Northern District of Illinois
Press releases recorded for this federal judicial district.
Statement by the United States Attorney’s Office Following the Sentencing of Former U.S. Speaker of the House John Dennis HastertRead the Press Release
U.S. District Judge Thomas M. Durkin for the Northern District of Illinois today sentenced John Dennis Hastert, 74, of Plano, Illinois, to 15 months in federal prison. Hastert pleaded guilty last year to one count of illegally structuring cash withdrawals in order to evade financial reporting requirements.
After the sentencing hearing, the U.S. Attorney’s Office for the Northern District of Illinois issued the following statement:
“With this case, the Office sought to hold Mr. Hastert accountable for the crimes he committed that could still be prosecuted: illegally structuring cash withdrawals and lying to the government about his motive for engaging in that activity. All of us have been inspired by the strength and bravery of the victims and witnesses who came forward in the most challenging of circumstances. As in all cases, the Office is dedicated to doing everything we can to help victims and their families seek justice. It is our hope that the sentence imposed today will promote respect for the law.”
The sentencing was announced by U.S. Attorney Zachary T. Fardon for the Northern District of Illinois; Special Agent in Charge Michael J. Anderson of the Chicago Office of the Federal Bureau of Investigation; and Special Agent in Charge James D. Robnett of the Chicago Office of the Internal Revenue Service-Criminal Investigation Division.
The government is represented by Assistant U.S. Attorneys Steven A. Block and Diane MacArthur.
Statement by the United States Attorney’s Office Following the Sentencing of Former U.S. Speaker of the House John Dennis HastertRead the Press Release
CHICAGO — U.S. District Judge Thomas M. Durkin today sentenced JOHN DENNIS HASTERT, 74, of Plano, to 15 months in federal prison. Hastert pleaded guilty last year to one count of illegally structuring cash withdrawals in order to evade financial reporting requirements.
After the sentencing hearing, the United States Attorney’s Office for the Northern District of Illinois issued the following statement:
“With this case, the Office sought to hold Mr. Hastert accountable for the crimes he committed that could still be prosecuted: illegally structuring cash withdrawals and lying to the government about his motive for engaging in that activity. All of us have been inspired by the strength and bravery of the victims and witnesses who came forward in the most challenging of circumstances. As in all cases, the Office is dedicated to doing everything we can to help victims and their families seek justice. It is our hope that the sentence imposed today will promote respect for the law.”
The sentencing 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; and James D. Robnett, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.
The government is represented by Assistant U.S. Attorneys Steven A. Block and Diane MacArthur.
Sauk Village Treasurer Charged with Stealing More Than $21,000 from Police Pension FundRead the Press Release
CHICAGO — The treasurer of south suburban Sauk Village was arrested today for allegedly looting the village’s Police Pension Fund out of more than $21,000.
JAMES GRIEGEL, 71, of Sauk Village, is charged with embezzlement in a criminal complaint filed in U.S. District Court in Chicago. Federal authorities arrested Griegel this morning. He made an initial appearance today before U.S. Magistrate Judge Maria Valdez and was ordered released on a personal recognizance bond.
The complaint alleges that Griegel fraudulently issued pension fund checks to himself and forged the names of Sauk Village officials as signatories. Griegel listed the names of conferences and seminars on the memorandum lines of the checks to falsely make the payments appear to have been business related, according to the complaint. Griegel then cashed the checks and used the money for his own benefit, including making purchases at gas stations, rental car locations, restaurants and storage facilities, the complaint states.
Griegel worked as the village’s treasurer from May 2013 until January 2016, when he was suspended from the post. He issued the checks over a ten-month period from April 2015 to January 2016, according to the complaint.
The embezzlement charge carries a maximum sentence of ten years in prison and a $250,000 fine, and restitution is mandatory.
The arrest 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; and John F. Oleskowicz, Special Agent-in-Charge of the U.S. Department of Justice’s Office of the Inspector General, Chicago Field Office.
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. 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 Sunil Harjani.
Convicted Felon from Hickory Hills Sentenced to More Than Six Years in Prison for Illegally Possessing Rifles and a ShotgunRead the Press Release
CHICAGO — A convicted felon from southwest suburban Hickory Hills was sentenced today to more than six years in federal prison for illegally possessing several firearms with obliterated serial numbers.
STEVEN RILEY, 24, sold a 20-gauge shotgun, two rifles and 40 rounds of assorted ammunition to an individual for $2,500 in November 2014. Unbeknownst to Riley, the buyer was a confidential informant who was working at the direction of agents from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. Riley had previously been convicted of two felonies prior to the gun sale.
Riley pleaded guilty last year to one count of illegal possession of a firearm by a convicted felon. U.S. District Judge Virginia M. Kendall imposed the 75-month sentence in federal court in Chicago.
“Firearms and firearm-related violence have plagued the City of Chicago for years, and continue to do so,” Assistant U.S. Attorney Jordan Palmore argued in the government’s sentencing memorandum. “Conduct like that of the defendant in this case only contributes to this ongoing violence.”
In addition to the shotgun and rifles, Riley admitted in a plea agreement that he sold other firearms and assorted ammunition to the informant from October 2014 to February 2015. These additional sales netted Riley $3,600. In March 2015, agents executing a search warrant at Riley’s home in Hickory Hills discovered two loaded semi-automatic pistols and various ammunition, according to the plea agreement.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Jeffery Magee, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives. The Hickory Hills Police Department assisted in the investigation.
The government is represented by Ms. Palmore and Assistant U.S. Attorney Elizabeth Pozolo.
Glenview Man Pleads Guilty to Perjury Charge for Lying to Federal Grand Jury Investigating Possible Hiring Violations in Cook County Circuit Court Clerk’s OfficeRead the Press Release
CHICAGO — A Glenview man who was hired by the Cook County Circuit Court Clerk’s Office after loaning $15,000 to a company controlled by the Clerk’s husband pleaded guilty to a perjury charge today for lying during testimony before a federal grand jury.
SIVASUBRAMANI RAJARAM admitted in a plea agreement that in August 2014 he loaned $15,000 to Goat Masters Corp., whose president was the husband of the Cook County Circuit Court Clerk. The following month, Rajaram was hired by the Clerk’s Office as a level four Senior Clerk, according to the plea agreement. Rajaram had previously worked in the Clerk’s Office but had been living in India for several years.
On or about Oct. 1, 2015, Rajaram testified before a federal grand jury that was investigating possible criminal violations in connection with the purchasing of jobs and promotions within the Clerk’s Office. During his testimony, Rajaram said he had not spoken to the Circuit Court Clerk after his 2014 hiring. He also testified that he had spoken to another high-ranking employee of the Clerk’s Office only “three or four times” since returning to Chicago from India. Rajaram admitted in the plea agreement that both statements were false.
Rajaram, 48, of Glenview, pleaded guilty to one count of making a false declaration before a grand jury. The charge is punishable by up to five years in prison and a maximum fine of $250,000. U.S. District Judge John W. Darrah scheduled a sentencing hearing for Sept. 14, 2016, at 1:30 p.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Anita Alvarez, 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.
The government is represented by Assistant United States Attorneys Heather McShain and Ankur Srivastava.
Plea Agreement
Former Evanston Man Sentenced to over 19 Years for Robbing First Federal Savings Bank in Rock FallsRead the Press Release
ROCKFORD — A former Evanston, Ill. man was sentenced Tuesday in federal court on a federal bank robbery charge.
The defendant, CONRAD J. GONZALEZ, 48, was sentenced by U.S. District Judge Frederick J. Kapala to 234 months in federal prison, and ordered to serve 3 years of supervised release following his term of imprisonment.
On January 7, 2016, following a three-day trial before Judge Kapala, Gonzalez was found guilty by a federal jury of robbing the First Federal Savings Bank, located at 701 1st Ave., in Rock Falls, Ill. on Oct. 30, 2013.
According to the indictment and evidence at trial, at approximately 1:00 p.m. on Oct. 30, 2013, Gonzalez entered First Federal wearing a baseball cap and Chicago Bears sweatshirt. Gonzalez approached a bank teller and handed her a note demanding money. When the teller attempted to retrieve the note from the counter, Gonzalez said, “That was a stupid thing to do,” and took the note back. The teller then handed $1,870 to Gonzalez, who then walked out of the bank on foot.
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 Federal Bureau of Investigation. The Rock Falls and Sterling Police Departments assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Joseph C. Pedersen and Monica V. Mallory.
Federal Jury Convicts Head of Schaumburg Home Health Company in Scheme to Fraudulently Bill Medicare for Unnecessary CareRead the Press Release
CHICAGO — A federal jury has convicted the head of a Schaumburg home health company on fraud charges for scheming to bill Medicare for millions of dollars in unnecessary services.
As the manager of Suburban Home Physicians, which did business as Doctor at Home, DIANA JOCELYN GUMILA directed employees to perform in-home visits with patients who were physically capable of leaving their residences and not in need of the in-home treatment. Gumila also inflated the costs incurred by Medicare by directing employees to bill the treatment at the most complicated levels, even though the visits were typically routine and did not qualify for the elevated billing.
After a two-week trial in federal court in Chicago, the jury Friday night convicted Gumila, 46, of Streamwood, on 21 counts of health care fraud and three counts of making false statements in a health care matter. Each count of health care fraud is punishable by up to ten years in prison, while each false-statement count is punishable by up to five years in prison.
U.S. District Judge Charles P. Kocoras scheduled a sentencing hearing for July 26, 2016, at 9:45 a.m.
GUMILA became the latest defendant convicted in the federal investigation of Doctor at Home. The prior convictions include ALAN NEWMAN, a physician from Chicago, and JAMES ADEMIJU, a nurse from Matteson who operated two nursing agencies. In a plea agreement, Newman admitted falsely certifying patients for nursing services even when he knew that the patients did not need such care. Newman admitted causing approximately $2.6 million in losses to Medicare, according to his plea agreement. Ademiju pleaded guilty to making illegal payments for patient referrals, and he acknowledged billing for services that were improperly authorized by physicians from Doctor at Home.
Evidence presented at Gumila’s trial included a surreptitious audio recording in which Gumila can be heard telling a new doctor to “paint the picture” of patients so as to make them appear confined to their homes. Emails from Gumila were also shown to the jury, including one in which she referred to a physician who did not read orders before signing them as “the type of doctor we need [b]ecause he will just do what we tell him to do.”
Gumila’s conviction 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 Joseph Del Favero, Deputy Assistant Inspector General for Investigations of the Railroad Retirement Board Office of the Inspector General.
The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), 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 by Assistant U.S. Attorneys Stephen Chahn Lee and Vikas Didwania.
Federal Prosecutions Serve as Reminder to Comply with Tax Obligations as Filing Deadline ApproachesRead the Press Release
CHICAGO — Federal authorities today announced criminal charges against four Chicago-area residents for a variety of alleged income tax frauds. With tax season in full swing, the prosecutions serve as a warning to avoid dishonest tax-return preparers, and to remind taxpayers that each individual is responsible for the contents of his or her own return.
Two Chicago-area tax preparers were charged with assisting clients in obtaining hundreds of 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 and child credits.
In addition, two individuals were indicted for filing hundreds of fraudulent income tax returns that claimed refunds totaling more than $2.1 million. The fraudulent returns were filed electronically with the Internal Revenue Service.
“Tax preparers and individuals who willfully file false returns will be held accountable,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “Although tax prosecutions occur throughout the year, it is especially important with Tax Day looming to remind the public of the importance of proper compliance with their tax obligations.”
“IRS Criminal Investigation is committed to ensuring that honest taxpayers are not cheated and that all taxpayers pay their fair share,” said James D. Robnett, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. “With the filing deadline approaching, individuals who might be thinking about cheating should think twice or they will risk the consequences.”
According to statistics available from the Treasury Inspector General for Tax Administration, U.S. taxpayers filed approximately 150 million returns in 2014. The IRS found that more than 2.1 million of those returns claimed fraudulent refunds totaling more than $15.7 billion.
In addition to criminal penalties, including incarceration, fines and the costs of prosecution, convicted defendants remain responsible for all taxes and interest due, as well as civil penalties, U.S. Attorney Fardon 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, he added.
In one of the prosecutions announced today, TAMITHA BROWN, 50, of Bolingbrook, was charged with preparing and filing false and fraudulent income tax returns. Brown, a tax preparer who owned Bolingbrook-based E&T Tax Services Inc., filed the returns for the years 2008 through 2012, resulting in tax losses of approximately $189,856, according to the indictment. The government in Brown’s case is represented by Assistant U.S. Attorneys Jeannice Appenteng and Cornelius Vandenberg.
Another tax preparer, BARBARA GARRETT, who co-owned Chicago-based Preferred Financial, was charged with filing seven individual income tax returns that she knew contained false and fraudulent information. Garrett, 45, of Chicago, filed the returns on behalf of various taxpayers for the tax year 2009. The false information included invalid business losses and education credits, according to the indictment. The government in Garrett’s case is represented by Assistant U.S. Attorney Sean Driscoll.
