Bank observed that he was trying to cash a check with a forged signature from a longtime branch customer. A search of Johnson’s car revealed five bins of stolen mail in the trunk. Johnson was released on bond by a Gwinnett County judge, but continued his conduct. On July 7 and 9, 2018, while on bond in his Gwinnett county case, Johnson was captured on surveillance video breaking into the post office and stealing mail.
Zachary Adam Johnson, 41, of Loganville, Georgia, has been sentenced to two years, one day in prison to be followed by three years of supervised release. On November 13, 2018, Johnson pled guilty to one count of aggravated identity theft and one count of mail theft.
This case was investigated by the U.S. Postal Inspection Service, which has already notified the victims it was able to identify from the seized stolen mail. The Snellville police department also assisted with this case.
Assistant U.S. Attorney Alana R. Black prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Local businessman illegally in United States pleads guilty to bribing IRS agent to fix his federal taxesRead the Press Release
ATLANTA – Local business owner Magdaleno Garcia Alonso has pleaded guilty to attempting to bribe an IRS Revenue Agent to get out of paying his personal and business taxes.
“Garcia attempted to buy his way out of paying his taxes by bribing an IRS Revenue Agent,” said U.S. Attorney Byung J. “BJay” Pak. “As expected, the agent reported his illegal offer – and now Garcia must answer for his crimes.”
“It is the mission of the Treasury Inspector General for Tax Administration (TIGTA) to protect the integrity of the IRS and promote the fair administration of our federal tax system,” said Special Agent in Charge Gary Smith of TIGTA’s Southern Field Division. “TIGTA and our law enforcement partners at the U.S. Attorney’s Office will do everything within our power to ensure those individuals who attempt to bribe IRS agents and corrupt our nation’s tax system will be prosecuted to the fullest extent of the law.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Garcia owned and operated Acworth Georgia Concrete, Inc. Garcia filed tax returns with the Internal Revenue Service (“IRS”) for 2015 and 2016, both as an individual and on behalf of his concrete business. Based on those filings, the IRS notified Garcia that it was auditing his tax returns. As a result of the audit, the IRS calculated that Garcia owed approximately $234,000 in back taxes for his business and approximately $111,000 in back taxes personally.
In mid-September 2018, Garcia offered to pay the IRS Revenue Agent who completed the audit of his tax returns a cash bribe if the agent reduced Garcia’s tax liabilities. The Revenue Agent properly reported Garcia’s bribe offer to the appropriate authorities – and federal law enforcement agents set up an undercover operation to record Garcia.
On September 19, 2018, Garcia met the Revenue Agent at a fast-food restaurant in Cobb County, Georgia. During that recorded meeting, Garcia proposed that if the IRS agent reduced his back taxes from $345,000 to $100,000, then he would pay the IRS agent $30,000 in cash. In fact, Garcia hand wrote an agreement setting out the terms of his bribery scheme, writing that he would “pay [the] IRS $100,000” in back taxes (instead of $345,000) and would give the IRS Agent a bribe payment of “$20,000 now” and “$10,000” in the future. In her undercover role, the IRS agent agreed and signed Garcia’s contract. Garcia then gave the IRS Agent $20,000 in cash. On November 10, 2018, federal law enforcement officers arrested Garcia as he arrived to meet the IRS agent to give her an additional $5,000 cash bribe payment.
Garcia has admitted and agreed that he is a citizen of Mexico, is illegally in the United States, and will consent to being removed from the United States after he completes his prison sentence.
On November 6, 2018, a federal grand jury returned an indictment against Garcia, 50, of Acworth, Georgia, for bribery. Garcia pleaded guilty to that charge via criminal information.
This case is being investigated by the U.S. Department of the Treasury, Treasury Inspector General for Tax Administration (TIGTA).
Assistant U.S. Attorney Jeffrey W. Davis, Public Integrity and Special Matters section chief, is prosecuting the case. The case was previously prosecuted by former Assistant U.S. Attorney Jenny R. Turner.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Georgia Department of Corrections officer convicted of accepting bribes to smuggle contrabandRead the Press Release
ATLANTA - Jokelra Copeland has been convicted by a federal jury for accepting bribe payments to smuggle contraband, including illegal drugs, into Autry State Prison in Pelham, Georgia.
“It’s troubling that Copeland was willing to sell her oath of office by breaking the very laws she had only months before promised to enforce,” said U.S. Attorney Byung J. “BJay” Pak. “Smuggling contraband into our state prisons is a dangerous business. It compromises the safety of everyone in the prison – inmates, corrections officers and other employees. This type of conduct will not be tolerated. And this defendant will now be held accountable for her betrayal of the public trust.”
“Those who violate their sworn duties as prison officers for greed are a top priority for the FBI,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Copeland not only betrayed the institution she was sworn to protect, she also betrayed every hard working corrections officer who upholds their oath every day.”
“We are pleased to see that justice has been served on this individual for her role in jeopardizing the safe and secure operations of our facilities,” said GDC Interim Commissioner Timothy C. Ward. “Ridding our prisons of corrupt staff and shedding light on those who choose a path of dishonor continues to be one of our top priorities.”
According to U.S. Attorney Pak, the charges and other information presented in court: Copeland began work for the Georgia Department of Corrections (“GA DOC”) in 2014. She was assigned to work the overnight shift at Autry State Prison in Pelham, Georgia. Within months of being hired, Copeland conspired with inmates and other corrections officers to smuggle contraband into the prison.
On multiple occasions, the defendant smuggled marijuana to inmates by hiding the packages under her clothing as she passed through the prison’s security entrance. During a four-month period in mid-2015, Copeland accepted more than $13,000 in bribe payments from the family members of at least two inmates. Financial records showed that on at least eleven occasions bribe payments were sent to Copeland using international financial wire services.
Jokelra Copeland was one of 68 GA DOC officers who were arrested by the FBI in 2016 after an extensive federal investigation. The FBI investigation revealed that some GA DOC officers were willing to smuggle contraband into state prisons in exchange for bribes while other officers were willing to use their law enforcement credentials to protect drug deals occurring outside of the prisons.
Jokelra Copeland, 32, of Doerun, Georgia, will be sentenced before U.S. District Judge Amy Totenberg on May 1, 2019. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
This case is being investigated by the FBI.
Assistant U.S. Attorney and Deputy Chief of the Public Integrity and Special Matters section Brent Alan Gray and Assistant U.S. Attorney Bret R. Hobson are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Metro Atlanta man sentenced for arranging to have sex with a minorRead the Press Release
ATLANTA, Ga. – Mewael Berhane, who communicated on the Internet to arrange to meet a minor girl for sex, has been sentenced to federal prison for enticing a minor to engage in illegal sexual activity.
“This case shines a light on some of the darkest corners of the Internet, where predators seek out minors to victimize,” said U.S. Attorney Byung J. “BJay” Pak. “Through the vigilance of our law enforcement partners, Berhane is being held accountable for his depraved conduct.”
“The federal investigation and subsequent prison sentence clearly reflects the threat Berhane posed to the community,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Fortunately, he connected with an undercover FBI agent and not a child. Let it be a warning to sexual predators who think the anonymity of the internet keeps them protected from detection.”
According to U.S. Attorney Pak, the charges and other information presented in court: In October 2017, Berhane posted an ad on Craigslist that was titled “Very Taboo-something different.” In the ad, he expressed his interest in finding mothers and daughters who wanted to have sex with the same man.
An agent with the FBI responded, posing as the “mother” of an 11-year-old girl. The “mother” wrote that she was looking for someone to teach her 11-year-old daughter how to be with a man sexually. Berhane told her that he would “definitely be up for that.”
Berhane continued communicating with the girl’s “mother” on the cell phone app “Kik messenger” and graphically described the sex acts which he planned to engage in with the 11-year-old girl. Berhane asked the mother to send him photos of her 11-year-old daughter on multiple occasions. He even sent her a photo of himself wearing only his underwear.
On November 7, 2017, Berhane made arrangements to meet the mother and the girl for the purpose of engaging in sex with the child. That same day, the defendant drove from his office in Decatur to Duluth, Georgia, in rush hour traffic to meet the girl. He was arrested when he arrived at the pre-arranged location.
Mewael Berhane, 40, of Stone Mountain, Georgia, has been sentenced to ten years in prison, to be followed by ten years of supervised release. He will also be required to register as a sex offender when he is released from prison. Berhane was convicted on these charges on October 22, 2018, after he pleaded guilty.
This case was investigated by the FBI.
Assistant U.S. Attorneys William G. Traynor and Leanne M. Marek prosecuted the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Atlanta real estate attorney receives 15-year sentence for defrauding his law firm out of millions of dollarsRead the Press Release
ATLANTA –Nathan E. Hardwick IV has been sentenced to 15 years in federal prison for orchestrating a scheme to defraud his law firm out of millions of dollars. On October 12, 2018, following a four-week trial, a federal jury convicted Hardwick of wire fraud, conspiracy, and making false statements to a federally insured financial institution.
“This attorney violated the trust placed in him by his clients and his partners; as a result, he is now facing a lengthy prison sentence,” said U.S. Attorney Byung J. “BJay” Pak. “Lawyers who steal client money and embezzle from their partners can expect years in prison for their violation of trust.”
“It is especially troubling that this crime was orchestrated by a lawyer who swore an oath to uphold the law and represent his clients with integrity,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Hardwick was in debt through his own fault and chose to steal from his clients and firm to pay back that debt and finance his extravagant lifestyle. Now he will pay back his debt to society in prison.”
According to U.S. Attorney Pak, the charges and other information presented in court: Hardwick and Asha R. Maurya engaged in a scheme to defraud MHSLAW, Inc. and its subsidiaries, Morris Hardwick Schneider, LLC, and LandCastle Title, LLC, (collectively referred to as “MHS”). MHS owned and operated a law firm that specialized in residential real estate closings and foreclosures, and it ran a title business. MHS employed approximately 800 people in 16 states. Hardwick was the managing partner of the law firm and the CEO of the title business. He also ran the law firm’s closing division, which was based in Atlanta. Maurya managed MHS’s accounting operations under Hardwick's supervision and control.
In early 2007, Hardwick and his law partners sold off part of their business, and Hardwick pocketed approximately $11.8 million. Hardwick quickly squandered that money, however, and by the end of 2010 was broke and deeply in debt.
From January 2011 through August 2014, Hardwick siphoned off more than $26 million from MHS’s accounts to pay his personal debts and expenses and to finance his extravagant lifestyle. More than $19 million of that was client money that was stolen from MHS’s attorney trust accounts. Hardwick spent approximately $18.5 million of the fraud proceeds on gambling, private jets, and more than 50 different social companions.
MHS’s audited financial statements showed that the firm’s combined net income from 2011 through 2013 was approximately $10 million. During that same three-year period, however, Hardwick took more than $20 million out of the firm’s accounts.
Both Hardwick and Maurya made numerous false statements to Hardwick’s law partners concerning the amount of money that Hardwick was taking out of the firm. And Hardwick and Maurya conspired to cover-up the fraud.
Nathan E. Hardwick IV, 53, of Atlanta, Georgia, was sentenced by U.S. District Judge Eleanor L. Ross to serve 15 years, forfeit over $19.9 million in criminal proceeds, given a $2,300 special assessment, and will be required to pay restitution to the victims of the offense. When he is released from prison, Hardwick will be required to serve six years on supervised release. Judge Ross sentenced Asha R. Maurya to seven years in prison, and three years of supervised release. Maurya was also ordered to forfeit $900,000 in criminal proceeds. Their restitution hearing is scheduled for May 9, 2019.
This case was investigated by the FBI.
Assistant U.S. Attorneys Russell Phillips, Lynsey Barron, Kelly Connors, and former Assistant U.S. Attorney Doug Gilfillan prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
U.S. Attorney Pak announces the appointment of thirteen new Assistant U.S. AttorneysRead the Press Release
ATLANTA – U.S. Attorney Byung J. “BJay” Pak announced the appointment of thirteen new Assistant U.S. Attorneys who will immediately employ their talents to support the Northern District of Georgia’s (NDGA) mission to enforce the law and defend the interests of the citizens we serve in this district.
“Citizens expect exceptionally talented and dedicated lawyers to represent the United States in federal court,” said U.S. Attorney Byung J. “BJay” Pak. “These outstanding Assistant U.S. Attorneys have proven they are committed to excellence in their service to our country, and the citizens of the Northern District of Georgia.”
- Miguel R. Acosta is a former Special Assistant U.S. Attorney in the Western District of Texas, where he prosecuted immigration offenses. Prior to that he was an attorney with Gobel Flakes, LLC in Orlando. Miguel served as a law clerk to U.S. Magistrate Judge Karla Spaulding in the Middle District of Florida. Miguel graduated magna cum laude, from University of Tampa with a degree in Criminology, and he received his law degree, cum laude, from Florida State University College of Law, where he served as Administrative Editor of the Journal of Land Use & Environmental Law. He began his career in the U.S. Air Force JAG Corps, and is currently a JAG in the Florida Air National Guard. Miguel is a member of the Criminal Division.
- Carolyn “Tippi” Cain Burch handled complex civil litigation and appeals for Chalmers Burch & Adams LLC. Earlier in her career, she was a senior litigation associate with King & Spalding LLP and Swift Currie, McGhee, & Hiers, LLP. She was a law clerk for U.S. District Judge C. Ashley Royal in the Middle District of Georgia. Tippi graduated, cum laude, in political science from Auburn University, and received her law degree, cum laude, from the University of Georgia —where she was Vice Chair of the Moot Court Board. Tippi currently serves as Chairwoman of the Board of the Georgia Department of Community Affairs. Tippi is a member of the Appeals and Legal Advice Division.
- Anthony DeCinque was a Senior Associate at Morris, Manning & Martin, LLP, where he handled complex commercial litigation and appellate matters. Previously, he practiced at Mayer Brown LLP and Patterson Belknap Webb & Tyler LLP in NYC. Anthony graduated from Georgia Tech, where he majored in chemical engineering. He graduated from NYU Law School. Upon graduating, Anthony clerked for Hon. Morton Greenberg, U.S. Court of Appeals for the 3rd Circuit. Anthony is a member of the Civil Division.
- Akash Desai joins us from Kilpatrick Townsend & Stockton LLP, where he was an associate in the trademark litigation group. Akash graduated magna cum laude in Political Science from the University of Rochester, and he received his law degree from Vanderbilt University School of Law. He also holds an LLM from NYU Law School. He clerked for Hon. Jon McCalla, U.S. District Judge in the Western District of Tennessee, and for Hon. Aleta Trauger, U.S. District Judge in the Middle District of Tennessee. Akash is a member of the Civil Division.
- Irina Dutcher served as a Chief Senior Assistant District Attorney for the Fulton County District Attorney’s Office. She was previously an Associate at Kilpatrick Townsend and a Law Clerk for Honorable C. Lynwood Smith, U.S. District Judge for the Northern District of Alabama. Irina received her J.D. from Vanderbilt University Law School and her B.A., magna cum laude, from the University of Southern California. Irina is a member of the Criminal Division.
- Soo Jo served as the senior staff attorney for the Magistrate Court of Gwinnett County, and has over two decades of experience representing city and county governments in numerous subject matter areas. Soo received her J.D. from Georgia State University College of Law and her B.S. from Georgetown University. Soo is a member of the Civil Division.
- Alex Joseph was an Assistant Solicitor in the Fourteenth Circuit Solicitor’s Office in Beaufort, S.C., where she handled felony prosecutions. She was previously an Assistant District Attorney in the Ocmulgee Judicial Circuit, serving as the lead prosecutor in several trials. She previously served as an extern for U.S. Magistrate Judge Linda T. Walker, and after law school, she was a law clerk to Superior Court Judge Robert Chasteen of the Cordele Judicial Circuit. Alex received her law degree from the University of Georgia School of Law, cum laude, where she was a member of the Journal of Intellectual Property Law. She received her B.A. in Political Science from Wellesley College. Alex is a member of the Criminal Division.
- Cal Leipold was previously an AUSA in the Middle District of Louisiana, where he prosecuted OCDETF and violent crime cases. Prior to becoming an AUSA, he served as a JAG officer in the Army. He has done a tour of duty in Kandahar, Afghanistan, and was awarded the Bronze Star Medal for his service. An Atlanta native, Cal earned a B.A. in History from Furman University and his law degree from Georgia State College of Law, where he was the Chief Justice of the Student Honor Court, and a member of the Moot Court Board. He also earned an L.L.M. in National Security law, with distinction, from Georgetown University Law Center. Cal is a member of the Criminal Division.
- Mellori Lumpkin-Dawson was a litigator at Greenberg Traurig, where she handled all aspects of employment litigation. Previously, she practiced law at Holland & Knight LLP in Atlanta. Originally from Bainbridge, Georgia, Mellori graduated summa cum laude from Florida A&M University, where she majored in Business Administration. She received her law degree from UC-Berkeley, where she was the Supervising Editor of the California Law Review and served as the Articles Editor of the Berkeley Journal of African-American Law & Policy. From August 2012 to October 2012, she served as a Special Assistant District Attorney for the South Georgia Judicial Circuit, where she tried two felony jury cases to verdict. Mellori is a member of the Civil Division.
- Scott McAfee was a Senior Assistant District Attorney in the Fulton County District Attorney’s Office, where he was a member of the Major Case Division handling murder cases. He previously served as an intern for Justice David E. Nahmias on the Supreme Court of Georgia. He is an Eagle Scout. Scott earned his law degree, cum laude, from the University of Georgia School of Law, and earned his B.A. in Political Science and Music from Emory University. Scott is a member of the Criminal Division.
- Annalise Peters came from Alston & Bird, where she was an associate in the Litigation and Trial Practice Group. She was an intern with our office in the Major Crimes Section from August to December 2013, during which time she co-tried a marriage fraud case through the 3rd year law intern program. Annalise was a law clerk to Hon. Julie Carnes, 11th Circuit Court of Appeals. A native of Atlanta, Annalise earned her law degree from UVA Law School, where she was the Assistant Managing Editor of the Virginia Law Review. She received her B.A. from University of Georgia, summa cum laude, Phi Beta Kappa, and she was the captain of the UGA Varsity Track & Field Team. Annalise is a member of the Criminal Division.
- Teresa Marie Stolze was a Senior Assistant DeKalb District Attorney in the Stone Mountain Judicial Circuit. Teresa has tried over two dozen cases as lead and was an intern in our office on two occasions – from February to May 2007 and from June to August 2009. Teresa served as a law clerk for then-Superior Court Judge Tilman “Tripp” Self III and Judge Edgar W. Ennis, of the Macon Judicial Circuit. She also worked as a law clerk for Judge Steve Jones, who was then on the Superior Court of Athens-Clarke County. She is a double dawg, earning her law degree, cum laude, from UGA Law School, where she was the Managing Board Notes Editor of the Georgia Law Review. She earned her B.A., summa cum laude, Phi Beta Kappa. Teresa is a member of the Criminal Division.
