Northern District of Illinois

Husband and wife co-owners of a Chicago-area home health agency pleaded guilty today for their roles in a scheme to obtain millions of dollars in Medicare reimbursements through the payment of kickbacks for patient referrals.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney John R. Lausch Jr. of the Northern District of Illinois, Special Agent in Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.  

Carmencita Agno, 52, and Emmanuel Agno, 54, both of Streamwood, Illinois, each pleaded guilty to one count of conspiracy to offer and pay kickbacks before U.S. District Court Judge Sharon Coleman of the Northern District of Illinois.  Sentencing has been scheduled for Sept. 19, 2019, before Judge Coleman.

As part of their guilty pleas, Carmencita Agno and Emmanuel Agno each admitted that they caused Renaissance Home Health Services Inc. (Renaissance) of Elk Grove Village, Illinois, a home health agency they both co-owned, to make concealed kickback payments to patient marketers and other sources of Medicare patient referrals.  As a result of these illegal kickback payments, Renaissance improperly obtained approximately $1.6 million in profits.  Carmencita Agno and Emmanuel Agno further admitted that they caused Axis Healthcare Services Inc. (Axis) of Rolling Meadows, Illinois, another home health agency co-owned by Carmencita Agno and for which Emmanuel Agno served as the administrator, to make approximately $365,000 in illegal kickback payments to Maristel Canete, 49, formerly of Streamwood, a patient marketer.  In order to conceal the illegal nature of the payments to Canete, the conspirators caused Axis to enter into sham contracts with companies set up by Canete for receiving the payments.

Carmencita Agno and Emmanuel Agno were charged along with Canete and Antonio Clavero, age 50, of Schiller Park, Illinois, in a superseding indictment returned on June 16, 2016.  Clavero pleaded guilty on Sept. 29, 2017, and is awaiting sentencing; Canete is a fugitive. 

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

This case was investigated by the FBI and HHS-OIG.  Trial Attorney Patrick Mott of the Criminal Division’s Fraud Section is prosecuting the case. 

The Medicare Fraud Strike Force 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, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the 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.

 

CHICAGO — A high-level member of the Four Corner Hustlers street gang has been arrested on federal drug charges for allegedly selling wholesale quantities of heroin on the West Side of Chicago.

RAYMOND BETTS, 52, of Riverdale, is charged with conspiracy to possess a controlled substance with the intent to distribute.  A criminal complaint filed in federal court in Chicago accuses Betts of selling or directing sales of heroin on eight occasions from December 2018 to March 2019.  Seven of the alleged sales occurred in the Austin neighborhood of Chicago, while one deal was allegedly conducted in south suburban Riverdale. 

Two other alleged members of the gang are also charged in the conspiracy: ANGELA BELL, 48, of Chicago, and MAURICE WILLIAMS, 50, of Riverdale.  All three defendants were arrested Wednesday.  Bell will appear for a detention hearing on Friday at 1:30 p.m. before U.S. Magistrate Judge Sunil R. Harjani in Chicago.  Judge Harjani scheduled detention hearings for Williams and Betts for Monday at 2:45 p.m.

The charges and arrests were 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 and Explosives; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Thomas J. Dart, Cook County Sheriff; and Eddie Johnson, Superintendent of the Chicago Police Department.  Assistant U.S. Attorneys Katie M. Durick and Kalia Coleman represent the government.

The multi-year investigation was conducted with the Organized Crime Drug Enforcement Task Force (OCDETF) and the High Intensity Drug Trafficking Area Task Force (HIDTA).  The mission of the task forces, which are comprised of agents and officers from numerous federal, state and local law enforcement agencies, is to identify, disrupt, and dismantle the most serious drug trafficking organizations.

According to the complaint, Betts operates a drug trafficking organization comprised of members or associates of the Four Corner Hustlers.  Betts is a high-ranking member of the gang and the only one to hold the title of “Prince,” according to the complaint.  Betts is also the founder and leader of an enforcement or security faction of the Four Corner Hustlers known as the “Body Snatchers,” the complaint states.

The complaint describes eight transactions for a total of approximately 136 grams of heroin.  The seven deals in Chicago allegedly occurred in the 5300 block of West Washington Boulevard, while the Riverdale transaction occurred in an alley near the 13800 block of South Edbrooke Avenue in the south suburb, according to the complaint.  Unbeknownst to the defendants, the buyer was confidentially working on behalf of law enforcement, the complaint states.

The public is reminded that charges contain only accusations and are 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 conspiracy charge is punishable by up to 40 years in prison.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — The former owner of a Chicago medical clinic was sentenced today to more than six years in federal prison for selling opioid prescriptions to patients whom he knew lacked a legitimate medical need for the drugs.

MOHAMMED SHARIFF, who owned Midtown Medical Center in Chicago’s Uptown neighborhood, conspired with a physician to sell oxycodone, hydrocodone, and other medications to patients whom they knew lacked a medical reason for taking the drugs.  At Shariff’s direction, the physician, DR. THEODORE GALVANI, wrote prescriptions for the powerful opioids without conducting an appropriate physical examination or performing any medical tests.  Dr. Galvani often met with more than 70 patients per day, sometimes seeing them in groups of two or more at the same time.  At Shariff’s direction, a “crew leader” organized groups of people to obtain opioid prescriptions from Dr. Galvani, often leading to long lines that stretched beyond the clinic’s door.

Shariff, 68, of Lincolnwood, pleaded guilty last year to one count of conspiracy to knowingly dispense controlled substances outside the usual course of professional practice and without a legitimate medical purpose.  U.S. District Judge Harry D. Leinenweber imposed a 75-month sentence in federal court in Chicago.

Dr. Galvani, of Spring Grove, previously pleaded guilty to drug conspiracy charges.  He is awaiting sentencing.

Shariff’s sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Jeffrey Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Tara Sullivan, Acting Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Health and Human Services Office of Inspector General.

“The defendant chose to make his living in a vitally important industry,” Assistant U.S. Attorney Peter M. Flanagan argued in the government’s sentencing memorandum.  “Rather than devote himself to people in need of fundamental care, however, he showed an abject disregard of patients and perverted his companies into engines of unlawful profit.”

“This announcement sends a clear message to the medical professionals who exploit their power, prey on the vulnerable, and violate controlled substance laws: you will be investigated and held accountable to the fullest extent,” said DEA SAC McKnight.  “It also highlights the significance of federal law enforcement and prosecutors working together.”

According to Shariff’s plea agreement, individuals paid $100 to $200 in cash to Shariff and Galvani in exchange for the improper prescriptions.  For individuals insured by Medicare, Shariff and Dr. Galvani prescribed the opioids and then submitted or caused others to submit false claims to Medicare, seeking reimbursement for purported office visits with those individuals, the plea agreement states.  From February 2012 to March 2013, Shariff and Dr. Galvani received a total of at least $584,188 through the improper prescription scheme.  During the same period, the pair was responsible for prescribing more than two kilograms of oxycodone, more than 595,000 hydrocodone pills, and more than 190,000 alprazolam pills (commonly known as Xanax), to individuals whom they knew had no legitimate medical need for those drugs.

In addition to the improper prescriptions, Shariff attempted to carry out a separate fraud scheme involving a home health care company that he owned, Elgin-based Home Health Resource LLC.  In a May 2016 meeting in Chicago, Shariff offered to pay a physician $500 each time the doctor certified a Medicare beneficiary as eligible for home health care and referred the patient to Shariff’s company.  Unbeknownst to Shariff, the physician was cooperating with law enforcement, and their conversation was surreptitiously recorded.  Shariff told the cooperating physician that Shariff instructed nurses at the company to “tell the patient you are homebound,” and that “when the doctor come, don’t say that you go out and drive and this and that.  Don’t tell anybody you drive, don’t tell anybody you’re taking the bus, even going to the groceries.  If anybody asks, ‘I stay home.  I’m homebound.’”

CHICAGO — A former high-ranking member of the Sinaloa drug cartel in Mexico was sentenced today to 15 years in prison for his role in trafficking large amounts of illegal drugs to the Chicago area.

VICENTE ZAMBADA-NIEBLA conspired with other Sinaloa members to import and distribute large quantities of illegal drugs into the United States.  From approximately 1996 to 2008, Zambada-Niebla oversaw shipments of narcotics from Central and South America into Mexico and eventually into the U.S.  The cartel covertly transported the drugs via private aircraft, submarines, container ships, fishing vessels, buses, tractor-trailers, automobiles, and other methods.  Zambada-Niebla also oversaw the corresponding transfer of drug proceeds back to Mexico.

Zambada-Niebla, 44, has been in law enforcement custody since March 2009.  He pleaded guilty in 2013 to a drug conspiracy charge and agreed to cooperate with the U.S. government in its efforts to dismantle the Sinaloa Cartel and one of its rivals, the Beltran-Leyva organization, and hold their leaders accountable in U.S. courts.

U.S. District Chief Judge Ruben Castillo imposed the 15-year sentence in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration.  Valuable assistance was provided by the Internal Revenue Service Criminal Investigation Division in Chicago, and the Chicago Police Department.

“Zambada-Niebla played a major role in flooding the streets of Chicago with dangerous narcotics,” said U.S. Attorney Lausch.  “Not only has he been brought to justice for his actions, but his extensive cooperation led to charges against dozens of other high-level drug traffickers in courts throughout the United States.”

“The DEA law enforcement team and prosecutorial partnerships continue to thrive and this sentencing is just one result of those great partnerships,” said SAC McKnight.  “Members of the Sinaloa Cartel’s leadership have been held accountable for their actions.  DEA will continue to focus investigative efforts to arrest the remainder of the Sinaloa Cartel leaders who are operating in Mexico to face justice in the United States.”

Zambada-Niebla is one of more than 20 members of the Sinaloa and Beltran-Leyva cartels to be indicted in federal court in Chicago.  The investigation has resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamines, and 78 kilograms of heroin.

CHICAGO — A federal grand jury today indicted City of Chicago Alderman EDWARD M. BURKE on racketeering and bribery charges for allegedly abusing his position to solicit and extort private legal work and other benefits from companies and individuals with business before the city.

The 19-count indictment accuses Burke of corruptly soliciting work for his private law firm from companies involved in redevelopment projects at the Old Main Post Office in downtown Chicago and a fast food restaurant in Burke’s ward on the Southwest Side.  It also alleges that he corruptly attempted to assist a business owner with a development on the Northwest Side shortly after the business owner told Burke that he would engage Burke’s law firm.  The firm, Klafter & Burke, specialized in seeking property tax reductions for corporate clients. 

The charges also allege that Burke threatened to oppose a Chicago museum’s admission fee increase because the museum failed to respond to Burke’s inquiry about an internship at the museum for a child of Burke’s friend.  

The indictment was returned today in U.S. District Court in Chicago.  It charges Burke, 75, of Chicago, with one count of racketeering, two counts of federal program bribery, two counts of attempted extortion, one count of conspiracy to commit extortion, and eight counts of using interstate commerce to facilitate an unlawful activity. 

The indictment also charges two other individuals: PETER J. ANDREWS, an employee in Burke’s 14th Ward office; and CHARLES CUI, a Chicago real estate developer.  Andrews is accused of conspiring with Burke to extort the operator of the fast food restaurant, while Cui allegedly steered private legal work to Burke in an effort to influence and reward the alderman in connection with permitting and tax increment financing for the Northwest Side development.  Andrews, 69, of Chicago, is charged with one count of attempted extortion, one count of conspiracy to commit extortion, two counts of using interstate commerce to facilitate an unlawful activity, and one count of making a false statement to the FBI.  Cui, 48, of Lake Forest, is charged with one count of federal program bribery, three counts of using interstate commerce to facilitate an unlawful activity, and one count of making a false statement to the FBI.

Arraignments for Burke and Andrews are scheduled for June 4, 2019, at 10:00 a.m., before U.S. Magistrate Judge Jeffrey Cole.  Arraignment for Cui has not yet been scheduled.

The indictment 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 City of Chicago Inspector General’s Office and the Amtrak Office of Inspector General provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Amarjeet Bhachu, Diane MacArthur, Matthew Kutcher, Sarah Streicker and Timothy Chapman.

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.

Racketeering, attempted extortion, and conspiracy to commit extortion are each punishable by up to 20 years in prison.  Federal program bribery is punishable by up to ten years.  Using interstate commerce to promote unlawful activity and making a false statement to the FBI are each 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.

CHICAGO — A southwest suburban man who described himself as a “one stop shop” for narcotics and firearms has been sentenced to eleven and a half years in federal prison.

ANTOINE JACKSON, 42, of Tinley Park, sold heroin, three guns and ammunition to an individual in the summer of 2017.  The sales netted Jackson a total of $6,565 in cash.  Unbeknownst to Jackson, the buyer was an informant working on behalf of law enforcement.  Jackson also sold heroin to the informant on later occasions, earning an additional $4,500.

Jackson pleaded guilty last year to one count of dealing firearms without a license, one count of distribution of a controlled substance, and one count of using and carrying a firearm during a drug trafficking crime.  U.S. District Judge Ronald A. Guzman on May 23, 2019, imposed a 138-month prison sentence.

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 the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.  Substantial assistance was provided by the Chicago Police Department, Matteson Police Department, Tinley Park Police Department, and Will County Metropolitan Area Narcotics Squad.

“In a city that has seen shootings and homicides in astronomical numbers, illegal dealing of firearms should not be tolerated,” Assistant U.S. Attorney Tobara S. Richardson argued in the government’s sentencing memorandum.  “The collateral effect of drug trafficking is to flood the streets with these substances that breed addiction and violence and that undermine the safety of communities.”

Jackson admitted in a plea agreement that he sold heroin and guns to the informant in three transactions in June 2017.  Two deals occurred at Jackson’s residence in Tinley Park, while a third transaction was held in a Tinley Park forest preserve.  During the deal in the forest preserve, Jackson showed the informant a gun that was tucked in Jackson’s waistband. 

The guns sold by Jackson included an AK-47 rifle and two handguns, with extended magazines for each of them.  While arranging one of the deals with the informant, Jackson referred to himself as a “one stop shop” for firearms and narcotics.

Jackson also admitted in his plea agreement that he sold the informant heroin in December 2017 and March 2018.  Those sales netted Jackson $4,500.  The March 2018 deal occurred in a restaurant parking lot in Oak Forest.

Holding gun traffickers and drug dealers 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 federal law enforcement agencies have deployed the PSN program to attack a broad range of violent crime issues facing the district, including by prosecuting individuals who illegally traffic firearms or who carry firearms in connection with drug trafficking offenses.

CHICAGO — Eight Chicago-area residents are among ten individuals charged as part of an international investigation into online fraud schemes, including “romance scams” and “mystery shopper scams.”

