Northern District of Illinois
Press releases recorded for this federal judicial district.
Former Aurora Resident Sentenced to 20 Years in Prison for $4.8 Million International Timeshare FraudRead the Press Release
CHICAGO — An Aurora native who operated several fraudulent Mexican real estate businesses was sentenced today to 20 years in prison for his role in a $4.8 million swindle of timeshare owners.
GILBERT BRETT FREEMAN, 44, led a scheme to defraud more than 1,400 owners by falsely promising that he would sell their Mexican timeshares to corporate buyers. Freeman and others collected payments from the owners for fictitious fees and taxes that he claimed were required to complete Mexican real estate deals, and that he promised would be refunded upon closing. In reality, Freeman had no intention of selling the timeshares or reimbursing the owners.
Freeman instead used the money to fund a lavish lifestyle that included a penthouse apartment in an oceanfront resort, Rolex watches, numerous vacations, and the rental of a Lamborghini in Las Vegas for $1,399 per day. Some of his victims resided in the Chicago area.
Freeman, a native of Aurora who most recently resided in Puerto Vallarta, Mexico, pleaded guilty in 2014 to five counts of wire fraud. U.S. District Judge Elaine E. Bucklo imposed the 240-month sentence in federal court in Chicago.
“The defendant’s actions had a devastating impact on countless victims,” Assistant U.S. Attorney Christopher J. Stetler argued in the government’s sentencing memorandum. “Rather than using his victims’ money to fund timeshare sales, the defendant chose to use that money to bankroll an extravagant lifestyle.”
Authorities arrested Freeman in July 2012 in Las Vegas. According to his plea declaration, Freeman was involved with various Mexican-based companies, including International Resorts Resale, Resort Closing Services, Timeshare Consolidators, Timeshare Liquidators, and Transfer My Timeshare. At Freeman’s direction, “lead generators” contacted the timeshare owners and explained that the companies could coordinate the sale of their properties. When an owner expressed interest, company employees known as “liners” followed up to arrange the first payment, which the liners claimed would be refundable even though it wasn’t.
“Closers” from the companies were then brought in to convince the owners to make additional payments to cover the bogus fees and taxes that were purportedly needed to complete the deal, according to the charges. Closers and liners received commissions for each payment collected from the timeshare owners.
The final step involved purported “escrow employees,” who claimed to represent independent businesses and who assured the owners that their money would be securely held until reimbursement. In reality, there were no such escrow agreements, and the so-called escrow representatives were actually working for one of Freeman’s companies, according to the charges.
In all, eleven defendants have been charged in the scheme, which began in 2008 and continued in various forms until January 2015. Four defendants, including Freeman, have pleaded guilty, while the others have pleaded not guilty and are awaiting trial.
The sentencing of Freeman 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 C. Steven Baker, Director of the Midwest Region of the Federal Trade Commission. The government is being represented by Mr. Stetler.
Northwest Side Pharmacist Sentenced to a Year and a Day in Federal Prison for Selling Counterfeit Viagra and CialisRead the Press Release
CHICAGO — A suspended Chicago pharmacist was sentenced today to a year and a day in federal prison for dispensing counterfeit erectile-dysfunction pills he had imported from China.
MICHAEL MARKIEWICZ sold approximately 1,600 counterfeit Viagra and Cialis tablets without a prescription to customers at his Northwest Side pharmacy. Markiewicz had ordered the phony pills from China via the Internet. Had the pills been genuine, their retail value would have been approximately $35,000.
Markiewicz, 39, of Norridge, pleaded guilty last year to one count of trafficking and attempting to traffic in a counterfeit drug, and one count of dispensing a counterfeit drug with the intent to defraud and mislead.
In addition to the prison term, U.S. District Judge John Z. Lee also fined Markiewicz $10,000 and ordered him to forfeit his pharmacy to the government.
“Defendant’s conduct risked the health of his customers, both by ordering a drug with mysterious origins and by giving it to patients without a doctor’s authorization,” Assistant U.S. Attorney Samuel B. Cole argued in the government’s sentencing memorandum. “It was a substantial breach of trust by a medical professional.”
According to Markiewicz’ plea agreement, the counterfeit tablets from China were shipped in boxes that purported to contain pens. The customs declaration described the packages as containing only the pens, without identifying the hidden tablets. Markiewicz sold the counterfeit tablets in his pharmacy for at least $20 per pill, according to the plea agreement.
The Illinois Department of Professional Regulation suspended Markiewicz’ pharmacist license in 2012, and it also revoked the pharmaceutical privileges of his business, Belmont Pharmacy. Markiewicz had most recently been operating the business as an herb and nutrient retailer in the same location, 6148 W. Belmont Ave. in Chicago.
The sentencing was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Mark S. McCormack, Acting Special Agent-in-Charge of the U.S. Food and Drug Administration’s Office in Chicago; and Antonio Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
The government is represented by Mr. Cole and Assistant U.S. Attorney Eric S. Pruitt.
Former City of Chicago Transportation Official Convicted of Corruption in Awarding of Red-Light Camera ContractsRead the Press Release
CHICAGO — The former assistant transportation commissioner for the city of Chicago was convicted today on federal corruption charges in connection with the awarding of lucrative red-light camera contracts.
After a two-week trial in federal court in Chicago, the jury convicted JOHN BILLS on all counts against him. The counts include nine counts of mail fraud; three counts of wire fraud; one count of extortion under color of official right; one count of conspiracy to commit bribery; three counts of bribery; and three counts of filing false tax returns. Bills, 54, of Chicago, faces a maximum combined sentence of 304 years in prison.
U.S. District Judge Virginia M. Kendall scheduled a sentencing hearing for May 5, 2016, at 10:00 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; Joseph M. Ferguson, Inspector General for the City of Chicago; and James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
“By accepting bribes in exchange for influencing city contracts, John Bills deprived the city of Chicago of money and honest services,” said Mr. Fardon. “When public officials abuse their power and violate the public trust for personal gain, we will be there to hold them accountable.”
As an assistant transportation commissioner, Bills was a voting member of the city’s Request for Proposal evaluation committee, which sought vendors under the city’s Digital Automated Red Light Enforcement Program. In 2003, the committee recommended awarding contracts to Phoenix-based Redflex Traffic Systems Inc., to install cameras that automatically record and ticket drivers who run red lights. Evidence at trial revealed that from approximately 2003 to 2011, Bills used his influence to expand Redflex’s business with the city, resulting in millions of dollars in contracts for the installation of hundreds of red-light cameras. In exchange for his efforts, Redflex provided Bills with cash and personal benefits, including meals, golf outings, rental cars, airline tickets, hotel rooms and other entertainment.
Some of the benefits were given directly to Bills, while hundreds of thousands of dollars in cash was funneled to him through a friend, MARTIN O’MALLEY. Redflex hired O’Malley as a contractor and paid him lavish bonuses as new cameras were added in Chicago. O’Malley testified at trial that he often stuffed the bonus money into envelopes and gave it to Bills during meals in Chicago restaurants.
Between 2004 and 2008, Chicago paid Redflex approximately $25 million. After KAREN FINLEY became CEO of Redflex in 2007, O’Malley’s commissions escalated and Redflex was awarded a “sole-sourced” contract for another $33 million. The city then followed up that contract with another deal worth $66 million – for the installation of nearly 250 additional red-light cameras.
Bills retired from the city in 2011.
Finley, of Cave Creek, Ariz., pleaded guilty last year to one count of conspiracy to commit bribery. She is scheduled to be sentenced by Judge Kendall on Feb. 18, 2016.
O’Malley, of Worth, pleaded guilty in December 2014 to one count of conspiracy to commit bribery. His sentencing date has not yet been set.
The government is represented by Mr. Fardon and Assistant U.S. Attorneys Laurie J. Barsella and Timothy Storino.
Federal Jury Convicts Tinley Park Physician in Medicare Fraud SchemeRead the Press Release
CHICAGO — A physician at Chicago-based Mobile Doctors was convicted on federal fraud charges today for falsely certifying patients as confined to their homes as part of a scheme to defraud Medicare.
After a four-day trial in federal court in Chicago, the jury convicted DR. BANIO KOROMA on two counts of healthcare fraud and two counts of making false statements related to health care matters. Dr. Koroma, 66, of Tinley Park, worked for Mobile Doctors, which contracted with physicians to arrange in-home visits for patients in Illinois, Michigan, Indiana and other states. Mobile Doctors, which closed in 2013, was located at 3319 N. Elston Ave., in Chicago.
Evidence at trial revealed that Dr. Koroma certified patients as confined to their homes when they were not actually home-bound and did not require the skilled-nursing services that he had ordered. One of the patients testified at trial that she was able to leave her home and could visit her primary-care physician for office visits, even though Dr. Koroma was certifying her as confined to the home. Dr. Koroma’s false certifications cost Medicare more than $45,000 for this patient alone, according to evidence at trial.
The healthcare fraud counts each carry a maximum sentence of ten years in prison, while the false statement counts are each punishable by up to five years. U.S. District Judge John J. Tharp Jr. scheduled a sentencing hearing for June 2, 2016, at 1:00 p.m.
The investigation was carried out by the Medicare Fraud Strike Force, which consists of agents from the Federal Bureau of Investigation 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 Department of Justice and HHS to prevent fraud and to enforce anti-fraud laws around the country.
The investigation previously resulted in the conviction of DIKE AJIRI, who served as Mobile Doctor’s chief executive officer. Ajiri, of Wilmette, pleaded guilty in October 2015 to one count of healthcare fraud. He admitted fraudulently increasing Medicare bills for in-home treatment that was shorter and less complicated than the claims indicated. The improper billing – known as “upcoding” – defrauded Medicare and the Railroad Retirement Board of approximately $1,854,000, according to Ajiri’s plea agreement. Ajiri faces a maximum sentence of ten years in prison when Judge Tharp sentences him on April 19, 2016, at 2:00 p.m.
The jury verdict against Dr. Koroma 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 Region of the U.S. Department of Health and Human Services Office of Inspector General. The Railroad Retirement Board Office of Inspector General is also participating in the case.
The government is represented by Assistant United States Attorneys Stephen Chahn Lee and Eric Pruitt. To report health care fraud or to learn more about HEAT, logon to: StopMedicareFraud.gov.
Leader of Jewelry Heist Ring Sentenced to 31 Years in Prison for Robbing and Attempting to Rob Jewelers in Chicago and Lake ForestRead the Press Release
CHICAGO — The leader of a jewelry heist ring that robbed two Chicago jewelers and attempted to rob another in Lake Forest was sentenced today to more than 31 years in federal prison.
Over the course of two weeks in September and October 2012, PALO BROWN and his crew robbed two jewelry stores in Chicago and a gas station in Forest Park, and also attempted to rob a jeweler in Lake Forest. As they fled the final robbery in Chicago’s Edgewater neighborhood, Brown and another member of his crew tried to car-jack a woman at gunpoint. The woman screamed and fought back, and the pair fled.
Brown, 34, of Chicago, pleaded guilty last year to one count of conspiracy to obstruct, delay and affect commerce by robbery; one count of using, carrying and brandishing a firearm during a crime of violence; and one count of attempted car-jacking. U.S. District Judge Virginia M. Kendall imposed the 376-month sentence in federal court in Chicago.
Assistant U.S. Attorney Peter M. Flanagan said Brown was “the mastermind of a multi-week campaign of armed violence.” Flanagan argued in the government’s sentencing memorandum that Brown “organized a crew that threatened numerous people with guns.”
Brown admitted in a plea agreement that he and his crew robbed Thornton’s Gas Station in Forest Park on Sept. 24, 2012. During the robbery, another member of the crew, PARIS STARWALT, pistol-whipped a customer over the head. The robbery netted the crew $500 and two cartons of cigarettes.
The first jewelry heist occurred the following day at Arab Jewelry in the East Albany Park neighborhood of Chicago. Brown, Starwalt and a third member of the crew, FELICE DESILVIA, took about $200,000 worth of diamonds and jewelry. During the robbery, DeSilvia duct-taped a store employee to a chair to prevent him from running away.