- Samuel Williams served as a Trial Attorney for the U.S. Department of HUD in Atlanta. Previously, he worked as an extern for the U.S. EEOC and as a Judicial Intern for Hon. Linda M. McGee, North Carolina Court of Appeals. Sam received his J.D. from the University of North Carolina, where he was a Chancellor Scholar, and earned his B.A., summa cum laude, from Appalachian State University. Samuel is a member of the Civil Division.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
- Miguel R. Acosta is a former Special Assistant U.S. Attorney in the Western District of Texas, where he prosecuted immigration offenses. Prior to that he was an attorney with Gobel Flakes, LLC in Orlando. Miguel served as a law clerk to U.S. Magistrate Judge Karla Spaulding in the Middle District of Florida. Miguel graduated magna cum laude, from University of Tampa with a degree in Criminology, and he received his law degree, cum laude, from Florida State University College of Law, where he served as Administrative Editor of the Journal of Land Use & Environmental Law. He began his career in the U.S. Air Force JAG Corps, and is currently a JAG in the Florida Air National Guard. Miguel is a member of the Criminal Division.
Union General Hospital to pay $5 million to resolve alleged False Claims Act violationsRead the Press Release
ATLANTA – Union General Hospital (“UGH”), located in Blairsville, Georgia, has agreed to pay $5 million to resolve allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians.
“It is imperative that all medical decisions are based on the best interest of the patient not on financial gain,” said U.S. Attorney Byung J. “BJay” Pak. “This settlement demonstrates our commitment to ensuring healthcare providers stay focused on the patient and not enriching themselves.”
“It is a priority for the FBI to protect taxpayers from those who would circumvent our healthcare laws,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Not only do taxpayers lose, but so do citizens who count on programs like Medicare for their healthcare needs.”
“It is unacceptable for hospitals to provide financial incentives to induce physicians to steer patients their way, said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “The OIG will vigorously pursue providers who enter into arrangements that can potentially corrupt medical decision making.”
In early 2016, the U.S. Attorney’s Office for the Northern District of Georgia initiated a civil health care fraud investigation into UGH after receiving information from law enforcement agents who arrested several UGH employees for alleged criminal misconduct regarding controlled substances. Shortly after these arrests, UGH replaced the majority of its executive team, conducted an internal investigation, and voluntarily disclosed significant amounts of information related to several financial relationships with physicians and physician practices.
This settlement resolves allegations that UGH engaged in several different improper financial relationships with physicians between 2012 and 2016, in violation of the Stark Law. The Stark Law forbids hospitals from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital unless the relationship falls within a defined exception. The United States alleges that the relationships UGH had with certain physicians were prohibited because UGH compensated the physicians in amounts that were above or inconsistent with fair market value or in a manner that took into account the volume or value of the physicians’ referrals.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Department of Health & Human Services Office of Inspector General, and the Federal Bureau of Investigation, with assistance from the Tactical Diversion Squad from the Drug Enforcement Administration.
The civil settlement was reached by Assistant U.S. Attorneys Lena Amanti and Gabriel Mendel.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Families United Services and Pamela McKenzie to pay $645,000.00 and agree to exclusion in order to resolve False Claims Act allegationsRead the Press Release
ATLANTA – Families United Services, Inc. (FUS) and Pamela McKenzie, the owner of FUS, have agreed to pay $645,000, and to be excluded from federal health care programs for a period of five years to resolve allegations that they submitted claims to the Georgia Medicaid Program for behavioral health services that they never provided. The effect of the exclusion is that federal health care programs will not make any payments to FUS or McKenzie, or anyone who employs them, for any services that they have provided.
“Georgia Medicaid provides valuable mental health services and treatment for many of Georgia’s most vulnerable citizens,” said U.S. Attorney Byung J. “BJay” Pak. “False billing of the Georgia Medicaid Program diverts monies for citizens who depend on Medicaid for vital medical care. Our pursuit of individuals who defraud federal health care programs will not cease.”
“Working with our law enforcement partners, we are dedicated to protecting patients and the federal health care programs intended to serve them,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Using our exclusion authority is a great remedy for banning bad providers from the program and protecting the American taxpayer.”
“We appreciate the Department of Community Health’s Program Integrity Section for being diligent in bringing this issue to our attention to investigate,” said Attorney General Chris Carr. “We will continue to work with our federal partners and root out those organizations and individuals that cross legal boundaries and do so at the expense of taxpayers.”
The government alleges that FUS and McKenzie violated the False Claims Act, 31 U.S.C. § 3729, et seq., by causing the submission of false claims to the Georgia Medicaid Program between October 1, 2010 and June 10, 2012 for behavioral health care services that were never provided.
FUS is a Georgia corporation that was enrolled with the Georgia Department of Community Health to provide behavioral health services. Between October 1, 2010 through June 10, 2012, FUS provided services to Medicaid members under two programs operated by the Georgia Department of Behavioral Health and Developmental Disabilities—Assertive Community Treatment (ACT) and Core. ACT is a recovery focused, high intensity, community based service for adults with severe and persistent mental illness. Core services are a comprehensive range of outpatient and out of center mental health services provided to persons of all ages. The Georgia Medicaid Fraud Control Unit initiated its investigation after receiving a referral from the Program Integrity Section of the Georgia Department of Community Health.
This settlement highlights a powerful tool to protect federal health care programs and beneficiaries and to hold accountable those who commit health care fraud—the exclusion authority of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). Section 1128 of the Social Security Act gives HHS-OIG the authority to exclude individuals and entities from participation in federal health care programs for fraud or other misconduct.
The claims resolved are allegations only, and there has been no determination of liability.
This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the Georgia Medicaid Fraud Control Unit, and the U.S. Department of Health & Human Services Office of Inspector General.
The civil settlement was reached by Assistant U.S. Attorney Lena Amanti and Assistant Attorney General Sara Vann.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Electronic Health Records Vendor to Pay $57.25 Million to Settle False Claims Act AllegationsRead the Press Release
Greenway Health LLC (Greenway), a Tampa, Florida-based developer of electronic health records (EHR) software, will pay $57.25 million to resolve allegations in a complaint filed by the United States under the False Claims Act alleging that Greenway caused its users to submit false claims to the government by misrepresenting the capabilities of its EHR product “Prime Suite” and providing unlawful remuneration to users to induce them to recommend Prime Suite, the Justice Department announced today.
“Electronic health records are critically important to the health care decision process, and both patients and providers rely on these technologies to safely and accurately record and transmit vital health information,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “This resolution demonstrates our continued commitment to pursue EHR vendors who misrepresent the capabilities of their products, and our determination to promote public health while holding accountable those who seek to abuse the government’s trust.”
The American Recovery and Reinvestment Act of 2009 established the Medicare and Medicaid EHR Incentive Program to encourage healthcare providers to adopt and demonstrate their “meaningful use” of EHR technology. Under the program, the U.S. Department of Health and Human Services (HHS) made incentive payments available to eligible healthcare providers that adopted certified EHR technology and met certain requirements relating to their use of the technology. To obt ain certification for their product, companies that develop and market EHR technology are required to demonstrate that their product(s) satisfies all applicable HHS-adopted certification criteria. Developers must first pass testing performed by an independent, accredited testing laboratory authorized by HHS, and then obtain and maintain certification by an independent, accredited certification body authorized by HHS.
In its complaint, the government contends that Greenway falsely obtained 2014 Edition certification for its product Prime Suite when it concealed from its certifying entity that Prime Suite did not fully comply with the requirements for certification. Among other things, Greenway’s product did not incorporate the standardized clinical terminology necessary to ensure the reciprocal flow of information concerning patients and the accuracy of electronic prescriptions. Greenway accomplished its deception by modifying its test-run software to deceive the company hired to certify Prime Suite into believing that it could use the requisite clinical vocabulary.
Additionally, in order to be eligible to receive incentive payments, healthcare providers were required to meet certain targets for EHR-related activities. For example, at certain times providers were required to provide patients with clinical summaries following office visits. In its complaint, the government further alleges that Greenway was aware that an earlier version of Prime Suite, which was certified to 2011 Edition criteria, did not correctly calculate the percentage of office visits for which its users distributed clinical summaries and thereby caused certain Prime Suite users to falsely attest that they were eligible for EHR incentive payments. Greenway refrained from rectifying this error in order to ensure that its users would receive incentive payments. As a result, numerous users of this earlier version of Prime Suite falsely attested that they were eligible for EHR incentive payments when, in fact, they had not met all necessary use requirements
Finally, the government also alleged that Greenway violated the Anti-Kickback Statute by paying money and incentives to its client providers to recommend Prime Suite to prospective new customers.
“In the last two years my office has resolved two matters against leading EHR developers where we alleged significant fraudulent conduct. These are the two largest recoveries in the history of this District and represent the return of over two-hundred and twelve million dollars of fraudulently-obtained taxpayer monies. These cases are important, not only to prevent theft of taxpayer dollars, but to ensure that the promise of health technology is realized in the form of improved patient safety and efficient healthcare information flow,” said United States Attorney Christina E. Nolan for the District of Vermont. “This resolution demonstrates my office’s initiative and resolve to vigorously uncover and to doggedly pursue these complex cases. We will be unflagging in our efforts to preserve the accuracy and reliability of Americans’ health records and guard the public fisc against corporate greed. EHR companies should consider themselves on notice.”
“Medical professionals and patients depend on the security and competency of electronic health records as a means to improving both the quality and coordination of health care services," said U.S. Attorney Byung J. “BJay” Pak for the Northern District of Georgia. "Vendors who falsify the viability of their products erode the integrity of public health systems and will be held accountable for their misrepresentations.”
“The False Claims Act settlement in this case will hopefully be a deterrent to those who selfishly circumvent our federal healthcare programs for their own benefit,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI will not tolerate companies stealing from federal taxpayers and the people who trust in the fairness of our federally funded healthcare programs.”
As part of the settlement, Greenway entered into a five-year Corporate Integrity Agreement (CIA) with the HHS Office of Inspector General (HHS-OIG) covering the company’s EHR software. This innovative five-year CIA requires, among other things, that Greenway retain an Independent Review Organization to assess Greenway’s software quality control and compliance systems and to review Greenway’s arrangements with health care providers to ensure compliance with the Anti-Kickback Statute. Greenway must provide prompt notice to its customers of any patient safety related issues and maintain on its customer portal a comprehensive list of such issues and any steps users should take to mitigate potential patient safety risks. The CIA also requires Greenway to allow Prime Suite customers to obtain the latest versions of Prime Suite at no additional charge, the opportunity to migrate their data from Prime Suite to another Greenway-developed software product also at no additional charge, and to give Prime Suite customers the option to have Greenway transfer their data to another EHR software vendor without penalties, service charges, or any other fees other than contractual amounts still owed in connection with goods or services already provided.
“Electronic Health Records can be key to an integrated health system providing improved care” said Derrick Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Putting patients at risk will result in intensive investigation and compliance obligations such as those in OIG’s comprehensive five-year Corporate Integrity Agreement.”
This matter was jointly handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Offices for the District of Vermont and Northern District of Georgia, the HHS Office of Inspector General, and multiple HHS agencies and components. The Federal Bureau of Investigation’s field office in Atlanta, Georgia provided significant investigative support to the investigation.
The case is captioned United States v. Greenway Health, LCC, 2:19-CV-20 (D. Vt.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Former City of Atlanta Deputy Chief of Staff sentenced to federal prison for accepting bribesRead the Press Release
ATLANTA - Evelyn Katrina Taylor-Parks has been sentenced to federal prison for conspiring to accept bribe payments while she served as the City of Atlanta’s Deputy Chief of Staff to the Mayor.
“Let Ms. Taylor-Parks’ case be a warning to any and all public officials who abuse their power for personal gain, or for the benefit of their associates to the detriment of the taxpayers: we will thoroughly and appropriately investigate such criminal breaches of fiduciary duty and bring them to justice irrespective of the dollar amount of the ill-gotten gain,” said U.S. Attorney Byung J. “BJay” Pak.“Parks abused the trust placed in her by the people of the city of Atlanta,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI and its partners in law enforcement will not tolerate those who choose to try to influence established and proper government procedures. We would urge anyone who witnesses similar activity by public officials to contact the FBI.”
“In order to regain trust in our local government, we will continue to investigate and recommend criminal charges against those who engage in corrupt governmental practices,” said Thomas J. Holloman, Special Agent in Charge, IRS- Criminal Investigation. “The sentence handed down today should deter those who seek to peddle political influence and access for personal financial gain while in a public service position.”
According to U.S. Attorney Pak, the charges, and other information presented in court: From approximately January 2010 to May 2018, Parks served as the Deputy Chief of Staff to the Mayor of the City of Atlanta. As the Deputy Chief of Staff, Parks had various responsibilities, including managing core City of Atlanta operations, coordinating with the Mayor and the executive staff to execute the administration’s policies, and facilitating the procurement process.
In her position, Parks signed an annual Financial Disclosure Statement attesting that she was not self-employed or employed by any business or entity other than the City of Atlanta, and that she had not received more than $5,000 in annual income from any source other than the City of Atlanta. Parks executed the Financial Disclosure Statements under penalty of perjury in 2011, 2012, and 2013, stating she was not employed outside the City of Atlanta.
A vendor, who was an executive with a firm in Atlanta during Parks’ tenure as the Deputy Chief of Staff, sought work through his businesses with the City of Atlanta, and the City of Atlanta ultimately awarded one project to the vendor’s firm worth $99,999.
From late-2011 to mid-2013, Parks met privately with the vendor on multiple occasions. During these meetings, Parks and the vendor discussed various topics, including the vendor’s desire to obtain work with the City of Atlanta, the idea of sole-source contracting, and the process by which the vendor could obtain a sole-source contract with the City of Atlanta. At the time of these meetings, the vendor was actively seeking projects and work with Atlanta, and at times was performing work for the City of Atlanta.
The vendor paid Parks thousands of dollars and paid for various services on Parks’ behalf, while seeking work with the City of Atlanta. In return for these bribe payments, Parks knew that the vendor wanted her to use her position and power as the Mayor’s Deputy Chief of Staff to assist the vendor with the City of Atlanta’s contracting and procurement process, and to assist the vendor in the future when needed.
In exchange for accepting money from the vendor:
1. Parks met regularly with the vendor, took the vendor’s calls, and responded to the vendor’s emails.
2. She organized and arranged meetings between the vendor and high-ranking employees within the City of Atlanta and with a member of the City Council.
3. Based on the high-level nature of her position, Parks knew that when she contacted City of Atlanta employees, on behalf of the vendor, those employees would feel compelled to comply with her requests.
4. Parks provided the vendor with information and advice regarding the processes and procedures to obtain a sole-source contract with the City of Atlanta.
5. She assisted the vendor in obtaining a City Council Resolution allowing the City of Atlanta to negotiate a sole-source contract with the vendor that was possibly worth millions of dollars. Parks believed that the vendor intended to use the resolution in an attempt to obtain government contracts outside of Atlanta.
6. She also facilitated and expedited the process for the vendor to receive payment for work the vendor had completed for the City of Atlanta.
In total, Parks admitted to taking bribe payments from the vendor on 7 or 8 occasions, where each bribe was between $1,500 and $2,000. Parks also received from the vendor a Louis Vuitton handbag, a cruise to Mexico, and a trip to Chicago. Parks never disclosed her ongoing financial relationship with the vendor and/or the vendor’s firm on her Financial Disclosure Statements to the City Atlanta. As a result, from January to July 2013, the City of Atlanta issued payments of $19,900, $11,750, $15,000, $17,200, and $36,149 to the vendor’s firm.
On November 16, 2017 and on February 15, 2018, Parks was interviewed by the Federal Bureau of Investigation. During those interviews, Parks falsely stated that she had never taken money from the vendor.
On August 15, 2018, Evelyn Katrina Taylor-Parks, 49, of Douglas County, Georgia, pleaded guilty to a criminal information charging her with one count of conspiratorial bribery. Based on her conviction, Parks was sentenced to one year and nine months in prison to be followed by three years of supervised release and was ordered to pay approximately $15,000 in restitution.
This case was investigated by the FBI and the Internal Revenue Service – Criminal Investigation.
Assistant U.S. Attorney Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section, and Assistant U.S. Attorney Jill E. Steinberg, Deputy Chief of the Criminal Division prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
MEDIA ADVISORY -- Release of statements for arrest of Hasher TahebRead the Press Release
The U.S. Attorney for the Northern District of Georgia and the Special Agent in Charge Chris Hacker of the FBI Atlanta Field Office have released the following statements in regards to the arrest of Hasher Taheb:
U.S. Attorney Pak:
“Investigating and prosecuting individuals who seek to cause mass casualties is law enforcement’s top priority. Today, the Joint Terrorism Task Force partners, led by the FBI, arrested Hasher Taheb, 21, of Cumming, Georgia after a thorough investigation into his plans to attack federal buildings. As articulated in the affidavit supporting the complaint, his alleged intent was to attack the White House and other targets of opportunity in the Washington DC area. Mr. Taheb has been charged with violating Title 18USC 844(f)(1) -- attempt to damage by means of an explosive any building owned, possessed, or leased by the United States or any department or agency thereof, or any institution or organization receiving federal financial assistance. The JTTF initiated the case after receiving a tip from the community. Because the FBI, U.S. Secret Service, and numerous Federal, state and LE partners are active participants in the JTTF, all potential threats have been neutralized and under control from the inception of this case. Again, I want to clarify that there were no threats posed to any targets located in Northern District of Georgia, nor was the upcoming Super Bowl a target of his alleged activity,” said U.S. Attorney Byung J. “BJay” Pak.
FBI Statement:
"It is important to point out that this investigation and arrest were the direct result of a tip from the community, another example of how important it is to contact law enforcement if you see or hear something suspicious," said Chris Hacker, Special Agent in Charge of FBI Atlanta. "Taheb is charged as the result of a year-long investigation by FBI Atlanta's Joint Terrorism Task Force. We want to thank the Forsyth County Sheriff Office and Gwinnett County Police Department for assisting us with his arrest. The investigation is continuing, but at this stage it is believed Taheb was acting on his own."
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Gang member sentenced to prison for illegally possessing firearmRead the Press Release
ROME, Ga. – Jermaine Courtney Brown, a member of the Gangster Disciples gang, has been sentenced to prison for possessing a firearm while a convicted felon.