Two individuals, TANYEA MACK and KATRINA WALLS, were charged with filing hundreds of fraudulent individual income tax returns. Mack, 40, of Waukegan, filed approximately 232 false returns in the names of various individuals, claiming refunds totaling more than $1.15 million, according to the indictment. Walls, 41, of Chicago, filed approximately 177 false returns in the names of various individuals, claiming refunds totaling $983,798, according to the indictment. Assistant U.S. Attorney Derek Owens represents the government in the Mack and Walls cases.
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. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
For tips and guidelines to assist taxpayers in choosing a reputable tax professional and for preparing their own taxes, visit the official IRS website by logging on to: https://www.irs.gov/uac/Choose-Your-Tax-Preparer-Wisely.
Former Cook County Sheriff’s Police Officer Sentenced to 7 1/2 Years in Prison for Robbing Drug Dealers While on DutyRead the Press Release
CHICAGO — A former police officer in the Cook County Sheriff’s Department was sentenced today to 7 1/2 years in federal prison for robbing drug dealers of cocaine, marijuana and contraband cigarettes while on duty.
ROBERT VAUGHAN admitted in a plea agreement that he robbed eight drug dealers from 2011 to 2013, earning a total profit of $300,000. Vaughan conducted the robberies with two other law enforcement officers, and the trio shared in the profits, according to the plea agreement. The robberies were carried out in Chicago, Cicero, Plainfield, Lyons, Melrose Park and Forest Park.
Vaughan, 45, of Frankfort, pleaded guilty last year to one count of robbery. U.S. District Judge Samuel Der-Yeghiayan imposed the 90-month sentence in federal court in Chicago.
“This is the type of crime one would expect to only see on a television show,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “The crimes were brazen, arrogant and detrimental to the citizens of this district. While the victims of the offense in this case garner no sympathy – they are drug dealers and contraband traffickers – it cannot excuse the outrageous conduct by Vaughan, who committed robberies using his badge and gun.”
According to the plea agreement, Vaughan was assigned to the High Intensity Drug Trafficking Area (HIDTA) team, a joint federal, state and local initiative to combat the trafficking of illegal narcotics. Vaughan admitted using his position as a police officer to orchestrate deals with drug traffickers for marijuana, cocaine and contraband cigarettes. Immediately after the transactions, Vaughan would arrest and handcuff the individuals – but then keep the narcotics for himself and release the dealers without charges. Vaughan later sold the narcotics to other dealers in exchange for cash.
Vaughan also robbed individuals and homes of marijuana based on information he had learned from confidential informants. He was arrested on Nov. 3, 2014, after he and another law enforcement officer robbed 70 pounds of marijuana from an individual whom they believed was a drug courier. Unbeknownst to the officers, the individual was an undercover federal agent, according to the plea agreement.
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.
The government is represented by Mr. Harjani.
Husband and Wife Owners of Chicago Physical Therapy Company Indicted in Schemes to Defraud Medicare and Force LaborRead the Press Release
A Chicago couple was charged in an indictment with a scheme to use their health care business to defraud Medicare out of millions of dollars, while also conspiring to employ a woman against her will.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office, Special Agent in Charge James D. Robnett of the Internal Revenue Service-Criminal Investigation (IRS-CI) Chicago Field Office, Acting Special Agent in Charge James M. Gibbons of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Chicago Field Office, Special Agent in Charge James Vanderberg of the U.S. Department of Labor’s Office of Inspector General-Office of Labor Racketeering and Fraud Investigations Chicago Region and Cook County State’s Attorney Anita Alvarez made the announcement.
Richard Tinimbang, 38, and his wife, Maribel Tinimbang, 40, both of Chicago, were charged with participating in a $45 million fraud scheme involving three Lincolnwood, Illinois, based home health care companies owned by Richard Tinimbang’s mother, Josephine Tinimbang. The companies allegedly paid bribes and kickbacks to obtain Medicare beneficiaries, ignored doctors who refused to certify beneficiaries as being in need of home health care and falsified medical records to make patients appear sicker than they actually were.
This indictment is part of a larger health care fraud investigation in which 13 others have been charged. Three defendants have pleaded guilty and await sentencing; the 10 others, including Josephine Tinimbang, are awaiting trial. Richard and Maribel Tinimbang’s business, Patients First Physical Therapy Inc., purportedly provided in-home therapy services to patients of three home health care companies – Donnarich Home Health Care Inc., Josdan Home Health Care Inc. and Pathways Home Health Services LLC. According to the indictment, several individuals who worked at Donnarich, Josdan and Pathways conspired to commit health care fraud and laundered money to conceal the scheme. From 2008 through 2014, the scheme resulted in $45 million in losses to Medicare, according to the indictment.
Richard Tinimbang also allegedly submitted fraudulent forms to the U.S. Department of Homeland Security in order to allow a Filipino woman to legally work in the United States, stating that the woman would be hired as a business analyst at Josdan, thus qualifying her for an H-1B visa. However, according to the indictment, when the woman arrived in the United States, Richard Tinimbang put her to work full time as a nanny and housekeeper for him, his wife and others. The couple allegedly attempted to induce the woman to sign a servitude contract that provided for payment of $66 per day – regardless of the number of hours worked – for a term of seven years. According to allegations in the indictment, the contract further provided that if the woman quit before the seventh year, she would be required to pay $25,000 in damages. The couple allegedly threatened to send her back to the Philippines without being paid for the work she had already performed in order to force her to sign the contract and surrender her passport.
The couple and Josephine Tinimbang used proceeds from the fraud to make numerous personal purchases, including shares of stock, vehicles, real estate and jewelry, according to the indictment. The indictment alleges that the couple concealed the money they had pocketed by falsely making it appear to be business expenses.
Richard Tinimbang is charged with one count of conspiracy to defraud Medicare, one count of conspiracy to pay or receive health care kickbacks, two counts of paying kickbacks to induce referrals of Medicare beneficiaries, one count of money laundering conspiracy, one count of conspiracy to obtain forced labor and one count of presenting false statements in an immigration document. Maribel Tinimbang is charged with one count of conspiracy to defraud Medicare, one count of money laundering conspiracy and one count of conspiracy to obtain forced labor.
An indictment is merely a charge and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The Medicare Fraud Strike Force and the Cook County Human Trafficking Task Force investigated the case. Trial Attorney Brooke Harper of the Criminal Division’s Fraud Section is prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Husband and Wife Owners of Chicago Physical Therapy Company Indicted in Scheme to Bilk Medicare and Employ Housekeeper Against Her WillRead the Press Release
CHICAGO — A Chicago couple used their health care business to bilk Medicare out of millions of dollars while also conspiring to force a housekeeper to work against her will, according to an indictment returned in federal court in Chicago.
RICHARD TINIMBANG and his wife, MARIBEL TINIMBANG, participated in a $45 million fraud scheme involving three Lincolnwood-based home health care companies owned by Richard Tinimbang’s mother, according to the indictment. The companies paid bribes and kickbacks to obtain Medicare beneficiaries, ignored doctors who refused to certify beneficiaries as being in need of home health care, and falsified medical records to make patients appear sicker than they actually were, the indictment states. The couple and Richard Tinimbang’s mother, JOSEPHINE TINIMBANG, allegedly used proceeds from the fraud to make numerous personal purchases, including shares of stock, vehicles, real estate, and jewelry.
Richard Tinimbang, 38, of Chicago, is charged with one count of conspiracy to defraud Medicare, one count of conspiracy to pay or receive health care kickbacks, two counts of paying kickbacks to induce referrals of Medicare beneficiaries, one count of money laundering conspiracy, one count of conspiracy to obtain forced labor, and one count of presenting false statements in an immigration document.
Maribel Tinimbang, 40, of Chicago, is charged with one count of conspiracy to defraud Medicare, one count of money laundering conspiracy, and one count of conspiracy to obtain forced labor.
An arraignment date has not yet been set.
The charges against Richard and Maribel Tinimbang are contained in a third superseding indictment returned last week in U.S. District Court in Chicago. The case is part of a larger health care fraud investigation that previously resulted in charges against 13 others. Three defendants have pleaded guilty and are awaiting sentencing, while the other ten, including Josephine Tinimbang, are awaiting trial. The investigation found that several individuals who worked at three related home health care companies – Donnarich Home Health Care Inc., Josdan Home Health Care Inc., and Pathways Home Health Services LLC – conspired to commit health care fraud and laundered money to conceal the scheme. The fraud started in 2008 and continued into 2014, resulting in a loss to Medicare of $45 million, according to the indictment.
Richard and Maribel Tinimbang’s business, Patients First Physical Therapy Inc., purported to provide in-home therapy services to patients of the three companies. The indictment states the couple concealed the money they had pocketed by falsely making it appear to be business expenses, then used it to purchase personal items, including a 5,000-square-foot residence in Lincolnwood.
In addition to the health care fraud charges, Richard Tinimbang is accused of submitting fraudulent forms to the U.S. Department of Homeland Security to allow a Filipino woman to legally work in the United States. Richard Tinimbang stated in the form that the woman would be hired as a business analyst at Josdan, thus qualifying her for an H-1B visa. When the woman arrived in the United States, Richard Tinimbang put her to work full time as a nanny and housekeeper for him, his wife and others, the indictment states.
The couple allegedly attempted to induce the woman to sign a servitude contract that provided for payment of $66 per day – regardless of the number of hours worked – for a term of seven years. The contract further provided that if the woman quit before the seventh year, she would be required to pay $25,000 in damages, the indictment states. To force the woman to surrender her passport and sign the contract, the couple threatened to send her back to the Philippines without being paid for the work she had already performed, according to the indictment.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; 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; James D. Robnett, Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago; James M. Gibbons, Acting Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); 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 Cook County State’s Attorney Anita Alvarez.
The investigation was carried out by the Medicare Fraud Strike Force, which consists of agents from the FBI and the U.S. Department of Health and Human Services, and prosecutors from the U.S. Attorney’s Office and the Justice Department’s Fraud Section. The strike force is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and HHS to prevent fraud and enforce anti-fraud laws around the country.
The case was also investigated by the Cook County Human Trafficking Task Force, a multi-disciplinary unit that brings law enforcement agencies together to work on human trafficking cases.
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. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Trial Attorney Brooke Harper of the Justice Department’s Criminal Division Fraud Section.
To report healthcare fraud or to learn more about it, logon to: StopMedicareFraud.gov.
Indictment
City of Chicago Building Inspector Charged with Demanding Bribe from Property Owner in Exchange for Allowing Renovations Without a PermitRead the Press Release
CHICAGO — A building inspector for the City of Chicago was arrested today for allegedly demanding a $300 bribe from a property owner in exchange for allowing renovation work without a permit.
ROBERTO URIBE, 55, of Chicago, is charged with attempted extortion for soliciting the bribe from an owner of a two-story building in Chicago, according to a criminal complaint and affidavit filed in U.S. District Court. Unbeknownst to Uribe, the building owner was cooperating with federal authorities and had surreptitiously recorded the bribery demand.
In a recorded conversation on Nov. 9, 2015, Uribe allegedly boasted of his ability to shut down the renovation work unless the owner paid him $300. “What’s going to happen is, if we put a stop on it, it’s going to stop you for six months, seven months,” Uribe told the building owner, according to the complaint. “So now, what’s happening now is you’re gonna give me some appreciation, and you’re gonna hurry up and get this done. And that appreciation is gonna be $300. Now how quickly can you get me my money to keep my mouth shut?”
Federal authorities arrested Uribe this morning. He was released on a personal appearance bond after an initial hearing this afternoon before U.S. Magistrate Judge Sheila Finnegan in Chicago. A status hearing is scheduled for April 26, 2016, at 1:15 p.m.
The attempted extortion charge is punishable by up to 20 years in prison and a $250,000 fine.
The arrest 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; and Joseph M. Ferguson, Inspector General for the City of Chicago.
Uribe is employed as a Building/Construction Inspector for the City of Chicago Department of Buildings, which enforces the permitting and inspection requirements of the Chicago Building Code. According to the complaint, Uribe initially approached workers performing renovations at the building and asked if they had a permit to work on the front window façade. The workers put Uribe in touch with the building owner, who met with Uribe and learned of the bribery solicitation.
Uribe allegedly told the owner that paying a bribe to avoid a permit would save money and benefit both of them. “This here will stop you for six months and it’ll cost you starting at $3,500 for an architect and plans,” Uribe told the owner in a recorded conversation, according to the complaint. “I’m looking out for you, we’re looking out for each other.”
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. 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 Sarah Streicker.
Complaint
Chicago Doctor Indicted for Falsifying Medical Certifications to Help Applicants Bypass U.S. Citizenship Testing RequirementsRead the Press Release
CHICAGO — A Chicago physician and a member of her staff have been indicted for falsifying medical certifications to help applicants bypass tests for U.S. citizenship.
