Northern District of Illinois
Press releases recorded for this federal judicial district.
Former U.S. Marine Charged with Stealing Identities of Fellow Service Personnel in Scheme to Defraud Navy Federal Credit Union of More Than $138,000Read the Press Release
CHICAGO — A former United States Marine from Calumet City stole the identities of several fellow Marines and used their information to illegally procure more than $138,000 from Navy Federal Credit Union, according to an indictment returned this week in federal court in Chicago.
While serving in Combat Logistics Regiment 3 at Camp Foster in Okinawa, Japan, LEONARD E. PARKER JR. obtained a Marine roster containing the personal information of several fellow Marines stationed at the camp, according to the indictment. After returning to the United States, Parker and a co-defendant, DONTREAL S. EVANS, allegedly used the Marines’ information to transfer approximately $138,798 from the Marines’ accounts into bank accounts belonging to individuals Parker and Evans had recruited into the scheme.
Parker and Evans offered to pay those individuals to allow Parker and Evans to control and access the accounts, the indictment states. The pair later withdrew funds and made purchases from the accounts they controlled, and kept the proceeds from the scheme, according to the indictment. Parker also allegedly filed false tax returns in the names of Marines whose personal information was on the roster.
The indictment, which was returned Thursday, charged Parker, 24, of Calumet City, with five counts of financial institution fraud; one count of aggravated identity theft; and four counts of filing false claims against the United States. Evans, 21, of Lansing, was charged in the indictment with three counts of financial institution fraud. The defendants’ arraignment in U.S. District Court in Chicago has not yet been scheduled.
Each count of financial institution fraud carries a maximum sentence of 30 years in prison, a $1 million fine and mandatory restitution. If convicted of aggravated identity theft, Parker also would face a mandatory, consecutive term of two years in prison. Each count of filing false claims carries a maximum sentence of five years in prison, a $250,000 fine, and mandatory restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigation in Chicago.
The investigation is ongoing.
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 being represented by Special Assistant U.S. Attorney Heidi Manschreck.
Indictment
Fifteen Defendants Facing Federal or State Charges for Selling Heroin, Cocaine and Crack Cocaine on Chicago’s South and West SidesRead the Press Release
CHICAGO — Fifteen defendants are facing federal or state narcotics charges for their alleged roles in supplying and distributing heroin and cocaine on Chicago’s South and West Sides. A lengthy investigation led by agents of the Drug Enforcement Administration and officers of the Chicago Police Department assigned to the Chicago Strike Force, resulted in federal charges against twelve defendants and state charges against three others.
Police and federal agents from the Chicago Strike Force began arresting the defendants this morning. All twelve federal defendants are in custody.
The federal defendants were charged in seven separate criminal complaints filed yesterday in U.S. District Court and unsealed following the arrests. The federal defendants began making initial court appearances this afternoon before U.S. Magistrate Judge Michael T. Mason in Chicago. The state defendants were charged in separate complaints and will appear at a later time in state court.
According to affidavits filed in support of the federal arrests, the investigation revealed that ANTHONY MURRAY, a member of the Black P-Stone Nation street gang (the “P-Stones”), distributed narcotics in an area the P-Stones refer to as the “Hundreds,” which is near 112th Street and Princeton Avenue in Chicago’s Roseland neighborhood. Murray, 43, of Chicago, also known as “Ant” or “Big Ant,” allegedly arranged narcotic transactions with a confidential source working with agents from the Chicago Strike Force in 2013 and 2014. The deals were surreptitiously recorded by officers who used wiretapped cellular phones and extensive surveillance as part of the investigation.
According to the federal affidavits, Murray was supplied with narcotics by three co-defendants: BRIAN GORDON, 42, of Chicago, also known as “G”; LAMONT TURNER, 41, of Chicago, also known as “Pookie”; and RUDOLPH CALLASO, 35, of Chicago. The affidavit alleges that FLOMONT JOHNSON, 40, of Hammond, Ind., contributed to the operation by converting powder cocaine into crack cocaine.
The federal affidavits allege that Murray and Gordon sold narcotics to a high-ranking member of the P-Stones, who, unbeknownst to Murray and Gordon, was assisting the government as a confidential source.
Murray, Gordon, Turner, Callaso and Johnson were charged with conspiring with each other to knowingly and intentionally possess with intent to distribute cocaine and heroin. If convicted, Murray, Gordon, and Johnson each face a mandatory minimum sentence of 5 years in prison and a maximum of 40 years in prison and a $5 million fine. If convicted, Turner and Callaso each face a maximum of 20 years in prison and a $1 million fine.
The affidavits allege that Murray also sold narcotics to another co-defendant, GERLAND ORR, 45, of Chicago. Orr was charged with knowingly and intentionally possessing cocaine with the intent to distribute. If convicted, Orr faces a maximum of 20 years in prison and a $1 million fine.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Anita Alvarez, Cook County State’s Attorney; Dennis A. Wichern, Special Agent in Charge of the Chicago Field Division of the Drug Enforcement Administration; Garry F. McCarthy, Superintendent of the Chicago Police Department; and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division.
“The Chicago Strike Force is a potent alliance of federal, state and local law enforcement that is committed to halting the stream of narcotics into our communities,” Mr. Fardon said. “The charges announced today are the result of the hard work and determination of our investigative partners,” Mr. Fardon said.
“As prosecutors, we recognize the efforts of specialized law enforcement partners like the Chicago Strike Force and we work hand in hand to eradicate the flow of dangerous drugs in our communities,” Ms. Alvarez said. “We applaud the work of the Strike Force and look forward to continued collaboration,” Ms. Alvarez said.
"The Chicago Police Department remains manically focused on reducing violence in our city,” said Superintendent McCarthy. "With the engine of violence in Chicago primarily fueled by the drug trade, the Chicago Strike Force represents the culmination of local, state and federal resources targeting those who torment our neighborhoods with violence and sending a clear message that violence, drug dealing and gang activity will simply not be tolerated."
“DEA, along with its outstanding Strike Force partners, will continue to focus our efforts against heroin traffickers and gang members that plague our communities with violence, the concern of everyday Chicagoans,” said Special Agent Wichern. “This investigation exemplifies the created synergy of the Chicago Strike Force.”
The investigation was conducted through the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) Chicago Strike Force, which ― in addition to the DEA, IRS-CID and CPD ― consists of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service, and task force officers from various state and local law enforcement agencies, including the Cook County Sheriff’s Police Department and the Illinois State Police.
The federal complaints charge several other defendants with various narcotics-related violations on the South and West Sides of the city. MELVIN SYKES, 34, of Chicago, also known as “Cooch,” and ANDRE GLADNEY, 48, of Chicago, also known as “Red,” were charged with knowingly and intentionally distributing heroin. If convicted, Sykes and Gladney each face a maximum of 20 years in prison and a $1 million fine. LEON LONDON, 32, of Bellwood, Ill., also known as “Bookie,” and JAMES WILSON, 36, of Cicero, were charged with knowingly and intentionally distributing crack cocaine. If convicted, London and Wilson each face a mandatory minimum of 5 years in prison and a maximum of 40 years and a $5 million fine.
A federal complaint also charges VINCENT YOAKUM, 55, of Chicago, also known as “Vinny Blue,” and RANDY GRIFFIN, 44, of Chicago, with conspiring with each other to knowingly and intentionally possess with intent to distribute cocaine. A federal affidavit filed in support of the complaint alleges that a high-ranking member of the P-Stones assisted the government as a confidential source and purchased cocaine from Yoakum and Griffin for $10,000 in cash. The transaction was observed and recorded by federal agents, according to the affidavit. If convicted, Yoakum and Griffin each face a maximum of 20 years in prison and a $1 million fine.
Assistant United States Attorneys Shoba Pillay and Jeremy Daniel are representing the government in the federal cases. Assistant State’s Attorney Daniel Maloney is handling the state cases.
The public is reminded that complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Yoakum Complaint
Wilson Complaint
Sykes Complaint
Orr Complaint
Murray et al Complaint
London Complaint
Gladney ComplaintWest Suburban Real Estate Broker Sentenced to 16 Months in Federal Prison for Mortgage Fraud ScamRead the Press Release
CHICAGO — A west suburban real estate broker was sentenced today to 16 months in federal prison for his role in a mortgage fraud scheme involving a pair of Chicago apartment buildings.
GEORGE DRAVILAS, 37, of Medinah, pleaded guilty in February to one count of bank fraud. In addition to the prison term, U.S. District Judge Gary Feinerman ordered Dravilas to pay $463,110 in restitution. Judge Feinerman ordered Dravilas to begin serving his sentence no later than Sept. 21, 2015.
Dravilas was arrested in May 2014 after a long-term federal undercover investigation exposed a scheme to defraud Standard Bank through fraudulent mortgage loan transactions. Dravilas admitted in his plea agreement that he knowingly provided false documents as part of mortgage loan applications to finance two residential properties in the name of straw buyers who Dravilas had arranged would receive a share of the seller’s loan proceeds. After fraudulently helping to secure the financing, Dravilas schemed to sell both apartment buildings for the inflated sale price of $275,000 each, while agreeing to kick back $100,000 on each transaction to the undercover straw buyers, keeping a fee for himself in the process.
The properties were two-flat apartment buildings located in the 6300 block of South Parnell Avenue and the 6600 block of South Sangamon Street in Chicago. Dravilas acknowledged in his plea agreement that the fair market value of the buildings was $45,000 and $47,000, respectively, and that Standard Bank stood to lose a combined $458,000 from the scam. In addition, as part of his plea agreement, Dravilas acknowledged that he engaged in additional mortgage fraud schemes involving two additional real estate properties in Chicago.
“Mortgage fraud is a crime that affects more than the lenders that funded the loans,” said Assistant U.S. Attorney Andrew S. Boutros. “It has a cascading, domino effect on a variety of property owners, neighborhoods, communities and other constituents.”
A co-defendant, BRIDGET HUTCHERSON, 40, of Chicago, pleaded guilty in April to one count of bank fraud. Hutcherson admitted in a plea declaration that she accepted $600 in December 2013 to supply a confidential informant with fraudulent W-2s, check stubs, and earnings statements in the names of the straw buyers. Hutcherson is scheduled to be sentenced by Judge Feinerman on Aug. 10, 2015, at 10:30 a.m.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Brad Geary, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development Office of Inspector General in Chicago. HUD-OIG and FBI agents conducted the investigation through the South Suburban Financial Crimes Task Force, which includes the Cook County Sheriff’s Police Department, the Internal Revenue Service Criminal Investigation Division, the U.S. Postal Inspection Service, and the U.S. Postal Service Office of Inspector General.
The government is being represented by Assistant U.S. Attorney Andrew S. Boutros.
Rockford Man Sentenced to 12 Years in Federal Prison for Drug-Trafficking and Firearm OffensesRead the Press Release
ROCKFORD — A Rockford man was sentenced yesterday in federal court on drug-trafficking and firearm charges. JARVIS WASHINGTON, 28, of Rockford, Ill., was sentenced by U.S. District Judge Frederick J. Kapala to a total of 12 years in federal prison, and ordered to serve 4 years of supervised release following his term of imprisonment. After a 3-day jury trial in U.S. District Court, Washington was convicted on April 1, 2015, of possession of heroin and cocaine base (“crack cocaine”) with intent to distribute, possession of marijuana with intent to distribute, and possession of a firearm and ammunition as a felon.
According to the indictment and evidence at trial, on Sept. 24, 2013, Washington possessed with intent to distribute at least 94.6 grams of heroin, 227.1 grams of crack cocaine, and 376.7 grams of marijuana. Many of the drugs were already individually packaged for sale, and Washington possessed the tools to package the remaining drugs for sale. In addition, Washington possessed a loaded .45 caliber handgun and both .45 caliber and .40 caliber ammunition. Washington previously had been convicted of a felony punishable by a term of imprisonment exceeding one year and, therefore, was prohibited by law from possessing a firearm and ammunition.
The defendant 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; Jeffrey A. Magee, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and Gary Caruana, Winnebago County Sheriff. The Rockford Police Department and Loves Park Police Department assisted in the investigation.
The government was represented by Assistant U.S. Attorneys John G. McKenzie and Talia Bucci.
Social Security Administration Benefits Authorizer and Four Others Charged in $1.9 Million Kickback SchemeRead the Press Release
CHICAGO — A benefits authorizer at the Social Security Administration in Chicago authorized over $1.9 million in fraudulent benefits to more than 150 recipients who kicked backed cash to him and several others, according to a federal indictment unsealed today.
The benefits authorizer, JAYSON CRUZ, 39, of Chicago, worked at the Social Security Administration’s Great Lakes Program Service Center in Chicago. Cruz and four others were arrested this morning by federal authorities.
The ten-count indictment, which was filed on June 30, 2015, and unsealed today following the arrests, alleges that the defendants fraudulently caused the Social Security Administration to issue more than $1.9 million in payments to approximately 154 recipients between approximately September 2009 and December 2013.
Cruz was charged with ten counts of wire fraud. MONICA KNOX-SUMRELL, 41; VONZELL WHITE, 33; MICHAEL ELARDE, 37; and JERRY BROWN JR., 36, all of Chicago, were each charged with two counts of wire fraud. All five defendants pleaded not guilty during their arraignments this afternoon before U.S. District Judge Virginia M. Kendall in Chicago. All five defendants were released on their own recognizance. Judge Kendall scheduled a status hearing for 9/16/15 for all defendants.
According to the indictment, Cruz was one of the Social Security Administration employees responsible for authorizing monthly Old-Age, Survivors, and Disability Insurance Benefits to beneficiaries, representative payees, qualifying family members and representatives of deceased beneficiaries. The indictment alleges that Cruz, Knox-Sumrell, White, Elarde, and Brown recruited recipients of these benefits to receive additional payments on top of what they were legitimately owed. After Cruz fraudulently authorized the excess payments, Cruz, Knox-Sumrell, White, Elarde and Brown collected the majority of the money back from the recruited individuals, according to the indictment. Cruz also fraudulently authorized “underpayments” to White, Elarde, Brown and others, by falsely representing that they were relatives or representatives of deceased beneficiaries who were owed money from the Social Security Administration, according to the indictment.
