Northern District of Illinois

CHICAGO — A husband and wife have been sentenced to federal prison for stealing the identities of at least ten people and using the information to file fraudulent tax returns seeking more than $1.3 million in refunds.

TILLMAN LIGGINS III, 50, of Joliet, was sentenced Tuesday to five years and four months in prison.  His wife, CHINITA WILLIAMS-LIGGINS, 39, of Joliet, was sentenced in July to three and a half years in prison.  The couple was also ordered to pay $331,154 in restitution to the IRS. 

U.S. District Judge Robert W. Gettleman imposed the sentences in federal court in Chicago.

The sentences were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Kathy A. Enstrom, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.

“Without the compliance of taxpayers with our country’s tax laws, the federal government would essentially cease to function,” Assistant U.S. Attorney Kalia Coleman argued in the government’s sentencing memorandums.  “The honest taxpayers must shoulder a disproportionate amount of the tax burden, and fewer necessary government services and benefits can be provided when some people cheat the IRS out of substantial sums of money.”

Liggins III and Williams-Liggins each pleaded guilty earlier this year to one count of wire fraud and one count of aggravated identity theft.  The couple admitted in plea agreements that they obtained personal identifying information, including names, Social Security numbers, and dates of birth, of at least ten individuals without their knowledge or consent.  They used that information to prepare and file false and fraudulent individual federal income tax returns (Forms 1040) for the tax years 2011, 2012, 2013, and 2014.

In total, the pair caused to be filed with the IRS at least 219 false and fraudulent tax returns seeking refunds of approximately $1,323,793.  As a result of the scheme, the IRS deposited approximately $331,154 in fraudulent refunds into bank accounts controlled by the couple and others.

WASHINGTON – The Department of Justice on Tuesday filed a complaint in the United States District Court for the Northern District of Illinois on behalf of Captain and Judge Advocate Derrick Strong against the City of Chicago Fire Department (CFD), alleging that the City violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) when it failed to provide Strong with an opportunity, after his return from active duty military service, to take a promotional examination that he missed while deployed.

“The men and women of our Armed Forces make personal sacrifices to protect our nation, and they have rights that must be respected,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. “The Department of Justice will not falter in protecting the rights of those who selflessly serve our country.”   

“Beginning with the American Revolution and every day since the Revolution, American patriots risked their lives to establish and defend our nation by serving in the United States armed forces.  The United States has an obligation to ensure that employers do not penalize our servicemembers for performing their  military duty,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “Generations of Americans owe a debt of gratitude to our soldiers, sailors, and other servicemembers, and the United States Department of Justice remains committed to robust enforcement of civil rights protections for these brave women and men.”

According to the complaint, Strong is currently assigned to the 416th Theater Engineer Command’s (TEC), Office of the Staff Judge Advocate as a Trial Counsel and Administrative Law Attorney, where he provides legal advice and overall legal support to the 416th TEC and its Command. He is also employed as a Cross-Trained Firefighter and Emergency Medical Technician-Basic (Firefighter/EMT) for the Chicago Fire Department. Mr. Strong is currently assigned to Squad 5, which is a Special Operations Heavy Rescue unit. From Sept. 30, 2016, to June 26, 2017, he was actively deployed with the U.S. Army Reserve in support of Operation Enduring Freedom. While Strong was deployed, the City of Chicago administered a test for firefighters to become fire engineers.  He alleges, as outlined in the complaint filed in federal court, that the CFD violated USERRA by failing to provide him with an opportunity to take a Fire Engineer promotional examination following his return to work upon his honorable discharge from active duty military service.

The Justice Department gives high priority to the enforcement of servicemembers’ rights under USERRA. This lawsuit stems from a referral to the United States Department of Justice from the United States Department of Labor, after an investigation by the Department of Labor’s Veterans’ Employment and Training Service.  Additional information about USERRA can be found on the Justice Department’s websites here and here, as well as on the Department of Labor’s website here.

ROCKFORD — A Rockford man was sentenced today in federal court by U.S. District Judge Philip G. Reinhard to 15 months in prison for aiming the beam of a laser pointer at an aircraft. 

BRENTON WELLS, 45, admitted in a written plea agreement that on Dec. 6, 2018, while standing in the backyard of a residence in Rockford, he knowingly aimed his laser pointer at an aircraft flying over the residence. Wells also admitted that he continued to aim his laser pointer at the aircraft for a period of time even as the aircraft moved through the sky over the residence. Wells pleaded guilty to the charge on Aug. 20, 2019.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; Dan O’Shea, Rockford Chief of Police; and on behalf of the Department of Homeland Security: Marc Sledge, Director of Air and Marine Operations, Great Lakes Air and Marine Branch, and James Gibbons, Special Agent-in-Charge of the Chicago Field Office of Homeland Security Investigations.  The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.

ROCKFORD — A former Loves Park woman pleaded guilty today before U.S. District Judge Philip G. Reinhard to wire fraud. 

MICHELLE L. McKINNEY, 43, admitted in a written plea agreement that between June 2013 and September 2016, while employed as an account manager by a roofing company that operated a cloud-based construction management program, she schemed to defraud her employer and obtain money and property by fraudulent representations and concealment of material facts. 

McKinney faces a maximum sentence of 20 years’ imprisonment and a fine of up to $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.  Sentencing is set for May 11, 2020, at 9:00 a.m. 

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.

As an account manager, McKinney was responsible for the oversight of the company’s payroll, human resources, accounts payable, and accounts receivable.  From 2013 through March 2014 the company was located in Rockton, and from then through 2016 the company was located in Beloit, Wisc.  Some of the company’s employees, including McKinney, were issued a corporate credit card.  Without the company’s knowledge, McKinney also had another corporate credit card issued.  McKinney also had access to the company’s bank account and accompanying debit card.  As stated in the plea agreement, McKinney authorized monthly funds transfers from the company to pay the entire balance of all of the company’s credit cards.  McKinney used the credit cards and debit card to make unauthorized purchases for her own benefit totaling $475,775.84.  In order to conceal her unauthorized purchases, McKinney disguised her unauthorized charges in the company’s accounting system as company expenses such as office supplies or fees.  McKinney also created fictitious payroll invoices in the amount of her unauthorized purchases.  To conceal the true nature of the transactions, she entered her personal transactions in bulk into the company’s accounting system instead of line-by-line.

ROCKFORD — A South Beloit man pleaded guilty today before U.S. District Judge Matthew F. Kennelly to charges of producing child pornography. 

ADRIAN C. PETERS, 26, admitted in a written plea agreement that from October 2012 to December 2014 he enticed seven minor victims - ages 14 to 17 - to engage in sexually explicit conduct for the purpose of producing a recording of such conduct on computers.  Peters then transmitted some of the videos via the internet.  The minor victims were from Illinois, Wisconsin, and Arizona.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago Office of the FBI.  The Winnebago County Sheriff’s Office and the South Beloit Police Department assisted in the investigation.  The government is represented by Assistant U.S. Attorney Michael D. Love.

Each count of producing child pornography carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years.  Sentencing is set for April 17, 2020, at 9:30 a.m.

CHICAGO — A former associate clerk in the Office of the Clerk of the Circuit Court of Cook County was sentenced today to two years in prison for lying under oath to a federal grand jury.

BEENA PATEL, 58, of Chicago, was convicted earlier this year of making false declarations before a grand jury.  The grand jury was conducting an investigation of possible criminal violations in connection with the purchasing of jobs and promotions in the Clerk’s office.

U.S. District Judge Sara L. Ellis imposed the two-year sentence after a hearing in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Patrick M. Blanchard, Cook County Inspector General; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI. 

“Defendant not only had answers to the questions the grand jury was asking, but had information that went to the very heart of its investigation,” Assistant U.S. Attorneys Heather McShain and Ankur Srivastava argued in the government’s sentencing memorandum.  “Witnesses who lie during the course of a grand jury investigation not only violate their solemn oath to tell the truth, but also impede the grand jury’s ability to gather evidence.”

According to evidence at trial, the grand jury was conducting an investigation of possible criminal violations in connection with the purchasing of jobs and promotions in the Clerk’s office.  Patel sold campaign fundraiser tickets on behalf of the Clerk to colleagues in the office and knew that other employees did the same.  Yet when asked about it during grand jury testimony on Oct. 15, 2015, Patel denied selling the tickets to employees and denied knowing that other employees had done the same.  The jury at trial found that Patel’s statements were false. 

Evidence further revealed that Patel provided false statements to the grand jury about two other matters.  Patel lied when she denied having recent conversations with another Clerk’s Office employee who had previously loaned $15,000 to a company associated with the Clerk and her husband.  Patel also falsely denied contacting the Clerk’s Chief of Staff regarding a promotion opportunity for a Clerk’s Office employee whose brother had previously donated $10,000 to the Clerk’s campaign.

CHICAGO — A convicted felon has been sentenced to nearly seven years in federal prison for illegally possessing a loaded handgun and 61 rounds of ammunition in the South Shore neighborhood of Chicago.

ANTONIO BROWN, 25, of Chicago, illegally possessed the gun and two extended-capacity magazines in the 7500 block of South Dante Avenue on Sept. 22, 2018.  Brown was in the front passenger seat of a stolen vehicle that had been pulled over by officers from the Chicago Police Department.  He initially tried to hide the gun and ammunition under his seat to avoid detection, but the officers discovered the items during an ensuing search of the vehicle.

Brown was not legally allowed to possess a firearm after previously being convicted in state court of the attempted armed robbery of a nail salon.  He was released from state prison seven months before the traffic stop.

Brown pleaded guilty earlier this year to one count of illegal possession of a firearm by a felon.  U.S. District Judge Ronald A. Guzman imposed the 82-month sentence Thursday in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; and Charlie Beck, interim Superintendent of the Chicago Police Department.

“In a city plagued by traumatic injuries and death from bullets being indiscriminately sprayed on the street, the public is truly fortunate that CPD was able to interdict defendant and seize his arsenal before any harm could come to anyone,” Assistant U.S. Attorney Devlin N. Su argued in the government’s sentencing memorandum.  “By illegally packing a devastating amount of firepower, defendant dramatically increased the risk of violence to the community.”

According to evidence and arguments presented to the Court during the federal case, Brown has appeared in several music videos and photographs posted on YouTube or Facebook holding handguns equipped with laser sights and extended-capacity magazines similar to the type he possessed during the traffic stop.  Brown is frequently seen in the videos and photos aiming the guns directly at the camera.

Holding convicted felons accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods – the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, including by prosecuting individuals who illegally possess firearms.  The U.S. Attorney’s Office also participates in Project Guardian, an initiative from the Department of Justice that serves as a complementary effort to the success of PSN.  Project Guardian focuses specifically on investigating, prosecuting, and preventing gun crimes, and it emphasizes the importance of using modern technologies to promote gun crime intelligence.

CHICAGO — A federal judge today sentenced a Chicago man to more than 16 years in prison for shooting an agent from the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives.

ERNESTO GODINEZ shot the agent on May 4, 2018, in the Back of the Yards neighborhood of Chicago.  At the time of the early morning shooting, the agent and several law enforcement officers were conducting a covert investigation in the 4300 block of South Hermitage Avenue.  The agent was wounded in the head but survived.

A federal jury earlier this year convicted Godinez, 29, of both counts against him, including one count of assault of a federal officer, and one count of discharging a firearm during a crime of violence.  U.S. District Judge Harry D. Leinenweber imposed a sentence of 16 years and eight months in prison.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of ATF.  Substantial assistance was provided by the Chicago Police Department, FBI, U.S. Marshals Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Drug Enforcement Administration, and Illinois State Police.

“The depravity of the defendant’s crime is remarkable,” Assistant U.S. Attorneys Kavitha J. Babu and Nicholas J. Eichenseer argued in the government’s sentencing memorandum.  “This was indiscriminate, deadly violence by a recidivist shooter.  It is critical that assaults on law enforcement be met with serious punishment.”

“The primary goal of our violent crime prosecutions is to ensure public safety,” said U.S. Attorney Lausch.  “To that end, we will continue to aggressively prosecute repeat violent offenders like Defendant Godinez in order to hold them accountable for their reprehensible conduct and to deter others from committing similar crimes.  I commend the AUSAs, agents, and officers involved in this case for their outstanding work to seek justice.  Our office will continue to use every available federal law enforcement tool to investigate, prosecute, and seek stiff prison sentences for those offenders who illegally use, possess, or transfer firearms.”

“This experience emboldens us to continue in our efforts to reduce gun violence in the city of Chicago,” said ATF SAC Jones.  “We stand together with the families of all victims of violence in our city as they seek the closure we found today.  We commit all of ATF’s resources to investigate violent crimes in partnership with the Chicago Police Department to ensure that offenders are prosecuted to the fullest extent of the law.”

CHICAGO — A suburban Chicago man was sentenced today to a year and a half in federal prison for conspiring to straw purchase handguns on behalf of a woman who allegedly tried to smuggle the firearms into Egypt.

OMRAN ISMAIL purchased four handguns in November 2013 from a licensed firearms dealer in Tinley Park, and then immediately transferred the guns to co-defendant OLA SAYED so that Sayed could bring them to Egypt.  The guns were discovered in Sayed’s checked luggage at O’Hare International Airport in Chicago as she attempted to board a flight to Cairo, via London. 

A federal jury in Chicago earlier this year convicted Ismail, 53, of Burbank, of both firearm counts against him.  U.S. District Judge Sara L. Ellis imposed the 18-month sentence after a hearing in federal court.

Sayed, of Palos Park, was charged in the conspiracy but fled and is considered a fugitive.

Ismail’s sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  Valuable assistance was provided by the Chicago Police Department and U.S. Customs and Border Protection.

“Unlawfully purchasing and transferring firearms is an incredibly serious offense,” Assistant U.S. Attorneys Abigail L. Peluso and Katie M. Durick argued in the government’s sentencing memorandum.  “Ismail’s conduct was deliberate and reckless, and it could have resulted in additional unlawful activity had the guns been successfully smuggled to Egypt.”

According to evidence presented at Ismail’s trial, Ismail purchased four 9mm firearms from the dealer on Nov. 18, 2013.  When he purchased the firearms, Ismail completed a federal form falsely certifying that he was the actual buyer.  Ismail picked up the guns from the dealer five days later, at which time he confirmed that all of his answers on the form were “still true, correct, and complete.”  Ismail then immediately transferred all four firearms to Sayed, so that Sayed could take the firearms with her to Egypt.

Sayed purchased two other 9mm firearms, and then took all six guns with her to O’Hare Airport on Dec. 23, 2013, according to the charges pending against her.  Authorities at the airport discovered the guns in Sayed’s checked luggage as she waited to board her flight, the charges against Sayed allege.

ROCKFORD — A Carpentersville man pleaded guilty today in federal court before U.S. District Judge Sara L. Ellis to mail fraud. 

ROBERTO FISHER, 50, admitted in a written plea agreement that from March 9, 2010, to May 25, 2013, he and others devised and participated in a scheme to defraud and to obtain money from the U.S. Treasury Department.

Sentencing for Fisher is set for March 27, 2020, at 10:30 a.m.  He faces a maximum sentence of 20 years’ imprisonment.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kathy A. Enstrom, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service – Criminal Investigation Division; Craig Goldberg, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service; and James M. Gibbons, Special Agent-In-Charge of the Chicago Field Office of Homeland Security Investigations. The government is represented by Assistant U.S. Attorney Michael D. Love.

In the plea agreement, Fisher admitted that from March 9, 2010, through May 18, 2012, he met with PATTY CORDOBA, the owner and manager of PATTY’S TAX SERVICE (“PTS”) - a tax preparation business in Capron and McHenry - and other PTS employees, including MARIO CORDOBA, LUISA CARBAJAL, and ALICIA AREVALO, to provide information to PTS to have fraudulent tax returns prepared and filed on behalf of individuals who resided in Mexico.  As part of the scheme to defraud, Fisher provided false information about individuals who resided in Mexico in order to obtain Individual Taxpayer Identification numbers to file fraudulent federal income tax returns. During that time period, Fisher provided PTS with identifying information for eleven individuals and their dependents, all of whom resided in Mexico.  Fisher admitted he told those individuals that he was going to use their information for tax purposes and that he would give them money for allowing him to use their information.  Fisher admitted that he provided the fraudulent individual tax identification numbers to Patty Cordoba and other employees of PTS to prepare 53 fraudulent Form 1040s in those names. 

After May 18, 2012, Fisher continued the scheme to defraud by preparing four additional fraudulent Form 1040s for the 2012 tax year, and he signed the four returns in the names of those individuals.  Fisher admitted that he, Patty Cordoba, Mario Cordoba, Luisa Carbajal, Arevalo and other PTS employees mailed the 57 returns to the IRS Service Centers in Austin, Tex., Fresno, Calif., and Kansas City, Mo.  Fisher also admitted that after some of the returns were filed, the IRS requested additional information on some of the returns filed and that he provided letters to Patty Cordoba and other PTS employees who prepared letters in response to the IRS letters.  Patty Cordoba signed the letters in the names of the other individuals and either Fisher or Patty Cordoba or another PTS employee mailed the letters to the IRS.