DR. JASMINKA KOSTIC and NIKKI POZDOL fraudulently diagnosed the applicants as physically or mentally impaired, which purportedly rendered them unable to demonstrate the required knowledge of U.S. history and the English language, according to an indictment returned yesterday in U.S. District Court in Chicago. A medical certification of impairment allows individuals to seek a waiver from the civics and English-language tests required for naturalized U.S. citizenship.
Dr. Kostic, 59, of Chicago, and Pozdol, 47, of Chicago, are each charged with one count of knowingly making false statements in a document submitted to the U.S. Citizenship and Immigration Services. Dr. Kostic is also charged with one count of attempted unlawful procurement of citizenship or naturalization. Both charges are punishable by a maximum sentence of ten years in prison.
An arraignment date in federal court in Chicago has not yet been scheduled.
Dr. Kostic is a licensed physician who maintains a medical practice on the North Side of Chicago. Pozdol worked in Dr. Kostic’s office. According to the indictment, Dr. Kostic and Pozdol falsely certified that an applicant was unable to demonstrate the ability to read, write and speak English, and unable to answer questions regarding U.S. history and civics – even in a language understood by the applicant. The certification also provided a false length of time in which a medical examination was allegedly rendered to the applicant, and a false description of the clinical methods used to diagnose the purported impairments, according to the indictment.
Dr. Kostic and Pozdol fraudulently certified the impairment results as true and correct in U.S. Citizenship and Immigration Services Form N-648, titled “Medical Certification for Disability Exceptions,” the indictment states. The false N-648 would have allowed the individual to request a physical or mental impairment exception to the civics and English-language tests required for U.S. citizenship, according to the indictment.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James M. Gibbons, Acting Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The public is reminded that an indictment contains only charges and 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 government is represented by Assistant United States Attorney Devlin Su.
Indictment
Federal Grand Jury Indicts Two Men for Robbing Individuals at Gunpoint at ATMs in West and Northwest SuburbsRead the Press Release
CHICAGO — Two men have been indicted in connection with the armed robberies of individuals at automated-teller machines in the west and northwest suburbs of Chicago, federal authorities announced today.
The indictment alleges that KENNETH HAYES and ANTONIO DUNNER forced victims to withdraw money from drive-thru ATMs. Wearing disguises to cover their faces, the pair verbally threatened the individuals while Hayes brandished a firearm, the indictment states. Hayes and Dunner divided the proceeds between themselves, according to the indictment.
The indictment was returned yesterday in U.S. District Court in Chicago. It charges Hayes, 21, of Carpentersville, and Dunner, 22, of Elgin, with one count of conspiracy to interfere with commerce by threats or violence, five counts of interfering with commerce by threats or violence, and two counts of carrying, using or brandishing a firearm in connection with a crime of violence.
An arraignment date in federal court has not yet been scheduled.
The indictment alleges that the pair robbed or attempted to rob individuals at drive-thru ATMs in Glen Ellyn on Sept. 16, 2015; Park Ridge on Sept. 23, 2015; Arlington Heights on Oct. 19, 2015; and Northbrook on Sept. 23, 2015, and Oct. 8, 2015.
The pair is also accused in the indictment of robbing a gas station in Elmhurst on Nov. 1, 2015, with Hayes brandishing a firearm during the heist.
According to the indictment, Hayes and Dunner scouted drive-thru ATMs for potential robberies. Once the pair settled on a location, they traveled to the site together in Hayes’ vehicle and concealed themselves while watching for individuals using the ATMs. In addition to cash, Hayes and Dunner often stole the victims’ cellular telephones and disposed of them to prevent the victims from being able to quickly contact law enforcement, according to the indictment.
The indictment 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 Police Departments from Arlington Heights, Carpentersville, Elgin, Northbrook, Glen Ellyn, Park Ridge and Elmhurst provided substantial assistance in the investigation.
The conspiracy charge and each count of interfering with commerce by threats or violence carries a maximum sentence of 20 years. Carrying, using or brandishing a firearm in connection with a crime of violence is punishable by a mandatory minimum sentence of seven years for the first count, and a mandatory minimum of 25 years for the second count.
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.
The government is represented by Assistant U.S. Attorney Jordan Palmore.
Indictment
Three Sets of Father and Son Among More Than 15 Defendants Charged with Dealing Cocaine and Heroin in Chicago and Surrounding SuburbsRead the Press Release
CHICAGO — More than 15 defendants, including three fathers and their sons, are facing federal or state drug charges for their alleged roles in dealing wholesale amounts of heroin and cocaine in Chicago and surrounding suburbs, authorities announced today.
During the course of the investigation, dubbed “Operation Chicago Storm,” law enforcement agents assigned to the Chicago Strike Force seized more than 100 kilograms of cocaine, nine kilograms of heroin, 14 firearms and $600,000 in narcotics proceeds. Authorities uncovered the criminal activity through the use of wiretapped cellular phones, cooperating witnesses and extensive surveillance.
Fourteen federal defendants were arrested in the past week. Two state defendants have been charged in separate complaints filed in state court.
According to federal criminal complaints and affidavits unsealed after the arrests, the investigation revealed that JULIO MARTINEZ SR. and his son, JULIO MARTINEZ JR., trafficked kilogram quantities of heroin and cocaine in the Chicago area, primarily on the Northwest Side of the city. EDWIN DEL VALLE, also known as “Chino,” worked with the Martinezes to supply the narcotics to wholesale customers, the affidavits state. Del Valle allegedly stashed the narcotics in a garage in the Portage Park neighborhood of Chicago.
Martinez Sr., 54, of Lawrenceville, Ga.; Martinez Jr., 32, of Chicago; and Del Valle, 38, of West Columbia, S.C., are each charged with one count of conspiracy to knowingly and intentionally possess with intent to distribute heroin, and one count of knowingly and intentionally possessing cocaine with the intent to distribute.
Two other sets of father and son were also charged as part of the investigation. JUVENAL MARTINEZ, 66, and his stepson, ISRAEL MARTINEZ, also known as “Chino,” 32, both of Plainfield, were charged with participating in a conspiracy to distribute cocaine. Also charged in a cocaine-dealing conspiracy were PHILLIP VEGA, also known as “Moose,” 42, of Berwyn, and his son, JACOB VEGA, 24, of Chicago.
Strike Force agents executing a search warrant as part of the investigation discovered a Glock 17 semiautomatic handgun in the home of Phillip Vega. The search also uncovered 56 rounds of ammunition, 60 grams of cocaine, and a digital scale, according to the affidavits.
Throughout the course of the investigation, authorities surreptitiously recorded numerous drug transactions, including one near the Kennedy Expressway at Armitage Avenue in Chicago. More than 140 grams of cocaine was allegedly sold in that deal by NICHOLAS PADIN, 28, of Chicago, who is charged with both the conspiracy and the possession with intent to distribute.
The charges were 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 Drug Enforcement Administration; Eddie T. Johnson, Interim Superintendent of the Chicago Police Department; Anita Alvarez, Cook County State’s Attorney; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division.
The investigation was conducted through the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force, which ― in addition to the DEA, IRS-CID and CPD narcotics officers ― consists of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the FBI, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, and task force officers from various state and local law enforcement agencies, including the Cook County Sheriff’s Police and the Illinois State Police.
Also charged in the complaints with participating in a conspiracy to distribute heroin are JOSE RIVERA, 56, of Chicago; and MAURICE HART, also known as “Mo,” 46, of Chicago.
Charged with participating in a conspiracy to distribute cocaine are ADAM AGUIAR, 41, of Chicago; CHARLES MEDINA, 32, of Chicago; and LUIS MONTES, also known as “Nene,” 47, of Chicago.
The complaints charged LUIS NOCE, also known as “Guido,” 32, of Berwyn, with knowingly possessing cocaine with the intent to distribute.
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 United States Attorneys Christopher J. Stetler and Sean K. Driscoll are representing the government in the federal cases. Assistant Cook County State’s Attorney Bronwyn Sears is prosecuting the state cases.
Montes and Padin Complaint and Affidavit
Martinez Israel/Juvenal Complaint
Vega Phillip/Jacob Complaint and Affidavit
Noce Complaint
Aguiar and Medina Complaint
New Lenox Man Sentenced to More Than Ten Years in Federal Prison for Trading Dozens of Photos and Videos of Child PornographyRead the Press Release
CHICAGO — A New Lenox man who traded dozens of photos and videos of child pornography was sentenced today to more than ten years in federal prison.
Using the screen name trckgirl69, TERENCE MEAGHER traded the images and videos with others via a peer-to-peer file-sharing network on the Internet. Many of the images depicted real prepubescent minors engaged in sexually explicit conduct, including portrayals of sadistic and masochistic activity. Unbeknownst to Meagher, one of the users with whom he shared 88 pornographic images was an undercover law enforcement officer.
Meagher, 47, pleaded guilty last year to one count of transportation of child pornography. U.S. District Judge Rebecca R. Pallmeyer imposed the 124-month sentence in federal court in Chicago.
“By distributing child pornography, through trades with others who sought child pornography, Defendant continued the victimization of children who have been filmed or photographed engaging in acts no child should be part of,” Assistant U.S. Attorney Scott Edenfield argued in the government’s sentencing memorandum. “Defendant’s distribution of child pornography was frequent and extremely serious.”
In addition to sharing the pornographic images, Meagher admitted in a plea agreement that on Jan. 2, 2008, he surreptitiously photographed the private area of a minor child who was under the age of 12.
The sentencing 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; and Cook County Sheriff Thomas J. Dart.
The government is represented by Mr. Edenfield.
Animal Rights Activist Sentenced to Six Months of Home Confinement for Vandalizing a Farm and Releasing 2,000 Mink from CagesRead the Press Release
CHICAGO — A Los Angeles man was sentenced today to six months of home confinement for vandalizing a Grundy County fur farm and releasing more than 2,000 mink from their cages.
After releasing the mink, TYLER LANG and an accomplice spray painted the barn with the words, “Liberation is Love.” The pair also poured an acidic substance over two trucks that were parked on the farm in Morris, Ill.
Lang, 27, pleaded guilty last year to one count of conspiring to travel in interstate commerce with the purpose of damaging an animal enterprise.
U.S. District Judge Amy J. St. Eve sentenced Lang to three months’ time already served in prison, six months of community confinement and six months of home confinement, followed by one year of supervised release.
“Lang was not engaging in lawful activism or peaceful protest, but instead was committing a crime,” Assistant U.S. Attorney Bethany K. Biesenthal argued in the government’s sentencing memorandum. “The use of illegal methods of activism – harassment, threats, vandalism – does nothing more than taint the image of law-abiding activists who are attempting to create change through legal protest and lawful demonstration.”
The accomplice, KEVIN JOHNSON, of Los Angeles, pleaded guilty last year to the same charge as Lang. Judge St. Eve sentenced Johnson last month to three years in prison.
The vandalism and releasing of the mink occurred on Aug. 13, 2013. The mink farmers, with assistance from law enforcement, were able to recover 1,600 of the animals. The remaining mink died or were never found. Lang and Johnson also destroyed cards from the cages that identified the breed of each animal, making it impossible to determine the breed of the recovered minks.
The sentencing of Johnson 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 Ms. Biesenthal and Assistant U.S. Attorney William Ridgway.
Polo Woman Pleads Guilty to Bank EmbezzlementRead the Press Release
ROCKFORD — A Polo, Ill. woman pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to embezzling $59,560.88 from First State Bank Shannon-Polo.
KAYLA C. BERGSTROM, 46, of Polo, was First Vice-President of First State Bank, with branches located in Polo and Shannon, Ill.
According to the plea agreement, Bergstrom had the highest security level assigned in the bank’s software program, which controlled all customer bank accounts, the bank’s general ledger accounts, adding new accounts, and the maintenance of all bank accounts. Bergstrom’s responsibilities included reconciling all of the bank’s correspondent accounts including the bank’s correspondent account with US Bank. Bergstrom stated in the plea agreement that between Feb. 23, 2010 and Feb. 3, 2014, she embezzled a total of $59,560.88 from First State Bank by creating 34 separate cash advance tickets for the bank’s correspondent account at US Bank and crediting the amounts of cash advance tickets to her personal account and the business account for her husband’s automobile repair business. Bergstrom admitted in her plea agreement that she concealed her embezzlement by changing the balances on the bank’s US Bank account statements by manually cutting and pasting false account balances on the statements. The deposits of the bank were insured by the Federal Deposit Insurance Corporation.
Bergstrom faces a maximum sentence of 30 years’ imprisonment, a term of supervised release of up to five years following imprisonment, and a fine of up to $1 million. Sentencing for Bergstrom is set for June 28, 2016, at 9:00 a.m. before U.S. District Judge Philip G. Reinhard.
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 Joseph Moriarty, Special Agent in Charge for the Chicago Regional Office, Federal Deposit Insurance Corporation - Office of Inspector General.
