Northern District of Illinois
Press releases recorded for this federal judicial district.
Federal Judge Sentences Man to Ten Years in Prison for Illegally Possessing Firearm in RockfordRead the Press Release
ROCKFORD — A federal judge has sentenced a Rockford man to ten years in federal prison for illegally possessing a firearm in Rockford.
LAWNDALE PELTS, 36, was found guilty of the firearm offense in May following a jury trial in federal court in Rockford. U.S. District Judge Iain D. Johnston imposed the sentence on Friday.
According to evidence presented at trial, on July 6, 2021, multiple people began shooting at each other in a residential neighborhood on 41st Avenue in Rockford. Home security footage depicted Pelts in possession of a firearm as he fled the shooting. Pelts threw his gun in a residential yard and later, while at the hospital, lied to police about what happened. As a previously convicted felon, Pelts was prohibited by federal law from possessing firearms.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives, and Carla Redd, Chief of the Rockford Police Department. The Beloit, Wisc. Police Department assisted in the investigation. The government was represented by Assistant U.S. Attorneys Jessica Maveus and Cassandra Maier.
Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods (PSN) – the Department of Justice’s violent crime reduction strategy. In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
Businessman Sentenced to More Than Two Years in Federal Prison for Running Fencing Operation out of Suburban Chicago StoresRead the Press Release
CHICAGO — A businessman has been sentenced to more than two years in federal prison for running a fencing operation out of his suburban Chicago stores.
ZIAD I. ZAYED used his store – Crestwood Electronics Inc. in Crestwood, Ill. – and other businesses to knowingly purchase stolen electronic devices and other merchandise, re-package the items, and then sell them to buyers out of state and overseas. Some of the items fenced by Zayed included laptop computers, fitness tracking devices, and digital cameras, some of which were stolen from railcars near Chicago.
Zayed, 49, of Frankfort, Ill., pleaded guilty last year to a federal conspiracy charge. U.S. District Judge Sharon Johnson Coleman on Wednesday sentenced Zayed to two years and four months in federal prison and ordered him to pay more than $1.3 million in restitution.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI.
“By providing a marketplace to sell stolen goods, the defendant has incentivized thieves to steal and rob, whether that’s off tractor trailers sitting on railcars or phones from innocent victims,” Assistant U.S. Attorneys Barry Jonas and Ann Marie E. Ursini argued in the government’s sentencing memorandum.
Loan Originator Convicted in $2.6 Million Mortgage Fraud SchemeRead the Press Release
CHICAGO — A federal jury in Chicago has convicted a loan originator of orchestrating a mortgage fraud scheme that bilked multiple financial institutions out of $2.6 million.
KEVIN SMITH, 52, of Melrose Park, Ill., was found guilty on Sept. 6, 2024, of all five bank fraud counts against him. Each count is punishable by up to 30 years in federal prison. U.S. District Judge John F. Kness set sentencing for Dec. 17, 2024.
Smith was a loan originator for mortgage lending businesses that originated and processed loans for real estate purchases in the Chicago area. Evidence at the two-week trial revealed that Smith engaged in a scheme to fraudulently obtain approximately $2.6 million in federally guaranteed mortgage loans in connection with the purchase of 14 properties in Chicago. Smith recruited buyers at real estate investment seminars held in Chicago-area churches and hotels and caused them to make false representations to lenders about, among other things, the source of their down payments and their intention to occupy the properties as their primary residences. Smith provided or caused others to provide funds to the buyers for use as down payments, knowing that the lenders would be falsely led to believe that the money belonged to the buyers. After a closing and the issuance of the government-insured mortgage loans, Smith made payments to the buyers – describing them as “grants” – and then pocketed payments from the sellers without notifying the lenders.
The conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago, and Gregory Billingsley, Special Agent-in-Charge of the Department of Veterans Affairs, Office of Inspector General, Central Field Office. The government is represented by Assistant U.S. Attorneys Rick D. Young and Misty N. Wright.
“Loan originators and other mortgage professionals are entrusted with protecting the integrity of the government-backed mortgage program,” said Acting U.S. Attorney Pasqual. “Our office will continue to hold accountable any individual who violates that trust to line their own pockets.”
“Smith abused his position of trust as a gatekeeper of FHA-insured mortgage loans and used his real estate knowledge to circumvent the rules to secure his own self-interest,” said HUD-OIG SAC Jindra. “HUD-OIG will continue to work with its prosecutorial and law enforcement partners to aggressively pursue and bring to justice those who seek to profit by abusing HUD’s mortgage insurance and housing programs.”
“This guilty verdict demonstrates the VA Office of Inspector General’s commitment to protecting vulnerable veterans from fraudulent lending practices,” said VA-OIG SAC Billingsley. “The VA-OIG thanks the U.S. Attorney’s Office and our law enforcement partners for their efforts in this investigation.”
Federal Indictment Accuses Former Gary, Ind. Police Officer of Enticing a Minor to Produce Child PornographyRead the Press Release
CHICAGO — A former Gary, Ind. Police officer was arrested today on federal criminal charges for allegedly enticing a minor to produce and record sexually explicit conduct.
JAMES W. BOND, 52, of Crown Point, Ind., is charged with sexual exploitation of a minor and receiving and possessing child pornography, according to an indictment returned in U.S. District Court in Hammond, Ind. The indictment alleges that Bond, while serving as a Commander with the Gary Police Department earlier this summer, enticed and coerced a minor to produce sexually explicit conduct and send it to Bond. At the time, the minor was employed by the City of Gary as part of the Summer Youth Employment Program.
Bond was arrested this morning. His initial court appearance is scheduled for this afternoon before U.S. Magistrate Judge Abizer Zanzi in U.S. District Court in Hammond, Ind.
The indictment and arrest were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of Homeland Security Investigations in Chicago, and Douglas G. Carter, Superintendent of the Indiana State Police. The government is represented by Assistant U.S. Attorney Elie Zenner. The case is being prosecuted by the U.S. Attorney’s Office for the Northern District of Illinois upon recusal by the U.S. Attorney’s Office for the Northern District of Indiana.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. The exploitation count is punishable by a minimum sentence of 15 years in federal prison and a maximum of 30 years. The receipt count is punishable by a minimum sentence of five years and a maximum of 20 years, while the possession count carries a maximum sentence of ten years.
If you believe that you or someone you know may have been victimized by James W. Bond, you are encouraged to contact Homeland Security Investigations by calling 1-877-4-HSI-TIP. The service is available 24 hours a day, seven days a week.
Bond indictmentSuburban Chicago Tax Professional Admits Stealing More Than $1.1 Million in Client FundsRead the Press Release
CHICAGO — A suburban Chicago tax professional has admitted in federal court that he fraudulently obtained more than $1.1 million from more than ten clients under the false pretense that the money would be sent to the IRS and state revenue authorities to satisfy tax liabilities.
ADAM R. OLIVA, 43, of Rolling Meadows, Ill., pleaded guilty on Sept. 13, 2024, to one count of wire fraud and one count of preparing a false tax return. The wire fraud count is punishable by up to 20 years in federal prison, while the tax count carries a maximum sentence of three years. U.S. District Judge Andrea R. Wood set sentencing for Jan. 24, 2025.
Oliva held himself out as a tax professional who did business under various names, including Oliva and Associates LLC and The Oliva Group LLC. Oliva admitted in a plea agreement that from 2015 to 2020, he fraudulently induced the clients to provide him with money for the purported purpose of paying the clients’ income taxes. Oliva instead kept the money for himself. Oliva also admitted that he filed false tax returns on behalf of some of the clients, reflecting no or lower tax liabilities in order to make it less likely that the IRS would contact the clients about their unpaid tax liabilities.
The guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Ramsey E. Covington, Acting Special Agent-in-Charge of IRS Criminal Investigation Chicago Field Office, and Vincent R. Zehme, Special Agent-in-Charge of the Chicago Region of the FDIC’s Office of Inspector General. The government is represented by Assistant U.S. Attorney Rick D. Young.
Earlier this year, Oliva pleaded guilty in a separate fraud case for duping investors who had provided him with money to fund purported short-term loans to clients. Oliva promised the investors that they would receive returns of 10-20% on their investments. In reality, Oliva never intended to make any short-term loans. Instead, he pocketed the investors’ money and used it for personal expenses, including gambling, meals at restaurants, and retail purchases. Oliva faces up to 20 years in prison in that case when he is sentenced on Oct. 18, 2024, by U.S. District Judge John J. Tharp, Jr.
Oliva plea agreement (23 CR 195) Oliva plea agreement (22 CR 178)Managers of Suburban Chicago Youth Counseling Center Sentenced to Prison for Defrauding Illinois Medicaid out of $2.5 MillionRead the Press Release
CHICAGO — The owners of a suburban Chicago youth counseling center have been sentenced to federal prison terms for bilking Illinois Medicaid out of approximately $2.5 million through a fraudulent billing scheme.
From 2011 to 2018, SUMMER MATHESON and TERRENCE EWING, co-managers of Laynie Foundation Inc., along with foundation employee RICHARD GRUNDY, fraudulently billed Illinois Medicaid for more mental health counseling services than the foundation actually provided. Matheson, Ewing, and Grundy also used the Matteson, Ill.-based foundation to seek payment from Illinois Medicaid for non-reimbursable activities, such as internal case reviews, staff training, clinical supervision, and recordkeeping. Matheson attempted to cover up the fraud by directing foundation personnel to backdate and falsify patient records to make it appear that a licensed practitioner had reviewed and approved certain mental health services, when, in fact, Matheson knew that a practitioner had not reviewed and approved those services. As a result of the fraud, Matheson, Ewing, and Grundy fraudulently obtained approximately $2.5 million from Illinois Medicaid and managed-care organizations used by Illinois Medicaid.
Medicaid is a state-administered program, and each state sets its own guidelines regarding eligibility and services. For Illinois Medicaid recipients, funding is shared between the federal government and the State of Illinois.
Matheson, Ewing, and Grundy each pleaded guilty last year to a federal health care fraud charge. U.S. District Judge John Robert Blakey on Thursday sentenced Matheson, 46, of Chicago, to six years in federal prison, and Ewing, 62, of Chicago, to four and a half years. Judge Blakey previously sentenced Grundy, 39, of Chicago, to three years and a month.
The sentences were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Mario Pinto, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General, and Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI. Valuable assistance in the investigation was provided by the Illinois Attorney General’s Office, Illinois State Police, and Illinois Department of Healthcare and Family Services. The government was represented by Assistant U.S. Attorneys Prashant Kolluri and Charles W. Mulaney.
U.S. Attorney’s Office in Chicago Announces Individual Self-Disclosure Pilot ProgramRead the Press Release
CHICAGO — The U.S. Attorney’s Office in Chicago today announced the formation of a pilot program that encourages early and voluntary self-disclosure of criminal conduct by individual participants in certain non-violent offenses.
The six-month pilot program is geared toward individuals who have participated in and have knowledge of criminal wrongdoing by virtue of their employment. The purpose of the program is to encourage and incentivize individuals to self-report wrongdoing that was previously unknown to law enforcement, without fear of criminal prosecution for doing so. The benefit for those who make timely and meaningful disclosures is a non-prosecution agreement in exchange for their ongoing assistance. Depending on the success of the pilot program, the Office will determine whether to extend it on a more permanent basis.
“We are implementing this pilot program to provide a roadmap for how to report individual and organizational misconduct,” said Morris Pasqual, Acting United States Attorney for the Northern District of Illinois. “We hope the program will enhance our effectiveness by incentivizing individuals and their counsel to provide us with actionable and timely information.”
From today through March 15, 2025, the Office will accept submissions on a pre-printed intake form that should be emailed to [email protected]. Each submission will be reviewed by a working group of Assistant U.S. Attorneys. Anonymous reporting is not allowed, and individuals who have already been informed they are a subject or target of a federal criminal investigation will not be eligible. The reporting individual must agree to forfeit or disgorge any proceeds from their own criminal wrongdoing and pay full restitution to victims.