Cruz authorized the fraudulent payments by entering false codes into the Social Security Administration’s electronic system, the indictment alleges. According to the indictment, Social Security Administration procedures allowed Cruz to authorize a payment of less than $6,000.00 to a recipient without supervisor approval. Cruz authorized the fraudulent payments in amounts slightly less than $6,000 in order to avoid detection of the fraud, the indictment alleges.
The indictment also alleges that Knox-Sumrell falsely represented to recipients that she worked for the Social Security Administration in order to further the scheme
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tracey Thanos, Special Agent in Charge of the Chicago Field Division of the Social Security Administration’s Office of the Inspector General. “Employee fraud is something we take very seriously,” Thanos said. “We have no higher priority than investigating and pursuing justice whenever these instances occur, and we will continue to do so.”
The investigation is ongoing, the officials said.
The indictment seeks forfeiture from all five defendants of approximately $1,981,290, as well as a residence in Chicago. Each count of wire fraud carries a maximum sentence of 20 years in prison; a $250,000 fine, which may be increased to the greater of twice the gain or twice the loss3
from the crime; and mandatory restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. The public is reminded that an indictment 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 being represented by Special Assistant U.S. Attorney Heidi Manschreck.
Indictment
Marina Developer Sentenced to 60 Months in Federal Prison for Defrauding the Village of Riverdale of over $370,000Read the Press Release
CHICAGO – A real estate developer who defrauded the Village of Riverdale of over $370,000 in public funds was sentenced today to 60 months in federal prison.
JOHN THOMAS, 52, of Chicago, owned and controlled Nosmo Kings LLC, which entered into an agreement with Riverdale to develop property along a marina in 2012. Only a portion of the funds were actually used for legitimate construction work. Thomas misappropriated $372,182 for his own personal use after creating and submitting fraudulent invoices for construction work that was never performed.
Thomas pleaded guilty to one count of wire fraud in May 2014. In addition to the five-year sentence, U.S. District Judge James B. Zagel ordered restitution of $372,182.
“John Thomas is a serial con man,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “Within months after release from probation from another federal conviction, the defendant set out to defraud the Village of Riverdale through the use of the village’s Tax Increment Financing program,” Harjani said.
Nosmo Kings entered into a TIF agreement with Riverdale in February 2012. Per the agreement, Thomas was required to submit documentation identifying completed construction expenses, including invoices and checks paid to vendors. Thomas created and submitted false invoices for non-existent companies and for companies that never performed work at the marina. For instance, one of the invoices requested reimbursement of $25,750 for construction supplies from a company that was actually a currency exchange to which Thomas owed money. Thomas used other TIF funds to pay personal expenses and the rent on his apartment.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The government is being represented by Assistant United States Attorney Sunil Harjani.
Former Chicago Man Sentenced to 18 Months in Federal Prison for Accepting Cash to Help 80 People Avoid City Impound FeesRead the Press Release
CHICAGO — A former Chicago resident who accepted cash payments to help 80 people file false bankruptcy petitions as a way of avoiding City of Chicago impound fees was sentenced today to 18 months in federal prison.
Daniel Rankins, 32, of Storm Lake, Iowa, and formerly of Chicago, pleaded guilty in December to one count of bankruptcy fraud. He was ordered to pay $142,737.00 in restitution by U.S. District Judge Robert M. Dow Jr. Rankins must surrender to begin serving his sentence on Sept. 29, 2015.
“What he came up with was a pretty sophisticated system,” Judge Dow said in imposing the sentence. “He could have found a better way to apply himself.”
Rankins assisted 80 people with filing false Chapter 7 bankruptcy cases in order to get their vehicles released from the City of Chicago impound lot without paying fines or fees. Rankins had approached these individuals outside a City office or was referred to them by acquaintances. He personally accompanied them to the U.S. Bankruptcy Court in downtown Chicago, and furnished them with partially completed bankruptcy applications which named the City and its impound lot as the only creditors. In exchange, Rankins accepted cash payments from the false debtors which equaled approximately half of what was owed to the City.
“This was a sophisticated hustle,” said Assistant U.S. Attorney Megan Church, who represented the government. “It was a street scam, and he was ripping off the taxpayers.”
The scheme was uncovered in May 2012 when the City of Chicago’s Department of Revenue (now Finance Department) alerted the U.S. Trustee for the Northern District of Illinois to a significant increase in the number of individuals who were using bankruptcy as a means of obtaining their impounded vehicles without paying fines or fees. The U.S. Trustee’s Office reviewed the applications and learned that the false debtors had claimed an inability to pay the $306 Bankruptcy Court filing fee and hadn’t appeared for court hearings. All of the cases were eventually dismissed, and the court fees were never collected.
In January 2013 Rankins arranged for an undercover officer to file a false bankruptcy petition under the guise of obtaining a release of the officer’s vehicle from the impound lot, in exchange for a cash payment to Rankins of $600.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Joseph M. Ferguson, City of Chicago Inspector General. The U.S. Bankruptcy Court and the U.S. Trustee’s Office for the Northern District of Illinois cooperated and assisted with the investigation.
West Suburban Nurse Sentenced to 60 Months in Federal Prison for Shipping Firearms to the PhilippinesRead the Press Release
CHICAGO — A registered nurse from Lombard who admitted purchasing and shipping more than 30 weapons to the Philippines has been sentenced to 60 months in federal prison.
Makasiar also admitted in his plea agreement that he filed a false report on Aug. 17, 2012, with the Lombard Police Department after learning that two of the weapons would be inspected by U.S. Customs and Border Protection. In the report, Makasiar falsely stated that the 2 weapons had been stolen from him prior to their being shipped.
“Defendant’s conduct implicates the foreign policy and national security interests of the United States and threatens the safety of the Philippines by contributing to the proliferation of the small arms trade,” Assistant U.S. Attorney Ryan Fayhee argued in a government sentencing memorandum. “The illegal trafficking of firearms from the United States to the Philippines is a significant law enforcement problem.”
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and 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).
"The illegal exportation of firearms is tantamount to breaching the border," Gibbons said. "The prosecution of weapons smugglers is an HSI priority as we work to interdict illegally trafficked guns and secure our nation’s borders in both directions."
Two Suburban Developers and an Attorney Among Six Defendants Charged with Mortgage FraudRead the Press Release
CHICAGO— A federal grand jury returned a 25-count indictment yesterday charging six defendants with devising and participating in a mortgage fraud scheme which caused more than $16 million in losses to banks, mortgage lenders, Fannie Mae, and Freddie Mac. Among those named as defendants are two real estate developers—VINCE MANGLARDI, 59, of Long Grove, and THEODORE “TJ” WOJTAS, JR., 43, of Glenview—who are accused of committing fraud in connection with the marketing and sale of condominiums at a 50-acre development in Palatine known as “The Woods at Countryside.”
The indictment accuses Manglardi and Wojtas of, among other things, using an assortment of advertising methods and sales pitches—on air, online, in writing, and at live presentations—to falsely promote the purchase of condos at the Woods as a means to financial independence and wealth, enticing prospective condo buyers with substantial, unsustainable financial incentives, including down payment refunds and up to three years’ worth of mortgage payments, maintenance costs, and property tax payments.
The indictment alleges that Manglardi, Wojtas, and their co-schemers colluded with each other to induce people to purchase condos at the Woods based on false promises and assurances. The indictment further alleges that the defendants colluded with one another and with others to misrepresent and conceal material facts from banks and mortgage lenders in order to fraudulently induce such banks and mortgage lenders to approve non-conforming loans to condo buyers, thereby exposing numerous lenders and Fannie Mae and Freddie Mac to millions of dollars in losses.
Four alleged co-schemers are named as defendants, specifically: attorney DAVID W. BELCONIS, 56, of Long Grove; NUNZIO L. GRIECO, 63, of Palatine, formerly an employee of the developers; WALTER VALI, 62, of Mundelein, formerly a mortgage loan originator; and KARIN L. GANSER, 62, of Palatine, formerly a licensed real estate salesperson. All six defendants will be arraigned on the criminal charges on a date to be determined by the U.S. District Court.
The indictment also seeks the forfeiture of $16 million. It charges various acts of wire fraud, mail fraud, and false statements to financial institutions. Each count of the indictment carries a maximum term of imprisonment of 30 years and a maximum fine of $1,000,000. If a defendant is convicted, the court must impose a reasonable sentence pursuant to the federal criminal code and the advisory sentencing guidelines.
The criminal charges were announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Barry McLaughlin, Special Agent-in-Charge of the Midwest Regional Office of the Federal Housing Finance Agency’s Office of Inspector General; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant United States Attorney Brian Havey.
The public is reminded that an indictment contains only allegations; it is not evidence of guilt. The defendants are presumed innocent of the charges and they are entitled to a fair trial at which the government has the burden of proving their guilt beyond a reasonable doubt.
Indictment
Chicago Investment Fund Manager Sentenced to 72 Months in Federal Prison for Defrauding Investors of over $9 MillionRead the Press Release
CHICAGO — A Chicago investment manager who fraudulently obtained millions of dollars from investors in a sophisticated Ponzi scheme to fund his extravagant lifestyle was sentenced today to 72 months in federal prison.
The defendant, NEAL GOYAL, 34, of Chicago, who was the sole managing member and founder of Blue Horizon Asset Management, LLC, and Caldera Advisors, LLC, was also ordered to pay more than $9.2 million in restitution by U.S. District Judge Matthew F. Kennelly. Goyal, who pleaded guilty in February to one count of wire fraud, was ordered to surrender to begin serving his sentence on September 17, 2015.
“Goyal was running a Ponzi scheme and he stole much of his investors’ money to prop up his extravagant lifestyle,” Assistant U.S. Attorney Kenneth Yeadon argued in a government sentencing memorandum. “There is no justification for the crimes that Goyal committed other than his own desire to place his own self-interests in front of the interests of his investors.”
From 2006 to 2014, Goyal perpetrated the scheme by setting up a fake trading shop on Michigan Avenue in Chicago in order to fool his investors into believing that his trading strategy generated market-beating returns. Goyal concealed his scheme by using existing investor money to repay investors, and by creating and distributing false account statements. Many of the duped investors were Goyal’s friends and family members.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. They commended the assistance of the U.S. Securities and Exchange Commission.
Volo, Illinois Woman Indicted for the Robbery and Attempted Robbery of Three Chase Bank BranchesRead the Press Release
ROCKFORD — A Lake County woman was indicted today in federal court and charged with two counts of bank robbery and one count of attempted bank robbery. TERESA M. KNOWLES, 39, of Volo, Ill., was charged with the robbery of Chase Bank, in Crystal Lake, Ill. on March 21, 2015, and Chase Bank, in Grayslake, Ill. on March 24, 2015, as well as the attempted robbery of Chase Bank in Johnsburg, Illinois, on March 24, 2015.
Knowles is scheduled to appear before U. S. Magistrate Judge Iain D. Johnson for an initial appearance on Thursday, July 2, 2015, at 11:00 a.m. in federal court in Rockford. 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. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, 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.
Indictment
Two Area Men Charged in Separate Federal Child Pornography IndictmentsRead the Press Release
ROCKFORD — Two area men were charged by a federal grand jury in separate cases on child pornography charges. ZACHARY RODRIGUEZ, 24, of Loves Park, Ill., was indicted on June 16, 2015, on one count of using a minor to engage in sexually explicit conduct in November 2014. Rodriguez appeared in federal court on June 23, 2015, and pled not guilty.
ADRIAN C. PETERS, 22, of South Beloit, Ill., was charged today with 12 counts of using a minor to engage in sexually explicit conduct for the purpose of transmitting a live visual depiction that would be transmitted and transported by a means or facility of interstate and foreign commerce, during the period of October 2012 to December 2014. Peters is scheduled to appear today at 3:00 p.m. before Magistrate Judge Iain D. Johnston.
Each count of sexual exploitation of a minor carries a potential penalty of a minimum of 15 years and a maximum of up to 30 years in prison, up to five years of supervised release following imprisonment, a fine of up to $250,000, and full restitution. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. Each 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 indictments were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The Winnebago County Sheriff’s Office assisted in the investigations, along with the South Beloit Police Department in the charges against Peters, and the Loves Park Police Department in the charge against Rodriguez.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Rodriguez Indictment
Peters IndictmentFormer Member of the United States House of Representatives Charged with Failing to File Federal Income Tax ReturnsRead the Press Release
CHICAGO ― Melvin Reynolds, 63, a former member of the United States House of Representatives, was indicted yesterday on federal charges alleging that he failed to file income tax returns for the years 2009 through 2012.
Reynolds will appear for his arraignment at a date yet to be determined by the U.S. District Court
According to the indictment, Reynolds received gross income in each year in excess of the minimum amount required to file a tax return. As a result, he was required by law, by April 15 of the following year, to file an income tax return (Form 1040 and accompanying attachments). Reynolds willfully failed to file income tax returns for four consecutive years – 2009, 2010, 2011 and 2012.
Each count of failing to file a federal income tax return carries a maximum sentence of one year in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced the indictment with Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigative Division Chicago.
The government is being represented by Assistant U.S. Attorneys Barry Jonas and William E. Ridgway.
Indictment
Barge Captain Sentenced to Six Months for Fatal 2005 Explosion That Discharged Slurry Oil in Chicago Canal and Marine CompanyOrdered to Pay over $5.3 Million in RestitutionRead the Press Release
CHICAGO — The captain of a petroleum barge that exploded in 2005, resulting in the death of a crew member, was sentenced to six months in federal prison today after being convicted of felony maritime negligence and causing thousands of gallons of oil to pollute the Chicago Sanitary and Ship Canal. The corporate barge owner, convicted of the same offenses, was sentenced to three years of supervised release and make restitution in excess of $5.3 million to the National Pollution Funds Center for the monies it paid out as a result of the spill. The defendants, DENNIS MICHAEL EGAN and EGAN MARINE CORP., were found guilty in June 2014 following a bench trial.
Egan, 36, of Topeka, Ill., and formerly of Lemont, and Egan Marine Corp., of Lemont, were each convicted of one count of negligent manslaughter of a seaman and one count of negligently discharging oil pollution to a navigable waterway. The verdict was delivered in an oral ruling from the bench by U.S. District Judge James Zagel in June 2014. In addition to the prison sentence, Judge Zagel also ordered Dennis Egan to one year of supervised release. Judge Zagel has scheduled a hearing for July 1 to rule on restitution amounts to the family of the victim.
