Northern District of Illinois
Press releases recorded for this federal judicial district.
Former Associate Clerk in Cook County Circuit Court Clerk’s Office Indicted for Lying to Federal Grand Jury Investigating Possible Hiring Violations in the OfficeRead the Press Release
CHICAGO — A former associate clerk in the Cook County Circuit Court Clerk’s Office lied under oath to a federal grand jury when she denied selling tickets for the Clerk’s campaign fundraisers to other employees in the office, according to a federal indictment announced today.
BEENA PATEL sold fundraiser tickets to colleagues in the Clerk’s office and knew that other employees did the same, the indictment states. The fundraisers were held several times each year by an entity that raises money for the Clerk’s campaign fund. When asked about it during testimony before a federal grand jury on or about Oct. 15, 2015, Patel said she never sold tickets to employees of the Clerk’s office, and that she knew of no other employees who collected money or handed out tickets to the fundraisers, according to the indictment. The indictment states that both statements were false.
The indictment was returned Thursday in U.S. District Court in Chicago. It charges Patel, 55, of Chicago, with three counts of making false declarations before a grand jury. Each count carries a maximum sentence of five years in prison. The Court has not yet scheduled an arraignment hearing.
The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Kimberly M. Foxx, Cook County State’s Attorney; Patrick M. Blanchard, Cook County Inspector General; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
“Perjury before a grand jury is a serious offense and fundamentally undermines the investigative process of the grand jury,” said Acting U.S. Attorney Levin. “Witnesses who testify before federal grand juries must be held accountable if they violate the oath they take to tell the truth.”
According to the indictment, the grand jury was conducting an investigation of possible criminal violations in connection with the purchasing of jobs and promotions within the Clerk’s office. Patel testified before the grand jury on or about Oct. 15, 2015, and on or about July 14, 2016, and the indictment alleges that Patel lied during both sessions.
In addition to the false statements about the fundraiser tickets, the indictment also charges Patel with providing false statements to the grand jury about two other matters. Patel allegedly lied when she denied knowing that another employee in the Clerk’s office had spoken to law enforcement and testified in the grand jury. The indictment further alleges that she falsely denied having knowledge of efforts made to assist another Clerk’s office employee with a promotion and pay increase. The same employee had received two prior raises and promotions after the employee’s brother contributed approximately $10,000 to the entity that raises money for the Clerk’s campaign fund, the indictment states.
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.
The government is represented by Assistant U.S. Attorneys Heather McShain and Ankur Srivastava.
Former Chief Executive of Chicago Public Schools Sentenced to More Than Four Years in Prison in Connection with Bribery and Kickback SchemeRead the Press Release
CHICAGO — BARBARA BYRD-BENNETT was sentenced today to more than four years in federal prison for using her position in charge of the Chicago Public Schools to guide lucrative no-bid contracts to her former employer in exchange for bribes and kickbacks.
While serving as the Chief Executive Officer of CPS, Byrd-Bennett steered no-bid contracts worth more than $23 million to two education-consulting firms, THE SUPES ACADEMY LLC and SYNESI ASSOCIATES LLC. In exchange, Byrd-Bennett expected to receive cash kickbacks from the companies, as well as a consulting job at SUPES upon her retirement from CPS. Byrd-Bennett admitted in a plea agreement that the kickbacks were to be paid to her in the form of a “signing bonus” on the first day of her new employment.
Byrd-Bennett, 67, of Solon, Ohio, pleaded guilty in 2015 to one count of wire fraud. In addition to the 54-month prison sentence, U.S. District Judge Edmond E. Chang also fined Byrd-Bennett $15,000 and ordered that she and her co-defendants jointly share in a $254,000 restitution payment to CPS. Byrd-Bennett was ordered to report to prison no later than Aug. 28, 2017.
The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Nicholas J. Schuler, Inspector General for CPS.
“Byrd-Bennett agreed to cheat and deceive CPS from the get-go, to eliminate any opposition to her efforts to expand contracts for the SUPES entities within CPS, and to line her pockets with money obtained from a cash-strapped school district through her fraud,” Assistant U.S. Attorneys Megan Cunniff Church and Lindsay C. Jenkins argued in the government’s sentencing memorandum. “She corrupted the process entirely.”
Byrd-Bennett had previously worked as a consultant for SUPES and Synesi before moving to CPS in May 2012. In addition to the expected kickback from the contracts, Byrd-Bennett admitted in her plea agreement that the companies provided her with numerous other benefits while she was CEO, including meals and tickets to sporting events. She resigned as CEO on June 1, 2015.
All five defendants charged in the case have now been convicted and sentenced. The Wilmette-based SUPES and the Evanston-based Synesi, as well as their former owners, GARY SOLOMON, 49, of Wilmette, and THOMAS VRANAS, 36, of Glenview, pleaded guilty to federal criminal charges last year. Solomon admitted that he maintained a line item within the companies’ internal financial statements to set aside Byrd-Bennett’s kickback money, which would be paid in the form of a one-time signing bonus on her first day back. Solomon told Byrd-Bennett in a 2012 email, “If you only join for the day, you will be the highest paid person on the planet for that day. Regardless, it will be paid out on day one.”
Judge Chang today sentenced Vranas to 18 months in prison. Solomon was sentenced last month to seven years in prison.
Federal Authorities Announce Criminal Charges in Tax CasesRead the Press Release
CHICAGO — Federal authorities today announced criminal charges against three Chicago-area defendants for a variety of alleged tax frauds. Although Tax Day has recently come and gone, the prosecutions serve as a warning for citizens to comply with their tax obligations.
Two Chicago-area tax preparers were charged with assisting clients in obtaining thousands of dollars in fraudulent refunds. The preparers fraudulently reduced their clients’ tax liabilities by misrepresenting their eligibility to claim tax credits, such as dependent exemptions, education expenses, real estate and child credits.
In addition, an Illinois attorney was charged with filing fraudulent individual income tax returns that willfully omitted more than $637,000 in income he received from his law firm.
“It is imperative to remind the public that criminal tax prosecutions occur throughout the year,” said Joel R. Levin, Acting United States Attorney for the Northern District of Illinois. “Tax preparers and individuals who willfully file false returns will be held accountable.”
“The IRS Criminal Investigation Division is committed to ensuring that all taxpayers pay their fair share,” said Gabriel L. Grchan, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. “We are aggressively serving the American people by investigating criminal violations of the Internal Revenue Code. Tax fraud does not know a season – IRS special agents pursue criminals year round, not only at tax time.”
In addition to criminal penalties, including incarceration, fines and the costs of prosecution, tax evaders remain responsible for all taxes and interest due, as well as civil penalties, the officials noted. Individuals making false claims against the government may be required to pay restitution and could be sued civilly for an amount greater than the fraudulent claims.
In an indictment returned earlier this month, LAURIE HELFER, 55, was charged with preparing and filing false and fraudulent income tax returns. Helfer, a professional tax preparer who owned Northlake-based “The Tax Lady Laurie,” filed the returns on behalf of clients for the tax years 2008 through 2010, according to the indictment. The returns claimed false credits for earned income, education and child care expenses, the indictment states. The government in Helfer’s case is represented by Assistant U.S. Attorneys Rick D. Young and Carol A. Bell.
Another professional tax preparer, LONNIE BLAKNEY, who owned Chicago-based “Blakney Tax Associates,” was charged earlier this month with preparing and filing individual income tax returns that he knew contained false and fraudulent information. Blakney, 63, of Normal, Ill., filed the returns on behalf of various taxpayers for the tax years 2010 and 2011, according to the indictment. The false information included invalid credits for real estate taxes, charitable donations, child and dependent care costs, and education expenses, according to the indictment. The government in Blakney’s case is represented by Assistant U.S. Attorney John D. Mitchell.
The attorney, TIMOTHY K. LIOU, was charged earlier this month with filing fraudulent individual income tax returns for the tax years 2010, 2011 and 2012. Liou, 50, of Wheaton, willfully omitted approximately $637,380 in gross income he had received from his firm, “The Liou Law Firm,” according to the indictment. Assistant U.S. Attorney Brian Netols represents the government in Liou’s case.
The public is reminded that charges are not evidence of guilt. The defendants are presumed innocent and are 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.
For tips and guidelines 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.
Belvidere Physician Sentenced to Nine Years and Ordered to Pay More Than $2.7 Million for Health Care FraudRead the Press Release
ROCKFORD — A suspended physician was sentenced today by U.S. District Judge Frederick J. Kapala on charges of federal health care fraud.
CHARLES S. DEHAAN, 62, of Belvidere, was sentenced to nine years in federal prison, to be followed by three years of supervised release. He was also ordered to pay restitution of $2,787,054.
DeHaan pleaded guilty on May 20, 2016, to two counts of health care fraud in connection with a scheme to defraud Medicare that included overbilling and billing Medicare for treatment of patients that were already deceased.
According to a written plea agreement, DeHaan during the course of the scheme was a physician licensed in Illinois. Between January 2009 and January 2014, DeHaan primarily billed Medicare for in-home patient visits and certifications for patients he deemed homebound. DeHaan admitted in the plea agreement that he knew Medicare authorized payment for home visits and physician services only if those services were actually provided and were medically necessary because of disease, infirmity, or impairment. The plea agreement further states that DeHaan billed Medicare for medical services purportedly provided to patients, when he knew he did not provide any reimbursable medical service. This included DeHaan billing Medicare at the highest reimbursement levels for routine, non-complex visits with new and established patients, even though DeHaan knew the visit did not qualify for the highest levels of reimbursement, and further included billing Medicare for patients DeHaan never actually treated. According to the plea agreement, some of the patients DeHaan billed for had died prior to the date of the alleged visit.
The sentencing was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; 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 Illinois Department of Financial and Professional Regulation assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Scott R. Paccagnini and Talia Bucci.
Three Family Members in North Suburban Chiropractic Group Sentenced to Federal Prison in $10.8 Million Fraud SchemeRead the Press Release
CHICAGO — A north suburban chiropractor and his brother and father have been sentenced to federal prison terms in connection with a phony billing scheme that bilked insurance carriers out of more than $10.8 million.
DR. VLADIMIR GORDIN JR., VLADIMIR GORDIN SR., and ALEXSANDER GORDIN, operated Gordin Medical Center S.C., a chiropractic clinic in Wheeling. The trio used the company to falsely bill the carriers for medical services that were either not provided or not medically necessary, and they attempted to cover up the scam by fabricating patients’ medical records. In some cases, patients knew of the overbilling and were incentivized to participate by having their deductibles met at no cost to them, or by sharing in a portion of the overbilling proceeds via checks provided to them by Gordin Jr. and Gordin Sr.
From 2006 to approximately November 2012, Gordin Medical Center and an ultrasound service that was part of the scheme submitted false bills totaling $28,775,000, causing a loss to the five carriers of $10,847,000. The loss includes medical claims administered on behalf of several union health and welfare funds in the Chicago area.
The three Gordins pleaded guilty earlier this year to healthcare fraud. U.S. District Judge Edmond E. Chang imposed the prison sentences Monday in federal court in Chicago. Vladimir Gordin Jr., 46, of Northbrook, was sentenced to seven years; Vladimir Gordin Sr., 70, of Riverwoods, was sentenced to two and a half years; and Alexsander Gordin, 34, of Northbrook, was sentenced to two years.
The sentencings were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor’s Office of Inspector General in Chicago; and E.C. Woodson, Inspector in Charge of the U.S. Postal Inspection Service in Chicago.
“As a result of the scheme, the Gordins created a medical center whose focus, for both the chiropractors and the employees, was not patient care,” Assistant U.S. Attorneys Heather K. McShain and Sarah E. Streicker argued in the government’s sentencing memorandum. “Rather, GMC was a front for false billing; patient care was an afterthought.”
Two other defendants convicted in the case were also sentenced this week. MICHELLE KOBRAN, who owned and operated Ultrasound Mobile Service Ltd., in Vernon Hills, pleaded guilty last year to healthcare fraud. Kobran, 69, of Vernon Hills, admitted falsely billing insurance companies for ultrasounds that were performed on patients referred to her by Gordin Jr. Kobran kicked back a portion of her insurance proceeds to the Gordins. Judge Chang on Tuesday sentenced Kobran to nine months in prison.
ALINA LEVIT, 46, of Vernon Hills, worked for Gordin Medical Center as the office manager. In pleading guilty last year to misdemeanor embezzlement, Levit admitted creating phony “sign in” sheets to falsely represent that patients were physically present and received certain health-care services on a given day, when, in fact, no such treatment was rendered. Judge Chang on Tuesday sentenced Levit to 18 months of probation, including 90 days of intermittent incarceration on weekends.
To report health care fraud, logon to: StopMedicareFraud.gov.
Former Chicago Police Dispatcher Sentenced to More Than Three Years in Prison for Scheming to Smuggle Contraband into Cook County JailRead the Press Release
CHICAGO — A former dispatch supervisor for the Chicago Police Department was sentenced today to more than three years in prison for providing government information to her boyfriend in an effort to help smuggle contraband into Cook County Jail.
STEPHANIE LEWIS used her position in the City of Chicago Office of Emergency Management and Communications to access law enforcement databases to locate the personal information of a corrections officer at the jail. Lewis provided the information to her boyfriend, an inmate in the jail who had schemed with the officer and others to sneak in the contraband to sell to other inmates. Lewis admitted in a plea agreement that she knew her boyfriend and the others used the information to threaten the officer with physical harm unless he continued with the scheme and smuggled additional contraband into the jail.
Lewis, 43, of Chicago, pleaded guilty earlier this year to one count of conspiracy to commit extortion. U.S. District Judge Charles R. Norgle imposed the 41-month sentence in federal court in Chicago.
The sentencing was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Cook County Sheriff Thomas J. Dart; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
Lewis is one of five defendants convicted in the case. The prior convictions include the corrections officer, JASON MAREK, who admitted delivering contraband, including marijuana, tobacco and alcohol, to a jail inmate after tucking it into sandwiches and sneaking it past security. Marek was assigned to a maximum-security tier of the jail when he smuggled in the goods in May and June of 2013. Marek is awaiting sentencing.