The Chicago-based investigation, dubbed “Operation Gold Phish,” identified a variety of cyber-enabled fraud schemes allegedly carried out by individuals in the United States and Nigeria.  One of the alleged schemes involved “romance scams,” in which a defendant builds trust with a victim through a purported online romance before convincing the victim to send money to a predetermined recipient.  The defendants contacted victims via websites such as Match.com, Facebook, and Instagram.

Another cyber-enabled fraud allegedly carried out by the defendants involved a “mystery shopper scam,” in which victims were fraudulently offered opportunities to receive commissions for evaluating services such as Western Union and MoneyGram.  The victims received a check with instructions to deposit it in their bank accounts, withdraw the money in cash, and wire it to a predetermined third party.  The check turned out to be fake, and the victims were defrauded of the money they had withdrawn from their accounts, the charges allege.

Nine of the defendants were originally charged last year with conspiracy to commit wire fraud.  A federal indictment, returned May 16, 2019, added a tenth defendant and expanded the charges against the others.  The original defendants are in law enforcement custody – eight in the U.S. and one in Nigeria – while the newly added defendant remains at large.

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 Federal Bureau of Investigation; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  Valuable assistance was provided by the Nigerian Economic and Financial Crimes Commission.  Assistant U.S. Attorneys Peter S. Salib and Charles W. Mulaney represent the government.

Charged in the indictment are:

• Newly added defendant OLANIYI NASIRU OJIKUTU, 39, of Chicago (three counts of wire fraud)
• DANIEL SAMUEL ETA, also known as “Captain” and “Etaoko,” 35, of Skokie (12 counts of wire fraud, one count of conspiracy to commit a computer intrusion, one count of passport fraud)
• BABATUNDE LADEHINDE LABIYI, also known as “Junior,” 26, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• BARNABAS OGHENERUKEVWE EDJIEH, 29, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• SULTAN OMOGBADEBO ANIFOWOSHE, also known as “Ayinde,” 27, of Chicago (one count of wire fraud, one count of mail fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• BABATUNDE IBRAHEEM AKARIGIDI, also known as “AK,” 39, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• MIRACLE AYOKUNLE OKUNOLA, 21, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• OLUROTIMI AKITUNDE IDOWU, also known as “Idol,” 55, of Chicago (one count of wire fraud, one count of making a false statement to a financial institution, one count of passport fraud)
• ADEWALE ANTHONY ADEWUMI, 28, of Richardson, Texas (two counts of wire fraud)
• OLANIYI ADELEYE OGUNGBAIYE, also known as “DonChiChi,” 26, of Lagos, Nigeria (one count of wire fraud, one count of conspiracy to commit a computer intrusion).  Ogungbaiye is in law enforcement custody in Nigeria.

The eight defendants in U.S. custody pleaded not guilty during arraignments last week before U.S. Magistrate Judge Jeffrey Cole in Chicago.

In addition to the romance and mystery shopper schemes, the indictment accuses the defendants of engaging in other cyber-enabled scams.  In a scheme known as a “business email compromise,” the defendants fraudulently obtained usernames and passwords or sent spoofing email messages to employees claiming to be from a known business contact, instructing victims to change the wire instructions for bank payments, the charges allege.  Per the instructions given in the fraudulent emails, the victim then unknowingly wired funds to a bank account controlled by the defendants that had been opened in a fictitious name utilizing a fake passport, the indictment states.

The public is reminded that charges contains only accusations and are 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.  Making a false statement to a financial institution carries a maximum sentence of 30 years in prison; wire fraud is punishable by up to 20 years; passport fraud is punishable by up to ten years; and conspiracy to commit computer fraud 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.

CHICAGO — With the summer months approaching, 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.

The Department of Justice recently strengthened and enhanced PSN, an evidence-based program that serves as the centerpiece of the Department’s violent crime reduction strategy.  In the Northern District of Illinois, U.S. Attorney Lausch has deployed the enhanced PSN program to attack a broad range of violent crime issues facing the district.  Northern District of Illinois prosecutors target criminal organizations, leading to prosecutions of complex racketeering and drug trafficking enterprises, while also removing the most violent offenders from the community through prosecution of individual violent crime, drug, and firearm possession cases.  PSN resources are also invested in local prevention and reentry programs that seek to implement lasting reductions in crime through community engagement.

“Anyone thinking of engaging in gun violence or trafficking dangerous narcotics in Chicago this summer needs to know that a federal prosecution could await them,” said U.S. Attorney Lausch.  “A primary goal of our office is to reduce violent crime, and we will continue to use every available federal law enforcement tool to keep people safe this summer and beyond.”

The PSN program has enabled the U.S. Attorney’s Office to sustain and expand upon significant increases in the prosecution of violent crime and gun offenders.  For example, in the first seven months of the 2019 Fiscal Year (FY),[1] the U.S. Attorney’s Office charged more federal firearm offenses than were charged in each of the entire fiscal years of 2004 through 2016.  The number of charged firearm defendants in 2019 will likely substantially exceed the numbers charged in 2018 and 2017, which saw the most and second-most 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 four months of 2019, violent crime in Chicago was down 10%, according to CPD statistics.  CPD reported double-digit reductions in murders, robberies, burglaries, and carjackings, compared to the same four-month period in 2018.  Shooting incidents were down 8% in that period, which also marked a 41% reduction compared to 2016.

“We are working closer than ever with our federal, state, and local law enforcement partners to increase prosecutions of trigger-pullers and carjackers, and those who illegally use and possess firearms,” said U.S. Attorney Lausch.  “While we are making progress, we realize that a great deal of work remains to be done, especially in the summer months ahead.” 

Enforcement Actions

The U.S. Attorney’s Office works closely with U.S. law enforcement agencies, including the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), Homeland Security Investigations (HSI), Postal Inspection Service (USPIS), Internal Revenue Service (IRS) and U.S. Marshals Service (USMS) to investigate and prosecute violent offenders.   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 county and local departments throughout the district.

As part of these efforts, law enforcement in the Northern District frequently use an important tool for investigating violent crime and firearms cases:  ATF’s 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.

Thus far in Fiscal Year 2019, the U.S. Attorney’s Office has prosecuted hundreds of defendants for firearms offenses, drug trafficking, and other violent crimes.

• Racketeering Prosecutions

• “Combating violent street gangs is a top priority in our office,” said U.S. Attorney Lausch.
• This month, racketeering and murder charges were unsealed 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 defendants have pleaded not guilty to the charges.  The U.S. Attorney’s Office worked closely in the investigation with FBI and CPD.
• Racketeering charges were also brought this month against LUIS CONTRERAS, of Chicago, for allegedly committing murder to maintain and increase his position in the Latin Saints street gang.  The indictment alleges that members of the Latin Saints boasted about the gang on social media and intimidated rival gang members through acts of violence.  Arraignment is set for May 23, 2019.  ATF, HSI and CPD led the probe.
• Last month, two alleged members of the Evans Mob street gang were charged with committing murder in aid of racketeering.  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 the gang’s territory on Chicago’s South Side.  The defendants have pleaded not guilty.  The case was investigated by ATF and CPD.
• In October 2018, a joint federal and state investigation resulted in racketeering and murder charges against five alleged members of a Chicago street gang faction known as the Goonie Boss.  The federal indictment alleges that Goonie members and their associates terrorized the Englewood neighborhood on Chicago’s South Side and were responsible for eleven murders.  The defendants have pleaded not guilty.  The case was investigated by FBI 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 federal jury in Chicago convicted OMRAN ISMAIL, of Burbank, of conspiring to straw purchase several handguns on behalf of someone else.  Ismail faces up to ten years in prison when he is sentenced later this year.  HSI, CPD, and U.S. Customs and Border Protection participated in the probe.
• In February 2019, four defendants were charged as part of an investigation that disrupted a Missouri-to-Chicago firearms pipeline.  The probe, led by ATF and CPD, revealed that two Missouri residents brought numerous handguns to Chicago and supplied them to a convicted felon for eventual sale on the streets.  The defendants have pleaded not guilty.  One of the defendants who allegedly purchased some of the guns in Chicago, DERRICK CLAIBORNE, was also charged in a separate federal indictment with possessing multiple firearms and fentanyl-laced heroin in his residence in the South Loop neighborhood of Chicago.  Claiborne has pleaded not guilty in that case.
• In December 2018, JYMIL CAMPBELL, a convicted felon from Chicago, was sentenced to six and a half years in prison for illegally selling more than a dozen firearms in the city’s North Lawndale neighborhood.  Campbell sold ten handguns, three rifles, and four large-capacity magazines for $8,700.  Unbeknownst to Campbell, the two buyers were confidential informants working on behalf of law enforcement.  ATF led the probe.
• In October 2018, MONICA NAVEJAR, of Chicago, was indicted on firearm charges for conspiring to “straw purchase” handguns in Indiana on behalf of a convicted felon in Chicago.  The charges accuse Navejar of purchasing the guns from licensed dealers in Indiana and falsely certifying on federal forms that she was the actual buyer.  Navejar pleaded not guilty.  ATF, FBI, and CPD conducted the probe.

• Carjacking Prosecutions

• “Our message to would-be carjackers this summer is simple: Committing a senseless act of violence like carjacking could earn you a stay in federal prison for a long time,” said U.S. Attorney Lausch.
• Earlier this month, four teenagers were indicted on carjacking or weapons offenses 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 a maximum sentence of life in prison.  Arraignments are set for May 29, 2019.  The probe was led by FBI and CPD, with assistance from the Cook County State’s Attorney’s Office.
• In February 2019, the U.S. Attorney’s Office announced federal carjacking charges against five individuals in connection with violent carjackings in Chicago or the suburbs.  The defendants have pleaded not guilty.  The investigations were conducted by CPD, ATF and FBI, with assistance from ISP and the Cook County State’s Attorney’s Office. 

• Illegal Possession of Firearm Prosecutions

“If you are a felon and you are thinking about picking up a gun this summer, 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,” said U.S. Attorney Lausch.

The U.S. Attorney’s Office has brought numerous firearm cases as part of PSN and the recent addition of its Gun Crimes Prosecution Team strategy, which was created to enhance the prosecution of illegal firearm cases in certain police districts in Chicago.  Working collaboratively with federal and local law enforcement, and state prosecutors, the 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.  As noted above, over the past two years and during the current fiscal year, the U.S. Attorney’s Office has increased its prosecution of illegal possession and illegal use of firearms cases – charging more gun defendants in each of the past two years than in any single year in more than a decade.  More than 175 individuals have been charged with federal gun crimes thus far in FY 2019, according to preliminary data – an increase of over 80% from the number of firearm defendants charged federally during the same period in 2018.

“Our goal as prosecutors is not simply to bring more cases against more defendants, but to reduce the number of homicides and shootings in the Northern District.  We work with our law enforcement partners to identify cases that will have the greatest impact on the communities most plagued by violence, and where prosecutions and federal prison time are most likely to disrupt cycles of shootings and retaliation,” said U.S. Attorney Lausch.  “We recognize there are presently far too many gun crimes in the Chicago area, and we have increased our enforcement efforts in order to charge as many impactful cases as possible.”

Examples of felon-in-possession sentencings in federal court during FY19 include:

• GLENN WATKINS, of Chicago, was sentenced to six and a half years in prison for illegally possessing a .380-caliber semiautomatic handgun in the city’s Hermosa neighborhood.  Watkins was arrested in May 2017 for a traffic violation.  After being taken into custody, CPD officers discovered that Watkins had hidden the gun inside a cloth holster that was tied to his testicles with a white shoelace.
• KEESHON SAMSON, of Chicago, was sentenced to nearly six years in prison for illegally possessing a loaded semiautomatic handgun in the city’s South Chicago neighborhood.  The gun had been reported stolen in a burglary of a licensed firearms dealer a month earlier.  At the time he possessed the gun, Samson was on probation for a kidnapping offense.  CPD and ATF led the probe.
• IESHA STANCIEL, of Willowbrook, was sentenced to six years in prison for illegally possessing two firearms in DuPage County.  Stanciel also threatened an individual who was cooperating with law enforcement in the case.  In a message on the cooperating individual’s Facebook page, Stanciel posted emojis of a handgun and referred to the individual as a “snitch.”  FBI and ATF led the probe, with assistance from the Cook County Sheriff’s Office and Bolingbrook Police Department.
• LUIS REYNOSO, of Chicago, was sentenced to more than seven years in prison for illegally possessing two loaded semi-automatic handguns in a park in the Little Village neighborhood of Chicago.  Reynoso had previously been convicted of multiple felonies, including attempted murder.  The probe was conducted by FBI and CPD.
• MICHAEL SMITH, of Chicago, was sentenced to five and a half years in prison for illegally possessing a semiautomatic handgun with an obliterated serial number on the city’s Near West Side.  CPD officers observed Smith retrieve the gun from a parked vehicle and place it in his waistband.  When officers approached, Smith ran but was apprehended on the second-floor porch of a nearby residence.  At the time of the offense, Smith was on probation for a felony narcotics conviction.
• DIANTE DAVIS, of Chicago, was sentenced to ten years in prison for brandishing a loaded handgun while dealing drugs in Chicago’s Homan Square neighborhood.  During a deal with an undercover law enforcement officer, Davis pointed the gun at the officer and accused him of working for law enforcement, saying, “You’re probably recording me right now.”  As it turned out, the drug deal was indeed surreptitiously recorded by law enforcement.  Davis was arrested, and the undercover officer was not harmed.  DEA and CPD led the investigation, with assistance from ISP.
• Two days after being released from custody for a felony conviction, DAVID HOLLY, of Chicago, was arrested for illegally possessing a loaded handgun on a street on Chicago’s Far South Side.  He was convicted after a bench trial and sentenced to five years in federal prison.  CPD led the probe.
   
• Narcotics Trafficking Prosecutions

The U.S. Attorney’s Office targets traffickers who bring illegal drugs into Illinois from other states or countries, with a particular focus on traffickers who use guns, violence and threats of violence to protect and promote their illegal businesses.  The office also investigates and prosecutes dealers who distribute powerful opioids like fentanyl and heroin. 

“Fentanyl is a dangerously potent drug,” said U.S. Attorney Lausch.  “Anyone who sells fentanyl on the streets of Chicago this summer will endure the full weight of law enforcement, and that includes a possible federal prosecution.”