The following week, Brown and DeSilvia attempted to rob Lake Forest Jewelers in Lake Forest. Shortly after the pair entered the store armed with concealed handguns, an employee walked outside to place a call on his cellphone. Fearing that the employee was calling the police, Brown and DeSilvia abandoned their plans and exited the store.
On Oct. 8, 2012, Brown, Starwalt and DeSilvia robbed Bryn Mawr Jewelry in the Edgewater neighborhood of Chicago. Starwalt held two employees at gunpoint while Brown and DeSilvia collected $120,000 worth of loose diamonds and jewelry. After Brown and Starwalt exited the store, they attempted to car-jack a woman at gunpoint in a nearby garage. The woman screamed and bit Starwalt on the arm and hands, causing her and Starwalt to fall to the ground. Brown and Starwalt ran off and were quickly apprehended by Chicago Police officers.
Starwalt, of Mattoon, Ill., pleaded guilty in 2014 to the same charges as Brown. His sentencing hearing is set for April 1, 2016, at 1:00 p.m., before Judge Kendall.
DeSilvia, of Chicago, pleaded guilty in 2014 to one count of conspiracy to obstruct, delay and affect commerce by robbery; and one count of using, carrying and brandishing a firearm during a crime of violence. Her sentencing hearing before Judge Kendall will be scheduled at a later date.
Brown’s 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 and Explosives; Chicago Police Acting Superintendent John Escalante; and Cook County State’s Attorney Anita Alvarez.
The government is represented by Mr. Flanagan.
Former Clerk at Cook County Recorder of Deeds Admits Accepting Cash Bribe in Exchange for Preparing Fraudulent Real Estate DeedRead the Press Release
CHICAGO — A former clerk for the Cook County Recorder of Deeds pleaded guilty today to accepting a cash bribe in exchange for preparing a back-dated deed on an Oak Park home and agreeing to record it with her office.
REGINA TAYLOR accepted the $200 bribe from an individual who purportedly wanted to add a relative’s name to the deed of a residence in Oak Park, according to a written plea agreement. Unbeknownst to Taylor, the individual was actually an undercover law enforcement agent, the plea agreement states.
Taylor, 59, of Chicago, pleaded guilty to one count of honest services mail fraud. The conviction carries a maximum sentence of 20 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 Sara L. Ellis scheduled a sentencing hearing for April 13, 2016, at 10:30 a.m.
According to the plea agreement, the fraudulent quit claim deed was created to add the purported relative as a fourth owner of the Oak Park property. Taylor directed the undercover agent not to tell anyone that the three other individuals on the deed were deceased, according to the plea agreement. Taylor then prepared the fraudulent deed and back-dated it by 18 months, confirming the purported relative as a grantee.
After giving the fraudulent deed to the undercover agent to have it stamped at the Village of Oak Park, the undercover agent gave Taylor $200 in cash, according to the plea agreement. Taylor further directed the undercover agent to bring back the stamped copy of the fraudulent deed so that Taylor could officially file it at the Office of the Cook County Recorder of Deeds.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is represented by Assistant United States Attorney Megan Cunniff Church.
Plea Agreement
Two Aspiring Rappers Charged with Operating Sex-Trafficking Ring in Chicago and SuburbsRead the Press Release
CHICAGO — Two members of a Chicago-area rap group have been charged with using violence and coercion to force females to engage in prostitution, federal authorities announced today.
SAMUEL NICHOLS and CHARLES FEARS are each charged with one count of engaging in sex trafficking by force, fraud and coercion, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. The pair worked together to recruit females, including minors, to engage in the commercial sex business, the complaint states.
In order to solicit customers, Nichols and Fears posted advertisements on the website Backpage.com that featured photographs of the females wearing lingerie and posing in sexual positions, according to the complaint. Nichols and Fears provided the females with cellular telephones and instructed them to answer calls and schedule meetings with Backpage.com customers, according to the complaint. The meetings primarily occurred in motels in various suburbs, including Naperville, Downers Grove, Schaumburg, Lansing, Harvey, Alsip and Joliet, according to the complaint.
After performing sex acts for money, the females gave the proceeds to Nichols and Fears, the complaint states.
Fears, 22, of Chicago, was arrested this morning. He made an initial court appearance today and is scheduled for a detention hearing at 11:00 am on January 22, 2016 before U.S. Magistrate Judge Kim.
Nichols, 30, formerly of Chicago, was arrested in Tennessee and ordered removed in custody to Chicago.
According to the complaint, Nichols and Fears carried firearms and would often hit, slap and choke the females who worked for them, including one incident in which Nichols beat a female so badly she had to be hospitalized. The pair also supplied the females with drugs and alcohol to help them participate in committing the sex acts, the complaint states.
According to the complaint, Nichols and Fears are members of a Chicago-area rap music group called “Hit Squad.” The group, not to be confused with the 1990s East Coast-based hip hop collective of the same name, posts videos of their music on websites such as YouTube.com, the complaint states.
The charge of sex trafficking by force, fraud or coercion is punishable by a mandatory minimum of 15 years in prison and a maximum of life in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
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.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation and the Carol Stream Police Department, in coordination with the Cook County Human Trafficking Task Force.
The government is represented by Assistant U.S. Attorneys Sarah Streicker, Michelle Petersen and Libby Pozolo.
Complaint
Taxicab Operator Sentenced to 12 Months and A Day for Falsifying Titles of Salvaged Cars and Re-Using Them as Taxis on Chicago StreetsRead the Press Release
CHICAGO — A Northbrook man was sentenced today to 12 months and a day in federal prison for illegally obtaining clean titles for salvaged and rebuilt vehicles and using them as taxicabs on the streets of Chicago.
As the owner of Seven Amigos Used Cars Inc., ALEXANDER IGOLNIKOV fraudulently obtained paperwork to conceal the history of the damaged cars in order to bypass City of Chicago laws that prohibit the use of salvaged and rebuilt vehicles as taxicabs. Igolnikov, who also served as vice president of Chicago Elite Cab Corp., caused the impaired vehicles to be used as taxicabs on Chicago streets after they were falsely given clean titles in Indiana and Illinois.
Igolnikov’s scheme, which spanned from 2007 through April 2010, was uncovered in an investigation by federal authorities and the City of Chicago Inspector General’s Office.
Igolnikov, 68, of Northbrook, pleaded guilty last year to one count of conspiracy to transport, receive and possess a counterfeit security. U.S. District Judge Edmond E. Chang imposed the sentence in federal court in Chicago.
According to Igolnikov’s plea agreement, he and his associates fraudulently obtained “rebuilt” titles for damaged vehicles by submitting false paperwork– including affidavits with the forged signature of an Indiana law enforcement officer – to the Indiana Bureau of Motor Vehicles. The vehicles were then transported to the Chicago business of Chicago Carriage Taxi Company, which was also used by Seven Amigos Used Cars. After obtaining the Indiana rebuilt title for a salvaged vehicle, Igolnikov and his associates placed a sticker over the “rebuilt” section of the Indiana certification and then used that title to obtain a clean Illinois title from the Illinois Secretary of State’s Office. Igolnikov purchased the newly certified vehicles in the names of Seven Amigos Used Cars, Chicago Elite Cab and other related corporate entities, the plea agreement states.
Igolnikov and his business associates, including Chicago Elite Cab, operated the fraudulently certified vehicles as taxicabs in Chicago – in violation of the city’s medallion laws, which prohibit any vehicle that was ever issued a “salvage” or “rebuilt” title in any state from being used as a taxicab, the plea agreement states.
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 Joseph M. Ferguson, Inspector General for the City of Chicago.
The government is represented by Assistant United States Attorneys Margaret Schneider and Steven Dollear.
Chicago Man Sentenced to More Than 16 Years in Prison for Selling Shotguns and Rifles Imported to Chicago from IndianaRead the Press Release
CHICAGO — A Chicago man was sentenced today to more than 16 years in federal prison for selling nearly a dozen firearms that had been transported from Indiana to the streets of Chicago.
TERRENCE GRIGGS, 36, sold eleven firearms and a bulletproof vest to an individual he believed was a high-ranking member of a Chicago street gang. The weapons included two shotguns, four pistols, three revolvers and two rifles. Unbeknownst to Griggs, the buyer was an informant who was cooperating with law enforcement officers from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.
A federal jury last year convicted Griggs on all four counts of being a felon in possession of a firearm. U.S. District Judge Elaine E. Bucklo imposed a 200-month sentence today in federal court in Chicago.
“The city of Chicago is plagued with gun violence, and many of the guns in that violence are purchased through illegal sales like the ones Griggs orchestrated,” Assistant U.S. Attorney Angel M. Krull argued in the government’s sentencing memorandum. “The nature and circumstances of the offense – not only possessing, but trafficking in firearms – are incredibly serious.”
Evidence at trial revealed that in eight separate meetings in the summer of 2011, Griggs personally sold ten firearms and one bulletproof vest to the cooperating informant. Griggs also arranged and facilitated the sale of the eleventh weapon, although he wasn’t present for the sale.
The sentence 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 government is represented by Ms. Krull and Assistant U.S. Attorney Kartik K. Raman.
West Suburban Doctor Sentenced to Two Years in Federal Prison for Falsely Approving Unnecessary TreatmentRead the Press Release
CHICAGO — A west suburban physician was sentenced today to two years in prison for fraudulently certifying patients as confined to the home, allowing healthcare agencies to bill Medicare for millions of dollars in unnecessary in-home treatment.
As an employee and part-owner of Bloomingdale-based Home Care Physicians Inc., DR. ARTHUR DAVIDA received referrals from home-health agencies asking him to certify the patients as confined to the home. Although he knew that at least 20 percent of the patients were not confined to the home, Davida nonetheless provided the certification – allowing the agencies to bill Medicare for treatment that Davida knew was not medically necessary. Davida acknowledged in a plea agreement that he provided the certifications because he feared that, if he didn’t, the home-health agencies would stop sending him the referrals.
In imposing the 24-month sentence, U.S. District Judge John J. Tharp Jr. described the crime as a “very serious offense,” and one that involved “stealing money” from the Medicare program.
Davida, 62, of Bloomingdale, pleaded guilty last year to a health care fraud charge contained in a criminal information. According to the plea agreement, Davida began working at Home Care Physicians in 2009, and started conducting in-home visits in 2010. From 2010 and continuing through August 2013, Davida certified numerous patients as confined to the home and in need of skilled nursing services, when, in fact, they were able to leave their homes and did not need such services. The certifications caused the home-health agencies to submit claims to Medicare for payment of bills pertaining to medically unnecessary services.
Home-health agencies were paid more than $20 million by Medicare based on orders signed by Davida. Given his admission that 20 percent of these patients were not confined to the home, Davida acknowledged in the plea agreement that he caused losses of at least $4 million to the Medicare program.
The sentence 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 Region of the U.S. Department of Health and Human Services Office of Inspector General. The government is represented by Assistant United States Attorney Stephen Chahn Lee.
The investigation was carried out by the Medicare Fraud Strike Force, which consists of agents from the FBI and HHS, 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 Department of Justice and HHS to prevent fraud and enforce anti-fraud laws around the country.
To report health care fraud or to learn more about HEAT, logon to: StopMedicareFraud.gov.
Former Evanston Man Convicted of Robbing First Federal Savings Bank in Rock FallsRead the Press Release
ROCKFORD — A former Evanston, Ill. man was convicted today of bank robbery following a three-day jury trial in federal court in Rockford.
CONRAD J. GONZALEZ, 47, was found guilty 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.
Gonzalez faces a maximum potential penalty of up to 20 years in prison, up to 3 years of supervised release following imprisonment, a fine of up to $250,000, and full restitution. The court must impose a reasonable sentence guided by the advisory United States Sentencing Guidelines. Sentencing for Gonzalez is set for April 19, 2016, at 2:30 p.m.
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 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 Authorities Seize Nearly 90,000 Bottles of a Beverage Containing the Herbal Ingredient KratomRead the Press Release
CHICAGO — United States Marshals, acting with investigators from the U.S. Food and Drug Administration, today seized nearly 90,000 bottles of a beverage containing the herbal ingredient kratom.