“Brown’s criminal conduct and the behavior of other suspected members of his violent street gang plague our community and jeopardize the safety of our citizens,” said U.S. Attorney Byung J. “BJay” Pak. “We will continue to work closely with our law enforcement partners to combat gang violence and those who illegally possess firearms.”
“Brown clearly has not learned from prior convictions and continues to threaten the safety of our citizens,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI would like to thank the Cedartown Police Department for their diligence in arresting Brown once again. Because of their efforts Brown will have more time in prison to think about his future path.”
“The multi-jurisdictional cooperation encouraged and facilitated by Project Safe Neighborhoods is making a difference in the quality of life of our citizens. The Cedartown Police Department will continue to work with all our law enforcement partners to make our communities safer,” said Jamie Newsome, Chief of Police, Cedartown Police Department.
According to U.S. Attorney Pak, the charges and other information presented in court: On January 30, 2018, Cedartown Police Department officers observed Brown walking along an intersection in Cedartown, Georgia. The officers were familiar with Brown based on his prior contacts with law enforcement and his association with the Gangster Disciples, a well-known violent street gang suspected of being involved in numerous violent and drug-related crimes. The officers were also aware of an outstanding failure to appear arrest warrant for Brown, stemming from an arrest in February 2017 for possessing a firearm as a felon.
Brown ran when he saw the officers and the officers pursued him on foot and by a patrol car. Brown threw away his cellphone and jacket as he ran, but they were later recovered. After a short chase, Brown was apprehended. As the officers took Brown into custody, he stated that he was carrying a gun in his pants. He also asked one of the officers, “can’t you just throw [the firearm] in the bushes? I already have too many charges on me.”
In addition to recovering a loaded Taurus Millennium PT145PRO .45 caliber semi-automatic handgun, the officers recovered approximately 26.9 grams of marijuana and a digital scale. A court authorized a search of Brown’s cellphone, which revealed photos of Brown and other suspected gang members as well as a photograph of Brown pointing directly into the camera a firearm with a drum magazine that typically holds approximately 100 rounds of ammunition.
In addition to several misdemeanor convictions, Brown was convicted in 2008 of the felony offense of possession of cocaine in the Superior Court of Floyd County, Georgia. On March 19, 2018, Brown was also convicted in Floyd County, Georgia, of felon in possession of firearm for the February 2017 arrest.
Jermaine Courtney Brown, 28, of Cedartown, Georgia was sentenced January 10, 2019, to three years, one month in prison to be followed by three years of supervised release, and a $100 special assessment. Brown pleaded guilty to the indictment on September 12, 2018, and was sentenced by U.S. District Judge Harold L. Murphy.
This case was investigated by the FBI and the Cedartown Police Department.
Assistant U.S. Attorney Suzette A. Smikle prosecuted the case.
This case was brought as part of Project Safe Neighborhoods (PSN). In keeping with the Attorney General’s mission to reduce violent crime, the Northern District of Georgia’s PSN program focuses on prosecuting those individuals who most significantly drive violence in our communities, and supports and fosters partnerships between law enforcement and schools, the faith community, and local community leaders to prevent and deter future criminal conduct.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Federally charged Gangster Disciples member arrested after being fugitive for three monthsRead the Press Release
ATLANTA – Federal agents arrested the last of seven, recently indicted members and associates of a national gang —the Gangster Disciples — on federal racketeering charges stemming from a superseding indictment returned on October 25, 2018 by a federal grand jury. The newly arrested defendant, Antarious Caldwell, had been on the run since October. Caldwell was arrested in Clayton County on January 9, 2019 based on a tip after media attention and billboards alerted the public to Caldwell’s wanted status. Caldwell is now being held without bond.
The superseding indictment added seven defendants, most of whom were high-ranking Gangster Disciples leaders, who resided across the United States, and charged them with a variety of federal offenses, including conspiracy to violate the federal racketeering statute (RICO conspiracy), narcotics trafficking, fraud and other offenses.
“This defendant was on the run since October, including allegedly leading police on a high-speed chase with an infant in his car before once-again escaping,” said U.S. Attorney Byung J. “BJay” Pak. “The FBI caught up with Caldwell, showing that trying to hide from arrest is useless. The superseding indictment adds to what the grand jury already found against the Gangster Disciples — that members allegedly commit numerous types of crimes, including murder, robbery, drug trafficking, and large-dollar fraud.”
"The FBI would like to thank the media and the Outdoor Advertising Association of Georgia (OAAG) for helping us with a publicity campaign that directly led to the arrest of Caldwell," said Chris Hacker, Special Agent in Charge of FBI Atlanta. "We would also like to thank the Clayton County Sheriff’s Office for assisting us in his arrest. The main objective of the FBI's Safe Streets Gang Task Force investigation is to dismantle the Gangster Disciples and we feel we have made significant progress toward that goal with an extensive series of federal indictments and arrests."
According to U.S. Attorney Pak, the charges, and other information presented in court: Forty-one defendants were named in the indictments. The initial indictment, which included 34 defendants, was returned by the grand jury in April 2016. Since then nine defendants have entered guilty pleas in district court. The 2016 indictment alleged that defendants named in a RICO conspiracy charge committed murder, attempted murder, robbery, extortion, arson, firearm crimes, drug trafficking, wire fraud, bank fraud, credit card fraud, prostitution and obstruction of justice and other crimes in furtherance of the Gangster Disciples enterprise and to raise funds for the gang. It also alleged that the Gangster Disciples were organized into different positions, including board members, who were national leaders, governors, assistant governors, chief enforcers, and chief of security for each state where Gangster Disciples were active; and coordinators and leaders within each local group. To enforce discipline among Gangster Disciples and adherence to the strict rules and structure, members and associates were routinely fined, beaten, and even murdered, for failing to follow rules.
The October 2018 superseding indictment maintained all those allegations, and added allegations of murder, robbery, drugs and fraud involving the seven new defendants. The seven newly-indicted defendants, each named in the RICO conspiracy, were:
- Roy Farrell, 59, of Hattiesburg, Mississippi, held the rank of Gangster Disciples “Board Member.
- Mario Jackson, 38, of Jacksonville, Florida, held the rank of the Gangster Disciples “governor” of Florida and a national enforcer for the gang.
- Damien Madison, 32, of Denver, Colorado, was the Gangster Disciples “governor” for Colorado.
- Lawrence Grice, 32, of Houston, Texas, held the rank of a Gangster Disciples “governor” for Texas.
- Anthony Blaine, 36, of Smyrna, Georgia, was a recent Gangster Disciples “governor’ for Georgia.
- Antarious Caldwell, 25, of DeKalb County, Georgia, was a member of “HATE Committee,” an enforcement team for the Gangster Disciples.
- Condelay Abbitt, 34, of Birmingham, Alabama, was the personal assistant to a Gangster Disciples “board member.”
Members of the public are reminded that the indictment only contains charges. Each defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the FBI, Internal Revenue Service Criminal Investigation, Cobb County Police Department, DeKalb County Police Department, and DeKalb County District Attorney’s Office, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Clayton County Sheriff’s Office.
Assistant U.S. Attorney Kim S. Dammers, Chief of the Organized Crime and Gang Section for the Northern District of Georgia, and Ryan K. Buchanan, Deputy Chief of the Violent Crime & National Security Section for the Northern District of Georgia, along with Conor Mulroe, Trial Attorney, of the Department of Justice, Criminal Division, Organized Crime and Gang Section, are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
- Roy Farrell, 59, of Hattiesburg, Mississippi, held the rank of Gangster Disciples “Board Member.
Twenty-two incarcerated offenders graduate from Project Safe Neighborhoods prevention and reentry programRead the Press Release
ATLANTA – On January 9, 2019, the first group of participants graduated from the U.S. Department of Justice’s new Project Safe Neighborhoods (PSN) prevention and reentry program (known as “A.C.E.S.”) at the Metro Reentry Facility.
The PSN strategy in the Northern District of Georgia marries enforcement efforts with support of prevention and reentry programs to combat violent crime in a lasting way, including by engaging directly with offenders about the consequences of continuing violent behaviors and supporting locally based prevention and reentry efforts.
“This first graduating class from our PSN prevention and reentry program demonstrates how law enforcement can work collaboratively with community programs to connect with the most hard-to-reach populations and prevent violent crime,” said Byung J. “BJay” Pak. “We believe these graduates are on the right path to becoming productive citizens in our community.”
“We appreciate the support of our federal partners in assisting us with creating a safer Georgia,” said Timothy C. Ward, Interim Commissioner, Georgia Department of Corrections. “This program provides a unique opportunity for these individuals to become productive members of their community upon release.”
“Our expectation is that the A.C.E.S. group will become the model of reentry in Georgia,” said Art Powell, founder of EGRESS Consultants and Services, LLC. “Our hope is that these men have prepared themselves to become Credible Messengers to others upon their release. This unique group came from different gangs and criminal organizations, and yet did not have a single fight or issue during their six months together, an amazing accomplishment in itself. They have now formed a bond of camaraderie and mutual support that we hope will become a movement!”
“The A.C.E.S. initiative is a true demonstration of the impact that credible messengers have on reducing crime and restoring communities,” said Deborah Daniels, co-founder of Offender Alumni Association. “A former offender helping another former offender move forward and leave the past behind is the heartbeat of the Offender Alumni Association.”
As part of the PSN program, the U.S. Attorney’s Office partnered with the Georgia Department of Corrections, EGRESS Consultants and Services, LLC, and the Offender Alumni Association, to implement the intensive 6-month long prevention and reentry program for selected young adult repeat offenders at the Metro Reentry Facility who are incarcerated for gun or gang-involved crimes. The program relies upon the Credible Messenger model which utilizes individuals who have relevant life experiences (including their own prior involvement in the criminal justice system) to intervene with the program participants in a group setting.
The program participants themselves chose to name their group “A.C.E.S.” (Adults Committed to Empowerment and Success). Beginning in July 2018, twenty-two (22) A.C.E.S. participants met every week with Credible Messengers to learn how to make better and safer decisions, pursue their goals in preparing for reentry, repair relationships with family and community, and connect to educational, job readiness, and employment opportunities. The Credible Messengers will also serve as mentors for ongoing one-on-one support for the participants upon release. The members of the group were recognized this week for their completion of the PSN program.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Fourth defendant sentenced for role in Atlanta-based Mexican sex trafficking ringRead the Press Release
ATLANTA - Severiano Martinez-Rojas has been sentenced for his role in the sex trafficking of three victims. The defendant is the fourth member of an Atlanta-based Mexican sex trafficking ring convicted for their roles in compelling young women from Mexico and Central America to engage in commercial sex.
"Sex trafficking is a form of modern-day slavery that exploits and traumatizes some of the most vulnerable members of our society,” said U.S. Attorney Byung J. “BJay” Pak. “We stand united today with our colleagues at the Department of Justice, Eastern District of New York, and federal law enforcement partners, in applauding the courage of the three victims in this case who remained determined to see this prosecution to its conclusion. The lengthy prison sentence that this final defendant received is primarily the result of the valiant efforts of these human trafficking survivors to hold their traffickers accountable.”
“Human trafficking is disgraceful and unacceptable. The sentence demonstrates the Department of Justice’s unwavering commitment to combatting these crimes,” said Assistant Attorney General Eric Dreiband. “This sex trafficking enterprise was extensive and resulted in the abuse of young women and girls. The Civil Rights Division of the Justice Department is thankful for the hard work of the U.S. Attorney’s Office of the Northern District of Georgia, the FBI, and the Homeland Security Investigations team who helped deliver justice on behalf of the victims and survivors.”
"This case represents why sex trafficking is such a high priority matter for the FBI, our law enforcement partners, and the non-government agencies who provide assistance to those with nowhere else to turn,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “As one of the worst examples of human trafficking, this case should resonate with those who might consider this reprehensible criminal conduct acceptable. We urge anyone with information about human trafficking activities to contact authorities and help put an end to modern day slavery.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Between 2006 and 2008, defendant Severiano Martinez-Rojas and co-defendants Arturo Rojas-Coyotl and Odilon Martinez-Rojas, lured the three victims into fraudulent romantic relationships using false promises of love, marriage, and legitimate work. They then arranged for others to smuggle the victims across the border into the United States. Once illegally in the United States, the defendants used violence, threats, and intimidation to coerce the victims to perform countless commercial sex acts in the Atlanta area and Alabama, where defendant Severiano Martinez-Rojas also operated a brothel.
Severiano Martinez-Rojas, 53, of Mexico, was sentenced today by U.S. District Judge Edward R. Korman to 24 years, five months in prison for his role in the sex trafficking of three victims. Defendant Severiano Martinez-Rojas was indicted in May 2013 but had remained a fugitive until his arrest in Mexico in November 2015 as part of a coordinated U.S.-Mexico bilateral enforcement action. The action also resulted in the arrests of seven other defendants in a related Eastern District of New York case. Martinez-Rojas was also charged, convicted, and sentenced in that case.
Martinez-Rojas, and co-defendants Arturo Rojas-Coyotl and Odilon Martinez-Rojas, previously pleaded guilty to sex trafficking and were sentenced to 16 years and 21 years and 10 months in prison, respectively. Both defendants were also ordered to pay $180,000 in restitution to the victims. A third co-defendant, Daniel Garcia-Tepal, pleaded guilty to alien harboring and received a sentence of time served.
Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims, and reunite victims with their children. These efforts resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of more than 170 defendants in multiple cases in Georgia, New York, Florida, and Texas since 2009, as well as numerous Mexican federal and state prosecutions of associated sex traffickers.
The case was investigated by the FBI’s Atlanta Division and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Atlanta. Assistance with the arrest and extradition of defendant Severiano Martinez-Rojas was provided by HSI New York’s Trafficking in Persons Unit, HSI Mexico City Attaché Office, the U.S. Attorney’s Office for the Eastern District of New York, the Department of Justice’s Office of International Affairs, the State Department, and Interpol. The government of Mexico, including Mexico’s Procuraduría General de la República and Policía Federal, also played a prominent role in advancing the bilateral anti-trafficking enforcement efforts in this case.
This case was prosecuted by Assistant U.S. Attorney Richard S. Moultrie, Jr., Chief of the Violent Crime & National Security Section for the Northern District of Georgia, and Deputy Director of Litigation Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Fourth Defendant Sentenced for Role in Atlanta-Based Mexican Sex Trafficking RingRead the Press Release
Severiano Martinez-Rojas, 53, of Mexico, was sentenced on Friday by United States District Judge Edward R. Korman to over 24 years in prison for his role in the sex trafficking of three victims. The amount to be paid in restitution will be announced at a later date.
The defendant is the fourth member of an Atlanta-based Mexican sex trafficking ring convicted for their roles in compelling young women from Mexico and Central America to engage in commercial sex. Co-defendants Arturo Rojas-Coyotl and Odilon Martinez-Rojas previously pleaded guilty to sex trafficking and were sentenced to 16 years and 21 years and 10 months in prison, respectively. Both defendants were also ordered to pay $180,000 in restitution to the victims. A third co-defendant, Daniel Garcia-Tepal, pleaded guilty to alien harboring and received a sentence of time served.
“Human trafficking is disgraceful and unacceptable. Today’s sentence demonstrates the Department of Justice’s unwavering commitment to combatting these crimes,” said Assistant Attorney General Eric Dreiband. “This sex trafficking enterprise was extensive and resulted in the abuse of young women and girls. The Civil Rights Division of the Justice Department is thankful for the hard work of the U.S. Attorney’s Office of the Northern District of Georgia, the FBI, and the Homeland Security Investigations team who helped deliver justice on behalf of the victims and survivors.”
“Sex trafficking is a form of modern-day slavery that exploits and traumatizes some of the most vulnerable members of our society,” said U.S. Attorney Byung J. “BJay” Pak. “We stand united today with our colleagues at the Department of Justice, Eastern District of New York, and federal law enforcement partners, in applauding the courage of the three victims in this case who remained determined to see this prosecution to its conclusion. The lengthy prison sentence that this final defendant has received in this case is primarily the result of the valiant efforts of these human trafficking survivors to hold their traffickers accountable.”
“This case represents why sex trafficking is such a high priority matter for the FBI, our law enforcement partners, and the non-government agencies who provide assistance to those with nowhere else to turn,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “As one of the worst examples of human trafficking, this case should resonate with those who might consider this reprehensible criminal conduct acceptable. We urge anyone with information about human trafficking activities to contact authorities and help put an end to modern day slavery.”
According to documents filed in court, between 2006 and 2008, defendant Severiano Martinez-Rojas and co-defendants Arturo Rojas-Coyotl and Odilon Martinez-Rojas, lured the three victims into fraudulent romantic relationships using false promises of love, marriage, and legitimate work. They then arranged for others to smuggle the victims across the border into the United States. Once illegally in the United States, the defendants used violence, threats, and intimidation to coerce the victims to perform countless commercial sex acts in the Atlanta area and Alabama, where defendant Severiano Martinez-Rojas also operated a brothel.
Defendant Severiano Martinez-Rojas was indicted in May 2013 but had remained a fugitive until his arrest in Mexico in November 2015 as part of a coordinated U.S.-Mexico bilateral enforcement action. The action also resulted in the arrests of seven other defendants in a related Eastern District of New York case. Martinez-Rojas was also charged, convicted, and sentenced in that case.
Since 2009, the Departments of Justice and Homeland Security have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative. The Initiative seeks to more effectively dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims, and reunite victims with their children. These efforts resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of more than 170 defendants in multiple cases in Georgia, New York, Florida, and Texas since 2009, as well as numerous Mexican federal and state prosecutions of associated sex traffickers.
The case was investigated by the FBI’s Atlanta Division and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Atlanta. Assistance with the arrest and extradition of defendant Severiano Martinez-Rojas was provided by HSI New York’s Trafficking in Persons Unit, HSI Mexico City Attaché Office, the U.S. Attorney’s Office for the Eastern District of New York, the Department of Justice’s Office of International Affairs, the State Department, and Interpol. The government of Mexico, including Mexico’s Procuraduría General de la República and Policía Federal, also played a prominent role in advancing the bilateral anti-trafficking enforcement efforts in this case.
Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division, United States Attorney Byung J. “BJay” Pak of the Northern District of Georgia, FBI Special Agent in Charge Chris Hacker, and Homeland Security Investigations Special Agent in Charge Nick S. Annan, announced the sentence.
The case was prosecuted by Assistant U.S. Attorney Richard S. Moultrie, Jr., Chief of the Violent Crime & National Security Section for the Northern District of Georgia, and Deputy Director of Litigation Benjamin J. Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Former GBI inspector pleads guilty to charging over $60,000 on government credit cardsRead the Press Release
ATLANTA - Sandra J. Stevens, a/k/a Sandra J. Putnam, has pleaded guilty to making more than 325 personal charges totaling over $60,000 on government credit cards when she was a high-ranking member of the Georgia Bureau of Investigation (GBI).