The program is not available to individuals whose misconduct involved violence, the threat of violence, terrorism, or any sex offense involving the force, fraud, or coercion of a minor. Additionally, elected federal or foreign officials, federal law enforcement officers, and individuals who are the highest-ranking person in their organization are not eligible to participate in the program. Click here for a full list of terms and conditions.
NDIL Individual Self-Disclosure Intake Form NDIL Individual Self-Disclosure Pilot Program Terms and ConditionsRockford Man Sentenced to More Than Six Years in Federal Prison for Trafficking Cocaine and Selling FirearmsRead the Press Release
ROCKFORD — A Rockford man has been sentenced to more than six years in federal prison for trafficking cocaine and selling firearms in Rockford.
ROGELIO IBARRA, 34, pleaded guilty earlier this year to distribution of cocaine and the unlawful possession of firearms. U.S. District Judge Iain D. Johnston on Tuesday sentenced Ibarra to 76 months in federal prison.
Ibarra, a leader of the Rockford chapter of the “Insane Unknowns” street gang, admitted in a plea agreement that in 2021 and 2022 he and other gang leaders would distribute cocaine to Insane Unknown members to sell on the streets and fund the gang’s criminal activities. Ibarra also admitted that despite prior felony convictions, he possessed five firearms and sold those firearms to another individual.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI. The Winnebago County Sheriff’s Office, Rockford Police Department, and U.S. Drug Enforcement Administration assisted in the investigation. The government was represented by Assistant U.S. Attorney Robert S. Ladd.
Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods (PSN) – the Department of Justice’s violent crime reduction strategy. In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
Federal Judge Sentences Rockford Man to More Than Five Years in Prison for Illegally Possessing FirearmsRead the Press Release
ROCKFORD — A federal judge has sentenced a Rockford man to more than five years in federal prison for illegally possessing firearms in Rockford.
U.S. District Judge Iain D. Johnston on Tuesday sentenced RENARD MACKLIN, 36, to 70 months in prison to be followed by three years of supervised release. Macklin pleaded guilty earlier this year to a charge of illegal firearm possession. As a previously convicted felon, Macklin was prohibited by federal law from possessing firearms.
Macklin admitted in a plea agreement that, on two occasions, he possessed a firearm when he was a convicted felon. Macklin admitted that on Oct. 10, 2020, he was driving a vehicle in which he possessed a Ruger AR-15 style rifle loaded with a large capacity magazine and one round in the chamber. When Rockford Police attempted to pull him over, Macklin fled at a high rate of speed. On March 16, 2021, Macklin possessed a stolen semi-automatic handgun loaded with a 15-round magazine, which was seized by the Winnebago County Sheriff’s Office during the execution of a search warrant in Rockford.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives, Carla Redd, Chief of the Rockford Police Department, and Gary Caruana, Sheriff of Winnebago County. The government was represented by Deputy Criminal Chief Jessica Maveus.
Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods (PSN) – the Department of Justice’s violent crime reduction strategy. In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
Former Chief Operating Officer of Covid-19 Testing Kit Company Sentenced to More Than Six Years in Federal Prison for Embezzling $1.85 MillionRead the Press Release
CHICAGO — The former Chief Operating Officer of a suburban Chicago company that sold Covid-19 testing kits has been sentenced to more than six years in federal prison for embezzling more than $1.85 million in company funds.
While on pre-trial and pre-sentencing release for an earlier fraud scheme, DENNIS W. HAGGERTY, JR. issued fraudulent payments from the Willowbrook, Ill.-based company’s bank account for services and goods purportedly provided by himself or the company’s main vendor, a manufacturer from whom the company purchased Covid-19 testing kits. In reality, the services and goods had not been provided. The money purportedly sent to the testing-kit supplier was wired to a bank account that Haggerty controlled, and he spent the funds for his personal benefit.
In addition to the wire transfers, Haggerty issued checks drawn from the company’s bank account to himself, knowing that he would spend the money for his personal benefit. Haggerty concealed his fraud by making false and misleading statements on the checks and to the company’s president.
In all, Haggerty in 2021 and 2022 embezzled and fraudulently misappropriated more than $1.85 million from the company.
Haggerty, 48, of Burr Ridge, Ill., pleaded guilty earlier this year to a wire fraud charge and admitted that he committed the offense while on pre-trial and pre-sentencing release. U.S. District Judge John Robert Blakey on Thursday sentenced Haggerty to six years and five months in federal prison.
Haggerty must serve the sentence after completing his federal sentence for the earlier fraud scheme. In the prior case, Haggerty pleaded guilty to wire fraud and money laundering charges for swindling hospitals that had paid him millions of dollars for scarce personal protective equipment in the early weeks of the Covid-19 pandemic in 2020. He was sentenced in December 2022 to nearly five years in federal prison.
The recent sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI, and Mario Pinto, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of Inspector General. The government was represented by Assistant U.S. Attorney L. Heidi Manschreck.
Will County, Ill. Man Charged with Trafficking Cocaine and Attempting to Traffic Fentanyl in Chicago AreaRead the Press Release
CHICAGO — A Will County, Ill. man has been indicted on federal drug trafficking charges for allegedly distributing cocaine and attempting to distribute fentanyl in the Chicago area.
WILLIAM R. BUSSE III distributed cocaine and methamphetamine in Chicago in 2021, according to an indictment returned Thursday in U.S. District Court in Chicago. Busse also attempted to distribute cocaine and fentanyl in the Chicago suburbs that same year, the indictment states.
The indictment charges Busse, 41, of Homer Glen, Ill., with distribution and attempted distribution of controlled substances. Each of the six counts in the indictment is punishable by up to 20 years in federal prison.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sheila G. Lyons, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration, and Ruth M. Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service. The government is represented by Assistant U.S. Attorney Beth E. Palmer.
The investigation was conducted with the support of the Chicago High Intensity Drug Trafficking Task Force (HIDTA). The task force is comprised of federal, state, and local law enforcement agencies who work together to identify, disrupt, and dismantle drug trafficking operations.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Busse indictmentMan Charged with Robbing Suburban Chicago BankRead the Press Release
CHICAGO — A man has been charged in federal court with robbing a bank in Evanston, Ill. and attempting to rob a bank in Chicago on back-to-back days this month.
JEFFREY SULASKI robbed an Associated Bank branch in Evanston on Aug. 3, 2024, according to an indictment returned Tuesday in U.S. District Court in Chicago. A day earlier, Sulaski attempted to rob a Huntington Bank branch in Chicago, the indictment states. Sulaski committed the alleged offenses while on court-supervised release following his imprisonment for a prior bank robbery conviction.
The indictment charges Sulaski, 64, of Chicago, with one count of bank robbery and one count of attempted bank robbery. Arraignment is scheduled for Thursday at 2:30 p.m. before U.S. District Judge Matthew F. Kennelly.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI. The Chicago Police Department provided valuable assistance. The government is represented by Assistant U.S. Attorney Minje Shin.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count in the indictment is punishable by up to 20 years in federal prison.
Sulaski indictmentFederal Jury Convicts Man of Possessing Multiple Firearms While Trafficking Fentanyl in Chicago SuburbsRead the Press Release
CHICAGO — A federal jury has convicted a man on drug and firearm charges for possessing multiple guns while trafficking fentanyl and other narcotics in the Chicago suburbs.
The jury on Friday found OMARI ANDREWS, JR. guilty of possessing an AR-15 style firearm and three handguns while trafficking fentanyl, heroin, cocaine, crack cocaine, and marijuana in Mt. Prospect, Ill., in 2023. The jury returned its verdicts after a week-long trial in U.S. District Court in Chicago. Prior to trial, Andrews pleaded guilty to distributing fentanyl and heroin in Westmont, Ill., Villa Park, Ill., Des Plaines, Ill., and Hillside, Ill., in 2022 and 2023.
Andrews, 24, of Mt. Prospect, Ill., has been detained in federal custody since his arrest in 2023. U.S. District Judge Edmond E. Chang set sentencing for Dec. 18, 2024. Andrews faces a maximum sentence of life in federal prison.
The verdicts were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Sean Fitzgerald, Special Agent-in-Charge of Homeland Security Investigations in Chicago. The Skokie, Ill. and Evanston, Ill. Police Departments provided valuable assistance. The government is represented by Assistant U.S. Attorneys Alejandro G. Ortega and Sean Hennessy.
Holding firearm and drug offenders accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods (PSN) – the Department of Justice’s violent crime reduction strategy. In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
Suburban Chicago Businessman Sentenced to a Year in Prison for Underreporting $1.47 Million in TaxesRead the Press Release
CHICAGO — The owner of three Chicago-area childcare and transportation businesses has been sentenced to a year in federal prison for underreporting more than $1.47 million in income on his tax returns.
JEREMIAH JOHNSON owned New Beginnings Academy, New Beginnings Child Development, and Epic Transportation. During the calendar years 2015 to 2020, Johnson obtained more than $1.47 million of income from the operation of those businesses but failed to report the money on his individual tax returns. Johnson filed individual tax returns for those years but reported lesser W2 wages and some rental income. The failure to disclose the additional income he received from his businesses resulted in the preparation and filing of materially false individual income tax returns.
During the same time period, Johnson also failed to file corporate tax returns or pay any of the required employer and employee withholdings for federal income tax, Social Security tax, and Medicare.
Johnson, 46, of Frankfort, Ill., pleaded guilty earlier this year to a federal charge of filing a false tax return. In addition to the year-and-a-day prison term, U.S. District Judge Matthew F. Kennelly on Wednesday fined Johnson $10,000 and ordered him to pay $123,391 in restitution to the Internal Revenue Service.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Ramsey E. Covington, Acting Special Agent-in-Charge of IRS Criminal Investigation Chicago Field Office. The government was represented by Assistant U.S. Attorney Kristen Totten and former Assistant U.S. Attorney Patrick J. King, Jr.
Chicago Man Charged in Federal Court with Plotting to Kill Two Witnesses in Cousin’s Murder TrialRead the Press Release
CHICAGO — A Chicago man has been indicted on federal murder-for-hire charges for allegedly plotting to kill two potential witnesses in his cousin’s upcoming murder trial.
An indictment returned Wednesday in U.S. District Court in Chicago charges CHRISTOPHER YATES, 39, with two counts of murder-for-hire and one count of unlawful transfer of a firearm and ammunition.
According to the indictment and a criminal complaint previously filed in the case, Yates sought the killings of two individuals he believed would testify against his cousin in a state murder trial. Yates’s cousin is currently detained in state custody on murder and attempted murder charges for allegedly shooting two individuals, one fatally, in 2020. The trial was set to begin this fall.
Last month, Yates allegedly recruited a man to carry out the killings and provided him with a handgun and ammunition. Yates allegedly told the man, “I want them both off the board. Both of them got to [expletive] go.” Yates provided the man with $250 in cash and said he could offer more money later as payment for the killings, the charges allege. “Whatever you charge, I’m working on that,” Yates allegedly said.
Yates was arrested on July 31, 2024, and he remains detained in federal custody without bond. He pleaded not guilty to the charges during his arraignment Thursday in federal court in Chicago.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations. Substantial assistance was provided by the Cook County State’s Attorney’s Office and the U.S. Postal Service Office of Inspector General. The government is represented by Assistant U.S. Attorney Kirsten Moran.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. The unlawful transfer charge is punishable by up to 15 years in federal prison, while each murder-for-hire count is punishable by up to ten years.
Yates complaint Yates indictmentOwner of Suburban Chicago Construction Company Sentenced to Five Years in Prison on Bribery ChargesRead the Press Release
CHICAGO — The owner of a suburban Chicago construction company has been sentenced to five years in federal prison for conspiring to bribe an employee of the Cook County Assessor’s Office in return for favorable property assessments.
ALEX NITCHOFF, 57, of Lemont, Ill., pleaded guilty earlier this year to one count of conspiring to corruptly give something of value to influence and reward a public official, and one count of using an interstate facility to facilitate bribery. U.S. District Judge John F. Kness imposed the sentence on Wednesday during a hearing in federal court in Chicago.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI. Valuable assistance was provided by IRS Criminal Investigation and the City of Chicago Inspector General’s Office. The government was represented by Assistant U.S. Attorney Thomas P. Peabody.