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Plea Agreement
Chicago Marketer Convicted of Illegally Pocketing Bribes in Exchange for Referring Elderly Patients to Skokie-Based Home Health CompanyRead the Press Release
CHICAGO — A federal judge today convicted a Chicago marketer of taking illegal payments in exchange for referring elderly patients to a Skokie-based home healthcare company.
JENETTE GEORGE was convicted on two counts of violating the federal Medicare and Medicaid Anti-Kickback Statute, and one count of conspiracy to violate the statute. U.S. District Judge John W. Darrah issued the verdict in federal court in Chicago.
George, 62, of Chicago, faces up to 15 years in prison when she is sentenced by Judge Darrah on August 10, 2016, at 1:30 p.m.
George is the eleventh defendant to be convicted as part of the federal investigation into the bribes-for-referrals and fraud schemes at Rosner Home Healthcare Inc. The prior convictions include three of the company’s owners, as well as two Illinois physicians. Between January 2008 and July 2012, Rosner officials paid kickbacks and bribes to doctors, marketers, medical office employees and nurses to refer patients to Rosner. The referrals enabled Rosner to bill Medicare for home healthcare treatment that it subsequently provided.
“Physicians did not refer patients to Rosner; Defendant did,” Judge Darrah wrote in an opinion supporting the George verdict.
Rosner, which was based in Skokie and later in Morton Grove, has since closed.
George operated Ttenej Senior Referral Agency, which provided senior citizens with referrals to home healthcare firms in the Chicago area. Evidence at her three-day bench trial in October 2015 revealed that George received approximately $500 from Rosner for each patient she referred to the company. In one undercover surveillance video presented at trial, George is seen counting out the cash that she received from EDGARDO HERNAL, a former Rosner employee who by then was cooperating with federal authorities. Evidence at trial further showed that nurses at Rosner regularly put false information into patient charts to make Rosner’s services appear to be medically necessary, and to make patients appear to be sicker than they actually were.
Hernal pleaded guilty in 2013 to a conspiracy charge and is awaiting sentencing. In addition to George and Hernal, the other defendants convicted in the investigation are:
ANA NERISSA TOLENTINO, of Morton Grove, a nurse and former part owner of Rosner.
ARMANDO TOLENTINO, of Morton Grove, a nurse and former part owner of Rosner.
FREDERICK MAGSINO, of Morton Grove, a former part owner of Rosner.
EMMANUEL NWAOKOCHA, of Skokie, an Illinois physician.
MASOOD SYED, of Mount Prospect, an Illinois physician.
JENNIFER HOLMAN, of Chicago, an office manager in a medical office.
TITIS JACKSON, also known as Titus Jackson, of Chicago, a marketer who referred Medicare patients to Rosner.
LIONEL PAUL GASSMANN, of Skokie, a Rosner nurse who treated patients in their homes.
GLORIA ZISMAN, of Des Plaines, a Rosner nurse who treated patients in their homes.
In addition, ARTHUR DAVIDA, a Bloomingdale physician who falsely certified many of Rosner’s patients for home-health services, including some referred by George, was convicted of health care fraud in a related case. Davida was sentenced earlier this year to two years in prison.
The conviction of George 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; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), 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 by Assistant U.S. Attorneys Stephen Chahn Lee and Elizabeth Pozolo.
Chicago Investment Advisor Sentenced to Three Years in Prison for Defrauding a Suburban Bank and Two Clients out of More Than $3.2 MillionRead the Press Release
CHICAGO — A Chicago investment advisor was sentenced today to three years in federal prison for engaging in a scheme to defraud an Oak Brook bank and two of his clients out of more than $3.2 million.
ROBERT J. LUNN made a series of misrepresentations to Leaders Bank to obtain a line of credit and loans purportedly for the benefit of his business, Lunn Partners LLC, and two of his clients, including former Chicago Bulls player Scottie Pippen. Lunn misled the bank about the value of his assets and the purpose of the financing, and he fraudulently stated that Pippen and the other client, retired venture capitalist Robert Geras, were aware of the loans. In reality, neither Pippen nor Geras had any knowledge of them. Lunn used nearly all of the fraudulently obtained funds for his own benefit and to pay some of his other clients.
A federal jury in 2014 convicted Lunn, 66, of Chicago, on five counts of bank fraud. In addition to the 36-month sentence, U.S. District Judge Charles R. Norgle also ordered Lunn to pay restitution of more than $1.16 million to Leaders Bank, and $400,000 to Pippen.
“It is clear from the evidence that Lunn’s avarice knows no bounds,” Assistant U.S. Attorney Kenneth E. Yeadon and Special Assistant U.S. Attorney Richard G. Stoltz argued in the government’s sentencing memorandum. “He enriched himself by taking out the fraudulent loans and went to great lengths to conceal his crime from Leaders Bank, Mr. Pippen and Mr. Geras.”
According to evidence at trial, Lunn initially obtained a corporate line of credit from Leaders Bank for $480,000 in May 2001. He increased the credit line twice in 2004, first to $1.2 million and later to $1.32 million, after submitting financial statements that falsely proclaimed personal ownership of millions of dollars in stocks.
In September 2002, Lunn arranged for an unsecured bank loan of $1.4 million, purportedly for the benefit of Pippen. Lunn secured the loan by falsely representing that the proceeds would be used by Pippen to purchase an interest in an airplane.
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. The Chicago Regional Office of the U.S. Securities and Exchange Commission provided cooperation and participation in the prosecution.
The government is represented by Mr. Yeadon of the U.S. Attorney’s Office for the Northern District of Illinois, and Mr. Stoltz, a senior attorney with the SEC.
Rockford Man Sentenced for Illegally Possessing a FirearmRead the Press Release
ROCKFORD — A Rockford man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for illegally possessing a firearm as a convicted felon.
CLIFFORD HORTON, 28, of Rockford, Ill., was sentenced to 86 months in federal prison, to be followed by 3 years of supervised release. Horton pleaded guilty to the charge on Dec. 15, 2015, and admitted that on Nov. 4, 2014, having previously been convicted as a felon, he possessed a Taurus .380 caliber pistol.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; Gary Caruana, Winnebago County Sheriff; and, Patrick Hoey, Interim Chief of the Rockford Police Department.
The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.
Former Senior Analyst at the Federal Reserve Bank of Chicago Pleads Guilty to Stealing Sensitive Financial DataRead the Press Release
CHICAGO — A former senior analyst at the Federal Reserve Bank of Chicago admitted in federal court today that he stole confidential financial documents from the bank shortly before resigning his position and accepting a new job.
JEFFREY CHO, 35, of Chicago, pleaded guilty to one misdemeanor count of theft of property. The conviction carries a maximum sentence of one year in federal prison. U.S. Magistrate Judge Michael T. Mason scheduled a sentencing hearing for June 21, 2016, at 10:00 a.m.
In his role as a Senior Supervision Analyst, Cho had access to sensitive, proprietary and valuable information belonging to the bank. The information included financial data and materials relating to the bank’s responsibility to monitor the health of certain financial institutions in the United States.
According to a written plea agreement, Cho was in discussions in May 2015 to take a new job outside of the bank. Less than a week before accepting the outside company’s employment offer, Cho printed a confidential Federal Reserve document from his work computer and took it home with him. After accepting the offer on May 12, 2015, Cho printed an additional 31 confidential Federal Reserve documents from his work computer and brought those home as well. On the same day he resigned from the bank on May 26, 2015, Cho printed 3 more proprietary Federal Reserve documents from his work computer and brought them home.
When confronted by FBI agents, Cho initially denied taking home the confidential documents, according to the plea agreement. However, after a second interview with FBI agents the following month, Cho turned over four of the documents. Cho told agents that he had shredded the remaining documents after his first interview with the FBI, according to the plea agreement. On June 6, 2015, Cho turned over a bag full of shredded documents to the FBI, the plea agreement states.
Cho further admitted in the plea agreement that he printed confidential Federal Reserve documents while he was interviewing for another position with a different company in March 2015. Those documents were also sensitive materials concerning the financial health of certain U.S. financial institutions.
The conviction prohibits Cho from directly or indirectly participating in the affairs of any United States financial institution for at least ten years.
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 the Federal Bureau of Investigation; and Scott Redington, Special Agent-in-Charge of the Western Region Board of Governors of the Federal Reserve, Office of Inspector General.
The government is represented by Assistant United States Attorney Sunil Harjani.
Plea Agreement
Federal Grand Jury in Chicago Indicts California Man for Attempting to Provide Material Support to Overseas TerroristsRead the Press Release
CHICAGO — A California man who allegedly traveled to Syria to take up arms with terrorists has been indicted by a federal grand jury in Chicago for attempting to provide material support to acts of violence overseas.
AWS MOHAMMED YOUNIS AL-JAYAB, 23, of Sacramento, allegedly flew from Chicago to Turkey on Nov. 9, 2013, and then traveled to Syria. Between November 2013 and January 2014, Al-Jayab reported on social media that he was in Syria fighting with terrorist organizations.
The indictment charges him with one count of attempting to provide material support and resources, knowing that such support and resources would be used in preparation for, and in carrying out, violence against persons outside of the United States. The charge is punishable by up to 15 years in federal prison.
The indictment was returned today in U.S. District Court in Chicago. An arraignment date has not yet been set.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John P. Carlin, Assistant Attorney General for National Security; Monica M. Miller, Special Agent-in-Charge of the Sacramento Office of the Federal Bureau of Investigation; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the FBI.
The investigation was led by the Sacramento Joint Terrorism Task Force, which is comprised of FBI special agents and representatives from numerous federal, state and local law enforcement agencies. The U.S. Attorney’s Offices for the Northern District of Illinois and the Eastern District of California, as well as the U.S. Department of Justice’s National Security Division, provided assistance in the investigation.
Al-Jayab was also indicted earlier this year by a federal grand jury in Sacramento for allegedly making a false statement involving international terrorism. He pleaded not guilty to that charge. His next court appearance in Sacramento will be a status hearing on May 12, 2016, at 9:00 a.m. PDT, before U.S. District Judge Morrison C. England Jr.
According to a criminal complaint filed in the Eastern District of California, Al-Jayab is a Palestinian born in Iraq, who came to the United States as an Iraqi refugee in October 2012. Between October 2012 and November 2013, while living in Arizona and Wisconsin, Al-Jayab communicated via social media with numerous individuals about his intention to go to Syria to fight for terrorist organizations, the complaint states. On Nov. 9, 2013, he flew from Chicago to Turkey, and then traveled to Syria, according to the complaint.
Between November 2013 and January 2014, according to the complaint, Al-Jayab reported on social media that he was in Syria fighting with terrorist organizations. Al-Jayab returned to the United States on Jan. 23, 2014, and settled in Sacramento.
The indictment in California contends that Al-Jayab gave false statements to agents from the U.S. Citizenship and Immigration Services during an interview on Oct. 6, 2014. In the interview, Al-Jayab indicated that he never supported terrorist groups, and that the purpose of his trip to Turkey was to visit his grandmother. The California indictment contends that both statements were false.
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.
The government is represented in Chicago by Assistant U.S. Attorneys Barry Jonas and Shoba Pillay of the Northern District of Illinois, and Trial Attorney D. Andrew Sigler of the National Security Division’s Counterterrorism Section.
Indictment
California Man Indicted in Chicago for Attempting to Provide Material Support to Overseas TerroristsRead the Press Release
Aws Mohammed Younis Al-Jayab, 23, of Sacramento, California, was indicted today in the Northern District of Illinois for attempting to provide material support to acts of violence overseas.
The indictment was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Monica M. Miller of the FBI’s Sacramento Division and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division.
Al-Jayab was also indicted earlier this year by a grand jury in Sacramento for allegedly making a false statement involving international terrorism. He pleaded not guilty to that charge, and his next court appearance will be a status hearing on May 12, 2016, at 9:00 a.m. PDT, before U.S. District Judge Morrison C. England Jr. of the Eastern District of California.
According to a criminal complaint filed in the Eastern District of California, Al-Jayab is a Palestinian born in Iraq, who came to the United States as an Iraqi refugee in October 2012. Between October 2012 and November 2013, while living in Arizona and Wisconsin, Al-Jayab communicated via social media with numerous individuals about his intention to go to Syria to fight for terrorist organizations, the complaint alleges. The complaint further alleges that on Nov. 9, 2013, he flew from Chicago to Turkey and then traveled to Syria.
According to the complaint, between November 2013 and January 2014, Al-Jayab reported on social media that he was in Syria fighting with terrorist organizations. Al-Jayab returned to the United States on Jan. 23, 2014, and settled in Sacramento.
The indictment returned in California contends that Al-Jayab gave false statements to agents from the U.S. Citizenship and Immigration Services during an interview on Oct. 6, 2014. In the interview, Al-Jayab indicated that he never supported terrorist groups and that the purpose of his trip to Turkey was to visit his grandmother. The California indictment contends that both statements were false.