The U.S. Attorney’s Office often 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 federal prosecutions include:

• This month, eleven individuals, including a woman and two of her sons, were charged as part of a federal drug and gun investigation in Chicago.  During the multi-year probe, law enforcement seized 29 firearms and associated ammunition, a machete and sheath, approximately a kilogram of cocaine, and 78 pounds of marijuana.  Law enforcement also seized from one of the defendants a Rolex watch and two necklaces.  Attached to the necklaces were 14-carat gold pendants with the initials “LAFA” written in diamonds.  The initials are an apparent reference to the defendant’s suspected affiliation with LAFA, a Chicago street gang.  Arraignments have not yet been scheduled.  FBI and CPD led the investigation, with assistance by IRS, Cook County Sheriff’s Department, Evergreen Park Police Department, Joliet Police Department, Orland Park Police Department, and Bolingbrook Police Department.
• Ten defendants were charged in March 2019 as part of a multi-year federal probe into drug trafficking in the East Garfield Park neighborhood of Chicago.  Law enforcement seized approximately 13 pounds of suspected methamphetamines, a half-kilogram of suspected heroin, approximately 13,000 pills of suspected ecstasy, and 18 firearms.  The defendants have pleaded not guilty.  The investigation was led by ATF and CPD, with assistance from ISP. 
• In March 2019, 35 individuals were charged as part of a joint federal and state investigation into heroin and fentanyl trafficking on the West Side of Chicago.  Many of the defendants allegedly distributed heroin and fentanyl-laced heroin to customers in the Chicago area, with drivers dispatched to make drug deliveries after customers placed orders on a telephone hotline.  The defendants have pleaded not guilty.  The investigation was jointly conducted by the Organized Crime Drug Enforcement Task Force (OCDETF) and the Chicago High Intensity Drug Trafficking Task Force (HIDTA).  The task forces, which are comprised of agents and officers from the above-mentioned federal, state and local law enforcement agencies, identify, disrupt and dismantle the most serious drug trafficking organizations.
• In December 2018, a father and son from Chicago were among 18 individuals charged as part of an investigation into cocaine trafficking.  The defendants allegedly distributed cocaine to hundreds of customers in the Chicago area, with drivers dispatched to make door-to-door deliveries.  The defendants have pleaded not guilty.  The OCDETF investigation was led by FBI and DEA, with the assistance of police departments from Evanston, Skokie, Lincolnwood, Palatine, and Des Plaines.
• In “Operation Dirty Ice,” 12 individuals were charged with trafficking heroin on the West Side of Chicago.  During the probe, authorities seized one and a half kilograms of heroin, a half-kilogram of crack cocaine, more than $892,000 in illicit cash proceeds, and a stolen handgun.  The defendants have pleaded not guilty.  The OCDETF investigation was led by FBI and CPD, with assistance from IRS and ISP.
• Sales of fentanyl and fentanyl-laced heroin were the target of a joint federal and state investigation that resulted in charges against more than 25 individuals.  The federal charges described drug sales in the Tri-Taylor, Humboldt Park and West Garfield Park neighborhoods on Chicago’s West Side, as well as deals in the Chatham neighborhood on the city’s South Side.  The defendants have pleaded not guilty.  The probe was led by CPD, with assistance from numerous federal agents assigned to a HIDTA task force.

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 parolee forums and youth outreach forums, and these efforts will continue this summer.

The monthly parolee forums, also known as offender notification meetings, rotate among various Chicago neighborhoods.  Recent parolees who have moved back into the neighborhoods are offered the chance to make an informed choice not to engage in further criminal activity.  Researchers at Yale University found that ex-offenders who attend a forum are 30% less likely to commit a new offense than those who did not attend a forum.

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.

CHICAGO — Eleven individuals, including a woman and two of her sons, are facing criminal charges as part of a federal drug and gun investigation in Chicago.

During the multi-year investigation, law enforcement seized 29 firearms and associated ammunition, a machete and sheath, approximately a kilogram of cocaine, 78 pounds of marijuana, more than $190,000 in suspected illicit cash proceeds, and diamond jewelry, Rolex watches and designer clothing appraised at more than $300,000.  Much of the alleged drug trafficking occurred on the South Side of Chicago.

All eleven defendants were arrested last week.  Detention hearings for many of the defendants are being held this week in U.S. District Court in Chicago.

The charges were 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 Federal Bureau of Investigation; and Eddie Johnson, Superintendent of the Chicago Police Department.  Substantial assistance was provided by the Internal Revenue Service Criminal Investigation Division, Cook County Sheriff’s Department, Evergreen Park Police Department, Joliet Police Department, Orland Park Police Department, and Bolingbrook Police Department.  Assistant U.S. Attorneys Ankur Srivastava and Sheri Wong represent the government.

According to charges filed in federal court, RAKIM ASAD, 26, of Chicago, and his mother, HARRIETTE MCPHERSON, 46, of Chicago, conspired with each other and DERRICK MCNEAL, 46, of Chicago, to possess cocaine and marijuana with the intent to deliver.  Asad is also charged with knowingly possessing a loaded handgun in furtherance of a drug trafficking crime.

During the investigation, law enforcement seized from Asad a Rolex watch and two necklaces, according to the indictment against him.  Attached to the necklaces were 14-carat gold pendants with the initials “LAFA” written in diamonds, the indictment states.  The initials are an apparent reference to Asad’s suspected affiliation with LAFA, a Chicago street gang.

Four of the defendants are charged with conspiring to rob a drug dealer of marijuana in Chicago and Bridgeview in the summer of 2017.  The charges allege that KELVIN EVERETT, 38, of Chicago, GREGORY BLACKWELL, 29, of Chicago, QUINCY WRIGHT, 37, of Chicago, and JERRY PEOPLES, 42, of Chicago, possessed a loaded rifle and handgun during an attempted robbery of the dealer on June 13, 2017, in Bridgeview.  Everett, Blackwell, Wright and Peoples are also charged with illegal possession of the rifle and handgun, due to having prior felony convictions that prohibited them from lawfully possessing a firearm.

The charges further allege that RACHAD LUCAS, 38, of Calumet City, stored controlled substances in a storage unit in Calumet City.  Lucas is also charged with possessing marijuana with the intent to distribute, knowingly possessing a handgun in furtherance of a drug trafficking crime, and illegally possessing the handgun as a previously convicted felon.

Three other defendants face various drug charges: RACHAD UNDERWOOD, 42, of Chicago, CALVIN WOODS, 28, of Chicago, and SINCERE BRANNON, 19, of Chicago.  Brannon, who is also McPherson’s son, faces an additional charge of knowingly possessing a firearm in furtherance of a drug trafficking crime.

The public is reminded that charges contain only accusations and are 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 charges carry maximum penalties ranging from 20 years to 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 grand jury has indicted four teenagers on carjacking or weapons offenses in connection with the theft of a vehicle at gunpoint in Chicago’s Edgewater neighborhood.

JAMAR JARVIS, 18, RAYNELL LANFORD, 19, and JAMAAL ASHSAHEED, 19, all of Chicago, forcibly took a Lexus sport-utility vehicle from a victim early in the morning of Oct. 18, 2018, according to an indictment returned Tuesday in U.S. District Court in Chicago.  The fourth defendant, JAVION BUSH, 19, of Chicago, provided assistance to the others after the carjacking, the indictment states.

All four defendants are currently in law enforcement custody.  Arraignments in federal court in Chicago have not yet been scheduled.

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 Federal Bureau of Investigation; and Eddie Johnson, Superintendent of the Chicago Police Department.  The Cook County State’s Attorney’s Office provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Albert Berry III and Shy Jackson, and Special Assistant U.S. Attorneys Yvette Loizon and Maureen McCurry.

After taking the Lexus, Jarvis, Lanford and Ashsaheed drove it to a gas station in the South Loop neighborhood of Chicago, where they purchased gas and a gas can, the indictment states.  CPD officers later arrested the trio, as well as Bush. 

The indictment charges Jarvis, Lanford and Ashsaheed with conspiring to commit carjacking.  The three are also charged with using, carrying and brandishing a firearm during a crime of violence.  Bush is charged with being an accessory after-the-fact to the carjacking.

In addition to the Oct. 18, 2018, carjacking, the indictment charges Jarvis, Lanford and Ashsaheed with conspiring to commit an attempted carjacking late the prior evening.  In the attempted carjacking, Lanford allegedly displayed a firearm while unsuccessfully attempting to take an Acura sedan in Chicago’s Uptown neighborhood.

Using, carrying and brandishing a firearm in connection with a carjacking carries a maximum sentence of life in prison, while carjacking and attempted carjacking are each punishable by up to 15 years, and the conspiracy charge is punishable by up to five years.  The accessory after-the-fact charge is punishable by up to seven and a half years.

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.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A grand jury has indicted a Chicago man on federal racketeering charges for allegedly committing murder to maintain and increase his position in a violent street gang.

LUIS CONTRERAS, 39, is charged with one count of murder in aid of racketeering, one count of attempted murder in aid of racketeering, and two counts of illegally possessing multiple firearms and ammunition.  The indictment accuses Contreras of murdering Andre Franzell on Feb. 18, 2018, for the purpose of maintaining and increasing Contreras’s position in the Latin Saints street gang.  Franzell, 23, was fatally shot in the 7700 block of South Kilbourn Avenue in Chicago’s Scottsdale neighborhood.

The indictment was returned Wednesday in federal court in Chicago.  Arraignment has not yet been scheduled.

The indictment 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; James M. Gibbons, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Chicago; and Eddie Johnson, Superintendent of the Chicago Police Department.  The government is represented by Assistant U.S. Attorneys Kavitha Babu and Nicholas J. Eichenseer.

The indictment alleges that the Latin Saints is a criminal organization whose members and associates engaged in narcotics trafficking and committed acts of violence, including murder and assault, to acquire and preserve the gang’s territory on the South Side of Chicago.  Members of the Latin Saints publicly claimed responsibility for their activities, boasted about the gang on social media, and intimidated rival gang members through acts and threats of violence, according to the indictment.

The attempted murder count accuses Contreras of trying to kill a man on the same day as the Franzell murder.  The illegal firearm possession counts allege that Contreras is a convicted felon who was not lawfully allowed to possess a firearm or ammunition.

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.  Murder in aid of racketeering is punishable by a mandatory sentence of life in prison, and the death penalty is also possible.   The attempted murder count and the illegal gun possession counts are each punishable by up to ten years in prison.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — An Indiana man has been sentenced to 18 months in federal prison for threatening to commit violence at women’s reproductive health services clinics in Chicago and northwest Indiana.

LUKE DANIEL WIERSMA, 35, of Dyer, Ind., pleaded guilty last year to posting online threats of violence on at least seven occasions in October and November of 2017.  Wiersma submitted the threats through the clinics’ websites.  The clinic in Chicago provided reproductive health services, while the clinic in Hammond, Ind., provided counseling services related to women’s reproductive health.

U.S. District Judge Manish S. Shah imposed the sentence Tuesday in federal court in Chicago.

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 Federal Bureau of Investigation.  The Indianapolis, Ind., Field Office of the FBI and the Dyer, Ind., Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Kelly M. Greening and Georgia N. Alexakis.

“The defendant’s transmission of numerous death threats to the Chicago clinic and the Hammond clinic is an extraordinarily serious offense that threatens public safety and terrorizes both medical communities and the women who utilize reproductive health clinics,” Assistant U.S. Attorney Kelly M. Greening argued in the government’s sentencing memorandum.  “These types of threats have a significant, lasting impact on the lives of many, including the employees and volunteers of the clinics and the patients who visit the clinics for medical care.”

In one of the threats transmitted to the Chicago clinic on Oct. 29, 2017, Wiersma stated, “I will do anything and everything to stop the unmitigated murders of fetuses.  I will do anything to stop the atrocities committed by your clinic every minute of every day at your clinic.  You are all pieces of [expletive] and I will kill to stop these atrocities.  I will blow you up if I have to, burn the clinic down.  I will do whatever is necessary I swear to God I will.  After that you are in God’s hands and He will do His thing.”

CHICAGO — Four men sought to maintain and increase their positions in a violent Chicago street gang when they committed fatal shootings on the city’s Northwest Side, according to a newly unsealed federal indictment.

Charged with committing murder in aid of racketeering are HECTOR ROJAS, 26, JOSE MARTINEZ, 25, SANTO LOZOYA, 21, and PEDRO NAVARRO, 22, all of Chicago.  Navarro is also charged with committing two attempted murders in aid of racketeering.

The indictment was returned last month by a federal grand jury in Chicago, and it was ordered unsealed on May 9, 2019.  The defendants have pleaded not guilty to the charges.  U.S. District Judge Matthew F. Kennelly set a status hearing for June 20, 2019, at 1:30 p.m., in federal court in Chicago.

The defendants are members of the Milwaukee Kings street gang, according to the indictment.  All four defendants are currently in law enforcement custody. 

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 Federal Bureau of Investigation; and Eddie Johnson, Superintendent of the Chicago Police Department.  The government is represented by Assistant U.S. Attorneys Jeannice Appenteng and Jordan Matthews.

“Combating violent gangs like the Milwaukee Kings is a top priority in our office,” said U.S. Attorney Lausch.  “With this indictment, we’ve taken a major step toward removing violent offenders from the streets of Chicago.”

“When gang members engage in drug trafficking and other violent crimes, fear is generated in our communities,” said SAC Sallet.  “This indictment demonstrates our commitment to working with our law enforcement partners to keep our streets safe.  Together we will remove armed, violent criminals from our neighborhoods and bring them to justice.”

The indictment alleges that the Milwaukee Kings is a criminal organization whose members and associates engaged in narcotics trafficking and committed acts of violence, including murder, attempted murder, and assault.  Members of the Milwaukee Kings boasted of the gang’s activities on social media, threatened violence against rival gang members, and took steps to prevent law enforcement’s detection of criminal activities, according to the indictment.

Navarro is accused in the indictment of murdering Xavier Soto on April 27, 2017, for the purpose of maintaining and increasing Navarro’s position in the gang.  Soto, 15, was fatally shot in the 4900 block of West George Street in Chicago’s Cragin neighborhood.  Navarro also attempted to murder two other individuals on the same day as the Soto killing, the indictment states.

Martinez and Lozoya are accused of killing Crispin Coliz on Dec. 16, 2016, for the purpose of maintaining and increasing their positions in the gang, the indictment states.  Coliz, 28, was fatally shot in the 7200 block of West Grace Street in Chicago’s Dunning neighborhood.

The indictment accuses Rojas of murdering Daniel Guerra on Sept. 2, 2015, for the purpose of maintaining and increasing Rojas’s position in the gang.  Guerra, 19, was fatally shot in the 5900 block of West Diversey Avenue in Chicago’s Belmont Cragin neighborhood.

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.  Murder in aid of racketeering is punishable by a mandatory sentence of life in prison, and the death penalty is also possible.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — An information technology specialist has been sentenced to three years in federal prison for hacking into the servers of a north suburban company where he formerly worked as a contractor.