Nitchoff admitted in a plea agreement that from 2016 to 2019 he conspired with others to corruptly provide home improvement services and materials to Cook County Assessor’s Office employee LAVDIM MEMISOVSKI, who assessed property values and reviewed property tax appeals for Cook County commercial properties. Nitchoff and others provided free home improvement services and materials at Memisovski’s personal residence, including a concrete pad, decking materials, gas lines, sprinkler system heads, tiles, and other items, the plea agreement states. In return for the benefits, Memisovski took official action to reduce the property taxes owed for Nitchoff’s properties by at least $550,000, Nitchoff’s plea agreement states.
Memisovski, of Burbank, Ill., pleaded guilty last year to a conspiracy charge and is awaiting sentencing.
Former Attorney Sentenced to 25 Years in Federal Prison on Embezzlement and Fraud Charges in Connection with Collapse of Washington Federal BankRead the Press Release
CHICAGO — A former attorney has been sentenced to 25 years in federal prison for embezzlement and fraud in connection with the failure of Washington Federal Bank for Savings in Chicago.
ROBERT M. KOWALSKI served a key role in an embezzlement scheme at Washington Federal. The bank, which was based in Chicago’s Bridgeport neighborhood, was shut down in 2017 after the Office of the Comptroller of the Currency determined that it was insolvent and had at least $66 million in nonperforming loans. Much of the money was transferred to Kowalski, who at the time was a licensed attorney, and two real estate developers without all of the required documentation and often without any documentation whatsoever. The embezzled funds were falsely identified in the bank’s records as loan disbursements, even though the bank never required Kowalski to repay the money.
After the collapse of the bank, the Federal Deposit Insurance Corp. attempted to collect the money and properties that Kowalski obtained as part of the embezzlement scheme. Kowalski responded by filing a fraudulent bankruptcy case, in which he attempted to conceal his possession of numerous assets. To substantiate numerous misrepresentations in his bankruptcy filings and avoid paying taxes, Kowalski filed false corporate and personal tax returns for several years. He also failed to file any returns at all for two years.
Kowalski, 62, of Robbins, Ill., was convicted last year of embezzlement, bankruptcy fraud, and tax fraud charges. In addition to the prison term, U.S. District Chief Judge Virginia M. Kendall on Tuesday ordered Kowalski to pay restitution of $7.2 million to the FDIC and $424,047 to the IRS.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois; Vincent R. Zehme, Special Agent-in-Charge of the Chicago Region of the FDIC’s Office of Inspector General; Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development's Office of Inspector General in Chicago; Ramsey E. Covington, Acting Special Agent-in-Charge of IRS Criminal Investigation Chicago Field Office; Korey Brinkman, Special Agent-in-Charge of the Central Region of the Federal Housing Finance Agency, Office of Inspector General; Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI; Andrea Peacock, Special Agent-in-Charge of the Department of the Treasury, Office of Inspector General; Deborah Witzburg, City of Chicago Inspector General; and Kathryn B. Richards, Chicago Housing Authority Inspector General. Valuable assistance was provided by the U.S. Trustee Program. The government was represented by Assistant U.S. Attorneys Michelle Petersen, Kristin Pinkston, and Jeffrey Snell, and Special Assistant U.S. Attorney Brian Netols.
The federal criminal investigation into the bank’s collapse led to charges against a total of 16 defendants, including the bank’s Chief Financial Officer, Treasurer, and other high-ranking employees. Four defendants were convicted after jury trials, while ten defendants pleaded guilty and two entered into deferred prosecution agreements.
Robert Kowalski’s sister, JAN R. KOWALSKI, also formerly an attorney, pleaded guilty and is serving a two-and-a-half-year prison sentence for fraudulently enabling her brother to conceal more than $357,000 from creditors and the trustee in his bankruptcy case.
Carjacking in Chicago Suburb Leads to 15-Year Federal Prison SentenceRead the Press Release
CHICAGO — A man who carjacked a vehicle in a Chicago suburb and fired shots at a police officer who was pursuing him has been sentenced to 15 years in federal prison.
DAVID JOHNSON carjacked a vehicle in Orland Park, Ill., on Feb. 12, 2021. The victim was sitting in his car on the street outside of his home when Johnson approached, pointed a gun at the victim’s head, and demanded the key. Johnson stole the vehicle and led police on a high-speed chase into Chicago, where he crashed into another car in the city’s Morgan Park neighborhood. Johnson then fled on foot and fired shots at an Oak Forest, Ill. Police officer who was pursuing him. Chicago Police officers arrested Johnson a short time later. At the time of the carjacking, Johnson was on court-supervised release following his imprisonment for a prior federal firearm conviction.
Johnson, 27, of Chicago, pleaded guilty earlier this year to federal carjacking and firearm charges. U.S. District Judge Thomas M. Durkin imposed the sentence Thursday during a hearing in federal court in Chicago.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives. Substantial assistance in the investigation was provided by the Oak Forest, Ill. Police Department, Orland Park, Ill. Police Department, and Chicago Police Department. The government was represented by Assistant U.S. Attorney Elie Zenner.
Dolton, Ill. Police Officer Charged in Federal Court with Bankruptcy FraudRead the Press Release
CHICAGO — A police officer for the Village of Dolton, Ill. was indicted today by a federal grand jury in Chicago on bankruptcy fraud charges for allegedly engaging in a scheme to conceal assets and income from creditors and prevent payment of the settlement of a lawsuit.
A nine-count indictment returned this afternoon in U.S. District Court in Chicago charges LEWIS A. LACEY, 61, of Matteson, Ill., with bankruptcy fraud, making false statements and declarations in a bankruptcy case, and perjury. Each count is punishable by a maximum sentence of five years in federal prison. Arraignment has not yet been scheduled.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI, Ramsey E. Covington, Acting Special Agent-in-Charge of the IRS Criminal Investigation Chicago Field Office, Ruth M. Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service, and Hannibal Ware, Inspector General of the U.S. Small Business Administration. Valuable assistance was provided by the U.S. Trustee Program. The government is represented by Assistant U.S. Attorney Jason A. Julien and Special Assistant U.S. Attorney Brian P. Netols.
The officials noted that Lacey was indicted as part of an ongoing federal investigation.
According to the indictment, Lacey since the 1980s has filed numerous personal bankruptcy cases in the U.S. Bankruptcy Court for the Northern District of Illinois, including petitions in 2019 and 2020. The recent petitions automatically stayed enforcement of a settlement agreement Lacey had reached in 2017 with the plaintiff in a lawsuit in state court. The indictment alleges that Lacey filed the 2019 bankruptcy petition shortly after the plaintiff moved to enforce the settlement agreement, accusing Lacey of still owing $43,000 of the $55,000 settlement.
The indictment alleges that Lacey made several materially false and fraudulent representations in oral statements and documents submitted in the bankruptcy cases, including underreporting his monthly income and concealing bank accounts that he controlled. Among other things, Lacey falsely represented that he was separated from his spouse and that she did not reside with him or contribute to his monthly income and mortgage, the indictment states. The false representations allowed Lacey to fraudulently calculate his monthly income for purposes of repayment of his creditors as substantially less than it should have been if his spouse’s contributions were included, the indictment states.
During the charged fraud scheme, Lacey served as a police officer for the Dolton Police Department.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Lacey indictmentFederal Indictment Charges Man with Illegally Possessing Loaded Gun During Exchange of Gunfire in ChicagoRead the Press Release
CHICAGO — A federal grand jury has charged a man with illegally possessing a loaded handgun during an exchange of gunfire in Chicago earlier this year.
The indictment unsealed in U.S. District Court in Chicago charges MARQUIST EVANS, 30, of Chicago, with illegal possession of a machine gun and ammunition. Evans fired numerous shots from a handgun while standing in the doorway of a gas station in the 500 block of West Grenshaw Street in Chicago on May 6, 2024, according to a criminal complaint previously filed in the case. Evans fired the gun in the direction of two shooters, one of whom was armed with a rifle, who had emerged from a car and fired numerous shots at the vehicle in which Evans had arrived at the gas station, the complaint states. Evans’s handgun was equipped with a conversion device, also known as a “Glock switch,” which allow firearms to fire multiple rounds with a single pull of the trigger, the complaint states.
Evans is currently in law enforcement custody. Arraignment on the federal charges is scheduled for Aug. 15, 2024, at 10:30 a.m., before U.S. Magistrate Judge Keri L. Holleb Hotaling.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Larry Snelling, Superintendent of the Chicago Police Department. The government is represented by Assistant U.S. Attorney Saqib M. Hussain.
The investigation was conducted in coordination with ATF’s Crime Gun Intelligence Center of Chicago. The CGIC is a centralized law enforcement hub that focuses exclusively on investigating and preventing gun violence in Chicago and throughout northern Illinois. The CGIC is an interagency collaboration that brings together - under one roof - federal, state, and local law enforcement officers, prosecutors, and intelligence analysts to move quickly to investigate and prosecute violent crimes.
Holding firearm offenders accountable through federal prosecution is the centerpiece of Project Safe Neighborhoods, a nationwide Department of Justice initiative that brings together law enforcement officials, prosecutors, community leaders, and other stakeholders to develop comprehensive solutions to the most pressing violent crime problems. In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
“Our office is using every available law enforcement tool to continue to bring impactful cases that hold firearm offenders accountable and reduce violent crime in Chicago,” said Acting U.S. Attorney Pasqual. “Combating the unacceptable level of gun violence in Chicago will continue to be a top priority in our office.”
“This defendant was charged using the resources and partnerships that the Crime Gun Intelligence Center (CGIC) of Chicago created this spring,” said ATF SAC Amon. “The CGIC’s real time analysis of crime gun intelligence is a game changer in arresting and holding accountable those who are drivers of violent gun crime in our community.”
The charges in the indictment are punishable by a maximum sentence of 25 years in federal prison. The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Evans complaint Evans indictmentSuburban Chicago Man Guilty of Illegally Exporting Firearm Parts to IsraelRead the Press Release
CHICAGO —A suburban Chicago man has pleaded guilty to federal export-control charges for illegally shipping firearm parts to Israel.
AMIN BETUNI admitted in a plea agreement that he shipped the firearm parts to individuals in Israel on at least three occasions in 2022. The parts included rifle barrels, gas blocks for rifles, and bolt carrier groups. Betuni put false information on the shipping labels and concealed the firearm parts in packages containing auto parts or George Foreman grills. The firearm parts were on the United States Commerce Control List and subject to federal export regulations. As such, their export from the U.S. to Israel required a license or written approval from the Department of Commerce, neither of which was obtained by Betuni prior to his shipments.
During a court-authorized search of Betuni’s residence in Palos Hills, Ill., in December 2022, law enforcement discovered more than 1,200 rounds of assorted ammunition, a shotgun, rifle, and handgun, additional bolt carrier groups, and three firearm conversion devices, also known as “Glock switches,” which equip firearms to fire multiple rounds with a single pull of the trigger.
Betuni, 37, pleaded guilty on Aug. 1, 2024, to a federal charge of knowingly and fraudulently exporting firearm parts in violation of U.S. laws and regulations. The conviction is punishable by a maximum sentence of ten years in federal prison. U.S. District Judge John F. Kness set sentencing for Nov. 6, 2024.
The guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations, and Aaron Tambrini, Special Agent-in-Charge of the Chicago Field Office of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. Substantial assistance was provided by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Postal Inspection Service, and the Palos Hills, Ill. Police Department. The government is represented by Assistant U.S. Attorney Shawn D. McCarthy.
“Export-control violations are critically important because they undermine federal laws and regulations that seek to protect international security,” said Acting U.S. Attorney Pasqual. “Our office will continue to work with our law enforcement partners to relentlessly pursue those who seek to exploit U.S. export-control laws for financial gain.”
“Those who illegally export firearm parts will face consequences,” said SAC Fitzgerald. “Betuni’s actions not only violated international law but also undermined global security. HSI and our law enforcement partners remain steadfast in our commitment to uphold justice and prevent such dangerous activities. Let this guilty plea serve as a stern warning: anyone who jeopardizes peace and safety through illicit arms transfers will be held accountable.”