“The GBI, law enforcement, and the public placed great trust in Stevens based on her high-ranking position and years of service,” said U.S. Attorney Byung J. “BJay” Pak. “Stevens, however, betrayed that trust for material possessions.”
“Sandra Stevens took an oath to uphold the laws of the state of Georgia. Instead, she violated the public’s trust when she defrauded the government for personal gain. Public corruption will not be tolerated in Georgia and the GBI remains committed to working with our federal partners in these types of investigations,” said Interim GBI Director Scott Dutton.
According to U.S. Attorney Pak, the indictment, and other information presented in court: the GBI is a statewide agency that provided assistance to the criminal justice system in the areas of criminal investigations, forensic laboratory services, and computerized criminal justice information.
In October 1994, Stevens joined the GBI as an Intelligence Technician. On June 3, 1999, after becoming a Special Agent, Stevens took an oath of office to support and defend the Constitutions of the U.S. and the State of Georgia; to maintain public trust and abide by the GBI’s Code of Ethics; and to obey the laws of the land and the regulations of the GBI.
As a Special Agent with the GBI, Stevens held several prestigious and high-ranking leadership positions, including being the Special Agent in Charge of the Child Exploitation and Computer Crimes Unit, where she supervised approximately 25 GBI employees; and an Inspector of the Investigative Division, where Stevens supervised approximately 55 GBI employees. As the Inspector of the Investigative Division, Stevens earned more than $100,000 per year.
As a state agency, the GBI participates in Georgia’s Visa Purchasing Card (P-Card) Program. P-Cards are credit cards provided to Georgia employees for official business purchases, such as: supplies, materials, equipment, and services for official use. State policy expressly prohibits using P-Card for personal purchases. P-Card users are required to reconcile all purchases by electronically uploading receipts for each P-Card transaction.
In 1998, the GBI issued Stevens a P-Card for business-related purchases and expenses. As P-Card holder, Stevens signed an agreement stating that “under no circumstances will [she] use the Purchasing Card to make personal purchases, either for [her]self or for others.”
Nevertheless, from approximately May 9, 2013 to August 17, 2016, Stevens used her P-Card and the P-Cards of other GBI employees to make more than 325 unauthorized purchases of goods and services for her personal benefit or the personal benefit of others, including: a seven-piece dining set for $562.99, a corn hole game set for $229.99, two chaise lounge chairs for $399.99, and a 65-inch ultra HD smart television for $1597.99. Stevens also submitted altered receipts to the GBI in which she changed the description of the items purchased, the addresses to which the items were shipped, or both the item description and the shipping address.
For example, on May 27, 2016, Stevens used another GBI employee’s P-Card to order a $930.12 sofa from Amazon.com that was delivered to her home in Covington, Georgia. Subsequently, Stevens submitted a false receipt to the GBI in which she misrepresented the item description as 12 anti-spyware software discs, rather than a sofa, and misrepresented the shipping address as the GBI’s Headquarters in Decatur, Georgia, rather than her home address.
In total, the GBI paid over $60,000 for more than 325 unauthorized purchases made by Stevens on at least six GBI P-Cards. As a result of Stevens’s scheme to defraud, federal money from the U.S. Department of Justice and U.S. Department of Homeland Security grants was impacted.
On May 8, 2018, a grand jury charged Sandra J. Stevens, 46, of Covington, Georgia, with four counts of mail fraud and three counts of federal program theft. On January 3, 2019, Stevens pleaded guilty to mail fraud.
This case is being investigated by the Georgia Bureau of Investigation.
Assistant U.S. Attorneys Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section, and Jolee Porter are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Talking Rock man indicted for producing child pornographyRead the Press Release
GAINESVILLE, Ga. - Michael Lewis Bush has been arraigned on federal charges of producing, receiving, and possessing child pornography. The defendant had thousands of images of children, including some he allegedly took himself.
"This defendant allegedly produced and collected images portraying the sexual exploitation and abuse of young children,” said U.S. Attorney Byung J. “BJay” Pak. “It is essential that we target and remove from the community those individuals who pose such a great threat to our district.”
“Individuals who produce child pornography steal the innocence of children and re-victimize them each time the evidence of their exploitation is shared online,” said ICE Homeland Security Investigations Atlanta Special Agent in Charge Nick Annan. "This case shows HSI is actively working to identity and disrupt the trade of these illegal images, and also to identify and seek prosecution of the criminals who produce and possess them.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Federal agents determined that Michael Bush purchased child pornography online on multiple occasions between 2015 and 2018. Those agents executed a search warrant at Bush's home in August 2018 and found multiple digital devices containing thousands of images and videos of child pornography. They also discovered that Bush took a series of pornographic photographs of an eleven-year-old child and saved them to his computer where he retained them for years.
Michael Lewis Bush, 49, of Talking Rock, Georgia, was arraigned before U.S. Magistrate Judge J. Clay Fuller. Bush was indicted by a federal grand jury on November 14, 2018. Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.This case is being investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Assistant U.S. Attorney Jill E. Steinberg, Deputy Chief of the Criminal Division, is prosecuting the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Georgia correctional officer sentenced to federal prison for smuggling drugs into state prisonRead the Press Release
ROME, Ga. – Tiffany Cook, a former Georgia Department of Corrections (GDC) officer, pleaded guilty to being paid by a prison inmate to smuggle methamphetamine and marijuana into Hays State Prison located in Trion, Georgia.
“Correctional officers compromise the safety of our nation’s prisons when they trade their badges for money,” said U.S. Attorney Byung J. “BJay” Pak. “Prisons are supposed to be places where additional criminal activity is impossible, but this notion breaks down when officers participate in the crimes.”
“Cook not only betrayed the institution she was sworn to protect, she also betrayed every hard working corrections officer who upholds their oath every day,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Removing corrupt staff who violate their sworn duties as government employees and jeopardize the safety of fellow officers and inmates remains one of our main priorities.”
“The GDC does not tolerate actions of individuals who choose to bring discredit to the values of our agency and put their fellow Officers at risk,” said Timothy C. Ward, interim commissioner of the Georgia Department of Corrections. “We appreciate the support of our federal partners in ensuring that justice will be served, and we are proud of those Officers involved who were diligent in stopping the introduction of dangerous contraband into one of our facilities.”
According to U.S. Attorney Pak, the charges, and other information presented in court: On May 17, 2010, Cook began working with the GDC as a correctional officer. Beginning in April 2017, Cook served as a correctional officer at Hays State Prison. Hays State Prison is located in Trion, Georgia in Chattooga County. The facility opened in 1990 and currently holds approximately 1,680 male prisoners.
In early July 2018, the GDC received information from an inmate that Cook was being paid to smuggle illegal drugs into the prison. On July 9, 2018, Cook arrived at Hays State Prison to report for her regularly-scheduled shift. As Cook approached the time clock, correctional officers asked Cook to walk into a conference room. Following the request, Cook stated that she felt ill and wanted to leave the prison. Correctional officers detained and ultimately searched Cook.
Pursuant to their search, correctional officers recovered more than 118 grams of actual methamphetamine (with a purity of 90%), and more than 150 grams marijuana from Cook’s vaginal cavity and bra. After seizing the methamphetamine and marijuana, correctional officers placed Cook under arrest.
Tiffany Cook, 34, of Summerville, Georgia, was sentenced by Senior U.S. District Judge Harold L. Murphy to seven years, eight months in prison to be followed by five years supervised release. On October 11, 2018, Cook was charged in a criminal information with one count of possession, with intent to distribute, a controlled substance.
This case was investigated by the FBI and Georgia Department of Corrections.
Assistant U.S. Attorney Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section, prosecuted the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Justice Department Sues to Shut Down Promoters of Conservation Easement Tax Scheme Operating out of GeorgiaRead the Press Release
The United States filed a complaint seeking an order stopping Nancy Zak, Claud Clark III, EcoVest Capital Inc., Alan N. Solon, Robert M. McCullough, and Ralph R. Teal, Jr., from organizing, promoting, or selling an allegedly abusive conservation easement syndication tax scheme, the Justice Department announced today.
According to the complaint filed in the U.S. District Court for the Northern District of Georgia, the defendants’ scheme revolves around donations of conservation easements and corresponding tax benefits from those donations. Defendants also allegedly rely on grossly overvalued appraisals as part of their scheme.
“The Department of Justice is working with our partners in the Internal Revenue Service to shut down fraudulent conservation easement shelters, which in this case were based on willfully false valuations,” said Richard E. Zuckerman, the Tax Division’s Principal Deputy Assistant Attorney General. “Individuals investing in these schemes with benefits that seem too good to be true should ensure they are paying their proper federal income tax liability.”
“When it comes to aggressive transactions marketed by unscrupulous advisors, we will take every enforcement option available, including civil and criminal penalties,” said Internal Revenue Service Commissioner Charles P. Rettig. “Cheating on your taxes will not be tolerated.”
Under the proper circumstances, the Internal Revenue Code allows a taxpayer to take a charitable donation deduction equivalent to the fair market value of a conservation easement, but only if certain requirements with respect to the donation of an interest in property for conservation purposes are satisfied. This deduction is referred to as the “qualified conservation contribution.”
The defendants allegedly organize, promote, and sell ownership interests in limited liability entities, referred to in the complaint as “conservation easement syndicates.” According to the complaint, at the time defendants organize, promote, and sell ownership interests in a conservation easement syndicate, the syndicate plans to donate a conservation easement on land it owns, and then claim a corresponding tax deduction for the “qualified conservation contribution.”
However, these syndicates lack economic substance and are shams. They only serve as a conduit to transfer overvalued and otherwise improper federal tax deductions to customers, according to the government’s complaint. Additionally, the complaint alleges the conservation easements promoted by the defendants do not meet the requirements for a “qualified conservation contribution” under the Internal Revenue Code.
According to the complaint, defendants knew, or had reason to know, that the statements they made to customers regarding the tax benefits were false or fraudulent. In this regard, the complaint alleges that defendants knew the syndicates that they promoted planned to donate a conservation easement but otherwise did not plan to engage in any ongoing business activity. The complaint also alleges that the only return on investment a customer could anticipate from “investing” in a syndicate was the tax benefit from the planned conservation easement donation, which was many times larger than the purported investment. The complaint further alleges that the defendants made or furnished gross valuation overstatements about the valuation of conservation easements and the corresponding tax deductions, or caused others to do so.
The suit alleges that defendants have organized, promoted, and sold at least 96 conservation easement syndicates resulting in the syndicates reporting over $2.0 billion of tax deductions from overvalued and improper “qualified conservation contributions,” and have passed those tax deductions through to the thousands of customers of defendants’ scheme, resulting in hundreds of millions of dollars of tax harm.
On December 23, 2016, the IRS issued Notice 2017-10, announcing that certain syndicated conservation easement transactions are listed transactions if entered into on or after January 1, 2010. Notice 2017-10 applies to those prospective investors who receive oral or written promotional materials offering the possibility of a charitable donation deduction of at least 2.5 times their investment. A typical transaction covered by Notice 2017-10 involves the advertised investment in a pass-through entity that owns real property or acquires real property for the purpose of encumbering the property with a conservation easement.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Fifteen defendants sentenced in stolen U.S. Treasury check ringRead the Press Release
ATLANTA - Fifteen defendants have been sentenced for their part in a ring that stole over $10 million in U.S. Treasury checks from the mail and then cashed them at Walmart and Kroger stores around the country using fake identifications. The sentences ranged from two to ten years in prison for members of the ring.
“This sentencing marks a success for our multi-agency Stolen Treasury Check Task Force, which targets the widespread problem of U.S. Treasury check thefts in Georgia,” said U.S. Attorney Byung J. “BJay” Pak. “Criminals who steal Treasury checks victimize senior citizens, the disabled, veterans, and hard-working taxpayers who have earned these funds and depend on them. As this case shows, we will pursue these theft rings and hold them accountable regardless of how far away they go to cash the checks and avoid detection.”
“The success of this investigation can be directly attributed to the federal agencies that partnered with the Secret Service to bring this ring to justice,” said Special Agent in Charge Kimberly A. Cheatle, U.S. Secret Service, Atlanta Field Office. “It is immensely gratifying to see those who prey on the vulnerable prosecuted and sentenced for their crimes.”
“The collaborative investigative efforts by the Stolen Treasury Check Task Force resulted in the disruption of a criminal group engaged in an illegal financial scheme,” said David M. McGinnis, U.S. Postal Inspector in Charge of the Charlotte Division. “Criminals should take note that Postal Inspectors along with our law enforcement partners will vigorously pursue and bring to justice anyone who commits a crime against the U. S. mail system.”
“This check-theft scheme affected numerous innocent citizens, including Social Security beneficiaries, who have rightly earned government payments,” said SSA OIG Atlanta Field Division Acting Special Agent-in-Charge Gregory Wiggs. “We will continue to work with our law enforcement partners on similar investigations, and we thank the U.S. Attorney’s Office for prosecuting this significant case.”
“This case demonstrates our office’s commitment to protecting federal inmates, who were among the victims in this case, from fraudulent check schemes. We thank and commend our law enforcement partners who worked tirelessly with us to ensure a successful result for the Stolen Treasury Check Task Force,” said Robert A. Bourbon, Special Agent in Charge of the U.S. Department of Justice Office of the Inspector General’s Miami Field Office.
“The United States Postal Service Office of Inspector General takes allegations of mail theft seriously and vigorously investigates these matters to protect the overall integrity of the Postal Service,” said Special Agent in Charge Imari R. Niles.
According to U.S. Attorney Pak, the charges and other information presented in court: Maurice Shuler and Milton Minter received stolen U.S. Treasury checks that were taken from the U.S. Mail before reaching their intended recipients. The checks included tax refund, Social Security, and veterans checks. After receiving the checks, Shuler and Minter provided them to a network of check cashers who negotiated the stolen checks, mainly at Walmart and Kroger stores. The defendants used fake driver’s licenses to pose as the check payees and forged the payees’ names on the back of the checks. They also used other individuals’ Social Security numbers to cash the checks.
In an effort to avoid detection, the defendants traveled to different states, including Alabama, Mississippi, Illinois, Michigan, Minnesota, Kentucky, Iowa, Louisiana, and Tennessee, to cash the stolen checks. Over the span of four years, the ring was responsible for cashing over 6,000 stolen U.S. Treasury checks worth over $10 million.
Fifteen defendants have been sentenced as part of this case. U.S. District Judge Timothy C. Batten, Sr. sentenced the following individuals:
- Maurice Shuler, a/k/a Fred, 29, of Atlanta, Georgia, was sentenced to seven years in prison to be followed by three years of supervised release, and ordered to pay $9.5 million in restitution.
- Sepater Ransom, 31, of Atlanta, Georgia, was sentenced to five years and one month in prison to be followed by three years of supervised release, and ordered to pay $550,000 in restitution.
- Angela L. Williams, 43, of Lithonia, Georgia, was sentenced to time served (she has served four years and 20 days), three years of supervised release, and ordered to pay $116,053.58 in restitution. Williams has been in custody since November 28, 2014 on related charges in Mississippi.
Judge Batten previously sentenced the following 12 defendants:
- Milton Minter, a/k/a White Boi, 34, of Riverdale, Georgia, was sentenced to ten years in prison to be followed by three years of supervised release, and ordered to pay a $75,000 fine.
- Chucky Ransom, 45, of Blakely, Georgia, was sentenced to seven years in prison to be followed by three years of supervised release, and ordered to pay $550,000 in restitution.
- Damontdra Ransom, a/k/a Pop, 24, of Blakely, Georgia, was sentenced to two years and one day in prison to be followed by three years of supervised release, and ordered to pay $45,912.96 in restitution.
- Brian K. Hightower, a/k/a Big, 37, of Stockbridge, Georgia, was sentenced to two years and one day in prison to be followed by three years of supervised release, and ordered to pay $116,053.58 in restitution. Hightower was also sentenced to prison in Mississippi on related state charges.
- Charles E. Bolton, Jr., a/k/a Lightpole Jones, 29, of Atlanta, Georgia, was sentenced to two years and eighteen days in prison to be followed by three years of supervised release, and ordered to pay $212,683.51 in restitution. Bolton was also sentenced to prison in Mississippi on related state charges.
- Mariah C. Clark, 28, of Loganville, Georgia, was sentenced to two years and seven months in prison to be followed by three years of supervised release, and ordered to pay $208,423.51 in restitution.
- Lovely Richardson, 31, of Union City, Georgia, was sentenced to two years in prison to be followed by one year of supervised release, and ordered to pay $1,420 in restitution.
- Osiris O. Hernandez, 27, of Atlanta, Georgia, was sentenced to four years in prison to be followed by two years of supervised release, and ordered to pay $2,072 in restitution.
- Kimbela Jordan, 23, of Kankakee, Illinois, was sentenced to two years and six months in prison to be followed by three years of supervised release, and ordered to pay $35,040.15 in restitution.
- Raymon D. Gales, 29, of Atlanta, Georgia, was sentenced to four years in prison to be followed by three years of supervised release, and ordered to pay $207,392.36 in restitution.
- Jeremy Arnold, 32, of Riverdale, Georgia, was sentenced to two years and two months in prison to be followed by three years of supervised release, and ordered to pay $36,940.70 in restitution.
- Rodrekus R. Harris, 29, of Blakely, Georgia, was sentenced to two years and two months in prison to be followed by three years of supervised release, and ordered to pay $56,779.59 in restitution.
The remaining defendant, Gino Shuler, 31, of Atlanta, Georgia, is scheduled to be sentenced on January 9, 2018, before Judge Batten.
These sixteen defendants were previously charged in an 83-count indictment with conspiracy, theft of government money, and aggravated identity theft. All of the defendants were convicted after pleading guilty to one or more counts of the indictment.
This case was investigated by the U.S. Secret Service; U.S. Postal Inspection Service; Social Security Administration, Office of the Inspector General; Department of Justice, Office of the Inspector General; and United States Postal Service, Office of the Inspector General.
Assistant U.S. Attorney Stephen H. McClain, Chief of the Complex Frauds Section, and former Assistant U.S. Attorney Christopher C. Bly prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Jury convicts California man of traveling to Atlanta to have sex with a nine-year-old childRead the Press Release
ATLANTA - Craig Alan Castaneda has been found guilty by a jury of traveling from San Diego to Atlanta to have sex with a nine-year-old girl and of enticing a minor to engage in illegal sexual activity.
“Prosecuting child predators is one of this office’s highest priorities,” said U.S. Attorney Byung J. “BJay” Pak. “We are proud of the work that our law enforcement partners do in pursuing these predators, and we remain steadfast in our commitment to work with them to bring these persons to justice.”