Two other defendants, including Lewis’ boyfriend, PRINCE JOHNSON, of Chicago, have pleaded not guilty and are awaiting trial.
The government is represented by Assistant U.S. Attorney Megan Cunniff Church.
Bolingbrook Man Arrested on Child Pornography Charge for Allegedly Enticing Underage Boy to Engage in Sexually Explicit ConductRead the Press Release
CHICAGO — Federal authorities have arrested a Bolingbrook man for allegedly using social media to entice an underage boy to produce sexually explicit images and engage in sex acts with him.
RONALD GOBENCIONG, 44, posed online as three separate individuals – an escort, an escort’s manager, and a client – in order to recruit and entice the underage boy to produce pornographic images and engage in sexual relations with him, according to a criminal complaint and affidavit filed in federal court in Chicago. As part of online and text communications with the boy, Gobenciong requested and received pornographic photos and at least one video of the boy, whom Gobenciong knew was only 17 years old at the time, the complaint states. In February, Gobenciong engaged in sexual acts with the boy at a hotel in Burr Ridge, for which he gave the boy money, the complaint states. Gobenciong later threatened to distribute the pornographic images unless the boy continued to have sex with him, according to the complaint.
Gobenciong, also known as “David Marco,” “Steve John,” and “Joe,” was arrested on Thursday. The complaint charges him with one count of producing child pornography. A detention hearing is scheduled for April 24, 2017, at 3:00 p.m., before U.S. Magistrate Judge Maria Valdez in Chicago.
The complaint was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation; and Cook County Sheriff Thomas J. Dart. Valuable assistance was provided by the Child Exploitation Unit of the Cook County Sheriff’s Police and the Bolingbrook Police Department.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Production of child pornography is punishable by a minimum sentence of 15 years in prison and a maximum of 30 years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Eric S. Pruitt.
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, seven days a week.
United States Announces Settlement with Chicago Board of Elections to Ensure Compliance with Americans with Disabilities ActRead the Press Release
CHICAGO — The United States Attorney’s Office today announced a settlement with the Board of Election Commissioners for the City of Chicago to ensure accessibility of polling sites to persons with disabilities.
The agreement requires the Board of Elections to ensure that every polling site is accessible to persons with disabilities by the Nov. 6, 2018, election. The Board will provide training to all precinct coordinators on how to install and maintain any temporary equipment and accessibility items, such as wheelchair ramps, accessible parking or the placement of mats over thresholds. On Election Day and during early-voting periods the Board must maintain in working order all facilities and equipment, including lifts, elevators and ramps, that are needed to make polling sites accessible to individuals with disabilities.
The Board cooperated with the U.S. Attorney’s Office to voluntarily reach the settlement agreement without the need for a lawsuit.
The settlement agreement, which became effective on April 11, 2017, was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois.
“The right of individuals to participate in our democratic system of government includes full and equal access to polling sites,” said Acting U.S. Attorney Levin. “This agreement represents an important step toward guaranteeing voting access to all of our citizens.”
In 2016 the Board oversaw 1,452 polling sites that housed 2,069 precincts, and also operated 50 additional sites for early voting in the 40 days leading up to the election. Pursuant to the ADA and Illinois law, all polling places must be accessible to voters with disabilities. In the spring of 2016 the Department of Justice reviewed more than 100 polling places in Chicago and concluded that many have architectural barriers that make them inaccessible to voters who use wheelchairs or have mobility impairments, or voters who are blind or have vision impairments.
In response to the Department’s initial findings, the Board expressed its commitment to making all polling locations accessible to voters with disabilities, and it retained Equip for Equality, the federally funded protection and advocacy system for persons with disabilities in Illinois, to inspect an additional 1,000 Chicago polling sites. In the November 2016 election, Equip for Equality found additional polling sites that were not accessible to voters with disabilities. Pursuant to the settlement agreement, the Board will continue to engage Equip for Equality or some other third-party expert as a consultant to review polling sites and determine whether alternative locations should be used.
Although the United States agreed not to presently institute a civil action alleging discrimination under the ADA, it may review the Board’s compliance with the settlement at any time during the duration of the agreement. If the United States believes the agreement has been violated, it reserved the right to institute a civil action in the appropriate U.S. District Court to enforce the agreement.
The United States is represented by Assistant U.S. Attorney Patrick W. Johnson.
Title II of the ADA prohibits public entities, such as the Board of Election Commissioners for the City of Chicago, from discriminating against people with disabilities in their programs, services and activities. With respect to polling places, public entities are required to select and use polling places that are accessible. To learn more about the ADA and other laws protecting the rights of voters with disabilities, log on to www.ada.gov/ta-pubs-pg2.htm or call the Justice Department's toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD).
Lynwood Man Sentenced to 18 Months for Pocketing Bribes in Exchange for Allowing Food Service Workers to Bypass Sanitation Training and TestingRead the Press Release
CHICAGO — A Lynwood man has been sentenced to 18 months in federal prison for pocketing bribes in exchange for allowing food service workers to bypass sanitation certification training and testing mandated by the state of Illinois and city of Chicago.
ERNEST GRIFFIN, 71, took bribes from individuals who wanted to obtain Sanitation Certificates from the Illinois Department of Public Health without attending a 15-hour course and taking an exam. In exchange for an approximately $175 bribe, Griffin submitted false certifications and false test results to IDPH to make it appear that a bribe payer had completed the course, passed the exam, and was entitled to the certification. Griffin’s bribery scheme lasted from approximately 2008 until January 2015, when he was confronted by agents of the Federal Bureau of Investigation.
Griffin pleaded guilty last year to one count of federal program bribery. U.S. District Judge Manish S. Shah imposed the 18-month sentence Wednesday in federal court in Chicago. Judge Shah also fined Griffin $5,000.
The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the FBI.
“Defendant’s certificates-for-bribes scheme was a serious abuse of the public trust,” Assistant U.S. Attorney Maureen E. Merin argued in the government’s sentencing memorandum. “Defendant’s scheme not only potentially caused physical harm to members of the public, but also chipped away at the confidence that the public has in the ability of our government to enforce laws and regulations designed to protect the public health."
The state of Illinois and the city of Chicago require that food service establishments have a person on site at all times who holds an Illinois Food Service Sanitation Manager Certificate. In order to obtain the certificate, the IDPH required that individuals take an IDPH-approved 15-hour course and pass an IDPH exam. The course included instruction on food-borne illnesses, personal hygiene, food safety, pest control, proper cleaning and sanitizing procedures, and the prevention of food contamination. Griffin was authorized by the IDPH to teach the course and to administer the exam.
Two Suburban Chicago Men Charged with Conspiring to Provide Material Support to the Islamic StateRead the Press Release
CHICAGO — Two men from a north suburb of Chicago were arrested today on a federal complaint charging them with conspiring to provide material support to the Islamic State.
JOSEPH D. JONES, also known as “Yusuf Abdulhaqq,” 35, of Zion, and EDWARD SCHIMENTI, also known as “Abdul Wali,” 35, of Zion, are charged with conspiring to knowingly provide and attempt to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS). Jones and Schimenti were arrested this morning. They are scheduled to make an initial appearance today at 3:00 p.m. before U.S. Magistrate Judge M. David Weisman in Chicago.
Also today, authorities executed a search warrant at Jones’ residence in Zion.
The complaint and arrests were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Mary B. McCord, Acting Assistant Attorney General for National Security; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of FBI personnel and representatives from numerous federal, state and local law enforcement agencies. The Zion Police Department provided valuable assistance.
According to a complaint and affidavit filed in U.S. District Court in Chicago, Jones and Schimenti pledged their allegiance to ISIS and advocated on social media for violent extremism in support of the terrorist group. In the fall of 2015 the pair befriended three individuals whom Jones and Schimenti believed were fellow ISIS devotees. Unbeknownst to Jones and Schimenti, two of the individuals were undercover FBI employees and the third individual was cooperating with law enforcement and was not an ISIS supporter, the complaint states.
Over the next several months Jones and Schimenti met the undercover FBI employees and the cooperating source on numerous occasions, during which Jones and Schimenti discussed their devotion to ISIS and their commitment to Islamic State principles, the complaint states. Some of the meetings took place in Waukegan, Zion, Bridgeview, North Chicago, Highland Park and Chicago.
At one point, Jones and Schimenti shared photographs of themselves holding the Islamic State flag at the Illinois Beach State Park in Zion, according to the complaint. In a recorded conversation with the cooperating source, Schimenti commented that Schimenti would like to see the ISIS flag “on top of the White House,” the complaint states.
Earlier this year Schimenti engaged in physical training exercises with the cooperating source at a gym in Zion, the complaint states. Schimenti believed the cooperating source intended to travel overseas to fight for ISIS, and Schimenti commented that the exercises would “make you good, you know, in the battlefield,” according to the complaint.
Last month the pair furnished several cellular phones to the cooperating source, believing they would be used to detonate explosive devices in ISIS attacks, the complaint states. On April 7, 2017, Jones and Schimenti drove the cooperating source to O’Hare International Airport in Chicago with the understanding that the source would be traveling to Syria to fight with ISIS, the complaint states. Schimenti told the source to “drench that land with they, they blood,” according to the complaint.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The charge in the complaint is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Barry Jonas and Rajnath Laud of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
Two Illinois Men Charged with Conspiring to Provide Material Support to ISISRead the Press Release
Joseph D. Jones, also known as “Yusuf Abdulhaqq,” 35, and Edward Schimenti, also known as “Abdul Wali,” 35, both of Zion, Illinois, were arrested today on a federal complaint charging them with conspiring and attempting to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS). Jones and Schimenti were arrested this morning. They are scheduled to make an initial appearance at on April 12 at 3:00 p.m. CDT (4:00 p.m. EDT) before U.S. Magistrate Judge M. David Weisman in Chicago, Illinois. Authorities also executed a search warrant at Jones’ residence in Zion today.
The complaint and arrests were announced by Acting Assistant Attorney General for National Security Mary B. McCord, Acting U.S. Attorney Joel R. Levin for the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Office.
According to a complaint and affidavit filed in U.S. District Court in Chicago, Jones and Schimenti, both U.S. citizens, pledged their allegiance to ISIS and advocated on social media for violent extremism in support of the terrorist group. In the fall of 2015, the pair befriended three individuals whom Jones and Schimenti believed were fellow ISIS devotees. Unbeknownst to Jones and Schimenti, two of the individuals were undercover FBI employees and the third individual was cooperating with law enforcement and was not an ISIS supporter.
Over the next several months, as part of the conspiracy, Jones and Schimenti allegedly took steps to assist the cooperating source with plans to travel overseas to join ISIS. The defendants met the undercover FBI employees and the cooperating source on numerous occasions, during which Jones and Schimenti discussed their devotion and commitment to ISIS, according to the complaint. Some of the meetings took place in Waukegan, Zion, Bridgeview, North Chicago, Highland Park and Chicago, in Illinois.
At one point, Jones and Schimenti shared photographs of themselves holding the ISIS flag at the Illinois Beach State Park in north suburban Zion, according to the complaint. In a recorded conversation with the cooperating source, Schimenti commented that Schimenti would like to see the ISIS flag “on top of the White House,” the complaint states.
Earlier this year, Schimenti engaged in physical training exercises with the cooperating source at a gym in Zion, the complaint states. Understanding that the cooperating source intended to travel overseas to fight for ISIS, Schimenti commented that the exercises would “make you good, you know, in the battlefield,” according to the complaint.
According to the complaint, last month, the pair furnished several cellular phones to the cooperating source, believing they would be used to detonate explosive devices in ISIS attacks overseas. On April 7, Jones and Schimenti drove the cooperating source to O’Hare International Airport in Chicago with the understanding that the source would be traveling to Syria to join and fight with ISIS. Schimenti told the source to “drench that land with they, they blood.”
A complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The charge in the complaint is punishable by up to 20 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case was investigated by the Chicago Joint Terrorism Task Force, which is comprised of FBI personnel and representatives from numerous federal, state and local law enforcement agencies. The Zion Police Department also provided valuable assistance. The government is represented by Assistant U.S. Attorneys Barry Jonas and Rajnath Laud of the Northern District of Illinois, and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
Federal Grand Jury Indicts Illinois Attorney in Mortgage Fraud SchemeRead the Press Release
CHICAGO — An Illinois attorney has been indicted by a federal grand jury for fraudulently obtaining loans related to the purchase, maintenance and sale of properties on Chicago’s South Side.
JESSICA ARONG O’BRIEN fraudulently caused lenders to issue and refinance approximately $1.4 million in mortgage and commercial loans by making false representations and concealing material facts in documents submitted to the lenders, according to an indictment returned in federal court in Chicago. O’Brien used the fraudulently obtained mortgage loan proceeds to purchase an investment property in the 600 block of West 46th Street in Chicago, and fraudulently refinanced the mortgage on the property as well as on a second investment property in the 800 block of West 54th Street in Chicago, the indictment states. O’Brien then fraudulently obtained a commercial line of credit to maintain the properties, before selling them to co-defendant MARIA BARTKO and a straw buyer whom O’Brien knew would fraudulently obtain mortgage loans, according to the indictment.
The indictment charges O’Brien, 49, of Chicago, and Bartko, 49, of Chicago, with one count of mail fraud affecting a financial institution. O’Brien is also charged with one count of bank fraud. Arraignment is set for April 20, 2017, at 10:00 a.m., before U.S. Magistrate Judge Sheila M. Finnegan.
The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Catherine Huber, Special Agent in Charge of the Midwest Region of the Federal Housing Finance Agency, Office of Inspector General.
At the time of the alleged scheme, O’Brien was employed full time as a Special Assistant Attorney General for the Illinois Department of Revenue, while also owning a real estate company, O’Brien Realty LLC, and working part time as a loan officer for Amronbanc Mortgage Corp. in Lincolnwood, the indictment states. It was at Amronbanc where O’Brien met Bartko, who was employed there as a loan officer.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Mail fraud affecting a financial institution and bank fraud are each punishable by a maximum penalty of 30 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Matthew F. Madden and Tyler C. Murray.