“The guilty plea is a testament to the excellent cooperation between our law enforcement partners effectively targeting the illegal export of firearm parts,” said SAC Tambrini. “Whether the export involves firearm parts or other controlled items, the Office of Export Enforcement is committed to vigorously investigating illegal exports and holding violators accountable.”
Betuni plea agreementFederal Judge Sentences Chicago Man to 40 Years in Prison for Sex Trafficking Several ChildrenRead the Press Release
CHICAGO — A federal judge has sentenced a Chicago man to 40 years in prison for recruiting several children to engage in sex acts for money.
LENNIE PERRY trafficked at least seven minors under the age of 18. One of his victims was under 14 years old when Perry caused her to engage in a commercial sex act. Perry used websites such as Backpage and Facebook to advertise commercial sex acts and recruit the young victims to work for him. Perry also required that each of his victims have sex with him before he would traffic them to others. Perry arranged for the victims to meet individuals for the commercial sex acts in hotels and residences in Illinois, Minnesota, and Mississippi.
Perry, 49, was convicted in 2021 on federal sex trafficking charges. Six of Perry’s victims testified at trial about their ordeals.
In addition to the prison term, U.S. District Judge Edmond E. Chang on Wednesday ordered Perry to pay $523,600 in restitution to his victims.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Lucas Rothaar, Acting Special Agent-in-Charge of the Chicago Field Office of the FBI. The case was investigated by the FBI Chicago Child Exploitation Task Force. Valuable assistance was provided by the Chicago Police Department and Homeland Security Investigations.
“Defendant’s actions have created a trauma for the victims that is impossible to truly understand,” Assistant U.S. Attorney Charles W. Mulaney argued in the government’s sentencing memorandum. “Traffickers operating today should receive the message that if you traffic children in the Chicagoland area, you will receive the fullest punishment prescribed by law.”
If you believe you are a victim of sexual exploitation, you are encouraged to contact the National Center for Missing and Exploited Children by calling 1-800-843-5678 or logging on to www.cybertipline.com.
Rockford Man Sentenced to 60 Years in Prison for the Production of Child PornographyRead the Press Release
ROCKFORD — A Rockford man was sentenced today to 60 years in federal prison for producing child pornography.
U.S. District Court Judge Iain D. Johnston imposed the sentence on GARY WILSON, 53, and ordered that it be followed by a lifetime of court-supervised release.
Wilson admitted in a plea agreement that between 2016 and 2019 he solicited numerous minor boys online through gaming systems such as Xbox and PlayStation, social media applications, and text messages to produce sexually exploitive images and videos for Wilson’s sexual gratification. Wilson, who had previously been convicted of a sex offense, groomed his victims, gaining their trust through conversations during video games. Eventually Wilson coerced and enticed the children into sending him sexually exploitive images and videos in exchange for gaming codes and money.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Lucas Rothaar, Acting Special Agent-in-Charge of the Chicago Field Office of the FBI. The U.S. Department of Homeland Security and the Rockford Police Department assisted in the investigation.
“Few crimes are as grave as preying upon a vulnerable population and memorializing the sexual abuse of minors,” Deputy Criminal Division Chief Jessica S. Maveus argued in the government’s sentencing memorandum. “Had defendant not been caught by investigating agents (and a minor’s parent), defendant would have continued in his pursuit to sexually exploit minors for his own sexual gratification.”
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Justice Department’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please click here.
If you believe you are a victim of sexual exploitation, you are encouraged to contact the National Center for Missing and Exploited Children by logging on to www.missingkids.com or by calling 1-800-843-5678. The service is available 24 hours a day, seven days a week.
Two Men Sentenced to Federal Prison for Using U.S. Postal Service Arrow Keys to Steal Mail in ChicagoRead the Press Release
CHICAGO — Two men have been sentenced to federal prison terms for using U.S. Postal Service arrow keys to steal parcels from the mail in Chicago.
JOSEPH T. SOLOMON and THADDEUS J. HARPER were convicted as part of “Operation Broken Arrow,” a federal investigation into the thefts of mail using stolen arrow keys, which unlock doors and entry systems to nearly every apartment and office building in Chicago and several suburbs.
Solomon used an authentic arrow key in 2022 to open a panel of mailboxes in an apartment building in the Lincoln Park neighborhood of Chicago. Solomon stuffed pieces of mail into a trash bag and fled the area. He was later arrested in Indiana while driving a stolen U-Haul truck and leading police on a high-speed chase. Solomon crashed into several vehicles in Hammond, Ind., before being apprehended.
Harper used a reproduced arrow key to enter multiple residences in Chicago in 2021 and steal mail and parcels from at least ten victims. In one of his thefts, Harper used the key to gain entrance to an apartment building in Chicago’s River West neighborhood, where he took a piece of mail containing two checks totaling $2,500. Harper also took other packages addressed to the same victim that were valued at more than $6,600.
Harper, 44, of Country Club Hills, Ill., and Solomon, 39, of Norridge, Ill., pleaded guilty earlier this year to federal charges of unlawful possession of a U.S. Postal Service key. U.S. District Judge Virginia M. Kendall on Wednesday sentenced Solomon to two years in federal prison. U.S. District Judge Sharon Johnson Coleman on Tuesday sentenced Harper to 20 months in federal prison.
The sentences were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Ruth Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service. Substantial assistance was provided the Chicago Police Department and the Cook County Sheriff’s Office. The government was represented by Assistant U.S. Attorneys Minje Shin, Michael Maione, and Adam L. Rosenbloom.
“It is illegal under federal law to possess a stolen or reproduced key suited to a U.S. Postal Service lock,” said Acting U.S. Attorney Pasqual. “We will continue to work with our federal and local law enforcement partners to hold accountable anyone who unlawfully possesses such a key or steals from the mail.”
“The safety and security of the U.S. mail and its customers are core to the mission of the U.S. Postal Inspection Service,” said Inspector-in-Charge Mendonça. “This case is a tremendous example of how postal inspectors protect the integrity of the U.S. mail and aggressively investigate those individuals who steal or defraud individuals or businesses of money and property.”
Indiana Man Sentenced to Ten Years in Prison for Trafficking Guns from Indianapolis to ChicagoRead the Press Release
CHICAGO — An Indiana man has been sentenced to ten years in federal prison for trafficking 15 guns, including semiautomatic rifles and “ghost guns,” from Indianapolis to the Chicago area.
DEVANTE T. BROWN and a co-defendant, COREY SARTIN, transported 15 firearms from Indianapolis to the Chicago area in the spring and summer of 2022. Brown and Sartin sold the guns to undercover law enforcement officers in three separate transactions:
- April 9, 2022: Sartin sold a handgun to the undercover officers in Lynwood, Ill.
- May 31, 2022: Brown and Sartin sold four handguns and AR-style rifles with extended magazines to the undercover officers in the Pullman neighborhood of Chicago.
- June 24, 2022: Brown and Sartin sold four semiautomatic handguns, four semiautomatic rifles, and two privately made “ghost guns” to the undercover officers in Calumet City, Ill. A firearm is considered a “ghost gun” when it contains no identifiable serial number and was manufactured from parts collected from various sources.
In a text message to the undercover officers prior to one of the deals, Brown stated, “I come across guns all day long. We gone do good business together.”
Brown, 29, of Indianapolis, Ind., pleaded guilty earlier this year to a federal firearm charge. U.S. District Judge Franklin U. Valderrama on Tuesday sentenced Brown to ten years in prison. Sartin, 21, of Indianapolis, Ind., also pleaded guilty to a firearm charge and was sentenced last year to two and a half years in prison.
The sentences were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department. Valuable assistance was provided by the Dolton, Ill., Police Department. The government was represented by Assistant U.S. Attorney Jasmina Vajzovic.
Disrupting illegal firearms trafficking is a centerpiece of the Department of Justice’s cross-jurisdictional strike force aimed at reducing gun violence. As part of the Chicago Firearms Trafficking Strike Force, the U.S. Attorney’s Office collaborates with ATF, CPD, and other federal, state, and local law enforcement partners in the Northern District of Illinois and across the country to help stem the supply of illegally trafficked firearms and identify patterns, leads, and potential suspects in violent gun crimes.
Holding illegal firearm possessors accountable through federal prosecution is also a focus of Project Safe Neighborhoods (PSN) – the Department of Justice’s violent crime reduction strategy. In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
Rockford Man Sentenced to Six and a Half Years in Federal Prison for Possession of Child PornographyRead the Press Release
ROCKFORD — A Rockford man has been sentenced to six and a half years in federal prison for possession of child pornography.
GREGORIO BACINO, 27, admitted in a plea agreement that in 2021 he knowingly possessed on his cellular telephone over 1,000 images and videos of minors, including those as young as infants, engaged in sexually explicit conduct.
U.S. District Court Judge Iain D. Johnston on Friday sentenced Bacino to six and a half years in federal prison, to be followed by 25 years of court-supervised release. Bacino also must register as a sex offender.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Sean Fitzgerald, Special Agent-in-Charge of Homeland Security Investigations in Chicago. The government was represented by Assistant U.S. Attorney Robert S. Ladd.
Iranian National Extradited to United States for Alleged Scheme to Illicitly Ship Sophisticated Electronics to IranRead the Press Release
Note: View the indictment here
Iranian national Saeid Haji Agha Mousaei, 53, made his initial appearance yesterday in Chicago federal court following his extradition from the United Kingdom to face charges for his role in a years-long conspiracy to evade U.S. export restrictions and transship advanced U.S. electronic testing technology to Iran using third-party countries.
According to court documents, Mousaei was a manager of Dubai-based defendant company Millennium Product Company LLC (MPC). As alleged, from in or about January 2014 through at least August 2018, Mousaei, MPC and others, devised and participated in a scheme to obtain controlled electronics with military applications, including signals equipment like oscilloscopes and spectrum analyzers, for export and re-export to Iran.
As alleged, Mousaei and his co-defendants understood export restrictions on U.S.-origin goods to prohibited destinations like Iran and falsely represented to U.S. distributors that their purchases would remain in countries other than Iran, like the United Arab Emirates (UAE) or Armenia, where the defendants controlled unnamed companies. In reality, after arranging for distributors of U.S.-origin goods to export shipments to the UAE, the defendants allegedly transshipped goods from the UAE to Iran without the required license and in violation of U.S. law.
Mousaei and MPC are each charged with conspiracy to defraud the United States, which carries a maximum penalty of five years in prison; smuggling goods from the United States, which carries a maximum penalty of 10 years in prison; wire fraud, which carries a maximum penalty of 20 years in prison and violating the International Emergency Economic Powers Act, which carries a maximum penalty of 20 years in prison. Mousaei was arrested in the United Kingdom on Jan. 24, 2023, pursuant to an Interpol diffusion notice.
Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois, Executive Assistant Director Robert R. Wells of the FBI’s National Security Branch and Assistant Secretary for Export Enforcement Matthew S. Axelrod of the Commerce Department’s Bureau of Industry and Security (BIS) made the announcement.
The FBI and BIS are investigating the case.
Assistant U.S. Attorney Shawn D. McCarthy for the Northern District of Illinois and Trial Attorney Emma Ellenrieder of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
The Justice Department’s Office of International Affairs provided valuable assistance in securing the extradition of Mousaei from the United Kingdom.
This prosecution is being coordinated through the Disruptive Technology Strike Force, an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. Government to enhance the criminal and administrative enforcement of export control laws.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Chicago Man Sentenced to 25 Years in Federal Prison for Robbing Cell Phone Stores Throughout IllinoisRead the Press Release
ROCKFORD — A Chicago man has been sentenced to 25 years in federal prison for his role in a string of armed robberies of cell phone stores throughout Illinois.
In 2019 and 2020, JOHNATHAN BYARS and his co-conspirators carried out six robberies and two attempted robberies of cell phone stores, using firearms to threaten and physically assault store employees while stealing cash, phones, and other merchandise. The robberies occurred in Lansing, Ill., Bloomington, Ill., Rockford, Ill., Joliet, Ill., Coal City, Ill., and Mokena, Ill., while the attempted robberies occurred in Aurora, Ill., and Woodridge, Ill.
Byars, 26, pleaded guilty last year to robbery and firearm charges. U.S. District Judge Philip G. Reinhard sentenced Byars on July 16, 2024, to 25 years in federal prison.