Based on the 57 false and fraudulent Form 1040s submitted to the IRS, the U.S. Treasury issued and mailed tax refund checks to the addresses listed on the false tax returns in the names of those individuals.  Patty Cordoba opened bank accounts in the names of ten individuals.  Fisher deposited the 57 tax refund checks into those accounts or into his own bank account and withdrew the funds from some of the bank accounts.  As a result of Fisher’s filing of the 57 fraudulent tax returns, the IRS issued approximately $207,467 in refunds to which Fisher was not entitled.

Patty Cordoba, of Crystal Lake, and several others were charged in a related case.  Patty Cordoba pleaded guilty to mail fraud and on Sept. 28, 2016, and was sentenced to 55 months in federal prison and ordered to pay restitution of $1,115,072.  Her co-defendants in that case also pleaded guilty to mail fraud, including: Arevalo, of Poplar Grove, who was sentenced on Aug. 29, 2016, to 21 months in prison and ordered to pay restitution of $1,115,072; CESAR BESICHE, also known as Cesar Beciche-Barranco, of McHenry, who was sentenced on March 15, 2016, to time served and ordered released to the U.S. Department of Immigration and Customs Enforcement for processing of deportation proceedings against him; Carbajal, of Marengo, who was sentenced on June 23, 2016, to 16 months in prison and ordered to pay restitution of $1,115,072; Mario Cordoba, of Crystal Lake, who was sentenced on Sept. 1, 2016, to 33 months in prison and ordered to pay restitution of 1,115,072; OLGA LIDIA DIAZ-HERNANDEZ, also known as Olga Diaz, of McHenry, who was sentenced on July 8, 2016, to 21 months in prison and ordered to pay restitution of $166,296; VERONICA SANCHEZ-BARRADAS, of McHenry, who was sentenced on June 7, 2016, to 27 months in prison and ordered to pay restitution of $252,398; and VICTOR HERNANDEZ, of McHenry, who was sentenced on May 31, 2016, to 27 months in prison and ordered to pay restitution of $252,398.

CHICAGO — A suburban man has been sentenced to 15 years in federal prison for his role in transporting fentanyl and other drugs to the United States from China and selling it on the streets of Chicago.

NESTOR BURGOS, 32, of River Grove, pleaded guilty earlier this year to federal drug and firearm charges.  Burgos admitted dealing narcotics and possessing two handguns and a silencer in furtherance of his drug trafficking activities.

U.S. District Judge Sara L. Ellis imposed the 15-year sentence Monday in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; James M. Gibbons, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Chicago; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.

“Fentanyl is a powerfully lethal opioid which defendant brought to the streets of Chicago,” Assistant U.S. Attorney Terry M. Kinney argued in the government’s sentencing memorandum.  “Words cannot begin to describe the horrific damage that fentanyl has unleashed upon American society.”

“Criminals like Burgos are profiting from deadly addictions, and the snares of these addictions entrap more people every day,” said HSI Special Agent-in-Charge Gibbons.  “Let this sentence serve as a reminder that HSI will work tirelessly with its law enforcement and judicial partners to bring to justice those who supply our streets with fentanyl and other deadly synthetic opioids.”

Burgos admitted in a plea agreement that in the summer of 2017 he worked with ROLANDO ESTRADA to transport fentanyl, fentanyl analogues, heroin, and cocaine via mail from China to Chicago.  At the time, Estrada, formerly of Elmwood Park, was residing in Mexico and had ordered the drugs via the internet.  After selling the fentanyl and other drugs in the Chicago area, Burgos used bitcoins to pay Estrada a portion of the illicit proceeds. 

Estrada was also charged as part of the investigation.  He was arrested in April 2018 in Querètaro, Mexico.  After being extradited to Chicago, Estrada pleaded guilty to federal drug charges earlier this month before U.S. District Judge Ronald A. Guzman.  Estrada admitted in a plea declaration that he trafficked cocaine and a fentanyl analogue in the Chicago area in 2015 and 2016.  Judge Guzman set Estrada’s sentencing for Feb. 19, 2020, at 10:00 a.m.

Four former executives and two former employees of Outcome Health (Outcome), a Chicago-based health technology start-up company founded in 2006, were charged for their alleged roles in a fraud scheme that targeted the company’s clients, lenders and investors, and involved approximately $1 billion in fraudulently obtained funds.

Charged in a superseding indictment filed in the Northern District of Illinois and unsealed today are:

• Rishi Shah, 33, of Chicago, Illinois, the co-founder and CEO of Outcome Health, which was known as ContextMedia prior to January 2017;
• Shradha Agarwal, 34, of Chicago, the president of Outcome Health, who was branded as a co-founder;
• Brad Purdy, 30, of San Francisco, California, the chief operating officer and chief financial officer; and
• Ashik Desai, 26, of Philadelphia, Pennsylvania, the executive vice president of business operations and, more recently, the chief growth officer of Outcome.

Charged in an information filed in the same district are:

• Kathryn Choi, 29, of New York, New York, a senior analyst; and
• Oliver Han, 29, of Chicago, an analyst.

An initial appearance and arraignment for Shah, Agarwal and Purdy in federal court in Chicago have not yet been scheduled. An initial appearance and arraignment for Desai are set for Dec. 3, 2019, at 10:00 a.m., before U.S. District Judge Thomas M. Durkin.

An initial appearance and arraignment for Choi and Han are set for Dec. 5, 2019, at 1:30 p.m., before U.S. Magistrate Judge Jeffrey Gilbert.

“Outcome’s former executives and employees allegedly deceived lenders, investors, and their own auditors by falsely representing revenue for additional profit,” said Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division.  “The charges announced today demonstrate that lies and deception cannot serve as the basis for any company, including start-up companies, to falsely grow revenue for additional capital and private gain.”

 “The deception alleged to have been committed by the defendants tricked clients into paying for advertising it failed to deliver and served to falsely inflate the value of Outcome Health,” said Assistant U.S. Attorney Brian Hayes, Chief of the Criminal Division for the Northern District of Illinois.  “Our office will continue to investigate and hold accountable those who perpetrate fraud schemes.”

“These charges demonstrate that the FBI and its partners will hold businesses accountable for their misconduct,” said Deputy Special Agent in Charge Larry L. Lapp of the FBI’s Chicago Field Office.

“The defendants were charged with allegedly over-inflating the company’s revenue figures in order to fraudulently obtain loans from banks,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation’s Office of Inspector General (FDIC-OIG).  “This scheme was orchestrated by former leaders of the organization who personally benefitted from hundreds of millions of dollars.  We are committed to working with our law enforcement partners to investigate individuals involved in the crime and to preserve the integrity of the banking system.”

As alleged in the superseding indictment and information, from 2011 to 2017, the former executives and employees of Outcome, a digital provider of medical information and advertising in doctors’ offices, sold tens of millions of dollars of advertising inventory that did not exist.  This allegedly resulted in inflated financial statements that the former executives used to raise nearly $1 billion in debt and equity financing in 2016 and 2017.  Shah, Agarwal and Purdy are each charged with various counts of mail fraud, wire fraud and bank fraud.  Purdy is also charged with one count of false statements to a financial institution, and Shah is also charged with two counts of transactions in criminal proceeds.  Desai is charged with one count of wire fraud.  Choi and Han are each charged with one count of conspiracy to commit wire fraud.

According to the allegations, the former executives and employees perpetrated a fraudulent scheme by selling clients—most of whom were pharmaceutical companies—advertising inventory the company did not have and then under-delivering on its advertising campaigns.  Despite these under-deliveries, the company allegedly still invoiced its clients as if it had delivered in full.  To conceal the under-deliveries, the former executives and employees allegedly falsified affidavits and proofs of performance to make it appear the company was delivering advertising content to the number of screens in its clients’ contracts, and also inflated patient engagement metrics regarding how frequently patients engaged with Outcome’s tablets.  Furthermore, Desai allegedly altered a number of studies presented to clients to make it appear that the campaigns were more effective than they actually were.

The charging documents also allege that the under-delivery resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016.  The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy, Desai, Choi and Han allegedly fabricated data to conceal the under-deliveries from the auditor.  Shah, Purdy and Agarwal then allegedly used the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016 and $487.5 million in equity financing in early 2017.  The $110 million debt financing allegedly resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal; the $487.5 million equity financing allegedly resulted in a $225 million dividend to Shah and Agarwal.

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

The FBI and FDIC-OIG are investigating the case.  Assistant Chief William E. Johnston and Trial Attorney Kyle C. Hankey of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Matthew F. Madden of the Northern District of Illinois are prosecuting the case.  Daniel Olinghouse of the Criminal Division’s Money Laundering and Asset Recovery Section has assisted with forfeiture matters.

The U.S. Securities and Exchange Commission provided assistance in this case. 

WASHINGTON – Four former executives and two former employees of Outcome Health (Outcome), a Chicago-based health technology start-up company founded in 2006, were charged for their alleged roles in a fraud scheme that targeted the company’s clients, lenders and investors, and involved approximately $1 billion in fraudulently obtained funds.

Charged in a superseding indictment filed in the Northern District of Illinois and unsealed today are:

• RISHI SHAH, 33, of Chicago, the co-founder and CEO of Outcome Health, which was known as ContextMedia prior to January 2017.
• SHRADHA AGARWAL, 34, of Chicago, the president of Outcome Health, who was branded as a co-founder.
• BRAD PURDY, 30, of San Francisco, Calif., the chief operating officer and chief financial officer.
• ASHIK DESAI, 26, of Philadelphia, Penn., the executive vice president of business operations and, more recently, the chief growth officer of Outcome.

Previously charged in a criminal information filed in the same district are:

• KATHRYN CHOI, 29, of New York, N.Y., a senior analyst.
• OLIVER HAN, 29, of Chicago, an analyst.

An initial appearance and arraignment for Shah, Agarwal and Purdy in federal court in Chicago have not yet been scheduled. An initial appearance and arraignment for Desai are set for Dec. 3, 2019, at 10:00 a.m., before U.S. District Judge Thomas M. Durkin. An initial appearance and arraignment for Choi and Han are set for Dec. 5, 2019, at 1:30 p.m., before U.S. Magistrate Judge Jeffrey Gilbert.

“The deception alleged to have been committed by the defendants tricked clients into paying for advertising it failed to deliver and served to falsely inflate the value of Outcome Health,” said Assistant U.S. Attorney Brian Hayes, Chief of the Criminal Division for the Northern District of Illinois.  “Our office will continue to investigate and hold accountable those who perpetrate fraud schemes.”

“Outcome’s former executives and employees allegedly deceived lenders, investors, and their own auditors by falsely representing revenue for additional profit,” said Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division.  “The charges announced today demonstrate that lies and deception cannot serve as the basis for any company, including start-up companies, to falsely grow revenue for additional capital and private gain.”

“These charges demonstrate that the FBI and its partners will hold businesses accountable for their misconduct,” said Deputy Special Agent in Charge Larry L. Lapp of the FBI’s Chicago Field Office.

“The defendants were charged with allegedly over-inflating the company’s revenue figures in order to fraudulently obtain loans from banks,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation’s Office of Inspector General (FDIC-OIG).  “This scheme was orchestrated by former leaders of the organization who personally benefitted hundreds of millions of dollars.  We are committed to working with our law enforcement partners to investigate individuals involved in the crime and to preserve the integrity of the banking system.”

Assistant U.S. Attorney Matthew F. Madden of the Northern District of Illinois and Assistant Chief William E. Johnston and Trial Attorney Kyle C. Hankey of the Department of Justice Criminal Division’s Fraud Section are prosecuting the case.  Daniel Olinghouse of the Criminal Division’s Money Laundering and Asset Recovery Section is handling forfeiture matters.  The FBI and FDIC-OIG are investigating the case.  The U.S. Securities and Exchange Commission provided assistance.

As alleged in the superseding indictment and information, from 2011 to 2017, the former executives and employees of Outcome, a digital provider of medical information and advertising in doctors’ offices, sold tens of millions of dollars of advertising inventory that did not exist.  This allegedly resulted in inflated financial statements that the former executives used to raise nearly $1 billion in debt and equity financing in 2016 and 2017.  Shah, Agarwal and Purdy are each charged with various counts of mail fraud, wire fraud and bank fraud.  Purdy is also charged with one count of false statements to a financial institution, and Shah is also charged with two counts of transactions in criminal proceeds.  Desai is charged with one count of wire fraud.  Choi and Han are each charged with one count of conspiracy to commit wire fraud.

According to the allegations, the former executives and employees perpetrated a fraudulent scheme by selling clients—most of whom were pharmaceutical companies—advertising inventory the company did not have and then under-delivering on its advertising campaigns.  Despite these under-deliveries, the company allegedly still invoiced its clients as if it had delivered in full.  To conceal the under-deliveries, the former executives and employees allegedly falsified affidavits and proofs of performance to make it appear the company was delivering advertising content to the number of screens in its clients’ contracts, and also inflated patient engagement metrics regarding how frequently patients engaged with Outcome’s tablets.  Furthermore, Desai allegedly altered a number of studies presented to clients to make it appear that the campaigns were more effective than they actually were.

The charging documents also allege that the under-delivery resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016.  The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy, Desai, Choi and Han allegedly fabricated data to conceal the under-deliveries from the auditor.  Shah, Purdy and Agarwal then allegedly used the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016 and $487.5 million in equity financing in early 2017.  The $110 million debt financing allegedly resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal; the $487.5 million equity financing allegedly resulted in a $225 million dividend to Shah and Agarwal.

CHICAGO — A Chicago man was charged today in federal court with participating in the robbery of a Des Plaines bank earlier this week.

MAURICE MURPHY, 32, is charged with one count of bank robbery in connection with the Tuesday afternoon heist at Bank of America, 1300 E. Oakton St., Des Plaines.  A detention hearing is scheduled for Monday at 3:00 p.m. before U.S. Magistrate Judge Jeffrey Cole.

The federal charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; and William Kushner, Chief of the Des Plaines Police Department.  The government is represented by Assistant U.S. Attorney Ashley A. Chung.

According to a criminal complaint and affidavit filed in U.S. District Court in Chicago, Murphy aided and abetted the robbery by acting as a getaway driver.  Another individual entered the bank, pointed a gun at a teller, and demanded money, the complaint states.  The robber fled the bank and departed the area in a vehicle driven by Murphy, the complaint states.

Murphy was arrested in Des Plaines shortly after the robbery.  The other individual involved in the robbery was fatally shot during an encounter with law enforcement in Chicago later that day, the complaint states.

The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  The robbery charge is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, today announced that the office will participate in Project Guardian, a new initiative from the Department of Justice designed to reduce gun violence and enforce federal firearm laws.  Project Guardian is designed to serve as a complementary effort to the success of Project Safe Neighborhoods (PSN).

The Department reviewed and adapted some of the successes of past strategies, such as the “Triggerlock” program, to develop a new and robust effort to promote and ensure public safety.  Project Guardian focuses specifically on investigating, prosecuting, and preventing gun crimes, and it emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.

“Reducing gun violence and enforcing federal gun laws have always been among our office’s highest priorities,” said U.S. Attorney Lausch.  “As part of Project Guardian, we will work closer than ever with federal, state, and local law enforcement partners to reduce the unacceptable level of violent crime and help keep our citizens safe.”

“Gun crime remains a pervasive problem in too many communities across America,” said Attorney General William P. Barr.  “The Department of Justice is redoubling its commitment to tackling this issue through the launch of Project Guardian.  Building on the success of past programs like Triggerlock, Project Guardian will strengthen our efforts to reduce gun violence by allowing the federal government and our state and local partners to better target offenders who use guns in crimes and those who try to buy guns illegally.”

“Project Guardian will ensure our agents and intelligence resources are leveraging not only National Integrated Ballistic Information Network and eTrace technology to investigate the source and possessors of crime guns, but also our strong  partnerships among law enforcement, which are vital to keeping guns out the hands of those that threaten the security of our communities,” said Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Project Guardian’s implementation is based on five principles:

1. Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
    
2. Enforcing the Background Check System. United States Attorneys, in consultation with ATF, will create new, or review existing, guidelines for intake and prosecution of federal cases involving false statements (including lie-and-try, lie-and-buy, and straw purchasers) made during the acquisition or attempted acquisition of firearms from Federal Firearms Licensees.  Particular emphasis is placed on individuals convicted of violent felonies or misdemeanor crimes of domestic violence, individuals subject to protective orders, and individuals who are fugitives where the underlying offense is a felony or misdemeanor crime of domestic violence; individuals suspected of involvement in criminal organizations or of providing firearms to criminal organizations; and individuals involved in repeat denials.
    
3. Improved Information Sharing. On a regular basis, and as often as practicable given current technical limitations, ATF will provide to state law enforcement fusion centers a report listing individuals for whom the National Instant Criminal Background Check System (NICS) has issued denials, including the basis for the denial, so that state and local law enforcement can take appropriate steps under their laws.
    