According to the evidence at trial and court records, on Jan. 19, 2005, a fully-loaded Egan Marine Corp. tank barge, known as the EMC-423, being pushed by the tow boat Lisa E, was transporting approximately 600,000 gallons of clarified slurry oil (CSO) from the ExxonMobil Oil Corp. refinery near Joliet to the Ameropan Oil Corp. facility near the canal and California Avenue in Chicago. CSO is a byproduct of petroleum refining that can also be used as fuel, among other uses. Egan Marine Corp. employee Dennis Michael Egan was the pilot of the Lisa E and Captain of the vessels. As captain, Egan was responsible for the actions of his three-man crew and the safe operation of the vessels. About 4:40 p.m., just after clearing the Cicero Avenue Bridge and heading northeast parallel to the I-55 Stevenson Expressway, a large explosion, originating in one of the EMC-423’s four cargo tanks, occurred aboard the barge. As a result, the EMC-423 sank, discharging thousands of gallons of CSO and other oils into the canal. Immediately after the blast, crewman Alexander Oliva, 29, who had been aboard the barge, was determined to be missing. His body was recovered from the canal near Laramie Avenue on Feb. 4, 2005.
Finding both defendants guilty following trial, Judge Zagel ruled that the explosion occurred when the open flame from a propane fueled torch, which Alex Oliva was using to heat the barge’s cargo pump in preparation for offloading, came into contact with ignitable CSO vapors being vented from a storage tank headspace to the deck of the barge within mere inches of the cargo pump. The use of any open flame on a loaded petroleum barge is a violation of Coast Guard regulations and safe industry practice. The barge did have a lawful onboard heating system, but it was disconnected from the cargo pump, thereby requiring the crew to use an alternative means of heating the cargo pump for offloading. Judge Zagel concluded that the defendants were negligent because they knew that the crew occasionally used an open flame to heat the cargo pump but nonetheless permitted the crew to engage in the illegal and unsafe practice. As a result, the defendants were found guilty of negligently causing the death of Alex Oliva and negligently violating the Clean Water Act by discharging thousands of gallons of oil into the Canal, in violation of the Clean Water Act.
The total cleanup and other costs from the spill exceeded $12 million, more than $5.3 million of which was paid by the National Pollution Funds Center from a federal trust fund used to pay the costs of mitigating oil spill incidents, as well as legitimate damage claims of affected third parties. The fund was established by the Oil Pollution Act of 1990 following the Exxon Valdez spill in Alaska.
In imposing sentence, Judge Zagel remarked that when bad things don’t happen for a long period of time, there is a distinct risk that the level of care is lowered and this is the case where the catastrophe occurred.
“This case provides a tragic example of what happens when a vessel captain, and his employer, violate their special duty of care to their crew and the public by disregarding basic safety requirements,” said U.S. Attorney Zachary T. Fardon. “The ultimate tragedy of their crimes is that Alex Oliva would not have lost his life if the defendants valued basic safety higher than expediency.”
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Neal R. Marzloff, Special Agent-in-Charge of the U.S. Coast Guard Investigative Service, Central Region in Cleveland; and Justin Oesterreich, Acting Special Agent-in-Charge of the U.S. Environmental Protection Agency’s Criminal Investigation Division in Chicago.
The government was represented by Assistant U.S. Attorneys Timothy Chapman and Matthew Hiller and Special Assistant U.S. Attorney Crissy Pellegrin, of the U.S. EPA’s Office of Regional Counsel for Region 5 in Chicago.
Chicago Man Indicted for Fraudulently Obtaining Approximately $9 Million from InvestorsRead the Press Release
CHICAGO — A Chicago resident was charged yesterday with wire fraud after fraudulently obtaining approximately $9 million from approximately 50 investors by making false and misleading representations to the investors, which resulted in a loss to investors of approximately $4 million, according to the indictment. The charges allege that Nick Wurl, 25, of Chicago, was the President of Ludiera Capital, LLC, located in Chicago, and that he falsely represented to investors that Ludiera was in the business of buying, transporting, and selling commodities, such as corn and wheat, domestically and internationally, when, in fact, Ludiera never bought, transported, or sold any commodities.
Wurl was arrested on May 26, 2015, and released on bond. He will be arraigned at a later date in U.S. District Court.
According to the indictment, between approximately July 2013 through May 2015, Wurl made false representations about the nature of Ludiera’s business, the financial condition of Ludiera, the expected return and actual return on the investment, the risk involved in the investment, the status of the investment, and the use of investors’ funds. The indictment also alleges that Wurl misappropriated investors’ funds to trade futures and options without disclosing that he was using investors’ funds for trading, and to pay personal expenses for his own benefit. According to the indictment, Wurl fraudulently retained investors’ funds and concealed the scheme by preparing and distributing fraudulent account statements to investors.
The indictment seeks forfeiture of approximately $9 million.
Wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission assisted with the investigation.
The government is being represented by Assistant U.S. Attorney Jacqueline Stern.
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.
Indictment
42 Defendants Facing State or Federal Drug Charges for Allegedly Selling Heroin on City’s West SideRead the Press Release
CHICAGO — Forty-two defendants are facing state or federal narcotics charges for their alleged roles in supplying and distributing heroin in the area of West Grenshaw Street and Independence Boulevard, in the North Lawndale neighborhood on the city’s west side. An investigation led by officers of the Chicago Police Department and agents of the Drug Enforcement Administration assigned to the High Intensity Drug Trafficking Area (“HIDTA”) Task Force, resulted in federal charges against 16 defendants and state charges against 26 others, who police and federal agents began arresting early this morning.
Twelve firearms, approximately $50,000, nearly a half-kilogram of heroin, and over one-half kilogram of cocaine were seized this morning during the arrests of 32 of the charged defendants. The remaining defendants are either in custody or at large. Additionally, over one and a half kilograms of heroin were seized during the course of the investigation from last August through this month. Early today, Chicago police, DEA agents, and other HIDTA law enforcement partners also executed seven search warrants upon several defendants’ residences and three alleged stash houses, and seized two vehicles, including one defendant’s 2014 Maserati, Gran Turismo.
The federal defendants were charged with conspiracy, distribution, or possession with intent to distribute narcotics in five separate criminal complaints that were filed yesterday in U.S. District Court and unsealed following the arrests. The federal defendants are scheduled to begin appearing at 3 p.m. today before U.S. Magistrate Judge Maria Valdez in U.S. District Court. The 26 state defendants face charges ranging from Class 1 to Class X Delivery of a Controlled Substance and face a potential sentencing range of four to 30 years in prison upon conviction. The state defendants are expected to appear in bond court this afternoon at the Leighton Criminal Courts Building in Chicago.
According to a 230-page affidavit in support of the federal arrests and search warrants, the investigation revealed that JAMES TRIPLETT, also known as “Trell,” 33, of Berkley, controlled the distribution of heroin in the area of the 3700 block of West Grenshaw Street, in the North Lawndale neighborhood west of Douglas Park. Triplett allegedly assigned responsibility for heroin distribution on the block he controlled to specific individuals, who further delegated distribution to shift workers who sold heroin throughout the day.
Triplett obtained his heroin largely from supplier, LEVAUGHN COLLINS, also known as “Sweet Bobby,” 34, of Chicago, who along with his narcotics associates, obtained wholesale quantities of heroin which they mixed and packaged for distribution to buyers like Triplett who then subsequently sold the heroin on the street in the area of the 3700 block of West Grenshaw Street.
The area is just south of the Interstate 290 Eisenhower Expressway corridor that has been referred to as the “Heroin Highway” because of the accessibility it provides to city and suburban heroin customers.
“The Chicago HIDTA is a powerful collaboration of local, state, and federal law enforcement which concentrates its efforts on both narcotics suppliers and street-level distributors,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “This investigation and arrests associated with this open air drug market demonstrate how effective teamwork by law enforcement agencies can significantly reduce the flow of narcotics into our communities,” he said.
“This operation demonstrates how police and prosecutors are continuing to work together to dig in at the local level and hammer away at the drug markets plaguing our local communities,” said Cook County State’s Attorney Anita Alvarez. “Once again, we are pleased to join our state and federal law enforcement partners in these ongoing and coordinated efforts.”
“Investigating, charging and arresting heroin dealers is priority number one," said SAC Wichern. "Too many lives in Chicagoland are forever lost due to heroin use. I'm proud of the work done by these agents, officers and prosecutors, who worked tirelessly to achieve these results and I’m confident that with our continued partnership, we will have increasing success."
“IRS Criminal Investigation was an integral part of today’s law enforcement events by investigating the financial aspects of these investigations,” added Special Agent-in-Charge Boyd from IRS/CID.
The complaint affidavit alleges that Triplett was a wholesale supplier of heroin who, through his drug trafficking organization, ran the heroin trade in the area of the 3700 block of West Grenshaw Street. The complaint further alleges that Triplett tasked his narcotics associates with different responsibilities ranging from picking up and transporting the packaged heroin for subsequent distribution, to running the daily operations of the Grenshaw drug spot, to collecting proceeds from heroin sales there. The Triplett drug trafficking organization employed individuals, like MARCETTEAUS MCGEE, aka “Antonio,” aka “Keitho,” 31, of Chicago; CHRISTOPHER TIDWELL, aka “Gov,” 42, of Chicago; JAMES SMITH, aka “J Dub,” 35, of Chicago; and CHIQUITA JACKSON, 29, of Chicago, to manage the Grenshaw drug spot and advise Triplett when resupply was needed, to shuttle heroin among the various stash and retail locations, and to return his share of the profits to him. The organization employed street-level workers responsible for the retail sale of its heroin such as JACKIE TYLER, 29, of Chicago.
Levaughn Collins, a wholesale supplier to the Triplet drug trafficking organization, and others, operated his heroin distribution from his main stash house at 561 East 103rd Place, as well as specific locations such as 2936 West Warren Boulevard, the charges allege. Other defendants, including LARRY COLLINS, aka “Scooter,” 38, of Chicago, JIMMY BELL, aka “Dirt,” 38, of Chicago; LAMEL BURNS, aka “Slim,” 38, of Dolton; and KEVIN GARDNER, aka “Bo,” 35 of Chicago, allegedly assisted Levaughn Collins in diluting the heroin to increase profits and packaging the heroin into smaller, user-sized quantities for street-resale. Heroin packaged and distributed by Collins’s organization was typically packaged in small user-portion plastic bags with orange basketballs, purple lady logos, green Playboy bunnies, Hershey’s kisses, or black panda bear symbols stamped on them.
One federal complaint charges twelve defendants ― James Triplett, Levaughn Collins, Larry Collins, Jimmy Bell, Lamel Burns, Kevin Gardner, Christopher Tidwell, Marcetteaus McGee, James Smith, Chiquette Jackson, Jackie Tyler and ANTON HIGGINS, aka “Spud,” 35, of Chicago― with conspiracy to possess and distribute more than a kilogram of heroin. If convicted, they each face a mandatory minimum sentence of 10 years in prison and a maximum of life imprisonment and a $10 million fine.
DONALD MCINTOSH, aka “Donnie,” 40, of Chicago, and NEKENYA HARDY, aka “Keefy,” 36, of Berwyn, were charged separately with being heroin customers of Levaughn Collins. If convicted, McIntosh faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine and Hardy faces a maximum of 20 years in prison and a $1 million fine.
ANGELES AVALOS, 32, of Chicago, was also charged separately with being a heroin supplier to Levaughn Collins. If convicted, he faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine.
DEONTE THOMAS, aka “12th Street,” 25, of Chicago, was also charged separately with distributing heroin in the 3700 block of West Grenshaw Street. If convicted, he faces a mandatory minimum of five years in prison and a maximum of 40 years and a $5 million fine.
The 27 state defendants, charged for their alleged roles in supplying and distributing heroin are: CARL AUSTIN, DEMARIO BUTLER, DEJON CARR, LAVORA CHILDRESS, DEWAYNE COOK, JOHNNY CORBIN, SIMEON CURRIE, DEANDRE CURRY, MARQUITA DAVIS, ORLANDO EDWARDS, TERRELL HARRIS, WILLIE HUGHES, ERIC JACKSON, COSHAWNDRA JENKINS, ERIC LEMON, ANDRE MINOR, BERNARD PERSON, DARRYL PLEASANT, DONALD ROGERS, FLOYD SHAW, KENNETH SMITH, LEONARD SMITH, TIMESHA WASHINGTON, LEONARD WHITE, DOMINICK WILLIAMS and JASON WOODS.
Assistant United States Attorneys Katherine A. Sawyer and Andrew K. Polovin are representing the government in the federal cases. Assistant State’s Attorney Aaron R. Bond is prosecuting the state cases.
The public is reminded that complaints contain only charges and are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Collins Complaint
Hardy Complaint
McIntosh Complaint
Avalos Complaint
Greenshaw Affidavit
Thomas ComplaintRockford Man Sentenced to 12 Months in Federal Prison for Fraud Involving More Than $500,000 in Fictitious Money OrdersRead the Press Release
ROCKFORD — A Rockford, Ill. man was sentenced today by U.S. District Judge Philip G. Reinhard for producing a fictitious financial instrument that appeared to be issued under the authority of the U.S. Treasury. BRADLEY SHERMAN HAMPTON, 55, was sentenced to 12 months and one day in federal prison, to be followed by 3 years supervised release, and ordered to pay restitution of $76,500.
Hampton, who pled guilty on Feb. 5, 2015, admitted that on Aug. 31, 2009, he created a fictitious $48,780 money order in an attempt to defraud Regions Bank and the U.S. Treasury. According to the written plea agreement, Hampton also admitted that in 2009 he produced eight other fictitious money orders in an attempt to defraud. The nine fictitious money orders totaled $547,578.47 and purported to be issued under the authority of a Federal Reserve Bank, the Department of the Treasury, or the United States Treasury. The fictitious money orders were made payable to Chase Home Finance, Chase National Payment Service, Holcomb State Bank, Regency Worldwide Development, Inc., Harley Davidson Credit, and the Faith Center in Rockford, Ill. The $76,500 restitution is owed to the sole money order recipient that accepted a money order and disbursed money.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; and Frank Benedetto, Special Agent-in-Charge of the Secret Service’s Chicago Field Office.
The government was represented by Assistant U.S. Attorney Michael D. Love.