The beverages were manufactured for and held by Dordoniz Natural Products LLC, of South Beloit, and marketed under the brand name RelaKzpro. The product is estimated to be worth more than $400,000.
The bottles were seized after the U.S. Attorney’s Office in Chicago filed a civil forfeiture complaint on behalf of the FDA. The complaint alleges that kratom is a new dietary ingredient for which there is inadequate information to provide reasonable assurance that it does not present a significant or unreasonable risk of illness or injury.
Mitragyna speciosa, commonly known as kratom, is a botanical substance that grows naturally in Thailand, Malaysia, Indonesia and Papua New Guinea. The complaint, which was filed yesterday in U.S. District Court in Chicago, alleges that serious concerns exist about the toxicity of kratom in multiple organ systems. Consumption of kratom can lead to a number of health impacts, including respiratory depression, vomiting, nervousness, weight loss and constipation, the complaint states. Kratom has been indicated to have both narcotic and stimulant-like effects. Withdrawal symptoms may include hostility, aggression, excessive tearing, aching of muscles and jerky limb movements, according to the complaint.
The complaint states that dietary supplements containing kratom are adulterated under the Federal Food, Drug, and Cosmetic Act.
The seizure and complaint were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Melinda Plaisier, the FDA’s Associate Commissioner for Regulatory Affairs. The government is represented by Assistant U.S. Attorney Donald Lorenzen.
The public is reminded that a complaint contains only allegations and is not evidence of liability. The government has the burden of proving a civil case by a preponderance of the evidence.
Health care professionals and consumers should report any adverse events related to products containing kratom to the FDA by logging on to its website: www.fda.gov/medwatch/report.htm.
Complaint
Former McKinsey & Company Partner Arrested on Fraud Charges for Allegedly Billing $890,000 in Bogus Consulting Services and Travel ExpensesRead the Press Release
CHICAGO — A Chicago-based partner in a global management consulting firm schemed with a client to bilk their companies out of hundreds of thousands of dollars in purported consulting services that were never performed, according to a federal indictment announced today.
NAVDEEP ARORA, a former partner in the Chicago office of McKinsey & Company Inc., was arrested Sunday at JFK International Airport in New York. Arora, 51, of London, England, and formerly of Chicago, is charged with eight counts of wire fraud in an indictment filed in U.S. District Court in Chicago. Arora made an initial appearance yesterday in U.S. District Court in New York and was ordered detained pending further proceedings.
The indictment, which was returned in August and unsealed yesterday, also charges MATTHEW SORENSEN, a former internal consultant for State Farm Mutual Automobile Insurance Co., with five counts of wire fraud. Sorensen, 49, of Bloomington, Ill., is scheduled to appear for arraignment at 2:00 p.m. on Jan. 11, 2016, before U.S. Magistrate Judge Michael T. Mason in Chicago.
According to the charges, Arora oversaw various consulting services provided by McKinsey to State Farm. The indictment contends that Arora and Sorensen used two companies – “Gabriel Solutions” and “Andy’s BCB” – to defraud their employers out of phony consulting fees. Sorensen billed McKinsey for the bogus work purportedly performed by the companies, and Arora allocated the fees to the State Farm projects to which he was assigned, according to the indictment.
As a result of the scheme, McKinsey and State Farm paid $38,265 for consulting services purportedly performed by “Andy’s BCB,” and $452,710 in fees billed by “Gabriel Solutions,” the indictment states. Sorensen pocketed nearly all of the fees paid to “Andy’s BCB,” and he took approximately $370,000 of the amount paid to “Gabriel Solutions,” according to the indictment.
In addition to the phony consulting services, the indictment contends that Arora fraudulently obtained over $400,000 from McKinsey, State Farm and other McKinsey clients in the form of travel and expense reimbursements. Arora claimed that the costs had been incurred for legitimate business purposes, when in reality the expenses pertained to Arora’s personal travel. The indictment alleges that Arora falsely expensed personal trips to Scottsdale, Napa, Vail, Miami, Las Vegas, New York, London, Prague and Munich, among others.
Arora also obtained reimbursement for personal expenditures he incurred in Chicago while residing there, the indictment states. The Chicago expenses included hotel, dining and theater costs, according to the indictment.
Each count of wire fraud carries a maximum penalty of 20 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.
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 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. 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 Attorneys Sunil Harjani, Timothy Storino and Jason Yonan.
Indictment
Convicted Felon from Hickory Hills Pleads Guilty to Illegally Possessing Rifles and a ShotgunRead the Press Release
CHICAGO — A convicted felon from southwest suburban Hickory Hills pleaded guilty in federal court today to charges he illegally possessed firearms whose serial numbers had been obliterated.
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 sales.
Riley pleaded guilty today to one count of illegal possession of a firearm by a convicted felon. The conviction carries a maximum sentence of ten years in prison and a $250,000 fine. U.S. District Judge Virginia M. Kendall scheduled a sentencing hearing for April 14, 2016, at 10:00 a.m.
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 Assistant U.S. Attorneys Elizabeth Pozolo, John D. Mitchell, and Jordan Palmore.
Plea Agreement
Rockford Resident Sentenced to More Than 19 Years in Federal Prison for Possessing A Gun as A Convicted FelonRead the Press Release
ROCKFORD — A Rockford resident was sentenced today in federal court on a federal gun charge. The defendant, MARTEZ DICKSON, 29, was sentenced by U.S. District Judge Philip G. Reinhard to a total of 235 months in federal prison, and ordered to serve 5 years of supervised release following his term of imprisonment. On Sept. 15, 2015, following a two-day trial before U.S. District Judge Philip G. Reinhard, Dickson was found guilty by a federal jury of illegally possessing a firearm as a convicted felon.
According to the indictment and evidence at trial, on May 31, 2014, Rockford Police Officers were called to the McDonald’s on 11th Street after Dickson was discovered asleep in the driver’s seat of a car parked in the drive-thru lane. When officers arrived on the scene, Dickson was found in possession of a loaded 9 mm handgun, after previously having been convicted of a felony.
Dickson was originally charged in state court and was transferred to federal court where he was charged under tough federal firearms laws as part of the Project Safe Neighborhoods program. Project Safe Neighborhoods is an intensive, cooperative effort between local, state, and federal law enforcement to attack gun crimes. The cornerstone of the program is that every defendant committing an offense involving a gun will be reviewed for possible federal prosecution in order to obtain the harshest penalties for the worst offenders. Additional information about Project Safe Neighborhoods may be found at: www.psn.gov.
The sentencing 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; Joseph Bruscato, Winnebago County State’s Attorney; and Patrick Hoey, Interim Chief of the Rockford Police Department. The government was represented by Assistants U.S. Attorney Talia Bucci and Margaret J. Schneider.
Readout of Department of Justice’s First Meetings in Chicago Following Announcement of Pattern or Practice Investigation of the Chicago Police DepartmentRead the Press Release
The Department of Justice, including lawyers and senior leaders from the Civil Rights Division, and the U.S. Attorney’s Office of the Northern District of Illinois, completed two days of introductory meetings in Chicago today following last week’s announcement of a pattern or practice investigation into the Chicago Police Department (CPD). The team, comprised primarily of lawyers from the Civil Rights Division was joined by the head of the Civil Rights Division Vanita Gupta, as well as Zachary Fardon, the U.S Attorney of the Northern District of Illinois. The investigation into use of force, disparities in use of force and accountability systems of the CPD is being led by the Civil Rights Division with assistance from the U.S. Attorney’s Office of the Northern District of Illinois.
On Dec. 16, the group met with CPD Superintendent John Escalante and briefed CPD command staff on the investigative process. The Civil Rights Division also had initial meetings with community members and organizations in order to solicit information and explain the pattern or practice investigation’s scope and process.
Today, Dec. 17, the Civil Rights Division and U.S. Attorney’s Office met with additional community groups, city officials and union representatives. Meetings with the city of Chicago included Mayor Rahm Emanuel and his staff and a separate meeting with the Independent Police Review Authority Administrator Sharon Fairley.
Throughout the investigative process the Civil Rights Division, assisted by the U.S. Attorney’s Office, will continue to meet with representatives from the community, the city and the unions. During the course of the investigation, community members will have the opportunity to provide information both in public meetings and privately. Any public meetings will be announced at a later date. Anyone who wishes to share information relevant to the investigation is encouraged to contact the Department of Justice by phone: (844) 401-3735 or email: [email protected].
Readout of Department of Justice’s First Meetings in Chicago Following Announcement of Pattern or Practice Investigation of Chicago Police DepartmentRead the Press Release
WASHINGTON – The Department of Justice, including lawyers and senior leaders from the Civil Rights Division, and the U.S. Attorney’s Office of the Northern District of Illinois, completed two days of introductory meetings in Chicago today following last week’s announcement of a pattern or practice investigation into the Chicago Police Department (CPD). The team, comprised primarily of lawyers from the Civil Rights Division was joined by the head of the Civil Rights Division Vanita Gupta, as well as Zachary Fardon, the U.S Attorney of the Northern District of Illinois. The investigation into use of force, disparities in use of force and accountability systems of the CPD is being led by the Civil Rights Division with assistance from the U.S. Attorney’s Office of the Northern District of Illinois.
On Dec. 16, the group met with CPD Superintendent John Escalante and briefed CPD command staff on the investigative process. The Civil Rights Division also had initial meetings with community members and organizations in order to solicit information and explain the pattern or practice investigation’s scope and process.
Today, Dec. 17, the Civil Rights Division and U.S. Attorney’s Office met with additional community groups, city officials and union representatives. Meetings with the city of Chicago included Mayor Rahm Emanuel and his staff and a separate meeting with the Independent Police Review Authority Administrator Sharon Fairley.
Throughout the investigative process the Civil Rights Division, assisted by the U.S. Attorney’s Office, will continue to meet with representatives from the community, the city and the unions. During the course of the investigation, community members will have the opportunity to provide information both in public meetings and privately. Any public meetings will be announced at a later date. Anyone who wishes to share information relevant to the investigation is encouraged to contact the Department of Justice by phone: (844) 401-3735 or email: [email protected].
CEO of Florida Financial Firm Arraigned on Fraud Charges in $179 Million Sham Loan SchemeRead the Press Release
CHICAGO — The chief executive of a Florida financial firm was arraigned today on federal fraud charges for allegedly selling $179 million in sham loans to a Milwaukee investment company.
Nikesh Patel, the chairman and CEO of Orlando-based First Farmers Financial LLC, forged signatures and produced false documents to create the appearance that approximately 26 government-backed loans had been issued to borrowers in Florida and Georgia, according to an indictment returned earlier this month in federal court in Chicago. The sham loans purported to contain principal amounts ranging from $2.5 million to $10 million, the indictment states. Patel sold the fraudulent loans to a Milwaukee investment firm for $179 million, according to the indictment.
The indictment charges Patel, 32, of Windermere, Fla., with five counts of wire fraud. He pleaded not guilty this afternoon during his arraignment before U.S. District Judge Charles P. Kocoras in Chicago. The next court appearance was scheduled for Jan. 21, 2016, at 9:30 a.m.
Through its Business and Industry Guaranteed Loan Program, the U.S. Department of Agriculture guarantees a percentage of loans issued to borrowers who improve the economic and environmental climate in rural communities. First Farmers obtained certification to participate in the program after Patel submitted false statements to the USDA about his company’s assets and officers, according to the indictment.
The indictment contends that Patel then submitted false statements to the Milwaukee firm to secure the sale of the phony loans. The fabrications included a false guarantee that the USDA had backed a portion of the loans’ principal amounts, according to the indictment. The Milwaukee firm paid $179 million for the loans as an investment vehicle for its list of clients, which included community banks, retirement plans, municipalities, and subdivisions in Illinois and elsewhere, the indictment states.
The indictment 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 Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration.
Each count of wire fraud carries a maximum penalty of 20 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.
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 Attorneys Patrick J. King Jr. and Rick D. Young.
Rockford Man Pleads Guilty to Illegally Possessing A FirearmRead the Press Release
ROCKFORD — A Rockford man pleaded guilty today in federal court before U.S. District Judge Frederick J. Kapala to illegally possessing a firearm as a convicted felon. CLIFFORD HORTON, 28, of Rockford, Ill., admitted that on November 4, 2014, having previously been convicted of a felon, he possessed a Taurus .380 caliber pistol.