4. Coordinated Response to Mental Health Denials. Each United States Attorney will ensure that whenever there is federal case information regarding individuals who are prohibited from possessing a firearm under the mental health prohibition, such information continues to be entered timely and accurately into the United States Attorneys’ Offices’ case-management system for prompt submission to NICS.  ATF will engage in additional outreach to state and local law enforcement on how to use this denial information to better assure public safety.  Additionally, U.S. Attorneys will consult with relevant district stakeholders to assess feasibility of adopting disruption of early engagement programs to address mental-health-prohibited individuals who attempt to acquire a firearm.
    
5. Crime Gun Intelligence Coordination. Federal, state, local, and tribal prosecutors and law enforcement will work together to ensure effective use of the ATF’s Crime Gun Intelligence Centers (CGICs), and all related resources, to maximize the use of modern intelligence tools and technology.  These tools can greatly enhance the speed and effectiveness in identifying trigger-pullers and finding their guns, but the success depends in large part on state, local, and tribal law enforcement partners sharing ballistic evidence and firearm recovery data with the ATF.

In the Northern District of Illinois, the U.S. Attorney’s Office has continued to expand upon significant increases in the prosecution of gun offenders under Project Safe Neighborhoods.  In the 2019 Fiscal Year, which ended Sept. 30, 2019, the office charged more federal firearm defendants than were charged in each of the prior 15 years, according to preliminary data.  The number of charged firearm defendants in Fiscal Year 2019 was 44% higher than 2018, and 60% higher than 2017, according to preliminary data.  These increases are particularly impactful considering that the 2018 and 2017 fiscal years previously stood as the first and second highest years of charged firearm defendants, respectively, in more than a decade.

CHICAGO — A former technician at a Chicago pharmacy has been sentenced to five years in federal prison for stealing thousands of pills of hydrocodone and selling them for a profit.

ELIZABETH CRUZ worked at Allcare Discount Pharmacy, located in the 2700 block of West North Avenue in Chicago.  From October 2015 to December 2017, Cruz and a co-defendant, JACQUELINE GREEN, conspired to steal approximately 56,108 pills of hydrocodone and sell them outside the pharmacy.  Cruz and Green received at least $10,800 in proceeds from the sale of the stolen pills. 

Cruz concealed the theft by falsifying the pharmacy’s inventory to make it look like the pills had either not been received from the distributor or had been dispensed to patients. 

Cruz, 35, of Stone Park, pleaded guilty earlier this year to one count of conspiracy to possess a controlled substance with the intent to deliver.  U.S. District Judge Ronald A. Guzman imposed the prison sentence Wednesday in federal court in Chicago.

“The opioid epidemic has inflicted an unprecedented toll of suffering in Chicago and throughout the country,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  “The defendants in this case contributed to this crisis by making opiates available on the street to individuals who otherwise would not have access to them.  Our office will continue to actively attack the opioid crisis from all investigative and prosecutorial angles.”

The investigation was conducted by the Chicago Field Division of the U.S. Drug Enforcement Administration.

“When trusted pharmacy employees illegally divert powerful and addictive pain medications for misuse, they put individuals and their families at increased risk of drug dependence and overdose,” said Robert J. Bell, Special Agent-in-Charge of the DEA Chicago Field Division.  “This strong prison sentence is recognition of the seriousness of the opioid crisis.   The DEA will continue to aggressively bring all resources to bear, unilaterally and in cooperation with prosecutors and law enforcement partners, to save lives in the midst of the opioid epidemic.”

Green, of Chicago, pleaded guilty to the same charge as Cruz.   Judge Guzman in July sentenced Green to a year and a day in federal prison.

The government in this case was represented by Assistant U.S. Attorneys Nani M. Gilkerson and David Rojas.

CHICAGO — A former vice chancellor for City Colleges of Chicago obtained payments, some in the form of kickbacks, from vendors in exchange for steering them contracts for community canvassing and flyer distribution services, according to an indictment returned in federal court in Chicago. 

SHAROD GORDON, 45, of Oak Park, is charged with 16 counts of wire fraud.  Gordon was employed by City Colleges of Chicago as District Director of Community Affairs, then as Associate Vice Chancellor of Community Relations and Student Recruitment, and most recently as Vice Chancellor of Legislative and Community Affairs.

The indictment alleges that some of the vendor-companies were formed by City Colleges employees or associates of Gordon for the purpose of applying for the contracts.  In some instances, the work was never performed even though invoices were submitted and City Colleges paid them, the charges allege.  Upon receipt of the payments, representatives of several vendor-companies gave a portion of the payments to Gordon, directly or indirectly, and some of those payments were in the form of kickbacks, the charges allege.  The indictment seeks forfeiture of approximately $349,500 in criminally derived proceeds from Gordon and seven co-defendants.

The indictment was returned Tuesday in U.S. District Court in Chicago.  Arraignments have not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI.  The Office of Inspector General for the City Colleges of Chicago provided substantial assistance in the investigation.  The government is represented by Assistant U.S. Attorneys Georgia N. Alexakis and Timothy J. Storino.

In addition to Gordon, the indictment charges seven other defendants with participating in the scheme:

• ANGELIQUE ORR, 47, of Berwyn, is charged with five counts of wire fraud.  Orr was married to Gordon from 1998 to 2013, the indictment states.
• KRYSTAL STOKES, 39, of North Bay Village, Fla., is charged with two counts of wire fraud and one count of making a false statement to the FBI.  Stokes previously worked at City Colleges as a community outreach worker.
• MARVA SMITH, 37, of Chicago, is charged with two counts of wire fraud.  Smith worked at City Colleges as a liaison to governmental agencies.
• TIFFANY MCQUEEN, 43, of Naperville, is charged with two counts of wire fraud and one count of making a false statement to the FBI.  McQueen was an alleged associate of Gordon.
• NANCY VAZQUEZ, 48, of Chicago, is charged with two counts of wire fraud.  Vazquez was a lobbyist who operated a lobbying and consulting firm.
• MARQUITA PAYNE, 38, of Frisco, Texas, is charged with two counts of wire fraud.  Payne was an alleged associate of Gordon and the registered agent of a consulting company.
• TIFFANY CAPEL, 35, of Detroit, Mich., is charged with one count of wire fraud.  Capel was an alleged associate of Gordon who operated a marketing, branding, and apparel design company.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count of wire fraud is punishable by up to 20 years in prison, while the maximum sentence for each false statement count is five years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

A Chicago, Illinois, man has been arrested on a federal complaint charging him with attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS). The complaint and arrest were announced by John C. Demers, Assistant Attorney General for National Security at the U.S. Department of Justice John R. Lausch Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI. 

Thomas Osadzinski, 20, was arrested Monday, November 18, in Chicago.  A criminal complaint charges him with one count of attempting to provide material support and resources to a foreign terrorist organization.  Osadzinski appeared today before U.S. Magistrate Judge Jeffrey Cole in Chicago and was ordered held without bond.  A detention hearing was scheduled for Friday, Nov. 22, 2019, at 9:30 a.m.

Osadzinski is a U.S. citizen who resides in Chicago.  The complaint alleges that Osadzinski designed a process that uses a computer script to make ISIS propaganda more conveniently accessed and disseminated by users on a social media platform.  Osadzinski earlier this year shared his script – and instructions for how to use it – with individuals whom he believed to be ISIS supporters and members of pro-ISIS media organizations, the complaint states.  Unbeknownst to Osadzinski, the individuals were actually covert FBI employees and a person confidentially working with law enforcement, according to the complaint.

ISIS and its supporters disseminate the terror group’s propaganda materials online to as wide an audience as possible in order to recruit fighters and inspire violence against the United States and other countries.  Social media platforms routinely remove ISIS media content due to the violent nature of the materials.  According to the complaint, Osadzinski’s computer process would automatically copy and preserve ISIS media postings in an organized format, allowing social media users to continue to conveniently access and disseminate the content.

The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  The material support charge is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of federal, state and local law enforcement agencies.  The government is represented by Assistant U.S. Attorneys Barry Jonas, Melody Wells and Tiffany Ardam of the Northern District of Illinois, and Alexandra Hughes, Trial Attorney of the National Security Division’s Counterterrorism Section.

CHICAGO — A Chicago man has been arrested on a federal complaint charging him with attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS).

THOMAS OSADZINSKI, 20, was arrested Monday in Chicago.  A criminal complaint charges him with one count of attempting to provide material support and resources to a foreign terrorist organization.  Osadzinski appeared today before U.S. Magistrate Judge Jeffrey Cole in Chicago and was ordered held without bond.  Judge Cole scheduled a detention hearing for Friday at 9:30 a.m.

The complaint and arrest were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security at the U.S. Department of Justice; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI.  The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of federal, state and local law enforcement agencies.  The government is represented by Assistant U.S. Attorneys Barry Jonas, Melody Wells and Tiffany Ardam of the Northern District of Illinois, and Alexandra Hughes, Trial Attorney of the National Security Division’s Counterterrorism Section.

Osadzinski is a U.S. citizen who resides in Chicago.  The complaint alleges that Osadzinski designed a process that uses a computer script to make ISIS propaganda more conveniently accessed and disseminated by users on a social media platform.  Osadzinski earlier this year shared his script – and instructions for how to use it – with individuals whom he believed to be ISIS supporters and members of pro-ISIS media organizations, the complaint states.  Unbeknownst to Osadzinski, the individuals were actually covert FBI employees and a person confidentially working with law enforcement, according to the complaint.

ISIS and its supporters disseminate the terror group’s propaganda materials online to as wide an audience as possible in order to recruit fighters and inspire violence against the United States and other countries.  Social media platforms routinely remove ISIS media content due to the violent nature of the materials.  According to the complaint, Osadzinski’s computer process would automatically copy and preserve ISIS media postings in an organized format, allowing social media users to continue to conveniently access and disseminate the content.

The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  The material support charge is punishable by up to 20 years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The leader of a Chicago-area street gang has been arrested for allegedly attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS).

Jason Brown, also known as “Abdul Ja’Me,” allegedly provided $500 in cash to an individual on three separate occasions this year, with the understanding that the money would be wired to an ISIS soldier engaged in active combat in Syria, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Unbeknownst to Brown, the individual to whom he provided the money was confidentially working with law enforcement, and the purported ISIS fighter was actually an undercover law enforcement officer.

Brown, 37, of Lombard, Illinois, was arrested Thursday, Nov. 14, 2019.  He is charged with attempting to provide material support and resources to a foreign terrorist organization.  A detention hearing is set for Nov. 21, 2019, at 11:00 a.m., before U.S. Magistrate Judge Sunil R. Harjani in Chicago.

The complaint alleges that Brown is the leader of the AHK street gang, which is based in the Chicago suburb of Bellwood and comprised of former members of other gangs, including the Black P Stones, Gangster Disciples, and Four Corner Hustlers.  AHK members trafficked various narcotics in the Chicago area, including a fentanyl analogue, heroin, and cocaine, and often boasted about the gang’s activities on social media, the charges allege. 

Also Thursday, several AHK members or associates were arrested on federal drug charges.  As part of the investigation, law enforcement shut down the gang’s operation of two illicit drug markets on the West Side of Chicago and executed search warrants at numerous locations.

Seven AHK members or associates are charged in criminal complaints filed in federal court.  Charged with conspiracy to possess a fentanyl analogue, heroin, and cocaine with the intent to distribute are Tristan Clanton, 34, of Chicago, Randall Langston, 25, of Bellwood, Ill., his brother, Brandon Langston, 22, of Bellwood, Ill., Hezekiah Wyatt, 19, of Hillside, Ill., Lenolis Muhammad-Curtis, 24, of Bellwood, Ill., and Frank Thaxton, 19, of Chicago.  Charged with illegal distribution of the drug Xanax is Maurice Thomas, 30, of Chicago.  Judge Harjani set detention hearings for Wyatt and Brandon Langston for Nov. 18, 2019; Thomas and Muhammad-Curtis for Nov. 19, 2019; and Clanton for Nov. 20, 2019.  An arrest warrant has been issued for Randall Langston.

According to the charges, Clanton is an influential AHK member who leads a drug trafficking operation in Chicago and Bellwood.  The organization is responsible for trafficking more than a half kilogram of heroin, at least 474 grams of fentanyl analogue, and distribution quantities of cocaine and other drugs, the charges allege.  Clanton and his crew sold drugs near two intersections in the North Lawndale and Humboldt Park neighborhoods of Chicago.  Law enforcement shut down the crew’s operation of these markets as part of the federal probe.    

The public is reminded that charges contain only accusations and are not evidence of guilt.  The material support charge against Brown is punishable by up to 20 years in prison.  The drug conspiracy charge carries a maximum sentence of life in prison, while the drug distribution charge is punishable by up to five years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

Substantial investigative assistance was provided by the IRS Criminal Investigation Division, Illinois State Police, U.S. Postal Inspection Service, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Lombard, Illinois, Police Department, Addison, Illinois, Police Department, and Chicago Police Department.  The case is being prosecuted by Assistant U.S. Attorneys Shoba Pillay, Sean Driscoll and Nicholas Eichenseer of the Northern District of Illinois with support from the National Security Division, Counterterrorism Section.

CHICAGO — The suspected leader of a Chicago-area street gang has been arrested for allegedly attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS).

JASON BROWN, also known as “Abdul Ja’Me,” provided $500 in cash to an individual on three separate occasions this year, with the understanding that the money would be wired to an ISIS soldier engaged in active combat in Syria, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Unbeknownst to Brown, the individual to whom he provided the money was confidentially working with law enforcement, and the purported ISIS fighter was actually an undercover law enforcement officer, the complaint states. 

Brown, 37, of Lombard, Ill., was arrested Thursday.  He is charged with attempting to provide material support and resources to a foreign terrorist organization.  A detention hearing is set for Nov. 21, 2019, at 11:00 a.m., before U.S. Magistrate Judge Sunil R. Harjani in Chicago.

The complaint alleges that Brown is the leader of the AHK street gang, which is based in the Chicago suburb of Bellwood and comprised of former members of other gangs, including the Black P Stones, Gangster Disciples, and Four Corner Hustlers. 

Six other alleged AHK members or associates were charged in a separate complaint with federal drug offenses.  According to the charges, AHK members allegedly trafficked various narcotics in the Chicago area, including a fentanyl analogue, heroin, and cocaine, and often boasted about the gang’s activities on social media.  As part of the investigation, law enforcement shut down the gang’s operation of two illicit drug markets on the West Side of Chicago and executed search warrants at numerous locations.

“The conduct alleged in these two complaints presents grave risks to our communities,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  “We will seek accountability to the fullest extent of the law.” 

“These charges underscore the ceaseless efforts of federal, state, and local law enforcement agencies to disrupt the illegal flow of money and drugs,” said Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI.  “The FBI is proud to collaborate with its partners to make our neighborhoods safer and to keep valuable resources out of the hands of gang and terrorist organizations.”

U.S. Attorney Lausch announced the charges along with John C. Demers, Assistant Attorney General for National Security at the U.S. Department of Justice, and Eddie Johnson, Superintendent of the Chicago Police Department.  Substantial investigative assistance was provided by the IRS Criminal Investigation Division, Illinois State Police, U.S. Postal Inspection Service, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Lombard, Ill., Police Department, and Addison, Ill., Police Department.  The government is represented by Assistant U.S. Attorneys Shoba Pillay, Sean Driscoll and Nicholas Eichenseer of the Northern District of Illinois, with support from the National Security Division, Counterterrorism Section.

The alleged AHK members or associates charged with conspiracy to possess a fentanyl analogue, heroin, and cocaine with the intent to distribute are TRISTAN CLANTON, 34, of Chicago, RANDALL LANGSTON, 25, of Bellwood, Ill., his brother, BRANDON LANGSTON, 22, of Bellwood, Ill., HEZEKIAH WYATT, 19, of Hillside, Ill., LENOLIS MUHAMMAD-CURTIS, 24, of Bellwood, Ill., and FRANK THAXTON, 19, of Chicago.  Clanton, Brandon Langston, Wyatt and Muhammad-Curtis were arrested Thursday.  Judge Harjani set their detention hearings for next week.  Thaxton is currently in the custody of state law enforcement, and a federal court appearance will be scheduled at a later date.  An arrest warrant has been issued for Randall Langston.

According to the charges, Clanton is an influential AHK member who leads a drug trafficking operation in Chicago and Bellwood.  The organization is responsible for trafficking more than a half kilogram of heroin, at least 474 grams of fentanyl analogue, and distribution quantities of cocaine and other drugs, the charges allege.  Clanton and his crew sold drugs near two intersections in the North Lawndale and Humboldt Park neighborhoods of Chicago, according to the complaint.  Law enforcement shut down the crew’s operation of these markets as part of the federal probe.    

The public is reminded that charges contain only accusations and are not evidence of guilt.  The material support charge is punishable by up to 20 years in prison.  The drug conspiracy charge carries a maximum sentence of life in prison.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A federal jury has convicted a Chicago man of robbing an ATM technician at gunpoint in the city’s Little Village neighborhood.