12 Charged in Chicago as Part of Largest National Medicare Fraud Takedown in HistoryRead the Press Release
CHICAGO – Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today a nationwide takedown by Medicare Fraud Strike Force operations in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings. In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act. This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount. Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced thirteen defendants who were charged in four local cases as part of the national package.
“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Lynch. “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others. They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered. In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives. We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”
“Health care fraud extracts a huge toll on our nation’s health care system,” stated U.S. Attorney Fardon in announcing the cases charged in the Northern District of Illinois. “We will continue to aggressively pursue those health care providers that take advantage of not only the system, but the patients they are entrusted to care for.”
Three of the cases and nine of the defendants in the Northern District of Illinois involve home health services, an area which is “vulnerable to fraud, waste and abuse,” according to the Department of Health and Human Services Office of Inspector General in a 2012 report, “Inappropriate and Questionable Billing by Medicare Home Health Agencies.” In 2013, citing factors that strongly indicated fraudulent activity in the metropolitan Chicago area compared to other areas, the Centers for Medicare & Medicaid Services imposed the first-ever moratorium authorized by the Affordable Care Act to halt the enrollment of new home health providers in the metropolitan Chicago area.
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.
Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings. Today’s announcement marks the first time that districts outside of Strike Force locations have participated in a national takedown; those districts account for 82 defendants charged in the takedown.
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois, and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.
In addition to the Strike Force, today’s enforcement actions include cases brought by the U.S. Attorney’s Offices for the Northern District of Illinois, Southern District of Illinois, Northern District of Ohio, Western District of Pennsylvania, Western District of Kentucky, Southern District of New York, Alaska, and the Southern District of Georgia. The following cases are being prosecuted by the Northern District of Illinois:
United States vs. Janet Guerrero, et.al
Seven individuals who worked at three related home health care companies – Donnarich Home Health Care, Inc., Josdan Home Health Care Inc., and Pathways Home Health Services LLC – were charged by superseding indictment yesterday with conspiracy to commit health care fraud, health care fraud, false statements, and money laundering. The indictment alleges a $45 million fraud at the three home health care companies, starting as early as 2008 and continuing into 2014. The fraud as alleged included paying illegal bribes and kickbacks to obtain Medicare beneficiaries; ignoring doctors who refused to certify beneficiaries as “homebound” and eligible for care; enrolling patients who did not need or want the care; subjecting patients to pre-planned cycles of discharges and re-enrollments, regardless of their medical needs; and falsifying medical records to make patients appear to be homebound or sicker than they actually were.The newly-charged defendants include Josephine Tinimbang, an owner and operator of the companies; Dr. Jose Calub, the medical director; Sharon Gulla, a registered nurse and a former supervisor; and Marilou Lozano, Ronald Malalis, Mary Pilar Mendoza, and Isabelita Sabejon, registered nurses who enrolled non-homebound beneficiaries and fabricated medical records. Two defendants were charged in an earlier indictment: Sherwin Cubelo, a patient recruiter who received illegal kickbacks; and Janet Guerrero, an office manager who administered the kickbacks. The government is represented in this case by Trial Attorney Brooke Harper.
United States vs. Barry Fischer
Barry Fischer, 70, of River Forest, was indicted for health care fraud on Wednesday in a 20-count federal indictment for allegedly billing Medicare for unnecessary home visits, for falsely certifying patients for home health services, and for putting false information in patient charts. Fischer allegedly signed orders in which he falsely certified patients as “confined to the home,” under his care, and requiring skilled nursing services. According to the indictment, as a result of Fischer’s false certifications, Medicare suffered losses in the form of payments to the company Fischer worked for and various home health agencies. The government is represented in this case by Assistant U.S. Attorney Stephen Chahn Lee.United States vs. Zenaida Dimailig
Zenaida Dimailig, 78, of Bensenville, was charged by complaint with health care fraud for allegedly causing Medicare to be billed for home health services for patients who were not home bound and for services that were not rendered. Dimailig allegedly paid cash kickbacks to Medicare-covered patients who, in turn, allowed their Medicare information to be used to bill Medicare for home-health services that these individuals did not need. Dimailig then passed on this Medicare information and records that falsely suggested that certain services were provided to Medicare beneficiaries to home health care agencies for the purpose of billing Medicare. The government is represented in this case by Assistant U.S. Attorney Timothy Storino.United States vs. Omeed Memar
Omeed Memar, 46 of Chicago, a dermatologist, was indicted for health care fraud last week in a 16-count federal indictment for allegedly billing cosmetic treatments fraudulently as the destruction of large numbers of pre-cancerous lesions. According to the indictment, the defendant falsely diagnosed patients with actinic keratosis, or precancerous lesions that are typically rough, dry or scaly, and then billed public and private health insurers for medically unnecessary treatments. According to the indictment, between 2007 and January 2013, Memar falsely diagnosed patients with actinic keratosis, ordered his staff to provide intense-pulsed light treatments for his patients, and instructed his staff to document the procedures falsely as the destruction of 15 or more precancerous lesions. The government is represented in this case by Assistant U.S. Attorney Stephen Chahn Lee.The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lamont Pugh III, Special Agent-in-Charge of the U.S. Department of Health and Human Services Office of Inspector General in Chicago; James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago; Martin J. Dickman, Inspector General, U.S. Railroad Retirement Board; and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service, Criminal Investigation, Chicago Field Office.
Money laundering carries a maximum penalty of 20 years in prison and a $500,000 fine. Health care fraud and conspiracy to commit health care fraud carry a maximum penalty of 10 years in prison and a $250,000 fine and restitution is mandatory. Making a false statement in a health care matter carries a maximum penalty of 5 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The public is reminded that indictments and complaints are 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.
Fischer Indictment
Dimailig Complaint
Guerrero Superseding Indictment
Memar IndictmentCorporate Audit Director Sentenced to One Year for Insider TradingRead the Press Release
Chicago ─ A certified public accountant who was involved in the auditing process at a publicly-traded company based in Chicago was sentenced to one year and one day by U.S. District Court Judge Sara L. Ellis for engaging in insider trading of the company’s securities that made him an illegal profit of more than $286,000 in 2012. Dombrowski was also ordered to forfeit $286,211.55 and serve a term of two years of supervised release after his term of imprisonment. The defendant, Steven M. Dombrowski, 50, of Chicago, was the director of corporate audit for Allscripts Healthcare Solutions, Inc., and pled guilty to one count of securities fraud in December 2014. Dombrowski was ordered to surrender to the Bureau of Prisons on September 14, 2015.
According to the indictment, Dombrowski misused material nonpublic information he knew about Allscripts’ performance for the first quarter of 2012 and purchased put options and engaged in short sales of stock through a trading account in his wife’s maiden name that he controlled, which resulted in illegal profits of approximately $286,211.
Dombrowski and the employees he supervised were responsible for auditing and testing the processes and procedures Allscripts used to compute and report its financial performance. Allscripts provides information technology solutions to the healthcare industry and its common stock is traded on the NASDAQ stock market under the symbol MDRX.
Between April 10 and April 28, 2012, a quarterly blackout period was in effect at Allscripts. The blackout prohibited certain employees, including Dombrowski, who were given written notice and who had access to material nonpublic information, from engaging in trades of Allscripts securities 15 days before the end of a quarter, and ending after the second full business day following the company’s quarterly earnings announcement.
Dombrowski learned in April 2012 through his employment that Allscripts first quarter financial results were going to be less favorable than market expectations when they were publicly announced on April 26, 2012. Throughout April, Dombrowski conducted securities transactions that he designed to be profitable if the price of Allscripts stock declined, including purchasing put options and short selling stock, which he knew was prohibited and violated the company imposed blackout period. Allscripts stock, in fact, declined when its 2012 first quarter announcement revealed lower sales, less revenue, and lower earnings per share than the first quarter of 2011. After Allscripts stock declined on and after April 26, 2012, Dombrowski offset his Allscripts securities positions and profited approximately $286,211 from insider trading.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Chicago office of the U.S. Securities and Exchange Commission assisted in the investigation.
“We will vigorously prosecute defendants who commit insider trading at publicly-traded companies located in our district,” said U.S. Attorney Fardon. “Mr. Dombrowski betrayed the trust placed in him by his employer, Allscripts, and used his access to confidential company information for his own personal gain.”
The government was represented by Assistant United States Attorney Sunil Harjani in this case.
Former Dolton Certified Water Operator Charged with Falsifying Drinking Water Sampling DataRead the Press Release
Chicago — A former Dolton certified water operator was indicted yesterday on charges that, for several years, he routinely falsified paperwork to make it appear that Dolton was properly sampling its drinking water for microbiological contaminants. Dolton purchases its drinking water from the City of Chicago, which treats Lake Michigan water. However, Dolton is still required to test its drinking water for the presence of coliform bacteria in order to ensure that it has not become contaminated locally.
According to the six count indictment, between January 2008 and continuing through August 2013, Philip Kraus, 63, of Thornton, falsified records in order to conceal the fact that he was not sampling Dolton’s water system in accordance with the Safe Drinking Water Act and the U.S. EPA regulations that implement the Safe Drinking Water Act. Kraus will appear before for an arraignment at a later date determined by U.S. District Court.
Each month, Dolton was required to collect 25-30 samples of its drinking water from various points representative of the entire drinking water distribution system and thereafter to take those samples to a certified laboratory for testing. The samples were to be tested for the presence or absence of coliform bacteria – the presence of coliform bacteria in the drinking water may indicate that the drinking water is contaminated with microbiological contaminants. The indictment alleges that, contrary to the required sampling protocol, Kraus routinely collected multiple drinking water samples each month from only one or a few locations but falsely represented on Dolton paperwork and on forms submitted to Dolton’s contract laboratory that the samples were taken from representative locations throughout Dolton. The laboratory then transmitted the test results and the false sample site data to the Illinois EPA, which implements the federal Safe Drinking Water Act in Illinois pursuant to authorization from U.S. EPA. IEPA and U.S. EPA rely upon the test results and sample site data to ensure that Dolton was distributing to its residents and businesses drinking water free of microbiological contaminants. The contract laboratory is not accused of any wrongdoing.
The indictment charges Kraus with one count of engaging in a multi-year scheme between January 2008 and August 2013 to submit material false statements and five additional counts, each of which charges Kraus with causing the submission of a false statement to IEPA on a particular date in 2013.
The indictment alleges that all of the test results from the samples submitted to the contract laboratory were negative for the presence of coliform bacteria. The government does not possess information indicating that any person was harmed as a result of the alleged offenses.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Randall K. Ashe, Special Agent-in-Charge of the U.S. EPA’s Criminal Investigation Division in Chicago.
"The residents of the Village of Dolton relied upon Mr. Kraus, the Village’s Certified Water Operator, to make sure that their drinking water was properly sampled and tested for microbiological contamination." said Mr. Fardon. "Mr. Kraus violated the trust of the residents of Dolton, and, although we have no evidence that Mr. Kraus’ conduct caused any actual harm, it did create a very real risk of contamination going undiscovered."
Each of the six counts carries a maximum penalty of 5 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorney Timothy J. Chapman.
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.
Complaint
Suburban Investment Advisor Arrested for Defrauding Clients of Approximately $1 MillionRead the Press Release
Chicago – A Wilmette man was arrested this morning by agents from the Federal Bureau of Investigation and detectives from the Norridge and Arlington Heights Police Departments and is facing federal wire fraud charges for defrauding his clients of at least $1 million of investment funds. Alan Gold, age 60, was arrested at his residence and charged by criminal complaint that was unsealed following his arrest. FBI agents also conducted a search pursuant to a search warrant of Gold’s residence this morning. Gold appeared before U.S. Magistrate Judge Jeffrey Gilbert earlier today and was released on a $10,000 recognizance bond and is due back in court for a status on June 15 at 9:00 a.m.
According to the complaint, Gold engaged in a scheme to defraud his clients for at least five years through false statements. Gold, who managed several million dollars of client funds through his company, Alan Gold & Associates, based in his residence, allegedly sent account statements to clients falsely representing that their assets were invested in certain stocks, real estate funds, futures contracts, and other investment products, when Gold had actually spent those client funds on his own personal expenses.
According to the complaint, Gold, as early as 2008, told his clients that he would make “alternative investments” on their behalf using funds that he would wire from their brokerage account to his bank account. Among the investments Gold listed on client account statements were real estate ventures and holdings in real estate ventures, gold and natural gas futures contracts, and the stocks of publicly traded companies. Gold did not purchase securities and futures contracts for his clients, but allegedly spent the funds on gambling expenses at area casinos and personal living expenses. Gold allegedly continued to wire transfer funds from client accounts for at least five years using the same false statements and representations to clients. The scheme was exposed when Gold stopped returning client phone calls and a client reported the matter to law enforcement.
If convicted of wire fraud, Gold could be sentenced to a maximum term of imprisonment of 20 years and a $250,000 maximum fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation Chicago Office. The Chicago office of the U.S. Securities & Exchange Commission, the Arlington Heights Police Department, and the Norridge Police Department assisted with the investigation.
The government is being represented by Assistant United States Attorney Sunil R. Harjani.
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 guilty beyond a reasonable doubt.
Complaint
Former Sycamore Resident Sentenced to 97 Months in Federal Prison for Possessing Child PornographyRead the Press Release
ROCKFORD — A former Sycamore, Ill. resident was sentenced today by U.S. District Judge Frederick J. Kapala for possessing child pornography. MICHAEL PODOLSKY, 27, now of Elkader, Iowa, who pled guilty to the charge on January 27, 2015, was sentenced to 97 months imprisonment, to be followed by 5 years of supervised release. In his written plea agreement, Podolsky admitted that on and prior to July 12, 2013, he owned and was in possession of a computer at his home in Sycamore that contained more than 600 images of children engaged in sexually explicit conduct, and that among the images he possessed were images that depicted prepubescent minors engaged in sadistic conduct and violence.
The sentencing was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent‑in‑Charge of the Chicago Office of the Federal Bureau of Investigation; and Glenn Theriault, Chief of the Sycamore Police Department.
The government was represented by Assistant United States Attorney Michael D. Love.
Former Machesney Park Man Sentenced to 8 Months in Federal Prison for Concealment of Assets from A Bankruptcy TrusteeRead the Press Release
ROCKFORD — A former Machesney Park, Ill. man was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for concealing assets from a Bankruptcy Trustee. The defendant, ROBERT J. YONKEE, JR., 56, now of Lake Geneva, Wis., was sentenced to 8 months in federal prison, to be followed by 1 year of supervised release, and was ordered to a fine of $1,000.