The statutory maximum sentence for attempting to provide material support is 15 years in prison. An arraignment date has not yet been set.
An indictment is merely an allegation. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The investigation was led by the Sacramento Joint Terrorism Task Force, which is comprised of FBI special agents and representatives from numerous federal, state and local law enforcement agencies. The U.S. Attorney’s Office of the Eastern District of California and the U.S. Department of Justice’s National Security Division provided assistance in the investigation. The case in Chicago is being prosecuted by Assistant U.S. Attorneys Barry Jonas and Shoba Pillay of the Northern District of Illinois and Trial Attorney D. Andrew Sigler of the National Security Division’s Counterterrorism Section.
Al-Jayab NDIL Indictment
Three Rockford Area Men Charged with ArsonRead the Press Release
ROCKFORD — Three local men were indicted yesterday by a federal grand jury in Rockford, Ill. on charges of arson.
JASON VANDUYN, 39, of Machesney Park, Ill.; and BRIAN BURD, 48, and ROBERT WARMOTH, 42, both of Rockford, were all charged with one count of arson and one count of conspiracy to commit arson.
The indictment alleges that between June 7 and 12, 2015, Vanduyn recruited Burd and Warmoth to blow up a pickup truck. According to the indictment, Vanduyn had been in a fistfight with the owner of the truck on June 7, 2015, and Vanduyn wanted to exact revenge on the owner. The indictment states that Vanduyn offered to pay Burd and Warmoth and provided them with an explosive to use. During the early morning hours of June 12, 2015, Warmoth drove Burd to an area near Theodore Street in Loves Park, Ill., where the truck was parked. Burd smashed a window on the truck and placed the explosive in the truck, the indictment charges. No one was injured in the ensuing explosion.
Each count of arson and conspiracy to commit arson carries a mandatory minimum penalty of 5 years in prison and a maximum penalty of up to 20 years in prison, in addition to a fine of up to $250,000. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Vanduyn was arrested this morning and pleaded not guilty during his arraignment today before U.S. Magistrate Judge Iain D. Johnston. Vanduyn was ordered to be held in federal custody until a detention hearing on March 21, 2016, at 9:30 a.m. Burd and Warmoth are scheduled to appear before U.S. Magistrate Judge Johnston for arraignment on March 17, 2016, at 11:30 a.m.
The public is reminded that an indictment contains only charges and 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 indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; Jeffery Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and, Rodney Scott, Chief of the Loves Park Police Department.
The investigation was conducted under the auspices of the FBI Safe Streets Task Force, which includes representatives from the FBI, ATF, Loves Park Police Department, Winnebago County Sheriff’s Department, and Rockford Police Department.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
Indictment
Schaumburg Real Estate Executive Guilty of Evading More Than $550,000 in Personal Income TaxesRead the Press Release
CHICAGO — The owner of a Schaumburg real estate appraisal company pleaded guilty in federal court today to willfully failing to pay more than $550,000 in personal income taxes.
WILLIAM DADDONO, the owner of Advanced Appraisal Group, admitted in a plea agreement that from 2005 to 2010 he failed to pay taxes on more than $1.92 million in personal income. Daddono attempted to conceal the earnings by having the money deposited in a corporate account held in the name of a defunct business that he previously owned.
Daddono, 59, of Palatine, pleaded guilty to one count of willfully attempting to evade and defeat the payment of federal income tax. The conviction carries a maximum sentence of three years in prison and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
U.S. District Judge Sharon Johnson Coleman scheduled a sentencing hearing for June 10, 2016.
According to the plea agreement, Daddono owned and operated AAG and later American Appraisal Consultants, both of which were based in Schaumburg and provided real estate appraisal services. Daddono caused the companies to issue checks to Real Property Valuations, a defunct Illinois business that Daddono previously owned. To conceal the scheme, Daddono instructed employees of AAG and AAC to record the checks as corporate expenses.
As the sole signatory on a bank account held in the name of Real Property Valuations, Daddono was able to deposit the checks and then withdraw the money for personal use, according to the plea agreement. Daddono failed to report the amounts paid to him by AAG and AAC as income on his individual federal tax returns.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; 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. Attorney Sheri Mecklenburg.
Chicago Man Sentenced to 15 Years in Federal Prison for Possessing Thousands of Photos and Videos of Child PornographyRead the Press Release
CHICAGO — A Chicago man who traded more than 5,000 photos and 600 videos of children being sexually exploited has been sentenced to 15 years in federal prison.
Using the email account [email protected], DEVIN JONES traded the images and videos with others via the Internet. Many of the photos and videos depicted real children, including toddlers, being sexually abused. The images included portrayals of sadistic and masochistic conduct and other depictions of violence.
Jones, 27, of Chicago, pleaded guilty last year to one count of possession of child pornography. U.S. District Judge Edmond E. Chang sentenced Jones on Monday to 15 years in prison.
“Defendant’s crime is a damaging, exploitative and violent one,” Assistant U.S. Attorney Yasmin N. Best argued in the government’s sentencing memorandum. “Each time defendant viewed and distributed an image of a sexually abused child, he exploited that child.”
Jones admitted in a plea agreement that on Feb. 20, 2013, he received files on his laptop containing images of child pornography, including what appeared to be prepubescent females exposing their private areas. Later that day, Jones replied to the sender with several other photographs and a video depicting children engaged in sexually explicit conduct.
In addition to trading the pornographic images, Jones admitted in the plea agreement that from 2007 to 2013, he engaged in inappropriate and often sexual contact with approximately six minor children between the ages of five and nine years old.
The sentencing 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.
U.S. Attorney’s Office to Conduct Election Day MonitoringRead the Press Release
CHICAGO — The U.S. Attorney’s Office will monitor the primary elections in Chicago and surrounding suburbs on March 15, 2016, Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced today.
As part of the monitoring effort, the office will operate a telephone hotline for candidates or the public to report complaints related to the voting process. Two teams of Assistant U.S. Attorneys and other office personnel will monitor the hotline and be available to respond to complaints as needed.
The hotline number, staffed on Election Day only, is (312) 469-6157.
“There is no greater responsibility in a democracy than protecting the integrity of the voting process,” said Mr. Fardon. “A citizen who is entitled to vote should in no way be inhibited from doing so, and we stand ready to ensure the sanctity of the process.”
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes. Federal law also protects the rights of voters to mark their own ballot or to be assisted by a person of their choice. Violations of federal voting rights statutes carry penalties ranging from one to ten years in prison and fines of up to $250,000.
The office’s election monitoring efforts and subsequent investigations, if any, will be performed in consultation with the U.S. Justice Department. The Chicago office of the Federal Bureau of Investigation and the U.S. Marshals Service will assist in this effort by following up, if necessary, on any complaints of election fraud or voting rights infringements.
Complaints about ballot problems or discrimination can also be made directly to the Voting Section of the Justice Department’s Civil Rights Division in Washington, D.C., at (800) 253-3931 or (202) 307-2767. The Voting Section enforces the civil provisions of federal laws that protect the right to vote, including the Voting Rights Act, the Uniformed and Overseas Citizens Absentee Voting Act, the National Voter Registration Act, the Help America Vote Act and the Civil Rights Acts.
For information as to the location and hours of polling locations, Illinois residents are advised to contact the Illinois State Board of Elections by logging on to www.elections.il.gov or by calling (312) 814-6440.
Chicago Psychiatrist Who Took Kickbacks to Prescribe Mental Health Medication Sentenced to Nine Months in Federal PrisonRead the Press Release
CHICAGO — A Chicago psychiatrist was sentenced today to nine months in federal prison for accepting nearly $600,000 in fees and benefits from pharmaceutical companies in exchange for prescribing a medication to his patients.
DR. MICHAEL J. REINSTEIN prescribed the drug Clozapine to thousands of elderly and indigent patients in Chicago-area nursing homes and hospitals. In exchange for his efforts, the pharmaceutical companies provided Dr. Reinstein with consulting fees and entertainment expenses, including meals, tickets to sporting events, and all-expense-paid vacations. At one point in the early 2000s, Dr. Reinstein was the largest prescriber of the drug to Medicaid recipients in the United States.
Dr. Reinstein, 72, of Skokie, pleaded guilty last year to one count of violating the federal Medicare and Medicaid Anti-Kickback Statute. In addition to the nine-month sentence, U.S. District Judge Sharon Johnson Coleman also imposed forfeiture of $592,000, and ordered Dr. Reinstein to perform 120 hours of community service.
“Reinstein abused his position of public trust as a physician and took advantage of the faith and trust of his mentally ill patients in order to enrich himself,” Assistant U.S. Attorney Eric S. Pruitt argued in the government’s sentencing memorandum.
Clozapine is an anti-psychotic medication with potentially serious side effects, particularly for elderly patients. While Clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause a potentially deadly decrease in white blood cells, as well as seizures and inflammation of the heart muscle.
Dr. Reinstein has been a psychiatrist in the Chicago area since 1973, with an office in Chicago’s Uptown neighborhood. According to his plea agreement, he prescribed Clozaril, the brand-name version of Clozapine, long after less expensive, generic versions were available, because the manufacturer of Clozaril paid him thousands of dollars to promote the drug at speaking engagements.
After the deal with the brand-name manufacturer ended in 2003, Dr. Reinstein agreed to switch his patients to the generic version, but only after its manufacturers, Teva Pharmaceuticals USA Inc. and IVAX Pharmaceuticals LLC, agreed to pay him a consulting fee and finance a Clozapine research study performed by a Reinstein-affiliated entity. At Dr. Reinstein’s request, Teva also agreed to hire an individual whom Dr. Reinstein described as an important source of patient referrals. Between July 2006 and July 2011, Teva paid the individual approximately $112,000 to enter white blood cell data into a national Clozapine registry.
Reinstein previously agreed to pay the United States and the State of Illinois $3.79 million to settle a civil lawsuit. Teva and IVAX also paid the United States and the State of Illinois $27.6 million to settle civil allegations that they violated state and federal False Claims Acts.
The sentencing 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; 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 government is represented by Mr. Pruitt.
Loves Park Man Indicted on Child Pornography ChargesRead the Press Release
ROCKFORD — A Loves Park, Ill. man appeared today before U.S. Magistrate Judge Iain D. Johnson on child pornography charges.
GRANT WOJAHN, 35, of Loves Park, Ill., was indicted on Feb. 2, 2016, by a federal grand jury in Rockford and charged with one count of using a minor to engage in sexual conduct in order to produce child pornography, one count of transporting child pornography via the internet, and two counts of possessing child pornography that had crossed state lines, including an image of a minor under 12 years of age. Wojahn was arrested on Feb. 8, 2016, in Marin County, Cal., and transported by federal authorities back to Rockford. Wojahn pleaded not guilty during his arraignment today before U.S. Magistrate Judge Iain D. Johnston and was ordered held in federal custody until a detention hearing on March 15, 2016, at 2:30 p.m.
Sexual exploitation of a child for the purpose of producing child pornography carries a mandatory minimum of 15 years and a maximum of 30 years in prison, while transporting child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, and possessing child pornography carries a maximum of 10 years in prison and up to 20 years in prison for an offense involving a minor under 12 years of age. Each count carries a $250,000 maximum fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The indictment and arrest were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Michael Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
Indictment
Convicted Felon from Chicago Indicted on Federal Firearm OffensesRead the Press Release
CHICAGO — A Chicago man with a prior felony conviction has been indicted on federal gun charges for illegally dealing and possessing firearms.
The indictment contends that LAZARO SALAS, 32, illegally dealt firearms from September 2013 to November 2015. Salas allegedly purchased between 40 and 60 guns through a straw purchaser and then later re-sold them, according to a federal criminal complaint and affidavit. Two of the firearms were later found in the possession of Chicago gang members, the complaint states.
On Jan. 7, 2016, Salas purchased four handguns from an undercover agent with the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives, according to the complaint. The sale took place in a store parking lot near Salas’ residence in Chicago. Salas paid $350 for two of the guns, and he agreed to purchase the other pair for $200 and an ounce of marijuana, according to the complaint.
Salas was previously convicted of a felony, the indictment states.
The indictment was returned Tuesday in U.S. District Court in Chicago. It charges Salas with one count of dealing firearms without a license, and one count of being a felon-in-possession of a firearm. An arraignment date in federal court has not yet been set.
The charge of dealing firearms without a license is punishable by up to five years in prison, while being a felon-in-possession of a firearm carries a maximum sentence of ten years in prison and a $250,000 fine.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffrey A. Magee, Special Agent-in-Charge of the Chicago Field Division of ATF; and John Escalante, Interim Superintendent of the Chicago Police Department. The Illinois State Police also assisted in the investigation.
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.
The government is represented by Assistant U.S. Attorney Scott Edenfield.