EDWARD SOYBEL, 35, of Chicago, illegally accessed the servers of Lake Forest-based W.W. Grainger Inc., on multiple occasions in late 2016.  Soybel intentionally caused damage to Grainger’s automated inventory management program, which operates on-site dispensing machines for customers throughout the United States.  The dispensing machines provide secure access to durable products, such as safety equipment.  Soybel had worked as a technical support contractor at Grainger’s facility in Niles until he was terminated in early 2016.

A federal jury last year convicted Soybel on all 12 counts against him, including ten counts of intentionally causing damage to protected computers, one count of attempting to cause damage to protected computers, and one count of attempting to access a protected computer without authorization. 

Soybel has been in custody since December 2018, after he recorded a video of himself issuing threats of violence to law enforcement.  Before imposing the sentence Wednesday in federal court, U.S. District Judge Matthew F. Kennelly stated that he considered Soybel’s threats to be a significant aggravating factor, and he increased the sentence due to the gravity of the threats.

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 Federal Bureau of Investigation.  The Chicago Police Department provided valuable assistance.

“Defendant’s crimes were not an isolated lapse of judgment or one-off outburst,” Assistant U.S. Attorney Nicholas J. Eichenseer argued in the government’s sentencing memorandum.  “He essentially declared cyber war on Grainger, not out of principle or for financial gain, but out of spite.”

Evidence at trial revealed that Soybel repeatedly gained unauthorized access to a secure computer network of Grainger, a multi-national industrial supply company.  The network was an inventory-management system that operated a nationwide grid of dispensing machines to securely provide tools and safety equipment at customer sites.  Soybel remotely broke into the computer system by stealing and then using his former co-workers’ usernames and passwords.  Once inside the network, Soybel deleted millions of database records and reset the passwords.

The deletions caused outages of the system, locked out users, and temporarily impaired the dispensing machines.  Soybel’s attacks began in July 2016 and continued for several months.  Grainger incurred at least $300,000 in costs responding to the cyber-attacks.

CHICAGO — A Chicago software developer has been sentenced to three months in federal prison for fraudulently obtaining $200,000 in grant funds from the National Aeronautics and Space Administration and the National Science Foundation.

MIROSLAV VELEV, a mathematician with a doctorate in electrical and computer engineering, operated the Chicago-based software development and consulting company Aries Design Automation LLC, which developed methods to solve electronic design automation problems.  Velev sought and obtained federal grant funds for his company through the Small Business Innovation Research program, which provides opportunities for small businesses to participate in federally-sponsored research and development.  Aries was awarded a total of $200,000 in grants from NASA and the NSF after Velev made materially false representations about the company’s financial condition.

Velev, 50, of Chicago, pleaded guilty last year to one count of conversion of government funds, a misdemeanor.  U.S. District Judge Gary Feinerman on Wednesday sentenced Velev to three months in federal prison.  Velev previously paid restitution of $150,000 to NASA and $50,000 to the NSF.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Curtis Vaughn, Special Agent-in-Charge of the Office of Investigations of NASA’s Office of Inspector General, Eastern Field Office; and Jennifer Springmann, Special Agent-in-Charge of the NSF’s Office of Inspector General’s Civil, Criminal and Program Integrity Division.

“Absent Velev’s fraud and false statements, his proposals would not have been approved and he would not have been awarded federal funds,” Assistant U.S. Attorney William R. Hogan, Jr., argued in the government’s sentencing memorandum.  “By intentionally deceiving the government, Velev personally benefitted at the expense of another eligible small business, and at the expense of the taxpayers who funded the SBIR program.”

“This investigation exposed an individual that used federal funds to advance his own personal gain,” said SAC Vaughn.  “I applaud the outstanding efforts of our agents and law enforcement partners.”

“The Small Business Innovation Research Program is a valuable tool in advancing NSF’s mission to promote the progress of science by increasing opportunities for small businesses to undertake cutting-edge scientific research,” said SAC Springmann.  “It is essential to protect the integrity of this program.  The NSF Office of Inspector General is committed to vigorously pursuing oversight of these taxpayer funds, and I commend the U.S. Attorney’s Office and our investigative partners for their support in this effort.”

The SBIR program required applicant companies to show independent, third-party investments or commitments of investments in their projects.  Velev admitted in a plea agreement that he falsely represented to NASA and the NSF that Aries had received the required independent investment from an individual investor.  Velev fraudulently submitted in his grant proposals a screenshot of his company’s bank account that reflected a funds transfer from the purported investor.  In reality, the investor did not exist, and Velev had routed his own money into the account to support the false appearance of an investment. 

Velev also submitted in his grant proposals an “investment letter” that identified a Chief Financial Officer for the purported investor.  In fact, the alleged CFO was an acquaintance of Velev’s wife and had no connection with an investment in Aries.

CHICAGO — A suburban Chicago man was sentenced today to 16 years in federal prison for attempting to detonate an explosive device at a bar in downtown Chicago.

ADEL DAOUD, 25, of Hillside, Ill., attempted to detonate what he thought was a 1,000-pound car bomb at a popular bar in the downtown Loop neighborhood of Chicago on Sept. 14, 2012.  Prior to the evening of the planned attack, Daoud had been preaching for violent jihad and expressed an interest in working with operational terrorists.  He researched and created a list of potential Chicago-area targets, which included movie theaters, bars and nightclubs, a suburban mall, and military recruiting centers.  Unbeknownst to Daoud, the explosive device at the Loop bar was inert and had been constructed by bomb technicians from the Federal Bureau of Investigation.  Daoud was arrested on the scene after twice attempting to detonate the purported bomb.  He has been in federal custody since then.

U.S. District Judge Sharon Johnson Coleman imposed the sentence in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; John C. Demers, Assistant Attorney General for National Security; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI.  The government is represented by Assistant U.S. Attorneys Barry Jonas and Tiffany Ardam of the Northern District of Illinois, with assistance by Trial Attorney Bridget Behling of the National Security Division’s Counterterrorism Section.

“Protecting our national security is the Department of Justice’s top priority,” said U.S. Attorney Lausch.  “We will continue to work with our law enforcement partners to prevent, disrupt, and defeat terrorist operations before they occur.”

“The conviction and sentencing of Adel Daoud are evidence of the FBI’s commitment to working vigilantly with our local, state, and federal law enforcement partners to prevent violent attacks before they occur,” said SAC Sallet.  “This investigation would not have been possible without the joint efforts of our law enforcement community.  As long as terrorists threaten the security of our nation, we will unite to shield our citizens from harm.  Our message to terrorists is clear: We will find you, we will arrest you, and we will bring you to justice.”

The attempted bombing was one of three cases against Daoud to be resolved today as part of the sentencing order.  While he was jailed for attempting to detonate the bomb, Daoud in late 2012 solicited his cellmate to have a violent gang member murder an FBI agent who had posed undercover as a terrorist during the investigation.  The murder-for-hire plot was not carried out, and the FBI agent was not injured.  The third case against Daoud involved a violent assault on a fellow jail inmate in 2015.  While incarcerated at the Metropolitan Correctional Center in Chicago, Daoud attacked an inmate who had drawn what Daoud felt was an insulting picture of the prophet Mohammad.  The inmate suffered lacerations on his head and a bite mark on an arm.

CHICAGO — A federal jury in Chicago has convicted a suburban man of conspiring to straw purchase several handguns on behalf of a woman who allegedly tried to smuggle the weapons into Egypt.

OMRAN ISMAIL, 53, of Burbank, was found guilty Wednesday of both counts against him, including one count of conspiracy to knowingly make a materially false statement to a licensed dealer and knowingly and willfully smuggle the firearms on a common carrier, and one count of acquiring a firearm from a licensed dealer by means of a materially false statement.  Evidence at trial revealed that Ismail in November 2013 purchased four handguns 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.  Sayed, 47, of Palos Park, was charged in the conspiracy but fled and is considered a fugitive.

The conspiracy count carries a maximum sentence of five years in prison, while the straw purchasing count is punishable by up to ten years.  U.S. District Judge Sara L. Ellis set sentencing for Dec. 3, 2019, at 10:00 a.m.

Ismail’s conviction 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 Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Eddie Johnson, Superintendent of the Chicago Police Department.  Valuable assistance was provided by U.S. Customs and Border Protection.  The government is represented by Assistant U.S. Attorneys Abigail L. Peluso and Katie M. Durick.

“Straw purchasers 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 these illicit transactions.”

“Individuals who circumvent our nation’s gun laws to illegally obtain firearms for others stand as a threat to our public safety and national security,” said Special Agent-in-Charge Gibbons.  “HSI will continue to work with our law enforcement partners to enforce these vital laws.”

According to evidence presented at the three-day trial, Ismail purchased four 9mm firearms from the dealer on Nov. 18, 2013.  Sayed accompanied Ismail to the gun store, and Ismail falsely represented to the dealer that Sayed was his wife.  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 additional 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 allege.

CHICAGO — A musician from a west suburb of Chicago was sentenced today to ten years in federal prison for enticing several underage girls, some as young as 14 years old, to produce sexually explicit videos of themselves.

AUSTIN JONES, 26, of Bloomingdale, pleaded guilty earlier this year to one count of receipt of child pornography.  U.S. District Judge John Z. Lee imposed the 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; and James M. Gibbons, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Chicago.  The Illinois Attorney General’s Internet Crimes Against Children Task Force and the Bloomingdale Police Department provided valuable assistance in the investigation.

“Production and receipt of child pornography are extraordinarily serious offenses that threaten the safety of our children and communities,” Assistant U.S. Attorney Katherine Neff Welsh argued in the government’s sentencing memorandum.  “Jones’s actions took something from his victims and their families that they will never be able to get back.”

“Today’s sentencing of Austin Jones represents a major step towards justice for the young victims whom he manipulated and exploited,” said Special Agent-in-Charge Gibbons.  “HSI is committed to protecting the most vulnerable members of our society, our children, from predators who abuse their trust.”

Jones is a musician with a significant following on social media, including Facebook and YouTube.  His online music videos have been viewed millions of times. 

Jones admitted in a plea agreement that in 2016 and 2017 he chatted with six underage girls on Facebook and enticed them to produce pornographic videos of themselves and send them to him.  Jones told some of his victims to send him the videos as a way to “prove” they were his biggest fans.  He also told some of his victims that the videos were part of a modeling opportunity, and that he could assist them in gaining followers on Instagram.

In addition to the six victims who sent videos, Jones further admitted in the plea agreement that he used Facebook on approximately 30 other occasions to attempt to persuade minor girls to send him sexually explicit videos and photographs.

If you believe you are a victim of sexual exploitation, you are encouraged to call the ICE Tip Line at 1-866-DHS2-ICE (1-866-347-2423) or the National Center for Missing and Exploited Children at 1-800-843-5678.  The hotlines are available 24 hours a day, seven days a week.

CHICAGO — A suburban tax professional has pleaded guilty to preparing and filing more than 160 fraudulent tax returns in an attempt to bilk the Internal Revenue Service out of at least $550,000.

LAURIE HELFER, 57, of Hillside, pleaded guilty Tuesday to two counts of willfully aiding and assisting in the preparation of a fraudulent tax return.  Each count is punishable by a maximum sentence of three years in federal prison.  U.S. District Judge Virginia M. Kendall set sentencing for Aug. 22, 2019.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.  The government is represented by Assistant U.S. Attorney Carol Bell.

Helfer operated the tax-preparation businesses Laurie’s Freelance & Tax Preparation Services and The Tax Lady Laurie Inc., which were based in the western suburbs of Chicago.  According to a written plea agreement, Helfer filed approximately 162 false returns for the tax years 2007 through 2010.  In each of the returns, Helfer knowingly made material, false statements to obtain refunds to which her clients were not otherwise entitled.  The statements included false information about employment, educational, and child care expenses.  Helfer’s conduct resulted in an actual federal tax loss of approximately $54,797, and attempted losses of between $550,000 and $1.5 million, the plea agreement states.

CHICAGO — A Chicago man sought to maintain and increase his position in a violent street gang when he fatally shot a man outside a South Side gas station last fall, according to a federal indictment unsealed today.

DERRICK SWANSON, 22, of Chicago, is charged with committing murder in aid of racketeering, and illegally possessing a handgun.  He was arrested this morning.  Arraignment in U.S. District in Chicago has not yet been scheduled.

The indictment accuses Swanson of murdering Anthony Carter on Oct. 2, 2018, for the purpose of maintaining and increasing Swanson’s position in the Evans Mob street gang.  Carter, 27, was fatally shot outside a gas station in the 800 block of East 79th Street in Chicago’s Grand Crossing neighborhood.

The indictment 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 Eddie Johnson, Superintendent of the Chicago Police Department.  The government is represented by Assistant U.S. Attorneys Vikas Didwania, Rajnath Laud, and Albert Berry III.

The indictment alleges that the Evans Mob, also known as “GuttaGang” and “HitzSquad,” is a criminal organization whose members and associates engaged in narcotics trafficking and committed acts of violence, including murder, attempted murder and assault, to acquire and preserve the gang’s territory on the South Side of Chicago.  Members of the Evans Mob publicly claimed responsibility for their acts of violence, taunted rival gang members, and took steps to prevent law enforcement’s detection of criminal activities, according to the indictment.

The indictment also renews a charge that was initially filed in November against another suspected Evans Mob member, PIERRE ROBINSON, 26, of Chicago.  Robinson is accused of murdering Glenn Houston on Dec. 23, 2014, for the purpose of maintaining and increasing Robinson’s position in the gang.  Houston, 23, was fatally shot inside a store about four blocks west of where Carter was killed.  

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.  Murder in aid of racketeering is punishable by a mandatory sentence of life in prison, and the death penalty is also possible.   The illegal gun possession charge is punishable by up to ten years in prison.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A federal judge has sentenced a Chicago man to 30 years in prison for leading an armed robbery crew that targeted stores on the city’s North and Northwest Sides.

ROBERT L. BERRIOS, 51, committed 24 armed robberies or attempted armed robberies in 2012.  His crew mainly struck at cellular telephone stores, often terrorizing store employees by wearing masks and brandishing firearms.  In some of the heists, the robbers physically restrained store employees with zip ties.  The robberies netted the crew $115,063.60 in cash.

A jury in 2017 convicted Berrios on robbery, firearm, and conspiracy charges.  In addition to the 30-year prison sentence, U.S. District Judge Matthew F. Kennelly on Tuesday ordered Berrios to pay $115,063.60 in restitution to the victim stores.  Judge Kennelly made findings that Berrios was the leader of the robbery crew and that he obstructed justice by committing perjury during his trial.

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 Federal Bureau of Investigation.  The Chicago Police Department provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Angel M. Krull and Georgia Alexakis.