“This conviction is another example of the lengths child predators will go to prey on our children,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “It is also an example of the FBI’s determination to pursue them. We hope it also serves as a warning to predators who feel they can act out on the internet without fear of being caught.”
According to U.S. Attorney Pak, the charges and other information presented in court: In early April 2015, an FBI agent acting in an undercover capacity posted an ad on Craigslist in which he portrayed himself as a mother in search of a “teacher” for her nine-year-old daughter. The defendant responded to the ad the next day and described his previous experience in molesting children, including a child as young as four years old. He also said that he was “grooming” (that is, preparing) another child to be molested but that the family had moved away a few months earlier.
The defendant continued to communicate with the undercover agent for the next several weeks, and he made plans to travel from San Diego, California, to Atlanta, Georgia. In one of his final communications with the undercover agent before boarding a plane, he instructed the mother to obtain sex toys and lubricant. FBI agents met the defendant when he arrived at the Hartsfield-Jackson International Airport in Atlanta on May 2, 2015, and arrested him.
Craig Alan Castaneda, 39, of Imperial Beach, Calif., was indicted by a federal grand jury in the Northern District of Georgia, June 2, 2015, on one count of traveling from another state to engage in sexual activity with a child under the age of 12 years, and one count of enticing a minor to engage in illegal sexual activity.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Castaneda was convicted by a federal jury a three day trial. Sentencing for Castaneda has not yet been scheduled.
This case is being investigated by the FBI.
Assistant U.S. Attorneys Nicholas Hartigan and Paul R. Jones are prosecuting the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Canadian man sentenced for enticing Georgia and Mississippi girls to engage in sexually explicit conduct over the internetRead the Press Release
ATLANTA - Yves Joseph Legault has been sentenced for coercing and enticing the production of child sexual exploitation images over the Internet. The defendant preyed on children in both Mississippi and Georgia simultaneously.
“Legault’s determination to pursue lurid desires shows his lack of fear of the law and a willingness to harm children no matter how young they are,” said U.S. Attorney Byung J. “BJay” Pak. “Predators use the Internet and social media sites to lure unsuspecting teens into their web of deceit. Fortunately, our law enforcement partners adapt quickly to new methods these individuals use, and catch those who prowl the Internet to engage in sexual activity with minors. Our office will continue to prosecute these cases, and we highly encourage parents to be actively involved in children’s social media activities and Internet use.”
“Predators like Legault are always lurking on line, and a threat to our children. Hopefully his sentencing will serve as a warning to all parents to monitor what their children are doing on the internet and on their cell phones,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Be assured the FBI's Violent Crimes Against Children unit and its Metro Atlanta Child Exploitation Task Force (MATCH) will use every investigative resource and remain vigilant for predators who pose a threat to children.”
According to U.S. Attorney Pak, the charges and other information presented in court: Beginning in approximately July 2017, Legault met a 13-year-old Marietta, Georgia, girl on the website Omegle, a free online and anonymous text and video chat tool. After moving their communications to Google Hangouts, the defendant asked the teen to perform sexual acts on live video-streaming for him. He eventually arranged to travel from Canada to Atlanta, Georgia, in order to have sex with the girl.
On August 11, 2017, Legault was arrested after flying from Toronto, Canada into Atlanta’s Hartsfield Jackson Airport to have sex with the teen. The 13-year-old girl’s mother had alerted agents with the FBI to the relationship after she intercepted a package he sent her daughter from Canada. A federal grand jury charged Legault for this conduct on August 15, 2017.
During the pendency of the Atlanta case and upon further investigation, agents discovered that during this same time period, Legault was also engaged in coercive and enticing chat and message exchanges with an eight-year-old girl residing in Pascagoula, Mississippi. Legault asked the girl to engage in sexually explicit behavior while the two were chatting over a live-streaming communication device. He was subsequently charged in the Southern District of Mississippi with one count of coercing and enticing the production of child pornography.
Yves Joseph Legault, 54, of Ontario, Canada, has been sentenced to 16 years in prison to be followed by supervised release for life, a $200 special assessment, and he will be deported to Canada upon completion of his sentence. Legault pleaded guilty to both federal cases in the Northern District of Georgia on September 18, 2018, was sentenced by U.S. District Judge Orinda D. Evans.
This case was investigated by divisions of the FBI in Georgia and Mississippi.
Assistant U.S. Attorney Skye Davis prosecuted the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Realtor sentenced for stealing millions from clientsRead the Press Release
ATLANTA – Emily Moerdermo Fu, a metro Atlanta realtor and businesswoman who defrauded clients out of over $22 million dollars over a two-year period, has been sentenced to seven years, three months for mail fraud.
“While Fu was a well-respected real estate and financial professional, she took advantage of her reputation and clients’ trust to defraud them,” said U.S. Attorney Byung J. “BJay” Pak. “In some cases she created fictitious closings and then pocketed the money. In other instances, she went through with the closing and used the property as collateral for unauthorized loans for her own benefit, meanwhile embezzling hundreds of thousands of dollars in managing such properties.”
"This announcement serves as a reminder to scam artists who blatantly commit fraud that they will be held accountable through the judicial system,” said Scott D. Fix, Acting U.S. Postal Inspector in Charge of the Charlotte Division. “Postal Inspectors are committed to pursuing those individuals who violate the public’s trust and encourage customers to keep a watchful eye on their investments.”
According to U.S. Attorney Pak, the charges and other information presented in court: Fu operated Capital Management in Suwanee, Georgia, which offered a wide range of services to investors in commercial properties around metropolitan Atlanta, including investment recommendations, property financing and acquisition, and management services. From 2004 to 2017, Fu established several investment companies for a group of clients for the supposed purchase of commercial real estate in Forsyth, Gwinnett, Fulton, and other metro counties.
In November 2017, the investors discovered irregularities in the books of some of the investment companies and confronted Fu, who admitted to having embezzled around $930,000. Through queries of county property databases and other investigations, it was determined that Fu had never followed through on several commercial real estate purchases, each valued in the millions of dollars. The properties included medical and shopping centers in Atlanta and across the northern metro area. Fu represented to her victims that she had completed the closings and was managing the properties, when in fact she had diverted the loans and investment funds for these “ghost purchases” to her own purposes. Fu had been a prominent real estate professional before she committed the fraud.
Emily Moerdermo Fu, 58, of Atlanta, Georgia, has been sentenced by U.S. District Judge Richard W. Story to seven years, three months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $22,043,640.67. Fu pleaded guilty to mail fraud on July 12, 2018.
This case was investigated by the U.S. Postal Inspection Service.
Assistant U.S. Attorney Brian Pearce prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Northern District of Georgia recognized by Department of Justice for work with Project Safe NeighborhoodsRead the Press Release
ATLANTA - The U.S. Attorney’s Office for the Northern District of Georgia has been recognized by the Department of Justice (DOJ) for their work with the Project Safe Neighborhoods (PSN) program at the 2018 PSN National Conference’s Award Ceremony in Kansas City, Missouri. Law Enforcement Coordinator Didi Nelson was cited for her outstanding contribution to the PSN Program, and the Offender Alumni Association (OAA), which organizes support groups for high-risk adult felons being released from custody to provide peer-to-peer support, help them solve dilemmas, and connect them with resources, received the DOJ Innovative Prevention/Reentry Strategy award.
Project Safe Neighborhoods focuses on prosecuting those individuals who most significantly drive violence in our communities, and supports and fosters partnerships between law enforcement and schools, the faith community, and local community leaders to prevent and deter future criminal conduct.
“We are extremely proud to be recognized for the hard work being done in this district,” said U.S. Attorney Byung J. “BJay” Pak. “As part of our PSN Strategy, we have extended partnerships and collaborations beyond the metro Atlanta area, teaming with individual law enforcement agencies and prosecutor’s offices to eliminate havens for crime and removing those who drive that crime from the community. In addition, we continue our commitment to assisting those returning from incarceration, seeking successful reentry into the community, through partnerships with outstanding organizations like the OAA. Congratulations again to both Didi and the OAA.”
During her more than three-decade career with DOJ, Didi Nelson has been a mainstay of the PSN program who has implemented the program faithfully and consistently in the District since its inception. As a former police officer Nelson’s commitment, credibility, and extensive knowledge of the program served as the bridge between the Department and local and state law enforcement whose partnership is so crucial for PSN's success. Didi continually works to implement anti-violence initiatives in every corner (and county) of the Northern District of Georgia as she also impacts the national PSN program more broadly as an ongoing consulting expert to other Districts in the country that are seeking to develop effective PSN strategies of their own.
OAA organizes support groups for high-risk adult felons being released from custody to provide peer-to-peer support, help them solve dilemmas, and connect them with resources. The organization consists of former offenders who are uniquely motivated and committed to helping those about to pending release from prison. OAA’s model recognizes that continuous and consistent support is crucial to help prevent recidivism. Accordingly, they meet with offenders while they are incarcerated and maintains relationships with them and their families, connecting them with networks of support in their communities upon release. The organization has supported more than 650 offenders returning to the community. In 2018, OAA expanded in support of the Northern District of Georgia’s PSN strategy and partners with the U.S. Attorney’s Office, state and federal agencies, and other providers to support high-risk adult offenders being released from custody into PSN target enforcement areas.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Defendants sentenced for $3.5 million sweepstakes scam targeting the elderlyRead the Press Release
ATLANTA - Silvia Sanchez Valverde, Rodolfo Orozco Aguilar, Daniel Sibaja, Priscilla Sibaja, and Elpelice Figueroa Rosales have been sentenced for their roles in a sweepstakes scam that targeted elderly individuals located throughout the United States.
“These defendants targeted and bilked dozens of vulnerable elderly victims out of $3.5 million,” said U.S. Attorney Byung J. “BJay” Pak. “Lottery and sweepstakes scams are one of the most common consumer frauds, with the majority of financial losses being suffered by the elderly. Citizens always should be wary of those requesting upfront money for supposed lottery or sweepstakes winnings.”
“This case makes clear that transnational scammers who believe they can avoid accountability for their crimes by transferring ill-gotten proceeds outside the country are mistaken,” said Special Agent in Charge of ICE Homeland Security Investigations Atlanta Nick S. Annan. “An international border is no defense for those who defraud senior citizens, and HSI is committed to using its cross-border authority to investigate and hold such persons accountable. We’re appreciative of our partnership with the U.S. Attorney’s Office to successfully prosecute this case and will continue to work with our federal, state and local partners to identify and stop financial crimes targeting vulnerable populations.”
According to U.S. Attorney Pak, the charges and other information presented in court: From February 2016 through September 2017, dozens of victims - most of whom were elderly - were contacted by telephone and told that they had won a sweepstakes or lottery. However, the victims were told that they could receive their sweepstakes winnings only after paying various expenses, such as taxes and fees. The victims were then directed to pay the expenses to various companies controlled by the defendants, such as J.G. Services, RF Financial Services, and Master Builders. The victims then mailed payments via personal and cashier’s checks to addresses that were linked to mailboxes rented by the defendants. The defendants deposited the checks, totaling over $3.5 million, into their bank accounts and then transferred the majority of the funds to Costa Rican bank accounts.
U.S. District Judge Leigh Martin May sentenced the defendants as follows:
- Silvia Sanchez Valverde, 47, of Buford, Georgia was sentenced to five years in prison, to be followed by three years of supervised release. Sanchez Valverde was convicted of conspiracy to commit mail fraud on August 27, 2018, after she pleaded guilty.
- Rodolfo Orozco Aguilar, 44, of Costa Rica was sentenced to four years in prison, to be followed by one year of supervised release. Orozco Aguilar was convicted of conspiracy to commit mail fraud on August 23, 2018, after he pleaded guilty. He faces potential removal from the United States, as a result of his conviction.
- Daniel Sibaja, 28, of Buford, Georgia was sentenced to four years in prison, to be followed by three years of supervised release. Daniel Sibaja was convicted of conspiracy to commit mail fraud on August 27, 2018, after he pleaded guilty.
- Priscilla Sibaja, 21, of Buford, Georgia was sentenced to three years in prison, to be followed by three years of supervised release. Priscilla Sibaja was convicted of conspiracy to commit money laundering on August 30, 2018, after she pleaded guilty. She faces potential removal from the United States, as a result of her conviction.
- Elpelice Figueroa Rosales, 62, of Buford, Georgia was sentenced to two years in prison, to be followed by three year of supervised release. Figueroa Rosales was convicted of conspiracy to commit mail fraud on August 24, 2018, after she pleaded guilty. She faces potential removal from the United States, as a result of her conviction.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Assistant U.S. Attorneys Kelly K. Connors and Cassandra J. Schansman prosecuted the case.
The Department of Justice Elder Justice Initiative promotes investigations and prosecutions of financial scams targeting the elderly. For more information regarding the Elder Justice Initiative, please visit www.justice.gov/elderjustice.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Atlanta U.S. Attorney Charges Iranian nationals for City of Atlanta ransomware attackRead the Press Release
ATLANTA - A federal grand jury in Atlanta has returned an indictment charging Faramarz Shahi Savandi and Mohammed Mehdi Shah Mansouri with committing a sophisticated ransomware attack on the City of Atlanta in March 2018 in violation of the Computer Fraud and Abuse Act.
“In March 2018, a devastating ransomware attack interrupted City of Atlanta government functions and disrupted our community,” said U.S. Attorney Byung J. “BJay” Pak. “In the days following the attack, local law enforcement officials worked tirelessly to respond to the incident and collect investigative information that was passed on to our counterparts leading the groundbreaking investigation into the SamSam ransomware attacks. This indictment, which is in coordination with the U.S. Attorney’s Office for the District of New Jersey and the Computer Crime and Intellectual Property Section of the U.S. Department of Justice, vindicates the City of Atlanta’s interest in ensuring that those responsible for the attacks face justice here as well.”
“This investigation and subsequent indictment demonstrates the Secret Service’s commitment to safeguarding our financial institutions, our communities, our homeland,” said Kimberly A. Cheatle, Special Agent in Charge of the U.S. Secret Service, Atlanta Field Office. “The virus causing the disruption of service to the City of Atlanta was triaged by cyber investigative experts at the Secret Service in conjunction with other federal law enforcement partners. This case serves as a reminder to all, particularly during the holiday season, to ensure protocols related to cyber hygiene are observed. The Secret Service appreciates the level of cooperation and information sharing throughout this investigation by all law enforcement partners which led to this indictment.”
“The FBI is always eager to help expose criminals who hide behind their computer and launch attacks that threaten our public safety,” said J.C. “Chris” Hacker, Special Agent in Charge of FBI Atlanta. “We are proud to have assisted our federal partners, the U.S. Secret Service, and our private sector partners in sending a strong message that we will work together to investigate and hold all criminals accountable.”
According to U.S. Attorney Pak, the indictment, and other information presented in court: On or about March 10, 2018 through approximately March 22, 2018, the defendants, Faramarz Shahi Savandi and Mohammed Mehdi Shah Mansouri, both of whom are Iranian nationals, caused the execution of a “ransomware” attack against the City of Atlanta, which encrypted vital city computer systems, and demanded a ransom payment to restore access.
The attack was executed by the use of a type of malware (or “ransomware”) referred to as “SamSam Ransomware,” which infected approximately 3,789 computers belonging to the City of Atlanta, including servers and workstations. Once deployed, the ransomware encrypted the files associated with each infected computer and displayed a ransom note. That is, the ransomware effectively locked the infected computers and made it impossible to access the information stored on them without a decryption key.
The ransom note demanded .8 Bitcoin to decrypt each affected computer or six Bitcoin to decrypt all affected computers. That is, the attackers gave the City of Atlanta the option of paying to decrypt certain computers (at a rate of .8 Bitcoin per computer) or to decrypt all the infected computers (for six Bitcoin). The ransom note directed the City of Atlanta to a particular Bitcoin address to pay the ransom and supplied a web domain that was only accessible using a TOR browser; the note suggested that the City of Atlanta could download the decryption key from that website. In the days following the attack, the webpage that purportedly contained the decryption key became inaccessible, and the City of Atlanta did not pay the ransom.
The attack significantly disrupted City of Atlanta operations, impaired certain governmental functions, and caused it to incur substantial expenses in the coming weeks and months. To date, the attack has inflicted millions of dollars in losses.
The indictment charges Faramarz Shahi Savandi, 27, of Shiraz, Iran, and Mohammed Mehdi Shah Mansouri, 34, of Qom, Iran, in the U.S. District Court for the Northern District of Georgia (“the Atlanta case”) with intentional damage to protected computers located in Atlanta that caused losses exceeding $5,000, affected more than 10 protected computers, and that threatened the public health and safety.
The defendants are also charged in the U.S. District Court for the District of New Jersey with one count of conspiracy to commit wire fraud, one count of conspiracy to commit fraud and related activity in connection with computers, two substantive counts of intentional damage to a protected computer located in New Jersey, and two substantive counts of transmitting a demand in relation to damaging a protected computer located in New Jersey. That case is being investigated by the FBI’s Newark Field Office, the U.S. Attorney’s Office for the District of New Jersey, and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS).
Assistant U.S. Attorneys Nathan P. Kitchens and Kamal Ghali, Deputy Chiefs of the Cyber and Intellectual Property Crime Section, are prosecuting the Atlanta case. The Atlanta Field Offices of the U.S. Secret Service and the Federal Bureau of Investigation assisted with the response to the City of Atlanta ransomware attack.
In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendants guilt beyond a reasonable doubt at trial.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Anil J. Desai, M.D., and related entities to pay over $200,000 to resolve False Claims Act allegationsRead the Press Release
Anil J. Desai, M.D., East Metro Internal Medicine, L.L.C. and Rockdale-Newton Hematology-Oncology (the “Desai Parties”), based in Conyers and Covington, Georgia, have agreed to pay $213,000 to resolve allegations that they violated the False Claims Act by submitting claims to Medicare and Medicaid for drugs that were never provided to their patients, and for drugs that had not received final marketing approval by the U.S. Food and Drug Administration (“FDA”).
“When healthcare providers bill for goods and services that they did not provide, it is the equivalent of taking money from the taxpayer’s pocket,” said U.S. Attorney Byung J. “BJay” Pak. “Additionally, billing for medications that were never approved by the FDA puts patients at risk. We will continue to pursue healthcare providers who put their own bottom line ahead of patient care.”
“The Office of Inspector General will diligently investigate providers who seek to defraud the Medicare and Medicaid trust funds through nefarious billing practices,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “This investigation illustrates how we collaborate with our law enforcement partners to protect beneficiaries while holding suspicious providers accountable.”