Indictment
Director of Lisle-Based Hospice Company Convicted in Scheme to Fraudulently Bill Medicare for Medically Unnecessary ServicesRead the Press Release
CHICAGO — A federal jury has convicted the director of nursing assistants at Passages Hospice for participating in a scheme to bill Medicare and Medicaid for unnecessary hospice services.
ANGELA ARMENTA, 35, of Wheeling, was convicted Tuesday night on three counts of health care fraud. Each count is punishable by up to ten years in prison.
Armenta is the seventh defendant to be convicted as part of the federal investigation into Passages Hospice LLC. The prior convictions include former co-owner SETH GILLMAN and the company itself.
Gillman, 47, of Lincolnwood, pleaded guilty last month to one count of health care fraud. In his plea agreement, Gillman admitted that Passages regularly billed Medicare and Medicaid for a high level of hospice service called “general inpatient,” even though he knew that many of these services were not medically necessary. Gillman further admitted that he implemented a bonus system to incentivize nursing directors and nursing-assistant directors, including Armenta, to place patients on general inpatient services when the patients did not need such services.
Evidence at Armenta’s seven-day trial revealed that from 2009 to 2012, Armenta was paid more than $300,000 in bonuses based on the number of patients who were placed on the higher level of services in the region Armenta and others supervised. Witnesses at her trial testified that Armenta told nurses to disregard proper training about general inpatient services.
U.S. District Judge Thomas M. Durkin did not immediately schedule Armenta’s sentencing hearing. A status hearing was set for July 19, 2016, at 9:00 a.m., at which time her sentencing date will be set.
In addition to Armenta, Gillman, and Passages Hospice, the four other defendants convicted in the investigation are:
GWEN HILSABECK, 49, of Pontiac, Passages’ former administrator.
CARMEN VELEZ, 36, of Palatine, Passages’ former director of clinical services.
JULIE PARKER, 56, of Shorewood, Passages’ former compliance officer.
LEROY MOORE, 49, of Shorewood, Passages’ former head of marketing.
In his plea agreement, Moore admitted that he and others at Passages offered gifts to staff members of various nursing homes to induce them to refer patients to Passages. The gifts included tickets to events, electronic music players, televisions, and gift cards.
Gillman, Passages, Hilsabeck, Velez, Parker and Moore are scheduled to appear for a status hearing before Judge Durkin on March 16, 2016, at 9:00 a.m., at which time their sentencing dates will be set.
The conviction of Armenta 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; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), 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 by Assistant U.S. Attorneys Stephen Chahn Lee, Abigail Peluso and James Durkin.
Behr Iron & Steel Inc. Pleads Guilty to OSHA Violation Causing Death of EmployeeRead the Press Release
ROCKFORD — A Rockford-based company pleaded guilty today before U.S. Magistrate Judge Iain D. Johnston to willfully violating Occupational Safety and Health Administration regulations, resulting in the death of an employee at the company’s facility in South Beloit, Ill.
BEHR IRON & STEEL INC., a high volume ferrous and nonferrous scrap processor, admitted in a plea agreement that on March 10, 2014, the company failed to provide lockout/tagout protection and confined space protection as required under OSHA regulations for the company’s employees who were cleaning a shredder discharge pit. The company admitted that those violations caused the death of an employee who got caught in a moving, unguarded conveyor belt.
The Company faces a maximum sentence of 5 years’ probation, a maximum fine of $500,000, and restitution to the victim employee in an amount determined by the Court. Sentencing is scheduled for July 12, 2016, at 1:30 p.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Ken Nishiyama Atha, Regional Administrator of OSHA in Chicago.
“Justice cannot restore life to the victim whose body was crushed because Behr Iron and Steel failed to provide protection from dangerous machinery on the job,” said Mr. Atha. “Safety training at the plant was woefully insufficient. Behr must be held responsible by the courts for ignoring safety standards and failing in its obligation to protect its workers on the job.”
Behr’s South Beloit facility recycles metals contained in such things as automobiles and refrigerators. According to the plea agreement, OSHA regulations require employers to adopt safety procedures to ensure that dangerous machines are properly shut off and unable to start up again prior to the completion of maintenance or servicing work. The safety procedures include placing a lock on the power source of the machine and a tag on the lock warning that the machine cannot be operated until the warning is removed, and identifying the employee who has the key to the lock. OSHA also promulgated regulations that address the need to protect employees from entering a confined space without safety precautions.
Metals shredded through a shredding machine in Behr’s South Beloit facility fall onto a conveyor belt located about ten feet underground in a shredder discharge pit, which was approximately six feet long and six feet wide. The shredded materials were then moved by a conveyor belt out of the discharge pit and through a sorting process. Some of the shredded metals fall onto the ground of the discharge pit near the conveyor belt. One or two Behr employees working on the shredding machine were required to clean the discharge pit on a daily basis. The employees shoveled shredded materials from the floor of the discharge pit onto the running conveyor belt.
On March 10, 2014, a Behr employee was cleaning the discharge pit when the employee’s arm was caught by the unguarded conveyor belt. The employee was pulled into the machinery and killed.
Behr admitted that there was no lock or operable emergency shut off switch in the discharge pit for the conveyor belt, and the conveyor belt did not have guards designed to protect employees. Behr also admitted that employees in the discharge pit were not adequately trained to use the shredder or the conveyor belt, and that the company had not developed and implemented confined space protection for employees entering the discharge pit.
The government is represented by Assistant U.S. Attorney Scott R. Paccagnini.
Plea Agreement
Oak Brook Doctor Convicted in Kickback Scheme at Sacred Heart HospitalRead the Press Release
CHICAGO — A federal jury today convicted an Oak Brook doctor of illegally receiving benefits in exchange for referring elderly patients to Sacred Heart Hospital on Chicago’s West Side.
After a five-week trial, DR. VENKATESWARA R. “V.R.” KUCHIPUDI was convicted on one count of conspiracy to defraud the United States, and nine counts of illegally soliciting or receiving benefits in return for referrals of patients covered under a federal health care program. Each count carries a maximum sentence of five years in prison and a $250,000 fine.
U.S. District Judge Matthew F. Kennelly scheduled a sentencing hearing for June 2, 2016, at 1:30 p.m.
Dr. Kuchipudi, 69, is the tenth defendant convicted in a multi-year investigation of the now-shuttered hospital at 3240 W. Franklin Blvd. in Chicago. From 2001 through April 2013, Sacred Heart executives conspired to pay kickbacks and bribes to physicians to induce them to refer patients for services that would be reimbursed by Medicare and Medicaid. The scheme earned Sacred Heart millions of dollars in reimbursements from Medicare and Medicaid.
The prior convictions include EDWARD NOVAK, the hospital’s owner and chief executive officer; ROY PAYAWAL, the chief financial officer; CLARENCE NAGELVOORT and ANTHONY J. PUORRO, both of whom were chief operating officers; and four other physicians. Sacred Heart closed in 2013 in the aftermath of a federal law enforcement search of the hospital and the arrests of principal executives and Dr. Kuchipudi.
Evidence at Dr. Kuchipudi’s trial revealed that he was one of Sacred Heart’s most prolific sources of patient referrals. In exchange for his referrals, Sacred Heart provided Dr. Kuchipudi with free labor in the form of physician assistants and nurse practitioners. The free labor was provided not only inside Sacred Heart but also in Chicago-area nursing homes where many of Dr. Kuchipudi’s patients resided. Sacred Heart allowed Dr. Kuchipudi to bill Medicare and Medicaid for the services of the physician assistants and nurse practitioners as if he employed them himself.
Evidence at trial further revealed that Dr. Kuchipudi and Sacred Heart arranged for his patients to be transported long distances to Sacred Heart for treatment, even when the nursing homes in which they resided were closer to hospitals where Dr. Kuchipudi had privileges and which had more comprehensive facilities.
The conviction 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; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), 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 by Assistant U.S. Attorneys Joel Hammerman, Diane MacArthur, Kelly Greening and Brian Wallach.
Chicago Police Officer Sentenced to Two Years in Prison for Using Excessive Force Against a Handcuffed Store ClerkRead the Press Release
CHICAGO — A Chicago Police officer was sentenced today to two years in federal prison for using excessive force against an employee of a Southeast Side convenience store.
A store surveillance camera captured ALDO BROWN punching and kicking the clerk on Sept. 27, 2012. BROWN had entered the store while on duty and without a search warrant, and proceeded to interrogate the victim about whether he possessed narcotics or weapons. Brown punched the victim’s face, causing him to stumble backwards into a cooler. Brown later kicked the victim in his ribs while he was handcuffed and lying on the ground.
A federal jury last year convicted Brown, 39, of Chicago, on one count of using excessive force. U.S. District Judge Virginia M. Kendall imposed the 24-month sentence in federal court in Chicago.
“Even apart from the physical pain inflicted, defendant’s conduct has significant ramifications for the criminal justice system,” Assistant U.S. Attorney Jessica Romero argued in the government’s sentencing memorandum. “Sworn law enforcement officers are held to a higher standard of conduct, not merely because of the authority that they enjoy, but because society relies on their trustworthiness, their honor, and their integrity in upholding and enforcing the laws that protect the community.”
Evidence at trial revealed that the victim was compliant with Brown’s instructions and did not resist. Brown can be seen on the video placing the victim in handcuffs and forcing him to lie on the floor. After removing a gun from the victim’s back pocket, Brown kicked the victim in his ribs.
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. The government is represented by Ms. Romero and Assistant U.S. Attorney Lindsay Jenkins.
McHenry Man Indicted on Child Pornography ChargesRead the Press Release
ROCKFORD — A McHenry, Ill. man was indicted today by a federal grand jury in Rockford on child pornography charges.
MICHAEL L. CHAPARRO, 27, was charged with one count of transporting child pornography via the internet, and two counts of accessing child pornography that had crossed state lines, including an image of a prepubescent minor and a minor under 12 years of age, with intent to view the child pornography.
Transporting child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, and accessing child pornography carries a maximum of 10 years in prison, and up to 20 years in prison for an offense involving a minor under 12 years of age. Each count carries a $250,000 maximum fine. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Chaparro will appear for arraignment on March 3, 2016, at 11:00 a.m. in Federal Court in Rockford, before U.S. Magistrate Iain D. Johnston.
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 indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Michael Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The McHenry County Sheriff’s Department and McHenry County State’s Attorney’s Office assisted in the investigation.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Indictment
Animal Rights Activist Sentenced to Three Years in Prison for Vandalizing a Farm and Releasing 2,000 Mink from Their CagesRead the Press Release
CHICAGO — A California man was sentenced today to three years in federal prison for vandalizing a Grundy County fur farm and releasing more than 2,000 mink from their cages.
After releasing the mink, KEVIN JOHNSON and an accomplice spray painted the barn with the words, “Liberation is Love.” The pair also poured an acidic substance over two trucks that were parked on the farm in Morris, Ill.
JOHNSON, 28, of Los Angeles, pleaded guilty last year to one count of conspiring to travel in interstate commerce with the purpose of damaging an animal enterprise. U.S. District Judge Amy J. St. Eve imposed the three-year sentence in federal court in Chicago.
Johnson “vandalized a small, family-owned business, forcing it to close its doors,” Assistant U.S. Attorney Bethany K. Biesenthal argued in the government’s sentencing memorandum. “While his intentions are noble, his tactics are not.”
The accomplice, TYLER LANG, of Los Angeles, pleaded guilty last year to the same charge as Johnson. Lang is scheduled to be sentenced by Judge St. Eve on March 23, 2016, at 9:15 a.m.
The vandalism and releasing of the mink occurred on Aug. 13, 2013. The mink farmers, with assistance from law enforcement, were able to recover 1,600 of the animals. The remaining mink died or were never found. Johnson and Lang also destroyed cards from the cages that identified the breed of each animal, making it impossible to determine the breed of the recovered minks.
The sentencing of Johnson 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 being represented by Ms. Biesenthal and Assistant U.S. Attorney William Ridgway.
Chicago Real Estate Developer Convicted on Federal Fraud Charges for Swindling Banks and the City out of Millions of Dollars in LoansRead the Press Release
CHICAGO — A federal jury today convicted the president of a Chicago real estate firm on fraud charges relating to a $105 million line of credit for city and suburban properties, including a former Goldblatt’s Department Store on the North Side and the Streets of Woodfield Mall in Schaumburg.
The fraud perpetrated by LAURANCE H. FREED, the president of Joseph Freed & Associates LLC, also involved the theft of millions of dollars from his business partner, Kimco Realty Corp. Freed also fraudulently obtained millions of dollars in publicly funded loans from the city of Chicago.
After a two-week trial, Freed, 53, of Chicago, was convicted on three counts of bank fraud, one count of mail fraud, and four counts of making a false statement to a financial institution. The conviction carries a combined maximum sentence of 230 years in prison.
U.S. District Judge Robert M. Dow did not immediately schedule a sentencing hearing. Judge Dow set a status hearing for March 24, 2016, at 9:30 a.m.