Three other members of the robbery crew were previously sentenced to prison terms.  DAVID REVIS, of Chicago, was sentenced to 15 years; JULIO RODRIGUEZ, of Chicago, was sentenced to nine years; and LUIS DIAZ, of Chicago, was sentenced to three years.

Evidence at Berrios’s trial revealed that the crew worked together to gather intelligence about possible targets, including store hours and the number of employees working at a given time.  The crew communicated with one another to plan the robberies and procure the necessary tools, including masks, zip ties, firearms, and getaway vehicles.

The jury convicted Berrios of leading the conspiracy to commit all 24 robberies or attempted robberies, and specifically made findings of guilt for nine robberies:

July 1, 2012: Walgreens store, 5935 W. Addison St., Chicago.

July 28, 2012: Currency Exchange, 2753 N. Ashland Ave., Chicago.

Aug. 15, 2012: Currency Exchange, 2814 N. Milwaukee Ave., Chicago.

Sept. 19, 2012: T-Mobile store, 1552 W. Chicago Ave., Chicago.

Sept. 28, 2012: T-Mobile store, 1958 W. Irving Park Rd., Chicago.

Oct. 2, 2012: T-Mobile store, 4000 W. Fullerton Ave., Chicago.

Oct. 13, 2012: T-Mobile store, 3951 N. Kimball Ave., Chicago.

Oct. 16, 2012: Cricket store, 3200 W. Armitage Ave., Chicago.

Oct. 22, 2012: AT&T store, 3955 W. Belmont Ave., Chicago.

CHICAGO — An Elk Grove Village man has been indicted in federal court on charges he tried to kill a postal carrier on New Year’s Eve.

CAMERON RUEBUSCH, 24, is charged with one count of attempted murder, one count of assault with a dangerous weapon, one count of using and discharging a firearm during a crime of violence, and one count of illegal possession of a firearm by a convicted felon.  A co-defendant, RONALD BEYER, JR., 24, of Mount Prospect, is charged with one count of being an accessory after the fact to the assault allegedly committed by Ruebusch.

The indictment was returned Thursday 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 Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The Elk Grove Village Police Department worked closely with the U.S. Postal Inspection Service and provided substantial assistance during the investigation.  The government is represented by Special Assistant U.S. Attorney Chester Choi.

According to the indictment and a criminal complaint previously filed in the case, Ruebusch shot the U.S. Postal Service carrier on Dec. 31, 2018, in Elk Grove Village.  According to the complaint, the mail carrier had recently completed a delivery in the 200 block of West Brantwood Avenue when Ruebusch approached the USPS vehicle and said something to the effect of, “What’s up man?”  The mail carrier put the vehicle in drive and drove away as Ruebusch fired a handgun, the charges allege.  The mail carrier was wounded but survived.

Beyer allegedly drove Ruebusch from the scene after the shooting.

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 attempted murder and assault charges are each punishable by up to 20 years in prison, while the maximum sentence for each of the firearm counts is ten years.  The accessory charge against Beyer is punishable by up to ten years.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

CHICAGO — A federal jury in Chicago has convicted a Southern California man of participating in an insider trading conspiracy that used inside information about an impending corporate acquisition to earn trading profits.

ERIC WELLER, 54, of Hermosa Beach, Calif., was found guilty Tuesday of one count of conspiracy to engage in insider trading.  The jury acquitted Weller on three counts of securities fraud.

The conviction is punishable by a maximum sentence of five years in prison.  U.S. District Judge Matthew F. Kennelly set sentencing for July 10, 2019.

The conviction 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 Federal Bureau of Investigation.  The U.S. Securities and Exchange Commission provided valuable assistance.  The government is represented by Assistant U.S. Attorneys John D. Mitchell and Jason Yonan.

Weller was among nine defendants charged as part of the federal investigation.  Five defendants pleaded guilty to the conspiracy charge prior to trial and are awaiting sentencing.  Three other defendants entered into deferred prosecution agreements after admitting their roles in the conspiracy and cooperating with the government’s investigation. 

Evidence at trial revealed that a vice president of corporate sales at Minnesota-based Life Time Fitness Inc. obtained material, non-public information about the potential sale of the company in 2015.  The executive knew that a sale would likely cause an increase in the company’s stock price, and the executive shared the inside information with a longtime friend so that the friend could trade and profit.  The friend shared the information with three co-conspirators, one of whom then shared it with Weller and three others.          

After receiving the material, non-public information, Weller purchased Life Time Fitness securities before news of the potential sale became public via a media report.  The report caused the stock price to increase substantially.  During a three-week period, the defendants earned more than $860,000 in illegal profits from the trades, including more than $550,000 earned by Weller.

ROCKFORD — A Rockford man, BRIAN KOTLIENTHONG, 32, appeared in federal court today following a grand jury indictment charging him with three counts of distributing cocaine and three counts of illegally possessing a firearm as a convicted felon.

Kotlienthong appeared before U.S. Magistrate Judge Iain D. Johnston, who scheduled a detention hearing for April 22, 2019, at 2:00 p.m., in federal court in Rockford.

As alleged in the indictment, Kotlienthong distributed cocaine three times in Rockford in December 2017.  The indictment further alleged that Kotlienthong, who had a previous felony conviction, illegally possessed two 9mm pistols and a 9mm rifle.

The charges 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 investigation was conducted by ATF and the Stateline Area Narcotics Team, which includes law enforcement officers and agents from the Illinois State Police and the Ogle County Sheriff’s Office. The government is represented by Assistant U.S. Attorney Talia Bucci.

Each count of distributing cocaine carries a maximum penalty of up to 20 years in prison, to be followed by a period of supervised release of three years to life, and a fine of up to $1 million.  Each count of illegally possessing a firearm carries a maximum penalty of up to ten years in prison, to be followed by up to three years of supervised release, and a fine of up to $250,000.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  

The public is reminded that an indictment contains only charges and 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.

ROCKFORD — A DeKalb resident, LUIS ALFREDO DELACRUZ, 49, was indicted today by a federal grand jury in Rockford on two counts of bringing aliens to the United States at a place other than a designated port of entry for commercial advantage or private financial gain, two counts of bringing aliens to the U.S. at a place other than a designated port of entry, two counts of transporting illegal aliens within the U.S. for commercial advantage or private financial gain, and eight counts of harboring illegal aliens for commercial advantage or private financial gain.

Delacruz will appear for arraignment on April 23, 2019, at 11:00 a.m., before U.S. Magistrate Judge Iain D. Johnston in Rockford.

The indictment 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 DeKalb Police Department assisted in the investigation. The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

As alleged in the indictment, in November 2015 and April 2016, Delacruz brought to the United States two alien individuals who had not received prior official authorization to enter.  Delacruz did not bring the individuals through immigration at a designated port of entry, the indictment states.  It is further alleged that on June 1, 2018, Delacruz illegally harbored eight illegal aliens in buildings or other places through employment by Alfredo’s Iron Works in Cortland.  Delacruz allegedly harbored these aliens for commercial advantage and his own financial gain.

Each count of bringing aliens to the United States at a place other than a designated port of entry for commercial advantage or private financial gain carries a mandatory minimum sentence of three years in prison and a maximum of ten years.  Each count of bringing aliens to the U.S. at a place other than a designated port of entry carries a maximum sentence of five years in prison.  Each count of transporting illegal aliens within the U.S. for commercial advantage or private financial gain and each count of harboring illegal aliens for commercial advantage or private financial gain carries a maximum sentence of ten years in prison.  Each count in the indictment also carries a maximum fine of $250,000, and a period of supervised release following imprisonment of up to three years.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines. 

The public is reminded that an indictment contains only charges and 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 — Federal authorities today announced criminal prosecutions against several Chicago-area defendants for a variety of alleged tax schemes.  With the arrival of Tax Day, the prosecutions serve as a reminder that individual taxpayers are responsible for the contents of their own return.

The recent prosecutions announced today include charges against a south suburban tax professional who allegedly filed a false personal income tax return, as well as a guilty plea by a west suburban general contractor who admitted willfully failing to file income tax returns for nearly a decade.

In addition to criminal penalties, including potential incarceration, tax evaders remain responsible for all taxes and interest due, as well as civil penalties. 

Today is the nation’s tax deadline.

“Preserving the integrity of the federal tax system is a significant priority in our office,” said John R. Lausch, Jr., United States Attorney for the Northern District of Illinois.  “Through vigorous criminal enforcement of the internal revenue laws, we will hold accountable those who attempt to cheat the system.”

“As the tax filing deadline quickly approaches, I urge all Chicago-area residents to fully comply with federal tax laws,” said Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago.  “If you choose to disobey these laws, please understand that you are not just hurting the government, you are hurting your neighbors and your community.  IRS special agents will continue to serve the American people by aggressively pursuing tax criminals year round.”

A federal jury last week convicted JERMAINE JACKSON, 48, of Chicago, of filing 13 fraudulent federal income tax returns in the names of various trusts he created.  Each of the returns sought a fraudulent tax refund based on fictitious income and withholding numbers.  The IRS identified the bogus nature of a dozen of the returns, but the agency paid a refund of $900,000 on one of them.  U.S. District Judge John Z. Lee set sentencing for July 10, 2019.  The government in Jackson’s case is represented by Assistant U.S. Attorneys Stephen Heinze and Patrick King.

In a criminal information filed last month, the U.S. Attorney’s Office charged LISA LLOYD TAYLOR, 51, of Country Club Hills, with one count of willfully filing a false personal income tax return, and one count of stealing approximately $134,835 of Social Security funds.  According to the charges, Taylor, who owned Ebiz Accounting Services in Country Club Hills, filed a false personal income tax return for calendar year 2012 that falsely listed gross receipts or sales from her business as $7,890, when Taylor knew that her gross receipts or sales substantially exceeded that amount.  Taylor has pleaded not guilty to the charges.  A status hearing is set for April 23, 2019, before U.S. District Judge Andrea R. Wood.  The government in Taylor’s case is represented by Assistant U.S. Attorney Nani Gilkerson.  The public is reminded that charges are not evidence of guilt.  Taylor is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The general contractor, STEPHEN KEEFE, 47, of Downers Grove, pleaded guilty last month to multiple counts of willfully failing to file personal income tax returns.  Keefe, who previously owned Downers Grove-based Stephen Keefe Construction and S. Keefe Construction, admitted in a plea agreement that he willfully failed to file income tax returns for the calendar years 2010 through 2017, despite receiving taxable income of at least $2.08 million in those years.  Keefe’s conduct caused a combined tax loss to the federal and state government of approximately $379,493.  U.S. Magistrate Judge Sunil R. Harjani set sentencing for June 28, 2019.  The government in Keefe’s case is represented by Assistant U.S. Attorney Patrick King.

Another recent tax prosecution resulted in a term of imprisonment for a northwest suburban business executive.  PETER KONOPKA, 72, of Marengo, was sentenced in December to six months in federal prison, and ordered to pay restitution of $189,837.  While President of Illinois-based Solarcrete Energy Efficient Building Systems, Konopka filed a bankruptcy petition on behalf of Solarcrete that contained false statements in order to conceal corporate assets from the bankruptcy trustee.  In addition, Konopka willfully failed to report personal income for the calendar year 2011 that included payments from business accounts that were used to pay off personal loans.  The government in Konopka’s case was represented by Assistant U.S. Attorney William Hogan.

For tips to assist taxpayers in choosing a reputable tax professional or preparing their own taxes, visit the official IRS website: https://www.irs.gov/help-resources.

CHICAGO — A recycling executive has been sentenced to three years in federal prison for illegally landfilling potentially hazardous electronic waste as part of a scheme to re-sell the materials and avoid paying income taxes.

BRIAN BRUNDAGE owned Intercon Solutions Inc. and EnviroGreen Processing LLC, which purported to recycle electronic waste on behalf of corporate and governmental clients.  Brundage represented to the clients that the materials would be disassembled and recycled in an environmentally sound manner.  In reality, from 2005 to 2016, Brundage caused thousands of tons of e-waste and other potentially hazardous materials to be landfilled, stockpiled, or re-sold at a profit to companies who shipped the materials overseas.  Brundage evaded $743,984 in federal taxes by concealing the income he earned from re-selling the e-waste and from paying himself funds that he falsely recorded as Intercon business expenses.  Brundage spent the purported expenses for his own personal benefit, including wages for a nanny and housekeeper, jewelry purchases, and payments to a casino in Hammond, Ind.

Brundage, 47, of Schererville, Ind., pleaded guilty last year to one count of wire fraud and one count of tax evasion.  U.S. District Judge Joan Humphrey Lefkow on Thursday imposed the three-year prison sentence and ordered Brundage to pay more than $1.2 million in restitution to his victims.

The sentence was announced by John C. Kocoras, First Assistant United States Attorney for the Northern District of Illinois; Jennifer Lynn, Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division; Gabriel L. Grchan, Special Agent-in-Charge of the Chicago office of the Internal Revenue Service Criminal Investigation Division; James M. Gibbons, Special Agent-in-Charge of the Chicago office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and Jeffrey Ryan, Special Agent-in-Charge of the U.S. General Services Administration’s Office of Inspector General, Great Lakes Regional Investigations Office.  The Hong Kong Environmental Protection Department provided valuable assistance in the investigation.  The government was represented by Assistant U.S. Attorneys Sean J.B. Franzblau and Kelly Greening of the Northern District of Illinois, and Special Assistant U.S. Attorney Crissy Pellegrin of the EPA.

Brundage admitted in a plea agreement that he caused employees of Chicago Heights-based Intercon and Gary, Ind.-based EnviroGreen to sell some of the e-waste and other materials to vendors who Brundage knew would ship the materials overseas.  Some of the materials contained Cathode Ray Tubes, which are glass video display components of computer and television monitors, and which contain potentially hazardous amounts of lead.  Brundage admitted causing multiple tons of CRT glass and other potentially hazardous materials to be destroyed in environmentally unsafe ways and later landfilled.

“Improper management of cathode ray tubes can pose risk to human health and the environment, as they contain significant quantities of lead,” said Special Agent-in-Charge Lynn.  “This case demonstrates that EPA and our law enforcement partners are committed to protecting the environment and ensuring that companies follow the law.”

“The GSA Office of Inspector General will aggressively pursue contractors who make false representations in order to obtain federal business,” said Special Agent-in-Charge Ryan.

“This sentence should serve as a reminder that HSI will continue to work with its federal, state and local partners to pursue offenders who endanger others by engaging in fraud and deceit,” said Special Agent-in-Charge Gibbons.

CHICAGO — A real estate developer has been indicted on federal bribery charges for allegedly steering private legal work to a Chicago alderman in an effort to influence and reward the alderman in connection with a permit and tax increment financing for a Northwest Side redevelopment project.