In pleading guilty to the charge on Jan. 14, 2015, Yonkee admitted he filed a Chapter 7 Bankruptcy Petition on Sept. 15, 2008, and by signing a Declaration verified his Petition, all his Schedules, and a Statement of Financial Affairs under penalty of perjury. According to the written plea agreement, from Sept. 15, 2008 through at least May 8, 2009, Yonkee fraudulently concealed property from the bankruptcy trustee, including his ownership interest in: a business that sold auto parts, automobiles, and motorcycles; the United States Super Truck Racing Series; Bobby Yonkee Racing; as well as other inventory, merchandise, capital, vehicles, and motorcycles.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Michael D. Love.
Suburban Man Indicted for International Parental KidnappingRead the Press Release
CHICAGO ― A Skokie man was indicted last week for international parental kidnapping of his three children and traveling with them to Turkey without their mother’s consent, permission or knowledge. MURTAZA ALI, 44, of Skokie, was charged with one count of international parental kidnapping by a federal grand jury. Ali was arrested on May 6 upon his return to O’Hare International Airport with the children, and remains in federal custody. Ali is scheduled to be arraigned Tuesday, June 2 at 10:00, in front of U.S. District Judge Samuel Der-Yeghiayan.
According to the court documents, Ali is a Pakistani-national, and with individual A, has three minor children. According to Individual A, on the evening of May 2, 2015, she was at a social gathering. Ali, along with the three children, was scheduled to pick her up after the event. He did not pick her up, and when she arrived home, Ali and the three children were not home, the house was a mess, and the passports and luggage were missing. An investigation by Skokie Police Department determined Ali’s last known location was believed to be near O’Hare Airport.
Ali, along with the three children, boarded a Turkish Airlines flight at O’Hare Airport and arrived in Istanbul, Turkey on May 2. According to Individual A, Ali called her from Turkey and stated that he had the three children and that he was traveling to Pakistan. According to information obtained from Turkish Airlines and other law enforcement agents, there was reason to believe that Ali was planning to board a flight from Turkey bound for Karachi, Pakistan, with the children. He was arrested on a federal complaint when he and his three children returned to the United States on May 6.
The arrest and indictment were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and William A. Ferrara, Chicago Director of Field Operations, Customs and Border Protection. Skokie Police Department assisted in the investigation.
The government is being represented by Assistant U.S. Attorney Heather McShain.
International parental kidnapping carries a maximum sentence of three years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Health Care Provider Sentenced to 75 Months for $2.5 Million Health Care FraudRead the Press Release
CHICAGO ― A former owner and operator of Selectcare Health, Inc., a provider of outpatient physical and respiratory therapy located in Park Ridge and Skokie, was sentenced to federal prison for engaging in a $2.5 million health care fraud scheme. Ankur Roy, 38, of Miami Beach, Florida, was sentenced last Friday to 75 months in prison followed by 3 years of supervision after his release by U.S. District Court Judge Gary Feinerman. Roy was also ordered to forfeit more than $2.5 million in proceeds he and his codefendants gained by defrauding Medicare and Blue Cross Blue Shield of Illinois. Roy was ordered to surrender to the Federal Bureau of Prisons on July 15, 2015. Roy was charged in 2013 with two co-defendants who both pled guilty; Dipen Desai, who was sentenced to 27 months’ imprisonment in December 2014, and Akash Patel, who is scheduled to be sentenced in July. Roy was convicted of five counts of the indictment by a jury in July 2014.
Between March and May 2011, Roy and his co-defendants submitted false and fraudulent health insurance claim forms to Medicare and Blue Cross Blue Shield for respiratory therapy services that they knew were never provided to patients. Roy, who proposed the scheme to his co-defendants as a means to extricate themselves from debt, designed the scheme to avoid raising red flags with Medicare and Blue Cross Blue Shield’s fraud detection systems. As a result of these false claims, Medicare and Blue Cross Blue Shield paid defendants over $2.5 million. Defendant took over $600,000 of that sum and used it for his own personal purposes, including for personal expenses, paying off credit card bills and repaying his student loan.
“Defendant Roy’s fraud deprived Medicare and Blue Cross Blue Shield of over $2.5 million, a substantial sum of money that should have gone to pay for medical services for senior citizens, and not to line his and his partners’ pockets,” Assistant U.S. Attorney Maureen Merin argued at sentencing.
The sentence today was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Robert J. Holley, Special Agent in Charge of the Federal Bureau of Investigation Chicago; Lamont Pugh III, Special Agent in Charge of the Chicago Regional Office of Health and Human Services, Office of Inspector General; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago.
The government was represented by Assistant U.S. Attorney Maureen Merin.
Two Former Will County Bank Officials Sentenced in Concealing Loan Delinquencies of Two Customers Causing $1.1 Million LossRead the Press Release
CHICAGO — A former director and a former officer of First Community Bank and Trust in Will County were sentenced for fraudulently making false entries in the bank’s records which generated reports falsely representing that loans were current, when, in fact they were delinquent. MARTIN E. SCHMIDT, JR., 56, of Beecher, was sentenced to 8 months of imprisonment by U.S. District Court Judge Charles Kocoras. DONNA M. BARBER, 53, also of Beecher, was sentenced by U.S. District Court Judge Jorge L. Alonso to one year of supervised release, with the first six months to be served as home confinement. Schmidt and Barber were ordered to pay restitution in the amounts of $1,183,374 and $684,938, respectively. Schmidt must report to the Bureau of Prisons on June 2, 2015. As a result of their convictions, both defendants are also barred from associating with or being employed by a financial institution for ten years.
The defendants together concealed that loans totaling approximately $2.8 million where delinquent, and caused the bank to lose more than $1.1 million. Schmidt was senior vice president for lending and a member of the board of directors of First Community Bank and Trust, which operates in Beecher and Peotone, and co-defendant Barber was vice president for mortgage lending.
Schmidt and Barber were charged together in October 2014 in a criminal information with making false bank reports with intent to defraud. Schmidt pled guilty in November 2014, and Barber pled guilty in December 2014.
“Both defendants were long-time trusted employees of the bank,” argued Assistant U.S. Attorney Brian P. Netols in the government’s sentencing memoranda, “In committing the offense, [they] repeatedly betrayed and violated that trust.”
Schmidt and Barber admitted that they caused and made false entries in the bank’s past due accounts report for September 2009 by intentionally omitting to disclose as past due two customers’ loans and advances in the total principal amount of approximately $2.5 million.
According to court documents, Schmidt was the point of contact for Customer K, and Barber was the point of contact for Customer M, and their compensation was based, in part, on the performance of the loans for which they were each responsible. By September 2008, Schmidt and Barber each knew that Customers K and M were unable to make payments to the bank on their various loans. They agreed that they needed to take action to prevent the delinquent accounts from appearing on the bank’s reports and began concealing their past due nature. The false entries extended from September 2008 until October 2009.
Barber, with Schmidt’s knowledge and approval, and Schmidt made and caused false entries in loan records allowing Customer M to skip payments without paying the interest due and extending notes without interest payments being current. Some false entries were made on a retroactive basis so the actual condition of the loans would not appear on the bank’s current monthly records. With these serious delinquencies concealed, the bank made additional loans to Customer M totaling $708,274, on which he subsequently defaulted.
At Schmidt’s request, Barber also made false entries in the Bank’s records relating to Customer K which allowed loan payments to be improperly skipped and overrode restrictions on additional advances. Schmidt then approved $269,038 in loans to Customer K after Schmidt knew that Customer K was then unable to repay. Schmidt also made unauthorized undocumented advances to Customer K totaling $105,562, paid $22,500 of Customer K’s overdrafts, and issued an unauthorized letter of credit to Customer K in the amount of $80,000.
Finally, Schmidt deceived the bank’s board of directors by leading them to believe that he and Barber were properly managing the bank’s loans, when they were actually fraudulently creating reports that made it appear that the loan portfolio was in better shape than it was.
The sentence was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Rockford Man Charged in Federal Court with Drug OffenseRead the Press Release
ROCKFORD — A Rockford, Ill. man was charged yesterday in federal court with possessing with the intent to distribute narcotic drugs. ANTHONY ROSS, 34, of Rockford, Ill., was charged with possessing with the intent to distribute cocaine, cocaine base (crack cocaine), and heroin on May 28, 2015. According to the complaint, Ross was taken into custody outside an apartment on 23rd Street in Rockford. When law enforcement officers went into the apartment to execute a search warrant, they found $1,205 in cash, two loaded semi-automatic pistols, and numerous packages of cocaine, cocaine base and heroin. When law enforcement officers went to a second location that day, a residence on Orchard Avenue in Rockford, they found over a kilogram of cocaine and 214 grams of heroin.
ROSS was brought before U.S. Magistrate Judge Iain D. Johnston yesterday for an initial appearance. He was ordered to be held pending a detention hearing and a preliminary hearing on June 2, 2015, at 2:30 p.m.
Possession with the intent to distribute of the charged narcotic drug Controlled Substances carries a maximum potential penalty of up to 20 years in prison, at least 3 years of supervised release following imprisonment, and a fine of up to $1,000,000. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that a complaint is only a charge and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The charge was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; CARL VASILKO, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives; JOSEPH P. BRUSCATO, Winnebago County State’s Attorney; and GARY CARUANA, Winnebago County Sheriff. Officers of the Rockford Police Department assisted in the investigation.
The government is being represented by Assistant U.S. Attorney John G. McKenzie.
Complaint
Largest Drug Trafficker from Shuttered Underground Silk Road Website Sentenced to 10 Years in PrisonRead the Press Release
Chicago --- A drug trafficker who used the illicit website “Silk Road” for worldwide drug sales was sentenced yesterday to 10 years’ imprisonment for selling millions of dollars’ worth of illegal drugs for bitcoins. The defendant, Cornelis Jan Slomp, 23, of Woerden, the Netherlands, pled guilty in April 2014 to conspiracy to import and distribute various controlled substances worldwide. Slomp was also ordered to forfeit $3,030,000 in illegal drug proceeds from his criminal enterprise. Slomp has been in federal custody since his arrest in August 2013.
"The crime is an extraordinarily serious one given the amounts involved, there's no question about that," said U.S. District Court Judge Matthew F. Kennelly said in imposing the sentence.
Slomp, who operated under the username “SuperTrips,” conducted more than 10,000 illegal online drug transactions and received approximately 385,000 in bitcoins as payment for his illegal drug sales. By his own admissions and as confirmed by law enforcement’s examination of the data retrieved from the Silk Road server, Slomp was the world’s largest drug trafficker on Silk Road.
Shortly before law enforcement agents shut down the Silk Road web site in August 2013, Chicago Homeland Security Investigations (HSI) agents arrested Slomp when he traveled from the Netherlands to Miami, Florida. At the time, Slomp had arranged to spin off his United States illegal drug trafficking business to his largest U.S.-based wholesale re-distributor of illegal drugs, Angel William Quinones, of Largo, Florida. Quinones, who was later arrested, has since pleaded guilty in federal court in Tampa and has been sentenced to 70 months’ imprisonment for his role in Silk Road drug trafficking activity.
According to court documents, for an eighteen-month period from March 2012 through about August 2013, Slomp distributed worldwide approximately: 104 kilograms of powder 3,4-methylenedioxy-N-methylamphetamine (MDMA); 566,000 ecstasy pills containing MDMA; four kilograms of cocaine; three kilograms of Benzodiazepine; and substantial quantities of amphetamine, lysergic acid diethylamide (LSD), and marijuana, in addition to allowing for substantial quantities of methamphetamine, ketamine, and Xanax to be distributed on his SuperTrips Silk Road vendor account.
“The public is harmed when illegal drugs are sold in the United States as well as in this district. This harm to the public is magnified when drug traffickers such as the defendant use sophisticated modern technology to reach larger segments of the population as well as to further conceal their identities and criminal activity. Here, the defendant used one of the most sophisticated dark websites of its time to sell enormous quantities of illegal drugs to wholesale redistributors, retailers, and users of drugs across the country – indeed, throughout the world – in more than 10,000 transactions,” argued Assistant United States Attorney Andrew S. Boutros in the government’s sentencing memorandum.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Gary Hartwig, Special Agent-in-Charge of HSI Chicago.
The case was prosecuted by Assistant U.S. Attorney Andrew S. Boutros.
Drug Trafficker Sentenced to 20 Years in Federal Prison for Supervising Sales of over 30 Kilos of Heroin on City’s West SideRead the Press Release
CHICAGO ― The leader of a drug trafficking organization who created and managed a heroin distribution operation run via a hotline telephone between 2008 and 2012 on the city’s west side was sentenced to 20 years in federal prison yesterday, federal law enforcement officials announced. The defendant, PIERRE HENDERSON, was responsible for supervising the distribution of over 30 kilograms of heroin, a federal judge determined before imposing the sentence.
Henderson, 37, of Chicago, pleaded guilty to conspiracy to distribute heroin in December 2014. U.S. District Judge Ronald A. Guzman imposed the 20-year sentence on Wednesday. Henderson’s brother, Eric Henderson, 35, pleaded guilty to conspiracy to distribute heroin in January 2014. In March 2015, U.S. District Judge Ronald A. Guzman sentenced Eric Henderson to 200 months in federal prison.
The defendant’s organization sold tens of thousands of user quantities to individuals from all over the Chicagoland area, “argued Assistant U.S. Attorney Shoba Pillay in the government’s sentencing memorandum. “His conduct directly contributed to the drug trafficking and attendant violence plaguing the streets of the city of Chicago and the heroin addiction crisis now afflicting this city.”
According to court documents, the Henderson brothers were involved in prolific daily sales of heroin to customers who called into the hotline to order heroin. After placing their phone orders the Henderson brothers’ customers traveled from all over the Chicagoland area to the city’s west-side to purchase heroin from street-level distributors, who worked for the Henderson brothers.
The Henderson brothers were among 8 federal defendants who were arrested in May 2013 following an FBI investigation, code-named Operation Heroin Hotline, of a phone-order heroin trafficking operation.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation was led by the FBI and was conducted under the umbrella of the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) in coordination with the Chicago Police Department.