On July 27, 2018, IVAN PARKER pointed a handgun to the technician’s head in the vestibule of a Chase Bank branch in the 3800 block of West 26th Street.  The robbery occurred shortly before 7:00 a.m. as the technician was loading an ATM with cash.  The technician tried to push away the gun and a struggle ensued.  Parker used pepper spray on the technician before grabbing a bag containing $106,335 in cash and running from the scene.  Parker was arrested the following month and has remained in custody since then.

Evidence at trial revealed that proceeds from the robbery were used to purchase a Buick sedan, jewelry, furniture, a television, and a PlayStation console.

The jury in federal court in Chicago on Wednesday convicted Parker of the single robbery count against him.  The charge is punishable by up to 20 years in prison.  U.S. District Judge Sara L. Ellis set sentencing for May 27, 2020.

The conviction was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorneys Tobara S. Richardson and Christine M. O’Neill.

CHICAGO — A federal judge today sentenced a Chicago man to 15 years in prison for robbing suburban retail stores at gunpoint.

REGINALD TAYLOR, 53, committed three armed robberies and one attempted armed robbery in the fall of 2012.  Taylor terrorized store employees by brandishing a handgun and threatening to shoot them if they did not comply with his demands.  In one of the heists, Taylor physically restrained store employees with their shoelaces.  The robberies netted him more than $54,000 in cash and hundreds of cell phones.

Taylor was arrested in Oak Lawn on Nov. 7, 2012, after attempting to rob a RadioShack.  He has remained in federal custody since then.

Taylor pleaded guilty earlier this year to robbery and firearm charges.  U.S. District Judge Elaine E. Bucklo imposed the sentence in federal court in Chicago.

“Our office will continue to be vigilant in investigating and prosecuting armed robbers,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  “We will advocate for substantial prison sentences – like the 15-year sentence imposed in this case – in order to keep our communities safe.”

U.S. Attorney Lausch announced the sentence along with Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives.  Substantial assistance was provided by Police Departments in Elgin, Frankfort, Palos Heights, and Oak Lawn.  The government is represented by Assistant U.S. Attorneys Jeannice W. Appenteng and Lindsay Jenkins.

Taylor admitted in a plea agreement that he committed three armed robberies:

Sept. 20, 2012: T-Mobile store, 200 block of South Randall Road, Elgin.

Nov. 1, 2012: RadioShack store, 21100 block of South LaGrange Road, Frankfort.

Nov. 7, 2012: RadioShack store, 11900 block of South Harlem Avenue, Palos Heights.

Taylor admitted in the plea agreement that he committed one attempted robbery:

Nov. 7, 2012: RadioShack store, 4800 block of West 95th Street, Oak Lawn.

WASHINGTON - The Justice Department announced today the formation of the new Procurement Collusion Strike Force (PCSF) focusing on deterring, detecting, investigating and prosecuting antitrust crimes, such as bid-rigging conspiracies and related fraudulent schemes, which undermine competition in government procurement, grant and program funding.

The PCSF will be an interagency partnership consisting of prosecutors from the Antitrust Division, Assistant U.S. Attorneys from the Northern District of Illinois and 12 other U.S. Attorneys’ Offices, and investigators from the FBI, Department of Defense Office of Inspector General, U.S. Postal Service Office of Inspector General and other federal Offices of Inspector General.

“Government procurement is vulnerable to corruption and too often results in inferior goods and services at a higher cost to taxpayers,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  “We will work aggressively with the Antitrust Division and our investigative partners to hold accountable individuals and companies who seek to corrupt the procurement process.”

“To protect taxpayer dollars, the Justice Department is doing its part to eliminate anticompetitive collusion, waste and abuse from government procurement,” said Deputy Attorney General Jeffrey A. Rosen.  “To ensure taxpayers the full benefits of competitive bidding, experienced investigators and prosecutors with the necessary expertise will partner in this Strike Force to deter, detect and prosecute antitrust crimes and related schemes in government procurements.”

“The investigation and prosecution of individuals and organizations that cheat, collude and seek to undermine the integrity of government procurement are priorities for this administration,” said Assistant Attorney General Makan Delrahim of the Antitrust Division.  “The PCSF will train and educate procurement officials nationwide to recognize and report suspicious conduct in procurement, grant and program funding processes.  We will aggressively investigate and prosecute those who violate our antitrust laws to cheat the American taxpayer.”

The PCSF will lead a national effort to protect taxpayer-funded projects at the federal, state and local level from antitrust violations and related crimes, starting with a focus on 13 districts throughout the country.  Prosecutors from the Antitrust Division and the participating U.S. Attorneys’ Offices, along with agents from the FBI and partner Offices of Inspector General, will work together to conduct outreach and training for procurement officials and government contractors on antitrust risks in the procurement process.  In addition, the partnered prosecutors and investigators will jointly investigate and prosecute cases that result from their targeted outreach efforts.

The Antitrust Division and its law enforcement partners have a history of prosecuting criminal antitrust conspiracies that take advantage of government contracts.  In late 2018 and early 2019, for instance, five South Korean oil companies agreed to plead guilty for their involvement in a decade-long bid-rigging conspiracy that targeted contracts to supply fuel to U.S. military bases in South Korea.  The Antitrust Division also indicted seven individuals for conspiring to rig bids and to defraud the government, and one executive was also charged with obstruction of justice.  In total, the companies have agreed to pay $156 million in criminal fines and over $205 million in separate civil settlements.  This year, the Justice Department, in partnership with the U.S. General Services Administration Office of Inspector General, also indicted individuals for involvement in rigging bids submitted to the GSA.

In addition to the Northern District of Illinois, the PCSF’s other U.S. Attorney partners include:

-Central District of California

-Eastern District of California

-District of Colorado

-District of Columbia

-Southern District of Florida

-Northern District of Georgia

-Eastern District of Michigan

-Southern District of New York

-Southern District of Ohio

-Eastern District of Pennsylvania

-Northern District of Texas

-Eastern District of Virginia

The PCSF’s investigative partners include:

-Defense Department Office of Inspector General

-FBI

-GSA Office of Inspector General

-Department of Justice Office of Inspector General

-Postal Service Office of Inspector General

The PCSF has launched a publicly available website where government procurement officials and members of the public can review information about the federal antitrust laws and training programs, and report suspected criminal activity affecting public procurement.  Individuals and companies are encouraged to email the PCSF at [email protected] to report anti-competitive conduct involving federal taxpayer dollars.

WASHINGTON – ContextMedia Health LLC, which operates under the trade name Outcome Health (Outcome), a digital provider of medical information and advertising in doctors’ offices, has agreed to a resolution with the Department of Justice by which it will pay $70 million to victims of a fraud scheme that targeted its clients, lenders and investors.

Outcome, a privately held company headquartered in Chicago, Illinois, admitted in resolution documents that from 2012 to 2017, former executives and employees of the company perpetrated a scheme to defraud clients — most of which were pharmaceutical companies — by selling advertising inventory that the company did not have. 

“Outcome’s payment of $70 million is an appropriate resolution for the corporate entity given the misconduct of executives and employees acting on its behalf,” said Assistant U.S. Attorney Brian Hayes, Chief of the Criminal Division for the Northern District of Illinois.  “This resolution demonstrates that there are significant consequences for businesses whose executives and employees engage in fraud.” 

“Outcome Health deceived its lenders and investors, and overbilled its clients, by fraudulently misrepresenting both the quality and quantity of its advertising services and concealing those misrepresentations from auditors,” said Principal Deputy Assistant Attorney General John P. Cronan.  “Today’s resolution demonstrates the Criminal Division’s unyielding commitment to making whole victims of fraud.”          

“For five years, employees of Outcome Health purposely failed to deliver on advertising campaigns and engaged in a pattern of misrepresentations to conceal their fraud,” said Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office.  “This resolution demonstrates the FBI’s commitment to working with its prosecutorial and investigative partners to ensure that justice is done.”

“Today’s agreement holds a healthcare technology company accountable for systematically committing fraudulent business practices for financial gain over many years,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation’s Office of Inspector General (FDIC-OIG).  “The FDIC-OIG is committed to investigating such corporate corruption which harms lending institutions, investors, customers, and competitors.  We remain dedicated to working with our law enforcement partners to investigate those who commit such misconduct.”

Outcome admitted that as a result of its practice of selling clients inventory it did not have, it under-delivered on its advertising campaigns.  Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full.  To conceal the under-deliveries, Outcome employees at the time falsified affidavits and proofs of performance to make it appear the company was delivering advertising content to the number of screens in its clients’ contracts.  Outcome executives and employees during that time also inflated patient engagement metrics regarding how frequently patients engaged with Outcome’s devices.  Furthermore, an executive at the time altered a number of studies presented to clients to make it appear that the campaigns were more effective than they actually were, Outcome admitted.

Outcome further admitted that its under-delivery on advertising campaigns resulted in a material overstatement of revenue for the years 2015 and 2016.  The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because executives and employees at the time fabricated data to conceal the under-deliveries from the auditor.  Outcome used the inflated revenue figures in its 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in early 2017, it admitted.

The Department and Outcome entered into a non-prosecution agreement (NPA) to resolve this matter.  Outcome’s obligations under the agreement will have a term of three years, unless the term is modified by the government.  Under the terms of the NPA, Outcome and its current parent company, Outcome Health LLC (Outcome Parent), committed to compensating the pharmaceutical client victims in the amount of $70 million, approximately $65.5 million of which has already been made through a combination of cash payments and in-kind services, and to set aside an additional $4.5 million to compensate any additional pharmaceutical clients who have not yet been made whole.  The NPA does not require Outcome and Outcome Parent to provide compensation to lenders and investors who were victims of Outcome’s scheme, however, because many of those lenders and investors are now the companies’ new owners.  Under the terms of the NPA, Outcome and Outcome Parent also agreed to cooperate with the government’s ongoing investigation of individuals, to report evidence or allegations of U.S. federal law to the Department, and to enhance their existing compliance program and internal controls, where necessary and appropriate, to ensure they are designed to detect and deter violations of U.S. federal law. 

The Department reached this resolution based on a number of factors, including Outcome and Outcome Parent’s ongoing cooperation with the United States and for taking extensive remedial measures.  For example, Outcome no longer employs the executives or employees who were involved in the wrongdoing, and Outcome and Outcome Parent made significant improvements to address and improve the reliability of reporting on advertising campaign delivery, including hiring third parties to audit all of their advertising campaigns.

The FBI and FDIC-OIG are investigating the case.  Assistant U.S. Attorney Matthew F. Madden of the Northern District of Illinois and Assistant Chief William E. Johnston and Trial Attorney Kyle C. Hankey of the Department of Justice's Criminal Division’s Fraud Section are prosecuting the case.

Download the Non-Prosecution Agreement here.

CHICAGO — Illinois State Rep. LUIS ARROYO has been charged in federal court with offering a bribe to a fellow state lawmaker in an effort to influence and reward the lawmaker for supporting legislation that would benefit Arroyo’s private lobbying client.

Arroyo, 65, of Chicago, is charged with one count of federal program bribery, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Arroyo made an initial court appearance this morning before U.S. Magistrate Judge Maria Valdez and was ordered released on a personal recognizance bond.  The next court date was not immediately set.

The complaint was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; and Kathy A. Enstrom, Special Agent-in-Charge of the Chicago office of the IRS Criminal Investigation Division.  The government is represented by Assistant U.S. Attorneys Christopher Stetler and James Durkin.

Arroyo has represented the 3rd District in the Illinois House of Representatives since 2006.  He has also managed Spartacus 3 LLC, a private lobbying firm in Chicago.

According to the complaint, on Aug. 2, 2019, Arroyo offered to pay $2,500 per month to an Illinois state senator in return for the senator’s support of sweepstakes-related legislation that would benefit one of Arroyo’s lobbying clients.  On Aug. 22, 2019, Arroyo met with the senator at a restaurant in Skokie and provided him a check for $2,500 as an initial payment, with the expectation that additional payments would be made for the next six to 12 months, the complaint states.  The check was made payable to a nominee of the senator for the purpose of concealing the illicit payment, the complaint states.

Federal program bribery is punishable by up to ten years in prison.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.  The public is reminded that a complaint is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

CHICAGO — John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, today announced continued progress in combating violent crime through a series of targeted strategies as part of the revitalized Project Safe Neighborhoods (PSN) initiative.

PSN is an evidence-based program that serves as the centerpiece of the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch has deployed the PSN program to attack a broad range of violent crime issues facing the district, from complex racketeering and drug trafficking enterprises to the illegal use, possession, or transfer of firearms.  PSN resources are also invested in local prevention and reentry programs that seek to implement lasting reductions in crime through community engagement.

“In the past three years our office in Chicago has substantially increased prosecutions of violent criminals, including trigger-pullers, drug traffickers, carjackers, and those who illegally use and possess firearms,” said U.S. Attorney Lausch.  “We are using every available federal law enforcement tool to reduce violent crime and help keep our citizens safe.”

“The revitalized Project Safe Neighborhoods program is a major success,” said Attorney General William P. Barr.  “It packs a powerful punch by combining advanced data with local leadership, further reducing violence in communities across the country and improving overall public safety.  U.S. Attorneys continue to focus their enforcement efforts against the most violent criminals and work in partnership with federal, state, local, and tribal police.  The Justice Department’s relationships across the board have never been stronger.”

The revitalized PSN program has enabled the U.S. Attorney’s Office in Chicago to sustain and expand upon significant increases in the prosecution of gun offenders.  According to preliminary data for the 2019 Fiscal Year, which ended Sept. 30, 2019, the U.S. Attorney’s Office charged more federal firearm defendants than were charged in each of the prior 15 years.  The number of charged firearm defendants in Fiscal Year 2019 was 44% higher than 2018, and 60% higher than 2017, according to preliminary data.  These increases are particularly impactful considering that the 2018 and 2017 fiscal years previously stood as the first and second highest years of charged firearm defendants, respectively, in more than a decade.

Crime statistics from the Chicago Police Department (CPD) reveal significant reductions in violent crime in Chicago this year.  In the first nine months of 2019, CPD reported a 9% decline in overall crime citywide, driven by double-digit reductions in murders, shootings, robberies and motor vehicle thefts compared to the same period last year.

Over the past two years, the Department of Justice has substantially increased the number of federal prosecutors nationwide to fight violent crime.  The Northern District of Illinois received 12 new criminal Assistant U.S. Attorney positions – announced in January, June and October of last year – and U.S. Attorney Lausch has put them to use.  Significantly, the U.S. Attorney’s Office created a Gun Crimes Prosecution Team to enhance the prosecution of illegal firearm cases in certain police districts in Chicago.  Working collaboratively with federal and local law enforcement, the Gun Crimes Prosecution Team focuses on charging Chicago’s most dangerous criminals quickly after arrest, endeavoring to disrupt the cycle of violence in the neighborhoods most in need.  “Our Gun Crimes Prosecution Team has had tremendous success investigating and prosecuting firearms cases from those Chicago neighborhoods suffering from the most violent crime,” said U.S. Attorney Lausch.  “Our partnerships with CPD and other state and local law enforcement have never been better.”

Firearm and violent crime investigations in Chicago have also been bolstered by an important tool from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF): the National Integrated Ballistic Information Network (NIBIN).  NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms.  NIBIN is a proven investigative and intelligence tool that can link firearms from multiple crime scenes, allowing law enforcement to quickly disrupt shooting cycles.  Federal, state and local law enforcement in Chicago have used NIBIN extensively to help solve violent crimes and prosecute trigger-pullers and other gun offenders. 

Through enforcement actions, prosecutions, and community partnerships, the U.S. Attorney’s Office works to reduce violent crime and make neighborhoods safer.

Enforcement Actions and Prosecution Activity

The U.S. Attorney’s Office works closely with U.S. law enforcement agencies, including ATF, Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI), Postal Inspection Service (USPIS), Internal Revenue Service-Criminal Investigation (IRS-CI) and U.S. Marshals Service (USMS) to investigate and prosecute a variety of violent crimes.  State and local partners in this effort include CPD, Illinois State Police (ISP), Illinois Department of Corrections (IDOC), Cook County State’s Attorney’s Office, Cook County Sheriff’s Office, and numerous local departments throughout northern Illinois.