Nineteen Defendants Charged in Federal Investigation That Disrupted Mexico-To-Chicago Narcotics Pipeline; 190 Kilograms of Heroin SeizedRead the Press Release
CHICAGO — Federal authorities have seized more than 190 kilograms of heroin as part of an investigation that disrupted a Mexico-to-Chicago narcotics pipeline and resulted in drug charges against 19 defendants.
The investigation, dubbed “Operation Over the Top,” spanned more than a year and included a seizure last month of 80 kilograms of heroin from a residence in Hanover Park. As part of the investigation, authorities shut down a heroin stash house in Bensenville and removed an additional 85 kilograms of heroin and cocaine from warehouses in St. Charles and Sugar Grove, and from a vacant lot on the West Side of Chicago. Law enforcement uncovered the alleged criminal activity through the use of wiretapped cellular phones, undercover narcotics purchases and extensive surveillance. The probe was led by the U.S. Drug Enforcement Administration and conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).
The investigation resulted in drug charges against 19 defendants in federal court in Chicago. Several of the defendants were arrested within the past two weeks, including one this past weekend. Others were charged and arrested earlier in the investigation, including five defendants who recently pleaded guilty to federal drug charges.
The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the DEA; and James M. Gibbons, Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Substantial assistance was provided by the San Antonio, Texas, office of the Federal Bureau of Investigation.
“This investigation is an example of the extraordinary determination and cooperation among our law enforcement partners,” said Acting U.S. Attorney Levin. “Our office remains committed to halting the stream of heroin and other dangerous narcotics into our communities.”
“Too many lives are lost to heroin and too many families forever scarred,” said DEA Special Agent in Charge Wichern. “I'm proud of the work done by these agents, officers and prosecutors who have worked tirelessly to achieve these results, and I’m confident that with our continued partnership, we will have increasing success.”
“These charges and seizures are an example of how successful partnerships among law enforcement agencies can be in removing drug traffickers from our community,” said HSI Special Agent in Charge Gibbons. “Our agents will continue to be relentless in their pursuit to target criminal enterprises that threaten public safety.”
The charges describe various narcotics-distribution organizations operating in the Chicago area. Last month, JULIO CESAR FLORES SAENZ, 29, of Hanover Park, was arrested with approximately 80 kilograms of heroin hidden in his residence and a vehicle compartment. In October 2016, Flores Saenz distributed four kilograms of heroin to RAMON GARCIA, 30, of Riverside, Calif., and two kilograms of heroin to VICTOR MANUEL VAZQUEZ-MORALES, 33, of Philadelphia, Penn., according to criminal complaints and affidavits filed in U.S. District Court in Chicago. In December 2016, NOEL MIRANDA, 36, of Chicago, sold a kilogram of heroin to a buyer outside the Ford City Mall in Chicago, and a few weeks later attempted to obtain an additional seven-and-a-half kilograms of heroin, according to the charges. The deals were allegedly set up by Noel Miranda’s cousin, LUIS MIRANDA, 30, of Chicago, who was arrested last month with a kilogram of heroin in his possession, the complaints state. Flores Saenz, Noel Miranda and Luis Miranda are each charged with conspiracy to possess with intent to distribute and distribution of a controlled substance.
JUAN CONTRERAS, 35, of Aurora, and JESUS ALBERTO MARTINEZ-REYES, 39, of Schiller Park, allegedly led a separate faction of narcotics dealers who unloaded heroin at warehouses in Naperville, Sugar Grove and St. Charles. The heroin had been shipped to Chicago from Mexico in secret compartments of semi-tractor trailers. Juan Conteras’ brother, DAVID CONTRERAS, 39, of Aurora, and Juan Contreras’ nephew, EDGAR RODRIGUEZ CONTRERAS, 32, of Aurora, along with Martinez-Reyes and HEDILBERTO VEGA-ROCHA, 47, of Schiller Park, pleaded guilty earlier this year to their roles in the distribution conspiracy. In written plea agreements, David Contreras, Martinez-Reyes, Edgar Contreras and Vega-Rocha admitted that they conspired with Juan Contreras and each other to distribute heroin that had been shipped from Mexico. After the heroin was unloaded, the secret compartments were stuffed with cash proceeds from the drug sales, and the trucks would return to Mexico, according to the plea agreements. David Contreras, Martinez-Reyes, Edgar Contreras and Vega-Rocha are awaiting sentencing. Juan Contreras is charged with conspiracy to possess with intent to distribute and distribution of a controlled substance. His case is set for trial on Oct. 16, 2017, before U.S. District Judge Amy J. St. Eve.
The charges also identify a Bensenville man who ran a stash house where heroin and cash from drug sales were stored. JESUS SALGADO, 24, ran the Bensenville stash house and sold narcotics in the Chicago area, according to the complaints and an indictment returned in federal court in Chicago. Jesus Salgado’s drug-dealing operation was overseen by his father, LORENZO SALGADO, 54, who resides in Mexico but communicated with his son via phone, according to the charges. U.S. law enforcement last year obtained court authorization to surreptitiously record conversations between the father and son, during which the pair discussed selling narcotics, according to the complaints.
The charges describe instances in which Jesus Salgado and his girlfriend, RUBY JOY BUENAVENTURA, 26, of Chicago, delivered drugs to customers in the Chicago area after having the deal arranged remotely from Mexico by Jesus Salgado’s father. One of the deals occurred in the parking lot of a Bensenville strip mall in May 2016 when Jesus Salgado delivered two kilograms of heroin to SERGIO AREVALO-GOMEZ, 22, of Chicago. Arevalo-Gomez pleaded guilty earlier this year to distribution of a controlled substance. He is scheduled to be sentenced by U.S. District Judge John Z. Lee on May 2, 2017.
An indictment also identifies JOSE LUIS RIVERA JR., 39, of Lawton, Okla., as an alleged courier who traveled to New Jersey, Arizona & Mexico on behalf of the Salgado family. Jesus Salgado, Lorenzo Salgado and Rivera Jr. are each charged with conspiracy to possess with intent to distribute and distribution of a controlled substance. Lorenzo Salgado is considered a fugitive, while Jesus Salgado and Rivera Jr. are in federal custody and scheduled to appear for a status hearing on May 3, 2017, before U.S. District Judge Robert Blakey.
Also charged with various narcotics offenses are ALEXANDER LAGUNAS, 26, of Midlothian; SYLVIA JIMENEZ-CELEDON, 37, of Eagle Pass, Texas; WILLIE G. POWELL JR., 47, of Sandstone, Minn.; and MONIQUE FORTNEY, 37, of Dearborn Heights, Mich.
The investigation was conducted under the umbrella of the OCDETF program, a partnership between federal, state and local law enforcement agencies. The principal mission of OCDETF is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations.
The public is reminded that complaints and indictments contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorneys Kelly Greening, Misty Wright and John Cooke.
Mexican Federal Police Commander Charged with Leaking Confidential Law Enforcement Information to Drug CartelRead the Press Release
CHICAGO — A former high-ranking commander in the Mexican Federal Police has been charged in federal court in Chicago with conspiring with others to corruptly impede a U.S.-based narcotics investigation.
IVAN REYES ARZATE, also known as “La Reina,” conspired with others to warn members of a Mexican drug cartel that they were the targets of an investigation being carried out by the U.S. Drug Enforcement Administration, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. Reyes had acquired the information through his position as a commander in the Mexican Federal Police, which was working with the DEA and the U.S. Attorney’s Office in Chicago to investigate an international drug trafficking and money laundering organization, the complaint states. Reyes and his co-conspirators tipped off cartel members when the DEA had obtained judicial authorization to intercept their phones, and leaked the identity of a cooperating source who was covertly working with the DEA to gather evidence against the cartel, the complaint states.
The complaint was filed Feb. 10, 2017, and ordered unsealed today. It charges Reyes, 45, of Mexico City, with conspiracy to corruptly obstruct, influence, and impede an official proceeding. Reyes was ordered detained in U.S. custody after making an initial appearance last week before U.S. Magistrate Judge Sheila M. Finnegan in Chicago. The case is next up before Judge Finnegan on April 13, 2017.
The complaint was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the DEA.
The investigation is being conducted through the Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force. Valuable assistance has been provided by the U.S. Attorney’s Office for the Southern District of California, the Chicago Police Department, the Illinois Department of Corrections, the Illinois State Police, and the U.S. Department of Homeland Security.
“The United States and Mexico have a long history of close cooperation in combatting transnational organized crime,” said Acting U.S. Attorney Levin. “The criminal complaint announced today is the first step in holding Mr. Reyes accountable for attempting to impede that bilateral cooperation by allegedly obstructing a significant investigation for personal gain. We remain steadfast in the unwavering commitment to disrupt and dismantle drug trafficking organizations and fight against corruption at all levels; our bilateral efforts will continue.”
According to the complaint, U.S. and Mexican authorities over the past year have been working together to investigate certain narcotics traffickers in Mexico. The investigation revealed that a network of high-level cartel members transported multiple tons of cocaine from Colombia to Mexico, and ultimately on to the United States.
Reyes was the principal point of contact for information being shared between U.S. law enforcement and the Mexican Federal Police. He first drew the attention of U.S. authorities in September 2016 while the investigation was active and ongoing, the complaint states. A member of the conspiracy sent a law enforcement surveillance photograph to an alleged Mexican drug trafficker and notified the man that he was a principal target of an investigation, the complaint states. In a conversation intercepted by law enforcement, a member of the conspiracy further informed the alleged trafficker that a confidential source cooperating with U.S. law enforcement was present at the meeting and “sitting with you the day of the picture,” according to the complaint.
Reyes’s name also surfaced the following month in additional intercepted conversations between members of the alleged Mexico-based transnational drug trafficking organization that was targeted in a joint investigation with U.S. Attorney’s Offices in Chicago and San Diego. The members of the organization discussed obtaining law enforcement information about the investigation, prompting one of the alleged Mexico City-based traffickers to identify the source of the information as “Ivan,” the complaint states. The alleged trafficker went on to say that “Ivan” previously leaked law enforcement information to a different Mexican cartel.
“Who is Ivan?” the alleged head of the transnational drug cartel asked in the intercepted conversations, according to the complaint. The alleged Mexico City trafficker responded, “The boss,” in an apparent reference to Reyes’ position as a high-ranking officer in the Mexican Federal Police. According to the complaint, in November 2016 Reyes met in person with the head of the cartel in Mexico City and discussed the leaked surveillance photograph.
The public is reminded that a complaint 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.
The conspiracy charge carries a maximum sentence of five years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Katherine Sawyer, Michael Ferrara and Devlin Su.
Indiana Man Sentenced to Two Years for Bringing Guns into Illinois and Illegally Selling Them on the Streets of ChicagoRead the Press Release
CHICAGO — An Indiana man has been sentenced to two years in federal prison for unlawfully dealing firearms on the West Side of Chicago.
In the fall of 2013 WILLIE LEE BILES JR. made multiple trips on a Megabus to Chicago from his home in Indianapolis, each time bringing handguns with him. Biles had legally purchased at least 29 firearms from licensed dealers in Indiana. Once in Chicago, Biles sold the firearms to individuals on the West Side for more than two times the price that Biles had paid for them.
Biles never asked any of the individuals for identification, and he failed to verify whether they could legally possess firearms. At least one of the individuals to whom Biles sold four firearms was a convicted felon who could not legally possess a firearm. Twelve of the firearms Biles sold were later recovered by law enforcement.
A jury last year convicted Biles, 44, of willfully dealing firearms without a license. U.S. District Judge Sara L. Ellis imposed the 24-month sentence Thursday in federal court in Chicago.
The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Celinez Nunez, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.
“The defendant conducted no background checks on his ‘customers,’ required no waiting period, and kept no records,” Assistant U.S. Attorneys Christopher V. Parente and Elizabeth R. Pozolo argued in the government’s sentencing memorandum. “These firearms have been used in attempted murders, recovered from documented gang members, convicted felons, and hidden inside drug stash houses.”
The convicted felon to whom Biles sold guns was previously sentenced in the case. OTTO LEWELLEN, of Bellwood, pleaded guilty in 2015 to being a felon in possession of a firearm. Lewellen stated in a plea agreement that he met Biles on multiple occasions in Chicago and Bellwood in the fall of 2013. During these meetings, Lewellen observed Biles holding a bag of firearms and selling the weapons to various individuals, according to Lewellen’s plea agreement. Lewellen admitted that he purchased four firearms from Biles. Authorities recovered two of them, but Lewellen said he sold the other two to a man he knew as “Red.” Officials have not been able to locate Red or the two guns. Judge Ellis in 2015 sentenced Lewellen to 18 months in prison.
The investigation was conducted with the Chicago High Intensity Drug Trafficking Task Force (HIDTA). Substantial assistance was provided by the Illinois State Police, Chicago Police Department, Bellwood Police Department and ATF Indianapolis Field Office.
Leader of Violent Robbery Crew Sentenced to 57 Years for Targeting Suburban Cell Phone StoresRead the Press Release
CHICAGO — A federal judge today sentenced a Park Forest man to 57 years in prison for leading a crew of armed robbers that targeted cell phone stores in the Chicago suburbs.
ERIC CURTIS recruited several individuals to join the crew and armed them with firearms to carry out the robberies. The crew stole hundreds of cell phones while terrorizing store employees and customers at gunpoint. After the robberies, Curtis helped to sell the phones and divide the profits among the thieves.
The robberies occurred in 2013 in cell phone stores in Addison, Norridge, Deerfield and Woodridge.
A jury last year convicted Curtis, 32, on one count of conspiracy to commit robbery, three counts of robbery, one count of being a felon in possession of a firearm, and three counts of using a firearm in a crime of violence. U.S. District Judge Charles P. Kocoras imposed the sentence in federal court in Chicago.
The sentence was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. Police departments from Chicago, Woodridge, Deerfield, Joliet, Norridge, Addison and East Peoria provided substantial assistance in the investigation.