“FDA’s drug approval requirements are designed to ensure the safety, efficacy, and quality of drugs distributed or administered to American patients,” said H. Peter Kuehl, Acting Special Agent in Charge, FDA Office of Criminal Investigations’ Miami Field Office. “Today’s announcement should serve as a reminder of our continued focus on those that risk patients’ health for profit.”
“Our Medicaid Fraud Control Division is always at work for Georgians, ensuring that Medicaid providers who bill the Medicaid program do not abuse it for their own financial gain,” said Georgia Attorney General Chris Carr. “We greatly appreciate the partnerships we have with federal agencies who share this same mission, and we will continue supporting them to prevent fraudulent activity.”
Dr. Desai owns both East Metro Internal Medicine, L.L.C. (“East Metro”) and Rockdale-Newton Hematology-Oncology (“Rockdale-Newton”), through which he has provided treatment to cancer patients. The Desai Parties billed Medicare and Medicaid for the drugs Eloxitan and Procrit in connection with Dr. Desai’s treatment of cancer patients. Eloxitan is a chemotherapy drug used to treat certain types of cancer and Procit is a medication that is used to treat anemia caused by chemotherapy as well as other conditions.
The government alleges that between November 1, 2008 and August 13, 2012, the Desai Parties submitted claims to Medicare and Medicaid for Procrit even though there was no record that they purchased enough Procrit to cover the amount that they billed. Moreover, the Government alleges that during that same time period, the Desai Parties submitted claims to Medicare and Medicaid for Eloxitan that had been purchased from a Canadian company, Quality Specialty Products, and had not received final marketing approval by the FDA. The civil settlement resolves the government’s investigation into these allegations.
This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Department of Health and Human Services - Office of Inspector General, and the Food and Drug Administration – Office of Criminal Investigations.
The civil settlement was reached by Assistant U.S. Attorney Neeli Ben-David, Deputy Chief of the Civil Division, and Sara Vann, Assistant Attorney General with the Georgia Medicaid Fraud Control Unit.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
LivaNova agrees to pay $1.87 Million to resolve False Claims Act allegations arising from improper kickback paymentsRead the Press Release
ATLANTA – LivaNova USA, Inc. (“LivaNova”), formerly known as Cyberonics, Inc., has agreed to pay the United States and the State of Georgia $1.87 million to resolve allegations that it violated the False Claims Act and the Georgia False Medicaid Claims Act by knowingly paying kickbacks to Georgia physicians with the intent to cause referrals for implantation of LivaNova’s medical devices.
“Healthcare providers must make recommendations about their patients’ health without respect to their own financial interests and medical device manufacturers cannot be permitted to influence that process with thinly-disguised kickback payments,” said U.S. Attorney Byung J. “BJay” Pak. “This settlement demonstrates our commitment to ensuring that the healthcare provided to our citizens, and the medical guidance given by Georgia physicians, is free from improper monetary influence.”
“The success of Georgia’s Medicaid program depends on the integrity of medical professionals in making decisions regarding patient care,” said Attorney General Chris Carr. “When companies provide incentives to physicians that emphasize interests beyond the patient, the entire system is corrupted. I am proud of our Medicaid Fraud Division’s work on this case, and we will continue to work alongside our federal partners to root out this activity.”
The government’s investigation concerned LivaNova’s policy and practice of paying speaking fees to Georgia physicians for supposed speaking and marketing events at which the attendees were primarily the physicians and their own staff. The physicians who received these fees were amongst the highest referral sources for surgical implantation of LivaNova’s device for treatment of refractory epilepsy. The government alleges that these payments violated the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), which prohibits the knowing and willful payment of “remuneration” to induce or reward the generation of business involving any item or service payable by Medicare and Medicaid. Such violations are actionable under the False Claims Act and the Georgia False Medicaid Claims Act.
The settlement resolves allegations filed by Ashley Case, a former employee of LivaNova, under the qui tam, or whistleblower, provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it did in this case. The lawsuit was filed in the Northern District of Georgia and is captioned United States of America and State of Georgia ex rel. Ashley Case v. LivaNova, P.L.C., Civil Action No: 1:16-cv-0807-MHC (N.D. Ga.). Ms. Case will receive a share of the settlement.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
This matter was investigated by the U.S. Attorney’s Office for the Northern District of Georgia and the Georgia Medicaid Fraud Control Unit.
Assistant U.S. Attorney Gabriel Mendel handled this matter for the U.S. Attorney’s Office.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao-ndga.
Former Department Administrator Pleads Guilty to Defrauding MARTA Out of More Than $520,000Read the Press Release
ATLANTA – Jhonnita L. Williams, a former department administrator at the Metropolitan Atlanta Rapid Transit Authority (MARTA), pleaded guilty to participating in a false-invoice scheme that resulted in MARTA paying more than $520,000 for maintenance projects where no worked was actually performed.
“MARTA trusted Williams to use and protect taxpayer dollars effectively and responsibly,” said U.S. Attorney Byung J. “BJay” Pak. “Her participation in a half of million dollar theft of MARTA funds demonstrates that she sold the public’s trust for self-enrichment.”
“Williams circumvented proper government procedures and dipped into taxpayers’ money to subsidize her own personal greed,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Public corruption is one of the FBI’s top priorities, and we are committed to holding accountable those who choose to abuse their positions of trust.”
“MARTA has zero-tolerance for any employee who betrays the trust placed in us by our customers,” said MARTA Police Chief Wanda Y. Dunham. “The guilty plea by Ms. Williams concludes a coordinated investigation with our federal law enforcement partners, and we are satisfied with the results. We hope this guilty verdict serves as a deterrent for others who would attempt to defraud the taxpayers.”
According to U.S. Attorney Pak, the indictment, and other information presented in court: MARTA is the principal public transportation operator in the Atlanta area, providing fixed rail and bus service to more than 500,000 passengers per weekday. Formed by Metropolitan Atlanta Rapid Transit Authority Act of 1965, MARTA is a multi-county local governmental agency with a 2016 annual budget of more than $880 million.
Williams worked for MARTA from 1999 to 2017. From 2010 to 2017, Williams worked as an assistant and department administrator for Joseph J. Erves. During most of the conspiracy, Erves served as MARTA’s senior director of operations and oversaw the maintenance of all of its buses and rail cars.
From approximately June 2010 to December 2016, Williams and Erves had more than 40 fake invoices prepared on behalf of three vendors for MARTA maintenance projects for which no work was performed. Williams and Erves used the false invoices as bases to authorize payments to the three vendors – including fake invoices submitted by a business owned by Ferrell Williams (who was romantically involved with Jhonnita Williams). After being paid, the all three of the vendors funneled most of the money received from MARTA back to Erves and Williams. In total, MARTA paid the three vendors more than $520,000 for maintenance projects where no worked was actually performed.
Williams used the money to pay for various personal expenses, including the financing and purchase of an approximately 3,000 square foot single-family home with four bedrooms and two and a half bathrooms.
On July 24, 2018, a grand jury returned a seven-count indictment against Williams, 47, of Atlanta, Georgia. Today, Williams pleaded guilty to one count of conspiratorial federal program theft.
On September 20, 2017, Joseph J. Erves, 54, of Lithonia, Georgia pleaded guilty to federal program theft. On January 16, 2018, Erves was sentenced to two years and nine months in federal prison, and was ordered to pay $522,825.45 in restitution.
On March 29, 2018, Ferrell Williams, 63, of Cincinnati, Ohio, pleaded guilty to conspiring to commit federal program theft. On August 1, 2018, Ferrell Williams was sentenced to eight months in federal prison, and was ordered to pay $41,539.1 in restitution.
This case is being investigated by the Federal Bureau of Investigation and the MARTA Police Department.
Assistant U.S. Attorneys Jeffrey W. Davis, Chief of the Public Integrity and Special Matters Section, and Alison Prout are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
U.S. Postal Service Workers Sentenced for Accepting Bribes to Deliver Cocaine through the MailRead the Press Release
ATLANTA – The last defendant of a group of 16 U.S. Postal Service letter carriers and clerks from across the Atlanta area was sentenced to federal prison for accepting bribes to deliver packages of cocaine – two kilograms or more at a time – in a wide-reaching undercover operation. The defendants were willing to make the deliveries for bribes as low as $250, and received sentences of between three and nine years in prison.
“U.S. Postal Service workers are typically valuable members of the community, entrusted to deliver the mail every day to our homes,” said U.S. Attorney Byung J. “BJay” Pak. “This important operation identified and prosecuted 16 corrupt individuals who chose to abuse that trust and instead used their positions to bring what they thought were large amounts of dangerous drugs into those same communities for a quick payoff.”
“The FBI places a high priority on public corruption based investigations and we hope this sentencing will serve as a deterrent for others,” said Chris Hacker, Special Agent in Charge, FBI Atlanta Field Office. “The blatant abuse of the public trust in this case not only stains the reputation of all U.S. Postal Service employees, but it puts the residents on their routes in significant danger by bringing drugs into their community.”
“Postal employees are paid to deliver mail, not drugs,” said Imari R. Niles, Special Agent in Charge, U.S. Postal Service Office of Inspector General, Capital Metro Area Field Office. “The vast majority of the Postal Service’s 600,000 employees are hard-working, trustworthy individuals. When postal employees decide to risk their job, benefits, retirement, and freedom to get involved with drug trafficking, Special Agents of the U.S. Postal Service Office of Inspector General will work with the Federal Bureau of Investigation, DeKalb County District Attorney’s Office and the U.S. Attorney's Office to put them all in federal prison.”
“Drug trafficking, in itself, is an inherently dangerous crime,” said Sherry Boston, DeKalb County District Attorney. “When perpetrated by those in positions of public trust, citizen safety is severely compromised. The DeKalb County District Attorney’s Office is committed to working with our law enforcement partners to ferret out cases of public corruption and ensure that those who abuse their authority and violate the public’s trust, are held accountable for their actions.”
According to U.S. Attorney Pak, the charges and other information presented in court: In 2015, federal agents involved in the dismantling of a drug trafficking organization in Atlanta learned that drug traffickers had been bribing postal workers to intercept and specially deliver packages of drugs while they were on their regular routes, including through residential neighborhoods. The drug traffickers believed the postal workers were less likely to be caught by law enforcement because of their official jobs, and found that the corrupt postal workers were willing to hand deliver the drugs in exchange for bribes. That criminal partnership exploited the U.S. Postal Service to deliver dangerous drugs into the community, and also increased the risk that innocent postal workers and bystanders on their routes would be exposed to the dangerous substances or to rival drug traffickers who sometimes try to rob postal workers to steal packages of drugs.
To catch the corrupt postal workers, federal agents used a confidential source who posed as a drug trafficker looking for postal workers to deliver packages of kilogram quantities of cocaine or marijuana. The defendants agreed to deliver the packages and negotiated the amount of the bribes they would charge, while law enforcement agents watched from a distance and recorded the interactions. All the defendants chose to deliver cocaine instead of marijuana, believing they could charge a higher bribe for packages of cocaine. They also agreed to deliver packages on multiple occasions over a period of time. When the confidential source asked if they knew any other postal workers who did the same thing, some of the defendants introduced the confidential source to coworkers who also wanted to deliver packages (with the defendant claiming an additional bribe for every package their recruit delivered).
The defendants convicted as a result of this operation include:
- Cydra Rochelle Alexander, 33, of Riverdale, Georgia, a letter carrier assigned to the Ralph McGill Carrier Annex and Central City Branch of the Atlanta Post Office was sentenced to five years, 10 months in prison to be followed by four years of supervised release, and ordered to pay forfeiture in the amount of $4,500 by U.S. District Judge Leigh Martin May on February 22, 2018. Alexander pleaded guilty to these charges on November 27, 2017.
- Aurthamis O. Burch, a/k/a Tank, 47, of Snellville, Georgia, a letter carrier assigned to the Doraville Post Office was sentenced to three years, 10 months in prison to be followed by three years of supervised release, and ordered to pay forfeiture in the amount of $1,500 by U.S. District Judge Steve C. Jones on April 10, 2018. Burch pleaded guilty to these charges on December 11, 2017.
- Kawana Rashun Champion, 36, of Jonesboro, Georgia, a clerk assigned to the North Springs Branch of the Sandy Springs Post Office and Central City Branch of the Atlanta Post Office was sentenced to nine years in prison to be followed by four years of supervised release, and ordered to pay forfeiture in the amount of $10,500 by U.S. District Judge Leigh Martin May on May 11, 2018. Champion pleaded guilty to these charges on February 20, 2018.
- Eleanor Lolita Golden, a/k/a Eleanor Johnson, 55, of East Point, Georgia, a letter carrier assigned to the West End Branch of the Atlanta Post Office was sentenced to six years in prison to be followed by four years of supervised release, and ordered to pay restitution in the amount of $4,500 by U.S. District Judge Leigh Martin May on May 17, 2018. Golden pleaded guilty to these charges on December 20, 2017.
- Tonie Harris, 55, of Decatur, Georgia, a letter carrier assigned to the Sandy Springs Post Office was sentenced to three years, one month in prison to be followed by four years of supervised release, and ordered to pay restitution in the amount of $1,450 by U.S. District Judge Steve C. Jones on August 14, 2018. Harris pleaded guilty to these charges on March 20, 2018.
- Leea Janel Holt, 39, of Atlanta, Georgia, a letter carrier assigned to the Old National Branch of the Riverdale Post Office was sentenced to 6 years, 6 months in prison to be followed by 4 years of supervised release, and ordered to pay restitution in the amount of $4,500 by U.S. District Judge Leigh Martin May on November 27, 2018. Holt pleaded guilty to these charges on June 6 and August 28, 2018.
- Clifton Curtis Lee, a/k/a Cliff, 43, of Lithonia, Georgia, a letter carrier assigned to the Sandy Springs Post Office was sentenced to three years, 10 months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,800 by U.S. District Judge Steve C. Jones on June 18, 2018. Lee pleaded guilty to these charges on February 28, 2018.
- Shakeed Anilah Magee, 41, of College Park, Georgia, a letter carrier assigned to the West End Branch of the Atlanta Post Office was sentenced to five years in prison to be followed by four years of supervised release, and ordered to pay restitution in the amount of $3,000 by U.S. District Judge Leigh Martin May on February 13, 2018. Magee pleaded guilty to these charges on November 14, 2017.
- Horace Manson, 41, of Roswell, Georgia, a letter carrier assigned to the West End Branch of the Atlanta Post Office was sentenced to three years, 10 months in prison to be followed by two years of supervised release, and ordered to pay restitution in the amount of $3,000 by U.S. District Judge Leigh Martin May on April 17, 2018. Manson pleaded guilty to these charges on January 29, 2018.
- Olivia Marita Moore, 26, of Atlanta, Georgia, a letter carrier assigned to the Old National Branch of the Riverdale Post Office was sentenced to five years, 10 months in prison to be followed by four years of supervised release, and ordered to pay restitution in the amount of $4,500 by U.S. District Judge Leigh Martin May on July 16, 2018. Moore pleaded guilty to these charges on January 5, 2018.
- Eddie Nash, 64, of Decatur, Georgia, a letter carrier assigned to the West End Branch of the Atlanta Post Office was sentenced to five years in prison to be followed by four years of supervised release, and ordered to pay restitution in the amount of $3,000 by U.S. District Judge Leigh Martin May on July 17, 2018. Nash pleaded guilty to these charges on December 14, 2017.
- Jeffrey A. Pearson, 61, of Austell, Georgia, a letter carrier assigned to the Decatur Post Office was sentenced to four years, nine months in prison to be followed by four years of supervised release, and ordered to pay restitution in the amount of $2,000 by U.S. District Judge Eleanor L. Ross on May 22, 2018. Pearson pleaded guilty to these charges on February 1, 2018.
- Rodney Antwain Salter, 34, of Jonesboro, Georgia, a letter carrier assigned to the Martech Branch of the Atlanta Post Office was sentenced to five years in prison to be followed by four years of supervised release, and ordered to pay restitution in the amount of $3,000 by U.S. District Judge Leigh Martin May on May 17, 2018. Salter pleaded guilty to these charges on December 20, 2017.
- Frank Webb, 41, of Lithonia, Georgia, a letter carrier assigned to the Central City Branch of the Atlanta Post Office was sentenced to three years, four months in prison to be followed by two years of supervised release, and ordered to pay forfeiture in the amount of $3,000 by U.S. District Judge Leigh Martin May on May 16, 2018. Webb pleaded guilty to these charges on January 30, 2018.
- Katrina Nicole Wilson, a/k/a Trina, 39, of Fairburn, Georgia, a letter carrier assigned to the West End Branch of the Atlanta Post Office was sentenced to eight years in prison to be followed by five years of supervised release, and ordered to pay restitution in the amount of $9,500 by U.S. District Judge Leigh Martin May on August 27, 2018. Wilson pleaded guilty to these charges on April 12, 2018.
- Harvel Donta Young, a/k/a Dante, 41, of Atlanta, Georgia a letter carrier assigned to the Westside Annex Branch of the Marietta Post Office was sentenced to five years in prison to be followed by five years of supervised release, and ordered to pay restitution in the amount of $1,800 by U.S. District Judge Steve C. Jones on August 14, 2018. Young pleaded guilty to these charges on May 1, 2018.
Additionally, Dexter Bernard Frazier, a/k/a Dec, 57, of Fairburn, Georgia, who was not a postal employee but participated in some of the package deliveries by connecting the confidential source with postal workers, was sentenced to nine years in prison to be followed by 10 years of supervised release, and ordered to pay restitution in the amount of $10,700 by U.S. District Judge Steve C. Jones on June 13, 2018. Frazier pleaded guilty to these charges on March 6, 2018.
This case was investigated by the Federal Bureau of Investigation, DeKalb County District Attorney’s Office, and U.S. Postal Service Office of Inspector General.
Assistant U.S Attorneys Garrett L. Bradford and Jill E. Steinberg, Deputy Chief of the Criminal Division, prosecuted the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
- Cydra Rochelle Alexander, 33, of Riverdale, Georgia, a letter carrier assigned to the Ralph McGill Carrier Annex and Central City Branch of the Atlanta Post Office was sentenced to five years, 10 months in prison to be followed by four years of supervised release, and ordered to pay forfeiture in the amount of $4,500 by U.S. District Judge Leigh Martin May on February 22, 2018. Alexander pleaded guilty to these charges on November 27, 2017.
Former Attorney Charged with Defrauding Investors in a Fantasy Football Lottery LeagueRead the Press Release
ATLANTA –Timothy Cobb, 53, of Atlanta, was arraigned before U.S. Magistrate John K. Larkins III on wire and tax fraud charges for duping investors in a fantasy football lottery league.