Following up on the activities our office reported in November of last year and May of this year, our office remains active in fighting violent crime and working to keep safe the people of Chicago through various enforcement actions, prosecutions, and sentencings, as illustrated below: 

Gang-Related Prosecutions

• “Combating the unacceptable level of gang violence in Chicago has been a top priority in our office and will continue to be so,” said U.S. Attorney Lausch.
• ANTHONY MORGAN was sentenced in August to four years in prison for serving as a source of firearms for a Black P-Stones gang faction.  Morgan had firearms purchased in New Mexico and shipped to Chicago for distribution to the gang.  Using NIBIN, law enforcement tied two of the firearms to homicides, including the murder of 9-year-old Tyshawn Lee.  ATF and CPD led the probe, with assistance from USPIS and the U.S. Postal Service Office of Inspector General.
• Five members of the Four Corner Hustlers street gang pleaded guilty in August or September to a racketeering conspiracy charge and admitted participating in criminal activities on behalf of the gang.  KEITH CHATMAN, MARCHELLO DEVINE, DEANDRE SPANN and RONTRELL TURNIPSEED will be sentenced later this year, while STEVON SIMS was sentenced earlier this month.  Several other alleged members of the gang pleaded not guilty and are awaiting trial.  The federal probe was led by FBI, ATF and CPD, with assistance from the Illinois Secretary of State Police Department, U.S. Bureau of Prisons, IDOC, and ISP.
• RAYMOND BETTS, an alleged high-level member of the Four Corner Hustlers street gang, and two other suspected members of the gang were arrested in May on drug charges.  Betts allegedly led an enforcement or security faction of the Four Corner Hustlers known as the “Body Snatchers.”  The multi-year investigation was led by ATF, DEA, CPD and the Cook County Sheriff’s Office, with support of the Organized Crime Drug Enforcement Task Force (OCDETF) and the High Intensity Drug Trafficking Area Task Force (HIDTA).
• Racketeering and murder charges were unsealed in May against four alleged members of a Chicago street gang known as the Milwaukee Kings.  The charges allege that each of the defendants committed murder, while one of them also committed two attempted murders.  The charges are punishable by a mandatory sentence of life in prison, and the death penalty is also possible.  The defendants pleaded not guilty to the charges.  They remain detained in federal custody pending a trial date in 2021.  The U.S. Attorney’s Office worked closely in the investigation with FBI and CPD.
• Two alleged members of the Evans Mob street gang were charged in April with committing murder in aid of racketeering, a charge punishable by a mandatory sentence of life in prison and a possible penalty of death.  The indictment describes the Evans Mob as a criminal organization whose members and associates engaged in numerous acts of violence, including murder, attempted murder and assault, to acquire and preserve territory on Chicago’s South Side.  The defendants have pleaded not guilty and remain detained in federal custody.  The case was investigated by ATF and CPD.

Firearm Trafficking and Firearm Theft Prosecutions

• “Straw purchasers and firearms traffickers enable unlawful possession of guns and the violence that may follow,” said U.S. Attorney Lausch.  “We will continue to work with our law enforcement partners to hold accountable those who engage in illicit firearm transactions.”
• Earlier this month, a Missouri resident pleaded guilty to his role in a Missouri-to-Chicago firearms pipeline.  MARCUS INGRAM, of Charleston, Mo., admitted in a plea agreement that he transported five guns from Missouri to Illinois, where co-defendant JAMES SAUNDERS, of Chicago, illegally distributed them for a profit.  Saunders also pleaded guilty in the case, as did JUMONTA MOORE, of Sikeston, Mo.  The three are awaiting sentencing.  A fourth defendant, DERRICK CLAIBORNE, pleaded not guilty and is awaiting trial.  The probe was led by ATF and CPD.
• Earlier this month, two Chicago men were each sentenced to nine years in prison for stealing 366 handguns from a shipping yard in Memphis, Tenn., and transporting them in a U-Haul van to the Chicago area.  Law enforcement safely recovered all of the firearms.  The case was prosecuted in the Western District of Tennessee after an investigation by the U.S. Attorneys’ Offices in Chicago and Memphis, ATF and FBI, and the police departments of Memphis, Tenn., and Midlothian, Ill.
• Last month, two men were charged with conspiring to straw purchase 19 handguns in Wisconsin and re-sell or distribute them in Chicago.  The Wisconsin purchases occurred at retail stores, pawn shops and gun shows.  KIRK VALENTINE of La Crosse, Wisc., and FRANCISCO ROCHA, of Chicago, pleaded not guilty to the charges.  FBI and CPD led the investigation, which included use of NIBIN.
• Last month, two Minneapolis residents were charged in the District of Minnesota for their roles in illegally supplying a firearm that was used in shootings in Minneapolis and Chicago, including the shooting of a CPD officer.  The investigation was conducted by ATF, CPD, and the Minneapolis Police Department, with assistance from the U.S. Attorney’s Office in Chicago.  The case was made possible by investigative leads generated from NIBIN.
• An eleven-year prison sentence was handed down in May for a suburban Chicago man who described himself as a “one stop shop” for firearms.  ANTOINE JACKSON sold an AK-47 rifle, two handguns, ammunition and heroin to an individual who, unbeknownst to Jackson, was an informant working on behalf of law enforcement.  ATF conducted the probe, with assistance from CPD and police departments in Matteson and Tinley Park, as well as the Will County Metropolitan Area Narcotics Squad.
• A federal jury in April convicted OMRAN ISMAIL of conspiring to straw purchase several handguns on behalf of another individual.  Ismail faces up to ten years in prison when he is sentenced on Dec. 3, 2019.  HSI, CPD, and U.S. Customs and Border Protection participated in the probe.

Carjacking Prosecutions

• “Our message to would-be carjackers in Chicago is simple: Committing a senseless act of violence like carjacking could earn you a home in federal prison for a long time,” said U.S. Attorney Lausch.
• A trial date of April 6, 2020, has been set for four defendants charged in connection with a vehicle theft at gunpoint in Chicago’s Edgewater neighborhood.  Three of the defendants were charged with using, carrying and brandishing a firearm in connection with a violent crime - an offense punishable by up to life in prison.  The defendants have pleaded not guilty.  The probe was led by FBI and CPD, with assistance from the Cook County State’s Attorney’s Office.
• In August, two men who carjacked a sport-utility vehicle at gunpoint on Chicago’s Near North Side were each sentenced to eleven years in federal prison.  During the carjacking, the Jeep’s owner was struck on the back of the head with a gun, while a second gun was pointed at the heads of both the owner and a passenger.  The case was investigated by the Chicago 11th District Violent Crimes Task Force, which consists of agents and officers from the FBI, CPD, ATF, DEA and HSI.
• BRIAN MCKENZIE, of Chicago, remains detained in federal custody for allegedly using a handgun to carjack a Dodge Charger in a restaurant parking lot in suburban Orland Park.  He pleaded not guilty to charges brought earlier this year.  The case was investigated by ATF and the police departments of Orland Park and Oak Forest.
• Three defendants remain detained in federal custody while awaiting trial on a carjacking indictment returned earlier this year.  The charges allege that the trio violently took a Land Rover from a driver in the Wicker Park neighborhood of Chicago. They have pleaded not guilty.  The case was investigated by CPD, ATF, FBI, Cook County State’s Attorney’s Office, and ISP.
• KASHIF DUKES was charged earlier this year with carjacking a Mercedes-Benz in Chicago’s Bronzeville neighborhood.  Dukes allegedly displayed a firearm and threatened the driver before taking the car.  Dukes pleaded not guilty and remains detained in federal custody awaiting trial.  ATF, FBI and CPD led the probe.

Illegal Possession of Firearms Prosecutions

According to preliminary data, 284 individuals were charged with federal gun crimes in the Northern District of Illinois in Fiscal Year 2019 – a 44% increase over the number of firearm defendants charged in FY18, and a 60% increase over FY17.

“Our goal as prosecutors is not simply to bring more cases against more defendants, but rather to reduce the number of homicides and shootings in the Northern District of Illinois, and the way to do that is by bringing quality, impactful cases,” said U.S. Attorney Lausch.  “If you are a felon and thinking about picking up a gun in Chicago, you should expect to be prosecuted to the fullest extent of the law, and face the possibility of going to federal prison for a long time.”

Examples of illegal gun possession cases in federal court during FY19 include:

• Earlier this month, ANTWON BURTON was sentenced to more than five years in federal prison for illegally possessing a loaded handgun in Chicago.  Burton had previously been convicted of multiple felonies, including firearm offenses, and was on parole at the time of this offense.  Federal law prohibits felons from possessing guns.  The case was investigated by CPD and ATF.
• A federal grand jury in August indicted a convicted felon for allegedly illegally possessing more than 50 shotguns, rifles and handguns in his Chicago home.  HENRY REYES was previously convicted of murder and was not lawfully allowed to possess a firearm, the charges allege.  Reyes pleaded not guilty to the charges and is awaiting trial.  ATF and CPD conducted the investigation.
• A convicted felon was charged in federal court in August with illegally possessing a semi-automatic rifle at the Jesse Brown VA Medical Center in Chicago.  Law enforcement officers saw BERNARD HARVEY, of Indianapolis, Ind., in the clinic area of the VA and ordered him to drop the rifle, which he did.  The officers then ordered Harvey to the ground and placed him under arrest.  FBI, CPD and the Jesse Brown VA Police Department conducted the probe.
• JORDAN WATKINS, of Chicago, was sentenced in July to more than six years in prison for illegally possessing a loaded rifle on an elevated train platform in Chicago’s Lakeview neighborhood.  Watkins, who at the time was on parole for a felony conviction, was also carrying a messenger bag that contained two 30-round magazines.  FBI and CPD led the investigation, with assistance from IDOC.
• A federal grand jury in July charged GASTON TUCKER, of Chicago, with illegally possessing a loaded handgun in the Old Town neighborhood of Chicago.  Tucker was previously convicted of aggravated battery with a firearm, a felony for which he was on parole at the time of the alleged federal offense.  Tucker pleaded not guilty to the federal charge and is awaiting trial.  FBI and CPD investigated the case.
• ANTHONY DRAYTON was sentenced in June to seven years in prison for illegally possessing a loaded semi-automatic handgun and pointing it at a car full of people, including a 4-year-old child, outside a Chicago convenience store.  CPD officers were called to the area and quickly arrested Drayton.  ATF assisted in the probe.

Other Significant Firearm-Related Prosecutions

• Three Chicago men were charged in August with participating in a murder-for-hire conspiracy that resulted in two fatal shootings in Chicago.  The defendants allegedly believed one of the victims was cooperating with law enforcement in a drug investigation.  Law enforcement recovered the gun believed to have been used in the murders after it was discovered on a Minnesota resident who was arrested in Wisconsin.  ATF, CPD, IRS-CI, DEA, Cook County State’s Attorney’s Office, Cook County Sheriff’s Office, FBI, HIDTA and OCDETF participated in the investigation.
• A jury in June convicted ERNESTO GODINEZ on firearm and assault charges for shooting an ATF agent who was conducting a covert law enforcement activity in Chicago.  The agent was wounded but survived, and he testified at trial.  Godinez, of Chicago, will be sentenced later this year.  The assault charge is punishable by up to 20 years in prison, while the firearm charge is punishable by a minimum sentence of ten years in prison and must be served after any term of imprisonment imposed for the assault.  The case was worked by ATF, CPD, USMS, FBI, HSI, DEA and ISP.

Opioid Prosecutions

Opioids are a class of highly addictive drugs that includes heroin, fentanyl, and prescription painkillers such as oxycodone and hydrocodone.  The safety of Americans is being threatened by unprecedented levels of opioid misuse, addiction, and overdose.  The Department of Justice is committed to using every available tool to enforce federal drug laws and combat the opioid epidemic.  In the Northern District of Illinois, the U.S. Attorney’s Office has deployed a strategy of aggressive investigations and prosecutions of those who are most responsible for this epidemic.  This includes prosecuting the leaders of traditional drug trafficking organizations, as well as rogue healthcare providers, pharmacists, pharmacist technicians, and others who contribute to the supply and overuse of opioids. 

“This is the deadliest drug crisis in American history,” said U.S. Attorney Lausch.   “We are actively attacking the opioid crisis from all investigative and prosecutorial angles.”

Examples of recent opioid prosecutions in Chicago include:

• Sales of heroin and fentanyl were the target of a joint federal and state investigation, dubbed “Operation Road Rage,” that resulted in charges in March against 35 individuals.  During the multi-year probe, law enforcement seized a kilogram of heroin, most of which contained fentanyl.  Many of the defendants allegedly distributed heroin and fentanyl-laced heroin in the Chicago area, with drivers dispatched to make deliveries after customers placed orders on a telephone hotline.  The defendants have pleaded not guilty.  The investigation was jointly conducted by OCDETF and HIDTA, with assistance from the Cook County State’s Attorney’s Office, DEA, IRS-CI and CPD.
• JACQUELINE GREEN, a former technician at a Chicago pharmacy, was sentenced in July to a year in prison for stealing thousands of pills of hydrocodone and selling them for a profit.  Green, of Chicago, and co-defendant ELIZABETH CRUZ, of Stone Park, received at least $10,800 in proceeds from selling the stolen pills.  Cruz pleaded guilty and will be sentenced on Nov. 20, 2019.  DEA conducted the investigation.
• The former owner of a Chicago medical clinic was sentenced in May to more than six years in prison for selling opioid prescriptions to patients whom he knew lacked a legitimate medical need for the drugs.  MOHAMMED SHARIFF directed a clinic physician, DR. THEODORE GALVANI, to prescribe oxycodone, hydrocodone, and other powerful opioids without conducting a physical exam or performing any medical tests.  Dr. Galvani pleaded guilty and was sentenced in July to six years in prison.  The investigation was conducted by DEA, FBI, IRS-CI, and the U.S. Department of Health and Human Services Office of Inspector General. 

Other Significant Drug Trafficking Prosecutions

The U.S. Attorney’s Office targets traffickers who bring illegal drugs into Illinois from other states or countries, with a focus on organizations or individuals who use guns, violence and threats of violence to protect and promote their illegal businesses.  The U.S. Attorney’s Office works directly with the Cook County State’s Attorney’s Office to ensure that individuals trafficking drugs are charged with appropriate offenses in either federal or state court.  Examples of recent drug trafficking prosecutions include:

• Federal law enforcement announced this month that it seized more than 14 kilograms of cocaine and 15 firearms as part of an investigation that dismantled a Texas-to-Chicago narcotics pipeline and resulted in charges against ten defendants.  During the investigation, dubbed “Operation Grapevine,” authorities shut down a drug stash house in a lakefront condominium in Chicago.  The probe was led by HIDTA, with support from OCDETF.  Also participating were DEA, ATF, FBI, HSI, and CPD.
• Two high-ranking members of the Sinaloa drug cartel in Mexico were recently sentenced for their roles in transporting large amounts of cocaine and other drugs to the Chicago area.  JESUS RAUL BELTRAN LEON and VICENTE ZAMBADA-NIEBLA are among 20 members of the Sinaloa or Beltran-Leyva drug cartels to be charged in federal court in Chicago.  The Chicago-based investigation, led by DEA, has resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamines, and 78 kilograms of heroin.  Beltran Leon was sentenced in August to 28 years in prison, while Zambada-Niebla was sentenced in May to 15 years.
• A federal judge in July sentenced MARIO HERRERA, formerly of Chicago, to five years in prison for laundering illegal drug proceeds on behalf of two cartels in Mexico.  Herrera was among 30 defendants charged as part of the Chicago-based federal investigation dubbed “Operation King’s Gold.”  The conspirators laundered more than $100 million in narcotics proceeds on behalf of the Jalisco New Generation and Sinaloa cartels.  HSI, IRS-CI and ATF led the investigation, with assistance from DEA, CPD, USMS, Cook County Sheriff’s Office, DuPage County Sheriff’s Office, Buffalo Grove Police Department, and the Joliet Metropolitan Area Narcotics Squad.

Community Partnerships

The revitalized PSN program continues to invest resources in many violence-prevention initiatives.  Members of the U.S. Attorney’s Office have participated in offender notification meetings and youth outreach forums.  Offender notification meetings provide an opportunity for individuals who have been convicted of a state or federal offense to make an informed choice not to engage in further criminal activity. 

Researchers at Arizona State University found that the forums have a positive influence on the offenders’ perception of police and help create an understanding that criminal activity results in a higher risk to return to prison.  Researchers at Yale University found that ex-offenders who attend an offender notification meeting in Chicago are  30% less likely to commit a new offense than those who did not attend a meeting.