“The defendant’s crew terrorized dozens of victims during their crime spree and these victims will likely suffer from the trauma the defendant and his crew caused them for at least as long as any sentence this Court imposes on the defendant,” Assistant U.S. Attorneys Christopher V. Parente and Allison A. Ray argued in the government’s sentencing memorandum. “The defendant’s repeated reckless actions during this crime spree endangered the lives of many everyday citizens who were out on a shopping trip, or just showing up for work trying to earn an honest living.”
Evidence at trial revealed that Curtis’ crew conducted takeover-style robberies. Crew members would enter a store, brandish firearms and order employees and customers to the back of the store at gunpoint. The robbers would take as many cell phones as they could stuff into their duffel bags.
Seven other members of the crew previously pleaded guilty. The prior convictions include another top leader, ERIC ROGERS of Hazel Crest. Rogers stated in a plea agreement that the crew also robbed cell phone stores in Joliet and downstate East Peoria, as well as a store in La Porte, Ind. Eric Rogers is awaiting sentencing.
Chicago Father and His Twin Boys Sentenced to Prison for Sex Trafficking of MinorsRead the Press Release
CHICAGO — A Chicago father and his twin boys have been sentenced to federal prison terms for recruiting vulnerable minors to engage in sex acts for money.
NATHAN NICHOLSON groomed his sons to become pimps in a family sex trafficking operation. Nicholson used the twins, TYRELLE LOCKETT and MYRELLE LOCKETT, to recruit minor girls from Chicago-area malls by promising them money for going on dates. Once the girls expressed interest, Nicholson brought them to an abandoned house, photographed them partially clothed, and then “tested” them by requiring them to have sex with the twins. Soon thereafter Nicholson and his sons caused the girls to perform commercial sex acts for money, with Nicholson keeping the proceeds.
The twins also recruited their own girls and young women, and expanded their prostitution business by finding victims outside of Chicago. The brothers traveled to Indiana several times to bring victims, including minors, to Chicago to work for them. The twins forcibly brought one woman from Minnesota to Nicholson’s home in Chicago, but she managed to escape and call the police.
Nicholson, 45, of Chicago, pleaded guilty last year to one count of sex trafficking of a minor. U.S. District Judge Joan Humphrey Lefkow on Tuesday sentenced Nicholson to 16 years and eight months, and ordered him to pay $68,400 to two victims.
Tyrelle Lockett, 24, of Chicago Heights, and Myrelle Lockett, 24, of Chicago Heights, each pleaded guilty last year to one count of transportation of a minor with intent to engage in prostitution. Judge Lefkow on Wednesday sentenced Tyrelle Lockett to 17 years and eight months, and ordered him to pay $9,050 to three victims. Judge Lefkow on Thursday sentenced Myrelle Lockett to 17 years and eight months, and ordered him to pay $75,600 to one victim.
The sentencings were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Cook County Sheriff Thomas J. Dart. Valuable assistance was provided by the Indianapolis Office of the FBI, Cook County State’s Attorney’s Office, Cook County Human Trafficking Task Force, Chicago Police Department, Alsip Police Department, Dolton Police Department, Calumet Park Police Department, Lansing Police Department, Muncie, Ind., Police Department, and Rochester, Minn., Police Department.
Four of the defendants’ victims testified at the sentencing hearings. They described their ordeals of how the defendants coerced them into prostitution.
“The length and breadth of defendant’s conduct, which was driven by his greed and perverse sexual desires, affected numerous victims, inflicted violence on others, and sexually exploited minors and otherwise vulnerable victims,” Assistant U.S. Attorneys Renai S. Rodney and Shoba Pillay argued in the government’s sentencing memorandum in Tyrelle Lockett’s case. “The ripple effects of his conduct will be felt for years to come.”
Gang Members and Mexican Supplier Among Eleven Federal Defendants Charged with Selling Narcotics on Chicago’s West SideRead the Press Release
CHICAGO — Members of a Chicago street gang and a Mexican supplier are among eleven individuals charged for their alleged roles in the distribution of heroin and cocaine on the city’s West Side.
The joint federal and state investigation, dubbed “Operation Shut Travel Down,” spanned more than a year and resulted in the seizures of ten firearms, more than 3,500 grams of heroin, more than 550 grams of cocaine and crack cocaine, and more than 2,000 grams of methamphetamine. Authorities uncovered the alleged criminal activity through the use of wiretapped cellular phones, undercover narcotics purchases and extensive surveillance. The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), with assistance from the High Intensity Drug Trafficking Area Task Force (HIDTA).
The investigation resulted in charges against eleven defendants in federal court and more than 40 defendants in state court. Law enforcement officers arrested several of the defendants this morning. Authorities today also executed search warrants at two alleged drug stash houses, including a barbershop in the 900 block of South Western Avenue in Chicago.
The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Kimberly M. Foxx, Cook County State’s Attorney; Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; and Eddie T. Johnson, Superintendent of the Chicago Police Department. The United States Marshals Service provided valuable assistance.
The federal complaints describe a narcotics-distribution organization in the North Lawndale neighborhood overseen by members of the Traveling Vice Lords street gang. The organization utilized street-level distributors to sell cocaine and heroin at multiple open-air drug markets near the intersection of California Avenue and Lexington Street, according to the complaints. Traveling Vice Lords members used the barbershop to stash the drugs and facilitate distribution. The barbershop’s owner, TYRONE HUNTER, 38, of Chicago, is a ranking member of the gang who is described in the complaints as a drug supplier and a supervisor of the sales.
The complaints identify the operation’s other supervisor as ANTHONY WILLIAMS, 32, of Chicago. Anthony Williams is a Traveling Vice Lord whom law enforcement observed conducting numerous drug transactions, the complaints state. Anthony Williams also sold narcotics to an undercover officer on multiple occasions during the course of the investigation, according to the complaints.
Also charged in the federal complaints are CALVIN WILLIAMS, 41, of Chicago, a Traveling Vice Lord who oversaw the distribution of cocaine and heroin near the intersection of California Avenue and Harrison Street; and several Traveling Vice Lords who sold cocaine and heroin at street level: DEMETRIUS YANCY, 24, of Chicago; RICKY BROOKS, 39, of Chicago; JEROME CHOICE, 46, of Chicago; TERRANCE BROOKS, 34, of Chicago; and ATKINS WILLIAMS, 53, of Chicago.
In addition, two alleged suppliers of the drugs were also charged in the complaints. SIR CHARLES BLAND, 38, of Bolingbrook, and SALVADOR ROJAS-SANTOS, 63, of Mexico, supplied heroin and cocaine to Williams and Hunter for distribution on the West Side of Chicago, according to the charges.
The eleventh federal defendant, JOHN ANTHONY, 40, of Chicago, distributed heroin to undercover officers in North Lawndale on multiple occasions last year, according to the complaints.
Seven of the federal defendants are charged with conspiracy to possess with intent to distribute and distribution of a controlled substance; two are charged with distribution of a controlled substance; one is charged with possession with intent to distribute, and possession of a weapon by an illegal alien; and one is charged with attempted possession with intent to distribute a controlled substance. The federal defendants will begin making initial court appearances this afternoon before U.S. Magistrate Judge Sidney I. Schenkier in Chicago.
The state defendants will appear later in Cook County Criminal Court.
The investigation was conducted under the umbrella of the OCDETF program, a partnership between federal, state and local law enforcement agencies. The principal mission of OCDETF is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations.
The public is reminded that complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The U.S. Attorney’s Office in Chicago is representing the government in the federal cases. The cases are being prosecuted by Assistant U.S. Attorney Jordan Matthews of the Violent Crimes Section, and Assistant U.S. Attorney Nani Gilkerson of the Narcotics Section.
Chicago Chiropractor Indicted for Allegedly Billing $10 Million to Medicare and Private Insurers for Nonexistent TreatmentRead the Press Release
CHICAGO — A Chicago chiropractor with a clinic in the West Lawn neighborhood has been indicted on federal fraud charges for allegedly submitting at least $10 million in bogus claims to Medicare and private insurers.
HENRY POSADA submitted the fraudulent claims for purported physical therapy and chiropractic services that were never provided, according to the indictment. In some instances Posada was out of the state on the dates he claimed to have provided chiropractic services, while other times he used his patients’ names without their knowledge to create wholly fictitious claim forms, the indictment states. From 2008 to 2016, Posada submitted at least $10 million in fraudulent claims to Medicare and private insurers, causing those programs to pay at least $5.1 million to Posada and his clinic, Spine Clinics of America S.C., which does business as Associated Back Care and Rehabilitation. The clinic is located in the 4300 block of West 63rd Street in Chicago.
The indictment was returned March 16, 2017, in federal court in Chicago. It charges Posada, 54, of Clarendon Hills, with 18 counts of health care fraud. He pleaded not guilty at his arraignment Tuesday afternoon before U.S. District Judge Edmond E. Chang. A status hearing was scheduled for May 30, 2017.
The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; 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 U.S. Office of Personnel Management’s Office of Inspector General provided valuable assistance.
The indictment seeks forfeiture of the $5.1 million, as well as $850,000 in cashier checks, a 2013 Lexus LX 570 automobile, and a property in Watseka, Ill.
The public is reminded that an indictment 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.
Health care fraud is punishable by up to ten years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Nathalina Hudson.
Chicago Man Guilty of Brokering More Than 70 Illegal Gun TransactionsRead the Press Release
CHICAGO — A convicted felon from Chicago pleaded guilty today to federal firearm offenses, admitting that he brokered more than 70 illegal gun transactions.
JOHN THOMAS, 33, also known as “Batman,” pleaded guilty to two counts of being a felon in possession of a firearm, and one count of dealing firearms without a license. The conviction carries a maximum sentence of 25 years in prison. U.S. District Judge Andrea R. Wood scheduled a sentencing hearing for June 30, 2017, at 10:00 a.m.
The case against Thomas arose out of a larger federal investigation that has removed more than 100 illegal guns from the streets of Chicago. The federal probe involved controlled firearm sales to cooperating individuals.
The guilty plea was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Celinez Nunez, Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.
“Illegally brokering the sale of guns on the streets of Chicago poses a tremendous danger to the community,” said Acting U.S. Attorney Levin. “Prosecuting firearms offenses is a top priority in our office, and we will continue our efforts to disrupt the availability of illegal guns in our city.”
Thomas admitted in a plea agreement that he brokered the sale of 77 illegal guns, including rifles, shotguns and handguns. Some of the guns had obliterated serial numbers or had previously been reported stolen. Thomas either obtained the firearms himself and then sold them to individuals, or he arranged for the owner of the firearms to sell the guns to individuals in exchange for a fee for setting up the transaction, the plea agreement states. Unbeknownst to Thomas, the individuals who purported to purchase the guns were cooperating with law enforcement.
Thomas was previously convicted of a felony and was not legally authorized to possess any firearms.
One of the sales occurred on July 23, 2014, when Thomas arranged a meeting between a man identified in court records as Individual A, along with JAMEL DAVIS and a cooperating individual. The transaction, which took place in Davis’ garage in the 7600 block of South Seeley Avenue in Chicago, involved the sale of two .38-caliber revolvers. A federal jury last year convicted Davis of illegal possession of a firearm by a felon. Davis faces up to ten years in prison when he is sentenced later this month.
The government is represented by Assistant U.S. Attorneys Nicole Kim and Carol Bell.
Willowbrook Woman Sentenced to a Year in Prison for Defrauding City of Chicago’s Women-Owned Business Entity Procurement ProgramRead the Press Release
CHICAGO — A Willowbrook woman has been sentenced to a year and a day in federal prison for scheming to help a contractor falsely satisfy its female hiring requirement for city of Chicago construction projects.
As the owner of a certified Women’s Business Enterprise, ELIZABETH PERINO allowed her company to be claimed as a subcontractor on city projects so that the general contractor could satisfy its requirement to assign a portion of the work to female-owned businesses. Perino falsified paperwork to conceal the fact that her business, Perdel Contracting Co., would perform no actual work on the projects. As a result of Perino’s fraud, Perdel expected to receive payment equivalent to a percentage of the work that Perdel fraudulently claimed to have performed.
A jury last year convicted Perino, 62, of Willowbrook, on three counts of wire fraud and one count of mail fraud. U.S. District Judge Gary Feinerman imposed the sentence Thursday in federal court in Chicago.
The conviction was announced by Brian Hayes, Chief of the Criminal Division of the United States Attorney’s Office for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; Thomas Ullom, Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General in Chicago; James Vanderberg, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; and Joseph M. Ferguson, Inspector General for the City of Chicago.
A city of Chicago ordinance establishes an overall goal of awarding at least 5% of total annual funding of all city contracts to WBEs. For contracts with values exceeding $10,000, each contractor has to commit a certain percentage of labor to WBEs, either as a joint venture or subcontractor, or by purchasing goods or services from a WBE. In addition to being a WBE, Lockport-based Perdel, which specialized in concrete and carpentry work, also qualified to participate in city projects as a certified Disadvantaged Business Enterprise.
Evidence at Perino’s trial revealed that Perino and a co-worker agreed to act as a “pass-through” WBE/DBE on two city projects, meaning that Perdel’s employees would perform no work and Perdel’s equipment would not be used. For one of the projects – at O’Hare International Airport – Perino agreed to place the general contractor’s employees on Perdel’s payroll to perform the work that would be credited to Perdel. Perino also entered into a sham contract to “purchase” street sweepers from the general contractor and title them in Perdel’s name while the general contractor’s workers performed the street sweeping as purported employees of Perdel. Perino and the general contractor further agreed that, at the conclusion of the O’Hare project, the street sweepers would be returned to the general contractor for $1 per machine, and Perdel would receive 18% on top of the labor costs and $20 per hour for the street sweepers.
The government was represented by Assistant U.S. Attorneys Megan Cunniff Church and Matthew Kutcher.
Federal Jury Convicts Two Businessmen on Fraud Charges for Falsifying Loan Documents on Ten-Acre Parcel of Land in AuroraRead the Press Release
CHICAGO — Two businessmen have been convicted on bank fraud charges for falsifying loan documents to prevent foreclosure on a nearly $2 million parcel of land in Aurora. The fraud left one couple out of $450,000, and an elderly couple out of $300,000.