Horton is scheduled to be sentenced on March 18, 2016, at 2:30 p.m. Horton faces a maximum sentence of up to 10 years’ imprisonment, a term of supervised release of up to 5 years following imprisonment, and a fine of up to $250,000. The actual sentence will be determined by the United States District Court, guided by the advisory United States Sentencing Guidelines.
The guilty plea 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 is represented by Assistant U.S. Attorney Scott R. Paccagnini.
Plea Agreement
U.S. Army National Guard Soldier Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
CHICAGO — A soldier in the U.S. Army National Guard pleaded guilty today to federal charges that he conspired with his cousin to provide material support to a foreign terrorist organization in the Middle East.
HASAN R. EDMONDS, 23, of Aurora, pleaded guilty to one count of conspiring to provide material support to a foreign terrorist organization, and one count of attempting to provide material support to a foreign terrorist organization. The terrorist organization is identified in a written plea agreement as the Islamic State of Iraq and the Levant, commonly referred to as ISIL, ISIS, or the Islamic State.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John P. Carlin, Assistant Attorney General for National Security; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
“The top priority of federal law enforcement is to protect the safety of our citizens, both here and abroad,” said U.S. Attorney Fardon. “We will vigorously investigate and prosecute those who align themselves with ISIL and its mission of brutal violence.”
“Hasan and Jonas Edmonds conspired to provide material support to ISIL,” said Assistant Attorney General Carlin. “They admitted planning to wage violence on behalf of ISIL in the Middle East and to conduct an attack on our soil. Thanks to the efforts of many prosecutors, agents, and analysts, we were able to ensure these plotters did not attain their violent endgames, and with these guilty pleas, they will be held accountable. Counterterrorism remains the Department’s highest priority, and we will continue use all available tools to combat ISIL, a foreign terrorist organization that rapes, murders and enslaves Muslims and non-Muslims alike.”
According to the plea agreement, Hasan Edmonds and his cousin, JONAS M. EDMONDS, devised a plan for Hasan Edmonds to travel to the Middle East for the purpose of waging violence on behalf of ISIL. On March 25, 2015, Jonas Edmonds drove Hasan Edmonds to Midway International Airport in Chicago so that Hasan Edmonds could board a flight to the Middle East, according to the plea agreement. After dropping off Hasan Edmonds, Jonas Edmonds went to Hasan Edmonds’ residence and retrieved several of Hasan Edmonds’ National Guard uniforms, which Jonas Edmonds planned to wear as a disguise during a planned attack at the National Guard base in Joliet, the plea agreement states.
Hasan Edmonds is a member of the Army National Guard and had trained at the Joliet installation.
Law enforcement agents on the Chicago FBI’s Joint Terrorism Task Force arrested Hasan Edmonds at Midway Airport before he could board his flight. Shortly thereafter the agents arrested Jonas Edmonds at his home.
The cousins are citizens of the United States.
The charges against Hasan Edmonds carry a combined maximum sentence of 30 years in prison and $500,000 fine. U.S. District Judge John Z. Lee scheduled a sentencing hearing for March 18, 2016, at 11:00 a.m.
Jonas Edmonds, 30, of Aurora, pleaded guilty last week to one count of conspiring to provide material support to a foreign terrorist organization, and one count of making a materially false statement to a law enforcement officer regarding an offense involving international terrorism. He faces a maximum sentence of 23 years in prison when he is sentenced by Judge Lee on Jan. 27, 2016, at 2:00 p.m.
The Joint Terrorism Task Force is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Illinois State Police, the Aurora Police Department and the Illinois National Guard provided significant assistance in the investigation.
The government is represented by Assistant United States Attorneys Barry Jonas and John Kness of the Northern District of Illinois; and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
Plea Agreement
U.S. Army National Guard Soldier Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
A soldier in the U.S. Army National Guard pleaded guilty today to federal charges that he conspired with his cousin to provide material support to a foreign terrorist organization in the Middle East.
Hasan R. Edmonds, 23, of Aurora, Illinois, pleaded guilty to one count of conspiring to provide material support to ISIL, a designated foreign terrorist organization, and one count of attempting to provide material support to ISIL.
The charge was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division.
“Hasan and Jonas Edmonds conspired to provide material support to ISIL,” said Assistant Attorney General Carlin. “They admitted planning to wage violence on behalf of ISIL in the Middle East and to conduct an attack on our soil. Thanks to the efforts of many prosecutors, agents and analysts, we were able to ensure these plotters did not attain their violent endgames, and with these guilty pleas, they will be held accountable. Counterterrorism remains the department’s highest priority, and we will continue use all available tools to combat ISIL, a foreign terrorist organization that rapes, murders and enslaves Muslims and non-Muslims alike.”
“The top priority of federal law enforcement is to protect the safety of our citizens, both here and abroad,” said U.S. Attorney Fardon. “We will vigorously investigate and prosecute those who align themselves with ISIL and its mission of brutal violence.”
According to the plea agreement, Hasan Edmonds and his cousin, Jonas M. Edmonds, devised a plan for Hasan Edmonds to travel to the Middle East for the purpose of waging violence on behalf of ISIL. Hasan Edmonds admitted that on March 25, 2015, Jonas Edmonds drove Hasan Edmonds to Midway International Airport in Chicago so that he could board a flight to the Middle East. According to the plea agreement, after dropping off Hasan Edmonds, Jonas Edmonds went to Hasan Edmonds’ residence and retrieved several of Hasan Edmonds’ National Guard uniforms, which Jonas Edmonds planned to wear as a disguise during a planned attack at the National Guard base in Joliet, Illinois.
Hasan Edmonds is a member of the Army National Guard and had trained at the Joliet installation.
Law enforcement agents on the FBI’s Chicago Joint Terrorism Task Force arrested Hasan Edmonds at Midway Airport before he could board his flight. Shortly thereafter the agents arrested Jonas Edmonds at his home. The cousins are citizens of the United States.
The charges against Hasan Edmonds carry a combined maximum sentence of 30 years in prison and $500,000 fine. U.S. District Judge John Z. Lee of the Northern District of Illinois scheduled a sentencing hearing for March 18, 2016.
Jonas Edmonds, 30, of Aurora, pleaded guilty last week to one count of conspiring to provide material support to a designated foreign terrorist organization and one count of making a materially false statement to a law enforcement officer regarding an offense involving international terrorism. He faces a maximum sentence of 23 years in prison when he is sentenced by U.S. District Judge John Z. Lee on Jan. 27, 2016, at 2:00 p.m.
The case is being investigated by the FBI’s Chicago Joint Terrorism Task Force. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Illinois State Police, the Aurora Police Department and the Illinois National Guard provided significant assistance in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Barry Jonas and John Kness of the Northern District of Illinois; and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
Hasan Edmonds Superseding Information
Owner of Harwood Heights Home Health Care Company Indicted in Medicare Fraud and Kickback SchemeRead the Press Release
CHICAGO — The owner of a Harwood Heights home health care company paid kickbacks to marketers in exchange for referring elderly patients to the company for unnecessary treatment funded by Medicare, according to a 17-count federal indictment announced today.
The indictment alleges that JACQUELINE TUANQUI paid kickbacks to marketers to induce the referral of Medicare beneficiaries to her company, Hexagram Home Health Care LLC. Tuanqui paid the bribes even though some of the patients did not qualify for the in-home treatment her company provided, according to the indictment. Medicare paid Hexagram at least $450,000 for treatment rendered to patients who were referred there as a result of a kickback, the indictment contends.
Tuanqui, 53, of Bartlett, is charged with one count of conspiracy to pay or receive healthcare kickbacks, and eight counts of paying kickbacks to induce referrals of Medicare beneficiaries.
In addition to Tuanqui, an outside marketer was also charged in the scheme. SUSIE AVELLANOSA, the owner of Elgin-based Allied Care Services Inc., received payments from Tuanqui in exchange for referring non-homebound Medicare beneficiaries to Hexagram, according to the indictment. Avellanosa, 57, of Elgin, is charged with one count of conspiracy to pay or receive healthcare kickbacks, and eight counts of receiving kickbacks in return for referring Medicare beneficiaries.
Tuanqui and Avellanosa pleaded not guilty yesterday during arraignments before U.S. Magistrate Judge Mary M. Rowland. Their next court appearance is scheduled for Jan. 28, 2016.
The indictment contends that the scheme began in approximately November 2012 and lasted until approximately April 2014. As part of the conspiracy, Tuanqui and Avellanosa signed written contracts that were designed to conceal the true nature of the kickback agreement, which called for Avellanosa to be paid for supplying a pre-determined number of patients to Hexagram per month, according to the indictment. The written agreements fraudulently stated that Avellanosa would be paid based on the number of hours she worked, without any mention of the true nature of the scheme, the indictment states.
The kickback and kickback conspiracy counts are punishable by up to five years in prison and a $250,000 fine. If convicted, restitution is mandatory and the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines. 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 indictment was returned last month and unsealed yesterday. It 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; 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 investigation was carried out by the Medicare Fraud Strike Force, which consists of agents from the Federal Bureau of Investigation 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 Department of Justice and HHS to prevent fraud and to enforce anti-fraud laws around the country.
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
Physician and His Patient Indicted in Scheme to Fraudulently Prescribe and Dispense Oxycodone and AdderallRead the Press Release
CHICAGO — A southwest suburban doctor and his patient are facing federal drug charges for allegedly scheming to fraudulently prescribe and dispense thousands of Oxycodone and Adderall pills, authorities announced today.
From approximately January 2010 to July 2013, DR. WILLIAM MIKAITIS issued over 500 prescriptions for Oxycodone and Adderall tablets to his patient, DAVID STELMACHOWSKI, without ordering medical tests or performing a thorough physical examination, according to a 25-count federal indictment. Stelmachowski filled the prescriptions at 80 different Chicago-area pharmacy locations so as to avoid attracting attention to such a high number of prescriptions and pills, the indictment alleges. In all, Stelmachowski used these prescriptions to obtain approximately 37,000 pills or tablets of Oxycodone and Adderall, according to the indictment.
The indictment was returned last week in U.S. District Court in Chicago and unsealed today. The indictment charges Mikaitis and Stelmachowski with conspiring to distribute misbranded prescription drugs and conspiring to acquire controlled substances by fraud and deception. The two counts carry a combined maximum sentence of nine years in prison.
Mikaitis, 72, of Burr Ridge, is also individually charged with 15 counts of distributing a controlled substance outside the scope of professional practice. Each count is punishable by up to 20 years in prison. Stelmachowski, 38, of River Forest, faces eight individual counts of possessing Oxycodone with the intent to distribute. These counts each carry a maximum sentence of 20 years.
Mikaitis pleaded not guilty during an arraignment yesterday before U.S. Magistrate Judge Young B. Kim. Stelmachowski will be arraigned at a later date to be set by the Court.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; Mark S. McCormack, Acting Special Agent-in- Charge of the U.S. Food and Drug Administration’s Office in Chicago; and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.
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 United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Matthew Schneider.
Indictment
Aurora, Illinois, Man Pleads Guilty to Conspiring to Provide Material Support to ISILRead the Press Release
An Aurora, Illinois, man pleaded guilty today to federal charges involving conspiracy to provide material support to a foreign terrorist organization in the Middle East.
Jonas M. Edmonds, 30, pleaded guilty to one count of conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and one count of making a materially false statement to a law enforcement officer regarding an offense involving international terrorism.
The charge was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division.
Jonas Edmonds has been detained in federal custody since his arrest on March 25, 2015, by members of the FBI’s Chicago Joint Terrorism Task Force. According to the plea agreement, the defendant and his cousin, Hasan Edmonds, had devised a plan for Hasan Edmonds to travel to the Middle East for the purpose of waging violence on behalf of ISIL. Jonas Edmonds admitted that he expressed his support and excitement for Hasan Edmonds’ travel, believing that anyone who supported a mujahid (a fighter) was a mujahid himself.