The government is being represented by Assistant United States Attorneys Shoba Pillay and Lindsay Jenkins.
Naperville Man Pleads Guilty to Setting Fire to Chicago Air Route Traffic Control Center in AuroraRead the Press Release
CHICAGO — A Naperville man pled guilty today to federal charges he set fire to the Chicago Air Route Traffic Control Center in Aurora on September 26, 2014, federal law enforcement officials announced today. Brian Howard, 37, of Naperville, was charged by information earlier this month with one count of willfully setting fire to, damaging, destroying or disabling an air navigation facility; and one count of using fire to commit a federal felony. Howard will be sentenced on September 11, 2015 by U.S. District Court Judge Gary Feinerman and remains in federal custody since his arrest in September 2014.
According to court documents, Howard was employed by an FAA contractor at the Chicago Air Route Traffic Control Center (the “Control Center”) in Aurora, Illinois. Howard worked on telecommunications matters at the Control Center and at other FAA facilities for approximately eight years.
Howard pled guilty to intentionally damaging and disabling the telecommunication infrastructure at the Control Center, and setting fire to the area which housed these key components.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Carl Vasilko, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The government is being represented by Assistant U.S. Attorney Andrew K. Polovin.
Individuals impacted by the September 26, 2014 fire who wish to receive notice about future court hearings, including sentencing, are encouraged to contact the U.S. Attorney’s Office’s Victim Hotline number at 866-364-2621 (press #3), or by email at [email protected].
The charge of willfully setting fire to, damaging, destroying or disabling an air navigation facility, or willfully interfering by force or violence with the operation of that facility, likely endangering the safety of aircraft in flight, carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross loss caused by defendant’s actions.
The charge of using fire to commit a federal felony carries a mandatory penalty of 10 years in prison, which must be in addition to any sentence imposed for the underlying felony.
If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
Plea Agreement
Victim ResourcesLawyer Indicted for Tax Evasion on Income Received over the Course of Two Decades, Including Income Derived from Illinois Tobacco LitigationRead the Press Release
CHICAGO ― A Chicago lawyer was indicted on federal charges alleging that he evaded the payment of income tax on income he received over the course of two decades, including income he received in connection with the State of Illinois’s lawsuit against various tobacco companies.
Daniel P. Soso, 63, of Alsip, was charged with one count of income tax evasion. The indictment alleges that in 1996, the Illinois Attorney General entered into a written contract with several law firms who represented the State of Illinois in its lawsuit against certain tobacco companies to recover, among other things, money damages incurred by the State of Illinois as a result of the sale of tobacco products to residents of the State of Illinois. In addition, the contract provided that the law firms representing the State of Illinois, including Law Firm B, would share a “contingent fee” equal to ten percent of the total monetary recovery realized by the State of Illinois in its planned lawsuit. The indictment further alleges that Soso, Individual A (an individual formerly licensed to practice in Illinois) and Individual B (a partner of Law Firm B) entered into agreements to pay Soso and Individual A a portion of the attorney fees awarded in the tobacco lawsuit and concealed these agreements from the State of Illinois, the Illinois Attorney General and others.
The indictment further alleges that between 1993 and 2013, Soso failed to pay approximately $779,615.86 in taxes, which amount included taxes due from the income Soso received from the tobacco lawsuit. Further, the indictment alleges that Soso took a variety of acts to evade the payment of these taxes, to include the use of nominee bank accounts; making false statements to the IRS concerning his sources of income; and causing the circumvention of levies issued by the IRS to third parties to recoup taxes due from Soso.
The defendant will be arraigned at a later date in U.S. District Court. The charge carries a maximum sentence of five years in prison and a $100,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced the indictment with Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigative Division Chicago and Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation Chicago. The government is being represented by Assistant U.S. Attorneys Amarjeet S. Bhachu, Michael T. Donovan and Andrew K. Polovin.
The public is reminded that an indictment contains merely 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.
Indictment
Former Speaker of the United States House of Representatives Charged with Structuring Cash Withdrawals to Evade Currency Transaction Reporting Requirements and Making False Statement to the FBIRead the Press Release
CHICAGO — The former Speaker of the United States House of Representatives was charged today with structuring the withdrawal of $952,000 in cash in order to evade the requirement that banks report cash transactions over $10,000, and lying to the Federal Bureau of Investigation about his withdrawals. The defendant, JOHN DENNIS HASTERT, 73, of Plano, Illinois, was charged with one count each of structuring currency transactions to evade Currency Transaction Reports and making a false statement to the FBI in an indictment returned by a federal Grand Jury. He will be ordered to appear for arraignment on a later date in U.S. District Court.
According to the indictment, in 2010, Hastert agreed to provide Individual A $3.5 million in order to compensate for and conceal his prior misconduct against Individual A. From 2010 to 2014, Hastert withdrew a total of approximately $1.7 million in cash from various bank accounts and provided it to Individual A. Beginning in approximately July 2012, Hastert started structuring his cash withdrawals in increments of less than $10,000 to evade the filing of Currency Transaction Reports (“CTRs”), which banks are required to file for cash withdrawals in excess of $10,000. In December of 2014, when questioned by the FBI regarding his structuring of cash withdrawals, Hastert falsely stated that he was keeping the cash.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Stephen Boyd, Acting Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.
Each count of the indictment carries a maximum penalty of 5 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorneys Steven Block and Carrie Hamilton.
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.
Indictment
Chicago Area Psychologist Pleads in Nationwide Medicare Fraud Strike Force TakedownRead the Press Release
CHICAGO — An area psychologist pled guilty today to engaging in a health care fraud scheme to defraud the Medicare program, federal law enforcement officials announced today. SHARON A. RINALDI, a licensed psychologist, was charged in a five-count indictment returned in October 2012 with defrauding Medicare by submitting thousands of false claims for providing psychotherapy services to Medicare beneficiaries residing in skilled nursing homes in the Chicago area. Rinaldi submitted false claims to Medicare seeking a total reimbursement of approximately $1.1 million and as a result of those false claims, Medicare paid Rinaldi at least $447,155 in funds to which she was not entitled. Rinaldi, 60, of Inverness, pled to one count of health care fraud before U.S. District Court Judge Robert M. Dow. Rinaldi also has agreed to forfeit of more than $100,000 that was seized from her home and a personal bank account in September 2012.
According to the plea, between December 2008 and August 2012, Rinaldi claimed that she provided services to Medicare beneficiaries who were deceased at the time; that she provided services on certain dates when she was in other locations, such as Las Vegas and San Diego; and she inflated the number of hours that she had provided services on particular dates, often exceeding 24 hours in a single day.
Health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, and restitution is mandatory. Upon a conviction, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The plea was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation Chicago; and ; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG.
The government is represented by Assistant U.S. Attorney Paul Tzur.
Plea Agreement
Chicago Area Men Charged with Altering ATM Settings to Disperse More Cash Than ReportedRead the Press Release
CHICAGO ― Two men were indicted on April 29, 2015, by a federal grand jury in an indictment unsealed today for allegedly intending to defraud ATMs in and around Chicago by altering the settings of the ATMs so that the actual amounts disbursed far exceeded the withdrawal requests as well as the balance of the accounts from which the withdrawal requests were made. The funds that were fraudulently obtained totaled approximately $185,000. The defendants, Trent Ratliff and Fredrick Lee, were charged in a 10-count indictment. Both defendants were charged with one count of conspiracy to commit computer access fraud as well as separate counts of computer access fraud, corresponding to specific ATM withdrawals.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
Ratfliff, 52, of Chicago, and Lee, 60, of Chicago, were arraigned today before the Honorable Gary Feinerman and were released on a $4,500 bond. Both defendants have a status date on August 24, 2015. The indictment seeks forfeiture of approximately $185,000. According to the indictment, Ratliff and Lee, using debit cards that were registered in their own names from various banks or using debit cards that were registered in the names of several other individuals, deposited, or caused to be deposited, nominal sums of money on these debit cards. Between September 2010 and January 2011, using these debit cards, Ratliff and Lee accessed the management function of various ATMs in and around Chicago, without authorization from the owners of the ATMs, and altered the settings so that the ATMs falsely recorded, incorrectly reported, and transmitted debit amounts that exceeded the balance of the debit card accounts. In many cases, Ratliff and Lee altered the ATM settings so that account debits were recorded and reported by the ATM as one-twentieth of the actual funds that the ATM disbursed. In other words, a request for $100 from an altered ATM resulted in the disbursement of $2,000. Following the withdrawal of money from these ATMs, Ratliff and Lee again accessed the management function of the ATMs and changed the settings back so that subsequent account debits from that ATM were recorded and reported as being equal to the actual funds disbursed.
Each count of the indictment carries a maximum penalty of 5 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.
The government is being represented by Assistant United States Attorney Naana Frimpong.
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.
Indictment
Alderman’s Former Chief of Staff Sentenced to 15 Months for Accepting $7,500 BribeRead the Press Release
CHICAGO — A former chief of staff for a Chicago alderman was sentenced today to 15 months in prison for accepting a $7,500 cash bribe in exchange for obtaining the alderman’s letter of support for a license to sell alcohol in the alderman’s ward. The defendant, CURTIS V. THOMPSON, JR., 63, of Chicago, pled guilty in December 2014 to federal program bribery, in accepting a bribe from an individual who claimed he wanted to open a convenience store but was actually a cooperating witness in an FBI undercover investigation. U.S. District Court Judge Samuel Der-Yeghiayan also sentenced Thompson to one year of supervision after his release and to forfeit $7,500, the amount of the bribe. Thompson was ordered to surrender to the U.S. Bureau of Prisons on September 1, 2015.
According to court documents, Thompson accepted 75 $100 bills in a Christmas card that the cooperating witness gave him at the alderman’s holiday party in December 2013. Thompson admitted that he used the money he received to pay personal expenses.
“Over the years, time and time again, officials have demonstrated their greed,” said Judge Der-Yeghiayan while imposing sentence. “His job was to serve the citizens of Chicago, and he did not.”
“He (Thompson) readily joined the ranks of corrupt public officials who have chosen to line their pockets at the public’s expense,” argued Assistant U.S. Attorney Megan Church in the government’s sentencing memorandum. “He gave the residents of Chicago one more reason to doubt its leaders and public officials; one more reason to question the legitimacy of their municipal government; and one more reason to give into the cynicism of a “where’s mine?”
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorneys Megan Church and Bethany Biesenthal.
Lockport Pharmacist Indicted for Allegedly Falsely Billing $2.4 Million for Prescription ClaimsRead the Press Release
CHICAGO — A southwest suburban pharmacist was indicted on federal charges for health care fraud, federal law enforcement officials announced today. The defendant, WALTER BEICH, the owner and licensed pharmacist at Lockport Pharmacy, Inc. operating as Corwin Pharmacy, was charged in a twelve-count indictment returned by a federal grand jury last week, alleging he participated in a scheme to defraud various health care benefit programs in the amount of $2,400,000. The indictment also charges Beich with aggravated identity theft for his use of patient and physician names and identifying information during his scheme. The indictment also seeks forfeiture in the amount of $2.4 million, the amount of the alleged loss to the health care providers. Beich, 61, of Lockport, Illinois, was arraigned in federal court this morning and was released on a $4,500 unsecured bond and is scheduled for a status in front of U.S. District Court Judge John W. Darrah on June 26, 2015.
According to the indictment, Beich participated in a scheme to defraud Medicare, Medicaid, Blue Cross Blue Shield, Humana, and United Healthcare by filing fraudulent claims for prescription drugs that were not dispensed to his customers or he had switched out for less-expensive supplements instead of FDA-approved prescription drugs. The indictment also alleges that Beich had his employees create fake prescriptions to make it appear as if a physician had phoned-in certain prescriptions. In addition, the indictment alleges that Beich obtained physician sample drugs and then submitted insurance claims for dispensing these sample drugs as if he obtained those drugs through commercial distribution channels. The indictment also alleges that Beich dispensed a foreign-sourced drug to customers instead of the prescription Viagra.
Health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, and restitution is mandatory. Aggravated identity theft carries a mandatory prison term of two years’ incarceration, served consecutively to any other term of imprisonment imposed. Upon a conviction, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG; and James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Labor-OIG.
The government is being represented by Assistant U.S. Attorney Samuel B. Cole.
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.
Indictment
Woodstock Woman Pleads Guilty to False Statements in BankruptcyRead the Press Release
ROCKFORD —SOULA APOSTOLOPOULOS, 46, of Woodstock, Ill., formerly of Barrington Hills, Ill., pled guilty today before U.S. District Judge Philip G. Reinhard to making false statements in her bankruptcy case. She was indicted on October 21, 2014, along with her husband, DANIEL APOSTOLOPOULOS.
According to the plea agreement, on March 13, 2010, Soula Apostolopoulos filed a Chapter 7 bankruptcy Petition, and made false statements on the Statement of Financial Affairs that she signed under penalty of perjury. According to the indictment, Soula Apostolopoulos fraudulently concealed income she received from her interest in a Chicago restaurant she previously purchased with her husband, as well as her interest in Wisconsin real estate and in financial accounts during the year preceding the filing of her bankruptcy.
Providing material false statements or documents under penalty of perjury in a bankruptcy case carries a maximum penalty of 5 years in prison, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater. The judge may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years. The Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.
Members of the public are reminded that a criminal indictment contains only charges and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt of each defendant beyond a reasonable doubt.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Plea Agreement
Former Sandwich, Illinois Business Owner Sentenced for Making A False Statement to A Financial InstitutionRead the Press Release
ROCKFORD — A former Sandwich, Ill. business owner was sentenced today in federal court by U.S. District Judge Frederick J. Kapala for making a false statement to a financial institution. The defendant, STEVEN J. MOORHOUSE, 62, was sentenced to 21 months in federal prison, to be followed by 3 years supervised release, and was ordered to pay restitution of $881,012.38 to Old Second National Bank, Aurora, Ill. Moorhouse, who was President and majority owner of Jefsco Manufacturing Co., Inc., a manufacturing business, pled guilty to the charge on Jan. 12, 2015.
According to the plea agreement, during July 2009, Moorhouse sought a lender to make business loans to Jefsco and began to provide Jefsco’s financial information to Old Second National Bank (OSNB). The plea agreement further states that on Dec. 4, 2009, Moorhouse provided OSNB with a document that falsely inflated the value of the accounts receivable owed to Jefsco by hundreds of thousands of dollars. Moorhouse admitted he was aware that the amount of loan proceeds that OSNB would disburse would be, in part, determined by the amount of receivables.