KEVIN LEBEAU, 55, of Aurora, was found guilty of three counts of bank fraud and four counts of making false statements to a federally insured bank. BRIAN BODIE, 66, of Chicago, was convicted on three counts of bank fraud and three counts of making false statements to a federally insured bank. Each count carries a maximum sentence of 30 years in prison.
The jury returned the verdicts on Thursday after an eight-day trial in federal court in Chicago. U.S. District Judge Robert W. Gettleman has not yet scheduled sentencing hearings.
The convictions were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
Evidence at trial revealed that LeBeau and Bodie orchestrated a fraud scheme involving a $1.9 million loan from Amcore Bank. The bank in 2004 mortgaged a 10.4-acre property in Aurora to LeBeau and Bodie after the pair executed a full personal guarantee for the loan. By the fall of 2005 LeBeau and Bodie had failed to make the required loan payments, and foreclosure became imminent. In an effort to delay foreclosure, LeBeau and Bodie submitted fraudulent and fabricated information about the progress of efforts to develop the property.
Eventually the foreclosure occurred, and the property was sold in 2010 at a significant loss to the bank and several individual investors who had pledged their own money into the project. LeBeau and Bodie told the individual investors that their money would be used to develop a mixed-use development on the property. The individual victims included a couple that lost $450,000, and an elderly couple who lost $300,000. LeBeau and Bodie used some of the elderly couple’s money for business expenses and to make payments to the bank.
The government is represented by Assistant U.S. Attorneys Kartik K. Raman and Amarjeet S. Bhachu.
South Korean Businessman Convicted on Fraud Charges in Scheme to Deceive U.S. Municipalities out of Federal Stimulus FundsRead the Press Release
CHICAGO — A jury has convicted a South Korean businessman on multiple fraud charges for deceiving U.S. municipalities into spending federal stimulus money on his company’s foreign-made products.
HEON SEOK LEE, Chief Executive Officer and President of KTURBO and KTURBO USA, secured contracts to supply numerous municipalities across the United States with wastewater-treatment aeration blowers that Lee falsely represented had been manufactured in the United States. The false representations entitled Lee’s companies to win contracts funded through the stimulus package that the federal government provided to municipalities under the American Recovery and Reinvestment Act of 2009. In reality, Lee knew that KTURBO fully assembled its aeration blowers in South Korea and shipped them in final form to the United States, with the intention of obtaining in excess of $1.3 million from the fraudulently obtained contracts.
After an eight-day trial in federal court in Chicago, the jury on Wednesday found Lee, 50, of Seoul, South Korea, guilty of five counts of wire fraud and three counts of fraudulent importation of goods into the United States. Each count is punishable by up to 20 years in prison.
U.S. District Judge Sharon Johnson Coleman has not yet scheduled sentencing.
The conviction was announced by Joel R. Levin, Acting 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 Joseph Gonzales, Special Agent-in-Charge of the U.S. Environmental Protection Agency Office of Inspector General. The U.S. Department of Health and Human Services Office of Inspector General also provided assistance.
Congress passed ARRA to combat the Great Recession of 2008. Billions of dollars in stimulus funds went into the U.S. economy, including funds provided to municipalities and other local governments for the construction and renovation of wastewater treatment facilities. In order to receive ARRA funding, municipalities had their general contractors and engineering firms confirm that the contractors, subcontractors and vendors provided manufactured goods that complied with the “Buy American” provision in ARRA, which required that manufactured goods be “substantially transformed” in the United States.
Evidence at trial revealed that South Korea-based KTURBO, under Lee’s leadership and direction, in 2010 placed phony placards on its equipment stating that it was “Assembled in USA.” The fully assembled equipment – with placards – was then shipped from South Korea to the United States, for distribution to several municipalities across the country.
Law enforcement in 2011 searched KTURBO’s local facility in suburban Batavia, seizing blowers that had been fully manufactured in South Korea, as well as other relevant evidence. Lee was extradited to the United States in 2015.
The government is represented by Assistant U.S. Attorneys Patrick Otlewski and Megan Cunniff Church.
Chicago Trader Indicted on Fraud Charges for Allegedly Misappropriating at Least $1.5 Million in Client FundsRead the Press Release
CHICAGO — A Chicago trader defrauded more than a dozen clients out of at least $1.5 million by pocketing their money instead of investing it, according to an indictment returned in federal court in Chicago.
RANDALL RYE, the owner of Faster Than Light Trading LLC, told investors that they would earn substantial profits from his proprietary trading program. Rye claimed that he would invest their money in options and futures contracts using a computer algorithm. In reality, Rye misappropriated the investors’ funds for his own personal expenses, such as air and hotel travel costs, including vacations to St. Lucia and Bali, tickets to sporting events, including the World Series and the Masters golf tournament, and on other luxury items and large cash withdrawals, according to the indictment.
As a result of the scheme, Rye fraudulently misappropriated at least $1.5 million from at least 15 investors, the indictment states.
The indictment was returned Wednesday in federal court in Chicago. It charges Rye, 26, of Chicago, with six counts of wire fraud. Arraignment is scheduled for March 21, 2017, at 1:15 p.m., before U.S. Magistrate Judge Michael T. Mason in Chicago.
The indictment was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
According to the indictment, Rye falsely represented to investors that their money was generating substantial returns from his purported algorithmic trading program. Rye sent his investors numerous false account statements that appeared to be from established financial services companies, stating that all of the investors’ principal and profits were invested and profitable, the indictment states. However, Rye knew when he prepared the bogus statements that the documents were false and that investors’ funds were not actually maintained at the financial services companies.
Rye also used newer investors’ funds to make Ponzi-type payments to earlier investors.
Rye was arrested last month and he remains in federal custody. At the time of the arrest, law enforcement searched his home and office, seizing his business records and several expensive watches.
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.
Each count of wire fraud carries a maximum penalty of 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant United States Attorney Sunil Harjani.
United States Attorney Zachary T. Fardon Announces ResignationRead the Press Release
CHICAGO — Zachary T. Fardon, United States Attorney for the Northern District of Illinois since 2013, today announced his resignation from the Office, effective immediately. First Assistant U.S. Attorney Joel R. Levin has assumed the position of United States Attorney on an acting basis.
Mr. Fardon served as United States Attorney since Oct. 23, 2013, following his appointment by President Barack Obama. Under Mr. Fardon’s leadership the Office achieved significant convictions in the areas of public corruption, terrorism, gang crimes and narcotics, among many others.
Mr. Fardon created a specialized unit within the Criminal Division to address violent crime, while increasing the Office’s prosecutions of illegal firearms to its highest in more than a decade. His tenure was also distinguished by the creation of a new section to prosecute securities and commodities fraud, which resulted in a first-of-its-kind conviction for financial spoofing.
Mr. Fardon served on the U.S. Attorney General’s Advisory Committee since 2014. A select number of U.S. Attorneys are appointed to the AGAC to advise the Attorney General on policy, management and operational issues impacting U.S. Attorneys’ offices across the country.
“It has been the privilege of a lifetime to lead the U.S. Attorney’s Office in Chicago,” said Mr. Fardon. “I want to thank all of the talented men and women of the Office for their hard work and dedicated public service during my term.”
“Zach has served the citizens of the Northern District of Illinois and the United States with marvelous distinction,” said Mr. Levin. “I want to thank Zach for his service and his friendship, and I look forward to all that he will achieve in the future.”
Mr. Levin served as the First Assistant U.S. Attorney since 2014. He previously worked as an Assistant U.S. Attorney in the Eastern District of Wisconsin and the Northern District of California. In 1997 he joined the U.S. Attorney’s Office in Chicago, where he was part of the trial team, along with Mr. Fardon, that successfully prosecuted former Illinois Governor George Ryan on corruption charges.
Mr. Levin worked in private law practice from 2008 until returning to the U.S. Attorney’s Office as the First Assistant in 2014. Mr. Levin is a member of the American College of Trial Lawyers and an Adjunct Professor of Law at Northwestern University Pritzker School of Law. He is a graduate of Yale University and Harvard Law School.
McHenry County Man Pleads Guilty to Four RobberiesRead the Press Release
ROCKFORD — A McHenry County man pleaded guilty today before U.S. District Judge Frederick J. Kapala to four charges of robbery.
SHAWN M. RANK, 47, of Woodstock, pleaded guilty to the robberies of Heartland Bank and Trust Company, 327 W. Main St., Genoa, on Jan. 15, 2016; the Cash Store, 1479 N. State St., Belvidere, on April 1, 2016; Harvard Savings Bank, 58 N. Ayer St., Harvard, on May 6, 2016; and Alpine Bank, 600 S. State St., Belvidere, on June 13, 2016.
According to the written plea agreement, Rank admitted that at 10:30 a.m. on Jan. 15, 2016, he walked directly to a teller’s station at the Heartland Bank and Trust Company in Genoa, pushed a blue zippered bank bag across the counter and told the teller to fill it with $50s and $100s. Rank opened his jacket and showed a gun to the teller. The teller placed $1,250 in the bank bag.
In addition, Rank admitted in the plea agreement that in the Cash Store robbery he walked up to an employee standing at the counter and told the employee it was a robbery. The employee placed $1,232 in a blue bank bag.
Rank further admitted in the plea agreement that he similarly robbed Harvard Savings Bank when he placed a blue zippered bag on the counter, displayed a gun, and demanded that the teller give him money. The teller handed $2,700 to Rank.
Rank also admitted that he robbed Alpine Bank in Belvidere, again using a blue zippered bag. When Rank demanded money, the teller then gave him $1,790 from her drawer.
On each count Rank faces a maximum sentence of 20 years’ imprisonment, a term of supervised release of up to 3 years following imprisonment, and a fine of up to $250,000, and restitution. The actual sentence will be determined by the United States District Court, guided by the Sentencing Guidelines. Sentencing is set for June 29, 2017, at 2:30 p.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The DeKalb County Sheriff’s Office and the Harvard, Genoa, and Belvidere Police Departments assisted in the investigation.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
Two Convicted Felons from Chicago Area Sentenced to Prison on Federal Firearm OffensesRead the Press Release
CHICAGO — Two convicted felons from the Chicago area were sentenced to federal prison terms today for illegally possessing semiautomatic weapons.
THADDEUS JIMENEZ, 38, of Des Plaines, was sentenced to nine years and two months for illegally possessing a loaded .380-caliber semiautomatic pistol. Jimenez admitted in a plea agreement that he used the gun to shoot a man once in each leg. The shooting occurred on Aug. 17, 2015, in the 3500 block of West Belle Plaine Avenue in the Irving Park neighborhood of Chicago.
At the time of the shooting Jimenez was sitting in the driver’s seat of his Mercedes convertible, and in the passenger seat was JOSE ROMAN, 24, of Chicago. Roman was armed with a loaded .22-caliber semiautomatic rifle. After the shooting Jimenez and Roman sped off, but Chicago Police officers apprehended them nearby. The wounded man survived.
Roman was sentenced to seven years and one month for illegally possessing the rifle. Both Jimenez and Roman had previously been convicted of a felony.
U.S. District Judge Harry D. Leinenweber imposed the sentences in federal court in Chicago.
The sentencings were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives; Michael J. Anderson, 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 Sheriff’s Office provided valuable assistance.
The government is represented by Assistant U.S. Attorneys Kathryn Malizia and Michelle Petersen.
More Than 65 Individuals Facing Federal or State Charges for Allegedly Selling Heroin, Cocaine and Fentanyl on Chicago’s West SideRead the Press Release
CHICAGO — More than 65 defendants are facing federal or state narcotics charges for their alleged roles in distributing heroin, cocaine and fentanyl on Chicago’s West Side.
The joint federal and state investigation, dubbed “Operation Sweet Dreams,” spanned more than a year and resulted in the seizures of more than a dozen firearms, including an assault rifle and semiautomatic pistol, more than three kilograms of heroin, three kilograms of cocaine, and more than $380,000 in cash. Authorities uncovered the alleged criminal activity through the use of wiretapped cellular phones, undercover narcotics purchases and extensive surveillance. The probe was conducted under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF), with assistance from the High Intensity Drug Trafficking Area Task Force (HIDTA).
Law enforcement officers began arresting several of the defendants this morning.
The charges describe an extensive network of drug distribution, based predominantly in the Garfield Park, Homan Square and North Lawndale neighborhoods on the city’s West Side. Two of the defendants were charged with federal firearm violations as part of criminal complaints filed earlier this week in U.S. District Court and unsealed after the arrests.
The federal defendants will begin making initial court appearances this afternoon before U.S. Magistrate Judge M. David Weisman in Chicago. The state defendants were charged in separate complaints and will appear at a later time in Cook County Criminal Court.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Kimberly M. Foxx, Cook County State’s Attorney; Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration; Eddie T. Johnson, Superintendent of the Chicago Police Department; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division. The officials recognized the valuable assistance of the U.S. Marshals Service and the Illinois State Police.
The investigation uncovered numerous drug deals, including one that occurred last October in an alley in the 1800 block of North Leavitt Street in the Bucktown neighborhood of Chicago. A defendant purchased two kilograms of heroin in exchange for $132,800 in cash, the complaint states. The defendant was under law enforcement surveillance when he picked up the cash from a Near West Side house, the complaint states. The money was wrapped in a red and white Target shopping bag.
The investigation further revealed that one of the defendants agreed to sell his Chevrolet conversion van to a buyer he met in an online marketplace in exchange for a kilogram of cocaine. Unbeknownst to the defendant, the purported buyer was an undercover law enforcement officer. During an afternoon meeting last August at Diversey and Austin Avenues in the Belmont Cragin neighborhood of Chicago, the undercover officer gave the defendant a black bag containing a kilogram of sham cocaine in exchange for the van, according to the complaint. The deal was surreptitiously recorded by law enforcement.
The investigations were conducted under the umbrella of the OCDETF program, a partnership between federal, state and local law enforcement agencies. The principal mission of OCDETF is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations.