According to the plea agreement, Jonas Edmonds intended to carry out an act of terrorism in the United States after Hasan Edmonds had departed for the Middle East. Specifically, in March 2015, the cousins devised a plan for Jonas Edmonds to carry out an armed attack at the U.S. Army National Guard base in Joliet, Illinois, during which time Hasan Edmonds was a member of the Army National Guard and had been training at the Joliet installation. According to the plea agreement, the plan called for Hasan Edmonds to provide military uniforms for Jonas Edmonds to wear during the attack, as well as a list of officers for Jonas Edmonds to kill.
Jonas Edmonds’ sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal history, if any, the defendant’s role in the offense and the characteristics of the violation. Jonas Edmonds faces a maximum sentence of 15 years in prison for the material support charge, and up to eight years in prison for the false statement count. U.S. District Judge John Z. Lee of the Northern District of Illinois scheduled a sentencing hearing for Jan. 27, 2016, at 2:00 p.m. CST.
Hasan Edmonds was charged in a superseding information with one count of conspiring to provide material support to a foreign terrorist organization and one count of attempting to provide material support to a foreign terrorist organization. His next court appearance is scheduled for Dec. 14, 2015, at 11:00 a.m. CST before Judge Lee.
The case is being investigated by the FBI’s Chicago Joint Terrorism Task Force. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Illinois State Police, the Aurora Police Department and the Illinois National Guard also provided significant assistance in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Barry Jonas and John Kness of the Northern District of Illinois and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
Jonas Edmonds Plea Agreement
Aurora Man Pleads Guilty to Conspiring to Provide Material Support to ISILRead the Press Release
CHICAGO — An Aurora man pleaded guilty today to a federal charge that he conspired to provide material support to a foreign terrorist organization in the Middle East.
JONAS M. EDMONDS, 30, pleaded guilty to one count of conspiring to provide material support to a foreign terrorist organization, and one count of making a materially false statement to a law enforcement officer regarding an offense involving international terrorism. The terrorist organization is identified in a written plea agreement as the Islamic State of Iraq and the Levant, commonly referred to as ISIL, ISIS, or the Islamic State.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John P. Carlin, Assistant Attorney General for National Security; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Jonas Edmonds has been detained in federal custody since his arrest in March by members of the Chicago Joint Terrorism Task Force. According to the plea agreement, he and his cousin, HASAN EDMONDS, devised a plan for Hasan Edmonds to travel to the Middle East for the purpose of waging violence on behalf of ISIL. Jonas Edmonds expressed his support and excitement for Hasan Edmonds’ travel, believing that anyone who supported a mujahid (a fighter) was a mujahid himself, the plea agreement states.
According to the plea agreement, Jonas Edmonds intended to carry out an act of terrorism in the United States after Hasan Edmonds had departed for the Middle East. In particular, the cousins devised a plan for Jonas Edmonds to carry out an armed attack at the U.S. Army National Guard base in Joliet. At the time the scheme was hatched in March, Hasan Edmonds was a member of the Army National Guard and had been training at the Joliet installation. The plan called for Hasan Edmonds to provide military uniforms for Jonas Edmonds to wear during the attack, as well as a list of officers for Jonas Edmonds to kill, according to the plea agreement.
Jonas Edmonds, a U.S. citizen from west suburban Aurora, faces a maximum sentence of 15 years for the material support charge, and up to eight years for the false statement count. U.S. District Judge John Z. Lee scheduled a sentencing hearing for Jan. 27, 2016, at 2:00 p.m.
Hasan Edmonds, a U.S. citizen from of Aurora, is charged in a superseding information with one count of conspiring to provide material support to a foreign terrorist organization, and one count of attempting to provide material support to a foreign terrorist organization. His next court appearance is scheduled for Dec. 14, 2015, at 11:00 a.m. before Judge Lee.
The Joint Terrorism Task Force is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Illinois State Police, the Aurora Police Department and the Illinois National Guard provided significant assistance in the investigation.
The government is represented by Assistant United States Attorneys Barry Jonas and John Kness of the Northern District of Illinois; and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
Plea Agreement
Member of Computer Hacking Group “NullCrew” Pleads Guilty in Cyber-Attacks on Corporations, Universities and GovernmentsRead the Press Release
CHICAGO — A Tennessee man pleaded guilty in federal court today to charges he helped launch cyber-attacks on corporations, universities and governmental entities throughout the world.
As a member of the hacking group “NullCrew,” TIMOTHY JUSTEN FRENCH exploited computer vulnerabilities to obtain unauthorized access and steal confidential information, including encrypted personal data of thousands of individuals. French acknowledged in a plea declaration that it is the government’s position that his cyber-attacks caused at least $792,000 in monetary loss to the victims, which included companies, universities and governmental entities.
French, 21, of Morristown, Tenn., pleaded guilty to one count of intentionally damaging a protected computer without authorization. The conviction carries a maximum sentence of ten years in prison. U.S. District Judge Gary Feinerman scheduled a sentencing hearing for March 9, 2016, at 3:45 p.m.
NullCrew is a group of computer hackers who carried out a series of cyber-attacks against businesses, universities and governmental entities in the United States and throughout the world. To publicize their intrusions, French and other members of NullCrew maintained Twitter accounts, including @NullCrew_FTS and @OfficialNull, which they used to announce their cyber-attacks, ridicule their victims and publicly disclose the confidential information they had stolen, according to the plea declaration. French hid his true identity by using Internet aliases, including “Orbit,” “@Orbit_g1rl,” “crysis,” “rootcrysis,” and “c0rps3.”
French admitted in the plea declaration that he participated in at least seven cyber-attacks while a member of NullCrew from 2012 to 2014. One of the attacks was carried out against a large Canadian telecommunications company, while another attack targeted a U.S. state, according to the plea declaration.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney William Ridgway.
Plea Declaration
U.S. Attorney’s Office Collected More Than $50 Million in Civil, Criminal and Asset Forfeiture Actions in Fiscal Year 2015Read the Press Release
CHICAGO — The United States Attorney’s Office for the Northern District of Illinois collected more than $50 million in criminal, civil and asset forfeiture actions in Fiscal Year 2015, Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced today.
The 2015 collections included $19,468,802 in criminal actions, $11,584,602 in civil actions, and $19,136,036 in asset forfeiture actions. The Office also collected $314,659 in criminal and civil cases pursued jointly with other U.S. Attorneys’ Offices and components of the U.S. Department of Justice.
Attorney General Loretta E. Lynch announced yesterday that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. This figure represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Lynch. “The collections demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
“Our attorneys and staff are thoroughly committed to recovering funds for the federal treasury and for victims of federal crimes,” said Mr. Fardon. “The Office continues to provide a significant net financial benefit to the taxpayers of our district.”
The collections in the Northern District of Illinois included more than $2 million from the criminal fraud prosecution of insurance agent Michael Ward, and more than $1.9 million in a civil forfeiture action arising from healthcare fraud at the now-defunct Sacred Heart Hospital in Chicago.
The 94 U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States, and criminal debts owed to crime victims. Federal law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the money to state victim compensation and victim assistance programs.
Nationally, the largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Former Corrections Officer Pleads Guilty to Smuggling Marijuana and Alcohol into Cook County JailRead the Press Release
CHICAGO — A former Cook County Corrections Officer admitted in federal court today that he smuggled marijuana, tobacco and alcohol into the Cook County Jail.
JASON MAREK delivered the contraband to a jail inmate after tucking it into sandwiches and sneaking it past security, according to a written plea agreement. In exchange for his efforts, Marek received cash payments from the inmate’s wife, the plea agreement states.
Marek, 30, pleaded guilty to one count of federal program bribery. The conviction carries a maximum sentence of ten years in prison. U.S. District Judge Charles R. Norgle will schedule a sentencing hearing at a later date.
Marek was assigned to a maximum-security tier of the jail when he smuggled in the goods in May and June 2013. After initially selling used chewing tobacco to the inmate for $200, Marek and the inmate agreed to deal the marijuana and alcohol, according to the plea agreement. The inmate arranged for his wife to meet Marek at a location outside of the jail in order for Marek to receive payment for his services, the plea agreement states.
Marek admitted knowing that the inmate planned to sell the contraband to other inmates within the jail, according to the plea agreement.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Cook County Sheriff Thomas J. Dart; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorneys Megan Cunniff Church and Michelle Nasser.
Plea Agreement
Psychiatrist and Counselor Indicted for Falsifying Medical Reports to Help Applicants for U.S. Citizenship Bypass Testing RequirementsRead the Press Release
CHICAGO — A psychiatrist and counselor in a Chicago medical practice were arrested today on charges they falsely diagnosed individuals as disabled in order to help them bypass certain tests for U.S. citizenship.
Dr. MAREK WALCZYK and KATARZYNA FERGEMANN fraudulently declared the applicants as suffering from a physical or mental impairment that purportedly rendered them unable to demonstrate the required knowledge of United States history and the English language, according to an indictment returned last month in U.S. District Court in Chicago. A medical certification of impairment allows individuals to seek an exemption from the civics and English-language tests required for naturalized U.S. citizenship.
Federal authorities arrested Walczyk and Fergemann this morning. During an arraignment later in the morning before U.S. Magistrate Judge Maria Valdez, Walczyk and Fergemann pleaded not guilty and were released on $15,000 unsecured appearance bonds. A status hearing was scheduled for Jan. 7, 2016, at 9:45 a.m., before U.S. District Judge Andrea R. Wood.
Walczyk, 59, of Norridge, and Fergemann, 38, of Chicago, are each charged with one count of conspiracy to defraud the United States, and two counts of attempted unlawful procurement of citizenship or naturalization. The conspiracy count is punishable by a maximum sentence of five years in prison, while the attempted unlawful procurement counts each carry a maximum sentence of ten years.
Walczyk is a licensed psychiatrist who operates a medical practice on the Northwest Side of Chicago. Fergemann is employed by the practice as a licensed counselor. According to the indictment, Fergemann prepared a written report stating that she administered diagnostic testing procedures on an individual seeking to apply for U.S. citizenship, and that the tests revealed the individual suffered from a social anxiety disorder, panic disorder and major depressive disorder, as well as a learning impairment resulting from those conditions. Fergemann issued the report knowing that the individual did not suffer from a physical or mental impairment, the indictment states.
Walczyk fraudulently certified Fergemann’s 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 certification 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 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 Philip Fluhr.
Indictment
Chicago Man Charged with Posting Online Threat of Gun Violence at University of ChicagoRead the Press Release
CHICAGO — A Chicago man was arrested today for allegedly threatening to murder students and staff at the University of Chicago.
JABARI R. DEAN, 21, of Chicago, is charged with transmitting a threat in interstate commerce. He is scheduled to make an initial appearance today at 3:00 p.m. before U.S. Magistrate Judge Susan E. Cox.
Dean was arrested without incident this morning. In a Thanksgiving weekend posting on a social media website, Dean stated that he would execute approximately sixteen students or staff members on the campus quad of the University of Chicago on Nov. 30, 2015, according to a criminal complaint and affidavit filed in U.S. District Court in Chicago. Dean also stated in the posting that he would die “killing any number of white policemen that I can in the process,” according to the complaint.
Federal authorities identified Dean and confronted him prior to the 10:00 a.m. deadline referenced in the threat.
The arrest and charge 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; Chicago Police Superintendent Garry F. McCarthy; and the University of Chicago Police Department.
The charge carries a maximum sentence of five years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant U.S. Attorneys Tobara S. Richardson and Bethany Biesenthal.
U.S. Attorney's Office Provides Update on Investigation into the Shooting Death of Laquan McDonaldRead the Press Release
CHICAGO — On April 13, 2015, this Office announced a joint federal and state investigation into the October 20, 2014, fatal shooting of Laquan McDonald. Both before and since that announcement, the U.S. Attorney’s Office and our law enforcement partners have been conducting a thorough investigation into the circumstances of the shooting.
The federal investigation of the shooting remains active and ongoing.