The quarterly youth forums assist children aged 13-17 to identify a path other than gang membership.  The youth forums are conducted in partnership with CPD, the Cook County Juvenile Temporary Detention Center, and the University of Chicago Crime Lab, which tracks the progress of the children to assess results.

~~~

To learn more about Project Safe Neighborhoods in the Northern District of Illinois, visit https://www.justice.gov/usao-ndil/programs/psn.

CHICAGO — A federal jury today convicted two Chicago Police officers of fraudulently obtaining search warrants and stealing cash and drugs from properties they searched.

Officers XAVIER ELIZONDO and DAVID SALGADO were assigned to a gang team in the Chicago Police Department’s Tenth District.  According to evidence at trial, the officers conspired to submit materially false information to state court judges to fraudulently obtain search warrants that enabled them to enter various properties and seize cash and drugs.  The officers would then steal the items and falsify police reports to conceal the thefts. 

Elizondo, 47, and Salgado, 39, both of Chicago, were found guilty on all counts against them, including conspiracy to commit theft, deprivation of civil rights, embezzlement, and obstruction of justice.  Salgado was also charged and convicted of making a false statement to the FBI.  Sentencings were set for Jan. 23, 2020, before U.S. District Judge Matthew F. Kennelly.

The convictions were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI.  The Chicago Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Sean J.B. Franzblau and Ankur Srivastava.

Obstruction of justice is punishable by up to 20 years in prison.  The embezzlement and civil rights counts each carry a maximum sentence of ten years, while the conspiracy and false statement counts are each punishable by up to five years.

ROCKFORD — A Rockford man was sentenced today by U.S. District Judge Philip G. Reinhard to 15 years in federal prison, to be followed by a lifetime term of supervised release, on a child pornography charge. 

GREGORY GREENE, 59, pleaded guilty on July 11, 2019, to one count of transporting child pornography via the internet.  In a written plea agreement, Greene admitted that on May 31, 2016, he shared a child pornography video over the internet depicting the lewd exhibition of a minor child.  Greene also admitted that on Dec. 13, 2016, he possessed a computer containing approximately 1,650 images of child pornography, and a thumb drive containing approximately 1,200 images and videos of child pornography, some of which involved minors under 12 years of age. 

In addition to the prison sentence, Greene also was ordered to pay $39,000 in restitution to certain victims.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.  The government was represented by Assistant U.S. Attorney Margaret J. Schneider.

CHICAGO — The operators of a suburban Chicago manufacturing company have been charged in federal court with knowingly hiring and harboring undocumented workers.

DORA KUZELKA, 81, of Elgin, KENNETH KUZELKA, 62, of Chicago, KARI KUZELKA, 56, of Elgin, and KEITH KUZELKA, 58, of Elgin, are charged with one count of knowingly harboring an illegal alien and one count of knowingly engaging in a pattern or practice of hiring illegal aliens.

The Kuzelkas knowingly hired at least 18 undocumented workers at KSO MetalFab Inc., a sheet metal fabrication company in Streamwood, Ill., according to a criminal complaint and affidavit filed in U.S. District Court in Chicago.  Keith Kuzelka left the company last year, while the three other Kuzelkas continue to serve in executive management positions, the complaint states.

Dora Kuzelka, Kenneth Kuzelka and Kari Kuzelka were arrested this morning, while Keith Kuzelka self-surrendered to authorities this afternoon.  All four defendants made initial appearances in federal court in Chicago this afternoon and were ordered released on recognizance bonds.  U.S. Magistrate Judge Sheila M. Finnegan scheduled status hearings for Oct. 29, 2019.

The complaint and arrests were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).  The U.S. Department of Labor and U.S. Social Security Administration provided valuable assistance.  The government is represented by Special Assistant U.S. Attorney Christine Young and Assistant U.S. Attorneys Christopher Parente and Michelle Petersen.

According to the complaint, HSI’s Chicago office conducted a civil audit of KSO MetalFab in 2017 and determined that 36 of the company’s 67 employees were suspected of using fraudulent work authorization documents to verify their eligibility for employment.  HSI served the company with a written notice of the suspected violations, and the company responded by attesting that it had terminated all 36 of the identified employees.  KSO MetalFab later re-hired at least 18 of the previously terminated workers by utilizing a staffing agency, the complaint states.  KSO MetalFab instructed the workers to go to the staffing agency so that they could return to the company after the audit, the charges allege.  Many of the workers used the same names that they previously used before the audit, the complaint states.

The public is reminded that a criminal complaint is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Knowingly harboring an illegal alien carries a maximum sentence of five years in prison, while knowingly engaging in a pattern or practice of hiring illegal aliens is punishable by up to six months in prison.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

Lamesha Conley of Chicago, Illinois, pleaded guilty today to conspiracy and identity theft charges related to a scheme to obtain fraudulent tax refunds using stolen identity information, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to documents filed with the court, starting around January 2014, Conley provided more than 6,000 stolen identities to Dominique King and Roxann Gist for the purpose of filing fraudulent income tax returns. Between January 2014 and July 2015, King and Gist used those stolen identities to file fraudulent income tax returns with the Internal Revenue Service (IRS) seeking more than $2.6 million in refunds. King and Gist directed that some of the refunds be mailed to Conley and other co-conspirators.

Conley is scheduled to be sentenced on Jan. 27, 2020. Conley faces a statutory maximum sentence of 20 years in prison for conspiracy to commit wire fraud and a two-year mandatory minimum sentence for aggravated identity theft, which will run consecutive to any other sentence imposed by the court. Conley also faces a period of supervised release, restitution, and monetary penalties.

King, Gist, and other co-defendants previously pleaded guilty for their roles in the scheme. King was sentenced to 30 months in prison and Gist was sentenced to 36 months in prison. They were ordered to pay $1,332,935 in restitution to the IRS.

Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Timothy M. Russo and Lee F. Langston of the Tax Division, who are prosecuting this case. Principal Deputy Assistant Attorney General Zuckerman also thanked the U.S. Attorney’s Office for the Northern District of Illinois for their substantial assistance in the case.

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

CHICAGO — A Chicago man has been charged in federal court with conducting an illegal sports gambling business and concealing the income in a bankruptcy proceeding.

MICHAEL FRONTIER, also known as “Ira Goldberg,” “Brian Seagal,” and “Matthew Sullivan,” provided bettors with gambling accounts at an online sportsbook based in Costa Rica, according to a 14-count indictment returned in U.S. District Court in Chicago.  Frontier paid a service fee to the sportsbook for use of its platform, and then personally collected or paid cash to the bettors depending on the outcomes of their bets, the indictment states. 

The charges allege that Frontier concealed his gambling income when he fraudulently obtained an order from the U.S. Bankruptcy Court discharging his debts, including a $1.5 million civil judgment against him for negligence in a motorcycle accident.  Frontier used the fraudulently-obtained bankruptcy order as leverage to ultimately settle the negligence case for only $4,500, the indictment states.

The indictment was returned Thursday.  It charges Frontier, 35, of Chicago, with five counts of money laundering, five counts of making a false statement in a bankruptcy case, two counts of bankruptcy fraud, one count of conducting an illegal gambling business, and one count of making a false declaration before the U.S. Bankruptcy Court.  Arraignment in federal court in Chicago has not yet been scheduled.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of the FBI; and Kathy A. Enstrom, Special Agent-in-Charge of the Chicago office of the IRS Criminal Investigation Division.  The United States Trustee Program provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Devlin N. Su and Erika Csicsila.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. 

Each count of money laundering carries a maximum sentence of 20 years in prison, while the other counts in the indictment are each punishable by up to five years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A federal judge has sentenced a 30-year employee of a McHenry County manufacturing firm to a year and a day in federal prison for stealing trade secret information while planning to work for a rival company in China.

ROBERT O’ROURKE, 59, of Lake Geneva, Wisc., was convicted earlier this year by a federal jury in Chicago on seven counts of theft of trade secrets.  In addition to the prison term, U.S. District Judge Andrea R. Wood on Wednesday also fined O’Rourke $100,000.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of the FBI.

“Theft of trade secrets is a serious offense with wide-ranging consequences to the victim companies and the United States economy,” Assistant U.S. Attorney Shoba Pillay argued in the government's sentencing memorandum. “A would-be insider thief must understand the consequences of stealing their employer's trade secrets in order to benefit competitors, particularly when those competitors are based in China.” 

Ms. Pillay and Assistant U.S. Attorney Christopher V. Parente represented the government.

According to evidence at trial, O’Rourke since 1984 worked for Dura-Bar, a Woodstock-based manufacturer of continuous cast-iron products.  O’Rourke held the positions of plant metallurgist, quality assurance manager and salesperson, and helped the company develop business in China and other locations.  In late 2013, O’Rourke began several months of negotiations to take a similar job with a rival firm in Jiangsu, China.

In September 2015, while still employed at Dura-Bar, O’Rourke accepted the job offer in China.  He then downloaded electronic data and documents belonging to Dura-Bar without authorization two days before officially leaving the company.  The following week, he packed up the proprietary information and went to O’Hare International Airport in Chicago to board a flight to China.  Federal authorities intervened at the airport and seized the stolen trade secrets from O’Rourke before he could travel to China.

ROCKFORD —A Rockford man was sentenced today before U.S. District Judge John Robert Blakey to a total of ten years in federal prison, to be followed by three years of supervised release, on firearms charges.

KYLAND WILLIS, 21, who was charged in two separate cases, pleaded guilty on June 28, 2019, to conspiracy to steal firearms from a licensed firearms dealer and two counts of stealing firearms from a licensed firearms dealer.

According to a written plea agreement, Willis broke into the store of a firearms licensee in Loves Park on Dec. 15, 2017, and stole approximately eleven firearms. On Dec. 27, 2017, Willis and another individual broke into the store of the same firearms licensee again and stole an additional 13 firearms. Willis and the other individual also attempted to break into the store of a second firearms licensee in Loves Park on Dec. 26, 2017.

On Jan. 3, 2018, Willis, co-defendant MARTAEVIEN Q. STEVENSON, 21, also of Rockford, and a third individual broke into the store of a firearms licensee in Belvidere, and stole 30 firearms. Stevenson admitted to attempting to break into the firearms licensee store a second time on Jan. 8, 2019. Willis, Stevenson and other individuals also attempted to break into the firearms licensee’s store a third time on Jan. 10, 2018.

Stevenson pleaded guilty on May 24, 2019, to conspiracy to steal firearms from a licensed firearms dealer and stealing firearms from a licensed firearms dealer. Stevenson was sentenced on Sept. 13, 2019, to four years and nine months in federal prison, to be followed by three years of supervised release.

The sentencings were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives. The investigations were conducted by ATF, the Loves Park Police Department, the Belvidere Police Department, and the Rockford Police Department. The Winnebago County Sheriff’s Office assisted in the investigations. The government was represented by Assistant U.S. Attorney Talia Bucci.

CHICAGO — Three men have been arrested in connection with a bank robbery in Elmwood Park earlier this week.  Law enforcement is also investigating whether the trio committed other recent bank robberies in Chicago and nearby suburbs.

ANDRES ADAME, 34, of Melrose Park, AARON FLORES, 21, of Chicago, and MANUEL MARTINEZ, 23, of Chicago, are charged with one count of bank robbery in connection with the Wednesday heist at U.S. Bank, 7312 W. Grand Ave. in Elmwood Park.

According to a criminal complaint and affidavit filed in U.S. District Court in Chicago, Adame and Martinez were wearing sunglasses and surgical masks when they entered the bank shortly after 2:30 p.m., approached the teller counter and demanded cash.  After the tellers complied with the demands, Adame and Martinez left the bank and drove off in a Honda CR-V sport-utility vehicle driven by Flores, the complaint states.  Law enforcement pursued the defendants into Chicago, where the defendants’ vehicle collided with another car and came to a stop in a yard near West Altgeld Street and North Neva Avenue, the complaint states.  Martinez was arrested at the scene, while Adame and Flores were taken into custody after a foot chase, the complaint states.

Flores and Martinez are scheduled to appear for detention hearings on Oct. 8, 2019, before U.S. Magistrate Judge Jeffrey I. Cummings.  Adame’s initial court appearance has not yet been scheduled.

The investigation was conducted by the FBI and the Chicago Police Department, in coordination with the Elmwood Park Police Department.

The complaint and arrests were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of the FBI; and Eddie Johnson, Superintendent of CPD.  The government is represented by Assistant U.S. Attorney Ashley A. Chung.

The robbery charge is punishable by up to 20 years in prison.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.  The public is reminded that a complaint is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

ROCKFORD —A Rockford man was sentenced today by U.S. District Judge John Robert Blakey on a federal drug conspiracy charge.

TYSHON T. WATSON (also known as "TY"), 24, was sentenced to four years and nine months in federal prison, to be followed by three years of supervised release. Watson pleaded guilty on June 28, 2019, to conspiring to distribute one kilogram or more of heroin.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of the FBI; Dan O’Shea, Chief of the Rockford Police Department; and Gary Caruana, Winnebago County Sheriff. The federal investigation was conducted by the FBI-led Rockford Area Violent Gang Task Force, which includes the above agencies as well as the Loves Park and Freeport Police Departments. The U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives also assisted in the investigation. The government is represented by Assistant U.S. Attorney Talia Bucci.

In a written plea agreement, Watson admitted that he worked for a drug-trafficking conspiracy distributing heroin to street-level customers in the Rockford area on a daily basis between May 2017 and November 2, 2017. Watson began selling approximately five grams of heroin per week for the conspiracy, and his heroin sales later increased to approximately ten grams of heroin per day. As part of the conspiracy, Watson and his co-conspirator shared a phone that was used to arrange heroin sales, and they warned each other about potential police surveillance in areas where they were conducting drug trafficking.

On the day of Watson’s arrest in November 2017, Watson possessed 63 baggies of heroin that he intended to distribute to the conspiracy’s street-level customers. Watson at times also distributed heroin to the conspiracy’s larger-quantity customers who were heroin dealers themselves. Watson admitted that the conspiracy distributed or possessed with intent to distribute over one kilogram of heroin.

ROCKFORD — A Rockford man was sentenced today to four years in federal prison on one count of armed bank robbery and one count of bank robbery. 

DEMONTRION PHILLIPS, 25, pleaded guilty earlier this year to the armed robbery of Alpine Bank, 2642 Charles St. in Rockford, on July 17, 2017, and the robbery of Northwest Bank, 3106 N. Rockton Ave. in Rockford, on June 13, 2017.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of FBI; and Dan O’Shea, Chief of the Rockford Police Department.  The investigation was conducted by the FBI Safe Streets Task Force, which includes representatives from the FBI; U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; Loves Park Police Department; Winnebago County Sheriff’s Department; and Rockford Police Department. The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.

According to a written plea agreement, Phillips and another individual robbed the Alpine Bank at approximately 5:48 p.m.  During the robbery, Phillips brandished a BB gun, placed a note and a white plastic garbage bag on the counter, and demanded money.  While the teller was filling up the bag with money, Phillips took back the note, jumped over the counter and started placing money in the bag.  Phillips then went to another teller, began putting money in his bag, then jumped back over the counter and fled the bank.  Phillips dropped the BB gun and some of the money as he ran to a waiting vehicle in a nearby parking lot.

Phillips also admitted that he robbed the Northwest Bank. At approximately 4:15 p.m., Phillips provided a teller with a note that indicated he had a gun and wanted money, and he threatened harm.  The teller took money out of the teller drawer and placed it on the counter.  Phillips then put the money in a brown plastic grocery bag, put the note back in his pocket and left the bank with the money. 

In both robberies, Phillips wore a disguise including a fake beard.

In addition to the prison term, U.S. District Judge John J. Tharp, Jr., ordered Phillips to pay full restitution.

CHICAGO — An Indiana man and his niece have been indicted on federal kidnapping and domestic violence charges for allegedly kidnapping and assaulting the man’s former girlfriend.

ROBERT SPEED and his niece, SHIRLEY SPEED, held the victim against her will and repeatedly assaulted her with various dangerous weapons from July 26, 2019, to July 31, 2019, according to an indictment returned Wednesday in federal court in Chicago.  According to a criminal complaint previously filed in the case, the assaults occurred at residences in Chicago and Gary, Ind., as well as a hotel in the Chicago suburb of South Holland, during which the victim was repeatedly punched, hit with a crutch, kicked in the head and body, and choked with items such as an electrical cord.  The victim, who had a previous romantic relationship with Robert Speed, was eventually released and treated in a hospital for serious injuries, according to the charges.

The indictment charges Robert Speed, 36, of Gary, Ind., and Shirley Speed, 24, of Chicago, with one count of kidnapping and one count of interstate domestic violence.  Arraignments are scheduled for Oct. 10, 2019, at 11:00 a.m., before U.S. Magistrate Judge Susan E. Cox.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of the FBI.  The Chicago Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Matthew L. Kutcher and Michelle Kramer.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. 

The kidnapping charge is punishable by a maximum sentence of life in prison, while the domestic violence charge carries a maximum sentence of ten years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — Federal law enforcement seized more than 14 kilograms of cocaine and 15 firearms as part of an investigation that dismantled a Texas-to-Chicago narcotics pipeline and resulted in charges against ten defendants.