CHARLES CUI, 48, of Lake Forest, is charged with one count of federal program bribery, one count of making a false statement to the Federal Bureau of Investigation, and two counts of using interstate commerce to facilitate bribery and official misconduct.  The indictment was returned Thursday in U.S. District Court in Chicago.  Arraignment has not yet been scheduled.

The indictment 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 City of Chicago Inspector General’s Office provided valuable assistance.  The government is represented by Assistant U.S. Attorneys Amarjeet Bhachu, Diane MacArthur, Matthew Kutcher, Sarah Streicker and Timothy Chapman.

According to the indictment, Cui was the managing member of a company that owned property in the 4900 block of West Irving Park Road in the Portage Park neighborhood of Chicago.  In 2016, the Chicago City Council passed an ordinance that approved a redevelopment plan for the property and provided Cui’s company with $2 million in tax increment financing.  The City Council’s Finance Committee, which was chaired by the 14th Ward alderman, had recommended passage of the ordinance.  The property was located outside of the 14th Ward.

The following year, Cui submitted an application for a permit to use an existing sign at the property.  The sign would be used to advertise a retailer that contracted with Cui’s company to operate a store at the site.  After the Department of Planning and Development denied the application, Cui emailed the 14th Ward alderman, asking the alderman to “look into the matter,” the indictment states.  Cui’s email stated that the retailer “really needs it, otherwise they will either cancel the lease, or ask for significant rent reduction,” according to the indictment.  Cui, on behalf of his company, had previously entered into an agreement with the retailer that provided for the rent reduction if Cui’s company was unable to obtain the permit, according to the charges.  Cui estimated that the reduction would cost his company a total of $750,000, the indictment states.

The indictment states that in August 2017, Cui sent an email to a real estate attorney who had represented Cui with respect to the property.  In the email, Cui asked the attorney if the alderman, who in addition to the City Council position operated a private law firm specializing in contesting real estate tax assessments, could take over the property tax work for the property, stating, “I have TIF deal going with the City and he is the Chairman of Finance Committee.  He handled [sic] his tax appeal business card to me, and I need his favor for my tif money.  In addition, I need his help for my zoning etc for my project.  He is a powerful broker in City Hall, and I need him now.  I’ll transfer the case back to you after this year.”

Less than two weeks later, Cui signed a contingent fee agreement with the alderman’s law firm that provided for Cui to retain the firm to perform real estate tax work, the indictment states.

According to the indictment, the false statement charge pertains to Cui’s November 2018 interview with the FBI, during which Cui falsely stated that he hired the alderman’s law firm “just because he is a good tax appeal lawyer.”

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.

Federal program bribery is punishable by up to ten years in prison.  The false statement charge carries a maximum penalty of five years in prison.  Using interstate commerce to facilitate bribery and official misconduct is punishable by up to five years in prison.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.

ROCKFORD — A Freeport man was sentenced Tuesday by U.S. District Judge Frederick J. Kapala on a federal drug trafficking charge.

FRANK HOWARD, 36, was sentenced to 15 years in prison, to be followed by three years of supervised release.

The sentencing 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 Federal Bureau of Investigation; Leo P. Schmitz, Director of the Illinois State Police; and Todd Barkalow, Freeport Police Chief. The investigation was conducted by the Rockford Area Violent Gang Task Force, the Stateline Area Narcotics Team ("SLANT"), and the Freeport Police Department. The Rockford Area Violent Gang Task Force is led by the FBI and includes members of the Rockford, Loves Park, and Freeport Police Departments. SLANT is a task force led by the Illinois State Police. The government is represented by Assistant U.S. Attorney Margaret J. Schneider.

Howard pleaded guilty on Dec. 18, 2018, to possessing cocaine with the intent to distribute. In a written plea agreement, Howard admitted that on April 26, 2018, he drove to Chicago from Freeport and picked up cocaine from a source of supply. As Howard was driving the cocaine back to Freeport to sell to customers, he was stopped by law enforcement on Interstate 90 near Rockford. With the assistance of a K-9 unit, law enforcement officers discovered approximately 126 grams of cocaine in Howard’s vehicle.

Howard also admitted in the plea agreement that during the same time period, he sold cocaine on four occasions to an individual who, unbeknownst to Howard, was a confidential informant working with law enforcement.

CHICAGO — A federal judge in Chicago has sentenced several defendants in a bank fraud scheme to prison terms and ordered them to pay more than $14.3 million in restitution.

CHARNPAL GHUMAN, 39, of Palatine, and AGA KHAN, 39, of Bloomingdale, were business partners who “flipped” gas stations by purchasing them and re-selling to buyers whom Ghuman and Khan knew were not qualified to obtain bank financing.  The pair conspired with a loan officer inside American Enterprise Bank to submit false application documents to obtain loans from the bank guaranteed by the U.S. Small Business Administration.  An accountant participated in the scheme by furnishing AEB with false tax returns to help get more than half of the loan applicants qualified for financing.  From 2006 to 2009, Ghuman and Khan obtained more than $40 million in loan proceeds as a result of the scheme.

Ghuman and Khan pleaded guilty to bank fraud charges, as did the loan officer, AKASH BRAHMBHATT, 44, of Spring, Texas, and the accountant, SHITAL MEHTA, 53, of Elk Grove Village.

U.S. District Judge John J. Tharp, Jr., on Thursday ordered restitution to AEB of $14,343,899.  Judge Tharp had previously sentenced all four defendants to prison terms.

The sentences and restitution order were 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 Federal Bureau of Investigation; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.  The SBA and the Federal Deposit Insurance Corp. assisted in the investigation.

According to evidence in the case, Ghuman and Khan set up various corporate entities that purchased multiple gas stations in Illinois and other areas of the Midwest for immediate resale at a higher price.  Ghuman and Khan arranged for the financing on behalf of the buyers through AEB loans, which were guaranteed by the SBA if certain requirements were met, including that the borrowers provide a percentage of equity.  Ghuman and Khan worked with Brahmbhatt to falsify the loan applications, which included false statements regarding the buyers’ income, employment and experience, as well as false tax returns submitted by Mehta.  Ghuman and Khan also falsified equity payments required by the buyers.

“Ghuman and Khan walked away with millions of dollars in loan proceeds, while the borrowers defaulted, leaving the bank’s loss in the millions of dollars,” Assistant U.S. Attorney Sheri H. Mecklenburg argued in the government’s sentencing memorandum.  “This was not a one-time lapse in judgment.  Defendants’ fraud was repeated and ongoing, over the course of years.”

Judge Tharp ordered prison terms and restitution for each of the defendants:

Ghuman: Five years and six months in prison; restitution of $11,843,899, of which $2 million is owed personally and the remainder owed jointly with Khan.  Ghuman also received a concurrent sentence of three years in prison and was ordered to pay $1,952,653 to the IRS after also pleading guilty to filing a false tax return.

Khan: Three years in prison; restitution of $10,843,899, of which $1 million is owed personally and the remainder owed jointly with Ghuman.

Brahmbhatt: Three years in prison; restitution of $10,843,899, of which $1 million is owed personally and the remainder owed jointly with Ghuman.

Mehta: One year and one day in prison; restitution of $500,000, owed personally.

CHICAGO — A federal judge has sentenced a Bolingbrook man to 19 years in prison for engaging in sex acts with an underage boy and enticing him to produce sexually explicit images of himself.

RONALD GOBENCIONG, 46, posed on social media as three separate individuals – an escort, an escort’s manager, and a client – to entice the 17-year-old boy to produce pornographic images of himself.  In February 2017, Gobenciong engaged in sex acts with the boy at a suburban hotel, after which he gave the boy money.  Gobenciong later threatened to distribute the pornographic images to the boy’s father unless the boy continued to have sex with him.  Gobenciong admitted in a plea agreement that he engaged in similar conduct with two other underage boys during the same approximate time period.

Gobenciong, also known as “David Marco,” “Steve John,” and “Joe,” pleaded guilty last year to one count of production of child pornography, and one count of sex trafficking of a minor.  U.S. District Judge Manish S. Shah imposed the 19-year sentence on Thursday in federal court in Chicago.

The sentence 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 Federal Bureau of Investigation; and Thomas J. Dart, Cook County Sheriff.  Valuable assistance was provided by the Bolingbrook Police Department.

As part of online and text communications with the boys, Gobenciong requested and received pornographic photos and videos of them.  Gobenciong knew the victims were under 18 years old at the time.

“Defendant cynically played on the fears and insecurities of children, as well as their desire for friendship,” Assistant U.S. Attorney Eric S. Pruitt argued in the government’s sentencing memorandum.  “The depravity and cruelty of this conduct cannot be overstated.”

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.

ROCKFORD — A Rockford man was indicted today by a federal grand jury on charges of sex trafficking. 

TRAVIS THOMAS, also known as “Travis Thompson,” “Dontaveous Harper,” and “Dontavious Harper," 28, was charged with sex trafficking and transporting an individual in interstate commerce for the purposes of prostitution. 

As alleged in the indictment, Thomas coerced the victim to engage in sex acts from December 2017 to April 2018, and transported the victim from Illinois to Wisconsin and Texas in February 2018 to engage in prostitution.

The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Jeffrey Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The Hoffman Estates Police Department assisted in the investigation. The government is represented by Assistant U.S. Attorney Monica V. Mallory.

The sex trafficking count is punishable by a statutory minimum sentence of 15 years in prison, and a maximum of life in prison.  Transporting an individual for prostitution is punishable by up to ten years in prison.  Transportation of an individual for prostitution through coercion is punishable by up to a maximum of life in prison.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  

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

CHICAGO — A north suburban man pleaded guilty today to federal criminal charges for enticing underage girls to engage in sex acts with him.

CASEY IRELAND, 36, of Antioch, pleaded guilty 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.  Each count carries a mandatory minimum sentence of ten years in prison, and a maximum sentence of life in prison.  U.S. District Judge Rebecca R. Pallmeyer set sentencing for June 24, 2019, at 11:30 a.m.

The guilty plea 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, the plea agreement states.  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, the plea agreement states.

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.

A federal jury found the owner of a now-defunct Chicago, Illinois home health company guilty today for her role in a scheme involving over $3 million in fraudulent claims to Medicare for home health services that were procured through the payment of kickbacks.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney John R. Lausch, Jr. of the Northern District of Illinois, Special Agent in Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.

After a seven-day trial, Jacqueline Tuanqui, 56, of Bartlet, Illinois, was convicted of one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks, seven counts of payment for specific kickbacks and one count of visa fraud.  Sentencing has been scheduled for July 1, 2019, before U.S. District Judge Andrea R. Wood of the Northern District of Illinois, who presided over the trial.

According to evidence presented at trial, from 2008 to 2015, Tunaqui paid kickbacks in return for the referral of Medicare beneficiaries to Hexagram Home Health Care (Hexagram), a home health company that operated in the Chicago metropolitan area between 2008 and 2016.  The evidence established that Tuanqui and her co-conspirators billed Medicare $12 million, at least $3 million of which was fraudulent.  Trial evidence included the testimony of four individuals who were charged and pleaded guilty, including Hexagram’s former general manager, director of nursing and two patient recruiters.  The government’s witnesses also included four other former employees who admitted to facilitating kickback payments and forging patient files to advance the conspiracies. 

This case was investigated by the FBI and HHS-OIG with the assistance of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Northern District of Illionis.  The case was prosecuted by Trial Attorneys Leslie Garthwaite and Daniel Griffin of the Criminal Division’s Fraud Section. 

CHICAGO — Ten individuals are facing criminal charges as part of a federal drug and gun investigation in Chicago.

During the multi-year investigation, law enforcement seized approximately 13 pounds of suspected methamphetamines, a half-kilogram of suspected heroin, approximately 13,000 pills of suspected ecstasy, and 18 firearms.  Much of the alleged drug trafficking occurred in the East Garfield Park neighborhood on the West Side of Chicago.

Many of the defendants were arrested Thursday, and detention hearings are being held this week in U.S. District Court in Chicago.

The charges were 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 and Explosives; and Eddie Johnson, Superintendent of the Chicago Police Department.  The Illinois State Police provided valuable assistance.  Assistant U.S. Attorneys Katie M. Durick, William Dunne and John Mitchell represent the government.

Indictments and criminal complaints unsealed in federal court charge ten defendants with drug or gun offenses.  GREGORY HARRIS, 32, of Dolton, is suspected of supplying ecstasy and heroin to ERIC JONES, 44, of Posen, according to the complaint against Jones.  Jones sold narcotics on three occasions earlier this year to an individual who, unbeknownst to Jones, was cooperating with law enforcement, the complaint states.  Jones was charged with distribution of a controlled substance. 

Law enforcement last week carried out a court-authorized search of Harris’s residence and discovered a loaded handgun.  Harris was previously convicted of several felonies and was not lawfully allowed to possess a firearm.  Harris was charged with one count of illegal possession of a firearm by a convicted felon.  During the search, law enforcement also discovered approximately 13 pounds of suspected methamphetamines packaged in cellophane-wrapped, heat-sealed baggies, as well as a quarter-kilogram of suspected heroin, and approximately 10,000 pills of suspected ecstasy.

Three other convicted felons were charged with illegal possession of a firearm: JHALEYL LOTT, 28, of Chicago; DARIAN TAYLOR, 32, of Melrose Park; and TYSHAWN HOLLINS, 21, of Chicago.  Taylor and Hollins are also charged with drug offenses for allegedly distributing narcotics.

Five other defendants are charged with various narcotics offenses as part of the investigation: CURTIS SHEPPARD, 21, of Chicago; MICHAEL WARD, 38, of Chicago; DIONETE DOTSON, 28, of North Riverside; KYERRE HENDERSON, 28, of Chicago; and CARL DANIELS, 23, of Chicago.

The public is reminded that charges contain only accusations and are 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.

ROCKFORD — A Chicago man was arrested Friday after being indicted on charges of bank theft.

BRANDON MOORE, 29, was indicted by a federal grand jury in Rockford on March 19, 2019.  According to the indictment, on June 28, 2018, Moore stole more than $1,000 belonging to the Heartland Bank and Trust in Sycamore.  Moore has been in custody since his arrest and was scheduled to appear at 2:00 p.m. today before U.S. Magistrate Judge Iain D. Johnston.

The arrest 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 Federal Bureau of Investigation; and Jim Winters, Chief of the Sycamore Police Department. The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

The charge of bank theft carries a maximum sentence of ten years’ imprisonment, a term of supervised release of up to three years following imprisonment, and a fine of up to $250,000 or twice the gross gain or gross loss resulting from that offense, whichever is greater, plus full restitution. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.  

The public is reminded that an indictment is only a charge and 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 — City of Chicago Alderman WILLIE B. COCHRAN pleaded guilty today to a federal fraud charge for pocketing money from a charitable fund intended to help families and children in his South Side ward.