U.S. Announces Settlement with Illinois Landlord for Failing to Disclose Potentially Dangerous Lead HazardsRead the Press Release
WASHINGTON – The U.S. Department of Housing and Urban Development (HUD), the U.S. Attorney’s Office for the Northern District of Illinois, and the U.S. Environmental Protection Agency (EPA) today announced a settlement with a Rockford, Illinois landlord to resolve a claim he failed to inform tenants, some with young children, that their homes may contain potentially dangerous lead.
The agreement requires Dennis Hardesty to replace windows and clean up lead‑based paint hazards in 50 rental properties containing a total of 52 units (see attached list of properties). In addition to the $308,000 worth of lead abatement work, Hardesty agreed to pay $5,000 in penalties.
According to the federal government, Hardesty violated the Federal Residential Lead-Based Paint Hazard Reduction Act (Residential Lead Act) by failing to inform tenants that their homes may contain potentially dangerous levels of lead. Winnebago County health department officials identified at least seven children with elevated blood lead levels in the properties Hardesty leased. Investigations by the health department identified lead‑based paint and lead-based paint hazards in the units. Going forward, Hardesty will ensure that he will provide information about lead‑based paint to tenants before they are obligated to sign any lease.
The lead abatement work Hardesty will perform as a result of the settlement includes window replacement and abatement of all friction and impact surfaces, and clearance exams to make those units lead safe for families to rent and live in. HUD will provide ongoing monitoring of Hardesty’s implementation of the settlement agreement, and will share the results with its federal partners for possible further action.
“Lead poisoning is entirely preventable but it requires all of us to recognize that we share a responsibility to protect our vulnerable populations, especially young children who are still developing,” said Matt Ammon, Director of HUD’s Office of Lead Hazard Control and Healthy Homes. “Landlords of homes built before 1978 have a legal responsibility to make their tenants aware of lead-based paint and lead-based paint hazards they know about or that may be in their homes so that tenants can protect their families.”
“This settlement will protect children in Rockford from exposure to lead-based paint – and it sends a clear message to landlords and property managers across the country that the Environmental Protection Agency is prioritizing enforcement actions to eliminate elevated blood lead levels in children,” EPA Region 5 Administrator Susan Hedman said.
“This settlement requires Dennis Hardesty to institute a robust program to ensure that his properties are compliant with federal law,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “My office will continue to enforce these important laws to protect tenants from exposure to dangerous lead paint.”
The settlement announced today represents the first joint Residential Lead Act enforcement action in Rockford. It was the result of intensive coordination among local health officials and federal investigators. HUD, EPA and the Department of Justice are continuing similar enforcement efforts around the nation. As a result of enforcement actions taken thus far, landlords have agreed to conduct lead-based paint hazard reduction in more than 187,000 apartments and to pay $1.5 million in civil penalties. In resolving these cases, landlords have committed to expend more than an estimated $31 million to address lead-based paint hazards in the affected units. In addition, over $700,000 has been provided by defendants to community-based projects to reduce lead poisoning.
Background
The Residential Lead Act is one of the primary federal enforcement tools to prevent lead poisoning in young children. The Lead Disclosure Rule requires home sellers and landlords of housing built before 1978 to disclose to purchasers and potential tenants knowledge of lead-based paint or lead-based paint hazards using a disclosure form, signed by both parties, attached to the sales contract or lease containing the required lead warning statement, provide any available records or reports, and provide an EPA-approved “Protect Your Family From Lead in Your Home” information pamphlet. Sellers must also provide purchasers with an opportunity to conduct a lead-based paint inspection and/or risk assessment at the purchaser’s expense. Acceptable lead disclosure forms can be found at www.hud.gov/offices/lead/dislcosurerule and www.epa.gov/lead/pubs/leadbase.htm.
Health Effects of Lead-Based Paint
No safe blood lead level in children has been identified. Lead exposure can affect nearly every system in the body. Lead exposure causes reduced IQ, learning disabilities, developmental delays, reduced height, poorer hearing, and a host of other health problems in young children. Many of these effects are thought to be irreversible. In later years, lead-poisoned children are much more likely to drop out of school, become juvenile delinquents and engage in criminal and other anti-social behavior. Researchers have found that even at low levels, lead exposure in children can significantly impact IQ and might delay puberty in young girls.
At higher levels, lead can damage a child’s kidneys and central nervous system and cause anemia, coma, convulsions and even death. According to the Centers for Disease Control and Prevention (CDC), 4 million households have children living in them that are being exposed to high levels of lead. There are approximately half a million U.S. children ages 1-5 with blood lead levels above 5 micrograms per deciliter, the reference level at which CDC recommends public health actions be initiated.
Eliminating lead-based paint hazards in older low-income housing is essential if childhood lead poisoning is to be eradicated. According to CDC estimates, the percentage of children with elevated blood lead levels has been cut in half since the early 1990’s, although as many as 1 million children are still affected by lead poisoning today. HUD estimates that the number of houses with lead paint has declined from 64 million in 1990 to 37 million in 2006. About 23 million homes still have significant lead-based paint hazards, and about 3.6 million homes with children less than 6 years of age have one or more of these hazards.
Dennis Hardesty Subject Properties
Accountant Pleads Guilty to Embezzling More Than $130,000 from Illinois Medical District CommissionRead the Press Release
CHICAGO — A senior accountant at the Illinois Medical District Commission pleaded guilty today to charges she embezzled more than $130,000 from the agency by misdirecting procurement funds into her personal accounts.
CYNTHIA FERNANDEZ-ALONSO, 42, of Berwyn, used her position to direct payments from the Commission’s bank account into three personal accounts, according to a plea agreement. Fernandez-Alonso recorded the payments in the Commission’s internal records, but attributed them as having been made to the agency’s energy provider and other vendors, the plea agreement states.
Fernandez-Alonso pleaded guilty to one count of embezzlement. The conviction carries a maximum sentence of ten years in prison and a $250,000 fine, plus mandatory restitution. U.S. District Judge Elaine E. Bucklo scheduled a sentencing hearing for February 22, 2016, at 10:00 a.m.
The Illinois Medical District Commission is a governmental agency that facilitates collaboration among the various medical, health and social service agencies operating within the Illinois Medical District on Chicago’s Near West Side. Fernandez-Alonso was entrusted with the responsibility of authorizing payments from the Commission’s bank account to its outside vendors and suppliers.
From at least November 2013 to at least April 2015, Fernandez-Alonso directed deposits into her accounts on a nearly monthly basis. In some months, multiple transfers were made. On the same day she received one such deposit – for $4,852 on Dec. 10, 2014 – a purchase of jewelry was made with her Chase debit card at Kay Jewelers for $2,847, according to the plea agreement.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorneys Maureen Merin and Sarah Streicker.
Plea Agreement
U.S. Attorney Zachary T. Fardon Hosts Third Community Roundtable to Discuss Strengthening Trust between the Public and Law EnforcementRead the Press Release
CHICAGO — Civic, religious and community leaders joined top law enforcement personnel today to continue an ongoing dialogue about building trust between law enforcement and the Chicagoland community.
The Community Roundtable was convened by Zachary T. Fardon, United States Attorney for the Northern District of Illinois. It was held in the Columbus Park Refectory in the Austin neighborhood on the city’s West Side. Today’s event was the third such discussion, following up on productive sessions in December 2014 and March 2015.
“Today’s roundtable brought together passionate leaders, adult and youth, from different backgrounds who all share the common goal of improving community trust and making Chicago an even greater and safer place for all neighborhoods,” Mr. Fardon said. “We had a forthright and stimulating conversation about policing and community trust issues.”
The U.S. Department of Justice has made the issue of community policing a top priority. The Community Roundtables focus on developing tangible initiatives for improving the relationship between law enforcement and the community.
Among the more than 50 participants in today’s meeting were Cook County State’s Attorney Anita Alvarez, Chicago Police Superintendent Garry McCarthy, and representatives from the U.S. Drug Enforcement Administration, the Federal Bureau of Investigation, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the Cook County Juvenile Temporary Detention Center, the U.S. Marshal’s Service, Chicago Public Schools, KLEO Community Family Life Center, Chicago Board of Rabbis, Bowen High School, Purpose Over Pain, Apostolic Church of God, Chicago Community Trust, University of Chicago Crime Lab, YMCA, Mikva Challenge, Chicago Urban League, Bright Star Church, Chicago Violence Reduction Strategy, Westside Health Authority, Fierce Women of Faith, Bethel New Life Church, and Becoming A Man.
Glenview Man Indicted 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 purportedly loaning $15,000 to a company controlled by the Clerk’s husband lied under oath when testifying about it before a grand jury, according to a federal indictment announced today.
In August 2014, SIVASUBRAMANI RAJARAM purportedly loaned $15,000 to Goat Masters Corporation, 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. 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 conducting an investigation of 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 he had only spoken to another high-ranking employee of the Clerk’s Office “three or four times” since returning to Chicago from India, and that the conversations were not by phone.
The indictment alleges that both statements were false. According to the indictment, Rajaram spoke with both the Clerk and the high-ranking employee after being re-hired in 2014. His conversations with the high-ranking employee occurred dozens of times via cell phone, according to the indictment.
The indictment was returned Thursday in U.S. District Court in Chicago. Rajaram, 48, of Glenview, was charged with one count of making false declarations before a grand jury. The charge carries a maximum sentence of five years in prison. The Court has not yet scheduled an arraignment hearing.
The indictment 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 public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is represented by Assistant United States Attorneys Heather McShain and Ankur Srivastava.
Indictment
Former Chicago Police Sergeant Pleads Guilty to Passing Government Information to Store Clerk in Exchange for Cash PaymentsRead the Press Release
CHICAGO — A former sergeant in the Chicago Police Department pleaded guilty today to charges he took cash payments from a liquor store clerk in exchange for disclosing private government information.
RAY M. RAMIREZ served as a sergeant in the 12th Police District on the city’s Near West Side. Ramirez admitted in a plea agreement that he obtained information from law enforcement databases and passed it to the store clerk in exchange for cash payments of $150 to $200. The information included a criminal background check on a prospective store employee, a vehicle registration check, and a review of police incidents occurring in and around the store.
Ramirez also admitted that he shook down the clerk and other store employees for cash payments ranging from $70 to $200. Ramirez wore his police uniform and was on duty when he demanded the payments, according to the plea agreement.
Ramirez, 52, of Chicago, pleaded guilty to one misdemeanor count of intentionally accessing a Chicago Police Department mobile computer and exceeding his authorized access to obtain information from a department or agency of the United States. He faces a maximum sentence of 12 months in prison, a maximum fine of $100,000, and mandatory restitution. U.S. District Judge Ronald A. Guzman scheduled a sentencing hearing for March 16, 2016, at 10:30 a.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
The government is represented by Assistant United States Attorney Megan Cunniff Church.
Plea Agreement
West Suburban Drug Dealer Sentenced to 16 Years in Prison for Selling Dozens of Guns Later Used in Chicago ShootingsRead the Press Release
CHICAGO — A federal judge today sentenced a Lisle man to 16 years in prison for putting at least 80 firearms into the hands of known gang members on the streets of Chicago.
WALTER FREEMAN obtained the guns from a co-defendant, TIMOTHY VANA, in exchange for crack cocaine. Freeman later sold the guns to individuals he knew to be members of Chicago street gangs. Several of the guns were used in shootings and other crimes in and around Chicago.
Freeman, 36, of Lisle, pleaded guilty last year to one count of knowingly and intentionally distributing a controlled substance, and one count of knowingly possessing a firearm in furtherance of a drug trafficking crime. He also stipulated to being a felon in possession of a firearm in a charge that was filed in a separate indictment.
U.S. District Judge Sharon Johnson Coleman imposed the 16-year sentence in federal court in Chicago.
“Defendant’s possession and sale of at least 80 weapons directly contributed to the violence that our city faces,” Assistant U.S. Attorney Jennie Levin said in the government’s sentencing memorandum. “He has victimized the entire Chicago community.”
According to a written plea agreement, Freeman sold approximately seven grams of crack cocaine per week to a regular group of customers from 2008 to 2013. He also admitted selling crack cocaine to an undercover law enforcement agent on several occasions in 2011 and 2012.
Freeman obtained 40 guns from Vana between 1999 and 2001, and another 40 between 2010 and 2011. The guns included revolvers and semi-automatic weapons. Vana had stolen the guns from an avid firearms collector who resided at Vana’s family’s home in Bolingbrook.