During the investigation, dubbed “Operation Grapevine,” authorities shut down a drug stash house in a lakefront condominium in the Kenwood neighborhood of Chicago.  In addition to the cocaine and guns, law enforcement seized approximately $215,000 in cash, and gold and diamond jewelry with an estimated value of more than $30,000.

Arrests of the defendants were recently carried out in Illinois and Texas.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Robert J. Bell, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of the FBI; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Eddie Johnson, Superintendent of the Chicago Police Department.  Substantial assistance was provided by the IRS Criminal Investigation Division, U.S. Marshals Service, Cook County State’s Attorney’s Office, and Illinois State Police.  The government is represented by Assistant U.S. Attorneys Kelly Guzman, Katherine Neff Welsh and Brian Kerwin.

The probe was led by the Chicago High Intensity Drug Trafficking Area program (HIDTA), with support from the Organized Crime Drug Enforcement Task Force (OCDETF).  The programs partner with federal, state and local law enforcement agencies to identify, disrupt and dismantle the most serious drug trafficking organizations.

According to a criminal complaint filed in federal court in Chicago, DARRIN PULPHUS, 50, of Tinley Park, is the leader of a drug trafficking organization that obtained and distributed at least 23 kilograms of cocaine in the Chicago area in a three-month period earlier this year.  Pulphus obtained the drugs at least twice a month from a Texas-based supplier, CURTIS POPE, 40, of Houston, Texas, the complaint states.  Pope allegedly transported the cocaine from Texas in a semi-trailer truck.  Another Texas resident, SHAWN TURNER, 37, of Houston, Texas, helped facilitate the shipments, often flying from Houston to Chicago to assist Pulphus, the complaint states.

Once in the Chicago area, Pope delivered the drugs to Pulphus or other members of his crew at a truck yard in south suburban Riverdale, according to the complaint.  Pulphus then allegedly worked with various distributors to sell the drugs in the Chicago area.  The complaint charges four alleged distributors: DAVID BOWDEN, 51, DESHAWN WALLS, 34, DARRELL WILLIAMS, 45, and LAWRENCE JOHNSON, 38, all of Chicago.  Law enforcement seized a handgun and more than 900 grams of cocaine from Johnson after he obtained narcotics from Pulphus in April 2019, the complaint states.

The complaint also charges two alleged wholesale customers of Pulphus’s organization: ROME PERKINS, 60, and EDWARD HUMPHREY, 53, both of Chicago.  The tenth defendant, RICHARD HOWARD, 50, of Chicago, allegedly conspired with Pulphus in the distribution of cocaine.

All of the defendants have made initial appearances in federal court.  Johnson and Walls remain detained in federal custody, while Pulphus, Pope, Bowden, Williams, Howard, Humphrey, Turner and Perkins were ordered released on bond.

The public is reminded that a complaint contains only accusations and is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A Chicago man has been sentenced to 22 years in federal prison for recruiting minors on Facebook to participate in sex acts with him and others.

BRYAN OSBORNE, 30, posed as a woman on Facebook to send thousands of messages to intended victims, most of them minors.  Osborne enticed several children to agree to appear in sexually explicit films in exchange for a purported payment of thousands of dollars.  He told the minors that they would first need to engage in sex acts with a male producer named “Trey,” purportedly so that “Trey” could make sure the minors were suitable for filming.  Several of the minors agreed to the arrangement and engaged in sex acts with “Trey,” who turned out to be Osborne. 

Osborne admitted to engaging in sex acts or attempting to engage in sex acts with 14 minor victims.  Osborne often engaged in the sex acts with the minors inside and outside of a building in the Austin neighborhood on Chicago’s West Side.   He later fabricated various reasons for why the minors could not be paid.

Osborne pleaded guilty in 2017 to sex trafficking of a minor by force, fraud or coercion.  U.S. District Judge Sara L. Ellis on Monday sentenced Osborne to 22 years in prison, to be followed by 12 years of supervised release after imprisonment, and ordered him to pay restitution of $142,481 to the victims.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of the FBI; Kathy A. Enstrom, Special Agent-in-Charge of the Chicago office of the IRS Criminal Investigation Division; and Eddie Johnson, Superintendent of the Chicago Police Superintendent.  Members of FBI Chicago’s Child Exploitation and Human Trafficking Task Force assisted in the investigation.  The government is represented by Assistant U.S. Attorney Michelle Petersen.

According to evidence in the case, Osborne used various online personas to target children.  Osborne told some of the minors that they could be paid larger sums if they referred even younger children to him for participation in the purported films, including victims under the age of 12.

If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678, or log on to http://www.missingkids.com.  The service is available 24 hours a day, seven days a week.

CHICAGO — A Kane County man has been sentenced to 17 years in federal prison for producing and sharing images of child pornography.

MATTHEW BROWN, 31, of Montgomery, took photographs of a prepubescent minor and shared them with users on the Kik online messaging application.  Brown also possessed more than 240 other photographs and videos of child pornography.

Brown pleaded guilty last year to federal charges of production and transportation of child pornography.  In addition to the 17-year prison term, U.S. District Judge Sara L. Ellis on Thursday ordered Brown to pay $80,292 in restitution to the known victims depicted in the pornographic images and videos.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Larry L. Lapp, acting Special Agent-in-Charge of the Chicago office of the FBI.  The Cook County Sheriff’s Office provided valuable assistance.

“Defendant preyed upon the most innocent and vulnerable of victims – children,” Assistant U.S. Attorney John D. Mitchell argued in the government’s sentencing memorandum.  “These images are shocking and display the horrific exploitation of young children.”

According to evidence in the case, Brown accessed the Kik messaging application under the screennames “MaddMatter” and “ratsoff2u.”  He frequented Kik chatrooms that were set up for the purpose of exchanging child pornography.  Unbeknownst to Brown, one of the Kik users with whom he began communicating in 2015 was an undercover law enforcement officer.  Brown sent the undercover officer several images and videos of child pornography, including a sexually explicit photograph of a prepubescent minor that Brown had personally taken.

The images and videos were submitted to the National Center for Missing and Exploited Children, which determined that Brown possessed two series of child pornography.  Authorities have been able to identify some of the children who were exploited in the images and videos shared by Brown and others.  Some of the victims submitted statements to the Court in advance of Brown’s sentencing, detailing the harm caused by the production, distribution and possession of their images by individuals like Brown.

If you believe you are a victim of sexual exploitation, you are encouraged to call NCMEC at 1-800-843-5678, or log on to http://www.missingkids.com.  The service is available 24 hours a day, seven days a week.

ROCKFORD — A Rockford man was sentenced today by U.S. District Judge Philip G. Reinhard on a federal drug trafficking charge.  

MAURICE D. NEAL (also known as “Moe”), 37, was sentenced to 12 years and seven months in federal prison, to be followed by three years of supervised release.  Neal pleaded guilty on June 25, 2019, to distributing heroin. 

In a written plea agreement, Neal admitted that between October 2015 and September 2016, he operated a heroin trafficking business in the Rockford area, and maintained two cellphone lines as hotlines for customers to order and purchase heroin.  Neal typically sold user-quantity amounts of heroin, such as a gram or a half gram, but occasionally did larger transactions.  Neal admitted he engaged in a large number of transactions each day, selling at least ten to 15 grams of heroin a day, resulting in sales of at least 4,500 grams of heroin during the time period that he operated his heroin trafficking business.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian M. McKnight, Special Agent-in-Charge of the Chicago office of the U.S. Drug Enforcement Administration; and Brendan F. Kelly, Acting Director of the Illinois State Police. The case was investigated by the Rockford Resident Agency of the DEA's Chicago Field Office, and the Stateline Area Narcotics Team (“SLANT”), a task force led by the Illinois State Police.  The U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives, the Federal Bureau of Investigation, the Winnebago County Sheriff’s Department, and the Rockford Police Department assisted in the investigation. The government was represented by Assistant U.S. Attorney Margaret J. Schneider.

A co-defendant, QUINCY L. ATMORE (also known as “Q”), 47, of Rockford, pleaded guilty on Jan. 17, 2018, to distributing heroin.  Atmore was sentenced on May 9, 2018, to 17 years in federal prison. 

ROCKFORD — A Park Ridge man was sentenced today by U.S. District Judge Philip G. Reinhard to 14 years in federal prison, to be followed by three years of supervised release, for conspiring to commit extortion. 

ROBERT PANOZZO, 59, pleaded guilty to the charge on June 19, 2019. According to a written plea agreement, from Jan. 1, 2005, through Dec. 20, 2009, Panozzo conspired with JOSEPH D. ABBOTT, 40, formerly of Park City, and others, to extort money from an individual by actual and threatened force, violence, and fear. 

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois. The case was investigated by the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.

In 2005, Panozzo loaned money to the individual.  In 2006, the individual paid Panozzo in cash, which the individual believed was the last in a series of payments that satisfied his loans from Panozzo.  However, Panozzo told the individual that $100,000 was still owed as interest from the previous loans.  Panozzo admitted in the plea agreement that he recruited Abbott and others to cause harm to the individual and his property in order to coerce the individual to repay the loans from Panozzo.  On Oct. 5, 2006, Panozzo, Abbott and others confronted the individual at his place of business in McHenry County and demanded payment of the outstanding loans.  When the individual said he could not do so, Panozzo, Abbott and others struck the individual, causing injuries to his head and arms that required medical treatment.

Panozzo was incarcerated in the Illinois Department of Corrections from Nov. 3, 2006, to Sept. 25, 2008.  Panozzo admitted that after his release from IDOC and throughout 2009, he repeatedly called and left voicemail messages for the victim, demanding that he either pay off his loans or meet with Panozzo to discuss repayment.  On Feb. 8 and 11, 2009, Abbott left a note at the victim’s residence in McHenry County, demanding repayment of the $100,000.  Later that month, Abbott used a flammable liquid to set fire to a Dodge Caravan that was parked in the driveway of the victim’s residence.  Panozzo admitted that he had paid Abbott to set fire to the victim’s van.  On March 3, 2009, Panozzo called the victim’s residence and left a voicemail message that announced Panozzo intended to arrive at the victim’s residence within one hour. In April 2009, Panozzo and the victim engaged in a series of conversations in which Panozzo demanded repayment. On April 8, 2009, Abbott used an incendiary device to set fire to the contents of several trash cans and the garage located at the victim’s residence.  Panozzo also admitted that he had paid Abbott to “blow up” the victim’s residence.

Abbott was sentenced on July 26, 2019, to six and a half years in federal prison, to be followed by three years of supervised release, for conspiring to commit extortion.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division announced today a health care fraud law enforcement action in Detroit, Chicago and Minnesota.  Charges were filed against 20 individuals in the Eastern District of Michigan for their alleged involvement in Medicare fraud schemes resulting in $144.8 million in illegitimate billings.  In the Northern District of Illinois, charges were filed against 12 individuals for their alleged involvement in Medicare fraud schemes resulting in over $103 million in illegitimate billings. Of those charged in the two federal districts, seven were doctors or licensed medical professionals.  In addition, in the state of Minnesota, 21 defendants, including two licensed medical professionals, have been charged with defrauding Medicaid for almost $3 million. Minnesota’s Medicaid Fraud Control Unit (MFCU) investigated these cases.  

Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI and U.S. Health and Human Services-Office of Inspector General (HHS-OIG). 

The charges announced today aggressively target schemes billing Medicare, Medicaid and private insurance companies for medically unnecessary procedures, medical procedures that were never provided and prescription medications that often were never purchased and/or distributed to beneficiaries.

“Health care fraud robs taxpaying Americans and corrupts the relationship between doctors and patients,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “Today’s actions in the Midwest are further proof of the Department’s steadfast commitment to investigating and prosecuting those who put their personal greed above the public good.” 

“I applaud the actions taken by our law enforcement partners to seek out and hold accountable those who choose to defraud our health care programs,” said U.S. Attorney Matthew Schneider of the Eastern District of Michigan.  “These charges should send a strong message to health care professionals that theft from these vital programs will be met with serious consequences.”

“The abuse of our healthcare programs affects all taxpayers, who foot the bill to make coverage available,” said Special Agent in Charge Steven M. D’Antuono of the FBI’s Detroit Field Office.  “These offenders stole American taxpayers' hard-earned money to line their own pockets. We thank our federal and state partners for their collaborative efforts to stop this systemic fraud.”

“As we pursue these cases, our focus is always on the beneficiaries and taxpayers who rely on us to protect the integrity of Medicare programs,” said Special Agent in Charge Lamont Pugh III of the HHS-OIG Chicago Region.  “We will continue to work with our law enforcement partners to hold accountable anyone who steals taxpayer dollars and threatens the integrity of this vital benefit.”

*********

Among those charged in cases handled by Strike Force attorneys in the Eastern District of Michigan are the following:

James Letko, 46, of Pittstown, New Jersey; Steven King, 41, of Pembroke Pines, Florida; Patricia Flannery, 40, of Hellertown, Pennsylvania; Katherine Peterson, 33, of Millford, New Jersey; and Rami Lazeki, 40, of Plymouth, Michigan, were charged in an indictment filed Sept. 26 with one count of conspiracy to commit health care fraud and five counts of health care fraud.  The charges stem from an alleged $80 million, multi-prong health care fraud scheme run by Letko, the CEO of A1C Holdings; King, its chief compliance officer; Flannery and Peterson, members of its management team; and Lazeki, pharmacist in charge at All American Medical Pharmacy.  All five allegedly conspired to direct employees of multiple subsidiary pharmacies under A1C Holdings to conceal Letko’s ownership in the subsidiary pharmacies; falsify contracts with pharmacy benefit managers to conceal Letko’s ownership interest; classify subsidiary pharmacies as mail order when in fact they were retail pharmacies; authorize refills without patient consent and fail to collect co-pays to induce patients to accept refills of medically unnecessary medications and diabetic testing supplies.  The FBI and HHS-OIG investigated the case.  Assistant Chief Malisa Dubal of the Criminal Division’s Fraud Section is prosecuting the case.

Regina Black, 50, of Shelby Township, Michigan, owner of Rehabilitative Counseling and Behavior Services of America of Clinton Township, Michigan, was charged in an indictment filed Sept. 17 and unsealed today with five counts of health care fraud and three counts of wire fraud.  The charges stem from Black’s alleged role in a $4.9 million health care fraud scheme, in which she advertised and offered services, such as dancing, field trips and other social activities for Medicare enrollees at senior residential buildings.  Using the enrollees’ Medicare numbers, Black allegedly caused Medicare to be billed for individual and group psychotherapy services that were not medically necessary, not rendered and/or not otherwise eligible for reimbursement through Medicare.  The FBI and HHS-OIG investigated the case.  Trial Attorneys Steven Scott and Claire Sobczak of the Fraud Section are prosecuting the case.

Robert Cornfield, D.P.M., 55, of Rochester, Michigan, a podiatrist and owner of Robert H. Cornfield, DPM PC of Rochester, Michigan, was charged in an indictment filed Sept. 17 and unsealed today with five counts of health care fraud.  The charges stem from Cornfield’s alleged role in a $1.7 million health care fraud scheme in which Cornfield submitted or caused the submission of claims to Medicare for podiatric services he never provided.  Specifically, Cornfield allegedly defrauded Medicare by submitting claims for nail avulsions without actually performing the service.  From January 2010 through July 2019, Cornfield allegedly billed Medicare for more than 17,000 nail avulsion procedures, ranking him among the highest in the country for that procedure.  The FBI and HHS-OIG investigated the case.  Trial Attorneys Steven Scott and Jay McCormack of the Fraud Section are prosecuting the case.

Anthony Weinert, D.P.M., 48, of Oakland, Michigan, owner of Anthony Weinert DPM P.C. in Warren, Michigan, and Troy Surgicare in Troy, Michigan, was charged in an indictment filed Sept. 24 and unsealed yesterday with eight counts of health care fraud.  The charges stem from Weinert’s alleged role in a $1.7 million health care fraud scheme, in which Weinert submitted or caused the submission of claims to Medicare for podiatric services he did not provide.  Specifically, Weinert allegedly defrauded Medicare by submitting claims for nail avulsions, capsulotomies and mass removals without actually providing the services.  The FBI and HHS-OIG investigated the case.  Trial Attorneys Jay McCormack and Steven Scott of the Fraud Section are prosecuting the case.

Christopher Fratine, 52, of West Branch, Michigan, owner of Unity Home Health Care LLC of West Branch, Michigan, was charged in an indictment filed Sept. 26 with nine counts of health care fraud and three counts of wire fraud.  The charges stem from Fratine’s alleged role in an $18.2 million home health care fraud scheme in which he submitted or caused the submission of claims for home health episodes that were not provided.  The FBI, HHS-OIG, and Michigan State Police investigated the case.  Trial Attorney Steven Scott of the Fraud Section is prosecuting the case.  

Sharon King, 66, of Bloomfield Hills, Michigan, was charged in a superseding indictment filed Sept. 19 and unsealed today with three counts of conspiracy to pay and receive health care kickbacks.  One of the counts alleges that King engaged in these acts while on supervised release.  These charges come in addition to her original charge for conspiracy to commit health care fraud, which was originally filed in June 2018 and which remains pending.  The charges stem from King’s alleged role in a scheme to fraudulently bill Medicare in excess of $2.5 million for physician and home health services that were medically unnecessary, never provided and induced by kickbacks.  As part of the scheme, King allegedly provided kickbacks, including prescriptions for controlled substances, to Medicare beneficiaries who agreed to accept physician services from Thomas Mays, M.D. and referrals for home health services provided by Personal Touch, Inij Home Healthcare and other home health agencies.  These purported home health and physician services were allegedly often medically unnecessary, not actually provided and/or induced by health care kickbacks.  The FBI and HHS-OIG investigated the case.  Trial Attorney Jay McCormack is prosecuting the case, which Trial Attorney Tom Tynan of the Fraud Section initially handled.  