Cochran, 66, of Chicago, pleaded guilty to one count of wire fraud.  The conviction is punishable by up to 20 years in prison.  U.S. District Judge Jorge L. Alonso set sentencing for June 20, 2019, at 2:00 p.m.

The guilty plea 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 Federal Bureau of Investigation.  The FBI initiated the investigation after receiving information from the former City of Chicago Legislative Inspector General’s Office, which was headed at that time by Faisal Khan.  The government is represented by Assistant U.S. Attorneys Heather McShain and Christopher Stetler.

While representing the 20th Ward in the Chicago City Council, Cochran operated the “20th Ward Activities Fund,” which he purported to use for charitable endeavors to help families and children living in the ward.  Cochran controlled a bank account connected to the fund.  When soliciting donations to the fund, Cochran falsely represented that all contributions would be used for charitable events, including a back-to-school picnic, a Valentine’s Day party for senior citizens, and events during the holiday season in November and December.

Cochran admitted in a plea agreement that he used some of the contribution money for his own personal use, including paying his daughter’s college tuition, withdrawing cash at casino ATM’s, and purchasing items for his home.  From January 2010 to April 2014, Cochran pocketed approximately $14,285 from the fund and converted the money to his own personal use, the plea agreement states.

CHICAGO — A federal judge has sentenced a Will County man to more than four years in prison for stealing his elderly mother-in-law’s identity to misappropriate more than $175,000 from her.

JOHN V. KNAPP, 66, of Romeoville, pleaded guilty last year to one count of wire fraud and one count of aggravated identity theft.  U.S. District Judge Sharon Johnson Coleman on Friday sentenced Knapp to four and a half years in prison and ordered him to pay restitution of $177,538.38.

Knapp admitted in a plea agreement that he misappropriated funds from his mother-in-law in 2014 and 2015.  At the time, his mother-in-law was in her mid-90s.  At sentencing, the mother-in-law submitted a statement to the Court detailing the impact of Knapp’s conduct, which included stealing money that the mother-in-law’s late husband had earned to take care of her.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government was represented by Assistant U.S. Attorneys Edward G. Kohler and Rebekah Holman.

Evidence in the case revealed that Knapp on approximately 100 occasions misappropriated funds from his mother-in-law’s investment and bank accounts.  Knapp assumed her identity during four phone calls to her investment company to fraudulently authorize $129,500 in withdrawals from her investments.  During the calls, Knapp fraudulently provided his mother-in-law’s personal identifying information, which at times included her address, date of birth, telephone number, investment account number, and last four digits of her Social Security number.  As soon as the funds were deposited in his mother-in-law’s bank account, Knapp fraudulently caused checks to be made payable to him out of the account.

During one of the fraudulent phone calls, Knapp’s mother-in-law was residing in a hospital.  At the time of two other calls, she was residing at a rehabilitation center.

CHICAGO — A north suburban man was sentenced today to five years in federal prison for swindling more than $1.4 million from several clients, some of whom were elderly and had pledged their retirement savings.           

RICHARD K.  BOOY, the founder of Principal Financial Strategies LLC and Safe Financial Strategies Inc., used the promise of no-risk investments and guaranteed returns to persuade at least 15 clients to hand over more than $1.4 million.  Although Booy claimed to be affiliated with the more widely known investment firm Principal Financial Group, he had no actual relationship with the firm and was not authorized to invest client funds with it.  Instead of investing the funds as promised to clients, Booy used the victims’ money to cover personal expenses, including health insurance, fitness club membership, and purchases at Best Buy and DirecTV, and to make Ponzi-type payments to earlier investors.

Booy, 50, of Vernon Hills, pleaded guilty last year to one count of mail fraud.  U.S. District Judge Gary Feinerman imposed the 60-month sentence in federal court in Chicago.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration; and Tanya Solov, Director of the Illinois Securities Department of the Illinois Secretary of State.

“Defendant committed much of this egregious conduct while sitting in his victims’ homes and in their places of worship,” Assistant U.S. Attorney Matthew S. Ebert argued in the government’s sentencing memorandum.  “While face-to-face repeatedly with his victims, Booy brazenly made his pitch knowing that his actual purpose was to obtain and then devour his victims’ savings, pensions, and income.”

Booy carried out his fraud scheme from 2012 to 2016.  He continued his scheme even after Principal Financial Group obtained a temporary restraining order against him that led to a court-authorized seizure of his computer and other evidence from Booy’s home.

Most of Booy’s victims were elderly, and some furnished him with their entire life savings.  The victims included a Chicago pastor, a retired painter, a retired government worker, and an individual who suffers from Parkinson’s Disease.

CHICAGO — The owner of a debt collection company spent tens of thousands of dollars in an effort to corruptly influence and obtain business from court clerks in Florida and Illinois, including the Cook County Circuit Court Clerk, according to a federal indictment returned in Chicago.

DONALD DONAGHER, JR., 67, of Mechanicsburg, Pa., and Palm Beach Gardens, Fla., was the owner and Chief Executive Officer of Harrisburg, Pa.-based PENN CREDIT CORPORATION.  From 2009 to 2016, Donagher and Penn Credit provided money and services to benefit the court clerks and related individuals and entities, corruptly seeking favorable treatment in the awarding of the courts’ debt collection work, the indictment states.  The efforts included payments to certain clerks’ campaign committees, donations to charities supported by certain clerks, financial sponsorship of events hosted by certain clerks, and free or discounted “robocalls” made by Penn Credit on behalf of certain clerks’ campaigns, according to the indictment.  

The indictment was returned Thursday in U.S. District Court in Chicago.  It charges Donagher and Penn Credit with one count of conspiracy to commit federal program bribery, and five counts of federal program bribery.  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; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Patrick M. Blanchard, Cook County Inspector General.  The government is represented by Assistant U.S. Attorneys Heather K. McShain and Ankur Srivastava.

According to the charges, Donagher in June 2011 caused Penn Credit to pay $5,000 to a scholarship fund named for the Cook County Circuit Court Clerk.  Later that summer, Penn Credit began collecting debt for the Clerk’s Office, the indictment states.  On Aug. 19, 2011 – less than three weeks after Penn Credit began its work for Cook County – Donagher sent an email to Penn Credit employees and an Illinois lobbyist, advising that Donagher had promised the Cook County Clerk “10k of ‘early’ money,” the indictment states.  The following month, Donagher caused a $10,000 contribution to be made in his name “towards the fundraising efforts of Contributions to Friends of [the Cook County Circuit Court Clerk],” the indictment states.  The indictment further states that, several months later, Penn Credit made hundreds of thousands of phone calls on behalf of the Cook County Circuit Court Clerk without invoicing or receiving payment from the Clerk’s campaign. 

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 conspiracy charge is punishable by up to five years in prison, while the maximum sentence for federal program bribery is ten years.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.

The creator of a fraudulent Chicago-area pharmacy has been sentenced to 60 months in federal prison for his role in a $1.6 million health care fraud scheme.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney John R. Lausch Jr. of the Northern District of Illinois, Special Agent in Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.

James Calhoun, 74, of Des Plaines, Illinois, was sentenced by U.S. District Judge John Z. Lee of the Northern District of Illinois.  Judge Lee also ordered Calhoun to pay $1.6 million in restitution.  Calhoun pleaded guilty in September 2018 to one count of conspiracy to commit health care fraud. 

As part of his guilty plea, Calhoun admitted that he defrauded Medicare Part D of $1.6 million through an elaborate scheme in which he created a fictitious pharmacy on paper called “Cal’s Pharmacy” and used it to process hundreds of prescription claims for drugs that were never dispensed.  For most of its existence, the pharmacy had no physical location or inventory, he admitted.  Calhoun further admitted that he enrolled himself as a beneficiary in a Part D program and, from around January 2012 continuing through at least May 2015, Calhoun went to doctors’ appointments to try to obtain prescriptions for drugs that he would then pretend to fill at Cal’s Pharmacy, including and most often for the drug Arixtra, an expensive daily injection.  Calhoun also admitted that acting as Cal’s Pharmacy’s owner, a fact that was concealed through the use of a straw owner, Calhoun collected all of the Part D reimbursement payments made to Cal’s Pharmacy.  In addition to pretending to fill prescriptions for himself, Calhoun admitted that he fabricated prescription claims for three other people, including his codefendant and wife, Betty Calhoun.  Calhoun also admitted that later on in the scheme, when Medicare started to deny the prescription claims, Calhoun appealed the denial and knowingly created and submitted to Medicare false and fabricated checks as part of his appeal, including to an administrative law judge, claiming they showed his payment for Arixtra prescriptions from Cal’s Pharmacy.   

The total loss to Medicare was $1.6 million, Calhoun admitted.

Betty Calhoun pleaded guilty to one count of health care false statements in November 2018 and was sentenced to probation. 

This case was investigated by the FBI and HHS-OIG.  Trial Attorney Leslie S. Garthwaite of the Criminal Division’s Fraud Section prosecuted the case. 

The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force, 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, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.   In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

CHICAGO — A federal jury has convicted a former Chicago Police Department sergeant of participating in a robbery and extortion crew that targeted suspected drug dealers.

The jury in U.S. District Court in Chicago on Monday convicted EDDIE C. HICKS, also known as “David Rose,” 70, on all eight counts against him, including conspiracy to commit racketeering; drug conspiracy; possession of a controlled substance with intent to distribute; carrying a firearm in furtherance of a drug trafficking offense and crime of violence; theft of government funds; and failure to appear for a judicial proceeding.  The conviction is punishable by up to life in prison.  U.S. District Judge Joan Humphrey Lefkow did not immediately schedule sentencing.  A status hearing is set for April 10, 2019.

The conviction 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 Federal Bureau of Investigation.  Valuable assistance was provided by the U.S. Attorney’s Office in the Eastern District of Michigan, U.S. Marshals Service, Detroit, Mich., Police Department, Chicago Police Department, Cook County Sheriff’s Police Department, Bolingbrook Police Department, and Alsip Police Department.

The government is represented by Assistant U.S. Attorneys Morris Pasqual and Grayson Walker.

Hicks served as a Chicago Police officer from 1970 to 2000, ultimately attaining the rank of sergeant.  In the 1990s, he was assigned to CPD’s Narcotics Section.  Evidence at trial revealed that for nearly a decade Hicks and three other law enforcement personnel participated in a robbery ring that targeted suspected drug dealers under the guise of legitimate police investigations.  The four-person crew staged phony drug raids and automobile stops of suspected dealers, threatened them with arrest, then kept the drugs, cash or weapons they discovered.  From the early 1990s to 2001, the scheme netted the crew thousands of dollars in cash, multi-kilogram quantities of cocaine, hundreds of pounds of marijuana, and several firearms.

The three other crew members were previously convicted: LARRY HARGROVE, a former Chicago Police sergeant, was sentenced to 13 years in prison; MATTHEW L. MORAN, a former investigator for the State of Illinois Department of Professional Regulation, was sentenced to seven years and ten months in prison; and LAWRENCE W. KNITTER, a former CPD electrical mechanic, was sentenced to nine years and four months in prison.

The failure-to-appear charge against Hicks stemmed from his flight on the eve of trial when it was originally scheduled in June 2003.  Hicks was free on bond when he failed to appear in court.  He remained a fugitive until his arrest in Detroit, Mich., in September 2017.

CHICAGO — Thirty-five individuals are facing criminal charges as part of a joint federal and state investigation into heroin and fentanyl trafficking in Chicago.

During the multi-year investigation, dubbed “Operation Road Rage,” law enforcement seized a kilogram of heroin, most of which contained fentanyl, approximately $100,000 in cash, five firearms, and four vehicles.  Much of the alleged drug trafficking occurred in the West Garfield Park neighborhood on the West Side of Chicago.  Many of the defendants allegedly distributed heroin and fentanyl-laced heroin to customers in the Chicago area, with drivers dispatched to make deliveries after customers placed orders on a telephone hotline.

The investigation was jointly conducted by the Organized Crime Drug Enforcement Task Force (OCDETF) and the Chicago High Intensity Drug Trafficking Task Force (HIDTA).  The task forces partner with federal, state and local law enforcement agencies to identify, disrupt and dismantle the most serious drug trafficking organizations.

Criminal complaints unsealed in U.S. District Court in Chicago charge 22 defendants with federal drug offenses.  Many of the federal defendants were arrested Thursday, and detention hearings will be held this week in federal court in Chicago.  Thirteen other defendants were charged in state complaints, and many of them were also arrested Thursday.  The state defendants have begun making initial appearances in Cook County Criminal Court.

The charges were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kimberly M. Foxx, Cook County State’s Attorney; Brian McKnight, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; Nicholas Roti, Director of HIDTA; and Eddie Johnson, Superintendent of the Chicago Police Department.  Valuable assistance was provided by the U.S. Marshals Service.  Assistant U.S. Attorneys Misty Wright and Shy Jackson represent the government.

Fourteen federal defendants are charged in U.S.A. v. Robinson, et al (19 CR 201).  The complaint describes a drug trafficking organization in which heroin hotline operators and dispatchers often referred to themselves as “Sean.”  Customers intending to purchase heroin and fentanyl-laced heroin called a designated telephone number operated by members of the “Sean” drug trafficking operation, the complaint states.  The dispatchers then sent the organization’s many distributors to various West Side locations to conduct the drug deals, the complaint states.  Undercover law enforcement officers disrupted the Sean organization by conducting approximately 50 narcotics purchases after calling the Sean phones and meeting with the distributors, according to the complaint.  Charged with drug conspiracy are four individuals who, at various times, were responsible for dispatching the distributors: THOMAS CLEVELAND, 27, of Chicago, FREDERICK GILES, 26, of Chicago, AMELIA SMITH, 30, of Country Club Hills, and MICHAEL ROBINSON, 24, of Country Club Hills; as well as ten alleged distributors: WILLIE BLAIR, 32, of Chicago, LAWRENCE CLARK, 26, of Chicago, CARDELL COLEMAN, 21, of Chicago, JOLISA GAINES, 29, of Chicago, D’ANGELO GILES, 21, of Chicago, TYRELL KELLY, 27 of Chicago, KEITH MANNING, 27, of Bellwood, DEVONTE SMITH, 26, of Chicago, KAJUAN SMITH, 30, of Chicago, and DESMOND WHITE, 25, of Chicago.

Two federal defendants are charged in U.S.A. v. Chose, et al (19 CR 202).  Charged with drug conspiracy are ANNA T. CHOSE, 54, of Morris, and ROXANNE E. CONN, 56, of Wilmington.  The charges accuse the pair of being regular customers of the Sean drug trafficking organization.  The complaint describes three instances in the summer of 2018 when Chose and Conn purchased distribution quantities of narcotics from Robinson, and alleges that they regularly purchased narcotics from the Sean drug trafficking organization.