The conviction 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; and Joseph M. Ferguson, Inspector General for the City of Chicago.
The investigation previously resulted in the conviction of JFA’s vice president, CAROLINE WALTERS. Walters, of Palatine, pleaded guilty earlier this month to one count of making a false statement to a financial institution. Her conviction carries a maximum sentence of 30 years in prison. Walters is scheduled to be sentenced by Judge Dow on June 10, 2016, at 9:00 a.m.
According to evidence at Freed’s trial, the city of Chicago in 2002 issued two Tax Increment Financing notes to Uptown Goldblatts Venture LLC, a company formed by JFA to redevelop the former Goldblatt’s store in the city’s Uptown neighborhood. The TIF notes had a combined principal of $6.7 million, and Freed pledged one of the notes to Cole Taylor Bank as collateral.
Four years later, JFA-affiliated entities entered into agreements with a bank consortium for a revolving line of credit worth up to $105 million. Uptown Goldblatts became a borrower under the revolving loan agreement through a subsequent deal with LaSalle Bank, which was one of the banks in the consortium and which had recently been acquired by Bank of America. In the LaSalle deal, Uptown Goldblatts pledged the two TIF notes as collateral and also represented that the notes were owned free of other secured interests. The deal did not mention that one of the notes had already been pledged to Cole Taylor.
In 2009, Uptown Goldblatts fraudulently advised Cole Taylor that it would obtain a release and termination of the double pledge. The termination wasn’t possible, since the consortium had already declared JFA in default and had stopped negotiating with Freed.
Evidence at trial also revealed that in 2009 and 2010 Freed signed false affidavits to obtain millions of dollars in TIF payments from the city, knowing that the bank consortium and Cole Taylor were entitled to the payments.
As Freed’s business experienced financial difficulties, he withdrew more than $7 million from the Streets of Woodfield partnership without the knowledge and consent of his business partner Kimco, which owned 45% of the venture. Freed fraudulently recorded the money as “loans.”
The government is represented by Assistant U.S. Attorneys Renato Mariotti, Matthew F. Madden and Jessica Romero.
Kane County Woman Convicted of Witness Tampering for Hindering a Federal Investigation into Sham MarriageRead the Press Release
CHICAGO — A Kane County woman was convicted of witness tampering today for impeding a wide-ranging federal investigation into visa fraud and a sham marriage she had arranged for a Mongolian relative.
After a five-day trial in federal court in Chicago, the jury convicted ENKHCHIMEG ULZIIBAYAR EDWARDS, also known as “Eni Edwards,” on two counts of witness tampering and two counts of making false statements in a matter within the jurisdiction of the Executive Branch of the United States government. Each count of witness tampering is punishable by up to 20 years in prison, while the false statement counts each carry a maximum sentence of five years.
The jury trial was conducted before Judge Richard A. Posner of the U.S. Court of Appeals for the Seventh Circuit, who sat in the district court by designation. Judge Posner scheduled a sentencing hearing for May 26, 2016, at 10:00 a.m.
Edwards, 38, of Carpentersville, is a U.S. citizen of Mongolian descent. Evidence at trial revealed that she arranged a sham marriage in 2003 to allow her cousin, a Mongolian immigrant, to marry Edwards’ friend and seek permanent residency in the United States. In 2008 she served as the vice president of the American Mongolian Association and personally vouched for Mongolians attempting to enter the United States.
Edwards subsequently was hired as an officer of the U.S. Customs and Border Protection. In her employment application and background check, Edwards denied having close or continuing contact with foreign nationals.
During her time at CBP, Edwards was assigned to a team of federal law enforcement authorities conducting a broad investigation into visa fraud involving Mongolian immigrants. In the course of the investigation, authorities began looking into the role that Edwards played in the sham marriage. On at least two occasions during the investigation, Edwards attempted to corruptly persuade her friend to lie to investigators regarding the true reason for marrying Edwards’ cousin.
The jury verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois. The investigation was carried out by the U.S. Department of State, Diplomatic Security Service Chicago Field Office. The U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the U.S. Department of Homeland Security’s Office of Inspector General assisted in the investigation.
The government is represented by Assistant United States Attorneys Peter S. Salib and Megan Cunniff Church.
Freeport Resident Sentenced to 33 Months in Federal Prison for Tax FraudRead the Press Release
ROCKFORD — A Freeport resident was sentenced today in federal court on a federal tax fraud charge.
The defendant, DOMINIQUE CASTLE, 29, was sentenced by U.S. District Judge Frederick J. Kapala to 33 months in federal prison, and ordered to serve 3 years of supervised release following her term of imprisonment. Castle was previously sentenced for fraud related charges in Stephenson County and the federal sentence of imprisonment will be served consecutively to her state prison sentence. Judge Kapala also ordered Castle to pay $94,044 in restitution to the IRS and to four states.
On Nov. 3, 2015, Castle pleaded guilty to making a false claim to the IRS by filing a fraudulent income tax return. She also admitted to filing a total of 54 fraudulent income tax returns with the IRS and an additional 17 fraudulent income tax returns with four different states. Castle admitted in her plea agreement that in filing these returns, she obtained and used names of individuals, their Social Security account numbers, and their dates of birth in order to prepare and file the tax returns. Castle admitted that in the tax returns, she would claim fictitious amounts of income and of income taxes purportedly withheld.
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 Office of the Criminal Investigations Division of the IRS. The government was represented by Assistant U.S. Attorney John G. McKenzie.
Poplar Grove Woman Charged in Stolen Identity Fraud SchemeRead the Press Release
ROCKFORD — A Poplar Grove, Ill. resident was indicted in federal court in Rockford on charges of mail fraud, aggravated identity theft, and access device fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.
According to the indictment, SHAMEKA CARR filed fraudulent tax returns using stolen identities. Carr directed the anticipated tax refunds to prepaid debit cards and to federal income tax refund checks. She caused those items to be mailed to addresses that she had access to in Rockford, Ill. and surrounding areas. Carr used the cards and checks to enrich herself.
Each count of mail fraud carries a maximum sentence of 20 years in prison. Access device fraud carries a maximum sentence of 15 years in prison. Each count of aggravated identity theft carries a mandatory sentence of two years in prison. In addition, each count carries potential fines and restitution.
Acting Assistant Attorney General Ciraolo commended special agents of the United States Postal Service and IRS-Criminal Investigation and the Boone County Sheriff’s Department, who investigated the case, and Trial Attorneys Michael C. Boteler and John T. Mulcahy of the Tax Division, who are prosecuting the case.
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.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Alleged Con Man Charged with Impersonating a Psychiatrist and Prescribing Medications to Dozens of Patients in ChicagoRead the Press Release
CHICAGO — An alleged con man has been charged in federal court with holding himself out as a psychiatrist and fraudulently prescribing medications to a nine-year-old child and dozens of others.
SCOTT C. REDMAN, 36, used the identity of an Illinois physician to see patients and prescribe medications at a clinic on Chicago’s Near North Side, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. The real physician is a resident at a different Illinois medical facility.
Redman used the physician’s name to prescribe 71 prescriptions to 44 individuals from Dec. 10, 2015, to Jan. 30, 2016, according to the complaint. The purported patients included a nine-year-old child, who was prescribed a 30-day supply of Vyvanse, which treats attention deficit hyperactivity disorder, the complaint states.
Redman, formerly of Hammond, Ind., was arrested Wednesday. The complaint charges him with intentionally using a fictitious registration number in the name of another person to distribute and dispense a controlled substance. The charge is punishable by up to four years in prison.
Redman appeared yesterday before U.S. Magistrate Judge Jeffrey Cole and was ordered held in federal custody. A detention hearing is scheduled for Feb. 16, 2016, at 10:00 a.m.
According to the complaint, 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, according to the complaint.
In addition to the Vyvanse, Redman prescribed other controlled substances, including Adderall, Clonazepam and Zolpidem Tartrate, the complaint states.
The complaint 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 Drug Enforcement Administration.
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. 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 Katie M. Durick.
Federal Jury Convicts Milwaukee Man of Transporting a Minor to Illinois from Wisconsin to Engage in ProstitutionRead the Press Release
CHICAGO — A Milwaukee man was convicted in federal court today of transporting an underage girl to the Chicago area from Wisconsin to engage in prostitution.
DAJUAN KEY, 32, brought the girl to the Chicago area from Madison, Wisc., in September 2013. At the time, the victim was 15 years old. Once in the Chicago area, Key forced the girl to engage in commercial sex acts, with Key keeping all of the money.
After a three-day trial in federal court in Chicago, the jury convicted Key on one count of knowingly transporting a minor from Wisconsin to Illinois to engage in prostitution. The conviction is punishable by a mandatory minimum of ten years and a maximum of life in prison.
U.S. District Judge Virginia M. Kendall scheduled a sentencing hearing for May 23, 2016, at 10:00 a.m.
Evidence at Key’s trial revealed that Key encountered a minor online and travelled to Madison to pick her up and bring her to southwest suburban Romeoville. Key took photographs of the girl, provided her with lingerie to wear, and posted advertisements on the website Backpage.com. Key rented multiple hotel rooms that were used for encounters with individuals who responded to the advertisements. Key then collected all of the money earned by the minor victim.
The victim was rescued by officers of the Romeoville Police Department on Sept. 10, 2013, and Key was arrested.
The conviction 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 Romeoville Police Department provided assistance.
The investigation was conducted by the FBI’s Child Exploitation Task Force. The CETF is part of a nationwide effort known as the Innocence Lost National Initiative targeting the commercial sexual exploitation of children in the United States. In Chicago, the CETF is composed of FBI special agents and investigators from the Chicago Police Department, the Cook County Sheriff’s Office, and the Cook County State’s Attorney’s Office.
The government is represented by Assistant United States Attorneys Katherine Sawyer and Christopher V. Parente.
Chicago Woman Arrested on Federal Weapons Charges for Giving a Loaded Gun to a Minor for Use in a MurderRead the Press Release
CHICAGO — A federal indictment unsealed today charges a Chicago woman with giving a loaded .38 Special revolver to a minor, knowing that the minor would use it to commit a violent crime.
VANDETTA REDWOOD, 34, is charged with one count of transferring a firearm to a juvenile while knowing that the juvenile intended to use it in a crime of violence, and one count of possession of a firearm within 1,000 feet of a school zone.
Special agents with the United States Bureau of Alcohol, Tobacco, Firearms and Explosives and officers from the Chicago Police Department arrested Redwood this morning. She pleaded not guilty during her arraignment today before U.S. Magistrate Judge Maria Valdez. Redwood was ordered held in federal custody until a detention hearing on Feb. 16, 2016, before U.S. District Judge Amy J. St. Eve.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Jeffery Magee, Special Agent in Charge of the Chicago Field Division of ATF; and Chicago Police Interim Superintendent John Escalante.
“Prosecuting federal weapons laws is a top priority of our office,” said Mr. Fardon. “We will not hesitate to use every available federal tool to charge those responsible for furthering the cycle of violence in Chicago.”
“The circumstances of this case are tragic,” said Special Agent Magee. “ATF is committed to investigating firearms-related violent crime and ensuring those responsible are held accountable.”
“The Chicago Police Department is relentlessly focused on targeting guns and the offenders that use them to victimize our communities,” said Chicago Police Interim Superintendent John Escalante. “We will continue to use the full weight of our state and federal partners to send a very clear message that gun violence is not going to be tolerated on the streets of Chicago.”
According to the indictment, Redwood gave the loaded revolver to the minor on April 28, 2014. The indictment contends that Redwood knew the minor intended to use the gun to commit a crime of violence, namely first-degree murder and other firearm-related offenses. Redwood possessed the gun within 1,000 feet of two elementary schools on Chicago’s West Side – Oliver Wendell Holmes Elementary School and Visitation Catholic School, according to the indictment.
The charge of transferring a gun to a minor for use in a crime of violence carries a maximum sentence of ten years in prison. Possessing a gun within 1,000 feet of a school is punishable by up to five years.
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. 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 Michelle Nasser.
Indictment
Former Rockford Physician Pleads Guilty to Bankruptcy FraudRead the Press Release
ROCKFORD — A former Rockford physician pleaded guilty today before U.S. District Judge Frederick J. Kapala to making false statements in a bankruptcy case. LYNN Y. ZOIOPOULOS (also known as Lynn Shelton-Zoiopoulos), 60, now of Chicago, Ill., filed a Chapter 7 Bankruptcy Petition on Aug. 11, 2009. According to the written plea agreement, Zoiopoulos signed a declaration under penalty of perjury that the schedules she filed in the bankruptcy case were true and correct to the best of her knowledge, information, and belief. However, as Zoiopoulos admitted in the plea agreement, she had an interest in the estate of her deceased grandmother that she had intentionally concealed in order to deceive the bankruptcy trustee.