The sentencing was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Christy Romero, Special Inspector General for the Troubled Asset Relief Program; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation was conducted jointly by the Office of the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation.
The government was represented by Assistant U.S. Attorney Michael D. Love.
Felon Arrested for Possessing A Firearm at Area Shooting RangeRead the Press Release
CHICAGO — A Chicago man was arrested this morning and is facing federal gun charges for being a felon in possession of a firearm. The defendant, LABAR SPANN, was arrested following an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Chicago Police Department.
SPANN, 36, of the 800 block of North Francisco Street, was arrested at his residence and charged by criminal complaint that was unsealed following his initial appearance today. He appeared today before U.S. Magistrate Judge Michael T. Mason and was ordered to remain in custody pending a detention hearing at 2:00 p.m. on Monday in U.S. District Court.
According to the complaint, on September 14, 2014, Spann, a convicted felon, knowingly possessed a firearm, namely a Glock 19, model 19C, .9 mm caliber handgun while with two individuals, L.H. and K.C., at Midwest Sporting Goods, a firearms store and shooting range, located in Lyons, Illinois. Allegedly, one of the individuals, L.H., rented a Glock 19C pistol and proceeded to the firing line with Spann and K.C. while Spann allegedly loaded a magazine with 9 mm ammunition into the firearm and then shot at the target, emptying the magazine. Spann then allegedly loaded additional magazines into the firearm twice and handed it to L.H., then K.C., who each shot at targets and emptied the magazines.
If convicted of being a felon-in-possession of a firearm, the defendant could be sentenced to a maximum 10 years imprisonment and a $250,000 maximum fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The arrest and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation Chicago Office; Carl Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and Chicago Police Superintendent Garry McCarthy.
The government is being represented by Assistant U.S. Attorneys Peter S. Salib, Timothy J. Storino and Tobara Richardson.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Complaint
Bolingbrook Man Sentenced to 24 Months for Attempting to Illegally Export Thermal Imaging Camera to PakistanRead the Press Release
CHICAGO — A Bolingbrook man was sentenced today to 24 months in federal prison for violating U.S. export laws by attempting to ship a thermal imaging camera from his company in Schaumburg to a company in Pakistan without obtaining a license from the U.S. Commerce Department, federal law enforcement officials announced today. The defendant, Bilal Ahmed, 34, of Bolingbrook, Illinois, was also ordered to complete a term of two years of supervision after his release by U.S. District Judge Rebecca R. Pallmeyer. Ahmed was ordered to report to the Federal Bureau of Prisons on July 17, 2015. Ahmed pled guilty to one count of willfully violating export control regulations, specifically the International Emergency Economic Powers Act, between June 2009 and March 2014.
Ahmed was the owner, president, and registered agent of Trexim Corporation, an Illinois corporation based in Schaumburg, which was in the business of purchasing items for export from the United States. The defendant was regularly involved in the negotiation, purchase, and export of materials from United States manufacturers to overseas locations, including Pakistan. The defendant received orders for goods from Pakistani entities, including Pakistan’s Space and Upper Atmosphere Research Commission, also known as SUPARCO, and then purchased and exported those items to the Pakistani entities, including to SUPARCO. Ahmed knew that the export of goods, particularly the export of goods designated as “dual use” items, was controlled in some instances by the Department of State and the Department of Commerce and was aware that certain items required a license issued from either the Department of State or the Department of Commerce in order to be exported from the United States.
The items exported by Ahmed included, among other things, a FLIR HRC-U thermal imaging camera, carbon fiber to make “bullet proof-vests,” and microwave laminate, all to Pakistan. Each of those items was on a Commerce Department list of controlled export goods for reasons of national security and regional stability. A license was required to ship the items to Pakistan. The defendant exported and attempted to export those items to Pakistan without ever having applied for such a license.
“For a period of at least four years, defendant made it his business to export items from the United States to overseas locations, without obtaining the necessary licenses and approvals when required. In fact, based just on the purchase orders recovered from defendant’s computer at the time of his arrest, purchase orders reflected the export of approximately 203 items from the United States to Pakistan,” stated Assistant U.S. Attorney Bethany Biesenthal in the government’s sentencing memorandum.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, and Edward Holland, Supervisory Special Agent of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. The Justice Department’s National Security Division provided assistance in the case.
The government was represented by Assistant U.S. Attorney Bethany Biesenthal.
Postal Service Employees Arrested at O’Hare Airport for Opening and Stealing Contents from Packages Including NarcoticsRead the Press Release
CHICAGO — Two Postal Service employees were arrested today for allegedly opening and stealing the contents of Express Mail and Priority Mail parcels, which included narcotics. The defendants, Aramis Brown and Zaphronsia Wheeler, were arrested following an investigation by United States Postal Service Office of Inspector General (Postal OIG) and the United States Postal Inspection Service (USPIS).
Brown, 29, of Chicago, and Wheeler, 39, of Chicago, were charged by criminal complaints that were unsealed following their initial appearances today. They appeared today before Magistrate Judge Michael T. Mason in U.S. District Court and were released on a $4500 bond.
According to the complaint affidavits, Brown and Wheeler are Postal Service employees at the International Service Center located at O’Hare Airport, Chicago, Illinois (“International Service Center”) and allegedly have been opening and stealing the contents of Express Mail and Priority Mail parcels. These rifled Express and Priority Mail parcels fit the general profile for parcels which contain narcotics, in that they are sent from narcotics source states, from fictitious senders or to fictitious recipients, and narcotics sniffing canines alert to the parcels. The defendants are alleged to have stolen contents, some which included narcotics, out of Express and Priority Mail parcels from at least 16 pieces of mail on at least seven occasions.
The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Scott Caspall, Special Agent-In-Charge of the Chicago Great Lakes Area Field Office of the U.S. Postal Service Office of Inspector General; and Tony Gomez, Postal Inspector in Charge, U.S. Postal Inspection Service. Cook County Sheriff’s Office, Plainfield and Romeoville Police Departments assisted in the investigation.
The government is being represented by Special Assistant U.S. Attorney William Novak.
Theft of mail and narcotics offenses carries a maximum penalty of 5 years in prison and a $250,000 fine. 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 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.
Complaint
ComplaintChicago Investment Adviser Sentenced to 36 Months in $1 Million Fraud SchemeRead the Press Release
CHICAGO – A Chicago investment adviser was sentenced today to 36 months imprisonment for fraudulently using new investor funds, including funds from elderly investors, to pay off old investors, leading to a loss of almost $1 million. The defendant, JOSEPH HENNESSY, 54, of Western Springs, was also ordered to pay restitution in the amount of $645,900 to the victims of the fraud and was sentenced to three years of supervision after his release by U.S. District Court Judge Harry D. Leinenweber. Hennessy was ordered to report to the Federal Bureau of Prisons on June 23, 2015. Hennessy pled guilty on December 16, 2014 to one count of wire fraud.
Hennessy operated Resource Planning Group, Inc., a registered investment adviser with the U.S. Securities and Exchange Commission, in Chicago. Hennessy also formed and operated the Midwest Opportunity Fund, a private equity fund that targeted for purchase and investment small to medium-sized companies based in the Midwest.
“What you did involved a massive abuse of trust that needs to be punished,” stated Judge Leinenweber when imposing the sentence, “People relied on you.”
According to court records, between May 2009 and February 2010, Hennessy solicited investors to invest in the Midwest Opportunity Fund, and offered a high interest rate between 10% to 15% per year with a short maturity date of between two and six months. Hennessy falsely represented to the investors that their funds would be used to invest in small to medium-sized companies. However, Hennessy used the new investor funds to pay off old investors in the Midwest Opportunity Fund. Hennessy also misappropriated funds from the accounts of two elderly investors and forged their names on wire transfer forms without their authorizations. Hennessy used the elderly investors’ funds to repay existing investors in the Midwest Opportunity Fund.
“Defendant Joseph Hennessy owed a fiduciary duty to his clients. He was an investment adviser tasked with managing his clients’ money. However, when defendant went into debt with the Midwest Opportunity Fund, he used client money like a personal piggybank, selling promissory notes and transferring funds out of new client accounts to pay off old debtors,” argued Assistant United States Attorney Sunil Harjani in the government’s sentencing memorandum.
The case was prosecuted by Assistant U.S. Attorney Sunil Harjani.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The Chicago office of the U.S. Securities and Exchange Commission provided assistance with the investigation.
Palos Hills Felon Charged with Illegally Possessing and Dealing Firearms; 10 Guns SeizedRead the Press Release
CHICAGO ― Ten assorted pistols, rifles, shotguns, and a revolver have been seized and a Palos Hills man is facing federal firearms charges as a result of an investigation led by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Over the course of the investigation, the defendant illegally sold eight firearms to a confidential informant, and two additional firearms were seized from the defendant’s residence at the time of his arrest in March 2015.
Steven Riley, 23, of Palos Hills, was charged yesterday in a seven count indictment by a federal grand jury on charges of being a felon-in-possession of firearms and dealing firearms without a federal license. Riley was arrested on a federal complaint in March 2015, and remains on bond. Riley will be arraigned on a date to be determined by U.S. District Court Judge Virginia M. Kendall.
According to the complaint, beginning in October 2014 through February 2015, Riley sold numerous firearms to a confidential informant (CI). In recorded conversations between Riley and the CI, Riley discussed the importance of removing the serial numbers so that the firearms could not be traced. Riley also supplied the CI with ammunition at three of the five controlled purchases; one of the guns purchased by the CI was loaded with ammunition.
According to the charges, the CI purchased eight firearms in total from Riley; four rifles, three shotguns, and a revolver, many of which had obliterated serial numbers. Riley is also charged with illegal possession of two loaded semi-automatic pistols recovered at his residence during the execution of a search warrant. In addition, the indictment seeks forfeiture of 1,872 rounds of ammunition seized from his residence on the day of his arrest.
Being a felon-in-possession of a firearm carries a maximum sentence of 10 years in prison and a $250,000 fine. Dealing firearms without a federal license carries a maximum sentence of five years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Carl Vasilko, 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 being represented by Assistant U.S. Attorney Elizabeth Pozolo.
Criminal complaints are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Indictment
Former Vice-President and Seven Others Charged in Scheme to Defraud Beer Company of over $7 MillionRead the Press Release
CHICAGO — A former Vice-President of a brewing company was charged in a twenty count indictment yesterday along with seven co-defendants, as a result of an alleged scheme to defraud the company of at least $7 million by submitting false estimates and invoices that billed for fictitious promotional and marketing events. DAVID COLLETTI, 58, of Chicago, was charged in a federal grand jury indictment with wire fraud along with seven other co-defendants; RODERICK GROETZINGER, 61, of North Carolina, ANDREW VALLOZZI, 53, of Florida, JAMES RITTENBERG, 72, of Chicago, SCOTT DARST, 68, of Las Vegas, THOMAS LONGHI, 57, of Florida, FRANCIS BUONAURO Jr., 72, of Florida, and MARYANN ROZENBERG, 57, of Wisconsin. Defendants RITTENBERG and DARST were also charged with mail fraud. All eight defendants will be arraigned at a date determined by U.S. District Court.
The indictment alleges that COLLETTI, as a Vice-President, oversaw the marketing, promotion, and sale of beer for the victim company, which hired third-party vendors to organize and hold events and promotions designed to market the company’s beer. According to the indictment, GROETZINGER, VALLOZZI, RITTENBERG, DARST, LONGHI, BUONARO, and ROZENBERG controlled entities which claimed to provide third-party vendor services to the victim company during the course of the alleged scheme. The entities included Beverage Industry Marketing Services, Rave Media, Events Marketing Network LLC, AVA Advertising, Inc., AVA Marketing and Communications, LLC, Food and Beverage Network, Inc., Prime Promotions, Inc., P&D Marketing, Inc., Longhi Golf Operations, F&B Marketing, and Golden Logistics.
The indictment alleges that during COLLETTI’s tenure at the company, he worked with GROETZINGER, VALLOZZI, RITTENBERG, DARST, LONGHI, BUONARO, and ROZENBERG to submit false estimates and invoices in the name of entities which falsely billed the company for fictitious promotional events and for events at inflated prices. The estimates and invoices misrepresented the date, location, cost and type of events that were supposedly being held to market the company’s products. The fictitious events included supposed food and beer pairings, trainings, and promotions for certain customer accounts, held at casinos, hotels, and flea markets.
The indictment alleges that COLLETTI oversaw the approval of a number of these false invoices for payment and the company paid in excess of $7 million to the defendants’ entities. Subsequently, some of the defendants arranged for COLLETTI to receive a portion of the payments. According to the indictment, the defendants used the victim company’s money, for among other things, defendants’ personal expenses, collectible firearms, international golf trips, hunting trips, investments in a hotel and bar, and an arena football team.
The indictment seeks forfeiture of at least $7 million.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is being represented by Assistant U.S. Attorneys Jessica Romero and Jennie Levin.
Each count of mail or wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The 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.
Indictment
Final Defendant Sentenced in Operation Tow Scam 15 Defendants Convicted and SentencedRead the Press Release
CHICAGO — Former Chicago police officer Francis Zoller was the final defendant to be sentenced today in the six year investigation Operation Tow Scam, led by the Federal Bureau of Investigation. Zoller, 46, of Chicago, pled guilty on June 11, 2014 to one count of attempted extortion under color of official right and one count of mail fraud. U.S. District Court Judge Samuel Der-Yeghiayan sentenced Zoller to 12 months and one day in prison, followed by a term of one year of supervised release. Judge Der-Yeghiayan also ordered Zoller to pay restitution in the amount of $14,020, and to report to the Bureau of Prisons on August 11, 2015.
According to the court documents, Zoller engaged in a pattern of extortion of tow truck drivers and was also willing to stage an accident with one of them which led an insurance company to issue a check for $17,000 for damage that never occurred. Zoller used the authority of his office to extort money from his favored tow drivers, but he also misused his office to privilege those drivers over other towing companies who sought to obtain vehicle tows at accidents. “Zoller’s misuse of his authority on the streets of Chicago harmed the Chicago Police Department, the citizens he was sworn to protect and the tow truck drivers who were trying to make a living at accident scenes,” argued Assistant U.S. Attorney Michael Donovan in the government’s sentencing memorandum.