“Defendant chose and planned to commit not just one armed robbery, but eight separate robberies with multiple employee victims spanning multiple jurisdictions,” Assistant U.S. Attorney Theodora Anderson argued in the government’s sentencing memorandum. “These actions pose a danger to the community, particularly in bringing and using a firearm that was brandished and pointed and used to threaten employees.”
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives. Valuable assistance in the investigation was provided by the Illinois State Police, Rockford Police Department, Chicago Police Department, Woodridge Police Department, Mokena Police Department, Lansing Police Department, Coal City Police Department, Bloomington Police Department, Aurora Police Department, Joliet Police Department, and the McLean County, Ill. Sheriff’s Office.
Four other defendants were convicted and sentenced to prison as part of the federal investigation into the robbery spree:
- ANTIONE FULTON, 25, of Chicago, was sentenced to 12 years.
- CALEB MORALES, 24, of Chicago, was sentenced to nine years.
- ISRAEL HALL, 25, of Chicago, was sentenced to seven and a half years.
- VONTE SPAIN, 31, of Chicago, was sentenced to seven years.
Suburban Chicago Man Sentenced to 27 Years in Federal Prison for Attempting to Detonate Explosive Device in Downtown ChicagoRead the Press Release
CHICAGO — A suburban Chicago man was sentenced today to 27 years in federal prison for attempting to detonate an explosive device at a bar in downtown Chicago.
ADEL DAOUD, 30, of Hillside, Ill., attempted to detonate what he thought was a 1,000-pound car bomb at a bar in the downtown Loop neighborhood of Chicago on Sept. 14, 2012. Prior to the attack, Daoud advocated for violent jihad and expressed an interest in working with operational terrorists. He researched and created a list of potential Chicago-area targets, which included movie theaters, bars, a suburban Chicago mall, and military recruiting centers. Unbeknownst to Daoud, the explosive device at the Loop bar was inert and had been constructed by the FBI, which was investigating Daoud in an undercover capacity. Daoud was arrested outside the bar after twice attempting to detonate the purported bomb.
Daoud was originally sentenced in 2019 to 16 years in federal prison. The U.S. Attorney’s Office successfully appealed the original sentence to the Seventh Circuit Court of Appeals, which ordered the new sentencing hearing. Today, U.S. District Judge Matthew F. Kennelly sentenced Daoud to 27 years in prison and ordered that it be followed by a lifetime of court-supervised release.
The new sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Matthew G. Olsen, Assistant Attorney General for National Security at the Justice Department, and Lucas Rothaar, Acting Special Agent-in-Charge of the Chicago Field Office of the FBI. The government was represented by Assistant U.S. Attorneys Barry Jonas and Tiffany Ardam of the Northern District of Illinois, and Trial Attorneys Bridget Behling and Kevin Nunnally of the National Security Division’s Counterterrorism Section.
The attempted bombing was one of three cases against Daoud to be resolved today as part of the new sentencing order. While he was jailed for attempting to detonate the bomb, Daoud solicited his cellmate to arrange for a violent gang member to murder the FBI agent who had worked undercover to investigate Daoud. The murder-for-hire plot was not carried out, and the FBI agent was not injured. The third case against Daoud involved a violent assault on a fellow jail inmate in 2015. While incarcerated at the Metropolitan Correctional Center in Chicago, Daoud attacked an inmate who had drawn what Daoud felt was an insulting picture of the prophet Mohammad. The inmate suffered lacerations on his head and a bite mark on an arm.
Office Manager for Suburban Chicago Medical Equipment Boutique Indicted on Federal Health Care Fraud ChargesRead the Press Release
CHICAGO — The office manager for a suburban Chicago medical equipment boutique has been indicted on federal health care fraud charges for allegedly billing private insurers for products that were never provided, including breast prostheses, compression garments, and wigs for cancer survivors.
JUDY STRZELECKI served as the office manager for A Woman’s Place LLC, a durable medical equipment provider and retail shop in Downers Grove, Ill. A Woman’s Place provided breast prostheses, compression garments, wigs, mastectomy bras, and other items to cancer survivors and women with chronic health conditions. From 2015 to 2020, Strzelecki and others submitted fraudulent claims to Blue Cross and Blue Shield of Illinois and other health care benefit programs for equipment that was either not provided or was not medically necessary, according to an indictment returned in U.S. District Court in Chicago. Strzelecki and others also fraudulently billed the programs for more expensive products than were provided in order to seek higher reimbursement rates, the indictment states.
As a result of the scheme, Strzelecki and others fraudulently obtained at least $1.8 million in payments from health care programs for equipment that was not provided as billed, the indictment states.
Strzelecki, 73, of Downers Grove, Ill., is charged with seven counts of health care fraud. Each count is punishable by up to ten years in federal prison, and restitution is mandatory. Arraignment is set for July 23, 2024, at 10:45 a.m., before U.S. Magistrate Judge M. David Weisman.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Lucas Rothaar, Acting Special Agent-in-Charge of the Chicago Field Office of the FBI, and Rubén R. Chapa, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration. The government is represented by Assistant U.S. Attorney Misty N. Wright.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Strzelecki indictmentMan Charged in Federal Court with Committing Two Carjackings in ChicagoRead the Press Release
CHICAGO — A federal grand jury has indicted a man on carjacking and firearm charges for allegedly violently stealing two vehicles in Chicago earlier this year.
VIRGIL GIBSON, 22, of Chicago, stole a Chevrolet Malibu on April 7, 2024, and a Kia K5 on April 8, 2024, according to an indictment returned in U.S. District Court in Chicago. Gibson brandished a firearm in each of the carjackings and forcibly took the vehicles from the drivers, the indictment states. Gibson also confined the driver in the second carjacking against his will and forced him to wire money to Gibson, the indictment states.
The indictment charges Gibson with two counts of carjacking, three counts of brandishing a firearm during a crime of violence, one count of robbery, and one count of kidnapping. The charges in the indictment carry a maximum sentence of life in federal prison.
Gibson is currently in law enforcement custody. Arraignment in federal court is set for Aug. 12, 2024, at 10:00 a.m., before U.S. District Judge Virginia M. Kendall.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department. The government is represented by Assistant U.S. Attorney Kirsten Moran.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Gibson indictmentFormer Chief Financial Officer of Chicago Hospital Among Three Defendants Charged in Alleged $15 Million Embezzlement SchemeRead the Press Release
CHICAGO — The former Chief Financial Officer of a Chicago hospital schemed with a colleague and the owner of a medical supply company to embezzle more than $15 million in hospital funds, according to a superseding indictment returned in U.S. District Court in Chicago.
As the hospital’s CFO, ANOSH AHMED was responsible for managing the hospital’s finances, including its Finance, Accounting, and Accounts Payable departments. From 2018 to 2022, Ahmed schemed with the hospital’s Chief Transformation Officer, HEATHER BERGDAHL, and the medical supply company owner, SAMEER SUHAIL, to cause the hospital to issue payments to vendor companies for purported goods and services that the defendants knew had not been provided, the indictment states. Many of the purported vendor companies were created by Suhail and Ahmed under various names to conceal their association with the fraudulent payments, the indictment states. Bergdahl opened bank accounts in the names of two legitimate hospital vendors and caused the hospital to deposit fraudulent payments into those accounts, the indictment states.
In an effort to conceal the scheme, Ahmed, Bergdahl, and Suhail allegedly created fictitious invoices, payment requests, delivery receipts, and other false documents about goods and services purportedly provided to the hospital. As a result of the scheme, the defendants caused the hospital to pay more than $15 million into bank accounts that they controlled, the indictment states.
The superseding indictment was returned on Thursday. It charges Ahmed, 40, of Houston, Texas, with eight counts of wire fraud, four counts of embezzlement, eleven counts of aiding and abetting embezzlement, and three counts of money laundering. Bergdahl, 37, of Houston, Texas, is charged with 14 counts of wire fraud, 21 counts of embezzlement, and one count of money laundering. Suhail, 47, of Chicago, is charged with six counts of wire fraud, six counts of aiding and abetting embezzlement, and two counts of money laundering. Arraignments in federal court in Chicago have not yet been scheduled.
The superseding indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, Mario Pinto, Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of Inspector General, and Jason Bushey, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago. The government is represented by Assistant U.S. Attorneys Sheri H. Mecklenburg and Kelly L. Guzman. The officials noted that the investigation remains ongoing.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Ahmed et al superseding indictmentMan Sentenced to 15 Years in Prison for Trafficking Fentanyl and Illegally Possessing Firearm in ChicagoRead the Press Release
CHICAGO — A man has been sentenced to 15 years in federal prison for trafficking fentanyl and illegally possessing a loaded handgun in Chicago.
ERIC BROWN possessed the drugs and gun on Oct. 19, 2021, near the intersection of North St. Louis Avenue and West Iowa Street in Chicago’s Humboldt Park neighborhood. Brown carried a satchel that contained the handgun and 400 pills of a substance that Brown knew included fentanyl. When Chicago Police officers approached the intersection, Brown attempted to hide the gun by placing it in the wheel well of a nearby car. The officers recovered the gun, arrested Brown, and discovered the pills in his possession.
Brown, 34, of Chicago, pleaded guilty last year to federal drug and firearm charges. U.S. District Judge John J. Tharp, Jr., imposed the sentence Monday during a hearing in federal court in Chicago.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, and Larry Snelling, Superintendent of the Chicago Police Department. Valuable assistance was provided by the Chicago Field Division of the U.S. Drug Enforcement Administration.
“Drugs, and especially fentanyl, are a scourge to the public health and to law enforcement across the country, and a stain on the community,” Assistant U.S. Attorney Alejandro G. Ortega argued in the government’s sentencing memorandum. “The defendant did not think of the people he was harming when he possessed the fentanyl with intent to distribute it; he was only thinking of the profit he would make by selling the drugs.”
Holding illegal firearm possessors accountable through federal prosecution is a centerpiece of Project Safe Neighborhoods (PSN) – the Department of Justice’s violent crime reduction strategy. In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
Justice Department Leads Efforts Among Federal, International, and Private Sector Partners to Disrupt Covert Russian Government-Operated Social Media Bot FarmRead the Press Release
WASHINGTON – The Justice Department today announced the seizure of two domain names and the search of 968 social media accounts used by Russian actors to create an artificial intelligence-enhanced social media bot farm that spread disinformation in the United States and abroad. They used elements of artificial intelligence (AI) to create fictitious social media profiles – often purporting to belong to individuals in the United States – which the operators then used to promote messages in support of Russian government objectives, according to affidavits unsealed today.
In conjunction with the domain seizures and search warrant announced today, the FBI and the Cyber National Mission Force (CNMF), in partnership with the Canadian Centre for Cyber Security (CCCS), the Netherlands General Intelligence and Security Service (AIVD), Netherlands Military Intelligence and Security Service (MIVD), and the Netherlands Police released a joint cybersecurity advisory detailing the technology behind the social media bot farm, including details regarding how the bot farm’s creators leveraged their bespoke AI system in furtherance of the scheme. The advisory will allow social media platforms and researchers to identify and prevent the Russian government’s further use of the technology. In addition, X Corp. (formerly, Twitter) voluntarily suspended the remaining bot accounts identified in the court documents for terms of service violations.
“With these actions, the Justice Department has disrupted a Russian-government backed, AI-enabled propaganda campaign to use a bot farm to spread disinformation in the United States and abroad,” said Attorney General Merrick B. Garland. “As the Russian government continues to wage its brutal war in Ukraine and threatens democracies around the world, the Justice Department will continue to deploy all of our legal authorities to counter Russian aggression and protect the American people.”
“Today’s action demonstrates that the Justice Department and our partners will not tolerate Russian government actors and their agents deploying AI to sow disinformation and fuel division among Americans,” said Deputy Attorney General Lisa Monaco. “As malign actors accelerate their criminal misuse of AI, the Justice Department will respond and we will prioritize disruptive actions with our international partners and the private sector. We will not hesitate to shut down bot farms, seize illegally obtained internet domains, and take the fight to our adversaries.”