Clark and three other federal defendants are charged in U.S.A. v. Pitts, et al (19 CR 204).  Charged with drug conspiracy and distribution offenses are MICHAEL PITTS, 33, of Bellwood, TEVIN FORD, 27, of Chicago, and JHAMAAL HANEY, 26, of Chicago.  According to the complaint, the four defendants conspired to distribute approximately 94.8 grams of fentanyl-laced heroin to an undercover law enforcement officer from August 2017 to March 2018.  The charges also hold Pitts personally responsible for distributing a total of approximately 386.5 grams of heroin and fentanyl-laced heroin to undercover officers from August 2017 to May 2018.  One of Pitts’ customers suffered a drug overdose in May 2018 after Pitts distributed 1.13 grams of fentanyl-laced heroin to him, the complaint states.  The man appeared to be unconscious when Pitts pulled him out of a vehicle and left him at a nearby bus stop, the complaint states.  Chicago Fire Department personnel arrived on the scene and worked to successfully revive the man, the complaint states.

Three other federal defendants are charged with narcotics offenses as part of the investigation: JUSTIN BANASIAK, 35, of Chicago; JACLYN ROWLEY, 31, of Michigan City, Ind.; and MATTHEW ROSOLIK, 32, of Trail Creek, Ind.

The charges in the complaints carry maximum penalties of between 20 years and life imprisonment.  If convicted, the Court must impose reasonable sentences under federal sentencing statutes and the advisory U.S. Sentencing Guidelines. 

The public is reminded that charges contain only accusations and are 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.

CHICAGO — Former Illinois attorney EDWARD R. VRDOLYAK pleaded guilty today to federal tax evasion for assisting another lawyer in evading taxes on income received from a multi-billion dollar legal settlement with tobacco companies.

Vrdolyak, 81, of Chicago, pleaded guilty to one count of tax evasion.  The charge is punishable by up to five years in prison.  U.S. District Judge Robert M. Dow, Jr., set sentencing for July 23, 2019.

The guilty plea was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.  The government is represented by Assistant U.S. Attorney Amarjeet S. Bhachu and Special Assistant U.S. Attorney Michael T. Donovan.

Vrdolyak admitted in a plea agreement that he assisted another lawyer, co-defendant DANIEL P. SOSO, in evading federal income taxes owed by Soso for the calendar years 1993 through 2004, and 2008 through 2013.  The income was derived from attorney fees received in connection with a $9.2 billion settlement between the State of Illinois and a number of tobacco companies in the 1990s.  At the time of the settlement, Vrdolyak and Soso were licensed Illinois attorneys.  The pair collected legal fees from the settlement pursuant to agreements with one of the attorneys that represented the State of Illinois.  Pursuant to these agreements, Vrdolyak made payments to Soso between 2000 and 2005 of approximately $1,925,830, representing Soso’s agreed-upon share of the fees of the tobacco litigation.

In August 2005, the IRS served a notice of levy on The Law Offices of Edward R. Vrdolyak, which required the turnover of all salary, wages and other amounts owed to Soso.  Over the next two years, Vrdolyak received approximately $262,854 due Soso, but he concealed receipt of these funds from the IRS, knowing such concealment would assist Soso in evading the payment of taxes and assessments due the IRS, the plea agreement states.  Vrdolyak later caused approximately $170,242 to be paid to Soso instead of remitting these funds to the IRS.

Soso, 67, of Alsip, pleaded guilty last month to one count of tax evasion.  Judge Dow set Soso’s sentencing for June 25, 2019.

ROCKFORD — LEILANI HILLIS, 60, of Rockford, the former director of operations of a Rockford non-profit organization, pleaded guilty Monday before U.S. District Judge Frederick J. Kapala to one count of mail fraud and one count of tax fraud.

According to a written plea agreement, since 2001 Hillis was an employee of a non-profit organization whose mission was to attract, retain and expand jobs in the Rockford area.  The organization received funding from private sources and local governments. During her employment, Hillis handled the organization’s payroll, human resource matters and accounting, and oversaw the annual audit.  As of 2009, Hillis had signatory authority on the organization’s bank account and access to the organization’s PayPal account.  The organization issued employees, including Hillis, a credit card in the employee’s name.  From 2009 through April 2018, Hillis used her employee-issued credit card to make unauthorized purchases for her personal benefit totaling $632,718.99.  Hillis concealed her crime by using the organization’s accounting codes to make it appear the purchases were for the organization’s benefit, and she forged the initials of the organization’s president on the expense reports.  Hillis issued and signed checks from the organization’s account to the bank, knowing the payments included money to pay for her unauthorized purchases.

Hillis also admitted that she did not report as income the money from the organization that she used to pay the organization’s credit card for her unauthorized personal purchases.  As a result, for the tax years 2014 through 2017, Hillis failed to pay $151,186.91 in federal income taxes.

HILLIS faces a maximum sentence of 20 years’ imprisonment for mail fraud, and a maximum sentence of three years for tax fraud, while each charge also carries a fine of up to $250,000 or twice the gross gain or gross loss resulting from that offense, whichever is greater, plus full restitution. The actual sentence will be determined by the United States District Court, guided by the Sentencing Guidelines.  Sentencing for Hillis is set for June 27, 2019, at 9:00 a.m., before U.S. District Judge Philip G. Reinhard. 

The guilty plea 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 Federal Bureau of Investigation; and Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.

CHICAGO — Six defendants have been charged as part of an ongoing federal investigation into corruption schemes allegedly carried out by city of Harvey officials or their associates.  Among the defendants are two cousins with high-ranking relatives in Harvey government who allegedly extorted cash from a strip club owner, and two Harvey police officers who allegedly falsified a police report to protect acquaintances from facing firearm charges.  Federal law enforcement today executed court-authorized search warrants at two locations in Harvey.

Several of the defendants were arrested today and are scheduled to make initial court appearances today at 2:00 p.m. before U.S. Magistrate Judge Maria Valdez in Chicago.

The charges were 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 Federal Bureau of Investigation; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development's Office of Inspector General in Chicago; and Thomas J. Dart, Cook County Sheriff.  The Harvey Police Department is cooperating in the investigation.  The government is represented by Assistant U.S. Attorneys Sean J.B. Franzblau, Grayson S. Walker and Brian P. Netols.

Criminal complaints unsealed today in federal court in Chicago allege three separate corruption schemes:

U.S. v. Kellogg, et al, 19 CR 192

ROMMELL KELLOGG, 66, of Harvey, and COREY JOHNSON, 63, of Harvey, are charged with conspiracy to commit extortion.  Kellogg and Johnson are cousins with high-ranking relatives in Harvey government, the complaint states.  From 2012 to 2016, Kellogg and Johnson conspired to regularly extort payments from a Harvey strip club owner based on threats that the city would shut down the business if the payments were not made, the complaint states.  The charges allege that in exchange for the payments, city officials allowed the business to operate, knowing that acts of prostitution were occurring onsite.

U.S. v. Muhammad, et al, 19 CR 190

DERRICK MUHAMMAD, 70, of South Holland, and DERRICK MOORE, 48, of Blue Island, are charged with obstruction of justice and conspiracy to obstruct justice.  Muhammad and Moore are Harvey Police Department officers who allegedly worked together to falsify a police report to protect two acquaintances from possibly facing firearm charges.  The acquaintances – a father and son – were convicted felons who could not legally possess a firearm, the complaint states. 

In March 2018, the operator of a Harvey-based towing company notified Muhammad that a handgun was discovered in a Chrysler 300 sedan that had been reported stolen and ordered towed by police in nearby Calumet City, the complaint states.  The sedan was used by the father and had recently been driven by the son.  Muhammad and Moore schemed to conceal the firearm’s connection to the pair, with Moore preparing and filing a police report stating that he discovered the weapon in some brush near the towing company “while on patrol,” the charges allege.

U.S. v. Luster, et al, 19 CR 191

DONALD LUSTER, 55, of Dixmoor, and WILL WILEY, 56, of Harvey, are charged with conspiracy to commit federal program bribery.  Luster worked as a private consultant to the city of Harvey.  In November 2017, he agreed with Wiley to solicit bribe payments from an entrepreneur who owned a towing company in a nearby suburb, the complaint states.  In exchange for the bribes, Luster would provide the entrepreneur with a lease to a parcel of land owned by the city of Harvey, the complaint states.

Unbeknownst to Luster and Wiley, the entrepreneur was cooperating with law enforcement and had agreed to make consensual recordings of conversations and meetings with the pair, the complaint states.  In a recorded meeting on Dec. 3, 2017, the entrepreneur paid a cash bribe of $5,000 to Wiley, the complaint states.  Shortly thereafter, an employee of the city of Harvey provided the entrepreneur access to the parcel of land.  On Jan. 5, 2018, the entrepreneur delivered a $7,000 cash bribe to Luster, after which Luster and the city employee advised that the entrepreneur could continue to access and use the parcel, the complaint states.  An official lease was never provided to the entrepreneur, the complaint states.

~~~

The public is reminded that charges are 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 conspiracy counts are each punishable by up to five years in prison, while the obstruction charge is punishable by up to 20 years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

Anyone wishing to notify law enforcement of suspected corruption in Harvey is encouraged to email the FBI at [email protected].

CHICAGO — A federal jury today convicted a Chicago man on sex trafficking charges for arranging a commercial sex encounter for a 16-year-old girl that ended in the child’s murder in a south suburban garage.

JOSEPH HAZLEY, 35, was convicted on one count of conspiracy to engage in sex trafficking of a minor, one count of sex trafficking of a minor, and four counts of transporting a person across state lines for the purposes of prostitution.

The conviction is punishable by a maximum sentence of life in prison.  U.S. District Judge Sharon Johnson Coleman set sentencing for June 4, 2019.

The conviction 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 Federal Bureau of Investigation; and Eddie Johnson, Chicago Police Superintendent.  Substantial assistance was provided by the South Suburban Major Crimes Task Force, Cook County Sheriff’s Office, Cook County State’s Attorney’s Office, and Markham Police Department.  The government is represented by Assistant U.S. Attorneys Christopher Parente and Kelly Greening.

Evidence at trial revealed that Hazley posted the girl’s information in commercial sex advertisements on Backpage.com, and arranged multiple meetings for her to engage in prostitution.  Hazley drove the girl to several meetings in the Chicago area in December 2016. 

One of the meetings occurred in the early morning hours of Christmas Eve, after a customer had responded to Hazley’s posting.  Hazley drove the girl to Markham and waited in his car a few yards from the garage while she met with the customer.  During the encounter, the customer allegedly murdered the girl.

The suspected customer was subsequently arrested by the Chicago Police Department and charged with murder in Cook County Criminal Court.

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.  The hotline is available 24 hours a day, 7 days a week.

ROCKFORD — ALVIN J. MALONE, 31, of Rockford, was indicted today by a federal grand jury in Rockford for illegally possessing firearms as a convicted felon. 

The indictment alleges that on Feb. 19, 2019, Malone illegally possessed a loaded 12-gauge shotgun, a .22-caliber rifle, and a loaded .45 semi-automatic pistol.

Malone has been in custody since his arrest on Feb. 19, 2019.  He will appear for arraignment on March 6, 2019, at 11:00 a.m., before U.S. Magistrate Judge Iain D. Johnston in Rockford.

The indicted 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 the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.  The Rockford Police Department assisted in the investigation. The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

The charge of illegally possessing a firearm carries a maximum sentence of ten years in prison, to be followed by up to three years of supervised release, and a fine of up to $250,000.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

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

ROCKFORD — A Poplar Grove man was sentenced today by U.S. District Judge Frederick J. Kapala for theft of government funds. 

JONATHAN GORZELA, 56, was sentenced to 21 months in federal prison, to be followed by three years of supervised release. Gorzela, who pleaded guilty to the charge on Oct. 12, 2018, was also ordered to pay restitution in the amount of $160,858.

The sentencing was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Tracey Thanos, Special Agent-in-Charge of the Social Security Administration’s Office of Inspector General in Chicago. The Illinois Department of Rehabilitative Services assisted in the investigation. The government was represented by Assistant U.S. Attorney Margaret J. Schneider.

According to a written plea agreement, between April 1991 and December 2015, Gorzela received disability benefits from funds administered by the Social Security Administration that he was not entitled to receive.  Gorzela began receiving Social Security Income disability benefits in July 1984 after he sustained a gunshot wound to his back that left him a paraplegic.  Gorzela was required to immediately report to the SSA any changes in income, family size or composition, family income, benefits from other sources, improvement in medical condition, or return to work.  In multiple documents submitted to the SSA, Gorzela acknowledged he understood his responsibility to report any such changes to the SSA.  Gorzela married in April 1991 and from that date through October 2015 did not disclose his marriage, nor the fact that his spouse was employed throughout the time of the marriage, or his spouse’s income. 

In February 1998, Gorzela used false documentation to obtain a second Social Security number under another name.  From 2000 through 2014 Gorzela obtained various jobs using the second social security number and the other name.  None of the income obtained from that employment was reported to the SSA.  As a result of Gorzela’s failure to report his marriage, his wife’s income, and the income he earned using his second identity to the SSA, Gorzela was overpaid approximately $160,858 in SSI disability benefits.

Gorzela also used his second identity to falsely obtain payment from the Illinois Dept. of Rehabilitative Services for the use of a paid personal assistant for which he qualified due to his injury.  Between April 2006 and June 2008, Gorzela billed the IDRS approximately $28,566 for services purportedly provided to him under his alias identity.  In addition, Gorzela billed the IDRS for services purportedly provided to the defendant by his son during the time periods that his son was incarcerated and during periods that Gorzela was working full time.  Those billings resulted in the IDRS paying the defendant’s son approximately $21,382 for services that were not performed.  In total, Gorzela caused the IDRS to overpay $49,948 for services that were not performed.

CHICAGO — A federal jury has convicted a 30-year employee of a McHenry County manufacturing firm of stealing trade secret information while planning to move to China to work for a rival company.

The jury in U.S. District Court in Chicago on Monday convicted ROBERT O’ROURKE, 59, of Lake Geneva, Wisc., on seven counts of theft of trade secrets.  Each count is punishable by up to ten years in prison.  U.S. District Judge Andrea R. Wood set sentencing for June 3, 2019.

The conviction 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 Federal Bureau of Investigation.  The government is represented by Assistant U.S. Attorneys Shoba Pillay and Christopher V. Parente.

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, he began several months of negotiations to take a similar job with a rival firm in Jiangsu, China, eventually accepting the position of Vice President.

Evidence at trial revealed that in September 2015, while still employed with 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.