In total, 15 defendants were charged with extortion, tax fraud, lying to federal agents and accessing federal law enforcement database information. Of the 15 defendants, 14 pled guilty and one was convicted at trial. Of the 15 defendants, 11 are former police officers, including Zoller. Those convicted in connection to the Operation were:
Jimmie Akins, former CPD officer, pled guilty to attempted extortion under color of official right and filing a false tax return, and was sentenced to 18 months imprisonment;Michael Ciancio, formerCPD officer, pled guilty to attempted extortion under color of official right, and was sentenced to 24 months imprisonment;
Scott Campbell, former CPD officer, pled guilty to mail fraud and tax misdemeanor, and was sentenced to one year of probation;
Joseph Grillo, formerCPD officer, pled guilty to mail fraud, and was sentenced to two years probation;
James Athans, pled guilty tomail fraud and tax fraud and was sentenced to a year and a day in prison;
Joseph DeMichael, pled guilty to mail fraud, and was sentenced to two years probation;
Juan Prado, former CPD officer,pled guilty to attempted extortion under color of official right, and was sentenced to 46 months imprisonment;
James Wodnicki, former CPD officer, pled guilty to attempted extortion under color of official right and was sentenced to 24 months imprisonment;
Marcos Hernandez, formerCPD officer, pled guilty to improper access of a federal database, and was sentenced to two years probation;
Givoanni Rodriguez, pled guilty to making false statements to a federal officer, and was sentenced to two years probation;
Deavalin Page, former CPD officer,convicted after a jury trial of attempted extortion under color of official right, and was sentenced to 51 months imprisonment;
Gregory Garibay, former CPD officer, pled guilty to attempted extortion under color of official right and mail fraud, and was sentenced to 24 months imprisonment;
Brian Chandler, pled guilty to wire fraud and bank larceny, and was sentenced to 20 months imprisonment;
Ali Haleem, former CPD officer,pled guilty to attempted extortion under color of official right and selling firearms to a felon, and was sentenced to 15 months imprisonment.
Zoller’s sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Chicago Police Department, Office of Internal Affairs, and the Internal Revenue Service, Criminal Investigative Division, assisted in the investigation.
The government was represented by Assistant United States Attorneys Michael Donovan and Maggie Schneider.
Naperville Man Charged in Setting Fire to Chicago Air Route Traffic Control Center in AuroraRead the Press Release
CHICAGO — A Naperville man was charged by information today on federal charges he set fire to the Chicago Air Route Traffic Control Center in Aurora on September 26, 2014, federal law enforcement officials announced today. Brian Howard, 37, of Naperville, was charged with one count of willfully setting fire to, damaging, destroying or disabling an air navigation facility; and one count of using fire to commit a federal felony. Howard will be arraigned at a date yet to be determined in U.S. District Court and remains in federal custody since his arrest in September 2014.
The Chicago Air Route Traffic Control Center (the “Control Center”) is located in Aurora, Illinois. The Control Center is responsible for safely guiding airplanes at high altitudes across its geographic territory. Given its central location, the Control Center is one of the nation’s largest and most important. It controls the air space over parts of Illinois, Indiana, Iowa, Wisconsin, and Michigan; provides air traffic services to the Chicago and Milwaukee metropolitan areas; and handles approximately 3,000,000 aircraft operations per year.
According to court documents, Howard was employed by an FAA contractor. He worked on telecommunications matters at the Control Center and at other FAA facilities for approximately eight years.
On September 26, 2014, at approximately 5:00 a.m., Howard entered the Control Center using his FAA-issued credentials. He was carrying a black Pelican suit case. Approximately 30 minutes after entering the Control Center, Howard posted a Facebook message that stated, in part, “Take a hard look in the mirror, I have. And this is why I am about to take out [the Control Center] and my life. April, Pop, love you guys and I am sorry. Leaving you with a big mess.”
Several minutes later, an individual who worked at the Control Center contacted 911 and notified emergency personnel that the Control Center was on fire. First responders arrived on the scene to heavy smoke. They observed that a floor panel had been lifted exposing the Control Center’s telecommunications cables, some of which had been severed and set on fire. First responders also saw a gas can next to the floor panel that had been pulled away, the nozzle to the gas can, a towel that appeared to have been burned, and a black Pelican suit case.
Howard is charged with intentionally damaging and disabling the telecommunication infrastructure at the Control Center, and setting fire to the area which housed these key components.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Carl Vasilko, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The government is being represented by Assistant U.S. Attorney Andrew K. Polovin.
The charge alleged in the information of willfully setting fire to, damaging, destroying or disabling an air navigation facility, or willfully interfering by force or violence with the operation of that facility, likely endangering the safety of aircraft in flight, carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross loss caused by Defendant’s actions.
The charge alleged in the information of using fire to commit a federal felony carries a mandatory penalty of 10 years in prison, which must be in addition to any sentence imposed for the underlying felony.
If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The public is reminded that an information 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.
Information
River Grove Man Sentenced to 36 Months for Impersonating A United States Marshal Service EmployeeRead the Press Release
CHICAGO — A River Grove man was sentenced to 3 years in prison today as a result of his conviction for impersonating an employee of the U.S. Marshals Service on two occasions in 2013. The defendant, ROBERT P. ROZYCKI, 39pledguilty to the offense in November 2014. U.S. District Court Judge John J. Tharp, who imposed the sentence, also ordered Rozycki to one year of supervised release to include mental health treatment. Rozycki has been in custody since his arrest in June, 2014.
According to court records, in March 2013, Rozycki was at a McDonald’s restaurant located in Chicago’s Wrigleyville neighborhood wearing clothing and paraphernalia which he intended to resemble the duty uniform of a Deputy U.S. Marshal, including a dark long-sleeved t-shirt worn under a grey golf shirt, khaki cargo pants, a law enforcement utility belt equipped with handcuffs and a police radio, and a thigh holster containing what appeared to be a firearm. While dressed in this fashion, he approached a customer, and after a brief but heated exchange, he directed the customer to stand up. When the customer refused, Rozycki forcibly placed the customer in handcuffs and escorted him out of the restaurant. He released the customer a short time later at the direction of a McDonald’s manager.
In addition, in May 2013, the defendant was in the parking lot of the same McDonald’s restaurant wearing clothing and paraphernalia which he intended to resemble the duty uniform of a Deputy U.S. Marshal similar to the earlier impersonation. In addition, his car, a black Crown Victoria, was equipped to resemble a law enforcement vehicle with LED emergency lights, was parked in the same lot.
“The defendant usurped the authority of a legitimate law enforcement agent when he donned the uniform and equipment of a Deputy U.S. Marshal,” wrote Assistant U.S. Attorney Kathryn L. Maliza in the Government’s Sentencing Memorandum.
The sentence 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 case was prosecuted by Assistant U.S. Attorney Kathryn Malizia.
Man Sentenced to 7 1/2 Years for Identity Theft for Purposes of Filing False Tax ReturnsRead the Press Release
CHICAGO — A Chicago man was sentenced yesterday to 90 months in federal prison by U.S. District Court Judge Edmond E. Chang for his role in a scheme involving theft of hundreds of identities which were used to file approximately 395 false and fictitious tax returns claiming refunds in amounts totaling approximately $357,539.
The defendant, ROBERT BROWN, pleaded guilty in January 2015 to one count each of aggravated identity theft and wire fraud in a six-count indictment, admitting that beginning in January 2010 and continuing through March 2014, in cooperation with his co-defendant, he submitted fraudulent federal income tax returns using the misappropriated personal identifying information of approximately 332 taxpayers, causing the IRS to issue refunds. Several of the identities were stolen from residents of nursing homes and assisted living facilities. Judge Chang also ordered Brown to pay restitution in amount of $308,829, which is the amount that Brown caused the IRS to pay in fraudulently claimed tax refunds, and imposed a period of 3 years of supervision after his release. Brown is currently in federal custody.
Brown, 30, of Chicago, and co-defendant Lorenzo Brown, obtained personal identifying information from victim taxpayers, including names, social security numbers, and dates of birth, without the knowledge or consent of the victim taxpayers. Co-defendant Lorenzo Brown gave the misappropriated names, social security numbers, and dates of birth to defendant, who knew that Brown obtained the misappropriated identifying information from the residents of nursing homes and assisted living facilities, including the social security number and other personal identifying information. The defendant prepared fraudulent tax returns and electronically filed those fraudulent tax returns claiming fraudulent refunds based upon false income and false tax withholding information, using the identifying information provided to him by his co-defendant. The defendant caused the IRS to send fraudulently claimed tax refunds via prepaid debit card, United States Treasury check, or electronic funds transfers to bank accounts in the name of the co-defendant, who withdrew the funds from the bank accounts and provided portions of these funds to defendant.
“This defendant used the personal identifying information of many victims, including the vulnerable elderly and disabled victims who reside in nursing homes and assisted living facilities, for his own personal gain,” stated Assistant U.S. Attorney Kelly Greening in the Government’s Sentencing Memorandum, “He profited greatly off of the use of the victims’ information.”
Co-Defendant Brown is scheduled to be sentenced June 25, 2015, by U.S. District Court Judge Chang.
The sentence 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 Office of the Internal Revenue Service Criminal Investigation Division.
The government was represented by Assistant U.S. Attorney Kelly Greening.
Black Disciples Gang Leader Sentenced to 15 Years in Prison for Drug DistributionRead the Press Release
CHICAGO — A high-ranking leader of the Black Disciples street gang was sentenced today to 15 years in federal prison after being convicted of narcotics distribution. The defendant, WALTER BLACKMAN, 52, of Gary, Indiana, pleaded guilty in August 2014 to distribution of illegal narcotics. Today’s sentence was imposed by United States District Court Judge Edmond E. Chang. Blackman has been in federal custody since his arrest in April 2013. He must serve at least 85 percent of his sentence.
Blackman was a high-ranking leader of the Black Disciples street gang in Chicago. He distributed drugs – including crack cocaine, powder cocaine, and heroin – and controlled the Black Disciples gang members’ drug trafficking in the city of Chicago’s far south side, including the violence-plagued Roseland and Altgeld Gardens communities. According to the government’s sentencing memorandum, Blackman admitted that he had approximately 500 subordinate gang members underneath his control in his territory in “the hundreds,” being part of the Roseland neighborhood of Chicago named for the three-digit streets.
Blackman’s charges in this case, namely sixteen counts of drug distribution, are a small sample of his larger drug trafficking operation in and outside the Black Disciples street gang – an operation that encompassed multiple drug types, multiple years, and multiple states. The defendant was a repeat and large scale supplier of controlled substances, selling and distributing crack cocaine, powder cocaine, and heroin in the Chicago area and elsewhere, including Wisconsin, to numerous wholesale customers.
The Court held Blackman responsible for distributing approximately 4,000 grams of crack cocaine, 1,000 grams of powder cocaine, and approximately 390 grams of heroin. Blackman also possessed firearms during his drug trafficking activities.
“This sentence holds the defendant accountable for the narcotics enterprise he controlled, and for his role in the accompanying gang and gun violence that harms our communities,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois. “I want to thank our local, state, and federal law enforcement partners for their brave and outstanding work which has resulted in a major impact on this street gang’s narcotics operation and illegal activities,” Mr. Fardon added.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Internal Revenue Service’s Criminal Investigation Division and the Chicago Police Department’s Gang Investigations Division also had significant roles in the investigation, which was conducted through the federal High Intensity Drug-Trafficking Area (HIDTA) Task Force and under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF). The Indianapolis, Milwaukee, Minneapolis and Omaha offices of the FBI also assisted with the investigation.
The government was represented by Assistant U.S. Attorneys Carol A. Bell and Sarah Streicker.
Former Prison Guard Sentenced to 3 Years for Identity Theft of Inmates for Purposes of Filing Illegal Tax ReturnsRead the Press Release
CHICAGO — a former Miami Dade County Department of Corrections and Rehabilitation prison guard was sentenced today to 36 months in federal prison by U.S. District Court Judge Charles R. Norgle for his role in a scheme involving theft of prison inmates’ identities which were used to file false tax returns.
The defendant, CORNELIUS CRUMITY, pleaded guilty in May 2014, to one count each of aggravated identity theft and mail fraud in a two-count information, admitting that beginning in January 2008 and continuing through April 2011, he stole at least 50 inmate identities and filed fraudulent federal income taxes, attempting to cause the IRS to issue refunds in amounts totaling approximately $356,000. As a result of his conduct, the defendant caused the United States Treasury to suffer loss of at least $55,888. Judge Norgle also imposed a period of one year supervision after his release. Crumity has been ordered to report to the Bureau of Prisons on July 1, 2015.
Crumity, 39, of Pembroke Pines, Florida, was employed by the Miami-Dade County Department of Corrections and Rehabilitation (the “MDCDC”) as a prison guard. In that position, defendant had access to MDCDC databases and records which included the personal information of inmates, such as names and social security numbers. At various times, without the knowledge or authority of the MDCDC, the defendant accessed and copied the names and social security numbers of inmates who were incarcerated by the MDCDC, and used their names and social security numbers to file false and fraudulent tax returns with the Internal Revenue Service. Crumity filed the false and fraudulent tax returns without the knowledge or authorization of the inmates whose personal identifying information he had obtained from the MDCDC.
When preparing and filing the fraudulent tax returns, Crumity knowingly included false and fabricated W-2s, and false employer, wage and withholding information designed to result in significant tax withholding refunds to the purported filers, generally between $5,600 and $6,100 per return. In addition, he provided false home addresses for the purported filers, where defendant or his co-schemer in Illinois, David Mobley, received mail. In addition, in some instances, defendant caused the United States Treasury to credit the fraudulent tax withholding refunds to debit cards possessed by him or Mobley. After the defendant received the fraudulently issued refunds, he used the funds to his own benefit.
“Few crimes cause greater harm to society than law enforcement corruption,” stated Assistant U.S. Attorney Brian Hayes in the Government’s Sentencing Memorandum. “These ill effects are compounded when committed in a correctional institution, sending a message to inmates that directly contradicts the government’s goals of rehabilitation and reform.”
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Tony Gomez, Postal Inspector in Charge of the U.S. Postal Inspection Service, Chicago; and Stephen Boyd, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.
The government was represented by Assistant U.S. Attorney Brian Hayes.