“Today’s actions represent a first in disrupting a Russian-sponsored Generative AI-enhanced social media bot farm,” said FBI Director Christopher Wray. “Russia intended to use this bot farm to disseminate AI-generated foreign disinformation, scaling their work with the assistance of AI to undermine our partners in Ukraine and influence geopolitical narratives favorable to the Russian government. The FBI is committed to working with our partners and deploying joint, sequenced operations to strategically disrupt our most dangerous adversaries and their use of cutting-edge technology for nefarious purposes.”
“We support all civic engagement, civil dialogue, and a robust exchange of ideas,” said U.S. Attorney Gary Restaino for the District of Arizona. “But those ideas should be generated by Americans, for Americans. The disruption announced today protects us from those who use unlawful means to seek to mislead our citizens and our communities.”
“The disruption announced today is the result of a combined response with our international partners to a serious and unique threat,” said Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois. “Multiple U.S. and foreign governmental components worked closely and efficiently to address the threat and develop and execute a mitigation strategy. Through vigorous enforcement efforts and collaborative international partnerships, the Justice Department works tirelessly to disrupt criminal cyber activity.”
Overview
According to court documents, a bot farm is an enhanced software package which allows for the creation of false personas on social media platforms. Bot farms are enhanced by integrating components which contain artificial intelligence, such as image production or text generation.
As described in the affidavits filed in support of the warrants, development of the social media bot farm was organized by an individual identified in Russia (Individual A). In early 2022, Individual A worked as the deputy editor-in-chief at RT, a state-run Russian news organization based in Moscow. Since at least 2022, RT leadership sought the development of alternative means for distributing information beyond RT’s standard television news broadcasts. In response, Individual A led the development of software that was able to create and to operate a social media bot farm. As planned, the social media bot farm would create fictitious online personas for social media accounts, through which RT, or any operator of the bot farm, could distribute information on a wide-scale basis. The development was executed by Individual B and others, who hid their identities and location (Russia) while beginning to purchase infrastructure for the social media bot farm in April 2022.
In early 2023, with the approval and financial support of the Presidential Administration of Russia (aka “the Kremlin”), a Russian FSB officer (FSB Officer 1) created and led a private intelligence organization (P.I.O.), as explained in the affidavits. The P.I.O.’s membership was comprised of, among others, employees at RT, including Individual A. The true purpose of the P.I.O. was to advance the mission of the FSB and the Russian government, including by spreading disinformation through the social media accounts created by the bot farm.
According to the affidavits, FSB Officer 1, Individual A, and other members of the PIO had access to the social media bot farm. The following are examples of Russian-government narratives that the bot farm posted on X in October and November 2023:
- A purported U.S. constituent replied to a candidate for federal office’s social media posts regarding the conflict in Ukraine with a video of President Putin justifying Russia’s actions in Ukraine;
- A purported resident of Minneapolis, Minnesota, posted a video of President Putin discussing his belief that certain geographic areas of Poland, Ukraine, and Lithuania were “gifts” to those countries from the Russian forces that liberated them from Nazi control during World War II;
- A purported U.S. resident of a city identified only as “Gresham,” posted a video claiming that the number of foreign fighters embedded with Ukrainian forces was significantly lower than public estimates.
- The same purported individual posted a video of President Putin claiming that the war in Ukraine is not a territorial conflict or a matter of geopolitical balance, but rather the “principles on which the New World Order will be based.”
To register the fictitious social media accounts, the social media bot farm relied on private email servers, which in turn relied on the two domain names seized by the FBI. An individual who controls an internet domain can create email accounts using the domain. For example, an individual controlling the domain name www.example.com can create email accounts using @example.com (e.g., [email protected]). Here, the actors obtained and controlled the domain names “mlrtr.com” and “otanmail.com” from a U.S.-based provider. They then used those domains to create the email servers that ultimately allowed them to create fictitious social media accounts using the bot farm software.
The FSB’s use of U.S.-based domain names, which the software used to register the bots, violates the International Emergency Economic Powers Act. In addition, the accompanying payments for that infrastructure violate federal money laundering laws.
The Justice Department commends members of the private sector who coordinated with law enforcement efforts on this disruption, including X for its voluntary efforts to suspend the identified bot accounts from its platform. Prior to the government’s action, X identified and suspended a significant number of the bot accounts.
The Justice Department’s investigation is ongoing.
The National Security Division’s National Security Cyber Section, U.S. Attorney’s Office for the District of Arizona, and U.S. Attorney’s Office for the Northern District of Illinois are prosecuting the case, with valuable assistance from the National Security Division’s Counterintelligence and Export Control Section.
Three Former Executives Sentenced for $1B Corporate Fraud SchemeRead the Press Release
Three former executives of Outcome Health (Outcome), a Chicago-based health technology start-up company, were sentenced for their roles in a fraud scheme that targeted the company’s clients, lenders, and investors and involved approximately $1 billion in fraudulently obtained funds.
- Rishi Shah, 38, a co-founder and former CEO of Outcome, was sentenced on June 26 to seven years and six months in prison.
- Shradha Agarwal, 38, a co-founder and former president of Outcome, was sentenced yesterday to three years in a half-way house.
- Brad Purdy, 35, the former chief operating officer and chief financial officer of Outcome, was also sentenced yesterday to two years and three months in prison.
“Outcome’s former executives deceived their clients, their auditor, their lenders, and their investors for years,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Their sentences should serve as yet another reminder that ‘faking it until you make it’ is not an acceptable practice for any business, whether that company is a technology start-up or a well-established corporation. Lying about your revenue to obtain customers or financing is fraud, plain and simple. The Criminal Division is committing to holding companies and their executives accountable for their misconduct.”
“The defendants’ vast scheme defrauded the clients, investors, and lenders who supported their business,” said Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois. “Although they sought to hide the fraud by silencing whistleblowers and duping auditors, a jury rightly held the defendants accountable for their extensive fraud scheme. Our office will continue to work tirelessly with our law enforcement partners to deliver justice for the victims of complex fraud schemes.”
According to court documents and evidence presented at trial, Outcome, which was founded in 2006 and known as Context Media prior to January 2017, installed television screens and tablets in doctors’ offices across the United States and then sold advertising space on those devices to clients, most of which were pharmaceutical companies. Shah, Agarwal, and Purdy sold advertising inventory the company did not have to Outcome’s clients and then under-delivered on its advertising campaigns. Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full. Shah, Agarwal, and Purdy lied or caused others to lie to conceal the under-deliveries from clients and make it appear as if the company was delivering advertising content to the number of screens in the clients’ contracts. Purdy and others at Outcome also inflated metrics that purported to show how frequently patients engaged with Outcome’s tablets installed in doctors’ offices. According to the trial evidence, the scheme targeting Outcome’s clients began in 2011 and lasted until 2017, and resulted in at least $45 million of overbilled advertising services.
“This was an elaborate, billion-dollar fraud scheme by three people who were supposed to be leaders of the company,” said Executive Assistant Director Timothy Langan of the FBI’s Criminal, Cyber, Response, and Services Branch. “Instead, these now former executives attempted to illegally line their own pockets. This type of fraud and abuse takes critical resources out of our health care system, and the FBI will always work with our law enforcement partners to investigate and prosecute anyone who intends to defraud the American public.”
Shah, Agarwal, and Purdy also defrauded Outcome’s lenders and investors. The under-delivery to Outcome’s advertising clients resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016. The company’s outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy caused others to fabricate data to conceal the under-deliveries from the auditor. Shah, Agarwal, and Purdy then used the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in early 2017. The $110 million debt financing resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal, and the $487.5 million in equity financing resulted in a $225 million dividend that benefited Shah and Agarwal.
“The defendants in this case have been brought to justice for their actions in deceiving Outcome Health’s clients and fraudulently obtaining approximately $1 billion from its lenders and investors,” said Assistant Inspector General for Investigations Shimon R. Richmond of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG). “The FDIC-OIG will continue to work alongside our law enforcement partners to hold accountable individuals who harm lenders, investors, and clients by committing such fraudulent acts."
A federal jury convicted Shah, Agarwal, and Purdy in April 2023. Shah was convicted of five counts of mail fraud, 10 counts of wire fraud, two counts of bank fraud, and two counts of money laundering. Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud, and two counts of bank fraud. Purdy was convicted of five counts of mail fraud, five counts of wire fraud, two counts of bank fraud, and one count of false statements to a financial institution.
Three other former Outcome employees pleaded guilty prior to trial. Ashik Desai, the former chief growth officer, pleaded guilty to one count of wire fraud. Kathryn Choi, a former senior analyst, and Oliver Han, a former analyst, both pleaded guilty to conspiracy to commit wire fraud. Desai will be sentenced on Sept. 20. Choi and Han will be sentenced on Oct. 4 and Oct. 11, respectively.
The FBI and FDIC-OIG investigated the case. The U.S. Securities and Exchange Commission provided assistance in the case.
Assistant Chief Kyle C. Hankey of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jason Yonan, Corey Rubenstein, and William Hogan for the Northern District of Illinois prosecuted the case. Former Assistant Chief William E. Johnston of the Criminal Division’s Fraud Section and former Assistant U.S. Attorneys Matthew F. Madden and Saurish Appleby-Bhattacharjee for the Northern District of Illinois also prosecuted the case through trial.
Suburban Chicago Physician Pleads Guilty to Federal Health Care Fraud ChargesRead the Press Release
CHICAGO — A suburban Chicago physician has pleaded guilty to federal health care fraud charges for billing Medicaid and private insurers for nonexistent services.
MONA GHOSH owned and operated Progressive Women’s Healthcare, S.C., a medical office in Hoffman Estates, Ill., specializing in obstetrics and gynecology services. From 2018 to 2022, Ghosh submitted and caused her employees to submit fraudulent claims to Medicaid, TRICARE, and numerous other insurers for procedures and services that were not provided or were not medically necessary, some of which were performed without patient consent. Ghosh also fraudulently overstated the length and complexity of in-office and telemedicine visits and submitted claims using billing codes for which the visits did not qualify in order to seek higher reimbursement rates, her plea agreement states. Ghosh admitted in the plea agreement that she prepared false patient medical records to support the fraudulent reimbursement claims.
Ghosh, 51, of Inverness, Ill., pleaded guilty Thursday to two counts of health care fraud. Each count is punishable by up to ten years in federal prison. U.S. District Judge Franklin U. Valderrama set sentencing for Oct. 22, 2024.
It is the government’s position that Ghosh is accountable for at least $2.4 million in fraudulently obtained reimbursements. Ghosh admitted in the plea agreement that she is accountable for more than $1.5 million of such fraudulently obtained reimbursements. The final amount will be determined by the Court at sentencing.
The plea agreement was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois; Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI; Darrin K. Jones, Special Agent-in-Charge of the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Southeast Field Office; Mario Pinto, Special Agent-in-Charge of the Chicago Division of the U.S. Department of Health and Human Services, Office of Inspector General; and Kwame Raoul, Illinois Attorney General. The government is represented by Assistant U.S. Attorney Misty N. Wright.
Ghosh plea agreementSuburban Chicago Man Sentenced to 16 Years in Prison for Selling Fentanyl-Laced HeroinRead the Press Release
CHICAGO — A suburban Chicago man has been sentenced to 16 years in federal prison for selling fentanyl-laced heroin.
CALVIN CARTER sold the drugs on two occasions in the fall of 2019. The first sale occurred in a gas station parking lot in Olympia Fields, Ill., and the second occurred in a liquor store parking lot in Country Club Hills, Ill. Unbeknownst to Carter, the buyer in both transactions was surreptitiously cooperating with law enforcement.
Carter, 44, of Country Club Hills, Ill., pleaded guilty earlier this year to federal drug distribution charges. In imposing the 16-year prison sentence on June 20, 2024, U.S. District Judge Manish S. Shah found that the government proved Carter possessed a firearm in connection with the drug offenses. Multiple firearms were discovered during a court-authorized search of Carter’s residence shortly after the drug sales.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Sheila G. Lyons, Special Agent-in-Charge of the Chicago Field Division of the U.S. Drug Enforcement Administration. Substantial assistance was provided by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives, FBI, Illinois State Police, and Chicago Police Department.