In the plea agreement, Zoiopoulos also admitted to defrauding her grandmother’s estate. According to the plea agreement, Zoiopoulos was appointed Executor of her deceased grandmother’s estate in 2001. As Executor, Zoiopoulos opened a bank account with the balance reaching up to $855,178 in May 2006. In October 2008, Zoiopoulos used $550,000 of the money from that account to purchase an annuity contract, which after its purchase became an asset of the estate. Between June 2008 and November 2012, with the intent to deceive and defraud the estate, Zoiopoulos embezzled assets of the estate by converting them to her own use, knowing she had a fiduciary duty not to use the assets of the estate for her personal benefit. Zoiopoulos further admitted she tried to conceal her embezzlements by not filing the required inventory, accounting, tax returns, and status reports for the estate.
Zoiopoulos also admitted she intended to conceal her embezzlements by sending $35,000 to her sister for the purpose of lulling her sister into believing the estate was being properly administered. Along with the payment, Zoiopoulos sent her sister a letter indicating she had invested the rest of the estate money. Zoiopoulos admitted in the plea agreement that she had not reinvested the money, but had embezzled it, and had sent the letter to her sister for the purpose of preventing her sister from making further inquiries into the status of the estate.
In October of 2012, Zoiopoulos took the remaining balance of the annuity, $227,170.18, and used the money for her personal benefit although she knew the money was an asset of the estate.
Providing material false statements or documents under penalty of perjury in a bankruptcy case carries a maximum penalty of 5 years in prison, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater. The judge may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years, and restitution. The actual sentence will be determined by the United States District Court, guided by the Sentencing Guidelines. Sentencing for Zoiopoulos is set for May 12, 2016, 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 Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorneys Michael D. Love and Margaret J. Schneider.
Plea Agreement
Vice President of Chicago Real Estate Firm Admits Lying to Lender in the Redevelopment of a North Side Department StoreRead the Press Release
CHICAGO — The vice president of a Chicago real estate firm pleaded guilty today to lying to a bank about a public financing note that was issued for the redevelopment of a former Goldblatt’s Department Store in the city’s Uptown neighborhood.
CAROLINE WALTERS, the vice president and treasurer of Joseph Freed & Associates LLC, admitted in a plea agreement that she lied to Cole Taylor Bank about a public financing note issued by the city of Chicago that had been pledged to two different banks as collateral. Walters falsely told Cole Taylor that her company would resolve the other pledge, which had been made to a bank consortium after Cole Taylor’s interest in the note was already secured. At the time Walters made the statement, she knew that the bank consortium had declared JFA to be in default and was no longer negotiating with them, according to the plea agreement.
Walters, 55, of Palatine, pleaded guilty to one count of making a false statement to a financial institution. The conviction carries a maximum sentence of 30 years in prison and a maximum fine of $1,000,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
U.S. District Judge Robert M. Dow scheduled a sentencing hearing for June 10, 2016, at 9:00 a.m.
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 the Federal Bureau of Investigation; and Joseph M. Ferguson, Inspector General for the City of Chicago.
Walters was indicted in 2013 along with JFA’s president, LAURANCE H. FREED. Freed, of Chicago, has pleaded not guilty to seven counts of bank fraud, one count of mail fraud, one count of wire fraud, and six counts of making a false statement to a financial institution. His jury trial is scheduled to begin on Feb. 8, 2016, in Judge Dow’s courtroom.
According to Walters’ plea agreement, the city of Chicago in 2002 issued two publicly-financed Tax Increment Financing notes to Uptown Goldblatts Venture LLC, a company formed by JFA to redevelop the former Goldblatt’s Department Store in Uptown. The TIF notes had a combined principal of $6.7 million. Uptown Goldblatts then secured a $15 million loan from Cole Taylor, conditioned on Uptown Goldblatts’ assignment to Cole Taylor of its rights to one of the TIF notes.
Four years later, two other JFA-affiliated entities – DDL LLC and Freed Illinois Holdings LLC – entered into agreements with a bank consortium for a revolving line of credit worth up to $105 million. Uptown Goldblatts became a borrower under the revolving loan agreement through a subsequent deal with LaSalle Bank, which was one of the banks in the consortium and which had recently been acquired by Bank of America. In the LaSalle deal, Uptown Goldblatts pledged the two TIF notes as collateral and also represented that the notes were owned free and clear of any other secured interests. The deal did not mention that one of the notes had already been pledged to Cole Taylor.
In 2009, Uptown Goldblatts and Cole Taylor amended their loan agreement to reflect that Uptown Goldblatts would obtain a release and termination of the double pledge. Walters also personally told Cole Taylor that JFA would resolve the issue as part of its negotiation with the bank consortium to modify and extend its loan, according to the plea agreement. At the time Walters made the statement, however, she knew that the consortium had declared JFA in default and had terminated the negotiations, the plea agreement states.
The government is represented by Assistant U.S. Attorneys Renato Mariotti, Matthew F. Madden and Jessica Romero.
Plea Agreement
Five Chicago Men Arrested in Connection with Violent KidnappingRead the Press Release
CHICAGO — Five men have been arrested on kidnapping charges for allegedly abducting a Berwyn man in broad daylight and holding him for ransom in a North Side auto body shop.
The kidnapping went awry after the abductors realized they had snatched the wrong man, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. The victim was the brother of the intended target. He was blindfolded and held at gunpoint for nearly two days in an auto body shop in Chicago’s Avondale neighborhood, before being released, the complaint states.
Federal authorities arrested the five defendants yesterday. Charged with conspiracy to commit kidnapping are ANTONIO SALGADO, 34; ARMANDO DELGADO, 36; OCTAVIO ALEJANDRE JR., 33; JAIME GUTIERREZ, 22; and MUNAF ABDULRAZAK MUSA, 22; all of Chicago. The charge carries a maximum sentence of life in prison.
All five defendants were ordered held without bond during initial court appearances yesterday before U.S. Magistrate Judge Susan E. Cox. Musa’s next court appearance is scheduled for Feb. 5, 2016, while the other defendants will next appear on Feb. 8, 2016.
According to the complaint, the abduction occurred on the afternoon of May 30, 2015, when the victim was kidnapped at gunpoint outside of his Berwyn home. The victim was forced into a sport-utility vehicle and taken to the auto repair shop. While being held, one of the kidnappers pushed a gun into the victim’s body and threatened him, while another kidnapper placed a knife on the victim’s fingers and threatened to cut them off, the complaint states.
Early the next morning, the victim’s uncle received telephone calls from an unidentified man who stated he was holding the victim, according to the complaint. The caller demanded approximately 25 kilograms of narcotics. At one point the victim was placed on the phone and instructed to tell his uncle to cooperate, the complaint states.
Unbeknownst to the defendants, several of their phones had previously been intercepted by federal authorities who were conducting an unrelated investigation, the complaint states. In a recorded call between Salgado and Delgado on the night of May 31, 2015, Delgado told Salgado, “There is a little situation. It’s the wrong guy because it’s his brother of the one that we’re trying to get.” According to the complaint, Salgado allegedly replied, “Let the guy go, but beat the [expletive] out of him.”
On the morning of June 1, 2015, the victim appeared at a bus station in Chicago, according to the complaint. The victim told police that he had walked to the bus station after being released from captivity during the night.
The arrest and charges were 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; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; Jim Ritz, Chief of the Berwyn Police Department; and John Escalante, Acting Superintendent of the Chicago Police Department.
The public is reminded that 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. 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 Kartik K. Raman.
Complaint
Former Bull Valley Man Sentenced to 9 Months in Federal Prison for Concealment of Assets from a Bankruptcy TrusteeRead the Press Release
ROCKFORD — A former Bull Valley, Ill. man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for the concealment of assets from a Bankruptcy Trustee. JOSEPH MICHAEL PHELAN, 52, now of Augusta, Ga., was sentenced to 9 months in federal prison to be followed by 3 months of home confinement. Phelan was also placed on 3 years of supervised release and ordered to pay $80,618.78 as restitution. Phelan was the former President of Phezer Enterprises, Incorporated, located in Crystal Lake, Ill.
Phelan, who pleaded guilty to the charge on Sept. 17, 2015, caused a Chapter 7 Bankruptcy Petition to be filed for Phezer Enterprises on Aug. 18, 2008. According to the written plea agreement, after Phelan closed Phezer Enterprises on Aug. 13, 2008, Phelan had three Phezer employees start cutting up and scrapping unused and used Phezer assets, including sheets of stainless steel and various metals. On Aug. 18, 2008, the day Phezer filed for bankruptcy, Phelan sold 21,182 pounds of stainless steel to a scrap metal company. Phelan personally received $15,251.04 for the steel.
As Phelan admitted in the plea agreement, between Aug. 18, 2008 and Aug. 29, 2008, two Phezer employees sold $13,399.24 worth of Phezer metals to a second scrap metal company. The two employees received cash for the scrap and provided the cash to Phelan.
As further stated in the plea agreement, in September and October 2008, Phelan received two checks totaling $51,968.50 issued to him from another scrap metal company for Phezer metals sold to that company. Phelan deposited both checks in his personal bank account. Phelan did not advise the trustee or a secured creditor that corporate assets had been sold to the three scrap metal companies, or account and deliver to the trustee or the secured creditor the proceeds from the sales of Phezer assets.
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 Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Scott R. Paccagnini.
Chicago Woman Charged with Posing as Federal Housing Official to Scam Homeowners out of CashRead the Press Release
CHICAGO — A Chicago woman has been charged with posing as a federal housing representative to scam homeowners out of cash, federal authorities announced today.
CYNTHIA WALLACE, 45, of Chicago, is charged with one count of falsely assuming and pretending to be an officer of the United States. Last month Wallace posed as an official from the “Federal Housing Authority” and “H.U.D.” in numerous phone calls she placed to Chicago-area homeowners, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. During the calls, Wallace said the federal government would foreclose on the victims’ homes unless they wired money to a location determined by Wallace.
One of Wallace’s intended targets was a 79-year-old woman from the West Side of Chicago, the complaint states. Two other targets – a husband and wife from south suburban Harvey – wired more than $3,500 to Wallace, according to the complaint.
Wallace was arrested on Jan. 29, 2016, and appeared in court the following day before U.S. Magistrate Judge Michael T. Mason. Judge Mason ordered Wallace detained in federal custody, pending further proceedings. The next court date has not yet been set.
According to the complaint, Wallace – using the alias “Sherry Rice” – told the 79-year-old woman that the woman was entitled to $31,200 from the federal government, but only if the woman first wired $500 to a location determined by Wallace. If the woman didn’t submit the money, Wallace said the government would foreclose on the woman’s home, according to the complaint. The woman notified federal authorities, allowing agents to tape-record subsequent phone calls between her and Wallace. In one recorded call, Wallace told the woman, “We can do whatever we want to do if you’re not compliant,” according to the complaint. The woman did not wire any money.
Wallace later used a different alias – “Shree Box” – to target the Harvey couple, the complaint states. Wallace told the couple that they were qualified for a $12,000 “H.U.D./F.H.A. grant” to avoid foreclosure on their house. In order to receive the purported grant money, Wallace said they had to obtain a home inspection at a cost of $480 – payable via MoneyGram to a location determined by Wallace, the complaint states. The couple wired the money. In a series of subsequent phone calls, Wallace told the couple that they could qualify for a larger grant, a low-interest mortgage loan and mortgage insurance if they wired additional funds, according to the complaint. The couple submitted the additional payments, but then notified federal authorities.
Wallace was arrested when she attempted to claim an additional $1,500 from the couple at a currency exchange on the South Side. The purported MoneyGram was actually a ruse set up by federal authorities, the complaint states.
Wallace is not employed by the Federal Housing Administration, which is a division of the U.S. Department of Housing and Urban Development.
The arrest was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago; 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. 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 S. Ebert and Maribel Fernandez-Harvath.
To report suspected fraud, logon to https://www.hudoig.gov/report-fraud or call 1-800-347-3735.
Former Davis, Ill. Resident Sentenced to 26 Months in Federal Prison for Failure to Register as a Convicted Sex OffenderRead the Press Release
ROCKFORD — A former Davis, Ill. resident was sentenced in federal court today by U.S. District Judge Frederick J. Kapala for failure to register under the federal Sex Offender Registration and Notification Act (“SORNA”). MARK STEPHEN CURTIS, 29, was sentenced to 26 months in federal prison, to be followed by 5 years of supervised release.
Curtis pleaded guilty to the charge on Oct. 26, 2015. In the written plea agreement, Curtis admitted that he was a sex offender required to register in Illinois under SORNA. Curtis moved from North Carolina to Davis, Ill. during September 2014, and remained a resident in Davis, Ill. until at least Oct. 19, 2014. Curtis admitted that he did not register as a sex offender as required, despite knowing that he needed to register within three days of moving to a new state.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Edward Gilmore, United States Marshal for the Northern District of Illinois.
The government was represented by Assistant U.S. Attorney Michael D. Love.