“This defendant allegedly defrauded investors who believed he would run a fantasy football lottery league through the Georgia Lottery,” said U. S. Attorney Byung J. Pak. “Cobb gambled on getting away with his scheme, but he lost.”
“Cobb is no longer engaging in fantasy but reality,” said Thomas J. Holloman, Special Agent in Charge, IRS- Criminal Investigation. “Today’s indictment represents the government’s effort to throw a penalty flag against Cobb’s illegal activity to defraud investors in his startup of a fantasy league football lottery. Working these types of cases should show the taxpayer’s that everyone has a responsibility to report ‘all’ income on their tax returns.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Cobb is a former attorney who started a company named Skyboxx Sports, LLC. Through Skyboxx, Cobb allegedly collected $500,000 from investors to start a fantasy football lottery league with the Georgia Lottery Corporation. Instead of using the proceeds from investors for business development, Cobb allegedly spent the money on himself for trips to Barbados and Mexico City, dining in restaurants in Atlanta, Miami Beach and New York, and other personal items. Cobb allegedly then filed false federal income tax returns that deliberately omitted the information he stole from his investors.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Internal Revenue Service Criminal Investigation.
Assistant U.S. Attorney Thomas J. Krepp is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Defendant Sentenced for ATM Skimming FraudRead the Press Release
ATLANTA - Gogut Serban was sentenced to federal prison for access device fraud and aggravated identity theft for stealing bank debit card numbers and personal identification numbers (PINs) of individuals in Georgia by using automated teller machines (ATMs) skimming devices.
“Identity theft is a continuing problem that damages the credit of too many unsuspecting Georgians,” said U.S. Attorney Byung J. “BJay” Pak. “Citizens are encouraged to visually and physically inspect ATMs for any obvious signs of tampering prior to using their debit or credit cards.”
“This investigation and subsequent conviction demonstrates the commitment the Secret Service and our law enforcement partners have in aggressively pursuing those who commit access device fraud and identity theft,” said Kimberly A. Cheatle, Special Agent in Charge of the U.S. Secret Service, Atlanta Field Office. “This sentencing is another great example of the law enforcement community working together to combat crime.”
“The Lawrenceville Police Department is extremely grateful for the assistance provided by our partners in the U.S. Secret Service during this seven-month investigation,” said Lawrenceville Police Chief Tim Wallis. “The continued cooperation of local and federal law enforcement agencies led to a successful conclusion of a complex case spread over several jurisdictions.”
According to U.S. Attorney Pak, the charges and other information presented in court: Serban and his co-conspirators used illegal skimming devices to steal over $80,000 from credit union customers by installing the devices at Associated Credit Union automated teller machines in Atlanta, Lawrenceville, Norcross and other locations in Georgia. When a customer used an ATM with a skimming device installed, the device electronically recorded the customer’s debit card number and a small camera in the device video recorded the ATM keyboard as the customer entered their PIN. Serban and others then encoded new cards with the stolen account information and used the altered cards at ATMs, draining money from over 70 victims’ bank accounts. The other co-conspirators in the scheme were charged in South Carolina.
Gogut Serban, 35, of Romania, was sentenced to two years, two months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $84,760.50. Serban was convicted of access device fraud and aggravated identity theft on August 28, 2018, after he pleaded guilty.
This case was investigated by the U.S. Secret Service and the Lawrenceville Police Department.
Assistant U.S. Attorney Christopher J. Huber, Deputy Chief of the Complex Frauds Section, prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga
Hyundai Construction Equipment Americas Inc. Sentenced to $1.9 Million Criminal Fine for Violating the Clean Air ActRead the Press Release
On Wednesday, November 14, 2018, Hyundai Construction Equipment Americas Inc. (Hyundai), then a subsidiary of Hyundai Heavy Industries Co. Ltd, pleaded guilty and was sentenced in federal court in Atlanta, Georgia, to pay a $1.95 million dollar criminal fine for conspiring to defraud the United States government and to violate the Clean Air Act, the Justice Department announced today. The charges relate to construction equipment Hyundai imported for sale into the United States from the Republic of Korea that contained engines that did not comply with air emissions standards under the Clean Air Act.
Hyundai imports construction and other equipment into the United States, which it sells to its dealer network. During a phase-in period for new air emissions standards, Hyundai opted to participate in a transition program that allowed it to import limited numbers of engines not in compliance with the new standards. As part of the program, Hyundai had to report the number of imported noncompliant engines to the U.S. Environmental Protection Agency. Hyundai’s imports of noncompliant engines substantially exceeded its allowance. A consultant retained by Hyundai to provide advice about complying with the requirements warned the company that it was out of compliance and that it risked a substantial penalty. The consultant advised Hyundai to stop importing and notify the EPA. Nonetheless, Hyundai continued to import the noncompliant engines, and its employees conspired to lie to the EPA and to impede EPA’s ability to enforce emissions standards. Ultimately, Hyundai submitted a report that intentionally understated the number of noncompliant engines it had imported from Korea.
“This case underscores the necessity for foreign companies that opt to do business in the United States to comply with our Nation’s laws developed to protect human health and the environment,” said Assistant Attorney General Jeffrey Bossert Clark for the Environment and Natural Resources Division. “A self-reporting regime, such as the one here, depends upon the honesty and integrity of the regulated parties. We hope that this case will chart a new course for Hyundai, and serve as a lesson for all companies that interact with our regulatory agencies.”
“Hyundai Construction Equipment Americas tried to increase its profits by illegally importing diesel engines that did not comply with U.S. Clean Air Act regulations,” said EPA Office of Enforcement and Compliance Assurance Assistant Administrator Susan Bodine. “This case shows that EPA and our law enforcement partners will not allow importers to gain a competitive advantage or risk the health and safety of our communities by evading U.S. environmental laws.”
Assistant Attorney General Clark thanked the U.S. Environmental Protection Agency’s Criminal Investigation Division for its work in this investigation. The case is being prosecuted by Senior Counsel Krishna Dighe of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorney Christopher J. Huber, Deputy Chief of the Complex Fraud Section, of the United States Attorney’s Office for the Northern District of Georgia.
Heroin Trafficker Indicted for Transporting 4.5 Kilograms Hidden Inside Car BatteryRead the Press Release
ATLANTA - Francisco Castaneda Rivera has been indicted by a federal grand jury for allegedly transporting 4.5 kilograms of heroin - hidden inside a car battery - from Texas to the Atlanta area.
“Drug trafficking organizations go to great lengths to creatively conceal and transport their poisonous merchandise across the United States,” said U.S. Attorney Byung J. “BJay” Pak. “Thanks to our vigilant and perceptive law enforcement agents, this large quantity of heroin was discovered and seized before it could make its way into our community.”
“Drug distribution is about delivering misery to the consumer,” said Robert J. Murphy, Special Agent in Charge of the DEA Atlanta Field Division. “DEA’s mission is about removing the supply before it gets to the consumer. This case was successful because of the dedicated efforts of our federal, state and local law enforcement partners and the United States Attorney’s Office.”
According to U.S. Attorney Pak, the indictment, and other information presented in court: On October 20, 2018, law enforcement conducted a traffic stop on a vehicle from Texas traveling east along Interstate 20 in Douglas County, Georgia. Rivera, who was previously known to law enforcement, was the owner and an occupant of the vehicle. Law enforcement searched the vehicle and observed that the battery in the truck was significantly cleaner than the rest of the engine compartment. Upon closer inspection, agents realized that the battery had been altered. They opened it and found five packages wrapped in electrical tape along with a motorcycle battery wired to provide electrical current sufficient to operate the vehicle. The substance inside the packages tested positive for heroin. Rivera was arrested and denied bond.
Francisco Castaneda Rivera, 64, of Houston, Texas was charged with possession with intent to distribute and conspiracy to possess with intent to distribute at least one kilogram of heroin. He was arraigned on November 16, 2018, before U.S. Magistrate Judge Catherine M. Salinas.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the Drug Enforcement Administration, with valuable assistance provided by the Georgia State Patrol.
Assistant U.S. Attorneys Garrett L. Bradford and David A. O’Neal are prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Financial Analyst Sentenced to Federal Prison for Embezzling more than $1.1 Million from HoneywellRead the Press Release
ATLANTA – Errol Buggs, a principal finance analyst for Honeywell International, Inc., was sentenced to federal prison for embezzling more than $1.1 million from his employer in a fraud scheme.
“Financial professionals who are unscrupulous are an insider threat to their employers because they have access to payment systems and can learn how to circumvent internal controls to enrich themselves,” said U.S. Attorney Byung J. “BJay” Pak. “Employers must remain vigilant against fraudulent vouchers, fictitious vendors, and sharing or theft of log-in credentials by employees.
“Wire fraud is an offense the FBI takes very seriously,” said Chris Hacker, Special Agent in Charge of the FBI Atlanta Field Office. “Buggs took advantage of his position as a financial analyst for his own personal greed, violating the trust put in him by his employer.”
According to U.S. Attorney Pak, the charges and other information presented in court: From January 2012 through June 2016, Buggs worked in the Roswell, Georgia office of Honeywell International, Inc., an American multinational conglomerate headquartered in New Jersey. An employee at a Honeywell subsidiary in Canada discovered three suspicious wire transfers to a supposed vendor in Georgia for which there were no supporting invoices.
An investigation determined that the payee, Tredd LLC, was a shell company incorporated by Buggs, who was listed in the Georgia Secretary of State’s Office as its Chief Operating Officer. Further investigation showed that Buggs setup Tredd as a vendor in Honeywell’s invoice payment system using a legitimate vendor’s address.
As a senior finance analyst, Buggs was authorized to approve vouchers initiated by colleagues. The defendant used the log-in credentials of a colleague and the credentials of two former employees. By masquerading as other employees, Buggs was able to approve fictitious vouchers and bypass safeguard restrictions against self-dealing of this kind. He used this scheme to cause 28 wire transfers and a check to be sent to his bogus Georgia company. The money trail led to a bank account controlled by Buggs in metropolitan Atlanta. The total amount embezzled was determined to be $1,134,493.35.
Errol Buggs, 44, of Atlanta, Georgia, was sentenced to two years in federal prison, to be followed by three years of supervised release on November 15, 2018, by U.S. District Judge Thomas W. Thrash, Jr. He was also ordered to pay $1,134,493.35 in restitution to Honeywell.
The case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Brian Pearce prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Convicted Felon Sentenced for Armed Robbery of Waffle House and Assault on Police OfficersRead the Press Release
ATLANTA – Jason Philpot, a 10-time convicted felon, was sentenced to federal prison for the armed robbery of a Waffle House and assault on police officers, whom he led on a high-speed chase and shot at after the robbery.
“Philpot amassed nine felony convictions during the past 20 years prior to committing the offenses in this case,” said U.S. Attorney Byung J. “BJay” Pak. The citizens of our district are fortunate that his tenth felony, an armed robbery that involved a high-speed chase and shots fired at police officers, did not end in tragedy. Our community is now safer with Philpot behind bars.”
“The complete disregard shown by this defendant for the safety of the Waffle House employees and customers, the motoring public, and law enforcement officers who were shot at, is reprehensible,” said Chris Hacker, Special Agent in Charge of the FBI Atlanta field office. “The FBI would like to thank the employee who called 911 and DeKalb County Police for helping us make sure Philpot serves a lengthy sentence in federal prison.”
According to U.S. Attorney Pak, the charges and other information presented in court: On September 30, 2014, Philpot and his accomplice entered the Waffle House on LaVista Road in Tucker, Georgia, shortly after 10:30 PM. Philpot wore a black mask and carried an assault-style rifle while his accomplice wore a green mask and carried a handgun. The robbers approached two waitresses at gunpoint and demanded that the women provide money from their cash registers and relinquish any personal cash. Philpot and his accomplice then emptied the cash register, took the waitresses’ tip money, demanded access to the safe, and forced the waitresses to accompany the robbers to the rear of the restaurant before placing the women on the floor at gunpoint.
A Waffle House employee standing outside the restaurant saw the robbers flee and called 911, thereby alerting a nearby DeKalb County police officer about the robbery. The officer encountered the robbers and unsuccessfully attempted to stop them before they escaped in a car driven by the defendant. Philpot and his accomplice then led multiple police officers on a high-speed car chase through a busy commercial area. Philpot eventually crashed his car. He and his accomplice fled on foot and fired at the pursuing officers. The defendants fired 11 rounds at police officers before Philpot was arrested at a nearby hotel and his accomplice was apprehended in a brush area close to the hotel. Philpot pleaded guilty to the armed robbery of the restaurant, but proceeded to trial on the offenses of discharging a firearm during a crime of violence – the armed robbery – and being a previously convicted felon in possession of a firearm. A jury convicted him of the offenses on August 4, 2017.
The jury acquitted Philpot’s accomplice of all charges related to the Waffle House robbery and his accomplice subsequently pleaded guilty to committing the armed robbery of a McDonald’s restaurant that occurred days before the Waffle House robbery. Philpot’s accomplice received a sentence of 10 years in prison.
Jason Philpot, 38, of Atlanta, Georgia was sentenced to 25 years, eight months in prison to be followed by three years of supervised release.
This case was investigated by the Federal Bureau of Investigation and DeKalb County Police Department.
Assistant U.S. Attorneys Ryan K. Buchanan, Deputy Chief of the Violent Crime and National Security Section, and Jessica C. Morris prosecuted the case.
This case was brought as part of Project Safe Neighborhoods (PSN). In keeping with the Attorney General’s mission to reduce violent crime, the Northern District of Georgia’s PSN program focuses on prosecuting those individuals who most significantly drive violence in our communities, and supports and fosters partnerships between law enforcement and schools, the faith community, and local community leaders to prevent and deter future criminal conduct.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
CDC Senior Contracting Officer Sentenced for Failing to Disclose Payments from ContractorRead the Press Release
ATLANTA – Carlos Smiley was sentenced to federal prison for making false statements in his annual conflict of interest certification. Smiley was a long-time federal employee and Senior Contracting Officer at the Centers for Disease Control and Prevention (CDC), and the former President of the Atlanta Chapter of the National Contract Management Association.
“Federal contracting officers must disclose payments from outside parties fully and honestly,” said U.S. Attorney Byung J. “BJay” Pak. “Failure to do so limits the ability of federal agencies to detect, deter and punish undisclosed conflicts of interest.”
“We hold our employees to the highest standard and expect them to demonstrate the utmost integrity as civil servants to the nation,” said Elton Malone, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General – Special Investigations. “Smiley’s sentencing demonstrates, making false statements for the purpose of financial gain will not be tolerated.”
According to U.S. Attorney Pak, the charges and other information presented in court: On February 16, 2012 and January 7, 2013, Smiley completed Confidential Financial Disclosure Reports required by his position as a CDC Contracting Officer. Both times, Smiley answered “no” to the question asking whether he had received outside income.
Between September 2011 and January 2012, Smiley received several payments from A-TEK, a Virginia-based holding company that was seeking to do business with the CDC during that time. CDC previously granted Smiley’s request to operate a company called Charisma III, Inc. as an outside business activity. After that, Smiley ostensibly received payments through Charisma III for real estate investment advice.
In 2012, A-TEK was awarded a single-source contract for the staffing of CDC field stations overseas. Smiley signed the contract as the approving contracting officer for CDC. A-TEK turned down the contract after learning of the relationship between Smiley and a representative of its holding company, who was also an A-TEK employee until fired for his conduct. Smiley failed to disclose six payments for a total of $30,600.
In 2015, CDC investigators confronted Smiley about the payments. He admitted to receiving them and to having invented the Charisma III officer whose fictitious name appeared on the purported agreement between Charisma III and the holding company for real estate investment advice.
Carlos Smiley, 57, of Roswell, Georgia was sentenced to three months in federal prison by U.S. District Judge Thomas W. Thrash, Jr. on November 15, 2018. Smiley was also sentenced to one year of supervised release and 200 hours community service following his release from prison. He was also fined $5,000. Smiley was convicted of the charge on July 19, 2018, after pleading guilty to making false statements.
The case was investigated by the Department of Health and Human Services, Office of the Inspector General.
Assistant U.S. Attorney Brian Pearce prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Local Businessman Charged with BriberyRead the Press Release
ATLANTA – Magdaleno Garcia Alonso, the owner and operator of Acworth Georgia Concrete, Incorporated, was arraigned on November 13, 2018, on bribery charges for offering to pay an Internal Revenue Service (IRS) employee $30,000 to falsify results of audits of his individual and business tax returns for 2015 and 2016.
“Alonso’s alleged attempt to bribe a federal employee by offering cash in return for fabricated audit reports of his tax returns failed,” said U. S. Attorney Byung J. “BJay” Pak. “The integrity of IRS is not for sale and those who devise schemes to circumvent paying their tax obligations will be investigated and prosecuted.”
“It is the mission of the Treasury Inspector General for Tax Administration (TIGTA) to protect the integrity of the IRS and promote the fair administration of our federal tax system,” said Special Agent in Charge Gary Smith of TIGTA’s Southern Field Division. “TIGTA and our law enforcement partners at the U.S. Attorney’s Office will do everything within our power to ensure those individuals who attempt to bribe IRS agents and corrupt our nation’s tax system will be prosecuted to the fullest extent of the law.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Between September 14 and 19, 2018, Alonso allegedly bribed an IRS employee to falsify the results of audits of his personal and business tax returns for tax years 2015 and 2016. TIGTA agents arrested Garcia on November 9, 2018.
Magdaleno Garcia Alonso, 50, of Acworth, Georgia, was arraigned before U.S. Magistrate Judge John K. Larkins III on an indictment returned by a federal grand jury on November 5, 2018. Members of the public are reminded that the indictment only contains charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated by the U.S. Department of the Treasury, Treasury Inspector General for Tax Administration.
Assistant U.S. Attorney Jenny R. Turner is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
2018 Holiday Travel ReminderRead the Press Release
ATLANTA – As the upcoming holiday travel season approaches travelers are reminded to take extra care to ensure they have not packed firearms in their carry-on bags before leaving home. According to the Transportation Security Administration (TSA), Hartsfield-Jackson International Airport has led the nation in the number of guns detected at checkpoints for five of the last six years.
“As of November 12, 2018, 293 weapons have been recovered at Hartsfield-Jackson International Airport, of which 248 were found in the TSA passenger security lines, while 45 firearms were discovered in checked baggage,” said U.S. Attorney Byung J. “BJay” Pak. “Most passengers simply forget they have a gun in their possession until they reach the airport checkpoint. Unfortunately, the oversight is still a violation of the law.”
“The reason we are making this announcement today is because the message is clearly not hitting the mark,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Despite the fact that our enforcement policies have become more strict, incidents of guns detected at checkpoints have increased substantially. Don’t let your holiday travel plans be significantly disrupted for a simple mistake.”