“Defendant possessed almost one kilogram of heroin and fentanyl that he intended to distribute to others,” Special Assistant U.S. Attorney Niranjan Emani argued in the government’s sentencing memorandum. “The type of drugs that defendant sold and intended for distribution have devastating effects on the community.”
The government was represented by Mr. Emani and Assistant U.S. Attorneys Tiffany Ardam and Kristen Totten.
Businessman Sentenced to More Than a Year in Federal Prison for Scheming to Embezzle Funds from ClientRead the Press Release
CHICAGO — A businessman who operated two companies in a Chicago suburb has been sentenced to more than a year in federal prison for scheming to embezzle more than $950,000 from a client.
DONALD E. MUDD, 66, of Palm Beach Gardens, Fla., pleaded guilty earlier this year to a mail fraud charge. U.S. District Judge Elaine E. Bucklo on June 21, 2024, sentenced Mudd to 15 months in federal prison. Judge Bucklo also fined Mudd $60,000 and ordered him to pay $951,755 in restitution.
Mudd was the president of Mudd-Lyman Sales and Services and the manager of Simply Service LLC, both of which were based in Skokie, Ill. The businesses helped to market their clients’ products and facilitated the placement of goods in national hardware store chains. One of Mudd’s clients was a New York-based sealant manufacturer where co-defendant RODNEY HAWKINS worked as a vice president. Mudd admitted in a plea agreement that he schemed with Hawkins to embezzle funds from Hawkins’s employer by fraudulently inflating commissions and submitting false invoices for services that were never rendered. After receipt of the funds from the false invoices, Mudd and Hawkins split the proceeds.
Hawkins, 57, of Newton, N.C., pleaded guilty last year to a mail fraud charge and admitted his role in the scam. Hawkins is awaiting sentencing.
Mudd’s sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government is represented by Assistant U.S. Attorney Michelle Petersen.
Statements from Acting U.S. Attorney Morris Pasqual and FBI SAC Robert W. “Wes” Wheeler, Jr., Following the Sentencing in U.S. v. Edward M. BurkeRead the Press Release
Below are statements from Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the FBI Chicago Field Office, following the sentencing today in U.S. v. Edward M. Burke:
“Corruption in the Chicago City Council tears at the fabric of a vital body of local government,” said Morris Pasqual, Acting United States Attorney for the Northern District of Illinois. “When an alderman fails to discharge his duties with honesty and integrity, he betrays not only the citizens of Chicago, but his fellow public officials who do their jobs the right way. Our office will continue to vigorously prosecute corruption and hold public officials accountable for violating the public trust.”
“Aldermen are elected by their constituents to advocate for the public good,” said Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the FBI Chicago Field Office. “Bribery and extortion are contrary to that simple mission, and today’s sentencing highlights the consequences of betraying the public’s trust for one’s own illegal gains. The FBI is proud to work with partners at all levels of government to stamp out public corruption in northern Illinois.”
U.S. Attorney’s Office Seeks to Intervene in Lawsuit Against Itasca, Ill. for Refusing to Allow Treatment Center to Open in VillageRead the Press Release
CHICAGO — The U.S. Attorney’s Office in Chicago has sought to file a complaint in intervention in a pending lawsuit against Itasca, Ill., alleging the village engaged in unlawful disability discrimination in reviewing and ultimately denying a zoning request filed by a non-profit health care provider to use its property as a treatment center for people with substance-use disorders.
Haymarket DuPage LLC contracted in 2019 to purchase a hotel in Itasca with plans to repurpose it into a specialized treatment center offering health care services to treat substance-use disorders and related mental health disabilities. Haymarket’s main treatment center is in Chicago’s West Loop neighborhood and offers a range of services, including detoxification support, inpatient and outpatient treatment programs, primary medical and pediatric care, and a program allowing mothers in treatment to remain with their children. Haymarket has sought for years to expand into DuPage County due to the urgent need for treatment centers in Chicago’s western suburbs.
The complaint in intervention that the U.S. Attorney’s Office seeks to file contends that the village engaged in disparate treatment by employing a host of highly anomalous tactics to frustrate Haymarket’s application for zoning approval. The complaint alleges that village officials concocted a pretextual narrative that the treatment center would impose severe economic harms on the region, while also fanning the flames of residents’ fears by issuing numerous public statements disparaging Haymarket and its supporters. The complaint contends that the village also failed to fulfill its accommodation obligations under the Americans with Disabilities Act prior to denying Haymarket’s zoning request.
The U.S. Attorney’s Office’s motion to intervene in the lawsuit was filed Thursday in federal court in Chicago. It was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois. The government is represented by Assistant U.S. Attorneys Jordan A. Rosen, Sarah F. Terman, and Patrick W. Johnson.
Motion to InterveneChicago Consultant Sentenced to a Year in Federal Prison for Tax OffensesRead the Press Release
CHICAGO — A Chicago consultant was sentenced today to a year in federal prison for underreporting and failing to file federal income taxes.
ANNAZETTE COLLINS, 62, of Chicago, willfully filed a false individual tax return for the calendar years 2014 and 2015, and willfully failed to file an individual income tax return for the calendar year 2016. Collins also willfully failed to file a corporate income tax return for the calendar year 2016 on behalf of her consulting and lobbying business, Chicago-based Kourtnie Nicole Corp. Prior to operating her consulting business, Collins served in the Illinois General Assembly as a Representative and Senator.
A jury earlier this year convicted Collins on federal tax charges. In addition to the prison sentence, U.S. District Judge Jorge L. Alonso ordered Collins to pay $110,852 in restitution.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Jason Bushey, Acting Special Agent-in-Charge of the IRS Criminal Investigation Division in Chicago, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government was represented by Assistant U.S. Attorneys Michelle J. Parthum and Amarjeet S. Bhachu.
Chicago Health Care Company and Its Former Owners to Pay Nearly $2 Million to Settle False Claims Act LawsuitRead the Press Release
A Chicago health care company and its former owners will pay nearly $2 million to the United States and the States of Illinois and Indiana to resolve a civil lawsuit arising from the submission of false claims to Medicare and Medicaid.
The settlement resolves allegations that KAREFIRST MANAGEMENT, an independent nurse practitioner group, developed its own proprietary patient charting software and required its nurse practitioners to use it, despite knowing that it resulted in fraudulently upcoded claims being submitted to and paid by Medicare and Medicaid. The suit alleged that KareFirst contracted out nurse practitioners to see patients at skilled nursing facilities across the Chicago area. Those nurse practitioners charted all patient visits using the software developed by KareFirst. The software then generated false, upcoded claims that KareFirst submitted to Medicare and Medicaid for payment.
The settlement resolves a civil lawsuit filed in U.S. District Court in Chicago by a former employee of KareFirst under the qui tam, or whistleblower, provisions of the False Claims Act. The False Claims Act permits private citizens to bring lawsuits on behalf of the U.S. for false claims, and to share in any recovery. The U.S. intervened in the lawsuit prior to the settlement.
As part of the settlement agreement and consent order entered Friday by U.S. District Chief Judge Rebecca R. Pallmeyer, KareFirst and its former owners agreed to pay $1.99 million to Medicare and Medicaid over the next three years.
The settlement and consent judgment were announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Mario Pinto, Special Agent-in-Charge of the Chicago Division of the U.S. Department of Health and Human Services, Office of Inspector General, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government was represented by Assistant U.S. Attorney Sarah F. Terman.
The public is reminded that civil allegations are accusations only, and there was no determination of liability as part of the settlement and consent judgment.
KareFirst consent judgment and settlement agreementU.S. Attorney’s Office in Chicago Recognizes World Elder Abuse Awareness DayRead the Press Release
CHICAGO — The U.S. Attorney’s Office in Chicago today joined federal, state, and local partners in recognizing World Elder Abuse Awareness Day, which seeks to increase understanding of the many forms of elder abuse and the resources available to those at risk.
Elder abuse is an act that knowingly, intentionally, or negligently causes or creates a serious risk of harm to an older person by a family member, caregiver, or other person in a relationship of trust. Such harm may be financial, physical, sexual, or psychological.
“The U.S. Attorney’s Office is committed to investigating and prosecuting perpetrators who target the elderly and other vulnerable individuals for abuse,” said Morris Pasqual, Acting United States Attorney for the Northern District of Illinois. “On World Elder Abuse Awareness Day, our office reminds seniors and their caregivers to remain constantly vigilant to detect and report fraudulent schemes.”
“We know that the vast majority of elder abuse cases go unreported and that too many victims remain unseen,” said Attorney General Merrick B. Garland. “That is why the Department of Justice has aggressively targeted perpetrators of elder fraud and abuse, while providing victims with the support they need.”
In the past five years, the Department of Justice has pursued more than 1,500 criminal and civil cases involving conduct that targeted or disproportionately affected older adults. The Department has also returned hundreds of millions of dollars to elder fraud victims.
In the Northern District of Illinois, recent cases highlight the Department’s efforts to combat elder abuse:
Last month, Chicago businessman MARK STEVEN DIAMOND pleaded guilty to a federal fraud charge for bilking elderly homeowners in a home repair and reverse mortgage scheme. Diamond and the co-schemers targeted elderly victims based on the amount of equity in their homes and their relative lack of financial sophistication. Diamond is scheduled to be sentenced on Sept. 4, 2024.
In March, the U.S. Attorney’s Office seized suspected fraud proceeds of approximately $1.4 million of Tether (USDT), a cryptocurrency pegged to the U.S. dollar. The perpetrators, posing as tech support employees, informed victims who clicked on a computer popup that their bank accounts had been compromised. The perpetrators convinced the victims to convert money from traditional bank accounts into cryptocurrency to keep it “safe” from hackers. The scheme, which remains under investigation, impacted elderly victims throughout the U.S.
SUZANA VUKANAC was indicted in December on money laundering charges for allegedly receiving and transferring more than $1 million in cash derived from telemarketing and other online fraud schemes. Vukanac’s co-conspirators allegedly sold non-existent goods to victims, including the elderly, and falsely posed as romantic partners in need of money. Vukanac has pleaded not guilty and is awaiting trial.
In the fight to combat elder abuse, the Department of Justice maintains a variety of programs and initiatives:
- The Transnational Elder Fraud Task Force marshals federal and state agencies working collaboratively to investigate and prosecute foreign-based schemes that target older Americans. This initiative provides the public with information to guard against both traditional scams, such as tech support fraud, as well as trending schemes, such as romance scams.
- The Money Mule Initiative addresses money mule activity to disrupt these fraud schemes, and helps people to recognize and avoid participation in perpetuating fraud. In a money mule scheme, scammers recruit unsuspecting people, many times older victims, to move money in ways that avoid notice.
- To help older individuals and their families identify and avoid fraudulent activity, the Justice Department provides Senior Scam Alerts with information about tactics used in specific schemes, such as Social Security Administration impostor schemes, tech support scams, and lottery scams.
To learn more about the Department’s elder justice efforts please visit the Elder Justice Initiative page. To report elder fraud, contact the National Elder Fraud Hotline at 1-833-FRAUD-11 or 1-833-372-8311, or visit the FBI’s Elder Fraud Complaint Center at IC3.gov.
Owners of “Empire Market” Charged in Chicago with Operating $430 Million Dark Web MarketplaceRead the Press Release
CHICAGO — Two men have been charged in federal court in Chicago with operating “Empire Market,” a dark web marketplace that enabled users to anonymously buy and sell more than $430 million in illegal goods and services around the world.
THOMAS PAVEY, also known as “Dopenugget,” 38, of Ormond Beach, Fla., and RAHEIM HAMILTON, also known as “Sydney” and “Zero Angel,” 28, of Suffolk, Va., owned and operated Empire Market from 2018 to 2020, during which time they facilitated approximately four million transactions between vendors and buyers valued at more than $430 million, according to a superseding indictment returned Thursday in U.S. District Court in Chicago. The indictment charges Pavey and Hamilton with conspiring with each other and others to engage in drug trafficking, computer fraud, access device fraud, counterfeiting, and money laundering. The charges in the superseding indictment are punishable by a maximum sentence of life in federal prison.