The public is reminded that complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Assistant U.S. Attorneys Jeremy Daniel and Jeannice Appenteng are representing the government in the federal cases. The Cook County State’s Attorney’s Office is representing the government in the state cases.
Sports Memorabilia Executive Pleads Guilty to $9.5 Million Fraud SchemeRead the Press Release
CHICAGO — The owner of a sports memorabilia company admitted in federal court today that he conducted a fraud scheme using forged documents and phony sports memorabilia, including a doctored Heisman Trophy and fake baseball cards that he used as collateral on loans.
JOHN ROGERS, 44, of North Little Rock, Ark., pleaded guilty to one count of wire fraud. The conviction carries a maximum sentence of 20 years in prison. U.S. District Judge Thomas M. Durkin scheduled a sentencing hearing for Sept. 12, 2017, at 10:00 a.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Rogers admitted in a plea agreement that he carried out a fraud scheme between 2009 and 2014 through his two Arkansas-based businesses, Sports Card Plus and Rogers Photo Archive LLC, resulting in losses of more than $9.5 million to investors, customers and financial institutions.
In order to obtain money from investors, Rogers falsely represented that he had secured contracts to purchase certain collections of sports memorabilia and newspaper photograph archives his company would sell at a profit, according to the plea agreement. Rogers showed the investors contracts for collections and archives even though he knew the deals never actually existed because the contracts were forgeries that Rogers created to deceive them.
Rogers also admitted in the plea agreement that he sold various sports memorabilia that he knew was not authentic because he had either created the item himself or altered it to make it appear legitimate. For example, in February 2012 Rogers paired an altered Heisman Trophy with phony certifications to secure a $100,000 loan from an investor, according to the plea agreement.
Rogers also used other fraudulent contracts and fake sports memorabilia to secure more than $4 million in loans from multiple financial institutions in Arkansas, the plea agreement states. Rogers admitted in the plea agreement that he used fraud proceeds he received from investors and financial institutions to repay customers who detected his sale of fraudulent sports memorabilia. Rogers provided customers with fraudulent certificates of authenticity, as well as fraudulent hologram stickers from a major auction house, the plea agreement states.
The government is represented by Assistant United States Attorney Derek Owens.
Lake County Resident Pleads Guilty to Conspiring to Manufacture Marijuana in Rockford WarehouseRead the Press Release
ROCKFORD — A Lake County man pleaded guilty today before U.S. District Judge Frederick J. Kapala for his role in a conspiracy to manufacture and distribute marijuana.
JUSTIN T. PAGLUSCH, 35, of Ingleside, pleaded guilty to conspiracy to manufacture 1,000 or more marijuana plants and to distribute marijuana between November 2014 and Jan. 6, 2015, at a warehouse at 1916 11th St. in Rockford.
Sentencing is set for June 23, 2017, at 2:30 p.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Celinez Nunez, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Derek Bergsten, Chief of the Rockford Fire Department; and Anthony Scarpelli, Chief of the Skokie Police Department. The Winnebago County Sheriff’s Department Narcotics Unit and the Rockford Police Department Narcotics Unit assisted in the investigation.
On Oct. 6, 2015, in a superseding indictment, a federal grand jury in Rockford charged Paglusch and six other individuals with conspiring to manufacture, possess and distribute 1,000 or more marijuana plants. The indictment alleges that between Jan. 2, 2013, and Jan. 6, 2015, the defendants conspired to illegally grow and store marijuana in the warehouse, which was destroyed by fire on Jan. 6, 2015.
According to Paglusch's written plea agreement, in November 2014 Paglusch’s cousin, JEREMIAH N. CLEMENT, 39, formerly of Des Plaines, asked Paglusch to work with others in a marijuana growing operation at the warehouse. When Paglusch arrived at the warehouse in November 2014, over 1,000 marijuana plants growing on the fourth floor were almost ready to be harvested. There was also a smaller room on the fourth floor that housed the baby or "clone" marijuana plants. As stated in the plea agreement, Paglusch and Clement, along with three other co-defendants, started harvesting the crop of finished marijuana plants in December 2014. The harvested marijuana was weighed and packaged into one pound amounts and vacuum sealed. The processed marijuana was stored in a vault at the warehouse and had a combination lock. Paglusch admitted that during the period of the conspiracy, he was aware that Clement kept a .357 Ruger revolver at the warehouse for protection.
On Jan. 6, 2015, while at a hotel in Rockford, Paglusch learned that the warehouse had burned down in the early morning hours.
Clement previously pleaded guilty to the same charge as Paglusch. Clement was sentenced last year to ten years in prison.
Paglusch faces a mandatory minimum sentence of ten years in prison, a maximum sentence of life imprisonment, a maximum fine of $4 million, and a term of supervised release following imprisonment of at least five years and up to life. The sentence will be determined by the United States District Court, guided by the Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Owner of Suburban Telemarketing Company Sentenced to a Year in Prison in Patients-For-Cash Kickback SchemeRead the Press Release
CHICAGO — The head of a Homewood telemarketing company has been sentenced to a year in federal prison for pocketing illegal kickbacks in exchange for referring patients to home health care agencies.
As the owner of Serenity Marketing Inc., which did business as Serenity Living, SUNDAE WILLIAMS used unsolicited phone calls to recruit patients, including Medicare beneficiaries, for home health care services. Williams then referred those patients to several Chicago-area nursing agencies in exchange for payments on a per-patient basis.
A jury last year convicted Williams, 47, of South Holland, on one count of conspiracy to solicit and receive remuneration in return for referring Medicare patients, and six counts of soliciting and receiving remuneration in return for referring Medicare patients.
U.S. District Judge John J. Tharp Jr. on Wednesday imposed the prison sentence of 12 months and one day. In addition, Judge Tharp ordered Williams to forfeit $599,000, which represents the proceeds of her crimes.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Kristie Osswald, Special Agent-in-Charge of the Chicago Office of the Railroad Retirement Board Office of the Inspector General.
“For at least four years, defendant Sundae Williams helped fuel a system in which skilled nursing agencies and doctors defrauded Medicare by billing for unnecessary services that Medicare beneficiaries did not need or qualify for,” Assistant U.S. Attorney Stephen Chahn Lee argued in the government’s sentencing memorandum. “Defendant’s offense here is serious because it led to the kinds of waste and fraud that the Anti-Kickback Statute was designed to prevent.”
Williams is one of several defendants convicted as part of the federal investigation. The prior convictions include JAMES ADEMIJU, a nurse from Matteson who operated two suburban nursing agencies; Dr. ALAN NEWMAN, one of the doctors at Suburban Home Physicians, which did business as Doctor at Home; and DIANA JOCELYN GUMILA, a nurse and manager of Suburban Home Physicians.
Evidence at Williams’ trial revealed that Serenity employees were trained to cold-call Medicare beneficiaries and convince them to accept home health services. If a Medicare beneficiary expressed interest, Serenity employees obtained the beneficiary’s personal information, including their Medicare number, and provided it to certain home health agencies that had agreed to pay Serenity for such referrals.
The investigation is being carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team, a joint initiative between the U.S. Justice Department and the U.S. Department of Health and Human Services to prevent fraud and to enforce anti-fraud laws around the country. Dozens of defendants have been charged in numerous fraud cases since the strike force began operating in Chicago in 2011.
The government is represented Mr. Lee and Cornelius Vandenberg.
Founder of Suburban Tech Company Sentenced to 9 Years for Defrauding Investors out of More Than $9 MillionRead the Press Release
CHICAGO — The founder of a northwest suburban tech company has been sentenced to nine years in federal prison for defrauding investors out of more than $9 million.
GREGORY WEBB, 71, the founder and Chief Executive Officer of Elk Grove Village-based InfrAegis Inc., was convicted last year on nine counts of mail and wire fraud for fraudulently raising more than $9 million from more than 200 investors. In written materials and telephone conference calls with investors between 2007 and 2012, Webb falsely portrayed InfrAegis as a successful company with growing stakes in the science and technology field. Among other things, Webb told investors that the company had signed or was on the verge of signing billion-dollar contracts with government agencies and municipalities across the world, including Chicago. The company’s products purportedly could protect the public from terrorist attacks by recognizing individuals on the terrorist watch list and instantaneously detecting biological, chemical and radiological threats on city streets, as well as by identifying harmful bacteria and other threats to the world’s food and water supply.
In reality, InfrAegis was not in a position to deploy any of its products because they had never been fully developed or tested, and the company had never signed contracts or even came close to signing contracts for the deployment of its products. The investors, some of whom included Chicago firefighters and other first responders, never received any return on their investment in the company.
U.S. District Judge Virginia M. Kendall imposed the 108-month sentence Wednesday in federal court in Chicago. In imposing the sentence, Judge Kendall described the offense as “egregious,” and noted it was “heartbreaking” to read letters that victims had submitted to the Court.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission, which filed a civil enforcement action against Webb and InfrAegis, provided valuable assistance.
“Defendant engaged in a multi-year, multi-million-dollar fraud scheme designed to extract as much money as he could from trusting investors by lying to them,” Assistant U.S. Attorneys Kruti Trivedi and Rick D. Young argued in the government’s sentencing memorandum. “Defendant’s actions have had and will continue to have long-term consequences for many of these victims.”
Evidence at Webb’s trial revealed that more than $500,000 was paid to Webb and his spouse between 2007 and 2012. The company also spent more than $800,000 to pay corporate credit cards that were used to charge Webb’s daily living expenses, including charges at restaurants, grocery stores, gas stations, tobacco stores, a movie theatre, a sporting goods store, and an Apple iTunes account.
Webb, of Dallas, Tex., formerly resided in Arlington Heights. InfrAegis is now defunct.
Rockford Man Pleads Guilty to Robbing a Rockford Bank and a Coin StoreRead the Press Release
ROCKFORD — A Rockford man pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to bank robbery, robbery affecting interstate commerce and a related firearm charge.
DAVID J. SANDERS, 33, pleaded guilty to the robbery of BMO Harris Bank, 1480 S. Alpine Rd., Rockford, on May 31, 2016, and the robbery of Rockford Coin and Stamps, 4402 Center Terr., Rockford, on June 11, 2016, and to using and carrying a Remington pistol-grip shotgun in furtherance of the coin store robbery.
Sanders, who has been in custody since his arrest on June 14, 2016, is scheduled to be sentenced on June 27, 2017, at 2:30 p.m., before Judge Kapala.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Dan O’Shea, Chief of the Rockford Police Department. The investigation was conducted under the auspices of the FBI Safe Streets Task Force, which includes representatives from the FBI; U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; Loves Park Police Department; Winnebago County Sheriff’s Department; and Rockford Police Department.
According to a written plea agreement, on May 31, 2016, Sanders attempted to rob a different BMO Harris Bank branch, located at 2510 South Alpine Rd. in Rockford. Sanders approached the branch manager and pulled a note out of his pocket that stated he had a gun and demanded money. However, when a bank employee came out of an employee door into the lobby, Sanders took the note and walked out of the bank. A short time later, Sanders entered the BMO Harris Bank at 1480 S. Alpine, approached the teller counter and was greeted by the bank manager. Sanders handed the bank manager a note that stated, “I have a gun give me 1000.” The bank manager said she could not give Sanders money, and when she attempted to keep the note, Sanders took it away from the manager and said, “I want $1,000.” The manager opened the teller drawer and gave Sanders $2,260. Sanders then left the bank.
Sanders further admitted in the plea agreement that on June 11, 2016, he entered the coin store, walked behind the display counter and obtained a Remington pistol-grip shotgun - with five live shells attached to the side of it - that belonged to the store. Sanders admitted that while holding the shotgun he demanded money from an employee. An employee gave Sanders approximately $500. Sanders then fled with the money and the shotgun.
Each count of bank robbery and robbery affecting interstate commerce carries a maximum sentence of up to 20 years in prison 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.
The charge of using and carrying a firearm in furtherance of a crime of violence carries a mandatory minimum sentence of five years, a maximum sentence of up to life imprisonment, and a fine of up to $250,000. The sentence imposed for this charge must be consecutive to any other sentence imposed.
The Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Rockford Woman Sentenced to 51 Months in Federal Prison for Tax Fraud and Identify TheftRead the Press Release
ROCKFORD — A Rockford woman was sentenced in federal court today by U.S. District Judge Frederick J. Kapala for making false claims for federal income tax refunds and using other persons’ identification in connection with the fraudulent claims.
CRYSTAL S. JACKSON, 29, who pleaded guilty to the charges on Nov. 28, 2016, was sentenced to 51 months in federal prison, to be followed by three years of supervised release. She was ordered to pay $200 in special assessment, and to pay the United States Treasury $99,479 in restitution.
According to the written plea agreement, Jackson admitted that between 2011 and 2013, she prepared and filed, both electronically and by mail, 45 false federal individual income tax returns in the names of other individuals without their permission, causing fraudulent claims for refunds to be made against the United States Treasury. The 45 false returns were filed with the IRS for tax years 2010, 2011, and 2012, and requested refunds totaling $189,237. Jackson admitted that as a result of her fraud, the IRS issued refunds in the total amount of $99,479. According to the plea agreement, the refunds were issued in the form of U.S. Treasury checks or credited to debit cards in the names of the individuals in whose names Jackson fraudulently filed the federal income tax returns. Jackson further admitted that she used ATM machines to withdraw the funds placed on the debit cards.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James D. Robnett, Special Agent-in-Charge of the Chicago Field Office of the Internal Revenue Service - Criminal Investigation Division.
The government was represented by Assistant U.S. Attorney Joseph C. Pedersen.
Rockford Insurance Executive Charged with Defrauding ClientsRead the Press Release
ROCKFORD — A Rockford man was indicted today by a federal grand jury on fraud charges.
TODD J. FENDLER, 41, was charged with one count of wire fraud and one count of mail fraud in connection with a scheme to defraud former insurance clients of Fendler’s businesses.