The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives later recovered many of the weapons after they had been involved in shootings and other crimes in and around Chicago. ATF agents traced the serial numbers of the guns and learned they had been purchased by the same owner, who resided in Vana’s family’s house. Further investigation revealed the drugs-for-guns arrangement between Vana and Freeman.
Vana, 54, of Forest Park, pleaded guilty last month to one count of being a felon in possession of a firearm, and one count of knowingly possessing a firearm that he had reasonable cause to believe was stolen. Vana’s sentencing hearing before U.S. District Judge Elaine E. Bucklo will be scheduled at a later date.
Freeman’s sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Jeffery Magee, Special Agent in Charge of the ATF Chicago Field Division. The Cook County Sheriff’s Police and the Illinois State Police assisted in the investigation.
The government is represented by Ms. Levin.
U.S. Attorney's Office to Review City and Suburban Restaurants for Compliance with Americans with Disabilities ActRead the Press Release
CHICAGO — The United States Attorney’s Office in Chicago has launched a review of restaurants in the city and suburbs to ensure compliance with the Americans with Disabilities Act, authorities announced today.
The purpose of the review is to ensure that the restaurants are accessible to persons with disabilities. The initiative is undertaken in accordance with the congressionally-mandated responsibility to review compliance with the ADA. The U.S. Attorney’s Office hopes to work cooperatively with restaurant owners who are found to be non-compliant.
“The Americans with Disabilities Act is an important civil rights law,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “Restaurant owners must conform to its accessibility provisions, and we will pursue all reasonable measures to ensure compliance.”
This year marks the 25th anniversary of the passage of the ADA. The Act prohibits discrimination on the basis of disability in places of public accommodation, including restaurants, and requires such places to be “designed, constructed, and altered in compliance with the accessibility standards” established by the ADA’s implementing regulations.
As part of the program, an initial selection of restaurant owners in Chicago and the suburbs will be asked to complete a survey pertaining to their restaurant’s accessibility. Federal investigators may then conduct on-site inspections of the facilities to confirm survey responses and to evaluate compliance with ADA regulations. The initial round of surveys is being sent to the restaurants today.
Non-compliant owners and operators will initially have the option to voluntarily agree to upgrade their facilities to meet ADA requirements. However, owners and operators found to be engaging in a pattern or practice of discrimination – and those who fail to enter voluntary compliance agreements – may face a civil lawsuit and be subject to monetary penalties and civil fines.
Additional information about the ADA can be found at www.ada.gov, or by calling the toll-free information line at the Civil Rights Division of the Justice Department at (800) 514-0301 (voice) or (800) 514-0383 (TTY).
Member of Sinaloa Cartel Sentenced to 19 Years in Prison for Distributing Cocaine and Heroin Shipped to Chicago from MexicoRead the Press Release
CHICAGO — A high-ranking member of the Sinaloa Cartel in Mexico was sentenced today to 19 years in federal prison for his role in a conspiracy to transport large amounts of narcotics to the Chicago area.
TOMAS AREVALO-RENTERIA directed a portion of the cartel’s U.S.-based couriers, who distributed large quantities of cocaine and heroin in Chicago and throughout the United States. He also coordinated logistics for the cartel and served as a broker in its efforts to ship the narcotics from Mexico.
Arevalo-Renteria, 46, pleaded guilty last year to one count of conspiracy to possess with the intent to distribute cocaine and heroin. U.S. District Chief Judge Ruben Castillo imposed the 19-year sentence in federal court in Chicago.
“The defendant was a full functioning member of one of the most dangerous criminal organizations in existence,” Assistant U.S. Attorney Michael J. Ferrara argued in the government’s sentencing memorandum. “The direct and indirect damage that those drugs have caused to communities in Chicago and elsewhere is immeasurable.”
The U.S. Attorney’s Office in Chicago has worked closely with federal and local law enforcement agencies to target senior leadership of the Sinaloa Cartel. Arevalo-Renteria is one of more than 20 alleged members of the cartel to be indicted in federal court in Chicago. The indictments include charges against the cartel’s alleged leader, JOAQUIN “CHAPO” GUZMAN. The Chicago-based investigation has resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamine and 78 kilograms of heroin.
Arevalo-Renteria has been in U.S. custody since his arrest in his native Mexico in 2010. In his plea declaration, he admitted that he conspired with twin brothers from Chicago to distribute heroin and cocaine from 2005 to 2008. The twins, PEDRO FLORES and MARGARITO FLORES, operated a Chicago-based wholesale distribution network for both the Sinaloa Cartel and a rival organization.
In two separate transactions brokered by Arevalo-Renteria, the Flores brothers agreed in 2008 to purchase 27 kilograms of heroin from the Sinaloa Cartel, according to Arevalo-Renteria’s plea declaration. Unbeknownst to Arevalo-Renteria, the Flores brothers had begun cooperating with U.S. law enforcement and had provided information about the deals to investigators. The information allowed agents to seize the 27 kilograms of heroin.
The Flores brothers pleaded guilty to federal drug charges in 2012 and were each sentenced to 14 years in prison.
Arevalo-Renteria’s sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Chicago Police Superintendent Garry F. McCarthy.
The government is represented by Mr. Ferrara and Assistant U.S. Attorneys Erika Csicsila, Georgia Alexakis, Kathryn Malizia, and Sean Franzblau.
Owner of Wheaton Financial Firm Indicted on Federal Charges of Fraud and Misappropriation of FundsRead the Press Release
CHICAGO — The owner of a Wheaton financial firm misused more than $1.2 million in client money to fund his company’s payroll and business obligations, according to a ten-count indictment returned in federal court in Chicago.
ROBERT PEARSON, the owner and chief executive of Illinois Stock Transfer Co., took the money out of a client fund account the company maintained at BMO Harris Bank, the indictment alleges. Pearson allegedly used the money to meet his company’s payroll and tax commitments from February 2012 until approximately February 2014. He tried to conceal the scheme by fraudulently representing to customers, the U.S. Securities and Exchange Commission and an outside accountant that the funds were secure, the indictment states.
The indictment, which was returned Thursday, charges Pearson, 58, of Winfield, with ten counts of wire fraud. An arraignment hearing is set for Nov. 19, 2015, at 2:30 p.m. before U.S. District Judge Edmond E. Chang in Chicago.
Pearson’s Wheaton-based company, which did business under the name IST Shareholder Services, functioned as a transfer agent to repurchase shares of securities as a result of companies merging or being acquired. IST also reinvested dividends for shareholders of certain IST customers, recorded changes of ownership in securities, and maintained records of issuers.
According to the indictment, Pearson told his clients that IST complied with the rules and guidelines of the SEC, which mandated that transfer agents safeguard their customers’ funds. In reality, Pearson knew that his company did not comply with the SEC rules because he was misappropriating certain client funds, the indictment states. As a result of the scheme, Pearson misappropriated more than $1.2 million, according to the indictment.
The indictment 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 Antonio Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The SEC assisted in the investigation.
Each count of wire fraud carries a maximum penalty of 20 years in prison and restitution to be determined by the Court, plus a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater.
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 Jacqueline Stern.
Indictment
Former Director of Two North Suburban Medical Practices Sentenced to 18 Months for Defrauding the Companies out of Nearly Half a Million DollarsRead the Press Release
CHICAGO — The former executive director of two Deerfield-based physician offices was sentenced today to 18 months in federal prison for fraudulently diverting nearly $500,000 of the companies’ funds to her own use.
JAYNE KULHANEK, 57, used corporate credit cards of The Laser Network LLC and United Eye Care Providers to fund vacations in France and Spain, purchase antique furniture, and pay her own state and federal income taxes. Kulhanek concealed the six-year scheme by making false accounting entries in the companies’ ledgers.
Kulhanek, of Benton Harbor, Mich., pleaded guilty in February to one count of wire fraud. In addition to the 18-month prison term, U.S. District Judge John W. Darrah ordered Kulhanek to pay $364,598.05 in restitution.
“The crime is not one of a mistake made one time, but a six-year scheme to steal money and cover it up,” Assistant U.S. Attorney Sunil R. Harjani argued in the government’s sentencing memorandum. “Only when the defendant’s scheme was fully exposed by company management did she stop her fraudulent conduct.”
The Laser Network and United Eye Care Providers are affiliated physician offices that provide treatment for the eye. As executive director of the two companies, Kulhanek had access to the companies’ corporate credit cards and bank accounts in order to pay business expenses. She also maintained the companies’ accounting ledgers.
From January 2006 to December 2012, Kulhanek used the companies’ funds to pay balances on her personal credit cards that she had spent on her own living expenses. She attempted to conceal the scheme by fraudulently classifying the payments as having been made to a medical-equipment vendor or other supplier. The scheme netted Kulhanek $491,328.57.
When company officials initially confronted her about the antique furniture in November 2011, Kulhanek said she had used the wrong credit card to make the purchase. The scam continued for another year before it was fully exposed.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
The government is represented by Mr. Harjani.
Former Religious Services Worker at Federal Jail Pleads Guilty to Passing Unauthorized Information and Benefits to InmatesRead the Press Release
CHICAGO — A former religious services assistant at the downtown Metropolitan Correctional Center pleaded guilty today to providing sensitive information to inmates about fellow prisoners in the federal corrections system.
TOMMY HAIRE, 34, performed unauthorized searches on the MCC’s internal computer system to obtain personal information about several prisoners being housed elsewhere, and then relayed that information to inmates in the MCC, according to a plea agreement. The searches revealed various data, including the outside inmates’ psychological information, their status as sex offenders, their location within the prison system, and other personal identifying items. Haire admitted in the plea agreement that such information would be valuable to the MCC inmates as a means of extorting the other prisoners or for committing identity and tax fraud against them.
Haire, of Chicago, pleaded guilty to one misdemeanor count of conversion of government property. The charge carries a maximum sentence of one year in prison and a maximum fine of $100,000. U.S. Magistrate Judge Michael T. Mason scheduled a sentencing hearing for February 2, 2016.
In addition to obtaining the sensitive information of other prisoners, Haire also used his position to provide perks to MCC inmates. According to the plea agreement, Haire allowed the inmates to use his computer to surf the Internet, and to use his cellular phone to place calls outside of the jail. He also mailed letters on behalf of inmates, in violation of the MCC’s rules on screening prisoners’ correspondence.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and John F. Oleskowicz, Special Agent-in-Charge of the U.S. Department of Justice, Office of the Inspector General, Chicago Field Office.
The government is represented by Assistant United States Attorneys Lindsay Jenkins and Maureen Merin.
Plea Agreement
Federal Jury Convicts Ohio Man in Sex Trafficking Ring Involving Minors Brought to Chicago from IowaRead the Press Release
CHICAGO — An Ohio man was convicted yesterday for his role in a sex trafficking conspiracy involving minor girls who were transported to Chicago from Iowa to engage in prostitution.
WILLIE WOODS, 44, of Toledo, Ohio, helped transport the minor girls from Iowa City in 2012. Once in Chicago, Woods and his co-conspirators forced the girls to engage in prostitution. At the time, one victim was 14 years old and the two other victims were each 16 years old.
After a seven-day trial in federal court in Chicago, the jury convicted Woods on one count of sex trafficking conspiracy; three counts of sex trafficking of minors by force, fraud or coercion; one count of transporting minors to engage in prostitution; and one count of obstruction of justice.
The counts for sex trafficking of minors by force, fraud, or coercion are punishable by a mandatory minimum of fifteen years in prison to life and the transportation count is punishable by a mandatory minimum of ten years in prison to life. U.S. District Judge Sharon Johnson Coleman will schedule a sentencing hearing at a later date.
Woods is among three defendants charged in the case. MALIK McKEE and his sister, SHUNTINA McKEE, both of Iowa City, previously pleaded guilty to one count of sex trafficking conspiracy. Judge Coleman sentenced Malik McKee to 102 months in prison, plus restitution of $6,000. Shuntina McKee is awaiting sentencing.