“Hartsfield-Jackson Atlanta International Airport has led the nation in firearms detected by Transportation Security Officers at security checkpoints five of the last six years, and has already surpassed last year’s national record of 245,” said Mary Leftridge Byrd, TSA Federal Security Director for Atlanta. “We are urging passengers to thoroughly check their personal belongings for prohibited items like firearms, especially in carry-on bags, before leaving to the airport.”
Travelers who do not comply with firearm laws can expect a delay in their travel plans. Violators with a valid weapons permit will have their firearm confiscated and issued a federal citation. They will also be required to appear in court and will be subject to a $130 fine. Violators without a valid weapons permit will be arrested, charged and may face a maximum penalty of 10 years in prison. In addition, offenders are also subject to civil penalties levied by the TSA that can range between $2,000 to $13,000 per violation.
Travelers are advised to become familiar with TSA’s policy for transporting their guns prior to traveling to the airport, as firearms are permitted in checked baggage. (See TSA’s policy here). Don’t put a damper on your holiday travel – properly secure your firearms before your plans unravel.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
U.S. Attorney Byung “BJay” Pak Issues a Progress Report on Fighting the Opioid EpidemicRead the Press Release
ATLANTA – The U.S. Attorney for the Northern District of Georgia remains resolute in fighting the opioid epidemic that has plagued communities throughout the United States. According to the Centers for Disease and Control and Prevention, more than 140 Americans die daily from an opioid overdose, and in 2017, nearly 1,050 Georgians died from an opioid overdose. It is imperative that all levels of law enforcement, community organizations, policy makers, and citizens remain firmly committed to battling this epidemic.
“Earlier this year, President Trump declared the opioid crisis a public health emergency and set a goal to reduce opioid prescriptions by one-third over the next three years,” said U.S. Attorney Byung J. “BJay” Pak. “In our District, the results are promising. There were approximately 20 percent fewer opioid prescriptions written and filled in Fiscal Year 2018 than in Fiscal Year 2016, and the total Morphine Milligram Equivalents (MME) decreased over 18 percent for that same period. But our work is far from done. We are committed to further reducing the excess supply of prescription opioids which has unintentionally fueled the epidemic.”
“The DEA is committed to continuing the progress that has been made against the opioid epidemic by collaborating with local, state and federal law enforcement counterparts and the U.S. Attorney’s Office, in an effort to decrease the growing prescription drug abuse problem in our state,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “Through this collaborative effort, we will continue to target those criminals in Georgia and elsewhere who illegally distribute prescription drugs in our communities.”
In 2017, the U.S. Attorney’s Office for the Northern District of Georgia launched Operation SCOPE (Strategically Combatting Opioids through Prosecution and Enforcement). Operation SCOPE is designed to identify and prosecute those who illegally distribute opioids in our community through a collaborative partnership with state and local law enforcement. The initiative takes a three-fold approach to fighting the opioid crisis and focuses on:
●Identifying medical practitioners who overprescribe opioids, and those who defraud our health care system. For example, our office recently identified and sent approximately 30 medical professionals notification letters who were prescribing opioids in higher quantities or does than their peers. The letters provided prescribers with information pertaining to their opioid practices relative to their peers and referred them to educational materials to assist them in adopting safe opioid practices. Read more here.
●Investigating and prosecuting drug traffickers who illegally distribute opioids within the District, particularly those suppliers who are responsible for overdose deaths and non-fatal overdoses resulting in serious bodily harm caused by their product. For example, in
United States v. Edward Culton and Hubert Nathans: These defendants were charged with distributing fake Roxicodone pills that actually contained fentanyl. The distribution of the fake pill resulted in one overdose death and one non-fatal overdose in October 2017 and January 2018, respectively. Nathans pleaded guilty to conspiracy to distribute fentanyl on August 13, 2018, and has a sentencing hearing scheduled for November 13, 2018. Read more on this case here;
United States v. Donquell Weddington: Donquell Weddington was charged with distributing heroin April 2017, which resulted in the death of a 33-year old student who suffered and was treated for a drug overdose. The student later collapsed and died at Hartfield-Jackson International Airport the morning after being treated for the heroin overdose. Weddington’s case is currently in the pretrial phase. Read more on this case here; and
United States v. Michelle Dawn Dorsey, et al: Michelle Dawn Dorsey, Nigel Alan Waddell, Derrik Omar Frazier, and Tyler Josiah Matthews were charged with trafficking heroin. Dorsey is charged with distributing heroin, resulting in serious bodily injury in February 2016 and February 2017. Frazier is charged with aiding and abetting Dorsey’s distribution of heroin in February 2017, resulting in serious bodily injury. Waddell was sentenced to three years in federal prison on February 7, 2018. Matthews pleaded guilty to conspiracy to distribute and is awaiting sentencing. Read more on this case here.
●Targeting online suppliers, mainly from China and Mexico, who traffic opioids that can be purchased anonymously through the Dark Net.
The following are other opioid-related cases relating to traffickers, medical professionals, and others who committed serious drug crimes in the District:
United States v. Dr. Joseph L. Burton: Dr. Burton, a pathologist and former county medical examiner, and his conspirators were charged in a scheme to prescribe controlled substances outside of the scope of professional practice and without a legitimate medical purpose. In return for sexual favors, Dr. Burton supplied opioids to women who sold the pills. Dr. Burton was sentenced to eight years in federal prison on August 30, 2018. Read more on this case here.
United States v. Dr. John Michael Gowder, et al: John Michael Gowder, Dr. David Gowder, and Dr. James Heaton, were charged with illegally distributing oxycodone and other controlled substances outside the usual course of professional medical practice and for no legitimate medical purpose. They also allegedly directed employees of the Union General Hospital to assist them in distributing the drugs. Read more on this case here.
United States v. Elgin Demarco Jordan: Elgin Jordan was convicted of trafficking heroin and cocaine in the English Avenue area, along with money laundering. He used the proceeds from his drug activity to purchase several properties in the English Avenue area. Jordan was sentenced to eight years in prison and ordered to forfeit 14 properties, some of which were transferred to the Atlanta Police Department and the Atlanta Police Foundation to be used for police recruit housing. Read more on this case here.
United States v. Bernard Stokley, et al: Bernard Stokley, a/k/a Big Pat, Tobias Ellison, Alvin Hughley, a/k/a Alvin Beasley, and Vance Hoard, a/k/a Bernard Hoard, a/k/a Vance Holland were charged with conspiracy to import and to possess with intent to distribute heroin and money laundering. The defendants advertised their heroin on Facebook, and accepted orders over the telephone and through social media, including Facebook and Snapchat. Read more on this case here.
While the war to defeat the opioid crisis is far from over, the battle is being fought on several fronts. Specifically,
In August 2018, the Department of Justice and the DEA announced a proposal to decrease the in manufacturing quota for the six most frequently misused opioids by 10% in 2019. To learn more about the proposed plan click here.
On October 1, 2018, the Department of Justice awarded approximately $320 million to combat the opioid crisis in the United States, of which $5,791,356 was awarded to support programs here in Georgia. In the Northern District of Georgia, $2,240,783 was specifically awarded to support drug programs, youth-mentoring programs, and local agencies in Cobb and Douglas Counties. A breakdown of the awards can be found here.
On June 15, 2018, the U.S. Attorney’s Office for the Northern District of Georgia partnered with the Atlanta-Carolinas High Intensity Drug Trafficking Area (HIDTA) Office to create a public service announcement (PSA) to raise awareness of the devastating effects of opioids. On June 15, 2018, the PSA started airing for five weeks in 17 movie theaters across the District, featuring Joseph Abraham, a 19-year old from Gwinnett County, GA, who lost his battle with drug addiction minutes after taking a fatal mixture of heroin and fentanyl. The PSA ran a total of 76,887 times and was seen by over one million viewers. To view the PSA click here.
For the referenced cases, members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
United States sues UBS to recover civil penalties for fraud in the sale of residential mortgage-backed securitiesRead the Press Release
ATLANTA - The United States Government filed a civil complaint against UBS AG and several of its United States affiliates (together, UBS), alleging that UBS defrauded investors throughout the United States and the world in connection with its sale of residential mortgage-backed securities (RMBS) in 2006 and 2007.
“The complaint alleges that instead of ensuring that their representations to investors were accurate and transparent, UBS affirmatively misled investors and withheld crucial information from them about the loans in its deals,” said U.S. Attorney Pak. “UBS allegedly placed a higher priority on selling bonds and making profits than accurately representing the quality of the underlying loans to investors. These practices resulted in massive losses to investors, harmed homeowners, and ultimately jeopardized the banking system.”
“The fraudulent actions by UBS as alleged in the complaint contributed to the 2008 financial crisis, which resulted in lasting economic harm to the nation and unnecessary suffering for Americans,” said Principal Deputy Associate Attorney General Jesse Panuccio. “This suit aims to hold UBS accountable and sends a strong message that the Department of Justice will not tolerate fraud committed by corporations.”
“Investors who bought RMBS from UBS suffered catastrophic losses, which not only caused direct harm to those investors, but also contributed to the financial crisis of 2008,” stated U.S. Attorney Richard P. Donoghue. “The filing of this complaint makes it clear that we will continue to hold financial institutions fully accountable for their conduct and will aggressively pursue financial fraud.”
The complaint alleges that UBS’ actions violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud, wire fraud, bank fraud, and other misconduct. FIRREA authorizes the Attorney General to seek civil penalties up to the amount of the gain derived from the violation or the losses suffered by persons other than the violator resulting from the violation.
As detailed in the complaint, from 2006 through 2007, UBS allegedly misled investors about the quality of billions of dollars in subprime and Alt-A mortgage loans backing 40 RMBS deals. Specifically, in publicly-filed offering documents, UBS is alleged to have knowingly misrepresented key characteristics of the loans, thereby concealing the fact that the loans were much riskier and much more likely to default than UBS represented. In the end, the 40 RMBS sustained catastrophic losses.
The government’s case is being handled by the U.S. Attorney’s Offices for the Northern District of Georgia and the Eastern District of New York. The Office of the Inspector General for the Federal Housing Finance Administration also provided assistance in the government’s investigation.
Assistant U.S. Attorneys Austin M. Hall and Armen Adzhemyan with the Northern District of Georgia; and Assistant U.S. Attorneys Bonni J. Perlin, Michael J. Castiglione, Richard K. Hayes with the Eastern District of New York are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
United States Sues UBS to Recover Civil Penalties for Fraud in the Sale of Residential Mortgage-Backed SecuritiesRead the Press Release
BROOKLYN, NY – Earlier today, in federal court in Brooklyn, the United States filed a civil complaint against UBS AG and several of its United States affiliates (together, UBS), alleging that UBS defrauded investors throughout the United States and the world in connection with its sale of residential mortgage-backed securities (RMBS) in 2006-2007.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Byung J. Pak, United States Attorney for the Northern District of Georgia, and Jesse Panuccio, Principal Deputy Associate Attorney General of the Justice Department, announced the filing.
“Investors who bought RMBS from UBS suffered catastrophic losses, which not only caused direct harm to those investors, but also contributed to the financial crisis of 2008,” stated United States Attorney Donoghue. “The filing of this complaint makes clear that we will continue to hold financial institutions fully accountable for their conduct and will aggressively pursue financial fraud.” Mr. Donoghue expressed his grateful appreciation to the Federal Housing Finance Agency-Office of Inspector General, for its assistance in the government’s investigation.
“The complaint alleges that instead of ensuring that their representations to investors were accurate and transparent, UBS affirmatively misled investors and withheld crucial information from them about the loans in its deals,” stated United States Attorney Pak. “UBS allegedly placed a higher priority on selling bonds and making profits than accurately representing the quality of the underlying loans to investors. These practices resulted in massive losses to investors, harmed homeowners, and ultimately jeopardized the banking system.”
“The fraudulent actions by UBS as alleged in the complaint contributed to the 2008 financial crisis, which resulted in lasting economic harm to the nation and unnecessary suffering for Americans,” stated Principal Deputy Associate Attorney General Panuccio. “This suit aims to hold UBS accountable and sends a strong message that the Department of Justice will not tolerate fraud committed by corporations.”
The complaint alleges that UBS’s actions violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud, wire fraud, bank fraud and other misconduct. FIRREA authorizes the Attorney General to seek civil penalties up to the amount of the gain derived from the violation, or the losses suffered by persons other than the violator resulting from the violation.
As detailed in the complaint, from 2006 through 2007, UBS misled investors about the quality of billions of dollars in subprime and Alt-A mortgage loans backing 40 RMBS deals. Specifically, in publicly filed offering documents, UBS knowingly misrepresented key characteristics of the loans, thereby concealing the fact that the loans were much riskier and much more likely to default than UBS represented. In the end, the 40 RMBS sustained substantial losses.
The government’s case is being handled by the United States Attorney’s Offices for the Eastern District of New York and the Northern District of Georgia. Assistant United States Attorneys Bonni J. Perlin, Michael J. Castiglione, Richard K. Hayes, Armen Adzhemyan and Austin M. Hall are in charge of the prosecution.
E.D.N.Y. Docket No. 18-CV-6369 (MKB)
United States Sues UBS to Recover Civil Penalties for Fraud in the Sale of Residential Mortgage-Backed SecuritiesRead the Press Release
Earlier today, in federal court for the Eastern District of New York, the United States filed a civil complaint against UBS AG and several of its United States affiliates (together, “UBS”), alleging that UBS defrauded investors throughout the United States and the world in connection with its sale of residential mortgage-backed securities (RMBS) from 2006 through 2007.
Principal Deputy Associate Attorney General Jesse Panuccio, United States Attorney Richard P. Donoghue for the Eastern District of New York, United States Attorney Byung J. Pak for the Northern District of Georgia, and Associate Inspector General Jennifer Byrne, Federal Housing Finance Agency-Office of. Inspector General (FHFA-OIG) announced the filing.
“The fraudulent actions by UBS as alleged in the complaint contributed to the 2008 financial crisis, which resulted in lasting economic harm to the nation and unnecessary suffering for Americans,” said Principal Deputy Associate Attorney General Jesse Panuccio. “This suit aims to hold UBS accountable and sends a strong message that the Department of Justice will not tolerate fraud committed by corporations.”
“Investors who bought RMBS from UBS suffered catastrophic losses, which not only caused direct harm to those investors, but also contributed to the financial crisis of 2008,” stated United States Attorney Donoghue. “The filing of this complaint makes clear that we will continue to hold financial institutions fully accountable for their conduct and will aggressively pursue financial fraud.” Mr. Donoghue expressed his grateful appreciation to the Federal Housing Finance Agency-Office of Inspector General, for its assistance in the government’s investigation.
“The complaint alleges that instead of ensuring that their representations to investors were accurate and transparent, UBS affirmatively misled investors and withheld crucial information from them about the loans in its deals,” stated United States Attorney Pak. “UBS allegedly placed a higher priority on selling bonds and making profits than accurately representing the quality of the underlying loans to investors. These practices resulted in massive losses to investors, harmed homeowners, and ultimately jeopardized the banking system.”
The complaint alleges that UBS’ actions violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud, wire fraud, bank fraud, and other misconduct. FIRREA authorizes the Attorney General to seek civil penalties up to the amount of the gain derived from the violation, or the losses suffered by persons other than the violator resulting from the violation.
As detailed in the complaint, from 2006 through 2007, UBS misled investors about the quality of billions of dollars in subprime and Alt-A mortgage loans backing 40 RMBS deals. Specifically, in publicly-filed offering documents, UBS knowingly misrepresented key characteristics of the loans, thereby concealing the fact that the loans were much riskier and much more likely to default than UBS represented. Ultimately, the 40 RMBS sustained catastrophic losses.
This case is being handled by the United States Attorneys’ Offices for the Eastern District of New York and the Northern District of Georgia. Assistant United States Attorneys Bonni J. Perlin, Michael J. Castiglione, Richard K. Hayes, Armen Adzhemyan, and Austin M. Hall are in charge of the prosecution. The United States Attorneys’ Offices thank the Office of the FHFA-OIG for its assistance in the investigation.
Tax preparers sentenced to federal prison for conspiring to defraud the government of more than $3.8 millionRead the Press Release
ATLANTA - Joseph Racine and Arnouse Merlien were sentenced to federal prison for conspiracy to violate the federal income tax laws by purposely misrepresenting to the IRS that their clients were qualified to receive certain tax credits and deductions on their federal tax returns. Racine was the owner of JSR Westend Tax Services, located in Atlanta, Georgia and JSR Tax Services, located in Greenacres, Florida. Merlien was the office manager of JSR Tax Services in Florida.
“These defendants defrauded the U.S. government out of more than $3.8 million by falsely claiming tax credits and expenses on tax returns prepared for clients,” said U.S. Attorney Byung J. “BJay” Pak. “Tax preparers who devise schemes to cheat the IRS can look forward to spending tax seasons behind bars.”
“Racine and Merlien lined their pockets by manipulating taxpayers’ returns for the sole purpose of generating large refunds and fees,” said Thomas J. Holloman, Special Agent in Charge, IRS-Criminal Investigation. “This is an important reminder that if you file false tax returns for others, we will find out and you will face the consequences.”
According to U.S. Attorney Pak, the charges and other information presented in court: In December 2016, Internal Revenue Service - Criminal Investigation (IRS-CI) identified JSR Westend Tax Services as potentially filing fraudulent returns for tax years 2013 through 2015. The investigation revealed that Racine was filing fraudulent returns involving multiple credits and deductions, including the fuel tax credit, refundable education credit, and unreimbursed employee business expenses. Racine requested refunds on 99 percent of the returns, a rate significantly higher than the average over the same years. In March 2017, IRS-CI determined that JSR Tax Services in Florida, where Merlien primarily worked, was filing federal tax returns displaying the same patterns of fraud as those prepared at JSR Westend Tax Services in Atlanta.
The investigation revealed that Racine and Merlien engaged in this scheme to increase the amount of money they could charge their clients for preparing their returns. The investigation further revealed that the fraud perpetrated by Racine and Merlien resulted in losses to the U.S. Government in excess of $3.8 million.
Joseph Racine, 38, of Boynton Beach, Florida, was sentenced by U.S. District Judge Leigh Martin May to three years, four months in federal prison, to be followed by three years of supervised release.
Arnouse Merlien, 40, also of Boynton Beach, Florida, was sentenced to three years, in federal prison, to be followed by three years of supervised release. Both defendants were ordered to pay $3,854,915 in restitution to the Internal Revenue Service.
This case was investigated by the Internal Revenue Service Criminal Investigation Division.
Assistant U.S. Attorney Michael Herskowitz, Deputy Chief of the Organized Crime and Gang Section, prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.