According to the indictment, Fendler controlled and operated several insurance-related businesses in Rockford, including Surplus Market Solutions LLC, Northern Underwriting Managers Inc., and Northern Illinois Insurance Agency Inc. The indictment alleges that Fendler obtained bank account information from businesses and individuals who had applied for insurance policies through Fendler’s companies, and that Fendler used that information to create fictitious checks purportedly issued by the applicants. Fendler deposited those fictitious checks, the indictment charges, into bank accounts of Surplus Market Solutions. The indictment identified two such checks: a check for $1,447 purportedly drawn upon a bank account of the Hollywood Wax Museum Myrtle Beach LLC, and a check for $5,205.79 purportedly drawn upon a bank account of the Beer Haus LLC.
Arraignment has been set for March 8, 2017, at 10:00 a.m., before U.S. Magistrate Judge Iain D. Johnston in Rockford.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and E. C. Woodson, Postal Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
Each count in the indictment carries a maximum penalty of 20 years in prison, and a maximum fine of $250,000. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines, as well as restitution. 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 the defendant’s guilt beyond a reasonable doubt.
The government is being represented by Assistant U.S. Attorney John G. McKenzie.
Hotel Developer Sentenced to Three Years in Prison for Exploiting U.S. Visa ProgramRead the Press Release
CHICAGO — A Chicago hotel developer was sentenced today to three years in prison for exploiting a federal visa program to fraudulently raise capital from Chinese nationals who were seeking residency in the United States.
ANSHOO SETHI, the founder of A Chicago Convention Center LLC, purported in 2011 to build a hotel and convention center near O’Hare International Airport in Chicago. Sethi solicited Chinese nationals to invest $500,000 apiece in the project, plus $41,500 in administrative fees to Sethi’s company. Each Chinese national who participated in the project also applied for an EB-5 visa, which allows foreign investors to obtain a temporary two-year visa that could later be converted to a permanent visa upon success of an employment-generating investment. While soliciting investors Sethi made several false statements, including lies about funding and tax credits from the State of Illinois and the City of Chicago, none of which materialized.
The $900 million project never got off the ground, and no EB-5 visas were ever granted to investors.
Sethi, 32, of Chicago, pleaded guilty last year to one count of wire fraud. In addition to the 36-month prison term, U.S. District Judge John Z. Lee also ordered Sethi to pay $8.85 million in restitution to the victim investors.
The prosecution represents the largest EB-5 criminal fraud case in the United States to date.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
“Defendant Anshoo Sethi abused the EB-5 visa program and blatantly lied to investors and the United States government on a massive scale,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “Overseas investors spent much time and energy making the difficult decision to invest in the Sethi project, and processing their visa applications – not knowing that the project was built on a bed of lies and forged documents.”
According to his plea agreement, Sethi’s fraud scheme began in the summer of 2011 and continued until February 2013. Sethi told investors that he planned to build the hotel and convention center on a three-acre parcel of land in the 8200 block of West Higgins Road in Chicago, just east of O’Hare. Sethi falsely told investors that his company maintained relationships with large hotel chains that purportedly were interested in the project, including Hyatt, Starwood and Intercontinental Hotel Group. To bolster an additional false statement regarding City of Chicago funding, Sethi signed a “Redevelopment Agreement TIF” document that purported to convey a relationship between the city and Sethi’s company. The document, which contained a bogus city ordinance implying that the project had been approved for TIF funding, was provided to third party brokers who used it to solicit investors.
In all, Sethi raised approximately $158 million from more than 290 investors. The U.S. Securities and Exchange Commission brought a civil lawsuit against Sethi and was able to restore approximately $147 million to Chinese investors.
The government is represented in the criminal prosecution by Mr. Harjani.
Four Chicago Men Charged with Federal Narcotics Violations for Operating Busy South Side Heroin MarketRead the Press Release
CHICAGO — Four Chicago men have been arrested on federal drug charges for allegedly operating a busy heroin trade in the Douglas neighborhood on the city’s South Side.
A joint federal and state investigation, led by the U.S. Drug Enforcement Administration and the Chicago Police Department, revealed that the defendants were selling heroin via a shared cellular phone number known as the “Vanna White Line.” Individuals wishing to purchase heroin would call the Vanna White Line to place an order, and the defendants would arrange to meet the customer to conduct the transaction, according to a criminal complaint filed in U.S. District Court in Chicago. The drug deals would often take place in the 3500 block of South Calumet Avenue and other parts of the Douglas neighborhood, the complaint states. Over a six-month period in 2016, there were approximately 193,720 calls to the Vanna White Line, according to the complaint.
The investigation, dubbed “Operation Wheel of Fortune,” used wiretaps, controlled drug purchases and extensive surveillance to uncover the heroin operation. The probe was conducted under the umbrella of the High Intensity Drug Trafficking Area Task Force (HIDTA). The investigation also led to narcotics charges in state court against several other defendants.
The federal complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the DEA; and Eddie Johnson, Superintendent of the Chicago Police Superintendent. The U.S. Marshals Service and the Hickory Hills Police Department provided valuable assistance.
The federal defendants, JOSEPH THOMPSON, 33, MARIO COOPER, 28, DEWAYNE BOLDEN, 26, and DEVANTE REED, 23, were arrested Thursday. They are each charged with conspiracy to possess a controlled substance with the intent to distribute. They appeared Thursday before U.S. Magistrate Judge Michael T. Mason and were ordered to remain in federal custody pending detention hearings next week.
According to the complaint, the Vanna White Line was selling approximately 130 grams of heroin every two days. The heroin was allegedly stored in an apartment in the 4700 block of South Martin Luther King Drive in Chicago.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The federal drug conspiracy charge carries a minimum sentence of five years in prison and a maximum of 40 years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented in federal court by Assistant U.S. Attorneys Scott Edenfield and Cornelius Vandenberg.
Two Illinois Women Plead Guilty to Conspiring to File Fraudulent Tax Returns Using Stolen IdentitiesRead the Press Release
Roxann Gist and Dominique King, both of Chicago, Illinois, pleaded guilty to conspiracy and other charges related to a scheme to obtain fraudulent tax refunds using stolen ID information, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.
According to documents filed with the court, from 2012 to 2015, Gist, 45, and King, 26, along with another co-conspirator filed at least 858 fraudulent income tax returns, using stolen names and social security numbers. Those returns sought approximately $2,780,724 in refunds. As part of the scheme, Gist and King acquired the personal identification information of thousands of unsuspecting individuals, and directed others to receive and collect fraudulent income tax refund checks, and to open up bank accounts to receive direct deposits of such refunds. They also recruited others to provide addresses where refund checks could be delivered.
Gist and King are scheduled to be sentenced on June 6 and June 14, respectively. Gist faces a statutory maximum sentence of five years in prison for conspiracy to steal public funds, 10 years in prison for theft of public money and a two-year mandatory minimum sentence for aggravated identity theft, which will run consecutive to any other sentence imposed by the court. King faces a statutory maximum sentence of five years in prison for conspiracy to steal public funds and a two-year mandatory minimum sentence for aggravated identity theft, which will run consecutive to any other sentence imposed by the court. Gist and King also face a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Timothy M. Russo of the Tax Division, who prosecuted this case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Northern District of Illinois for their substantial assistance in the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Chicago Man Charged with Sex Trafficking for Recruiting Minors to Engage in Sex ActsRead the Press Release
CHICAGO — A Chicago man was arrested today on federal sex trafficking charges for allegedly using Facebook to recruit minors to participate in sex acts with him and others.
BRYAN OSBORNE, 27, posed as a woman named “Lonyae Johnson” to communicate via Facebook with more than 2,000 individuals, many of them minors, according to a criminal complaint and affidavit filed in federal court in Chicago. Osborne, as Johnson, enticed several children to agree to appear in films depicting child pornography, on the promise that they would be paid thousands of dollars, the complaint states. Osborne, however, told the minors that they would first need to have sex with a producer named “Trey,” purportedly so that Trey could make sure the minors were suitable for filming, according to the charges.
Several of the minors agreed to the arrangement and met with Trey, who turned out to be Osborne, the complaint states. Osborne, posing as Trey, engaged in sex acts with the minors inside and outside of a building in the Austin neighborhood on Chicago’s West Side, according to the complaint. He later fabricated various reasons for why the minors would not be paid, the complaint states.
The complaint charges Osborne with one count of sex trafficking and one count of enticing a minor to engage in a sex act. He appeared this afternoon before U.S. Magistrate Judge Michael T. Mason and was ordered to remain in federal custody. A detention hearing was scheduled for Feb. 16, 2017, at 9:00 a.m.
The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation; Eddie Johnson, Superintendent of the Chicago Police Superintendent; James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division; and Cook County Sheriff Thomas J. Dart. The Cook County State’s Attorney’s Office Investigations Bureau provided valuable assistance.
The government is represented by Assistant U.S. Attorneys Bethany Biesenthal, Michelle Petersen and Rebekah Holman.
According to the charges, Osborne used the Facebook handle “lonyae.gotafattie” to pose as Johnson. Osborne told some of the minors that they could be paid larger sums if they referred even younger children to Osborne for participation in child pornography, the complaint states. Osborne also enticed some minors on Facebook to engage in prostitution with other individuals he had recruited, according to the complaint.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Each count is punishable by a statutory minimum sentence of ten years in prison, and a maximum of life. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
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, seven days a week.
Indiana Man Sentenced to More Than 13 Years for Impersonating PsychiatristRead the Press Release
CHICAGO — An Indiana man was sentenced today to more than 13 years in federal prison for holding himself out as a psychiatrist and prescribing medications to a nine-year-old child and dozens of others.
SCOTT C. REDMAN, 37, of Hammond, Ind., used the identity of an Illinois physician to see patients and prescribe medications at a clinic on Chicago’s Near North Side. The real physician is employed by a different Illinois medical facility. Redman assumed the physician’s name to prescribe medications to more than 50 individuals from September 2015 to February 2016. The purported patients included a nine-year-old child, for whom Redman prescribed a 30-day supply of Vyvanse, a medication that treats attention deficit hyperactivity disorder.
A jury in November convicted Redman on three counts of wire fraud, one count of aggravated identity theft, one count of furnishing false information to the Drug Enforcement Administration, and five counts of distributing a controlled substance. U.S. District Judge Samuel Der-Yeghiayan imposed the 157-month sentence in federal court in Chicago.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the DEA.
“The defendant’s conduct was shameless,” Assistant U.S. Attorney Katie M. Durick argued in the government’s sentencing memorandum. “He preyed upon an already vulnerable population of patients, including a nine-year old little boy, who were seeking mental health treatment for a variety of psychiatric conditions.”
Evidence presented at trial revealed that Redman maintained office hours at the clinic to treat his supposed patients. A purported profile of Redman on the clinic’s website contained the name of the real physician, alongside a photograph of Redman and fraudulent biographical and educational information. In addition to the Vyvanse, Redman prescribed other controlled substances to his supposed patients, including Adderall, Clonazepam and Xanax.
The government is represented by Ms. Durick and Assistant U.S. Attorney Matthew F. Madden.
Illinois Man Admits to Filing Fraudulent Tax Returns Using Stolen ID InformationRead the Press Release
A Harvey, Illinois man pleaded guilty today to wire fraud and aggravated identity theft charges related to a scheme to obtain fraudulent tax refunds using stolen ID information, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.
According to the plea agreement, from November 2014 through March 2015, Jonathan Herring, 34, working with at least two others, prepared and filed income tax returns using stolen names and social security numbers, and deposited the fraudulently obtained tax refunds into bank accounts that he controlled. In total, Herring filed approximately 225 fraudulent returns claiming approximately $845,979 in tax refunds.
Herring was charged in February 2016 with wire fraud, aggravated identity theft and access device fraud. According to the indictment, some of the victims of his scheme were members of the U.S. Air Force.
Sentencing is scheduled for July 25. Herring faces a statutory maximum sentence of 20 years in prison for the wire fraud count and a mandatory sentence of two years in prison for the aggravated identity theft count, which will run consecutive to any other prison term he receives. Herring also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg thanked agents of the Internal Revenue Service Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Michael C. Boteler and Timothy M. Russo, who are prosecuting the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Northern District of Illinois for their substantial assistance in the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Alleged Cyber Spammer Indicted on Federal Fraud ChargesRead the Press Release
CHICAGO — An alleged cyber spammer has been indicted on federal fraud charges for sending well over a million spam emails and damaging several computer networks.
MICHAEL PERSAUD, 36, of Scottsdale, Ariz., used multiple Internet Protocol addresses and domains – a technique known as “snowshoe spamming” – to transmit spam emails over at least nine networks, according to an indictment returned in federal court in Chicago. Persaud sent well over a million spam emails to recipients in the United States and abroad, the indictment states. He often used false names to register the domains, and he created fraudulent “From Address” fields to conceal that he was the true sender of the emails, according to the indictment. The charges also accuse Persaud of illegally transferring and selling millions of email addresses for the purpose of transmitting spam.
The indictment charges Persaud with ten counts of wire fraud and seeks the forfeiture of four computers.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and R. Justin Tolomeo, Special Agent-in-Charge of the Milwaukee Office of the FBI.
According to the indictment, Persaud gained access and use of the victim networks by falsely representing that he would not use their systems to send spam, and that he would comply with their policies prohibiting spamming, the indictment states. In reality, Persaud used a California company called Impact Media LLC and other aliases to send spam on behalf of sellers of various goods and services, the indictment states. Persaud earned commissions for each sale generated by the spam, the indictment states.
When some of the networks terminated his lease and denied him access to their networks, Persaud used aliases to contract with other networks, according to the indictment. In some instances, Persaud provided false forms of identification and payment, including a driver’s license and debit card, to support the alias, the indictment states. Persaud’s alleged aliases included the names “Michael Prescott,” “Michael Pearson,” and “Jeff Martinez.”
The indictment was returned Dec. 9, 2016, and ordered unsealed after Persaud’s arrest last month in Arizona. His arraignment earlier today before U.S. Magistrate Judge Susan E. Cox marked his first Chicago court appearance. Persaud pleaded not guilty and was ordered released on his own recognizance. While on bond, Persaud is restricted from traveling outside the District of Arizona, with the exception of making court appearances in Chicago.