Evidence at Woods’ trial revealed that the defendants forced the minor girls to engage in prostitution in Iowa and Chicago. The defendants took photographs of the minors and used them in advertisements on websites, including Backpage.com. When a prospective “date” responded to the advertisement, the defendants arranged the meeting and then pocketed the proceeds.
The three minor girls testified at trial about their ordeals. The girls described the defendants’ violent and abusive acts, which included using power and coercion to force the girls to perform sex acts for money. One of the girls testified that Woods starved her by withholding food until she would submit to his demands to engage in prostitution.
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 Garry F. McCarthy, Superintendent of the Chicago Police Department. The FBI and Chicago Police conducted the investigation, in coordination with the Cook County Human Trafficking Task Force. Federal prosecutors and law enforcement authorities in the Southern District of Iowa and the Northern District of Ohio also provided assistance.
The government is represented by Assistant United States Attorneys Megan Cunniff Church and Bethany Biesenthal.
Rockford Woman Arrested on Federal Tax Fraud ChargesRead the Press Release
ROCKFORD — A Rockford, Ill. woman was arrested today on federal charges of making false claims for federal tax refunds and using other persons’ identification in connection with the fraudulent claims for tax refunds. CRYSTAL S. JACKSON, 27, of Rockford, was charged by a federal indictment on Oct. 20, 2015. The indictment charged her with 45 counts of filing fraudulent claims for federal tax refunds, and three counts of illegally possessing and using other persons’ identification in connection with making fraudulent claims for federal tax refunds.
The indictment alleges that between Aug. 1, 2011 and Feb. 5, 2013, Jackson prepared and filed, both electronically and by mail, 45 federal individual income tax returns in the names of other individuals without their permission, causing fraudulent claims for refunds to be made against the United States Treasury. The 45 false returns were filed with the IRS for tax years 2010, 2011, and 2012, and requested refunds totaling $189,237. Some of the 2010 and 2011 fraudulent tax returns listed the address of a relative of Jackson as the taxpayers’ address, and requested debit cards containing the tax refunds be mailed to that address.
Each count of filing a fraudulent claim for a federal income tax refund carries a maximum potential penalty of up to 5 years in prison. Each count of possessing another person’s identification in connection with making a fraudulent claim for a federal income tax refund carries a potential penalty of up to 5 years in prison, or up to 15 years in prison if the charge involves obtaining anything of value totaling $1,000 or more during any one year period. In addition each count charged carries a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater, and full restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. Jackson will appear for a detention hearing at 3:00 p.m. today 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 arrest was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Stephen Boyd, Special Agent-In-Charge of the Chicago Field Office of Internal Revenue Service - Criminal Investigation Division
The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.
Indictment
High-Frequency Trader Convicted of Disrupting Commodity Futures Market in First Federal Prosecution of "Spoofing"Read the Press Release
CHICAGO — In the first federal prosecution of its kind, a high-frequency trader was convicted today of disrupting commodity futures prices in a $1.4 million fraud scheme.
MICHAEL COSCIA, 53, used an automated trading technique to commit a crime known as “spoofing” to earn illegal profits from orders he placed through Chicago-based CME Group and London-based ICE Futures Europe. Coscia commissioned the design of two computer programs, known as algorithms, to implement his fraudulent strategy at his New Jersey trading firm.
The jury in federal court in Chicago deliberated for approximately one hour before convicting Coscia on all 12 counts, including 6 counts of commodities fraud and 6 counts of spoofing. Each count of commodities fraud carries a maximum sentence of 25 years in prison and a $250,000 fine, while each count of spoofing carries a maximum sentence of ten years in prison and a $1 million fine. U.S. District Judge Harry D. Leinenweber scheduled a sentencing hearing for March 17, 2016, at 9:45 a.m.
The indictment against Coscia, of Rumson, N.J., marked the first federal prosecution nationwide under the anti-spoofing provision that was added to the Commodity Exchange Act by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The case was prosecuted by Assistant United States Attorneys Renato Mariotti and Sunil Harjani of the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago. The section, which was created in 2014, is dedicated to protecting markets and preserving investors’ confidence.
“The defendant’s trading activities disrupted the markets in his favor and against legitimate traders and investors,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “We have to have fairness and integrity in our markets. And enforcement, including federal criminal prosecutions, is an important tool to protecting those values. The jury’s verdict exemplifies the reason we created the Securities and Commodities Fraud Section in Chicago, which will continue to criminally prosecute these types of violations.”
Mr. Fardon announced the conviction along with Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
High-frequency trading is a form of automated trading that uses computer algorithms for placing a high volume of trading orders in milliseconds. It is illegal for traders to engage in spoofing, which involves placing “bids” to buy or “offers” to sell a futures contract with the intent to cancel the bid or the offer before execution.
Evidence at the seven-day trial showed that Coscia engaged in spoofing in the markets of various commodities, including gold, soybean meal, soybean oil, high-grade copper, Euro FX and Pounds FX currency futures. In less than three months in 2011, Coscia illegally profited nearly $1.4 million.
Coscia has been a registered commodities trader since 1988. In 2007, he formed Panther Energy Trading LLC in Red Bank, N.J.
Illinois Man Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
A Bolingbrook, Illinois, man pleaded guilty today to a federal charge that he attempted to travel overseas to join a designated foreign terrorist organization in Syria.
The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division.
Mohammed Hamzah Khan, 20, pleaded guilty to one count of attempting to provide material support to a foreign terrorist organization, identified in a written plea agreement as the Islamic State of Iraq and the Levant (ISIL).
Khan, a U.S. citizen from southwest suburban Bolingbrook, faces a maximum sentence of 15 years in prison. U.S. District Judge John J. Tharp Jr. of the Northern District of Illinois did not immediately schedule a sentencing hearing. A status hearing was set for Dec. 3, 2015, at 12:30 p.m. EST.
Khan has been detained in federal custody since he was arrested on Oct. 4, 2014, at O’Hare International Airport by members of the Chicago Joint Terrorism Task Force.
According to his plea agreement, beginning no later than approximately February 2014, Khan used the Internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group. Khan spoke with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory, the plea agreement states.
Khan also admitted in the plea agreement that he knew ISIL had been designated by the United States as a foreign terrorist organization. Upon arriving in Syria, according to the plea agreement, Khan intended to work under the direction and control of ISIL, and be required to take any assignment ISIL gave him.
The case was investigated the FBI and the Chicago Joint Terrorism Task Force. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) and the Illinois State Police also provided significant assistance in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Matt Hiller, Angel Krull and Sean Driscoll of the Northern District of Illinois, and Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.
Mohammed Hamzah Khan Plea Agreement
Bolingbrook Man Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
CHICAGO — A Bolingbrook man pleaded guilty today to a federal charge that he attempted to travel overseas to join a foreign terrorist organization in Syria.
MOHAMMED HAMZAH KHAN, 20, pleaded guilty to one count of attempting to provide material support to a foreign terrorist organization. The organization is identified in a written plea agreement as the Islamic State of Iraq and the Levant (“ISIL”).
Khan, a U.S. citizen from southwest suburban Bolingbrook, faces a maximum sentence of 15 years in prison. U.S. District Judge John J. Tharp Jr. did not immediately schedule a sentencing hearing. A status hearing was set for Dec. 3, 2015, at 11:30 a.m.
Khan has been detained in federal custody since he was arrested on Oct. 4, 2014, at O’Hare International Airport by members of the Chicago Joint Terrorism Task Force.
Beginning no later than approximately February 2014, Khan used the Internet to obtain introductions to ISIL members in Syria and to assist him with traveling there to join the terrorist group, according to the plea agreement. Khan spoke with ISIL members to coordinate the logistics of his admission into ISIL-controlled territory, the plea agreement states.
Khan admitted in the plea agreement that he knew ISIL had been designated by the United States as a foreign terrorist organization. Upon arriving in Syria, according to the plea agreement, Khan intended to work under the direction and control of ISIL, and be required to take any assignment ISIL gave him.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John P. Carlin, Assistant Attorney General for National Security; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The Joint Terrorism Task Force is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), and the Illinois State Police also provided significant assistance in the investigation.
The government is represented by Assistant United States Attorneys Matt Hiller, Angel Krull and Sean Driscoll; and U.S. Department of Justice Trial Attorney Michael Dittoe of the National Security Division.
Plea Agreement
Volo, Illinois Woman Pleads Guilty to Robbing Two Chase Bank Branches and Attempting to Rob A ThirdRead the Press Release
ROCKFORD — A Lake County woman pleaded guilty today in federal court to two counts of bank robbery and one count of attempted bank robbery. TERESA M. KNOWLES, 39, of Volo, Ill., pleaded guilty before U.S. District Judge Frederick J. Kapala to robbing the Chase Bank, in Crystal Lake, Ill. on March 21, 2015, and the Chase Bank, in Grayslake, Ill. on March 24, 2015, as well as attempting to rob the Chase Bank in Johnsburg, Ill., on March 24, 2015.
According to the written plea agreement, on March 21, 2015, Knowles drove a Nissan SUV to a branch of Chase Bank located in Crystal Lake, Ill. She entered the bank, approached a teller window and passed the teller a note that demanded $10,000. The teller first handed Knowles $400. When Knowles said that was not enough money, the teller then handed Knowles another $2450. Knowles then left the bank and drove away.
Knowles also admitted in the plea agreement that on March 24, 2015, she drove to a branch of Chase Bank located in Grayslake, Ill. She entered the bank and handed a teller a note similar to the note Knowles used in robbing the Chase Bank branch in Crystal Lake. The teller handed Knowles $1,000. Knowles walked out of the Chase Bank with the note and drove away.
In addition, Knowles admitted that on March 24, 2015, she drove to a branch of Chase Bank located in Johnsburg, Ill. There, she entered the bank and handed a teller a note demanding money. When the teller refused to hand over any money, Knowles walked out of the Chase Bank and drove away.
Each count of bank robbery and attempted bank robbery carries a maximum potential penalty of up to 20 years in prison, up to 3 years of supervised release following imprisonment, a fine of up to $250,000, and full restitution. The court must impose a reasonable sentence guided by the advisory United States Sentencing Guidelines. Sentencing for Knowles is set for February 4, 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 J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The Johnsburg Police Department, McHenry Police Department, Grayslake Police Department, and Crystal Lake Police Department assisted in the investigation.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Plea Agreement
Statement by the U.S. Attorney's Office Following the Guilty Plea of Former U.S. House Speaker John Dennis HastertRead the Press Release
CHICAGO — This morning, JOHN DENNIS HASTERT, 73, of Plano, pleaded guilty in federal court to one count of illegally structuring cash withdrawals in order to evade financial reporting requirements. The Honorable U.S. District Judge Thomas M. Durkin scheduled a sentencing hearing for February 29, 2016, at 10:00 a.m.
The United States Attorney’s Office for the Northern District of Illinois issued this statement following the guilty plea:
“Now that Mr. Hastert has pled guilty, and the Court has accepted his guilty plea, the case will proceed to sentencing. As part of the sentencing process in this case, as in all cases, we will provide the Court with relevant information about the defendant’s background and the charged offenses, and the defendant will have an opportunity to do the same, so that the Court can impose an appropriate sentence taking into account all relevant factors in the case. We have no further comment about the matter at this time.”
Plea Agreement
Former Davis, Ill. Resident Pleads Guilty to Failure to Register as A Convicted Sex OffenderRead the Press Release
ROCKFORD — A former Davis, Ill. resident pleaded guilty today before U.S. District Judge Frederick J. Kapala to a charge of failure to register under the federal Sex Offender Registration and Notification Act (“SORNA”). MARK STEPHEN CURTIS, 29, who moved from North Carolina to Davis, Ill. during September 2014, admitted in a written plea agreement that he was a sex offender required to register in Illinois under SORNA. According to the plea agreement, Curtis remained a resident in Davis, Ill. until at least Oct. 19, 2014, but 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.
Curtis faces a maximum sentence of 10 years’ imprisonment, a term of supervised release following imprisonment of at least 5 years and up to life, and a fine of up to $250,000. Sentencing for Curtis is set for Feb. 2, 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 Roberto Robinson, Acting United States Marshal for the Northern District of Illinois.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Plea Agreement