Pavey and Hamilton are in U.S. law enforcement custody. Arraignments in federal court in Chicago have not yet been scheduled.
The superseding indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, Ruth Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service, and Ivan J. Arvelo, Special Agent-in-Charge of the New York office of Homeland Security Investigations. The government is represented by Assistant U.S. Attorneys Melody Wells and Ann Marie Ursini.
According to the charges, Pavey and Hamilton previously worked together to advertise and sell counterfeit U.S. currency on AlphaBay, a dark web marketplace for illicit goods that was shut down in 2017. They began operating Empire Market on Feb. 1, 2018, the indictment states. Thousands of vendors and buyers accessed Empire Market through a specialized anonymizing software and the site’s address, which ended in “.onion.” Vendors on Empire Market offered to sell various illicit goods and services, including controlled substances such as heroin, methamphetamine, cocaine, and LSD, as well as counterfeit currency and stolen credit card information, the indictment states. Buyers could browse the available goods and services by category, including “Fraud,” “Drugs & Chemicals,” “Counterfeit Items,” and “Software & Malware,” among others, the indictment states. After transactions were completed using cryptocurrency, buyers could review and rate their purchases on multiple criteria, including “stealth,” the indictment states.
During the investigation, federal law enforcement seized cryptocurrency valued at $75 million at the time of the seizures, as well as cash and precious metals.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Pavey et al superseding indictmentSuburban Chicago Tax Preparer Convicted of Covid-Relief FraudRead the Press Release
CHICAGO – A suburban Chicago tax preparer has been convicted on federal charges for fraudulently assisting customers in obtaining loans under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.
The jury in U.S. District Court in Chicago on Monday convicted HADI ISBAIH, 42, of Palos Heights, Ill., on all four counts of wire fraud against him. Each count is punishable by up to 20 years in federal prison. U.S. District Judge Sharon Johnson Coleman has not yet set a sentencing date.
The conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government is represented by Assistant U.S. Attorneys Kartik K. Raman and Rick D. Young.
The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan program (EIDL) were sources of relief established by the CARES Act in 2020. The programs allowed qualifying small businesses to receive low-interest, government-backed loans to cover a temporary loss of revenue during the Covid pandemic.
According to evidence presented at trial, Isbaih owned and operated Flash Tax Service Inc., a tax preparation business in Bridgeview, Ill. From May to August 2020, Isbaih submitted on behalf of several Flash Tax customers PPP and EIDL applications that contained materially false statements and misrepresentations about the customers’ businesses, such as gross revenues and number of employees. Isbaih also prepared and submitted tax returns with the loan applications that falsely represented the number of employees, monthly payroll, gross revenues, and annual income.
Isbaih charged Flash Tax customers an upfront fee of several hundred dollars before he submitted the fraudulent applications. If the customers received the PPP or EIDL funds based on those applications, Isbaih would then charge the customers additional fees.
Anyone with information about attempted Covid-relief fraud can report it to the Department of Justice by calling the National Center for Disaster Fraud Hotline at 866-720-5721, or by completing a NCDF online complaint form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Two Men Indicted on Federal Racketeering Charges for Allegedly Murdering Teenager to Increase Position in Chicago Street GangRead the Press Release
CHICAGO — Two men have been indicted on federal racketeering charges for allegedly murdering a teenager to maintain and increase their positions in a violent Chicago street gang.
GARY ROBERSON, 40, and JOSEPH MATOS, 41, both of Chicago, are charged with racketeering and firearm offenses in an indictment unsealed Thursday in U.S. District Court in Chicago. The indictment accuses the pair of murdering Chrys Carvajal on July 3, 2021, for the purpose of maintaining and increasing their positions in the Milwaukee Kings street gang. Carvajal, 19, was fatally shot in the Belmont Cragin neighborhood on Chicago’s Northwest Side.
The indictment alleges that the Milwaukee Kings is a criminal organization whose members and associates engaged in narcotics trafficking and committed acts of violence, including murder and assault, to acquire and preserve the gang’s perceived territory on the North Side of Chicago. Members of the gang intimidated rival gang members, victims, and witnesses through acts and threats of violence, boasted about their gang on social media, and took steps designed to prevent law enforcement from detecting their criminal activities, according to the indictment.
Roberson was arrested last month and has pleaded not guilty to the charges. He was ordered to remain detained in federal custody pending trial. Matos is not in custody and a warrant has been issued for his arrest.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI, and Larry Snelling, Superintendent of the Chicago Police Department. The government is represented by Assistant U.S. Attorneys Prashant Kolluri, Caitlin Walgamuth, and Kirsten Moran.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Murder in aid of racketeering is punishable by a mandatory sentence of life in prison, and the death penalty is also possible. If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.
Roberson et al indictmentSuburban Chicago Man Charged in Federal Court with Stealing More Than $9.5 Million in Interstate ShipmentsRead the Press Release
CHICAGO — A suburban Chicago man has been charged in federal court with stealing more than $9.5 million in goods, including liquor and commercial-grade copper, from interstate shipments.
According to an indictment unsealed Wednesday in U.S. District Court in Chicago, AIVARAS ZIGMANTAS used various aliases to falsely pose as a representative of real and fictitious carriers and brokers involved in transporting shipments across state lines. After fraudulently inducing individuals and entities to release shipments of goods to him, Zigmantas and others diverted the shipments from their intended destinations and stole the goods, the indictment states. As part of the fraud scheme, Zigmantas used aliases to open bank accounts and UPS Store mailboxes, and he created email addresses and websites in the names of fake individuals and entities, the indictment states.
The indictment alleges that Zigmantas and others intended to steal at least $13.5 million in goods, and successfully stole more than $9.5 million.
Zigmantas, 39, of Elk Grove Village, Ill., is charged with six counts of wire fraud, five counts of bank fraud, and two counts of theft of interstate shipments. He was arrested on Wednesday and pleaded not guilty during his arraignment Wednesday afternoon before U.S. Magistrate Judge Keri L. Holleb Hotaling. A detention hearing is scheduled for June 10, 2024.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations, and LaFonda Sutton-Burke, Director of the Chicago Field Office of U.S. Customs and Border Protection. U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations participated in the investigation. The government is represented by Assistant U.S. Attorney Misty N. Wright.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count of bank fraud is punishable by up to 30 years in federal prison. Each count of wire fraud is punishable by up to 20 years, while each theft count is punishable by up to ten years.
Zigmantas indictmentFederal Indictment Charges Man with Illegally Possessing Loaded Gun in ChicagoRead the Press Release
CHICAGO — A federal grand jury has charged a man with illegally possessing a loaded handgun in Chicago’s Lakeview neighborhood last month.
The indictment returned Tuesday in U.S. District Court in Chicago charges RAPHAEL HAMMOND, 37, of Chicago, with illegal possession of a firearm. The indictment alleges that Hammond illegally possessed the loaded .380-caliber handgun on May 5, 2024. Shortly after 1:00 a.m., Hammond fired the gun several times while standing on a sidewalk in the 1000 block of West Addison Street in Chicago, according to a criminal complaint previously filed in the case. At the time of the shooting, Hammond was on court-supervised release from a prior federal firearm conviction that prohibited him from legally possessing a firearm.
The charge in the indictment is punishable by a maximum sentence of 15 years in federal prison. Arraignment is set for June 18, 2024, at 11:00 a.m., before U.S. Magistrate Judge Jeffrey T. Gilbert.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations, Christopher Amon, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Larry Snelling, Superintendent of the Chicago Police Department. The government is represented by Assistant U.S. Attorney Saqib M. Hussain.
The investigation was conducted in coordination with ATF’s Crime Gun Intelligence Center of Chicago. The CGIC is a centralized law enforcement hub that focuses exclusively on investigating and preventing gun violence in Chicago and throughout northern Illinois. The CGIC is an interagency collaboration that brings together - under one roof - federal, state, and local law enforcement officers, prosecutors, and intelligence analysts to move quickly to investigate and prosecute violent crimes.
Holding firearm offenders accountable through federal prosecution is the centerpiece of Project Safe Neighborhoods, a nationwide Department of Justice initiative that brings together law enforcement officials, prosecutors, community leaders, and other stakeholders to develop comprehensive solutions to the most pressing violent crime problems. In the Northern District of Illinois, the U.S. Attorney’s Office and law enforcement partners have deployed the PSN program to attack a broad range of violent crime issues facing the district, particularly firearm offenses.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Hammond indictmentSuburban Chicago Man Sentenced to Federal Prison for Overstating Business Expenses and Charitable Contributions in Tax ReturnsRead the Press Release
CHICAGO — A suburban Chicago man has been sentenced to a year in federal prison for falsely overstating in personal tax returns the amount of his business expenses and charitable contributions.
A federal jury earlier this year convicted NIKKO D’AMBROSIO, 32, of Des Plaines, Ill., of making false statements in his personal income tax returns for the tax years 2019 and 2020. D’Ambrosio, who worked as a salesperson for an Illinois-based electronic sweepstakes kiosk operator, falsely claimed to have driven more than 474,000 miles on business-related travel for those two years. He also falsely claimed to have incurred more than $263,000 in business-related meal expenses during those years. D’Ambrosio’s false claims about his charitable contributions involved alleged donations of more than $63,000 to a Catholic church in Chicago. Financial and vehicle records presented at trial revealed that the mileage and meal expenses were vastly overstated, and a church representative testified that D’Ambrosio was not a parishioner and that the church had no record of any donations by D’Ambrosio in those years.
U.S. District Judge Thomas M. Durkin imposed the year-and-a-day sentence during a hearing Wednesday in federal court in Chicago.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Jason Bushey, Acting Special Agent-in-Charge of IRS Criminal Investigation in Chicago, and Robert W. “Wes” Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The government was represented by Assistant U.S. Attorneys Richard M. Rothblatt and Brandon D. Stone.
Federal Indictment in Chicago Charges Man with Illegally Importing Suicide Drug into the U.S. from MexicoRead the Press Release
CHICAGO — A federal grand jury in Chicago has indicted a Mexican resident on drug charges for allegedly illegally importing the drug Pentobarbital into the United States from Mexico for use in committing suicide.
A superseding indictment returned Tuesday in U.S. District Court in Chicago charges DANIEL GONZALEZ-MUNGUIA, also known as “Alejandro Vasquez,” 40, of Puebla, Mexico, with importing and distributing a controlled substance. The charges in the indictment are punishable by up to 60 years in federal prison.
Gonzalez-Munguia is currently detained in U.S. custody. Arraignment in federal court in Chicago has not yet been scheduled.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Sean Fitzgerald, Special Agent-in-Charge of the Chicago office of Homeland Security Investigations, and Ruth Mendonça, Inspector-in-Charge of the Chicago Division of the U.S. Postal Inspection Service. Valuable assistance was provided by U.S. Customs and Border Protection, the Illinois Army National Guard Counterdrug Program, the U.S. Attorney’s Office for the Southern District of Texas, and law enforcement agencies in Australia, Canada, China, France, Germany, Ireland, South Korea, Spain, Switzerland, and the United Kingdom. Assistant U.S. Attorney Kartik K. Raman is prosecuting the case. The officials noted that the investigation remains ongoing.
Pentobarbital, also known as Nembutal, is a drug sold in Mexico in commercially available bottles for the purpose of euthanizing animals. Pentobarbital is a controlled substance in the U.S. and has been used in state-sponsored executions.
According to the indictment and a criminal complaint previously filed in the case, Gonzalez-Munguia operated an online drug business to facilitate the sale and distribution of Pentobarbital to individuals in the U.S. and throughout the world who were contemplating suicide. During the investigation, law enforcement located numerous mail parcels that appear to have been shipped out of Mexico by Gonzalez-Munguia. Authorities in the U.S. and several foreign countries conducted well-being checks and recovered pentobarbital from numerous individuals who admitted to being despondent and ordering the suicide drug online via email addresses operated by Gonzalez-Munguia, the charges allege. Law enforcement offered assistance to these individuals. In other instances, individuals who purchased Pentobarbital via the email addresses were later found to be deceased, including individuals in Illinois and several other states and countries, the charges allege.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Gonzalez-Munguia complaint Gonzalez-Munguia superseding indictment