Farzana Haris, 59, of Canton, Michigan, owner and operator of Inij Home Health Care, was charged in an information filed Sept. 26 with one count of conspiracy to commit health care fraud. The charge stems from Haris’ alleged role in a scheme with co-conspirators Sharon King and Dr. Thomas Mays, M.D. to fraudulently bill Medicare approximately $1.1 million for home health services that were medically unnecessary, never provided and induced by kickbacks.  The FBI and HHS-OIG investigated the case.  Trial Attorney Jay McCormack is prosecuting the case, which Trial Attorney Tom Tynan initially handled.  

Charles Hobson Sr., 78 of Southfield, Michigan, co-owner and operator of Personal Touch Home Health Care, and Charles Hobson, Jr., 50, of Lathrup Village, Michigan, co-owner and operator of Personal Touch Home Health Care were charged in an information filed Aug. 23 with one count of conspiracy to pay and receive kickbacks and bribes in connection with a federal health care program. The charge stems from the Hobsons’ alleged role in a scheme with co-conspirator Sharon King, in which the Hobsons paid kickbacks to King and other patient recruiters in exchange for recruiting Medicare beneficiaries to Personal Touch. The FBI and HHS-OIG investigated the case.  Trial Attorney Jay McCormack is prosecuting the case, which Trial Attorney Tom Tynan initially handled.  

Mohamed Gomaa, 28, of Dearborn Heights, Michigan, a licensed pharmacist and owner of MedlifeRx Pharmacy of Auburn Hills, Michigan, was charged in an indictment filed Sept. 26 with four counts of mail fraud.  The charges stem from Gomaa’s alleged role in a $3.48 million scheme that dispensed expensive and medically unnecessary medications, using forged or fraudulent prescriptions, and sent them by mail to Medicare, Medicaid, BCBS and other private insurance beneficiaries who did not want or need them.  Gomaa then allegedly billed Medicare and the other various insurance programs and insurers for the high-cost drugs.  The FBI and HHS-OIG investigated the case.  Trial Attorney Patrick Suter of the Fraud Section is prosecuting the case.

Yogesh Pancholi, 40, of Northville, Michigan, owner of Shring Home Health Care (Shring) of Livonia, Michigan, was charged in an indictment filed Sept. 24 and unsealed yesterday with one count of conspiracy to commit health care fraud and wire fraud, two counts of health care fraud and two counts of money laundering.  The charges stem from Pancholi’s alleged role in a $2.8 million home health “bust out” scheme for the submission of request for advance payments or RAPs.  Pancholi allegedly submitted RAP claims through Shring for services not prescribed or rendered to Medicare.  The FBI and HHS-OIG investigated the case.  Trial Attorney Patrick Suter is prosecuting the case.

Kenneth Mitchell, D.P.M., 57, of Southfield, Michigan, a licensed podiatrist and minority owner of Urban Health Care Group LLC of Southfield, Michigan, was charged in a superseding indictment filed Sept. 17 and unsealed yesterday with one count of falsification of records in a federal investigation.  These charges come in addition to Mitchell’s original charges filed Sept. 17 consisting of one count of conspiracy to commit health care fraud and wire fraud and three counts of health care fraud.  The charges stem from Mitchell’s alleged role in a $1.8 million scheme by which he and co-conspirators submitted false and fraudulent claims for medically unnecessary podiatry and other services on behalf of Urban Health Care Group LLC.  HHS-OIG investigated the case.  Trial Attorney Patrick Suter of the Fraud Section is prosecuting the case.

Among those charged in cases handled by Strike Force attorneys in the Northern District of Illinois are the following:

Mark Sorensen, 50, of Chicago, Illinois, and Paulina Goncharova, 30, of Minneapolis, Minnesota, were indicted on Sept. 24 on one count of conspiracy to pay kickbacks and three counts of kickbacks.  Sorensen was the owner and Goncharova was the Vice President of Finance for Symed, a Medicare-enrolled durable medical equipment (DME) pharmacy in Chicago, Illinois.  The charges stem from Sorensen and Goncharova’s roles in a scheme to fraudulently obtain money from Medicare for braces including paying kickbacks to purchase signed doctors’ prescriptions and falsification of business records.  Between April 2015 and April 2018, Symed billed Medicare approximately $87 million, and was paid $25 million for DME claims.  Trial Attorney Leslie S. Garthwaite of the Fraud Section is prosecuting the case.

Altamash Mir, 43, formerly of Oak Brook, Illinois and Palos Hills, Illinois, owner of a home health “consulting” business and concealed owner of home health agencies; Muhammad Ateeq, 31, of Rawalpindi, Pakistan, a biller and concealed owner of home health agencies; Nadir Mir, 31, of Las Vegas, Nevada, manager of a home health agency; Tasneem Jamal, 66, formerly of Oak Brook, Illinois and Palos Hills, Illinois, administrator and nominee owner of a home health agency; Hamdeh Chatat, 37 of Highland, Indiana, administrator of a home health agency and a home health “consultant”; Bilal Malik, 41, of Palos Hills, Illinois, Las Vegas, Nevada, and San Bernadino, California, nominee owner of a home health agency; Kendria Cochran, 28, Chicago, Illinois, manager of multiple home health agencies; and Luis Ramos, 28, of Chicago Heights, Illinois, manager of multiple home health agencies, were charged on Sept. 26, 2019, in a 35-count indictment that alleges health care fraud, conspiracy to commit money laundering, concealment of money laundering, false statements relating to health care matters, and engaging in monetary transactions in criminally derived property of greater than $10,000 in value.  The charges stem from the defendants’ alleged roles in at least approximately a $40 million fraud scheme in which home health agencies were acquired using fake aliases and/or nominee owners and used to submit fraudulent claims for home health services that were never rendered.  Trial Attorney Patrick Mott and Assistant U.S. Attorney Jeremy Daniel are prosecuting the case.

Renato Duarte, Psy.D., 60, of Chicago, Illinois, was charged in an indictment filed Sept. 19 and unsealed today with six counts of health care fraud.  The charges stem from Duarte’s billing for providing psychological counseling services to patients who he did not see, including while he was traveling outside of the Chicago area.  This caused at least approximately $1.07 million in loss between June 2016 and April 2019.  Trial Attorney Leslie S. Garthwaite of the Fraud Section is prosecuting the case.   

*********

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

The Fraud Section leads the Medicare Fraud Strike Force (MFSF), which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, MFSF maintains 15 strike forces operating in 24 districts and has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

A Rockford woman was sentenced today in federal court before U.S. District Judge Philip G. Reinhard to 34 months in federal prison, to be followed by three years of supervised release, for selling and disposing of a firearm to a person she knew was a felon.

JASMINE C. TURNER, 26, pleaded guilty to the charge on June 12, 2019. According to a written plea agreement, Turner purchased a Glock .45-caliber pistol and a Diamondback 5.56-caliber pistol in May 2017 for her boyfriend at the time. Turner knew that her boyfriend previously had been convicted of second-degree murder, a felony. Turner admitted that she purchased the firearms at her boyfriend’s request and transferred the firearms to him shortly after purchasing them.

In addition, Turner admitted in the plea agreement that in April 2017 she made a false statement to a licensed firearms dealer in connection with the purchase of another firearm. Turner admitted that she falsely represented on a written form that she was the actual buyer of the firearm, when, in fact, Turner was buying the firearm for another individual. That individual was a friend-of-a-friend of Turner. Turner admitted that directly after the purchase, she gave the firearm to her friend to deliver to the other individual.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; and Dan O’Shea, Chief of the Rockford Police Department. The government is represented by Assistant U.S. Attorney Talia Bucci.

CHICAGO — A north suburban man has been sentenced to 15 years in federal prison for enticing underage girls to engage in sex acts with him.

CASEY IRELAND, 36, of Antioch, pleaded guilty earlier this year to one count of enticement of a minor to engage in criminal sexual activity, and one count of attempted enticement of a minor to engage in criminal sexual activity.  U.S. District Chief Judge Rebecca R. Pallmeyer imposed the 15-year sentence Thursday in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Leo Lamont, Special Agent-in-Charge of the Naval Criminal Investigative Service, Resident Agency Great Lakes.  Valuable assistance was provided by the Antioch Police Department and law enforcement authorities in Wisconsin.  The government is represented by Assistant U.S. Attorney A.J. Dixon.

Ireland admitted in a plea agreement that in the spring of 2017 he had sex with two 15-year-old girls from Wisconsin.  Ireland began communicating with the girls via online messaging applications. 

On May 18, 2017, and June 1, 2017, Ireland drove to Wisconsin to pick up the first victim at her high school, and then drove her back to his home in Antioch to engage in sex acts.  On May 31, 2017, Ireland arranged to pick up the second victim at a park near her home in Wisconsin, and then drove her to his home to engage in sex acts.

After the second victim informed law enforcement about her encounter with Ireland, authorities took control of her messaging account and reestablished communication with him.  During subsequent messages, Ireland and law enforcement – posing as the victim – arranged for Ireland to pick up the victim at the same park near her home to engage in another sexual encounter.  When Ireland drove to the park on June 7, 2017, he was arrested.

If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678, or log on to http://www.missingkids.com.  The service is available 24 hours a day, seven days a week.

CHICAGO — A Chicago woman has been indicted on federal charges for allegedly operating a prostitution business in the city’s West Town neighborhood.

JESSICA NESBITT, also known as “Madame Priscilla Belle,” 31, is charged with seven counts of using interstate commerce to facilitate prostitution, three counts of illegally structuring cash withdrawals to evade financial reporting requirements, one count of conspiracy to use interstate commerce to facilitate prostitution and transport and entice an individual across state lines to engage in prostitution, one count of enticing an individual across state lines to engage in prostitution, and one count of transporting an individual across state lines to engage in prostitution. 

The indictment was returned last month and ordered unsealed today.  Nesbitt pleaded not guilty at her arraignment this afternoon before U.S. Magistrate Judge Maria Valdez.  A status hearing was scheduled for Oct. 15, 2019, at 9:30 a.m., before U.S. District Judge Robert M. Dow, Jr.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Kathy A. Enstrom, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  The government is represented by Assistant U.S. Attorneys Devlin N. Su and Erika Csicsila.

According to the indictment, Nesbitt owned and operated a company called Kink Extraordinaires, which employed several individuals who engaged in prostitution.  Acts of prostitution were carried out in a residential building in the 2400 block of West Augusta Boulevard in Chicago, according to the indictment.  Nesbitt advertised prostitution services on multiple websites, including backpage.com, eros.com and Gentlemen’s Pages, as well as a website that Nesbitt operated called kinkextraordinaires.com, the indictment states.  Nesbitt also emailed her clients invitations to paid sex and fetish parties, including “Halloween Mischief” and “Black Tie Bizarre,” the indictment states.

In addition to activity in Chicago, Nesbitt arranged for herself and her employees to perform acts of prostitution in California, Washington, D.C., Florida, Indiana, Nevada, and Wisconsin, the indictment states.

The public is reminded that an indictment is not evidence of guilt.  The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The enticement charge is punishable by up to 20 years in prison, while the transportation and structuring charges carry a maximum sentence of ten years.  The charges of conspiracy and using interstate commerce to facilitate prostitution are each punishable by up to five years.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — Two men have been indicted on federal firearm charges for conspiring to straw purchase 19 handguns in Wisconsin and re-sell them in Chicago.

Wisconsin resident KIRK VALENTINE purchased the firearms at retail stores, pawn shops and gun shows, and falsely certified on required forms that he was the actual buyer, according to an indictment returned in U.S. District Court in Chicago.  In reality, Valentine was a straw purchaser who knowingly bought the guns at the direction of FRANCISCO ROCHA, a Chicago resident who identified which firearms he wanted and paid Valentine a premium over the list prices, the indictment states.  In the first six months of 2018, the pair caused at least 19 handguns to be purchased in Wisconsin and transported to Chicago, where Rocha and others re-sold and distributed them, the indictment states.

The indictment was returned Aug. 1, 2019, and ordered unsealed Wednesday.  Valentine, 23, of La Crosse, Wisc., and Rocha, 28, are charged with conspiracy to deal firearms without a license, and unlawfully dealing and importing firearms.

“Straw purchasers and firearm traffickers enable unlawful possession of guns and the violence that may follow,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  “Fighting violent crime is a top priority in our office, and we are committed to holding accountable those who engage in illicit firearm transactions.”

U.S. Attorney Lausch announced the charges along with Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI, and Eddie Johnson, Superintendent of the Chicago Police Department.  The U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives provided assistance.  The government is represented by Assistant U.S. Attorneys Albert Berry III and Elizabeth Pozolo.

“Straw purchasing firearms is not a victimless crime,” said FBI Assistant SAC Larry L. Lapp.  “It is a serious danger to our communities.  This indictment demonstrates the FBI’s commitment to working with our law enforcement and prosecutorial partners to help stop the flow of illegal guns into our neighborhoods.”

“We are going to continue to use the full weight of the Chicago Police Department and U.S. Justice Department to send a clear message that we will not tolerate the proliferation and use of illegal guns in Chicago,” said CPD Supt. Johnson.  “This case is the latest example of the daily work police officers, federal agents and United States Attorneys are doing to safeguard communities and create a culture of accountability for gun offenders.”

During the investigation, law enforcement utilized ATF’s National Integrated Ballistic Information Network.  NIBIN is a proven investigative and intelligence tool that can link firearms from multiple crime scenes, allowing law enforcement to quickly disrupt shooting cycles.  NIBIN is the only national network that allows for the capture and comparison of ballistic evidence to aid in solving and preventing violent crimes involving firearms.

Rocha was arrested in Wisconsin on Aug. 9, 2019.  He pleaded not guilty Wednesday during his arraignment in federal court in Chicago before U.S. Magistrate Judge Gabriel A. Fuentes.  Rocha was ordered to remain in federal custody pending a detention hearing on Sept. 10, 2019, at 1:30 p.m.

Valentine self-surrendered to the Court on Aug. 5, 2019.  He pleaded not guilty during his arraignment that day in federal court in Chicago before U.S. Magistrate Judge Maria Valdez.  He was ordered released on bond, and a status hearing was scheduled for Sept. 17, 2019, before U.S. District Judge John Z. Lee.

The indictment describes seven firearm transactions in Wisconsin:

• March 8, 2018: Valentine purchased three handguns at Gander Outdoors in Onalaska, Wisc.
• March 23, 2018: Valentine purchased two handguns from a dealer at Bob and Rocco’s Gun Show in Onalaska, Wisc.
• April 13, 2018: Valentine purchased a handgun at Big Rooster Firearms in Sparta, Wisc.
• May 13, 2018: Valentine purchased two handguns at Ace Hardware in La Crosse, Wisc.
• May 17, 2018: Valentine purchased two handguns at Holmen Pawn Shop in Holmen, Wisc.
• May 19, 2018: Valentine purchased two handguns from a dealer at Bob and Rocco’s Gun Show in Onalaska, Wisc.
• May 19, 2018: Valentine purchased seven handguns from a dealer at Bob and Rocco’s Gun Show in Onalaska, Wisc.

Holding straw purchasers accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods – the Department of Justice’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, including by prosecuting individuals who illegally purchase firearms.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each count of the indictment is punishable by a maximum sentence of five years in prison.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A suburban Chicago man has been sentenced to eight and a half years in federal prison for using thousands of stolen credit cards to purchase luxury goods and services.

CAMERON YORK bought credit card account numbers, Social Security numbers, and other personal identifying information from online sellers, sometimes paying in Bitcoin.  He then used the stolen information to make thousands of dollars in fraudulent charges for various items, including a Jaguar XJL and shoes from luxury brands Maison Margiela, Balenciaga and Louis Vuitton.  York also opened accounts at ComEd and Nicor Gas in the names of identity theft victims, racking up unpaid utility balances.

York, 28, of Stone Park, pleaded guilty earlier this year to charges of wire fraud, money laundering, and aggravated identity theft.  U.S. District Judge Sharon Johnson Coleman imposed the 102-month sentence after a hearing Sept. 4, 2019, in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kathy A. Enstrom, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service Criminal Investigation Division; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Eddie Johnson, Superintendent of the Chicago Police Department.  The U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives provided valuable assistance.  The government was represented by Assistant U.S. Attorney Michelle Petersen.

York’s fraud scheme began in 2015 and continued until 2018.  Evidence in the case revealed that York wired or caused to be wired approximately $164,598 to the online sellers to purchase the stolen information.  In exchange, York received at least 8,796 unique credit card account numbers, of which he attempted to use at least 4,800 to make purchases.  York often bought expensive items at high-end retail stores and then boasted about his purchases on social media.  In some of the postings, York is shown wearing the items or commenting on his luxury lifestyle.

CHICAGO — A north suburban psychologist has been sentenced to six months in federal prison and fined $100,000 for submitting false claims to private insurers and Medicare.

PAMELA ANTELL, also known as Pamela Gruenhut, operated a psychology practice in Glenview.  From 2011 to 2018, Antell submitted fraudulent claims to private insurers and Medicare for mental health services that were not rendered.  Some of the fraudulent claims were submitted for an individual who was not actually a patient, while in other instances Antell was not in Illinois on the dates she claimed to have provided treatment.  Antell also attempted to obstruct justice by instructing a former patient to lie to investigators about the frequency of treatment sessions and the patient’s payment of copayments.

Antell, 67, of Deerfield, pleaded guilty earlier this year to one count of health care fraud.  In addition to the prison term and fine, U.S. District Judge Jorge L. Alonso on Friday ordered Antell to pay $1,464,810 in restitution to the insurers and Medicare.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The government was represented by Assistant U.S. Attorneys Kelly Greening and L. Heidi Manschreck.