A status hearing was scheduled for Feb. 21, 2017, at 10:15 a.m., before U.S. District Judge Andrea R. Wood.
The public is reminded that an indictment 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.
Each count of wire fraud is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Jessica Romero of the Northern District of Illinois, and Assistant U.S. Attorney Michael Chmelar of the Eastern District of Wisconsin.
Healthcare Service Provider to Pay $60 Million to Settle Medicare and Medicaid False Claims Act AllegationsRead the Press Release
WASHINGTON – A major U.S. hospital service provider, TeamHealth Holdings, as successor in interest to IPC Healthcare Inc., f/k/a IPC The Hospitalists Inc. (IPC), has agreed to resolve allegations that IPC violated the False Claims Act by billing Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program for higher and more expensive levels of medical service than were actually performed (a practice known as “up-coding”), the Department of Justice announced today. Under the settlement agreement, TeamHealth has agreed to pay $60 million, plus interest.
“This settlement reflects our ongoing commitment to ensure that health care providers appropriately bill government programs vital to patient health care,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.
The government contended that IPC knowingly and systematically encouraged false billings by its hospitalists, who are medical professionals whose primary focus is the medical care of hospitalized patients. Specifically, the government alleged that IPC encouraged its hospitalists to bill for a higher level of service than actually provided. IPC’s scheme to improperly maximize billings allegedly included corporate pressure on hospitalists with lower billing levels to “catch up” to their peers.
“Medical providers who fraudulently seek payments to which they are not entitled will be held accountable,” said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois. “False documentation of treatment is not just flawed patient care; it is illegal.”
As part of the settlement, TeamHealth entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) covering the company’s hospital medicine division. This CIA is designed to increase TeamHealth’s accountability and transparency so that the company will avoid or promptly detect future fraud and abuse.
“When health care companies boost their profits by misrepresenting the services they bill to taxpayer-funded health care programs, our office will make sure they are held accountable for their deceptive schemes and that they make changes to bill these programs appropriately,” said Special Agent in Charge Lamont Pugh of HHS-OIG.
The settlement resolves allegations filed in a lawsuit by Dr. Bijan Oughatiyan, a physician formerly employed by IPC as a hospitalist. The lawsuit was filed in a federal court in Chicago, Illinois, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Oughatiyan will receive approximately $11.4 million.
The government’s intervention in this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of Illinois, and HHS-OIG.
The case is captioned United States ex rel. Oughatiyan v. IPC The Hospitalist, Inc., et al., Case No. 09-C-5418 (N.D. Ill.). The claims resolved by the settlements are allegations only and there has been no determination of liability.
Healthcare Service Provider to Pay $60 Million to Settle Medicare and Medicaid False Claims Act AllegationsRead the Press Release
A major U.S. hospital service provider, TeamHealth Holdings, as successor in interest to IPC Healthcare Inc., f/k/a IPC The Hospitalists Inc. (IPC), has agreed to resolve allegations that IPC violated the False Claims Act by billing Medicare, Medicaid, the Defense Health Agency and the Federal Employees Health Benefits Program for higher and more expensive levels of medical service than were actually performed (a practice known as “up-coding”), the Department of Justice announced today. Under the settlement agreement, TeamHealth has agreed to pay $60 million, plus interest.
“This settlement reflects our ongoing commitment to ensure that health care providers appropriately bill government programs vital to patient health care,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.
The government contended that IPC knowingly and systematically encouraged false billings by its hospitalists, who are medical professionals whose primary focus is the medical care of hospitalized patients. Specifically, the government alleged that IPC encouraged its hospitalists to bill for a higher level of service than actually provided. IPC’s scheme to improperly maximize billings allegedly included corporate pressure on hospitalists with lower billing levels to “catch up” to their peers.
“Medical providers who fraudulently seek payments to which they are not entitled will be held accountable,” said U.S. Attorney Zachary T. Fardon for the Northern District of Illinois. “False documentation of treatment is not just flawed patient care; it is illegal.”
As part of the settlement, TeamHealth entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) covering the company’s hospital medicine division. This CIA is designed to increase TeamHealth’s accountability and transparency so that the company will avoid or promptly detect future fraud and abuse.
“When health care companies boost their profits by misrepresenting the services they bill to taxpayer-funded health care programs, our office will make sure they are held accountable for their deceptive schemes and that they make changes to bill these programs appropriately,” said Special Agent in Charge Lamont Pugh of HHS-OIG.
The settlement resolves allegations filed in a lawsuit by Dr. Bijan Oughatiyan, a physician formerly employed by IPC as a hospitalist. The lawsuit was filed in a federal court in Chicago, Illinois, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Oughatiyan will receive approximately $11.4 million.
The government’s intervention in this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of Illinois, and HHS-OIG.
The case is captioned United States ex rel. Oughatiyan v. IPC The Hospitalist, Inc., et al., Case No. 09-C-5418 (N.D. Ill.). The claims resolved by the settlements are allegations only and there has been no determination of liability.
Chicago Man Charged with Possessing Child PornographyRead the Press Release
CHICAGO — A Chicago man was ordered detained in federal custody today for allegedly possessing thousands of photographs and videos of child pornography.
SCOTT RESKEY, 61, is charged with one count of possessing an image of child pornography involving a minor under the age of 12. A search of Reskey’s laptop computer revealed more than 45,000 images and more than 200 videos of apparent child pornography, according to a criminal complaint filed in U.S. District Court in Chicago.
Reskey was arrested last week at his home on the Northwest Side of Chicago. He appeared in federal court this morning before U.S. Magistrate Judge Young B. Kim and was ordered detained in federal custody.
The charge against Reskey arose from a federal investigation of an online community that sent and received child pornography via an anonymous website, according to the complaint. The investigation remains ongoing.
The complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The public is reminded that a complaint 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.
The charge in the complaint is punishable by a maximum sentence of 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Grayson Walker.
Suburban Chicago Physician Pleads Guilty to Federal Bribery ChargeRead the Press Release
ROCKFORD — A Suburban Chicago physician pleaded guilty today before U.S. District Judge Frederick J. Kapala to bribery concerning health care programs receiving federal funds.
NEIL SHARMA, 36, of Lemont, has been a licensed Illinois physician since March 2011. Between September 2013 and March 2015, he was the Medical Director of a managed care services company that contracted with both Medicare and Medicaid to provide health care benefits.
As stated in a plea agreement, the State of Illinois contracted with the company to provide skilled nursing services to patients who were covered by Medicare, Medicaid, or both. In early 2015, the company contracted with three other firms to provide skilled nursing services. Sharma admitted that from Feb. 13, 2015, to March 13, 2015, as Medical Director and an agent of the company, he corruptly solicited and accepted cash payments of $2,500 and $7,500 from an individual in exchange for Sharma sending more patients to the individual’s company, and for providing that company with additional Medicaid and Medicare beneficiaries through Sharma’s company’s anti-depressant monitoring program and hospital re-admission program.
As stated in the plea agreement, the additional business Sharma promised in exchange for the bribe would bring in millions of dollars.
Sharma faces 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. Sentencing is set for May 11, 2017, at 9:30 a.m., before Judge Kapala in Rockford.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorneys Scott R. Paccagnini and Joseph C. Pedersen.
Illinois Woman Pleads Guilty in Stolen Identity Tax Fraud SchemeRead the Press Release
A former Poplar Grove, Illinois woman pleaded guilty in federal court in Rockford, Illinois today to mail fraud and aggravated identity theft, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon for the Northern District of Illinois.
According to documents filed with the court, from 2012 through 2014, Shameka Carr, 30, used individuals’ names, social security numbers and dates of birth without their knowledge or consent to file fraudulent income tax returns. Carr directed the fraudulently claimed refunds to prepaid debit cards and refund checks which she had mailed to addresses in Rockford and its surrounding areas. Carr admitted to an intended tax loss of $1,026,284.
Sentencing is scheduled for May 2. Carr faces a statutory maximum sentence of 20 years in prison on the mail fraud count and a two-year mandatory minimum sentence on the aggravated identity theft count. Carr also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Fardon commended special agents of the U.S. Postal Inspection Service and IRS-Criminal Investigation and the Boone County Sheriff’s Department, who conducted the investigation, and Trial Attorneys Michael C. Boteler and John T. Mulcahy of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Leader of Chicago Street Gang Sentenced to 22 Years in Federal Prison for Dealing Guns and Drugs on West SideRead the Press Release
CHICAGO — A convicted felon who was a leader of the violent Gangster 2-6 Nation street gang has been sentenced to 22 years in prison on federal gun and drug charges.
A federal jury in 2015 convicted FRANCISCO MASIAS of selling cocaine and illegally possessing 16 handguns. Masias, who had previously been convicted of a felony, illegally acquired the guns from an associate. Masias then gave the guns to JOSE MALDONADO, a fellow gang member who in turn provided them to another gang member. Law enforcement seized the firearms before they could be further distributed.
Masias, Maldonado and more than 15 other defendants have been convicted as part of a joint federal, state and local investigation dubbed “Operation Shady Business.” The gang’s drug and gun activities were uncovered through the use of wiretaps, cooperating witnesses and surveillance. The probe was initiated by the Chicago Police Department and conducted under the umbrella of the U.S. Organized Crime Drug Enforcement Task Force (OCDETF), with assistance from the High Intensity Drug Trafficking Area Task Force (HIDTA).
U.S. District Judge Rebecca R. Pallmeyer imposed the 264-month sentence for Masias on Friday in federal court in Chicago.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Eddie Johnson, Superintendent of the Chicago Police Department; Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division. The Cook County State’s Attorney’s Office and the U.S. Marshals Service provided valuable assistance.
Masias, 38, of Berwyn, was a longtime leader of the Gangster 2-6 Nation, which operated a violent drug-trafficking organization on the West Side of Chicago, predominantly in the Little Village area. Evidence at trial revealed that the gang violently protected its distribution of cocaine. During the investigation officers searched a Nottingham Park residence that had been converted into a marijuana grow house and seized more than 100 marijuana plants, which had an estimated street value of $1 million. JASON HERRERA, who resided at the grow house and served as security, pleaded guilty to a drug charge and was sentenced to five years in prison.
A jury convicted Maldonado, of Chicago, on gun and drug charges, and he was sentenced to 22 years in prison.
The government is represented by Assistant U.S. Attorneys Matthew F. Madden and Ankur Srivastava.
Investment Manager Arrested on Fraud and Misappropriation Charges in Alleged Multi-Million Dollar SwindleRead the Press Release
CHICAGO — A Connecticut investment manager has been arrested for allegedly operating a multi-million dollar fraud scheme that swindled approximately 30 individuals, including victims who reside in the Chicago area.
ALVIN WILKINSON, the founder of Chicago Index Partners LP and Wilkinson Financial Opportunity Fund LP, both based in Sharon, Conn., persuaded approximately 30 individuals to invest approximately $13 million in his funds, according to an indictment returned in federal court in Chicago. Wilkinson’s marketing materials to potential investors noted his prior affiliation with the Chicago Board Options Exchange, where he previously served as a Director. Instead of investing the funds as promised to clients, Wilkinson used the victims’ money to cover personal expenses and to pay earlier investors through Ponzi-type payments, the indictment states.
The indictment was returned Tuesday and ordered unsealed after Wilkinson’s arrest Wednesday morning in Connecticut. The indictment charges Wilkinson, 58, of Sharon, Conn., with three counts of mail fraud and one count of wire fraud. A court date in Chicago has not yet been scheduled.
The indictment seeks forfeiture of $13 million in cash, as well as a property in Sharon, Conn.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Commodity Futures Trading Commission, which previously filed a civil enforcement lawsuit against Wilkinson, provided valuable assistance.
According to the indictment, Wilkinson was the sole officer of his funds and had exclusive authority to manage their operations. Investors in the funds included Wilkinson’s friends, acquaintances and former colleagues. Wilkinson claimed he would trade a portfolio of financial instruments on their behalf, including options and futures, and that his trading strategy made money regardless of market conditions. In reality, Wilkinson did not maintain any trading accounts for the funds, and he did not use investor funds to trade in options and futures, according to the indictment.
The fraud scheme alleged in the indictment began no later than 1999 and continued until at least May 2016.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Each count of the indictment is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Nicholas Eichenseer.
Wilkinson IndictmentFormer Chicago Police Dispatch Supervisor Pleads Guilty to Federal Extortion Charge in Connection with Scheme to Smuggle Contraband into Cook County JailRead the Press Release
CHICAGO — A former dispatch supervisor for the Chicago Police Department admitted in federal court today that she provided private government information to her boyfriend in an effort to help smuggle contraband into Cook County Jail.
STEPHANIE LEWIS used her position in the City of Chicago Office of Emergency Management and Communications to access law enforcement databases to locate the personal information of a corrections officer at the jail, according to a written plea agreement. Lewis provided the information to her boyfriend, an inmate in the jail who had schemed with the officer and others to smuggle in the contraband to sell to other inmates. Lewis admitted in the plea agreement that she knew her boyfriend and the others used the information to threaten the officer with physical harm unless he continued with the scheme and smuggled additional contraband into the jail.
Lewis, 42, of Chicago, pleaded guilty to one count of conspiracy to commit extortion. The conviction carries a maximum sentence of 20 years in prison. U.S. District Judge Charles R. Norgle set sentencing for April 26, 2017, at 11:30 a.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Cook County Sheriff Thomas J. Dart; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Lewis’ guilty plea brings to five the number of defendants convicted in the case. The prior convictions include the corrections officer, JASON MAREK, who admitted delivering contraband, including marijuana, tobacco and alcohol, to a jail inmate after tucking it into sandwiches and sneaking it past security. Marek was assigned to a maximum-security tier of the jail when he smuggled in the goods in May and June 2013.
Lewis’ boyfriend, PRINCE JOHNSON, of Chicago, has pleaded not guilty to conspiracy charges and is awaiting trial.
The government is represented by Assistant U.S. Attorney Megan Cunniff Church.